EXCISE DUTY — non-restoration of car of importer of 12 kilos of tobacco – community traveller providing evidence of intention to give 6 kilos to brother on 21st Birthday and of overtime earnings covering cost – appeal allowed
MANCHESTER TRIBUNAL CENTRE
IAN RICHARD TURNER Appellant
- and -
THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents
Tribunal: Mr J D Demack (Chairman)
Mrs G Pratt
Sitting in public in Manchester on the 23 May 2003
The Appellant in person
Mrs L Walmisley of counsel instructed by the solicitor for HM Customs and Excise for the Respondents
© CROWN COPYRIGHT 2003
DECISION
- This is an appeal by Mr Ian Richard Turner against a decision of the Commissioners of Customs and Excise on review by letter of 2 November 2000 refusing to restore to him a Renault Espace motor vehicle reg no J52 ONF ("the Renault") seized on 14 August 2000. (Customs also seized certain excise goods from him, but he did not appeal against their seizure. We do not know why he took that course, but are not prepared to proceed on the basis that he admitted importing them for a commercial purpose).
- In his Notice of Appeal, Mr Turner claimed that excise goods in the Renault were for his own use, in part being intended as a gift to his brother on his 21st Birthday.
- The reviewing officer, Mr P A Devlin, took the facts from the notes of the seizing officer, Stuart, and recorded them in the following way:
"You were stopped by an Officer at Dover on your return to the UK on 14 August 2000. You were driving a Renault Espace car registration number J52 ONF. In answer to questions you said that you had been to Calais to get beer and wine. You were asked if that was just for beer and wine and you said "yes". You were asked I you had any cigarettes or tobacco and said "yes", pointing at a black plastic bag by the passenger's seat and showing the Officer some cigars. You confirmed that you knew certain goods are prohibited and restricted and that you had no such goods. You were asked to open the vehicle and when the back door was opened the Officer saw black plastic bags under your beer. He asked what they contained and you said "just some cigarettes". You were asked how many and replied "three boxes of cigarettes and a box of tobacco". You said those goods were for yourself and your wife and that you only go to the continent once a year. You were asked where you had bought the tobacco goods and replied "Eastenders"; when asked where that was located, you said "Belgium". You were asked to confirm that you had been to Belgium as well and you did so. The Officer then examined the other side of the vehicle and looked into the bag with the tobacco and saw two boxes of tobacco. The Officer said that you had only mentioned one box and you said "No, I said some tobacco; but I only go once a year". You confirmed that you had not been to the continent in the past year. You clarified this by saying that your car had been there twice but you had only travelled once to buy cigarettes in the last year.
At this point you were formally required by the Officer to satisfy him that the goods were for own use and not for some other (commercial) purpose. You confirmed that you understood this requirement. In answer to further questions you gave the following details:
The hand rolling tobacco was for personal use. You smoke it. Your consumption varies between two and three pouches of tobacco per week. You expected the tobacco to last just over 12 months. You said the cigarettes were for your wife and that she smokes between 40 and 60 per day. The beer was for your joint use. The reason you had so much was said to be because of the distance involved which meant that you travelled once a year to buy a supply for that period. On the last occasion on which you travelled, you only bought beer. You had bought 25 cases of cans of it. On this occasion you had spent about £1,800. You had made your purchase from saved overtime payments.
You were asked if you had any rolling tobacco with you and you said you did not as you do not smoke in the car. You had not been smoking on the vessel or in France. You were asked how many cigarettes you obtained from a pouch [of tobacco] and replied some 200 to 250. The officer said "roll ups?" and you confirmed "yes". The Officer again clarified "that's from one pouch?" and you again confirmed "yes". You also confirmed that you use about 2 pouches per week dependent upon how many shifts you work. At the conclusion of the interview you read the Officer's written account of it and signed the notebook, agreeing that the record was accurate.
The officer then seized the excise goods which totalled 15,200 cigarettes, 12 kilos of tobacco, 150 cigarillos, 3 boxes of wine, a quantity of beer and the car."
- As that summary, in our judgment, presents a somewhat biased view of events, we find it helpful to list some of the questions and answers recorded in the officer's notes;
"Q: Hello Customs. Where have you been?
A: Over to Calais to get some beer and wine
. . .
Q: Where did you go?
A: Eastenders.
Q: Just for beer and wine?
A: Yes.
Q: What about cigarettes or tobacco?
A: Yes (indicating to a black plastic bag by the passenger seat and showing cigars).
. . .
Q: Can you open it [the car] up?
[opened back door to show black plastic bag under beer]
Q: What is in the bags?
A: Just some cigarettes.
Q: How much?
A: Three boxes of cigarettes and [?] a box of tobacco.
Q: What for?
A: Me and my wife, to last a year. I only go once a year.
. . .
Q: Where did you get the cigarettes and tobacco?
A: Eastenders.
Q: Where?
A: In Belgium.
Q: So you have been to Belgium too?
A: Yes.
Q: I am going to look at the other side. [ I then looked in the bag with tobacco – found 2 5kg boxes] – You said one box of tobacco?
A: No I said some tobacco."
- We could go on, but it is unnecessary for us to do so. The extracts from the notes we have chosen are, in our judgment, sufficient to illustrate that the seizing officer approached his or her task with a view to justifying seizure rather than dealing with the matter against a background of Mr Turner having an EC Community right to import excise goods into the UK for his personal use which he had personally transported. We particularly note the use of the word "just". On each of the two occasions it is said to have been used, taken in its immediate context it conveys the impression of Mr Turner having misled the officer. But its use on the first occasion would logically have led to the officer's next question being something like "No cigarettes or tobacco?"; and on the second occasion the question which would naturally have followed the reply of "Just cigarettes" would have been "How many?" not "How much?". For those reasons we doubt that the word "just" was used on either occasion it is said to have been.
- There are two further points we should make on the interviewing officer's notes. The first also relates to Mr Turner's reply to the question, "How much?", referring to tobacco products. The reply recorded in the notebook contains something which has been deleted and is illegible. It may well provide the true answer to Mr Turner's later claim that he did not say he had one box of tobacco, but had "some" tobacco. For that reason, we proceed on the basis that Mr Turner did say that he had "some" tobacco. The second relates to the number of cigarettes Mr Turner obtained from a pouch of tobacco. In evidence to us, Mr Turner, who was extremely nervous, claimed to have answered the interviewing officer's questions on the basis of packets of tobacco rather than pouches. As we found him to be an honest and straightforward witness, we accept his explanation for the discrepancy, and make no further reference in our decision to that point.
- Following seizure of his goods and the Renault, Mr Turner sought legal advice, and his solicitors wrote to Customs. So too did his mother. He wrote to them explaining that half the tobacco he had was intended as a gift to his brother on his 21st Birthday. He produced to Customs a copy of his brother's Birth Certificate showing his date of birth as 17 August 1979. Mr Turner also produced his wage slips for the months of June, July, August and September 2000 giving details of overtime worked in those months of 78 hours, 84 hours, 26 hours and 44 hours respectively, at high rates of pay. (His June overtime earnings alone were almost sufficient to cover the cost of the excise goods).
- We accept the Birth Certificate as proof that Mr Turner intended 6 kilos of tobacco to be a 21st birthday present for his brother, and his wage slips that he paid for the goods with his overtime earnings.
- We now return to the review letter. Mr Devlin next referred to the "relevant legislation", including paras 3 and 5 (3A) of the Excise Duties (Personal Reliefs) Order 1992 which required a Community traveller to satisfy Customs that excise goods afforded relief under the Order were not being held or used for a commercial purpose. Following the unappealed part of the decision of the Administrative Court in Regina (Hoverspeed Ltd and others) v CEC [2002] 3 WLR 1219, the 1992 Order was incompatible with EC Directive 92/12 and art 26 of the EC Treaty in so far as arts 3 and 5 of the Order created a presumption that excise goods held in excess of the minimum indicative levels were held for a commercial purpose (and therefore chargeable to additional excise duty in the UK) and placed the burden or proof that such goods were held for a commercial purpose on the traveller. As the reviewing officer violated Mr Turner's community law rights under the Directive, the seizure and subsequent proceedings would appear to be flawed.
- Mr Devlin opened his "consideration" of the issues by saying, "It is for me to determine whether or not the contested decision is one which a reasonable body of Commissioners could not have reached". That is incorrect: by s. 15(1) of the Finance Act 1994 he was required to confirm, withdraw or vary the decision not to restore the Renault. So the proceedings would appear to have become further flawed.
- At the risk of repeating certain points we made earlier in the context of the seizure of the goods and Renault, since we are now dealing with the decision on review, we set out certain points made by Mr Devlin about own use. He noted:
"When you were stopped you mentioned that you had been to "Eastenders" to buy alcohol. There are two "Eastenders" – the second being a tobacco outlet in Adinkerke, Belgium. You made no mention of having been there until it was pointed out to you. When tobacco goods were mentioned you showed the Officer your cigarillos and when the other goods were found you claimed that they were just cigarettes. That was not correct. You then claimed you had a box of tobacco when in fact you had two. Subsequently you were asked how many cigarettes you make from a pouch of tobacco and I find the answer you gave to be absurd. The officer concluded that the tobacco was not for own use and I agree with that conclusion because I find it more likely than not, given your answers, that you do not smoke hand rolling tobacco.
You said the reason you had so much tobacco goods was because you travel once a year and buy a year's worth at a time. That is contradictory to what you say you did previously in that you stated your last trip was to buy 25 cases of beer and no tobacco goods. Between trips you therefore saw the imperative to spend the bulk of £1, 800 on tobacco products. I do not find that plausible and consistent with own use."
- The first of those paragraphs provides an excellent illustration how Mr Devlin also focused on justifying Customs' actions rather than dealing with the matter on the basis of Mr Turner having EC Community rights, to which Customs were required to give full effect. Mr Turner was asked where he had been: he replied "Eastenders". That was a true and complete answer, but was not regarded by Mr Devlin as such. Then, as we have already said in dealing with the interview, he was asked, "Just for beer and wine?" Answer: "Yes". The very next question was: "What about cigarettes and tobacco?", to which he also answered "Yes". Even ignoring the point we earlier made about the use of the word "just", we take the view that those two questions must be considered together and not separately. Following his question about cigarettes and tobacco the officer then noted "(indicating to a black plastic bag by the passenger seat and showing cigars)". A little later the officer asked what was in the bags. The reply noted is "Just some cigarettes" followed in explanation of "How much?", "Three boxes of cigarettes and [?] a box of tobacco." (We have already dealt with the use of the word just and the illegible content of the brackets). That hardly squares with Mr Devlin's observation, "When tobacco goods were mentioned you showed the officer your cigarillos and when the goods were found you claimed they were just cigarettes."
- The only other point we must make relates to Mr Turner's previous trip to the continent to buy excise goods. When the interviewing officer asked him what he had bought on that occasion, the reply noted is "just beer". He was not asked if he had bought any tobacco products. That failure, in our judgment, causes us to question whether he used the word "just" in his reply. It is yet a further instance of the convenient use of that word, and we are not satisfied that it was used.
- Mr Devlin's letter then dealt with matters raised in correspondence by Mr Turner. First he said:
"You say you told the Officer that you had been to Belgium to buy tobacco. That is essentially true, but you only did so when it was put to you. The information was not volunteered. You say you do not recall saying you had one box of tobacco. You may not recall this, but you did say it and you signed the officer's notebook, agreeing that you said it."
- We merely observe of Mr Devlin's points that Mr Turner would not have known beforehand what information the interviewing officer wanted. He was never told that he must "volunteer information"; indeed it was never suggested to him that he might do so. The record of interview clearly shows that he answered the officer's questions honestly and without hesitation, and the fact that he signed the officer's notebook does not, in our judgment, indicate that he accepted it as a verbatim record of its contents.
- Mr Devlin next said, "You say the goods were in plastic bags to prevent theft and not to conceal them from Customs. If that was so, I see no good reason why you prevaricated about what you had bought?" That "prevarication" centres on the use of the word "just" with which we dealt above. It needs no further comment.
- Mr Devlin then dealt again with the question of the number of cigarettes Mr Turner claimed to obtain from a pouch of tobacco, and having accepted that some of the goods may have been for his brother and that he could afford to pay for them, said that he had failed to make out a satisfactory case for own use. He considered the seizure of both goods and Renault appropriate and in line with the policy that seized vehicles should not be restored refused restoration of the Renault. (We accept that the Commissioners are entitled to have a policy).
- We earlier said that we had found Mr Turner to be an honest witness. Notwithstanding the large amount of tobacco he imported, we are in no doubt that he intended it to be for his own use, using that phrase to include gifts. He is an industrious family man who, in our judgment, was most unlikely to resort to selling excise goods he had bought. Apart from anything else, working the long hours he did he would not have had time to indulge in smuggling. He may use money earned as he wishes. As the law stands, following the Court of Appeal judgment in R (Hoverspeed and others) v CEC [2002] 3 WLR 1219, it is for the Commissioners to prove that excise goods imported by a Community traveller are held for a commercial purpose. In the instant case they have not come close to so proving.
- It follows that we allow the appeal
- We are aware that the Commissioners have sold the Renault, so that we are confined to declaring their decision unreasonable and to giving directions to them as to the steps to be taken to secure that repetitions of the unreasonableness do not occur when comparable circumstances arise in future. All we propose to say in that regard, and which in part repeats what we said earlier, is that Customs' officers should conduct interviews against a background of Community travellers Community rights, and not solely against that of the Customs and Excise Management Act 1979.
- What the Commissioners have effectively done in disposing of the Renault is to defeat Mr Turner's right of appeal. If their powers of forfeiture under the Customs and Excise Management Act 1979 can be exercised regardless of an appeal under s. 16 of the Finance At 1994, we find it difficult to see how that can be compatible with Art 1 of Protocol 1 to the European Convention of on Human Rights. On this occasion we do not propose to take the matter further as we anticipate that the Commissioners will offer to compensate Mr Turner in the event of their accepting that the decision not to restore the Renault was unreasonable.
David Demack
Chairman
Release Date:
MAN/00/8035
