Udris v Customs & Excise [2003] UKVAT(Excise) E00595 (19 December 2003)

EXCISE DUTY — excise goods and car transporting goods seized at Dover on return to UK and forfeited  -  review decision confirming decision not to restore appellant’s goods or  vehicle  -  held on facts to be reasonable for Customs to conclude that vehicle should not be restored as goods held for a commercial purpose  -  grounds for restoration  not present  -  appeal dismissed     

MANCHESTER TRIBUNAL CENTRE

 
 	
	 MARTIN UDRIS 	Appellant

	- and -

	THE COMMISSIONERS OF CUSTOMS AND EXCISE	Respondents

			Tribunal :		Mr M S Johnson (Chairman)
						Mrs M P Kostick FCA ATII

Sitting in public in Manchester on the 16th October 2003

The Appellant appeared in person

Mrs L Walmisley, counsel instructed by the Solicitor for the Customs and Excise, for the Respondents

	© CROWN COPYRIGHT 2003

DECISION
1.	This is an appeal brought under section 16 of the Finance Act 1994 (“the Act”).  In it the appellant is appealing against the result of a review decision of the Commissioners of Customs and Excise (“Customs”) upholding an earlier decision of Customs refusing to restore to the appellant a quantity of excise goods and a vehicle, namely a Vauxhall Astra car, Registration No W59 YCX (“the vehicle”).  The vehicle was seized by Customs at Dover Hoverport on 9 June 2002 and forfeited.  At the time the appellant was re-entering the UK from France in the vehicle, accompanied by his son Mr Dean Udris and his brother-in-law Mr Alan Brown.  All three of them had excise goods seized and forfeited.   

2.	The excise goods seized and forfeited (“the goods”) consisted of the following:

Attributed to the appellant

2.5 Kg of hand-rolling tobacco of 3 different brands
420 Regal cigarettes
150 Old Windmill cigars

Attributed to Mr Dean Udris

8 Kg of hand-rolling tobacco of 2 different brands
460 cigarettes of various brands
300 Old Windmill cigars

Attributed to Mr Alan Brown

5 Kg of hand-rolling tobacco
150 Old Windmill cigars. 

3.	The appellant, Mr Dean Udris and Mr Alan Brown all attended the tribunal hearing.  Mr Dean Udris and Mr Brown were under the impression that the tribunal would be considering the non-restoration of their parts of the goods.  In fact, as appears from paragraphs 15 to 20 of this decision, Mr Dean Udris and Mr Brown had never requested Customs to restore their parts of the goods to them, so that that the reviewing officer, against whose decision this appeal lies, had nothing to review in their case.  It is only the appellant who has appealed to this tribunal, and it is indeed only in relation to his part of the goods and in relation to the vehicle that this tribunal has jurisdiction. 

4.	The ground alleged in the Notice of Appeal is that the appellant suffered unfair treatment as the goods were for personal use.

5.	The appellant gave evidence to the tribunal and was cross-examined by counsel appearing for Customs.  Although they did not formally give evidence, Mr Dean Udris and Mr Brown assisted the appellant in presenting his case.  The tribunal also had the benefit of a folder of documents relevant to the appeal prepared by Customs and handed in by counsel, incorporating witness statements from Mr Gerry Dolan of Customs, detailing Customs’ policy at the time of the seizure, and from Mr David Harris, the reviewing officer in this case.  There was no other evidence.

6.	The following are the facts as we find them to be.

7.	The appellant, his son and brother-in-law, who were travelling together in the vehicle, were stopped by Customs in Dover Hoverport on 9 June 2002 as they were re-entering the UK from France.  They were separately interviewed.  The following relevant facts emerged from those interviews.

8.	Each of the travellers admitted that he was in possession of excise goods.  Customs established that the parts of the goods attributable to each of them were as mentioned in paragraph 2 above.  All three individuals were established to be frequent travellers to the continent.  They had been in total to the continent at least seven previous times in 2002 alone.  

9.	According to all three travellers, the purpose of their trips had been to look at campsites, with a view to taking a Summer camping holiday at a later date.  

10.	The appellant said that he worked as a heavy goods vehicle driver.  He gave details of his consumption of tobacco and cigarettes.  He said that he had paid for his part of the goods himself.  The cigarettes would last him until the middle of the following week, and the tobacco at most three months.   He gave details of his income and outgoings.  It was established that he normally brought excise goods into the UK on each return from the continent.  Nothing was said about anyone other than the appellant consuming those goods.  

11.	The appellant told Customs that the vehicle was not owned by him but was being acquired by him on hire purchase.

12.	Mr Brown said that he, his wife and his sons would be smoking the part of the goods brought back by him.  He was employed as a van driver.  He gave details of his earnings.  He said that his wife worked as an auxiliary nurse.  He said that the part of the goods brought back by him would last about six months.   

13.	Mr Dean Udris said that he smoked about 40 roll-up cigarettes a day – one pouch per week – and that his 5 Kg of hand-rolling tobacco would last him about six months.  He was a casual worker but not working at the moment.  He had spent £226 on what he had bought.  He had no regular income and no savings.  

14.	Following the interviews, it appeared to Customs that the goods were held for a commercial purpose, as mentioned in article 5 of the Excise Duties (Personal Reliefs) Order 1992 SI 1992/3155 (“the PRO”).  They seized and forfeited the goods, as was provided for in that article, and also seized and forfeited the vehicle, pursuant to section 141(1) of the Customs and Excise Management Act 1979.

15.	The appellant wished the goods and the vehicle to be returned, so he went to see a solicitor, Mr Nick Wilson of Petherbridge Hussain, Bradford.  Mr Wilson wrote a letter to Customs on 13 June 2002, in which he requested Customs to take “the appropriate action” for that to happen.  Customs replied by letter dated 19 June 2002, saying that Mr Wilson’s letter was receiving attention and that he would receive a response in due course, but pointing out that the appellant’s co-travellers should write in themselves regarding the goods.  It appears that Mr Dean Udris and Mr Brown never in fact did this.

16.	A substantive response to Mr Wilson’s letter was written to Petherbridge Hussain by Customs on 19 July 2002.  Its author was Miss T J Wheeler, Team Leader in the Post Seizure Unit of Customs, Detection South Region, in Plymouth.  That letter made it plain that the author was considering the restoration only of the vehicle and of such of the goods as were attributed as belonging to the appellant.  The letter set out Customs’ then policy on the restoration of seized goods and vehicles, directed towards deterring and detecting fraud, and it stated that neither the appellant’s part of the goods nor the vehicle were being offered for restoration for the following reasons:  

•	The goods were in excess of the quantities specified in the schedule to the PRO and the vehicle was being used to transport the goods;

•	When interviewed, the appellant and his companions indicated that they were aware of those quantities, being frequent travellers;

•	Similar quantities of excise goods could have been purchased on the other occasions they had travelled;

•	The officer of Customs seizing the goods was not satisfied that the appellant could realistically smoke 4 - 5 pouches of tobacco per week, as he stated he did; and

•	The officer was not satisfied that the income of Mr Dean Udris supported the quantity of purchases made.

17.	The letter stated that, to encourage compliance, the normal policy in such cases was to refuse to restore seized goods and vehicles, and that the author of the letter had seen no evidence of exceptional circumstances in this case justifying a departure from that policy.

18.	The appellant then wrote personally to Customs by letter dated 28 August 2002.  In it, the appellant asserted that he had brought a lawful amount of tobacco into the UK, because it was for personal consumption.  He said that he and his wife both smoked between 40 and 60 cigarettes per day, and that a pouch of tobacco would allow 120 to 160 cigarettes to be rolled on average.  He said that the quantity he had purchased was not unreasonable.  He said that the vehicle was worth £7,000, that it was still under HP, that he worked as a long-distance lorry driver and had to travel 12 miles to get to work, and that he often began work at 3 am.  He said that he was greatly inconvenienced by not having the use of his car.  He said that his wife had breast cancer and a lymphoma and needed regular hospital treatment.  He said that without the use of a car, their day to day living was becoming increasingly difficult.  He said that he had acted within his rights, that the officers of Customs who seized his tobacco and the vehicle had laughed as they did so and acted unreasonably, and he requested that the vehicle and his tobacco be returned to him as soon as possible.  Otherwise, he said, he would be beginning legal action.

19.	A key allegation in the letter of 28 August 2002 was the following:

“You [i.e. Customs] refer to the frequency of my visits abroad and these can be explained by my desire to find a campsite for a holiday this Summer.  I am well within my rights to travel as often as I like as long as I have a current passport, and am appalled that you imply that my reasons for travel were improper”.

20.	We note that the letter of 28 August 2002 was, according to its terms, written on behalf of the appellant alone and not on behalf of Mr Dean Udris and Mr Brown as well.  The letter did not relate to such parts of the goods as were brought back by them.

21.	Customs treated that letter as a request for a review of their decision not to restore.  In due course the decision on that review was sent to the appellant, contained in a letter dated 16 September 2002.  The letter was signed by the reviewing officer, Mr Harris.  It was a comprehensive letter, extending to just over 8 typewritten pages.  

22.	In the review letter, Mr Harris first set out the background, quoting from Customs’ notes of the interviews they had with the appellant and his fellow travellers.  Then Mr Harris referred to the applicable legislation, including the PRO.  Then he referred to Customs’ restoration policies in relation to vehicles and excise goods respectively.  Finally he considered the decision contested by the appellant, and stated his conclusion, namely that he confirmed the contested decision not to offer restoration of either goods or vehicle.

23.	Between the date of the seizure in this case and the date of the review, there was published the decision of the Divisional Court of the Queen’s Bench Division in R (on the application of Hoverspeed Ltd and Ors) v C & E Comrs [2002] 4 All ER 912 (“the Hoverspeed case”) .  That decision appeared on 31 July 2002.  In the Hoverspeed case, the court held that the PRO wrongly placed the burden of proof on travellers to satisfy Customs that they were not holding or using excise goods for a commercial purpose, instead of on Customs.  The appellant’s assertion, in his letter dated 28 August 2002, had been that his part of the goods had been purchased for the personal consumption of himself and his wife, not for commercial purposes.

24.	Earlier still, on 20 February 2002, the decision of the Court of Appeal in Lindsay v C & E Comrs [2002] 3 All ER 118 (“the Lindsay case”) had appeared.  In that case, the court held that a decision by Customs not to restore a seized vehicle, even where excise goods were seized as not being for the traveller’s own use, could be disproportionate.  

25.	Accordingly this tribunal needs to keep in mind the burden of proof in this case, and also that it does not follow that, because the goods have been seized and not been restored, the vehicle should not be restored.

26.	The review letter in this case is silent as to any consideration of either the Hoverspeed case or the Lindsay case.  In the event, however, we are not persuaded that this makes any difference in this case.  The reasons given by Mr Harris for upholding the earlier decision not to restore in this case were that, as he found, the appellant and Mr Brown were frequent travellers to the continent, purchasing excise goods on every trip, and that they had lied to Customs about the real reason for travelling.  He examined what he described as the credibility of the reason given for those trips.  That reason was that the travellers – so they had said – were looking round for campsites to use on future occasions.  He noted that Mr Brown’s vehicle had travelled to France on 3 previous occasions in 2002, and the appellant’s vehicle on 4 previous occasions in 2002.  On each of those trips, Mr Harris noted, there were 3 persons in the vehicle.  

27.	Mr Harris then said:

“I am not persuaded that the explanation for the frequency of the travel that you gave the Officer is credible and therefore I must inevitably conclude that you were being less than honest with the Officer for the purposes of deception, because you knew what you were doing to be wrong”.

28.	Mr Harris then looked at what Mr Dean Udris had told Customs about his lack of regular work, noting that he had nevertheless spent £226 on excise goods.  Mr Dean Udris did not appear to be a consumer of hand-rolling tobacco, having told the Officer that he used one pouch of tobacco per week, smoking 40 roll-up cigarettes per day.

29.	Mr Harris also took into account that in 1997 Mr Brown had had a significant quantity of excise goods seized from him in Ramsgate.

30.	Finally, Mr Harris compared the appellant’s letter of 28 August 2002 with what he had told Customs in interview.  In interview, the appellant had not referred to sharing his tobacco between himself and his wife.  As regards the appellant’s claim to need the vehicle for transporting his wife, and to get to work, Mr Harris noted that the appellant had had a Citroën Xantia Estate Registration No R207 VDP registered to him as from 20 July 2002.  He did not therefore appear to be without transport.

31.	In tribunal, the appellant was adamant that looking at campsites was indeed the reason for his frequent trips to the continent.  He did not dispute that the trips had been made.  Each of those trips was a day trip, and each time he would just look round to see if there might be somewhere to camp for a Summer holiday.  He had not in fact camped abroad; his holidays had hitherto been in the UK, at Scarborough or Filey.  He had travelled to the continent in 2001 as well as in 2002, on the usual day trips, quite often to bring back supplies of beer.   

32.	Under cross-examination, the appellant said that he had not mentioned his wife’s smoking, when interviewed, because he had not been asked.  He told the tribunal that, unfortunately, his wife had now died.  He stuck to his story that he had indeed been to the continent in order to find campsites.  

33.	The appellant admitted that he had acquired the Citroën Xantia car.  This was because it was costing him a fortune in taxi fares to get to work.  The appellant did not deal with the fact that the Citroën had been acquired by the time that he wrote his letter dated 28 August 2002, yet was not referred to in that letter, despite the reference in that letter to his being greatly inconvenienced by not having the use of the vehicle seized.

34.	Appearing for Customs, Mrs Walmisley submitted that the tribunal was not concerned with the correctness of the initial seizure.  In that regard, she referred us to Gora v C & E Comrs [2003] V & DR 49 and [2003] EWCA Civ 525 (11 April 2003).  The seizure itself had not been challenged in this instance.  So far as restoration and the Hoverspeed case were concerned, the decision under appeal would inevitably have been the same, having regard to the grounds on which Mr Harris reached it.   Mrs Walmisley referred to the quantity of the goods, and submitted that the allegation that successive trips to the continent had been made to find campsites was implausible, seeing that the trips were all day trips.  Seven trips had allegedly been made to locate campsites.  Yet there was no evidence as to where any of these sites might be.  She submitted that the story about locating campsites was put forward to disguise the real reason for the trips, which was to bring back excise goods.

35.	That being so, Mrs Walmisley submitted, the Lindsay case fell by the wayside.  Proportionality was not an issue for the tribunal.  That the goods were held for a commercial purpose was, she submitted, established.  There were no reasonable grounds for the tribunal to interfere with the decision of the reviewing officer.  She invited us to dismiss the appeal.

36.	The appellant submitted that the goods would all be consumed by himself and his companions.  He said that it had not been proved otherwise by Customs.  Whilst they admitted various previous trips to the continent, they had a legitimate excuse for having made those trips.  The desire to locate campsites was a genuine one.  As the goods were not for a commercial purpose, it was wrong for them to have been taken by Customs, and they should be restored, as should the vehicle, because he and his fellow travellers had done nothing unlawful.  He invited us to allow the appeal.

37.	In considering this appeal, we are mindful of the scope of our jurisdiction.  This arises under section 16 of the Act, and specifically section 16(4), seeing that what we are deciding is what is termed by the Act an “ancillary matter”.  We are only to interfere with the decision of the reviewing officer if we are satisfied that he could not reasonably have arrived at it.  In that case, certain powers are open to us, including directing a further review.  But we need to be satisfied that the exercise of our powers is called for.

38.	This tribunal has heard evidence from the appellant.  In our view, that evidence went to bear out the correctness of the basis of the reviewing officer’s decision.  The appellant did not deviate from his position that his repeated trips abroad were for the purpose of locating campsites.  We have considered whether that was indeed the real purpose of the trips, and we accept Mrs Walmisley’s submission that it is implausible that that should be so.   The duration of day trips is such that one cannot get far from the continental port before having to return.  Moreover, why repeated trips should have allegedly been undertaken for that purpose is very hard to see.   We are unimpressed by the lack of corroborating evidence to show that that was indeed the purpose of the trips.  We accordingly reject that purpose as being the real one for these trips.

39.	If, as we have concluded, the purpose of the trips was not that put forward by the appellant, what then was the true purpose?      It is far more likely, we think, that the trips were for the purpose of bringing back excise goods.  The evidence points to a succession of occasions on which such goods might have been brought back.  The trip in June 2002 was no more than one of a series of such occasions, when, unfortunately from the point of view of the appellant, Customs caught up with what was happening.  That, we believe, is the truth of this case.

40.	We are therefore not satisfied that there was anything unreasonable about the reviewing officer’s approach to his task.  This is very far from being a case in which Mr Harris could not reasonably have arrived at his decision.  We think that he was entirely justified in reaching the decision he did, for the reasons he gave.  We find, in particular, that Customs have proved that the goods were held for a commercial purpose.

41.	That being so, we agree with Mrs Walmisley that proportionality with regard to the non-restoration of the vehicle is not a factor that should properly be considered in this case.  There are, moreover, no exceptional circumstances which, in our view, should have been taken into account in favour of the vehicle being restored.  The appellant has not demonstrated hardship, particularly in view of his replacement of the vehicle.  With regard to the non-restoration of the vehicle, there are no circumstances additional to those hitherto raised by the appellant that have emerged in tribunal.  We do not find that there were any considerations in that regard of which account has not been taken.

42.	For the above reasons we dismiss this appeal. 

MICHAEL JOHNSON
CHAIRMAN
RELEASE DATE:

MAN/2002/8249