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United Kingdom VAT & Duties Tribunals (Excise) Decisions

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Cite as: [2003] UKVAT(Excise) E00453

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Dineen v Customs & Excise [2003] UKVAT(Excise) E00453 (31 July 2003)

    EXCISE DUTY respondents refusal to restore excise goods to female appellant and car used by female appellant and friend to transport excise goods to male appellant failure by respondents to prove that excise goods held or to be used for commercial purpose finding of innocence on part of male appellant appeal allowed.



    - and -


    Tribunal: Mr J D Demack (Chairman)

    Mr K C Manterfield

    Mr R S Suri

    Sitting in public in London on 24 July 2002 and 30 May 2003

    The appellants in person

    Mr C Mellor of the Solicitor's office of HM Customs and Excise for the Respondents



  1. These are the appeals of Mrs Maureen Dineen and Mr Ian Dineen, Mrs Dineen being Mr Dineen's mother. She appeals against the Commissioners' decision on review not to restore excise goods seized from her. He appeals against a decision not to restore his motor car which was being used by his mother to transport her goods.
  2. The facts we find are set out in paragraphs 3 to 15 of our decision.
  3. On 11 January 2001 Mrs Dineen and her neighbour Mr Raymond Martin set off from their homes in Plaistow, Essex, to go to France and Belgium to buy goods, including excise goods. They travelled in Mr Martin's car. The car broke down on their outward journey. Mrs Dineen then telephoned her partner, and asked him to bring her son's car in order that they might continue their journey.
  4. (Mrs Dineen does have her own car, but at the time it was off the road undergoing repair. Her partner also has a car. She has the use of her son's car, but ordinarily seeks prior permission for its use, which permission is, unless Mr Dineen requires the car for his own use, invariably granted).
  5. Without obtaining permission or even notifying Mr Dineen of what he was doing, Mrs Dineen's partner took Mr Dineen's car to the broken down car. Mrs Dineen and Mr Martin then continued their journey in Mr Dineen's car.
  6. In France and Belgium the two bought some household goods, including dog food, rice, pasta and chocolates, and excise goods including 11,800 cigarettes. On their return journey they were stopped by Customs' officers in the UK Control Zone at Coquelles, France.
  7. They admitted to having a large quantity of cigarettes and some hand rolling tobacco. (Mrs Dineen challenged the officer's note that they had admitted having only 20 sleeves of cigarettes. We need not deal with that challenge as, in our judgment, it has no bearing on the outcome of events). Both admitted having been stopped by Customs previously and having been given Public Notice 1. Each also said that he or she travelled to Belgium about once a month.
  8. Officer Ling examined the contents of the car boot. He found 59 cartons of cigarettes, and 1 kilo of hand rolling tobacco.
  9. Mr Ling's notes of interview of Mrs Dineen show her as having identified as hers 10 cartons of Superking black cigarettes, 10 cartons of Superking blues, 5 cartons of Benson & Hedges, 2 cartons of Silk Cut, 3 of Superking greens and 10 pouches of tobacco. She said they had cost 574.20, and were financed with a bingo win of 500. No one had assisted her to buy the goods which were for her own use, and she smoked 40 to 50 cigarettes a day. Some of the cigarettes were for her family, but they would not be paying her for them. She did not intend to sell them. Although she had previously been stopped by Customs, she had never had her goods seized. She normally travelled abroad once a month, but before Christmas it had been more frequent.
  10. The notes of Mr Martin's interview show him as having said he had paid 556 for 15 Bensons, 10 Black, 4 Embassy and 10 golden Virginia. He also claimed his goods to be for own use, saying that he had financed his own purchases and did not expect to receive goods or favours for them.
  11. As the interviewing officer was not satisfied that the excise goods of the travellers were for own use, he seized them. In all they consisted of:
  12. "11,800 cigarettes

    1 kilo of tobacco
    156 litres of beer
    6 litres of sparkling wine
  13. 5 litres of spirits
  14. 100 cigarillos"

    He noted the following reasons for seizure:

    "1) goods in excess of minimum guide levels
    2) knowledge of law
    3) regular travelling
    4) previous Notice 1 issued
    5) inconsistent stories."
  15. Mrs Dineen asked for her goods to be restored to her. By letter of 8 February 2001 Customs informed her that they would not be restored because:
  16. 1) she had imported excise goods in excess of the MILS (as contained in the Excise Goods (Personal Reliefs) Order 1992)
    2) she had been warned previously by Customs that if she imported excise goods in excess of the MILS, the goods and vehicle would be liable to seizure
    3) she was a regular traveller, and on each occasion she had been stopped by Customs had been found to be carrying goods in excess of the MILS
    4) there were no exceptional circumstances that justified a departure from Customs' policy of refusing to restore seized goods
  17. Correspondence followed in which Mrs Dineen claimed that her circumstances had not been fully appreciated; the car seized was not hers; the alcohol she had bought was within the MILS; the cigarettes were intended as gifts; her high personal consumption of cigarettes was confirmed by a doctor's note; the source of the money used for the purchases was confirmed by a letter from a bingo hall giving details of a win of 500 in November 2000. (We observe that Mrs Dineen produced both doctor's note and letter).
  18. In response to a request for review of that decision, Customs informed Mrs Dineen that her goods would not be restored. The letter on review, dated 24 April 2001, from Mrs Florence simply stated that:
  19. "As part of the review procedure I have considered the evidence put before me, your subsequent correspondence, the legislation and current Departmental policy [annexed]. Accordingly, I can advise you that the decision which you are contesting has been confirmed. The excise goods will not be restored to you."

  20. A letter in identical terms except for the final sentence was sent to Mr Dineen on 24 April 2001. In his case the final sentence read: "The vehicle will not be restored to you." (We should explain that Mr Dineen did not ask for his car to be restored to him but, as Mrs Dineen has asked for its restoration in her letter requesting restoration of her excise goods, Customs treated her request as having been made on behalf of the two of them).
  21. At the time the two letters were sent out, the Excise Goods (Personal Reliefs) Order 1992 was in force. We note that, following the non-appealed part of the Divisional Court decision in R (Hoverspeed Ltd and others) v CEC [2002] WLR 1219, the Commissioners accepted that the 1992 Order was incompatible with EC Directive 92/12 and art 26 of the EC Treaty in so far as articles 3 and 5 created a presumption that excise goods held in excess of the minimum indicative levels (MILS) were held for a commercial purpose and were therefore chargeable to additional excise duty in the UK, and placed the burden of proof that such goods were not held for a commercial purpose on the individual in question. As the seizing officer (without realising it at the time) violated Mrs Dineen's community law rights under the Directive, the seizure of both the excise goods and car, and the subsequent proceedings, would appear to be flawed.
  22. And since Mrs Florence gave no reasons for deciding that neither goods nor car should be restored, a further flaw in the proceedings would appear to have emerged. We so say on the basis of the following passage from the judgment of Blackburne J in CEC v Alzitrans SL [2003] EWHC 75 (Ch) at para 53:
  23. "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 Article 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. This does not require the giving of lengthy reasons particularly if, as will almost inevitably be the case, the owner of the vehicle will be anxious to recover his vehicle with the result that there is likely to be a degree of urgency about the matter. Reasons should have been given for the Commissioners' decision in this case but, in circumstances that I have explained, this did not happen until the statement of case was lodged in opposition to Alzitrans's appeal to the tribunal. That is scarcely satisfactory."

  24. Mr Dineen and Mrs Dineen appeal against their respective decisions on review.
  25. Mr Mellor, counsel for the Commissioners, observed that the tribunal's jurisdiction was confined to a consideration of the reasonableness of the review officer's decision. He accepted that in making its determination the tribunal had power to make findings of primary fact, but contended that it could not substitute its own decision for that of the review officer. He submitted that the tribunal could only interfere with the review decisions if it found that the Commissioners could not reasonably have arrived at them, "reasonableness" in that context having its Wednesbury meaning, i.e. if the appellants could show that they had acted in a way in which no reasonable panel of Commissioners could have acted: that they had taken into account some irrelevant matter, had disregarded something to which they should have given weight, or had made some other error of law. He further submitted that the decisions in question must be judged in the light of the information available to the Commissioners at the time the decisions were made, so that facts and matters raised by the appellants after the decisions were made could not be taken into account in the tribunal's consideration of whether they had been reasonably arrived at.
  26. He submitted that, in reaching her decisions, Mrs Florence took into account the Commissioners' policies in relation to the restoration of excise goods and privately owned vehicles. He added that the Commissioners were entitled to adopt policies through which their discretionary power to restore seized goods and vehicles under s. 152 of the Customs and Excise Management Act 1979 was to be exercised, and the review officer was entitled to take them into account. Mr Mellor observed that the policies pursued the legitimate aim of deterring the importation of goods for commercial purposes. He maintained that the policies as applied achieved a fair balance between the deterrence of smuggling and the protection of the revenue on the one hand, and the individual's right to enjoyment of property under art 1 of Protocol 1 to the European Convention on Human Rights, and so met the test set out in Sporrong and Lonroth v Sweden (1982) 5 EHRR 35. He observed that the first issue in relation to the policies was whether the Commissioners had fettered their discretion by refusing to listen to an application that the relevant policy should not be applied in any given case, adding that in the instant cases the Commissioners had applied the policies after due consideration of all the facts and matters surrounding the seizure of the excise goods and vehicle, and the representations made by the appellants. He submitted that it could not therefore be said that they had fettered their discretion by failing to consider whether they should depart from their usual policies.
  27. Mr Mellor noted that the second issue in relation to the policies was whether their application, in the circumstances of those cases, complied with the requirements of proportionality. In relation to Mrs Dineen's excise goods, he accepted that the question arose whether the Commissioners' decision should be condemned in the light of the Court of Appeal decision in Lindsay v CEC [2002] 1 WLR 1766. (In that case the Court held that unless certain specific matters were considered, it was unreasonable to refuse to restore a vehicle when goods were imported to be passed on at cost price to family and friends). Since in Mrs Dineen's case no vehicle was involved, Mr Mellor submitted that proportionality did not demand that the matters set out by Lord Phillips in Lindsay be considered: given that the hardship caused in confiscating goods was likely to be less than in seizing a vehicle, different considerations applied. Mr Mellor contended that the approach adopted by Mrs Florence had been correct, and that she had taken all relevant considerations into account.
  28. Mr Mellor submitted that Mr Dineen's appeal was also to be distinguished from that of Lindsay in that the Commissioners had reasonably concluded that the excise goods had been intended to be used for a commercial purpose (sold at a profit). As Lord Phillips said at para 63 of his judgment in Lindsay: "Those who deliberately use their cars to further fraudulent commercial ventures in the knowledge that if they are caught their cars will be rendered liable to forfeiture cannot reasonably be heard to complain if they lose those vehicles." He submitted that even if we were to accept that Mr Dineen did not know the purpose for which his car was to be used, it was the Commissioners' policy that privately owned vehicles used for the improper importation of goods would be seized and not restored, except in exceptional circumstances: where the owner of the vehicle was not also the driver the policy still applied. He observed that the Commissioners took the view that, in lending a car, the owner took a calculated risk, and that risk included the vehicle being misused: where exceptional circumstances existed, the vehicle would be restored. In the instant case, if we were to allow Mr Dineen's appeal it would be tantamount to restoring the car to Mrs Dineen. He invited us to dismiss Mr Dineen's appeal.
  29. Mr Mellor addressed us on the questions of seizure and forfeiture. He observed, and we accept, that even if the checks carried out by Customs were invalid, the seizure of the excise goods and vehicle was not invalidated by that, see R (Hoverspeed Ltd v Others) v CEC [2002] EWCA 1804 .
  30. In the particular circumstances of Mr Dineen's case, we are unable to accept that he lent his car to his mother. It will be recalled that he was never consulted before his mother's partner took it, and was certainly unaware that it was to be used to go to the continent where she and her travelling companion were to buy excise goods. That his mother was allowed almost free use of the car, we accept. But that must be the case in many family situations. It does not follow that the sins of the father, or in this case the mother, be visited on the children. (And it would appear from the evidence that Mr Dineen was not aware that his mother had visited the continent in the car on one earlier occasion). We allow the appeal against non-restoration of the car as being an unreasonable decision by the Commissioners since they wholly failed to acknowledge the innocence of Mr Dineen in events. And as for Mr Mellor's point that if we were to allow his appeal, it would be tantamount to restoring the car to Mrs Dineen, we merely observe that it is he we find to be blameless, and it is his car with which we are concerned.
  31. In her closing statements, Mrs Dineen reminded us that she has responsible job (she is a civilian station officer with the police), and had the money to pay for her excise goods. She maintained that she had no need to smuggle excise goods for resale, and that her imports should be viewed against a background of her being a heavy smoker 40/50 per day. Pertinently, she pointed out that severe weather might prevent her from travelling to the continent, so that she claimed it was not unreasonable for her to buy additional stocks in the period in question.
  32. At the time Mrs Dineen and Mr Martin were stopped EC Directive 92/12, which fundamentally liberalised the rules as to freedom of individuals to import excise goods into the UK, was implemented by the Excise Duties (Personal Reliefs) Order 1992 ("the 1992 Order"). That order required a community traveller to establish that he or she was not importing excise goods for a commercial purpose. In the Hoverspeed case, at Divisional Court level [2002] 3 WLR 1219, it was held that that was incompatible with the terms of the 1992 Directive, and that the onus of proving that goods were held for a commercial purpose was on the Commissioners. The 1992 Order was subsequently revoked, and amending legislation put in place.
  33. Consequently, in Mrs Dineen's case, it was not for her to show that the excise goods she was importing were for her own use and were not held for a commercial purpose: that burden fell upon the Commissioners. But in Gascoyne v CEC [2003] EWHC 257 (Ch), Neuberger J dealt with the burden of proof in this way (para 83): "It is clear from paragraph 170 of the judgment in Hoverspeed that the PRO ("the 1992 Order") wrongly imposes the burden of proof on the alleged smuggler. However, in my judgment, unless it can be shown that the burden of proof so far as establishing whether the goods were for the personal use of Mr Gascoyne and/or Mrs Gifford [the appellant in that case], played a part in the determination of the issue by the Customs Officers in seizing the goods, or in the decision of the Commissioners to refuse restoration, or in the review carried out by Officer Tooke, the point can take matters no further forward so far as Mr Gascoyne is concerned. Although the burden of proof can be crucial in some cases, there will be many cases where, in practice, it plays no real part at all. Indeed, the point is well illustrated in connection with the PRO itself by what the court said at paragraph 173 in Hoverspeed:
  34. "[A]s Lord Woolf CJ pointed out in Goldsmith [ v CEC] 1 WLR 1673, no one is in a better position to know whether the goods are to be used for private or commercial purposes than the person in possession of them and, if Customs Officers do not believe him, there is in practical terms not much difference between his failing to satisfy them that they are not being held for his own use (the PRO test) and them being satisfied that they are being held for "commercial" [purposes] (the test under the Directive). In a borderline case, however, the location of the burden of proof may well make a difference.""

  35. It emerged, in cross-examination and in remainder from Mrs Dineen's admissions, and we find, that Mrs Dineen travelled to the continent on 8 September 2000, 2 November 2000, 18 November 2000, on an unknown date just before Christmas 2000, and on 4 January 2001. On 8 September she was stopped by Customs and she and two fellow travellers were found to have 12400 cigarettes, 6200 of which were claimed by her. She was allowed to retain the goods.
  36. No evidence was adduced to show what excise goods Mrs Dineen imported on 2 November 2000. She was again stopped by Customs on 18 November 2000 when they found her and her fellow traveller(s) to have 11800 cigarettes. In fairness to Mrs Dineen we should say that Customs accepted that not all that number were hers. Again she was allowed to retain the goods. Nor was evidence adduced of any importation on the pre-Christmas trip. On 4 January 2001 Mrs Dineen admitted importing 3000 cigarettes.
  37. Mrs Dineen admits to smoking 40-50 cigarettes per day. If, for the purposes of argument, we assume that her partner's smoking habit is similar, that amounts to a consumption by the household of up to 100 cigarettes a day, 700 a week, or 2800 per month. Smokers tend to have a favourite brand. Mrs Dineen's favourite appears to be Superking Blacks, and she said that her partner smokes "Bensons". It will be recalled that on 11 January 2001 Mrs Dineen had five different brands of cigarettes the three we have not dealt with she claimed for her son, daughter-in-law, and her daughter-in-law's mother. Her various claims were not challenged in cross-examination, nor was her contention that she intended to make gifts of the cigarettes not intended for herself. Against the background of an absence of challenge, we accept her claims.
  38. Mrs Dineen is a frequent traveller to the continent. It would appear that she regularly shops there, finding certain items much cheaper than in Britain. She is perfectly at liberty to shop where she wishes and to buy whatever she wants, including excise goods for own use.
  39. It is not for us to comment on her consumption of cigarettes: it is for Customs to establish, on the basis of evidence, that cigarettes she was importing were held or to be used for a commercial purpose. They have failed to adduce evidence to satisfy us that they were so held or to be used. We hold their decision not to restore the goods to her to be unreasonable. We allow her appeal.
  40. We direct the Commissioners to carry out a further review of their decisions not to restore the goods and car, such review to be carried out by an officer other than Mrs Florence, and to take account of our findings of fact. The re-review shall be carried out by 31 August 2003, and a copy shall be served on the London Tribunal Centre.
  41. In relation to Mrs Dineen's appeal, there is one final point we must make. Our decision is not intended to indicate to her that she may continue regularly and at short intervals to import cigarettes in quantities substantially in excess of the MILS: it is based solely on the Commissioners' failure to adduce evidence in relation to the importation we are dealing with proving that it was not made for own use.
  42. David Demack
    Release Date:


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