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United Kingdom VAT & Duties Tribunals (Excise) Decisions

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Cite as: [2003] UKVAT(Excise) E00396

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Jacqueline Cross v Customs and Excise [2003] UKVAT(Excise) E00396 (27 March 2003)
    RESTORATION REFUSAL Excise goods Foot passenger Small quantity of goods bought on behalf of family Goods to be given to babysitter Commerciality not proved Goods for own use also forfeit Proportionality Failure to consider particular facts and lesser sanctions New review directed



    - and -


    Tribunal: THEODORE WALLACE (Chairman)


    Sitting in public in London on 10 March 2003

    The Appellant appeared in person

    Sarabjit Singh, counsel, instructed by the Solicitor for the Customs and Excise, for the Respondents


  1. This is an appeal against a Review Decision refusing to restore a relatively modest quantity of tobacco products and alcohol seized from the Appellant at the Dover Hoverport on 30 January 2002. It was not contended that they were for resale at a profit.
  2. The Appellant wrote in a letter that 1600 cigarettes and one bottle of whisky were for herself, 800 cigarettes were for her sister, the tobacco was for her father, a bottle cherry brandy and one of apricot brandy and red wine were for her mother, three bottles were a free gift for buying the cigarettes and 200 cigarettes were to give to a friend as a thank you for looking after her daughter for the day. The tobacco for her father was 1 kg and the wine for her mother was 12 bottles. The Appellant wrote that her previous trip to France was October 2001. She wrote that she did not know that she was breaking the law as the goods were for family only.
  3. The Appellant attended but did not give evidence.
  4. The Review Decision dated 25 June 2002 was by Brian Rayden.
  5. It stated that the Appellant was stopped with her sister and declared a total of 2,600 cigarettes, 1 kilogrammes of tobacco and a case of wine. When interviewed she had told the officer that her mother had given her money for the wine and two bottles of liqueur, her sister gave money for 800 cigarettes and 200 were to be given in payment to a friend in return for her babysitting for her. She had paid 221.25 in all. She expected her cigarettes to last 2 months. The first time she had travelled abroad was in May 2001 since then she had done so five times. Sometimes, but not always, she had received money from her sister, father and mother for goods. She had seen Customs Notice No.1 and understood the guidelines. The tobacco goods were seized because being in excess of the guidelines the officer was not satisfied they were for own use; the alcohol was seized because it was packed with the other goods.
  6. In his review Mr Rayden wrote, under "Consideration" that she had failed to declare 3 litres of spirits making them liable to forfeiture and that the other goods were packed with them. Both tobacco and cigarettes were over the guidelines. She had admitted receiving money from her sister, father and mother for the goods and intended to give 200 cigarettes to a friend in payment for babysitting. He agreed with the seizing officer in not being satisfied that the goods were for her own use. He then wrote:
  7. "You clearly knew that you were doing wrong when you decided to import goods in excess of the guidelines."

    He wrote that the Appellant had offered no reason for departing from the policy of non-restoration and he could find no reason for varying the policy in her case.

  8. No direct evidence was produced by Customs as to the interception, interview and seizure. The tribunal gave two specific directions for statements to be served by the intercepting, interviewing and seizing officers but failed to comply. No satisfactory explanation was available.
  9. The Review contained a number of assertions or assumptions for which no evidence was produced. The Review referred to an interview; however Mr Rayden's statement failed to exhibit most of the notes. He told the Tribunal that he prepared the statement but had been sick when someone else prepared the exhibits.
  10. The Appellant did not accept that she had not declared the spirits. Mr Singh did not rely on this factor. The Appellant had written that she had not known that she was breaking the law : the statement in the Review that she clearly knew that she was doing wrong conflicts with this. The reference to the guidelines was irrelevant given that the goods were not all for own use; if they had been for own use, it would have been wrong.
  11. In evidence Mr Rayden said that he was aware of a previous occasion when the Appellant and Mrs Johnston, who was with her on January 30, were stopped and Public Notice 1 was issued and explained to them. He said that this was based on a file note which again was not in evidence.
  12. He said that the policy was that excise goods seized because duty which was due was unpaid should not be restored. He told the Tribunal that he had read the decision of the Court of Appeal in Lindsay v Commissioners of Customs and Excise [2002] 1 WLR 1766 but that it concerned restoration of a car rather than goods. He said that proportionality does have some relevance to excise goods; he said that it was proportionate in principle to refuse to restore excise goods which had been smuggled. By "smuggled" he meant brought in without paying duty which was due rather than concealed.
  13. Mr Singh for Customs said that duty was payable on the goods admittedly imported by the Appellant for her father, mother and sister because they were not for the Appellant's own use within article 2(1) of the Excise (Personal Relief's) Order 1992 which had been endorsed by the Divisional Court in R (Hoverspeed Ltd) v Customs and Excise Commissioners [2002] 3 WLR 1219 at paragraphs 104-5 and confirmed by the Court of Appeal. He said that the other goods were liable to forfeiture under section 141(1)(b) of the Customs and Excise Management Act 1979 because they were found with goods liable to forfeiture. He said that, although there was no evidence as to where they were found, there was no reason to assume that they were not all found together; the Appellant had said in opening that they were in a trolley when she was stopped. He relied on Degerdon v Commissioners of Customs and Excise (2002) E349. The words "found with" should be given their ordinary meaning, see Pinner v Everett [1969] 1 WLR 1266.
  14. He submitted that Lindsay was only directed at restoration of cars. However if, as the Tribunal considered in Mitchell v Commissioners of Customs and Excise [2003] E384, proportionality is relevant where goods only are concerned, he said that the difference here is that the Appellant was well aware of the guidelines from previous crossings and there was a degree of fault. The value of the duty relative to the goods was substantial.
  15. As to the decision of the Court of Appeal in John Dee Ltd v Commissioners of Customs and Excise [1995] STC 941, he accepted that, if the Tribunal considered here that proportionality should have been considered, he could not say that the same result was inevitable if all relevant matters had been considered but only that it was likely.
  16. Conclusions
  17. It is clear that the goods which the Appellant had admitted to buying on behalf of her father, mother and sister were not for her own use and were liable to forfeiture. The evidence is not clear as to the 200 cigarettes for babysitting : if they were a gift in appreciation of the friend's help they were for own use; on the other hand if the Appellant had agreed to buy them in return for babysitting, they were not. The burden of proof as to commerciality is on Customs, see Hoverspeed in the Divisional Court at paragraph 130D : it has not been discharged.
  18. The cigarettes and whisky for the Appellant herself and the 200 for babysitting were only liable to forfeiture if "found with" the goods for her father, sister and mother which were dutiable because not for her own use. There was no proper evidence as to this, although the Appellant told us in opening that they were all in a trolley together. The word "packed" also in section 141(1) which Mr Rayden used in the Review was clearly not appropriate. The burden of proof as to this rests with the Appellant : she has not discharged it and we hold that all the goods were therefore liable to forfeiture.
  19. This brings us to restoration.
  20. The non-restoration of the Appellant's goods constitute the deprivation of her possessions within Article 1, Protocol 1 to the European Convention on Human Rights. Such deprivation is only justified if it is in the public interest or "to secure the payment of taxes." In Lindsay v Customs and Excise Commissioners [2002] 1 WLR 1766, which concerned non-restoration, Lord Phillips MR said this at paragraph 52,
  21. "The action taken must, however, strike a fair balance between the rights of the individual and the public interest. There must be a reasonable relationship of proportionality between the means employed and the aim pursued : Sporrong and Lonnroth v Sweden (1982) 5 EHRR 35, 50-51, para 61 and Air Canada v United Kingdom (1995) 20 ERR 150 I would accept Mr Baker's submission that one must consider the individual case to ensure that the penalty imposed is fair."

    Lord Phillips went on to cite this passage from Louloudakis v Greece (Case C-262/99) [2001] ECRI 5547,

    "The administrative measures or penalties must not go beyond what is strictly necessary for the objectives pursued and a penalty must not be so disproportionate to the gravity of the infringement that it becomes an obstacle to the freedoms enshrined in the Treaty."
  22. Lord Phillips said at paragraph 63 that where there is smuggling for profit this will normally outweigh any other factor such as the value of a car. He distinguished such a case from social distribution for family and friends, although even in the latter case the scale of importation or other circumstances might justify forfeiture of a car. He did not address goods as opposed to cars, however we see no reason why the principles of proportionality which are general principles do not apply equally although the relevant factors are not the same.
  23. We do not accept Mr Rayden's approach that it is proportionate in principle for Customs to refuse to restore dutiable goods on which duty has not been paid, which he called "smuggled", without any consideration of the facts of the particular case or of the alternative remedies, including payment of the duty. In this case it was not suggested in the Review or in the Statement of Case that the goods were imported for sale at a profit.
  24. It is to be noted that in the present case the Commissioners seized not only the goods which were dutiable because they were not for the Appellant's own use but for her family but also those which were for her own use including those which were to be given to her friend for babysitting. Even on Mr Rayden's approach those latter warranted separate consideration.
  25. The fact that goods are liable to forfeiture under section 141 does not of itself make non-restoration of those goods proportionate. We do not accept that the fact that something is found in proximity to dutiable goods renders its non-restoration reasonable or proportionate without more.
  26. In the present case the failure of the Commissioners to serve the statements directed by the Tribunal and the decision of the Appellant not to give evidence makes it impossible to find any facts beyond those appearing above.
  27. We conclude however that, in failing to give proper consideration to the gravity of the infringement including the quantities involved, to the facts of the particular case and to the lesser sanction of requiring excise duty to be paid on the dutiable goods as a condition of restoration, the Commissioners failed to take into account matters which they ought to have taken into account. We direct a further review by an officer not previously concerned in the case. The matter has dragged on quite long enough and we direct that the review be carried out and notified to the Appellant and to the Tribunal within four weeks of the release of the decision.
  28. The Appellant is entitled to apply for her costs of attending the hearing.
  29. On this occasion we make no order in relation to the failure by the Respondents to comply with the direction for witness statements. However we stress the importance of the Commissioners putting into place proper procedures to ensure compliance with directions.
    RELEASED: 27 March 2003


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