E00812

.Excise Duties – cigarettes and tobacco – goods obtained for own use and supply to relatives – seizure of goods and vehicle, goods and vehicle condemned as forfeit by the Court – terms demanded for restoration of vehicle -  whether proportionate

EDINBURGH TRIBUNAL CENTRE

	PATRICIA HUGHES	Appellant

	- and -

	THE COMMISSIONERS OF CUSTOMS AND EXCISE	       Respondents

			Tribunal:	 T GORDON COUTTS, QC (Chairman)

Sitting in Dumfries on 12 October 2004.

for the Appellants		Mr J F Lawson, Primrose & Gordon, Solicitors

for the Respondents	Mr R MacLeod, Shepherd & Wedderburn, WS

© CROWN COPYRIGHT 2004.

DECISION

As a result of a cross-channel trip, by no means the first by either of them in the space of 12 months, the vehicle in which the Appellant and her brother were travelling was discovered to have tobacco in quantities well in excess of the revised guidelines in the Tobacco Products Regulations 2001/1712.

	The matter came before the Tribunal on the question whether the decision to deduct the excise duty payable on the smuggled goods from the sale price obtained when the seized vehicle was auctioned was one which no reasonable officer acting reasonably could have made – Customs and Excise Commissioners v J S Corbett (Numismatist) Ltd 1981 AC 22.

	The parties led no evidence but an agreed Statement of Facts was presented as follows:
1.	On 29 September 2001, the Appellant and her brother were stopped in the UK control zone in France.  There, an amount of excise goods (comprising 5 cases of beer, 12 bottles of wine, 5,800 cigarettes and 18 kilograms of tobacco) were seized as liable to forfeiture under sections 49 and 139 of CEMA 1979.
2.	The vehicle, which the Appellant and her brother were travelling in, was also seized pursuant to section 141 of CEMA.
3.	In interviews, the Appellant and her brother both stated that the car belonged to the Appellant.   Mr Hughes said the car belonged to his sister and her partner.  On 5 October, the Appellant’s solicitors appealed against seizure of the excise goods and the car, which is referred to as “their car”.   The Appellant is Patricia Hughes.
4.	The excise goods and car were condemned as fofeit by the Channel Magistrates Court on 11 April 2002.
5.	On 18 September 2002, the Appellant’s solicitors applied for restoration of the car.   The Respondents refused this application by letter of 1 November 2002.   The Appellant applied for a review, which review was carried out and the decision communicated by letter dated 28 January 2003.
6.	The review decision was to offer conditional restoration of the car.   However, as the car had been disposed of, compensation was offered in lieu of the car.   Compensation was offered less the excise duty payable, of £2,572.77.

	It was argued for the Appellant that exaction of the excise duty which would have been payable from the compensation to be given when the Commissioners decided to allow restoration was disproportionate, that it involved a double penalty – the goods having been forfeit – and that the decision caused hardship.    The matter should be remitted to the Commissioners to undertake a further review with a view to removing the “fine” which had been imposed.   Circumstances in favour of the Appellant were that the vehicle was jointly owned, that the quantities were not enormous, that they were not for commercial resale although for a commercial purpose as now defined in that they were imported on a not for profit basis.

	For the Respondents it was argued that the penalty which had been imposed reflected the not for profit element in that the restoration took account of the value of the vehicle and was accordingly not disproportionate.   There required to be in appropriate circumstances a deterrent element over and above forfeiture of the goods.    By Section 152 of the Customs and Excise Management Act 1979 the Commissioners may restore subject to such conditions as they think proper anything forfeited or seized under the Customs and Excise Act.   The vehicle was seized and it was condemned as forfeit by a Court.  The Commissioners therefore have a discretion in relation to restoration which in the present case taking into account the not for profit element and the value of the vehicle resulted in the condition that the duty evaded required to be paid before restoration.

	The matters were fully set out and the reasoning fully explained in the Commissioners letter to the Appellant’s Solicitors dated 28 January 2003.

	The argument asserting double penalty as something which made the decision of the Commissioners disproportionate is rejected.    Even in Lindsay v the Commissioners 2002 1 WLR 1766, 2002 3AER 118 which was the high watermark of the Appellant’s argument in correspondence Judge LJ at paragraph 73 said “In my judgment, the question whether the power to seize the vehicle of a non-profit making smuggler should be exercised is fact dependent, requiring a realistic assessment of all the circumstances of the individual case, including the alternative sanctions available to the Commissioners, rather than the virtually automatic imposition of a burdensome and, at times, oppressive prescribed penalty.”

	The Tribunal finds that the Commissioners’ Officer proceeded along the indicated lines in the above judgment.  He had a discretion, he exercised it on the facts before him.   It has not been shown that the exercise of that discretion was flawed or that he had acted unreasonably in the sense that the decision was not one at which no reasonable officer could have arrived.

	The appeal is accordingly dismissed.

T GORDON COUTTS, QC

CHAIRMAN

RELEASE 25 OCTOBER 2004.

EDN/03/8005