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	United Kingdom VAT & Duties Tribunals (Excise) Decisions
You are here: BAILII >> Databases >> United Kingdom VAT & Duties Tribunals Decisions >> United Kingdom VAT & Duties Tribunals (Excise) Decisions >> Smith v Customs and Excise [2005] UKVAT(Excise) E00841 (21 January 2005) URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2005/E00841.html Cite as: [2005] UKVAT(Excise) E841, [2005] UKVAT(Excise) E00841

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E00841

EXCISE DUTY — RESTORATION OF SEIZED GOODS — vehicle, trailer and alcohol — jurisdiction — Gora and Gascoyne considered — appeal allowed

MANCHESTER TRIBUNAL CENTRE

ALBERT CHARLES SMITH Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: Richard Barlow (Chairman)

Gilian Pratt

Sitting in public in Manchester on 2 December 2004

The Appellant in person

Mr J Close of counsel instructed by the Solicitor for HM Customs and Excise for the Respondents

© CROWN COPYRIGHT 2005


 


DECISION

Introduction

1. This appeal is against a review decision dated 10 August 2004 by which the Commissioners upheld the earlier decision not to restore to the Appellant a Toyota Land Cruiser, 2195.94 litres of beer, 225 litres of wine and 4 litres of spirits. The excise goods were imported from France in the motor car on 22 May 2004 at Dover and the goods and the motor car were seized on that date. We assume a trailer attached to the car was also seized though the documents do not confirm that.

Jurisdiction issue

2. As is commonly the case, the Respondents have argued that the tribunal is precluded from making any findings that contradict what they claim to be established facts, arising from the failure of the Appellant to give notice to the Commissioners requiring them to institute condemnation proceedings.
3. Paragraph 8 of the Statement of Case alleges that the goods were liable to forfeiture by reason of section 49(1) of the Customs and Excise Management Act 1979 (CEMA) or regulation 16 of the Excise Goods (Holding, Movement, Warehousing and REDS) Regulations 1992 (REDS). Paragraph 9 of the Statement of Case alleges that the vehicle is liable to forfeiture under section 141(1) of CEMA.
4. Section 49(1) of CEMA covers a wide range of grounds upon which goods may be liable to forfeiture under the compendious title "goods improperly imported". It includes, in what may be the most relevant provision in cases of this sort, forfeiture of goods liable at their importation to excise duties, where the goods are unshipped without payment of duty. Regulation 16 of REDS is equally wide ranging and applies to goods in respect of which there is a breach of regulation 6 or Parts IV, V or VI of the regulations. From the Statement of Case it is difficult to identify with certainty a specific breach of a specific regulation which is alleged to have given rise to the forfeiture in this case, though the allegation is made that the goods were imported for a commercial purpose; so the regulation could be identified by someone familiar with the legislation.
5. The Statement of Case cites parts of regulation 12 of the Excise Goods, Beer and Tobacco Products Regulations 2001, as amended. That provides that the excise duty point is the time at which a person holding goods does so with the intention of transferring them to another person for money or money's worth; which the regulations provide shall be regarded as holding them for a commercial purpose. Regulation 6 of REDS requires that duty should be paid on or before the excise duty point and, if it is not, regulation 16 gives a ground for seizure and forfeiture of the goods.
6. Our purpose in summarising the Commissioners' Statement of Case in respect of the legislative provisions under which the goods were seized is to illustrate that the allegations made therein are wide ranging and unspecific.
7. Despite that; the Commissioners argue that because the Appellant did not apply for condemnation proceedings it is to be deemed that the goods were held for a commercial purpose and that that issue cannot now be re-opened. Why, it might be asked, do the Commissioners allege that that issue is settled by the deeming that the goods were liable to condemnation when so many others may have arisen and when that issue may not? For example, as pleaded in the Statement of Case the goods may have been seized by reason of being concealed, giving rise to seizure under section 49(1)(e) of CEMA without reference to any allegation of commerciality.
8. Had the seizure required the issue of a seizure notice under paragraph 1(1) of Schedule 3 to CEMA, that notice would have stated the grounds for seizure but, as is commonly the case, the goods were apparently seized in the presence of a person whose presence made such a notice unnecessary (as to which see paragraph 1(2) of Schedule 3). An entirely non-specific form C156 giving no details of the grounds for seizure was issued.
9. It follows that although we are now able to determine how the Commissioners put their case for forfeiture that would not have been open to the Appellant at the time of the seizure or for some time afterwards. Reference to grounds of seizure in the notebook of the officer who interviewed the Appellant does not indicate that the Appellant was told the reason for the seizure; because the statements made do not amount to grounds for seizure but are a summary of the evidence from which the officer concluded the goods were not for the Appellant's own use. There is nothing in the note to say that the Appellant was told that was the ground for seizure.
10. If due written notice of seizure is given under paragraph 1(1) and served under paragraph 2 of Schedule 3 of CEMA, or if none is required by reason of compliance with paragraph 1(2) (seizure in the presence of an offender or owner), then a person seeking to claim against the seizure must give a "notice of claim", under paragraph 3, within one month of the notice of seizure; or the date of seizure if no notice is required. If no such notice of claim is given paragraph 5 provides that "the thing in question shall be deemed to have been duly condemned as forfeited". If a notice of claim is given, the Commissioners have an unspecified period of time in which to "take proceedings for the condemnation" (paragraph 6) in either a Magistrates' Court or the High Court (paragraph 8). Customs and Excise have argued that that the time for giving notice of claim cannot be extended.
11. Whilst it is true that the notice of claim does not need to state the grounds for the claim, so that a person who has had goods seized would not need to know the grounds relied upon by Customs and Excise before giving a notice, it is certainly also true that the Appellant was not properly informed about the grounds for seizure and the legal basis for it, until well after the time for claiming had expired, unless the officer making the seizure explained those facts. The Appellant did in fact agree that the officer had said the car was being seized because the goods were being imported for commercial use but we do not regard that as proof that full details were given about the legal basis for the seizure.
12. Against the above background Customs and Excise have asserted that the Appellant's failure to give notice of claim under paragraph 3 and the deeming that the goods are condemned as forfeit under paragraph 5 create res judicata against the Appellant which preclude him from challenging the non-restoration on the grounds that the goods were for his own use; or that it would be an abuse of process for him to mount such a challenge.
13. These contentions are based on the judgment of Buxton LJ in Gascoyne –v- HM Customs and Excise (not yet reported). In that case, following Gora –v- Customs and Excise Commissioners [2003] 3 WLR 160, Buxton LJ held that an importer cannot challenge the lawfulness of a seizure by way of an application for restoration of the goods under section 152(b) of CEMA if he has not given notice to the Commissioners to institute condemnation proceedings (see paragraphs 46 and 47 of the judgment). He held that although section 152(b) does not preclude such a challenge "the normal English law rules of res judicata or abuse of process" do preclude it. He went on to hold that the importer's rights under the European Convention on Human Rights do give him the right to challenge the refusal to restore the goods despite what would have been the position about deeming the seizure to be valid in English law if the Convention had not applied.
14. It should be pointed out that in cases like the present one no question of res judicata can arise because no proceedings have been instituted. If any authority is required for that proposition it is to be found in paragraph 51 of the judgment in Gascoyne where Buxton LJ refers to there being no objection to holding that an actual finding in condemnation proceedings would bind the tribunal.
15. But where there have been no condemnation proceedings the question is whether an Appellant who has failed to give notice to the Commissioners to institute condemnation proceedings is abusing the process of the tribunal by appealing on the grounds that the original seizure was invalid.
16. As to that, Buxton LJ said this at paragraphs 54 to 56:

"54 As it seems to me, for an importer to be completely shut out in the only tribunal before which he has in fact appeared from ventilating matters that are deemed to have been decided against him because of paragraph 5 of Schedule 3 does not adequately enable him to assert his Convention rights.

55 In my view, therefore, in a case where the deeming provisions under paragraph 5 are applied, the tribunal can reopen those issues: though the tribunal will always have well in mind, considerations of, or similar to, abuse of process in considering whether such issues should in fact be ventilated before it.

56 The mere fact that the applicant has not applied to the Commissioners, and therefore there have been no condemnation proceedings, would not, in my view be enough. But, in my judgment it goes too far to say that the deeming provisions have always, in every case, got to be paramount."

17. The phrase "the tribunal can reopen those issues" in paragraph 55 clearly refers back to the "matters that are deemed to have been decided against [the importer]" and so the validity of the seizure does become an issue where it is relevant to the question whether the goods should be restored. Clearly in any normal situation where the goods were not liable to seizure in the first place that will be a highly relevant factor for the Commissioners to take into account when they are considering whether to restore the goods, even though they have been deemed to be condemned.
18. The starting point for the consideration of whether the present appeal is an abuse of process must be to determine what the deeming provision has deemed to be the case. As we have already held, only rather sketchy details of the reason for the seizure were explained to the Appellant at the time of the seizure. We are not satisfied that the deeming provision has deemed the goods to be condemned for any identifiable or specific reason.
19. A notice 12A was sent to the Appellant shortly after the seizure. That document may well have been drafted before Customs and Excise decided to start contending that res judicata or abuse of process are bars to raising the issue of own use where no notice of claim has been given. It is certainly highly misleading to anyone trying to decide whether to give a notice of claim, if those contentions are to be relied upon. Paragraph 1.2 of notice 12A refers to three options. These are to give a notice of claim; to ask for restoration or to make a complaint about how Customs dealt with the matter. The paragraph relating to seeking restoration includes this sentence: "If you accept that we were entitled to seize the items or even if you do not you can still ask us to consider returning the vehicle and/or goods." (emphasis added). Paragraph 2.13 encourages the owner of the goods to think that condemnation proceedings will take a long time but there is nothing in the section dealing with restoration that suggests an appeal to the tribunal will also take a long time.
20. If Notice 12A is not intended to discourage resort to condemnation proceedings, it certainly risks having that effect. Paragraph 2.17 of the Notice says this: "If I lose [condemnation proceedings] can I still ask Customs to consider returning (restoring) the goods and/or vehicle? Yes." There is nothing to suggest that there will be any impediment against arguing that the goods were not liable to seizure after unsuccessful condemnation proceedings.
21. In those circumstances we do not regard the Appellant's case as an abuse of process in any sense and to disallow him from putting forward a case based on his contention that the goods were for his own use would prevent him from asserting his Convention rights in precisely the way that Buxton LJ mentioned at paragraph 54.
22. That view is not affected by the fact that the Appellant received some legal advice from a firm of solicitors before deciding not to give a notice of claim.
23. We would add that the Appellant has a significant difficulty in reading and writing. He stated this in evidence but it was also borne out by the nature of his signature on the documents he signed at the time of interview and by the fact that he told the officer he had left his glasses at home. He does not wear reading glasses and we are aware that this is a common excuse put forward, by reason of embarrassment, when people who are unable to read have to ask to have a document read to them. We should further add that the Appellant is quite clearly of normal intelligence and understands documents when they are read to him; though to understand a technical document like notice 12A would not be easy for anyone who had to have it read to them.

The facts

24. Mr Smith travelled to the Continent on a day trip from his home in County Durham in the vehicle that was seized and which was pulling a trailer. He travelled with a Mr Moss. On the return journey, on 22 May 2004, they were found to be importing the very large quantity of excise goods already referred to. When questioned Mr Smith said that the goods were for a party to celebrate his wedding anniversary and birthday and that 60 people were attending and that the goods would probably only last until the end of July.
25. Shortly afterwards, when he was more formally interviewed, Mr Smith mentioned that he was to hold two or three parties and explained that he would be having a party for all the workmen who had been involved in rebuilding a house for him over the previous 18 months. We were shown pictures of the house and it is a very substantial manor house property. It is clear that a large number of workmen would have been involved in the work.
26. Mr Smith gave evidence in a forthright and sensible manner without exaggeration or prevarication. He struck us as an honest witness. In particular he clearly suffered a genuine sense of grievance about the fact that his goods and vehicle had been taken. He also demonstrated that he had ample means to pay for the large quantity of goods he had bought. He gave the impression of an outgoing man of the type which is described as "a larger than life character" and we found it entirely plausible that he would hold big parties at which large quantities of alcohol would be consumed.
27. Clearly the quantity of excise goods involved in this case was suspicious but our finding is that the goods were for Mr Smith's own use.
28. We would add that Mr Moss gave an entirely consistent account when he was interviewed.
29. The fact that Mr Smith had travelled to the Continent with Mr Moss only a short time before this occasion was explained by both of them independently when interviewed. That trip was said to have been to collect some furniture for Mr Smith's sister who had been living inn Spain. We heard nothing that made us think that story was untrue.
30. We also regard it as significant that the large quantity of excise goods in this case was carried in a trailer which must have added to the likelihood that the vehicle would be selected for examination. Had Mr Smith been involved in illegal activity we doubt that he would not have thought of that. He also made the point that he would not have risked the seizure of his expensive car when, if he had intended to import goods illegally, he could have used a cheaper vehicle.

Decision

31. In the circumstances therefore the appeal is allowed and we direct under section 16 of the Finance Act 1994 that the decision under appeal, to refuse to restore the goods, is to cease to have effect and that the Commissioners are to carry out a further review of the original decision. We direct that the further review is to take into account the findings of fact that we have made including the finding that the goods were for the Appellant's own use.
32. Neither party sought an award of costs and we make no order.

RICHARD BARLOW

CHAIRMAN
Release Date: 21 January 2005

MAN/04/8092