E00855
RESTORATION OF GOODS — condemnation proceedings — reasonableness of
decision not to restore — appeal dismissed
MANCHESTER TRIBUNAL CENTRE
WILLIAM WADSWORTH Appellant
- and -
THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents
Tribunal: Jean Warburton (Chairman)
Carole A Roberts
Sitting in public in Manchester on 20 January 2005
The Appellant appeared in person
Andrew Vinson, of counsel, instructed by the Solicitor's office of HM
Customs and Excise for the Respondents
© CROWN COPYRIGHT 2005
DECISION
- This is an appeal by William Wadsworth against a
decision to refuse to restore 12,600 cigarettes seized at Manchester Airport
on 17 October 2002. The decision on review not to restore is contained in a
letter dated 3 February 2003.
- The Commissioners were represented by Mr A Vinson of
counsel, who put in a bundle of copy documents. The Appellant appeared in
person and put in a copy bank statement for the period 14 October to 7
November 2002.
- We heard evidence on oath from the Appellant. There
were agreed witness statements from two officers of Customs and Excise, Andrew
Reid, the seizing officer and Maureen Anne Crook, the reviewing officer. There
was also an agreed witness statement from Neil Belsey, an officer of the
Inland Revenue. The facts were not seriously in dispute and from the written
and oral evidence we find the main facts to be as follows.
The facts
- On 17 October 2002, the Appellant was returning from
a two day trip to Spain to take out commissioned satellite receivers. He was
stopped at Manchester Airport in the baggage hall by Andrew Reid, an officer
of Customs and Excise, and 12,6000 cigarettes were found in his luggage. The
cigarettes consisted of 32 sleeves of Silk Cut, 30 sleeves of Regal and one
sleeve of Lambert and Butler.
- Andrew Reid informed the Appellant that he suspected
the cigarettes were for commercial use and that if no satisfactory explanation
was given he would conclude that the goods were not for the Appellant's own
use and seize them. The Appellant declined to stay to be interviewed but
signed the officer's notebook.
- The Appellant made a request for restoration of the
cigarettes by letter of 21 October 2002. The request for restoration was
refused by letter dated 24 November 2002. By a letter dated 1 December 2002
the Appellant requested a review of that decision not to restore. By a letter
dated 22 January 2003 the Appellant provided further details and documentation
about his trips to Spain and income.
- The review was carried out on 3 February 2003 by
Maureen Crook. She reviewed all the papers including the record of interview
and later correspondence. Maureen Crook concluded that restoration of the
cigarettes should not be made. She concluded that the goods were not for own
use and were held for a commercial purpose. This conclusion was based on the
quantity of cigarettes and the Appellant's failure to stay for interview.
- The Appellant appealed the legality of the seizure
of the cigarettes and condemnation proceedings were taken in the magistrates
court. On 26 November 2003, Manchester Magistrates Court condemned the
cigarettes as forfeit.
- Prior to 17 October 2002, the Appellant had made
four holiday trips and three business trips to Spain in 2002.
Evidence
- The Appellant gave evidence that he smoked Regal
and his wife smoked Silk Cut cigarettes. The cigarettes were to be used as
Christmas presents for his sons-in-law; he would not be paid for them. In
earlier correspondence with the Commissioners the Appellant stated that his
family smoked on average 90 cigarettes a day and that the 12,600 would cover
the period until April 2003 when they or he would start to travel to Europe
again. He had not included any Lambert and Butler cigarettes.
- The Appellant stated in evidence that he had not
stopped to be interviewed on 17 October because Andrew Reid did not know the
law, in particular the case of Hoverspeed.
- The Appellant gave further evidence that the money
for the cigarettes came from taking satellite receivers to Spain. He did not
need funds from his bank accounts for their purchase. The copy bank account
handed to the tribunal shows a credit balance of £2,475.57 on 14 October 2002,
the account having been opened on that day by a deposit of that sum.
The Law
- The law as it applies in this case has been the
subject of review by the Divisional Court in Regina (Hoverspeed Limited) v
Customs and Excise Commissioners [2002] 3WLR 1219 ("the Hoverspeed
case") and to a more limited extent in relation to seizure by the Court of
Appeal in Commissioners of Customs and Excise v The Queen on the
application of Hoverspeed Limited [2002] EWCA Civ 1804. These cases make it clear that under the Excise Directive 92/12 EEC
goods are either held for personal use and subject to excise duty in the
member state of acquisition, Article 8, or held for commercial purpose and
subject to excise duty in the member state in which they are held, Article 9
(see the Hoverspeed case at [105] and the Court of Appeal at [65]).
- The Divisional Court in the Hoverspeed case
held that the Commissioners must have reasonable grounds for suspecting an
individual of holding goods for commercial purposes before he may lawfully be
stopped and searched – see at [180]. On that point, the decision was overruled
by the Court of Appeal which held that seizure of cigarettes was not
automatically invalid because it was the result of a check which was invalid –
see at [49].
- In Gora v Commissioners of Customs and Excise
[2003] 3 WLR 160 the Court of Appeal stressed that the question as to
whether goods are forfeit as being for commercial use is a matter for the
magistrates court and not the Tribunal. Commissioners of Customs and Excise
v Dickinson [2003] EWHC 2358 (Ch) decided that the issue of private use could be raised in relation to
the discretionary procedure of restoration on the issue of proportionality –
see at [49]. In Gascoyne v Commissioners of Customs and Excise
[2004] EWCA Civ 1162 the Court of Appeal considered the decision in Gora and
held that there was no Convention objection to holding that an actual finding
in condemnation proceedings either as to lawfulness of seizure on underlying
facts binds a tribunal.
- The Tobacco Products Regulations 2001 as amended
by Excise Goods, Beer and Tobacco Products (Amendment) Regulations 2004 set
out a number of factors to be considered when determining whether a person is
holding excise goods for a commercial purpose. These include any refusal to
disclose intended use and the quantity of goods. The indicative level for
cigarettes is 3,200. In the Hoverspeed case it was held that whilst the
burden of proof as to commerciality is on Customs, possession of goods in
excess of the indicative levels raises an evidential presumption which
requires an explanation from the possession of the goods – see at [115].
- The Commissioners are empowered by Customs and
Excise Management Act 1979 (CEMA) section 49 to forfeit dutiable goods which
have been imported or held without payment of duty. All such goods are liable
to seizure pursuant to section 139 of CEMA. Such powers must, however, be
exercised with due regard to proportionality as they involve the deprivation
of a person's property.
- Section 152 (b) of the 1979 Act allows the
Commissioners as they think fit to restore any goods which have been seized. A
review and appeal procedure from decisions of the Commissioners is set out in
Sections 15 and 16 of the Finance Act 1994. A holder of goods may appeal
against a review decision of the Commissioners taken under Section 15 to the
Tribunal. The Tribunal's powers on appeal are, however, limited by Section
16(4) to directing that the Commissioners' decision shall cease to have
effect, to directing that a further review be carried out or, if the latter is
no longer possible, declaring the decision to have been unreasonable. On
appeal, it is for the Tribunal to consider that the response is proportionate
in any case – see R (Hoverspeed Limited) v Customs and Excise
Commissioners [2002] 3 WLR 1219 at [130(10)] and [196].
Submissions
- The Appellant submitted that no explanation had
been given as to why he had been stopped and the Commissioners had not
provided any reasonable grounds for stopping him or the seizure of the goods.
He relied on the Hoverspeed case. The Appellant further submitted that
the cigarettes were for personal use; there was no evidence that the goods
were for commercial use.
- Mr Vinson for the Commissioners submitted that the
question of own use was not one for the Tribunal – the matter had been
determined in the condemnation proceedings. He relied on Gora and
Gascoyne. The Tribunal was concerned with the reasonableness of the
decision on review which he submitted passed all the tests of reasonableness.
Mr Vinson further submitted that, in any event, the seizure was valid because
of the number of cigarettes involved and the Appellant's failure to remain and
answer questions. There were no exceptional reasons which rendered the refusal
to restore disproportionate.
Reasons for decision
- The Tribunal's jurisdiction under Section 16(4) of
the Finance Act 1994 is not one to try again in the original decision to
forfeit but to consider whether the decision on review not to restore goods is
one that the Commissioners could not reasonably make.
- It is generally accepted that the test of
reasonableness requires the Tribunal to ask:
- Is this a decision which no reasonable panel of Commissioners could
have come to?
- Has some irrelevant matter been taken into account?
- Has some matter which should have been taken into account been
ignored?
- Has there been some error of law?
(see Commissioners of Customs and Excise v J H Corbitt
(Numismatists) Ltd [1980] STC 231; Associated Provincial Houses Ltd v
Wednesbury Corporation [1948] IKB 223)
- When Maureen Crook reviewed the decision on 3
February 2003 she clearly reviewed all the evidence then available to her
including the information supplied by the Appellant in his letter of 22
January 2003. It is also clear that she did not consider any irrelevant
matters. On the evidence available to her, we consider that her conclusion
that the goods were not for own use was a reasonable one. In the light of the
Commissioners' policy in relation to restoration, which has been accepted by
the courts, it was reasonable of her to follow that policy and to refuse to
order restoration.
- Subsequent to Maureen Crook's review, the
cigarettes were condemned as forfeit in the Magistrates Court as being for
commercial use. In any event, the quantity of cigarettes seized raised an
evidential presumption that the importation was commercial – see paragraph 16
above – and in our view, the Appellant has not rebutted that presumption by
his evidence to the Tribunal. There are thus no grounds on which to hold the
decision not to restore is not proportionate.
- Accordingly, the appeal is dismissed but we make
no direction as to costs.
JEAN WARBURTON
CHAIRMAN
Release Date: 24 February
2005
MAN/03/8053
