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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> European Brand Trading Ltd v HM Revenue and Customs [2016] EWCA Civ 90 (16 February 2016) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2016/90.html Cite as: [2016] EWCA Civ 90 |
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ON APPEAL FROM THE UPPER TRIBUNAL TAX & CHANCERY CHAMBER
Mr Justice Morgan
FTC /31/2013
Strand, London, WC2A 2LL |
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B e f o r e :
LORD JUSTICE LEWISON
and
LORD JUSTICE RYDER
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EUROPEAN BRAND TRADING LIMITED |
Appellant |
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- and - |
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THE COMMISSIONERS OF HER MAJESTY'S REVENUE AND CUSTOMS |
Respondent |
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MR JONATHAN SWIFT QC & MR JAMES PUZEY (instructed by Solicitors Office HMRC) for the Respondent
Hearing date: 9 February 2016
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Crown Copyright ©
Lord Justice Lewison:
"Our general policy is not to return seized excise goods (such as alcohol or tobacco products) vehicles used for commercial smuggling or any seized prohibited thing (such as illegal drugs, offensive weapons or endangered plant and animal species). However, we will consider all requests taking into account all relevant facts."
"We maintain that the goods are duty paid, they were purchased from a number of regular suppliers and the purchase invoices stated that the goods were duty paid."
"the goods were liable to forfeiture … in that:
a) they were chargeable with excise duty …; and
b) no excise duty had been paid on the goods."
"IT IS THIS DAY ADJUDGED that the Complaint is true and it is ordered that the said goods be condemned as forfeit."
"We maintain that the goods are duty paid, they were purchased from a number of regular suppliers and the purchase invoices stated that the goods were duty paid."
"We agree that it was for [HMRC] to establish that duty had not been paid on the seized goods or at least to show that there was no evidence that duty had been paid. We should expect the new review directed correctly to reflect the law."
"… material relevant to the duty paid status of the seized goods."
"3. Any person claiming that any thing seized as liable to forfeiture is not so liable shall, within one month of the date of the notice of seizure or, where no such notice has been served on him, within one month of the date of the seizure, give notice of his claim in writing to the commissioners at any office of customs and excise.
…
5. If on the expiration of the relevant period under paragraph 3 above for the giving of notice of claim in respect of any thing no such notice has been given to the Commissioners, or if, in the case of any such notice given, any requirement of paragraph 4 above is not complied with, the thing in question shall be deemed to have been duly condemned as forfeited.
6. Where notice of claim in respect of any thing is duly given in accordance with paragraphs 3 and 4 above, the Commissioners shall take proceedings for the condemnation of that thing by the court, and if the court finds that the thing was at the time of seizure liable to forfeiture the court shall condemn it as forfeited."
"HMRC say that, on the proper interpretation of the statutory provisions and their application to the facts of this case, the goods and the vehicle in question were, following the owners' withdrawal of their notice of claim, deemed by statute to have been duly condemned and forfeited as illegal imports for commercial use. In consequence the FTT had no power to treat them as legal imports on the basis of its factual finding of importation for own use. The FTT's finding flatly contradicted what the 1979 Act deemed to be illegal importation for commercial use following the withdrawal of the owners' notice of claim."
"(4) The stipulated statutory effect of the owners' withdrawal of their notice of claim under paragraph 3 of Schedule 3 was that the goods were deemed by the express language of paragraph 5 to have been condemned and to have been "duly" condemned as forfeited as illegally imported goods. The tribunal must give effect to the clear deeming provisions in the 1979 Act: it is impossible to read them in any other way than as requiring the goods to be taken as "duly condemned" if the owner does not challenge the legality of the seizure in the allocated court by invoking and pursuing the appropriate procedure.
(5) The deeming process limited the scope of the issues that the owners were entitled to ventilate in the FTT on their restoration appeal. The FTT had to take it that the goods had been "duly" condemned as illegal imports. It was not open to it to conclude that the goods were legal imports illegally seized by HMRC by finding as a fact that they were being imported for own use. The role of the tribunal, as defined in the 1979 Act, does not extend to deciding as a fact that the goods were, as the owners argued in the tribunal, being imported legally for personal use. That issue could only be decided by the court. The FTT's jurisdiction is limited to hearing an appeal against a discretionary decision by HMRC not to restore the seized goods to the owners. In brief, the deemed effect of the owners' failure to contest condemnation of the goods by the court was that the goods were being illegally imported by the owners for commercial use.
…
(7) … The key to the understanding of the scheme of deeming is that in the legal world created by legislation the deeming of a fact or of a state of affairs is not contrary to "reality"; it is a commonly used and legitimate legislative device for spelling out a legal state of affairs consequent on the occurrence of a specified act or omission. Deeming something to be the case carries with it any fact that forms part of the conclusion."
"To sum up: the FTT erred in law; the UT should have allowed the HMRC's appeal on the ground that the FTT had no power to reopen and redetermine the question whether or not the seized goods had been legally imported for the owners' personal use; that question was already the subject of a valid and binding deemed determination under the 1979 Act; the deeming was the consequence of the owners' own decision to withdraw their notice of claim contesting the condemnation and forfeiture of the goods and the car in the courts; the FTT only had jurisdiction to hear an appeal against a review decision made by HMRC on the deemed basis of the unchallenged process of forfeiture and condemnation; and the appellate jurisdiction of the FTT was confined to the correctness or otherwise of the discretionary review decision not to restore the seized goods and car. No Convention issue arises on that outcome, as the process was compliant with article 6 and article 1 of the First Protocol : there is no judge-made exception to the application of paragraph 5 according to its terms; the owners had the option of contesting in the courts forfeiture on the basis of importation for personal use; they had decided on legal advice to withdraw from their initial step to engage in it; and that withdrawal of notice gave rise to the statutory deeming process which was conclusive on the issue of the illegal purpose of the importation."
"In brief, the deemed effect of the owners' failure to contest condemnation of the goods by the court was that the goods were being illegally imported by the owners for commercial use."
"…in the legal world created by legislation the deeming of a fact or of a state of affairs is not contrary to "reality…"
"Deeming something to be the case carries with it any fact that forms part of the conclusion."
"If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it."
"33. …I do not consider it to be arguable that Jones does not demonstrate the limits of the jurisdiction. It is clearly not open to the tribunal to go behind the deeming effect of paragraph 5 Schedule 3 for the reasons explained in Jones and applied in EBT. The fact that the appeal is against an assessment to excise duty rather than an appeal against non-restoration makes no difference because the substantive issue raised by Mr Race is no different from that raised by Mr and Mrs Jones.
34. The Judge supported his contrary conclusion by referring to the period between the expiry of the one month time-limit for challenging seizure and the point at which the assessment to excise duty was issued. The Judge commented that the owner of seized goods should not be forced to seek condemnation proceedings simply to guard against the possibility of a future tax or penalty assessment: see at [31] of the Decision. But that is precisely what he must do if he wishes to assert, if he were to be assessed, that the goods were not subject to forfeiture. The effect of the deeming provisions is that the goods are legally forfeit. Notice 12A is clear that, unless the seizure is challenged, it is not possible subsequently to argue that the goods were not liable to forfeiture." (Emphasis added)
"If you want goods returned because you believe they should not have been seized in the first place, perhaps because you claim excise goods are for your 'own use', the only avenue open to you is to challenge the legality of the seizure by sending a Notice of Claim (see section 3). You cannot use the restoration process for this."
"Since the review officer should make a decision on the basis that duty was not paid on any of the seized goods, it is not relevant to the decision to inquire whether there is evidence to suggest that duty was paid on some or all of the goods. It is therefore not necessary or appropriate to disclose to EBT documents which might help EBT to argue that duty was paid on some or all of the goods. Such documents will be irrelevant to the further review. It is similarly irrelevant to inquire whether HMRC, at an earlier point in time, did sufficient to investigate whether duty had been paid or to inquire what would have emerged if HMRC had made inquiries, or further inquiries. What now matters is the position which has been established that duty was not paid on any of the seized goods."
Lord Justice Ryder, Senior President of Tribunals:
Sir Terence Etherton, Chancellor of the High Court: