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You are here: BAILII >> Databases >> United Kingdom VAT & Duties Tribunals Decisions >> United Kingdom VAT & Duties Tribunals (Excise) Decisions >> Watkins v Customs and Excise [2004] UKVAT(Excise) E00602 (14 January 2004) URL: https://www.bailii.org/uk/cases/UKVAT/Excise/2004/E00602.html Cite as: [2004] UKVAT(Excise) E602, [2004] UKVAT(Excise) E00602 |
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Watkins v Customs and Excise [2004] UKVAT(Excise) E00602 (14 January 2004)
E00602
RESTORATION – Goods and vehicle seized – Vehicle offered for restoration on payment of duty on seized goods – Amount of goods in excess of new guidelines – Appellant's case that review decision based on surmise, not evidence – Whether review decision reasonable – Appeal allowed – Further review directed
LONDON TRIBUNAL CENTRE
NIGEL JAMES WATKINS Appellant
- and -
THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents
Tribunal: ANGUS NICOL (Chairman)
GEORGE MILES
Sitting in public in Cardiff on 26 September 2003
The Appellant in person
Christopher Mellor, instructed by the Solicitor for the Customs and Excise, for the Respondents
© CROWN COPYRIGHT 2003
DECISION
The evidence
"Looking at the case in the round, I find the information supplied by all 3 of you to be highly implausible. I fail to comprehend why 3 men with different financial backgrounds, some of whom cross the Channel on a frequent basis should all travel to Belgium in order to all purchase exactly the same large quantity and brand of hand rolling tobacco, unless they purchased the tobacco with the intention of supplying it to others for profit."
Mr McEntee mentioned the changes in policy in October 2002 which allowed the restoration of vehicles on condition of payment of an amount equal to the duty on the goods imported when the amount in excess of the guidelines was moderate and the importer had not previously been involved with Customs. His decision was that the vehicle should be offered for restoration on payment of £1,795.98, which was the duty on 18 kg of tobacco and 400 cigarettes.
The law
"that, if an individual acquires (or having acquired for his own use subsequently decides to hold) products for a purpose other than his own use, such products are to be regarded as held for commercial purposes."
"12. Excise duty point
. . .
(1A) In the case of tobacco products acquired by a person in another Member State for his own use and transported by him to the United Kingdom, the excise duty point is the time when those products are held or used for a commercial purpose by any person.
(1B) For the purposes of paragraph (1A) above—
(a) . . .
(b) 'own use' includes use as a personal gift;
(c) if the tobacco products in question are—
(i) transferred to another person for money or money's worth (including an reimbursement of expenses incurred in connection with obtaining them), or
(ii) the person holding them intends to make such a transfer,
those products are to be regarded as being held for a commercial purpose.
(d) . . .
(e) without prejudice to subparagraphs (c) and (d) above, in determining whether tobacco products are held or used for a commercial purpose by any person regard shall be taken of—
(i) that person's reasons for having possession or control of those products,
(ii) whether or not that person is a revenue trader (...),
(iii) that person's conduct, including his intended use of those products or any refusal to disclose his intended use of those products,
(iv) the location of those products,
(v) the mode of transport used to convey those products,
(vi) any document or other information whatsoever relating to those products,
(vii) the nature of those products including the nature and condition of any package or container,
(viii) the quantity of those products, and in particular, whether the quantity exceeds any of the following quantities—
3,200 cigarettes
4,000 cigarillos ...
200 cigars
3 kilogrammes of any other tobacco products
. . .
(ix) whether that person personally financed the purchase of those products,
(x) any other circumstance that appears to be relevant."
"In relation to any decision as to an ancillary matter, or any decision on the review of such a decision, the power of an appeal tribunal on an appeal under this section shall be confined to a power, where the tribunal are satisfied that the Commissioners or other persons making that decision could not reasonably have arrived at it, to do one or more of the following, that is to say—
(a) to direct that the decision, so far as it remains in force, is to cease to have effect from such time as the tribunal may direct
(b) to require the Commissioners to conduct, in accordance with the directions of the tribunal, a further review of the original decision, and
(c) . . ."
The restoration of goods or vehicles falls within the definition of "ancillary matter" as defined in Schedule 5 to that Act.
"A person entrusted with a discretion must, so to speak, direct himself properly in law. He must call his own attention to matters which he is bound to consider. He must exclude from consideration matters which are irrelevant to what he has to consider. If he does not obey those rules, he may be said, and often is said, to be acting unreasonably."
That passage was cited in Customs and Excise Commissioners v J H Corbett (Numismatists) Ltd [1981] AC 22 by Lord Lane, who then said,
"[The Tribunal] could only properly [review the discretion] if it were shown that the Commissioners had acted in a way in which no reasonable panel of Commissioners could have acted; if they had taken into account some irrelevant matter or had disregarded something to which they should have given weight."
The Appellant's contentions
The Commissioners' contentions
Conclusions
"The Commissioners' policy involves the deprivation of people's possessions. Under Article 1 of the First Protocol to the Convention such deprivation will only be justified if it is in the public interest. More specifically, the deprivation can be justified if it is 'to secure the payment of taxes or other contributions or penalties'. 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 Lönnroth v Sweden (1982)5 EHRR 35, 50-51, para 61, and Air Canada v United Kingdom (1995) 20 EHRR 150.... I would accept Mr Baker's submission that one must consider the individual case to ensure that the penalty imposed is fair. However strong the public interest, it cannot justify subjecting an individual to an interference with his fundamental rights which is unconscionable."
And later, in paragraph 55, Lord Phillips said,
"Broadly speaking, the aim of the Commissioners' policy is the prevention of the evasion of excise duty that is imposed in accordance with European Community law. That is a legitimate aim under Article 1 of the First Protocol to the Convention. The issue is whether the policy is liable to result in the imposition of a penalty in the individual case that is disproportionate having regard to the legitimate aim."
The Master of the Rolls then went on to consider the Commissioners' policy in the light of the scale of the evil against which it is directed, in relation to the loss to the revenue resulting from improper, or commercial, importation of excise goods, and that travellers are warned of the consequences of importing excise goods otherwise than for their own use and of smuggling. He also distinguished, in paragraphs 63 and 64, between the commercial smuggler in the sense of importing to sell at a commercial profit, and the import of goods for the family and friends of the importer where there is no attempt to make a profit. In paragraph 73, Judge LJ said,
"In my judgment, the question whether the power to seize the vehicle of a non-profit-making smuggler should be exercised is fact-dependent, requiring a realistic assessment of all the circumstances of the individual case, including the alternative sanctions available to the Commissioners, rather than the virtually automatic imposition of a burdensome and, at times, oppressive prescribed penalty."
ANGUS NICOL
CHAIRMAN
RELEASED: 14 January 2004
LON/02/8179