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You are here: BAILII >> Databases >> United Kingdom VAT & Duties Tribunals Decisions >> United Kingdom VAT & Duties Tribunals (Excise) Decisions >> Kirkali v Customs & Excise [2003] UKVAT(Excise) E00449 (22 July 2003) URL: https://www.bailii.org/uk/cases/UKVAT/Excise/2003/E00449.html Cite as: [2003] UKVAT(Excise) E00449, [2003] UKVAT(Excise) E449 |
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Excise duty – seizure of vehicle – whether owner aware of trip abroad or use for smuggling – whether conclusions drawn by review officer reasonable on facts – policy not spelt out in review letter
LONDON TRIBUNAL CENTRE
CEMALIYE KIRKALI Appellant
- and -
THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents
Tribunal: JOHN CLARK (Chairman)
PRAFUL DAVDA
Sitting in public in London on 6 June 2003
Ms Ruby Hamid of counsel, instructed by Vahib & Co, Solicitors, for the Appellant
Ms Katrine Sawyer of counsel, instructed by the Solicitor's Office of HM Customs and Excise, for the Respondents
© CROWN COPYRIGHT 2003
DECISION
The law
The facts
The correspondence
" . . . however, our client informs us that we [sic] did not inform you of the real circumstances as she did not want to get her son in to [sic] trouble. She has been told that this is technically a criminal matter.
Our client is also aware of the fact that in order to get the car back, she may have to report the incident to the Police in order to gain a Crime Reference Number. Although she has yet to do this, and by doing so will get her son into trouble with the Police, our client states that if this remains the last resort in order to get her car back, then she will do so."
They referred to the importance of the vehicle to transport the Appellant's elderly disabled mother, Mrs Dervish, to various destinations, due to Mrs Dervish's inability to use public transport, and explained that because of Mrs Dervish's particularly bad state of health she had "constant appointments" at Chase Farm Hospital. Without the Appellant's car, Mrs Dervish would find it impossible to attend the appointments.
Later in their letter they said:
"Our client is also aware that she may have to pay some kind of restoration fee in order to get her vehicle back, our client states that she is more than willing to do so and again states that, although she accepts that you had a right to seize her car, it is clear that the offence committed was not her fault and she feels that she should not be punished for the mistake of her son."
"With effect from 14 July 2000 the Commissioners [sic] normal policy regarding privately owned vehicles used for the improper importation of excise goods is that they will not be restored. However, as from the 18th April 2002, vehicles will be considered for restoration where the traveller can demonstrate that the goods were to be supplied at purchase price and not for profit. These policies applied at the time of the seizure of the vehicle. However each case is considered to determine whether the affected party has substantiated that restoration should exceptionally be allowed."
He explained that he was taking a fresh look at the decision that the Appellant was contesting. He reviewed the circumstances and concluded that the goods were properly seized, and that the vehicle being used to transport them was equally liable to forfeiture by virtue of section 141 Customs and Excise Management Act 1979 ("CEMA"). He was not aware of any appeal to the Magistrates Court challenging the seizure of the goods and vehicle, and therefore they were condemned as forfeit to the Crown by the passage of time. This left the question of restoration. The policy stated that the vehicle should not be restored. He examined whether a case had been made out for disapplying that policy. He referred to the Appellant's reasons for giving the deciding officer an entirely fictitious account of how Volkan and Mr Kirkali came to be in possession of the vehicle. He had no reason to doubt that the Appellant would not want to get her son into trouble with the authorities. However, with a change of account the Appellant's credibility was thrown into doubt. He therefore explored the other aspects of the Appellant's accounts to check their veracity. As far as he was aware the Appellant had not reported the vehicle stolen, and therefore the review had to proceed on that basis.
Additional evidence
Use of the car
Contact with Mr Kirkali
The hardship issue
The review
Arguments for the Appellant
"Once it is accepted that the Appellant is innocent in that he did not know that the car would be used for bringing alcohol into the country, the amount of alcohol that was brought in and any other circumstances relating to the driver must be irrelevant. These circumstances should not have been taken into account in deciding whether to restore the car to the Appellant."
She argued that the relevant matters were the Appellant's ownership of the vehicle, her innocence, and the hardship she had suffered as a result of the seizure. The dependency of the Appellant's mother was particularly relevant. Ms Hamid submitted that Mr Harris had not taken these matters into account, or that he had given them insufficient weight.
Arguments for the Commissioners
Findings on the evidence
Conclusions
"I add one further note. It is a matter I have touched on earlier. Although the 1994 Act does not require the Commissioners to give reasons, it is axiomatic, if the complainant is to have any ground for challenging a review in other than the plainest case, that he be told the reasons for the review decision. In Anthony Hendy v Commissioners of Customs and Excise (a decision of the VAT and Duties Tribunal of 11 January 2002), the view was expressed that a determination on a review without reasons was not a proper compliance with section 15 of the 1994 Act and that, having regard to Articles [sic] 6(1) and Article 1 of the Protocol 1 to the Convention, it must be implicit that reasons for the decision under review are adequately stated. I agree."
We are aware that that case concerned the complete absence (for mistaken procedural reasons) of any decision. In the Appellant's case the review letter did contain the decision, but omitted to mention the policy on the basis of which the review had been carried out. We feel that this omission did put the Appellant at a disadvantage. The policy approach referred to in the review letter was more consistent with the treatment of owners directly implicated in smuggling. We accept that the letter did go on (relatively briefly) to consider the Appellant's position as third party owner, but there was no explanation of how that position affected the decision on review.
"Without that, it seems to me that the refusal to restore the cars of absent owners, who are truly ignorant of the borrower's activities, is a pure penalty and is not justified by art 1 of the First Protocol.
[73] I should make it plain that I consider that the word "ignorant" should be interpreted with some caution. The burden of proof is on the appellant – that is, the owner of the car: see CEMA s 154(2) and Finance Act 1994, s 16(6). It cannot be unreasonable for the Commissioners to require him to show, to their reasonable satisfaction, that he was ignorant of the borrower's intention. The natural presumption must be that the borrower of a car has possession of it with the informed consent of the owner and it is for the owner to displace that presumption; on this, the comments of Lord Woolf in Goldsmith v Commissioners of Customs and Excise [2001] WLR 1673, especially at pages 1679-1680, are very much in point.
[The Tribunal cited Lord Woolf's judgment, and continued at [75]:]
It would not be sufficient, in my view, to say that the vehicle had been lent for a cross-Channel trip but on the understanding that only modest quantities of excise goods, strictly for personal use, were to be bought. In such a case I think that the Commissioners are right in saying that the owner takes the risk that his generosity will be abused, and if it is his recourse is against the borrower. It seems to me that, in order to succeed, the owner would have to show that he was unaware that the vehicle was to be used for a cross-Channel trip at all, and that there was no reason to suppose that it might be used for such a purpose. Thus it would not, I think, be sufficient to say that the car had been lent for one purpose but used for another; the owner would have to go somewhat further and show that it was not reasonably foreseeable that the car would be used for smuggling. Closing his eyes to the obvious would not assist the owner. Geographical proximity to the Channel ports might be a factor to be considered. Evidence of previous trips could well be a difficult hurdle to overcome."
(1) That the review decision, so far as it remains in force, is to cease to have effect as from the date of release of this decision;
(2) That within 42 days of the release of this decision, the Commissioners carry out a further review of the decision not to restore the vehicle;
(3) That the further review shall be carried out by an officer who has had no previous connection with this matter;
(4) That the review shall take into account the findings on the evidence set out in this decision;
(5) That a copy of the Commissioners' letter setting out such review shall be served on the Tribunal within 2 working days of the completion of that further review;
(6) That in the event of the further review being adverse to the Appellant, that will be a decision from which a further appeal to the Tribunal will lie.
JOHN CLARK
CHAIRMAN
RELEASED:
LON/2002/8276