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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 >> Lightfoot v Revenue & Customs [2009] UKVAT(Excise) E01162 (16 January 2009) URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2009/E01162.html Cite as: [2009] UKVAT(Excise) E01162, [2009] UKVAT(Excise) E1162

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E01162

EXCISE DUTY- appellant brought in 18 kilos of hand rolling tobacco and 12800 cigarettes –goods condemned at Magistrates hearing –cannot raise "own use"– car valued at £38,500 –car restored on payment of £4203.34 under Commissioners policy - respondents acted reasonably - case dismissed.

MANCHESTER TRIBUNAL CENTRE

JOHN LIGHTFOOT Appellant

- and -
THE COMMISSIONERS FOR

HER MAJESTY'S REVENUE AND CUSTOMS Respondents

Tribunal: David S Porter Chairman

Peter Whitehead Member

Sitting in public in Manchester on 18 November 2008

Appellants appeared in person

Mr Josh Shields of counsel instructed by the acting solicitor for the Commissioners for H M Revenue and Customs, for the Commissioners

© CROWN COPYRIGHT 2008


 


DECISION
1. Mr Lightfoot appeals against the review by Deborah Hodge (the reviewing officer) contained in a letter dated 17 June 2008 refusing to return the Appellant's vehicle with out the payment of a penalty of £4203.34. The Appellant says that it was disproportionate and unreasonable to require a fee in order for the vehicle to be restored. Given that some of the goods were not his it was disproportionate to work out the fee in relation to the total value of the goods. The goods were purchased for his own and his family's use. The Respondents say that as the goods had been declared forfeit and the Appellant's application to the Magistrates' Court was unsuccessful, the goods were condemned as forfeit. As a result the Appellant could not claim that the goods were for his own use and the Reviewing Officer acted reasonably in requiring a payment of £4203.34 for the return of the car
2. Mr Josh Shields of counsel, instructed by the acting solicitor for the Commissioners for H M Revenue and Customs, appeared for the Respondents and produced a bundle of documents to the tribunal and since no one appeared for the Appellant this tribunal determined to proceed under rule 26(2) of the Value Added Tax Tribunal Rules 1986 (as amended)

The facts

3. In the absence of the Appellant the tribunal had to rely on the facts as set out in the review letter of 17 June 2008. As the goods had been condemned in the Magistrates' Court neither this tribunal nor the Appellant can argue that the goods were purchased for his own use. Mrs Hodge is, however, obliged to consider the circumstances of the purchase, in considering the Commissioners policy in relation to the return of vehicles.

The Commissioner's Policy

4. "The Commissioners' general policy is that private cars used for improper importation or transportation of excise goods should not normally be restored…..…However vehicles may be restored at the discretion of the Commissioners subject to such conditions ( if any) as they think proper (eg for a fee) in circumstances such as the following:

If the excise goods were destined for supply on a "not for profit" basis, for example for re-imbursement: see "Not for Profit" below

If the excise goods were destined for supply for profit, the quantity of excise goods is small, and it is a first occurrence

If the vehicle was owned by a third party who was not present at the time of the seizure, and they can show that they were both innocent of and blameless for the smuggling attempt, then consideration may be given to restoring the vehicle for a fee; if in addition to being both innocent and blameless the third party demonstrates that they had taken reasonable steps to prevent the smuggling in the vehicle then consideration may be given to restoring it free of charge

"Not for Profit"

From 28 March 2006 the Commissioners' policy for seized vehicles involved in smuggling excise goods which are not for own use, but are passed on to others on a "not for profit" reimbursement basis, has changed:

In non-aggravated cases vehicles will not normally be sized (but a warning letter will be issued). The meaning of "aggravated" is explained below.

Aggravated cases depend on how many aggravated offences have occurred within the previous 12 months:

a. For a first aggravated detection vehicles will normally be seized and restored for 100% of the revenue involved

b. For a second aggravated detection vehicles will normally be seized and restored for 200% of the revenue involved

c. For a third aggravated detection vehicles will normally be seized and not restored unless there are exceptional circumstances.

The 100% and 200% restoration fees are subject to a maximum of the trade buying price of the vehicle in Glass' Guide.

In all cases any other relevant circumstances will be taken into account in deciding whether restoration is appropriate. A vehicle will not normally be restored to a third party in a situation where that would be tantamount to restoring it to a person responsible for the smuggling.

The meaning of "Aggravated" in "Not for profit" cases

Aggravating circumstances include-

•    Any previous offence by the individual

•    Large quantities, for example more than:

6kg of hand rolling tobacco or

6,000 cigarettes or

20 litres of spirits or 200 litres of wine or 225 litres of beer.

•    Any other circumstances that would result in restoration not being appropriate

5. Mrs Hodge considered that the goods had been purchased by the Appellant for sale. The evidence from the various interviews was conflicting and in the response to the Appellant's solicitors she said :-

"When Mr Lightfoot was told that Mr Crewe had said that he didn't have any cigarettes and was asked if all the goods belonged to him he replied "Well if they say they are not theirs, they must be mine". It is at this point that I believe Mr Lightfoot started to tell the truth. It is my view that all the goods belonged to him and that he intended to dispose of them for a profit.

The solicitor stated that Mr Lightfoot is a man of limited means but he spent a substantial sum of money on tobacco and goods. He paid for his goods in cash and that incurs the inconvenience and risk of carrying a large amount of cash. Purchasers often use cash because they themselves have been paid cash in advance and it is a common feature of buying excise goods for commercial sale. Most purchasers use a debit or credit card but many smuuglers use cash instead so that there is no evidence of the transaction in their bank accounts or statements.

Mr Lightfoot told the Officer that he travelled in April 2007 and December 2007 and made another trip to spend the insurance money (arising from the burglary referred to below: Chairman's note). Commercial records show that three of his vehicles also travelled on 9 September 2007 and 28 October 2007. Although he claimed he had lost the goods purchased in April through a burglary, he has produced no evidence to support this. He therefore made at least four trips in 2007 giving him opportunity to purchase excise goods. If he had purchased 16 Kilos of tobacco and 12800 cigarettes on each of those trips, this would amount to a colossal 64 kilos of tobacco and 51,200 cigarettes worth over £12,000 at UK prices, which in any view, is a commercial quantity.

Your solicitor has not claimed that the excise goods were to be passed on to others on a "not for profit" reimbursement basis and I therefore conclude that they were held for profit and should therefore not normally be restored. None restoration is fair, reasonable and proportionate in the circumstances"

(Note. Her letter is dated 17 June 2008 and the Magistrates Court hearing was on 18 September 2008. She would not therefore been aware that the goods had been condemned as forfeit.)

The Vehicle.

Mrs Hodge the reviewing officer continued in her letter to the Appellant's solicitor… I am required to take into account the value of the car, I am aware that my decision should be reasonable and proportionate and should take into account all of the factors involved in this case. I accept that your client has medical problems that make his mobility difficult, combining this with the high value of the vehicle (£38,500) I have decide that restoration should be offered for a fee"

The submissions

6. The Appellant and his wife caused condemnation proceedings to be brought in the Magistrates Court. They were unsuccessful in their appeal and their goods cannot be returned as they are condemned forfeit. The HMRC policy provided that vehicles are not normally restored unless the goods were intended for a supply on a not for profit basis or on a profit basis if the quantity is small and it is a first offence. The reviewing officer took the view that the goods were being imported on a profit basis. On the grounds of hardship she agreed to restore the vehicle on the payment of the fee. She acted reasonably in all the circumstances and the appeal should be dismissed.

The decision

7. We have considered the facts and the law and have decided that the reviewing officer acted reasonably in requiring the Appellant to pay £4203.34 for the return of the vehicle. In view of the decision at the Magistrates Court it is not open to us to reconsider the facts to ascertain whether the goods were purchased for his own use. The review letter sets out clearly the position in relation to the fee for the restoration of the vehicle as far as Mrs Hodge is concerned and we agree that she has acted reasonably in light of the same and we dismiss the appeal

The Respondents made a request for costs and we awarded £250

DAVID S PORTER

CHAIRMAN
Release Date: 16 January 2009

MAN/08/8091