E00795
RESTORATION REFUSAL – Haulier – Commercial consignment of vodka – AAD invalid – Finding that driver unaware that illicit consignment – Review therefore on incorrect basis – New review directed – Appeal allowed

LONDON TRIBUNAL CENTRE

	RAMON DESMOND POWELLTHORNE	Appellant

-	and –

	THE COMMISSIONERS OF CUSTOMS AND EXCISE	Respondents

				Tribunal:	 THEODORE WALLACE  (Chairman)
						 SUNIL K DAS, ACIS

Sitting in public in London on 17 August 2004

Ghazan Mahmoud, counsel, instructed by Levys, solicitors, for the Appellant 

Robert Kellar, counsel, instructed by the Solicitor for the Customs and Excise, for the Respondents

© CROWN COPYRIGHT 2004

DECISION

1.	This was an appeal against the decision on review refusing to restore a Volvo FH-12 tractor and a trailer seized from the Appellant at Dover on 10 March 2003.

2	The trailer was carrying a cargo of 13,704 litres of Grant’s Vodka, the Administrative Accompanying Document (“AAD”) for which showed as the consignor Trans Int Nieupoort (“TIN”) the approval of which as a tax warehouse had been withdrawn on 8 May 2002.

3.	The vodka was seized under regulation 24 of the Excise Goods (Accompanying Documents) Regulations 2002 because the importation contravened regulation 12 requiring the goods to be accompanied by a valid AAD and because excise duty had not been paid.  If there had been a valid AAD the goods could have been consigned to an authorised warehouse keeper under duty suspension.

4.	There was no appeal in respect of the vodka.
5.	The review decision was based on the conclusion that the Appellant was knowingly involved in the illicit importation.

6.	Mr Mahmoud for the Appellant accepted that the approval of TIN as a tax warehouse had been withdrawn, so that the importation using the AAD was illicit, but contended that the Appellant,

“was not the smuggler, merely the unwitting means by which the smuggling was achieved,”

to use the words of Blackburne J at paragraph 46 of  Alzitrans SL v Commissioners of Customs and Excise [2003] V&DR 369, and he submitted that the refusal decision was disproportionate, see paragraph 45 of that decision.

7.	The Statement of Case did not allege that the Appellant was smuggling but rather that “HM Customs were not satisfied that J P European Haulage were not involved in the smuggling of goods.”  J P European Haulage is the name of the business operated by the Appellant and his mother.

8.	Mr Kellar did not make a clear allegation of smuggling at the hearing, however he cross-examined the Appellant on the basis that his evidence that he collected the vodka from TIN was untrue.  

9.	If the Appellant was not knowingly involved the Review Decision cannot stand since it was made on an incorrect factual basis and was clearly disproportionate.

10.	The legal burden of proof that the decision was based on incorrect facts lies on the Appellant.  If there was no evidence before us he could not succeed without showing clear errors on the face of the review decision.  Here the Appellant gave evidence that he was neither involved in or aware of smuggling.  When giving evidence he did not strike us as obviously untruthful.

11.	The case for Customs involves the serious allegation that the Appellant was knowingly involved.  In our judgment the Appellant’s evidence should only be rejected if the contrary evidence is “commensurate with the occasion”, see per Denning LJ in Bater v Bater [1951] Probate 35 at 36-7.  In Re H (Minors) [1996] AC 563, Lord Nicholls said this, 

“… the more serious the allegation the less likely it is that the event occurred and, hence the stronger should be the evidence before the court concludes that the allegation is established on the balance of probability.”  

Logic requires that the converse applies and that the more serious the allegation the easier it is for the Appellant to disprove it.

The evidence
12.	Two witnesses gave evidence and were cross-examined, the Appellant and the Review Officer, Gordon Arthur Murray.  Statements by four officers were agreed : Colin Ernest Wooldridge, who intercepted the Appellant; Jason Alan Swinerd, who examined the vehicle and trailer and seized them; Ryan Francis Crawford, who interviewed the Appellant before the seizure, and Donna Chaffey, who interviewed the Appellant on the afternoon after the seizure.

13.	There was a bundle of documents which included the notebooks and interview records and correspondence.  The original AAD with the envelope enclosing it, the original CMR International Consignment Note and a computer print-out from the System for Exchange of Excise Data (“SEED”) were produced.

14.	It is convenient to consider the documentary evidence first.  The SEED print-out dated 12 August 2004 showed that tax warehouse approval for TIN was withdrawn on 8 May 2002.

15.	A CMR was issued by Doncaster Cables Ltd to J P European Haulage on 7 March 2003 for a cargo of bobbins and support systems consigned to Qudenaarde, Belgium.  The Appellant’s vehicle with cargo crossed from Ipswich to Ostend on the evening of 9 March and the cargo was delivered on 10 March.

16.	When the Appellant was stopped at 2145 hrs on 10 March at Dover he handed a CMR document to Customs which showed TIN, of Toeulvgtweg 11, Nieupoort, Belgium, as consignor and Rangefield Dist, of Barking, as consignee; it was dated 10 March, contained the Appellant’s vehicle registration P960 DUD, gave the goods as 1142 cartons of Grant’s Vodka and stated that the AAD was attached.  The company completing this note was given as J P European Haulage.  It was signed “C Harper” and dated 10 March.  The name and address of J P European Haulage were stamped at the top.  

17.	The AAD included the following entries:
Box 1.		Consignor “Trans. Int. Nieupoort” and the address as 			“Toeulvgtweg 	11”
Box 2		Consignor’s Excise Number : “BE-AC-61/1233”
Box 3		Reference number of consignment : “TV-777”
Box 4		Consignee’s Excise Number : “6B 7569 38 377”
Box 7		Consignee : “Range Field Wharf Abbey Road …”
Box 8		Competent Authority at Despatch : “Recette des douanes
		Nieupoort Belgium”
Box 11		Transport Details : “MO 304 TR” crossed out and then 
		“P 960 DUD”
Box 17		Journey time : “72H”
Box 18a	Packages and Description of Goods : “1142 Cartons 
		Grant’s Vodka 37,5º”
Box 24		Dated “10/03/2003” and signed Mr “Cornelis”

Another AAD was produced by Customs with the same entries including  Box 3, apart from Box 11 “8410 ZG 59” and the date “20/02/2003”.  That other AAD had apparently been produced to Customs with another consignment.

18.	A fax message with the date “12/03/2003” and “JP European Haulage” at the top and “Maenhout NV” had the following message in manuscript underneath,

“Confirmation loading
	Trans int Nieupoort 
Siege D’Exploitation Toeulvgtweg 11
8620 Belgie
ref – P 960 DUD/JPE 3
Pls collect goods for delivery
   Tuesday 11th 2003 PM
        Rangefield Ltd Wharf Abbey Road, Barking, Essex. Grande Bretannge”

The signature was C Harper and was clearly the same signature as on the AAD.
19.	The Appellant was intercepted at 2145 hours by Mr Wooldridge and handed the officer the CMR and a brown envelope containing the AAD.  He told the officer that it was manifested as foodstuffs because of its high value.  He had loaded in Belgium and was going to Rangefield where he had been before.  Two officers from the National Discreditation Team (“NDT”) searched the vehicle and confirmed the load as vodka securing the vehicle at 2215 hours.

20.	The Appellant was interviewed by Mr Crawford and another officer. Mr Crawford’s statement produced a record of interview which his statement described as a transcript.  The interview lasted from 2245 hours to 0005 hours, well over an hour.  The record covered just 71 lines.  Although it was signed by the Appellant on each of the 3 pages, it is clear that it was only a very partial record and was not a transcript. 

21.	The Appellant was recorded as saying that he got the load from Maenhout who arranged it with TIN; his load from L K Walter did not go ahead.  He had come out on Sunday and delivered to Qudenaarde.  Qudenaarde was 1-1½ hours drive from TIN and he arrived there about noon.  He had telephoned the transport office at Maenhout having got the number off a trailer.  He had picked up the load from TIN at the address on the CMR.  No other lorry was loading.  He said that he spoke to a young girl in the office who gave him the AAD in a sealed envelope.  He did not see who wrote it.  He read a map to get to TIN and asked for directions at a service station.  He said that he would bill TIN.  They knew that he was coming and had his vehicle registration number.  He knew the load would be drink.  He had been to Rangefield 4 or 5 times always taking out.  He had not given his mobile number to anyone in the last 24 hours.  He was being paid £375 by TIN for the job.

22.	At 0010 hours Mr Crawford advised seizure of the vodka and vehicle on the grounds that the exporting bond no longer existed and the paperwork was identical to that handed over for another case.

23.	Later that morning Donna Chaffey, a member of the NDT, requested Customs at Stratford to ask Rangefield whether the consignment was booked in and to whose account.

24.	The Appellant called at the Customs office to ask for the vehicle to be released and agreed to come back for a further interview.  The interview was in two parts from 1320 to 1337 hours and 1412 to 1435 hours.  The notes for the first part covered 41 lines and the second part just 13 lines.  Again, the notes although signed by the Appellant cannot have been comprehensive.

25.	Again the Appellant said that he got the job from Maenhout by telephone having got their number off the side of one of their trailers.  He drove to TIN using his map and directions from a service station.  It did not have a sign outside, he went by the unit number.  He said that he had told Customs all he knew about the movement. He was going to bill the people in Box 1.  He had not checked with Rangefield, but they knew him from carrying loads outwards.  He said that he had never had a load of excise goods taken by Customs.

26.	In the second part of the interview Donna Chaffey told him that TIN bond had been closed since May 2002 and that the AAD was forged but the Appellant said that he knew nothing about the company operating there. Asked if he had a telephone number for Maenhout, he was recorded as saying “No”.  Donna Chaffey asked him to contact Maenhout and ask them to fax Customs about giving him the job. The Appellant then gave Customs his telephone numbers. The Appellant signed the notes as all correct.

27.	Later that afternoon Dona Chaffey received an e-mail from Stratford Customs saying that the sender had visited Rangefield that afternoon. The e-mail stated, “There were no bookings for a consignment of vodka and Mr Dixson the director informed me that he was not expecting a delivery.”

28.	On 12 March 2003 at 1209 hours Donna Chaffey received from the Appellant the fax headed Maenhout and signed C Harper which we have already described at paragraph 18 above.

29.	The Appellant requested return of the tractor and trailer on 12 March.  Restoration was refused on 28 March. A review was requested on 31 March and the Review decision was given on 14 May 2003.

30.	Mr Murray’s Review Decision contained the following passage:
“… I am not satisfied that you were not knowingly involved in the illicit importation of vodka.  The business TIN was not an approved excise warehouse, I believe the AAD was not a genuine document, the consignee, Rangefield was not expecting the consignment and I do not accept the credibility of your explanations regarding your dealings with Maenhout and the associated facsimile document … I am not content that you have given full and truthful explanations.”

Mr Murray concluded that the Appellant was “knowingly involved in the illicit importation” and decided that the vehicle and trailer should not be restored, the revenue involved being over £100,000.  Earlier in the review he stated that the duty was £100,694.88.

31.	The Appellant replied on 16 May stating that he had given the original Maenhout fax promptly when asked and provided the Maenhout telephone number which he had used.  He said that the transport officer was Mr C Harper.

The Appellant’s evidence
32.	We now come to the Appellant’s evidence which took some three hours with a lengthy cross-examination.

33.	The Appellant said that he had been a heavy goods vehicle driver for 13 years since he was 21.  He has been employed by Brunton Haulage Ltd on international haulage since December 2003.  He produced a reference from that firm stating that he was involved in runs to Gibraltar, Spain, France and Belgium with no problems.  He said that he had never been convicted of any offence of dishonesty and had had routine checks by Customs without any problem.  None of this was challenged.

34.	He said that J P European Haulage had been established in 1998 by himself and his mother. They had initially put in £20,000 which had been matched by the bank.  The vehicle used had been registered in his mother’s name being bought on finance with a deposit of £8,000 funded by his mother; the agreement was in her name.  She kept the paperwork and handled the money. His previous employer had gone into liquidation; he had contacts in Spain and Gibraltar working for his previous employer and took over those contacts with J P European Haulage.  He did the driving for J P European Haulage. He produced a reference from Trident Freight Services Ltd, a Gibraltar company, saying that he had been working for them for the past seven years transporting frozen, chilled and groupage freight from UK to Gibraltar on a regular basis; the reference stated that they had no complaints as to his service and conduct.

35.	The Appellant gave evidence of his outward trip on 9 March 2003 and said that the load for L K Walter was not ready for the return journey but was still being palletised and that he had to be back in the UK to collect a load for Trident. The L K Walter load was at Lockeren, a Europark service centre.  He said that he made a number of telephone calls from there on his mobile phone to try to get another return load.  

36.	At Lockeren he saw a trailer belonging to Maenhout who he knew used English hauliers; he had done work for them when working for a previous employer.  He telephoned the number on the side of the trailer and spoke to someone in the transport office who said that they had a load for the UK which they had been going to take themselves. He agreed to take the load.  He was given the address of TIN which was up on the coast 25 kilometres from Ostend.  Maenhout asked him to fax his goods in transit insurance and other paperwork to them from TIN.  He was told that it was a bonded load. The reference number for collection was to be his vehicle registration number.

37.	He arrived at TIN at about 1.00pm.  He produced a photograph of a building with no name but the road sign “Toeulvgtweg.”  There was a warehouse with an adjacent office. He went to the office and handed in the reference number and the paperwork for Maenhout.  The girl was expecting him and returned them to him including the CMR (see paragraph 16 above). He was given a sealed envelope marked “AAD” and Rangefield’s address; another envelope was inside.

38.	The Appellant said that he had done previous work for Rangefield but this was the first import to them.  He had no reason to check with Rangefield.  He had never had occasion to check with a customer before taking a load.  The vodka was loaded by forklift at TIN’s premises.

39.	He then described the seizure and interviews.  He said that at first he was not told why the vehicles were being searched but later was told that a vehicle had been seized previously with matching paperwork. He had asked why, if Customs knew that this was happening, Customs did not stop it.

40.	He said that it was not suggested to him that he was a smuggler.  He would not have collected the goods if he had known that the approval of TIN had been withdrawn.  Although it was possible to ask about bond approval in the UK, he would not know how to check abroad.  He had not seen the AAD until interviewed and had no reason to verify it.  As a lorry driver he relied on the CMR.  He believed that MO 304 TR (see paragraph 17) was one of Maenhout’s trailer numbers.

41.	He said that after the interviews he obtained Maenhout’s telephone number through international directory enquiries because his mobile phone with Maenhout’s number had been seized with the tractor.  He sent the fax at paragraph 18 on 12 March and sent a further copy after the Review Decision.

42.	The Appellant said that they only had the one lorry and the business had been forced to cease.  The finance company left matters for seven months.  The vehicle was restored to the finance company and sold for £7,500 less than the sum owed.  With Customs’ release charges and a collection fee, they had to pay the finance company £9,000.  His mother took a mortgage of £25,000 to pay the debts   He owed £100 a month income tax arrears and was still paying his mother off. The original £40,000 investment was lost.

43.	Cross-examined, the Appellant said that he was told that the return load on 10 March would take up to five hours to palletise; he did not have that time.  The original return load was at Lockeren; he did not have the name of the company.  The price agreed with L K Walter had been £380 plus the ferry.  He had offered Customs the telephone number of L K Walter to contact.

44.	He said that he normally filled in the CMR apart from Box 20.  Box 20 on the CMR had not been filled in in front of him.

45.	He said that he knew English drivers who pulled for Maenhout but did not know any Maenhout staff.  Maenhout gave him the details for the CMR and told him to go to TIN as soon as possible.  He wrote the address on a pad.  He had thousands of telephone numbers in a book and recorded the telephone number in the same book.  He used the mobile phone which had still not been returned.  He could not remember what he said about Maenhout’s telephone number, the officer did not ask directly whether he had it.  He did not say specifically that the number was on the mobile which was in the cab.  He had not written the number down before the seizure. He had not been specifically asked for it but told the first officer it was in the cab.  Asked about his answer “No” (paragraph 26), he said that he believed he said it was in the cab. Asked how Maenhout would contact him, he said when he got to TIN that he had faxed his details to Maenhout together with his mobile number. Asked why he had not told Mr Crawford this (paragraph 21), he said that he thought the question was referring to somebody else.  He said that the interview was 18 months ago and added, “I am not the most intelligent person in the world.”

46.	The Appellant said that Maenhout was going to pay him but the paperwork would be returned to TIN.  He agreed that this was obviously not the same as billing TIN.

47.	He said that the Maenhout fax (paragraph 18) was sent to his mother on Wednesday, 12 March. When it was put to him that it read like a prior confirmation, he said that was how it was received. He said that he would not have got Maenhout’s transmission report.

48.	The Appellant denied a suggestion by Mr Kellar that he never went to TIN. When it was put that their authorisation had been withdrawn, he asked how he would know : he had no means of checking.  He denied a suggestion that he was never going to Rangefield.  He said that he had suggested during a tea break that officers follow him to the bond.  Mr Kellar suggested to him that the Maenhout fax (paragraph 18) was not genuine and that C Harper’s signature was on both that fax and the AAD.  The Appellant said that he had no idea why it was the same signature. C Harper was the name he was given for the transport officer at Maenhout.  He produced photographs showing commercial buildings without a signboard but with the street sign “Toeulvgtweg” in the foreground which he had taken 3 to 4 weeks after the seizure.  He said that he never saw a sign for TIN.

Submissions
49.	Mr Kellar said that the evidence of Miss Chaffey that TIN’s warehouse approval had been withdrawn was not challenged and was supported by the SEED print-out.  If TIN did not have warehouse approval, it followed that the AAD was invalid.

50.	He submitted that the evidence of the Appellant was not credible.  It was not credible that he obtained such a high value cargo on such a casual basis without any contact with Maenhout except when driving for another employer several years earlier. He had told Miss Chaffey that he did not have a telephone number for Maenhout.  He said that the Appellant’s answers when interviewed were inaccurate or evasive.

51.	He said that the fax headed “Maenhout” (see paragraph 18) was phrased in the future “goods for delivery” although faxed to the Appellant two days after the seizure.  It was apparently signed by the same person “C Harper” as the CMR.  He said that since the authorisation of TIN had been withdrawn it was unlikely that it was trading in excise goods. Photographs produced by the Appellant of a warehouse at Toeulvgtweg did not show TIN’s name anywhere. The response by Rangefield to Miss Chaffey’s enquiry was consistent with no goods having been collected from TIN for Rangefield.

52.	Mr Keller said that Customs were not alleging fraud against the Appellant but accepted that the allegation as pleaded did involve a level of dishonesty.

53.	Mr Mahmoud for the Appellant said that the scenario was similar to that in Alzitrans. The Statement of Case did not allege that the Appellant was a smuggler, merely stating that Customs were not satisfied that the Appellant was not involved.

54.	He said that even if the Appellant was involved, proportionality was relevant. The position of the Appellant’s mother should have been considered.

55.	He said that the fact that TIN's approval had been withdrawn did not make the Appellant’s evidence in credible. Someone had acted illegally but why should this not be TIN? There had been no evidence as to why the approval of TIN had been withdrawn, nor was there any evidence that the Appellant knew that the AAD reference number of the consignment had been re-used. He submitted that the Appellant had been duped.  He said that it would have been surprising if Rangefield had accepted that an illicit consignment was expected.

56.	Mr Mahmoud said that the fact that Harpers name was both on the CMR and the Maenhout fax did not mean that the Appellant was involved.  The change in the registration number on the AAD supported the Appellant’s account.

Conclusions
57.	We have not found this an easy case to decide.
58.	We are satisfied that the importation was irregular since the authorisation of TIN had been withdrawn and the AAD was invalid.  The issue however is whether the Appellant, a driver of good character with no previous history of involvement in excise or other irregularities in 13 years of driving, knew of and was thus involved in the irregularity.

59.	There was no attempt by the Appellant to conceal the nature of the consignment from Customs.  He had produced the CMR which showed 1142 cartons of vodka.  Apart from Box 20, the signature of the consignor, it is clear from the writing that the CMR was filled in by the Appellant and included the name and address both of TIN and Rangefield.  He said that Box 20 with the signature “C Harper” was filled in at TIN but not in front of him and that the address of TIN had been provided by Maenhout.

60.	The Appellant’s evidence that before the interview he had not seen the AAD which had been in a sealed envelope was not challenged and we accept it.

61.	If we accept Mr Keller's suggestion that the Appellant did not collect the vodka from TIN at all, then much of the Appellant’s evidence was untrue and the rational inference would be that the Appellant was involved in the irregularity having at the least filled in a false CMR which he presented to Customs.

62.	Apart from the SEED print-out stating that the approval of TIN as a tax warehouse had been withdrawn in May 2002 from which we also infer that approval had not been restored, there was no evidence that a warehouse was not being operated at Toeulvgtweg 11, Nieupoort in March 2003. There was obviously a warehouse building at that address.

63.	On the Appellant’s case the false AAD was produced by TIN and the CMR was signed at TIN by the same person as signed the confirmation received later by him from Maenhout, the name “C Harper” being the name he was given at the Transport office at Maenhout. On this basis Maenhout (or someone at Maenhout) were involved in any irregularity as well as whoever was running the warehouse at Nieupoort. If Mr Harper (or whoever that person was) was prepared to deceive Customs there is no inherent improbability in his deceiving the Appellant also. It is however surprising if Maenhout were involved that they should have sent the fax at paragraph 18 which might have been evidence against themselves.  Customs adduced no evidence of any enquiries by them at Maenhout as to the truth of the Appellant’s assertions.

64.	While Mr Kellar made the point that Maenhout would not have entrusted a valuable cargo on such a casual basis, a smuggling enterprise of this type is inherently risky and can generate substantial profits. There is always the risk that the driver of an illicit cargo will make off with it.

65.	A further question arises as to the destination of the vodka.  The documentation showed the consignee as Rangefield and the Appellant’s evidence was that that was where he was going to deliver it. The e-mail from Stratford (paragraph 27) does not state what passed at the visit to Rangefield apart from the director stating that he was not expecting a delivery. Given that the AAD was irregular such an answer was not surprising. If the vodka was to be diverted elsewhere, the Appellant would have had to be given instructions. There were no questions as to this.  He did however have a mobile telephone.

66.	The evidence as to Maenhout’s telephone number was confused.  It is clear that the Appellant was asked whether he had it when interviewed and did not provide it.  The notes recorded that he said, “No”.  He told us that he did not have the number at the interview because it was on his mobile telephone which was still in the cab and that he had said this.  The notes by the officers were clearly only a partial record of what passed and not a complete record.  The notes covering the answer “No” contain only 62 words covering a period of 23 minutes.  We attach little weight to that answer.

67.	Essentially the appeal turns on whether we accept the Appellant’s evidence.  Having heard his evidence and cross-examination and considered the submissions of counsel, we find that the Appellant did not know that the consignment of vodka was not legitimate.  In the light of this conclusion it follows that the refusal to restore the tractor and trailer was made on a wrong factual basis and was a decision which could not reasonably have been made.

68.	The Appellant has already been deprived of the vehicle for 18 months.  We direct that the Commissioners carry out a further review within 21 days of the release of this decision serving copies on the Tribunal and the Appellant and that such review shall be on the basis of the conclusions in this decision.

69.	The Appellant is entitled to his costs.  We direct that in default of agreement any application under Rule 29 should be made to the Tribunal within two months with a schedule of costs claimed.

THEODORE WALLACE
CHAIRMAN
  
RELEASED: 8 October 2004

LON/03/8144