E00857
EXCISE DUTY — travellers bringing excise goods into United Kingdom for
distribution at cost to friends and family — goods and vehicle seized —
vehicle offered for restoration for its value, being less than the duty evaded
— whether decision reasonable — yes — appeal dismissed.
MANCHESTER TRIBUNAL CENTRE
MICHAEL LAWSON Appellant
- and -
THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents
Tribunal: Colin Bishopp (Chairman)
Carole Roberts
Sitting in public in Manchester on 18 January 2005
The Appellant in person
Samantha Holland, counsel, instructed by the Solicitors office of HM
Customs and Excise for the Respondents
© CROWN COPYRIGHT 2005
DECISION
- On 14 March 2004 the Appellant Michael Lawson
arrived at the United Kingdom control zone at the French entrance to the
channel tunnel in his Renault Laguna car. He was accompanied by his daughter
Emma. They were intercepted (we do not know why) by Customs officers who found
that the car contained 29.5 kilograms of hand rolling tobacco, 3,000
cigarettes, 231 litres of wine and small quantities of spirits and beer. The
officers came to the conclusion that the goods were not being brought into the
United Kingdom entirely for Mr Lawson's and his daughter's personal use and
they seized all the goods together with the car. They have refused to restore
any of the goods but they offered to restore the car to Mr Lawson on payment
of the sum of £4,125. Mr Lawson has paid that sum, in order to recover his
vehicle, but he challenges the decision, which was upheld on a review
conducted by Gareth Morgan.
- We heard evidence from Mr Morgan and from Andrea
Smith, the officer who intercepted Mr Lawson and his daughter. Mr Lawson did
not give evidence, but he attended to put his case to us and we naturally take
into account what he said.
- Mrs Smith told us that a number of factors had
influenced her in reaching her decision that the goods should be seized. They
included the fact that the excise goods contained in the car were declared
only in stages, as Mrs Smith found them during the course of her search; that
there were some minor discrepancies between what Mr Lawson and his daughter
said; and, most importantly, because Mr Lawson told her that some of the goods
were intended not for his own consumption but were to be supplied to others
who had either given him money in advance, or who would give him money in
exchange for the goods on his return. Mr Lawson made the point, both at
Coquelles and before us, that he would not make any profit from his trip; he
would be passing on the goods he bought for other people at cost price.
- It seems to us clear from the candour of his replies
to Mrs Smith's questions, at Coquelles, and from what he told us that Mr
Lawson thought, and still thinks, that it is legitimate to buy excise goods in
other Member States of the European Union, bring them to the United Kingdom
and supply them to others provided no profit is made. Unfortunately for him,
that is not the case; it is a criminal offence to sell within the United
Kingdom, even without making a profit, goods liable to United Kingdom excise
duty on which that duty has not been paid.
- European Community legislation, which the United
Kingdom has to follow, provides that excise duty is chargeable by the Member
State in which "the release for consumption" of excise goods takes place: see
Council Directive (EEC) 92/12, article 6. For present purposes, "release for
consumption" means disposal in exchange for money; that the money paid for the
goods may be no more than their cost price is irrelevant and it is also
irrelevant that the goods may already have borne duty in another Member State:
see article 7(1) of the same directive.
- Some relief from those requirements is afforded by
article 8 of the directive, which provides that duty may be paid only in the
country of acquisition – in the present case Belgium – provided the products
are "acquired by private individuals for their own use and transported by
them". The goods which Mr Lawson was proposing to pass on to his friends and
family, in return for the cost price, did not come within that category since
they were not transported by the people who were going to consume them. Those
goods therefore came within the general rule, which in this case means that
United Kingdom duty was due on them.
- Mr Lawson did not declare the goods and was not
intending to do so since, as he made clear to us, that he was under the
impression that he had no need to do so. Sadly for him, his ignorance of the
law does not help him. Because he did not make, or attempt to make a
declaration, all the goods he had in his possession, including those he and
his daughter intended to consume themselves, as well as his car were liable to
be seized by Customs and Excise, and forfeit to the Crown, by virtue of
section 141(1) of the Customs and Excise Management Act 1979.
- The Respondents' policies regarding the seizure of
excise goods and vehicles used to transport them, and the restoration of such
goods and vehicles, have been considered on many occasions by this tribunal
and, although less frequently, by the higher courts, most particularly in
Lindsay v Customs and Excise Commissioners [2002] STC 588 in which the
Court of Appeal indicated that it would be by no means disproportionate to
seize and not to restore excise goods brought into the country for onward sale
at cost, and that it would not be disproportionate or unreasonable to seize
vehicles used for the transport of goods, although when the Respondents were
considering whether or not to restore such vehicles, factors such as the scale
of the importation, and whether the traveller had had property seized for
similar reasons on a previous occasion would be relevant. The Commissioners'
subsequent policy, which again has been considered by this tribunal and the
higher courts, is to restore vehicles used by "first time offenders" for the
importation of goods for distribution at cost to friends and family on terms
which, broadly speaking consist of the payment of the duty sought to be
evaded, or the value of the vehicle, whichever is the less. That is precisely
the policy which has been applied here: Mr Lawson's vehicle was offered to him
for its value since that amounted to less than the duty evaded of £5,011.62.
The policy is not, in our view, unreasonable or unfair. It is designed to
protect United Kingdom revenues, and to protect also the interests of
legitimate traders selling excise goods on which UK duty has been paid. We
accept that the policy must be harsh if it is to achieve its objective of
deterring those who break the law.
- We can allow Mr Lawson's appeal only if we are
satisfied that Mr Morgan's decision to uphold the refusal of the goods, and to
confirm the offer to restore his vehicle to him for the payment of its value,
was unreasonable. That is the extent of the tribunal's jurisdiction: see
section 16(4) of the Finance Act 1994. It is quite impossible to say that Mr
Mogan's conclusion was unreasonable; on the contrary, we think it was both
reasonable and justified.
- In those circumstances we are unanimous that the
appeal must be dismissed.
COLIN BISHOPP
CHAIRMAN
Release Date: 24 February 2005
MAN/04/8082
