[2010] UKFTT 107 (TC)

TC00419

EXCISE DUTY – seizure of cigarettes – refusal of restoration – reasonableness of Commissioners’ decision – appeal allowed

FIRST-TIER TRIBUNAL
TAX

 	
					PETER WAKEMAN	Appellant

- and -

THE COMMISSIONERS FOR
				HER MAJESTY’S REVENUE AND CUSTOMS	Respondents

Tribunal: 	Lady Mitting (Judge)
		Rayna Dean MA FCA (Member)
			
Sitting in public in Birmingham on 26 January 2010

The Appellant appeared in person

Mr. A Lodge, counsel, instructed by the General Counsel and Solicitor to Her Majesty’s Revenue and Customs for the Respondents 

© CROWN COPYRIGHT 2010
DECISION

1.	The Appellant was appealing against the review decision of the Commissioners dated 15 May 2009 to refuse restoration of 5,200 cigarettes and 5 kilograms of hand-rolling tobacco seized from him on his arrival at Birmingham Airport on 23 February 2009.
The seizure
2.	Mr. Wakeman travelled from Birmingham Airport to Salou in Spain on 22 February 2009, returning the following day.  He had intended to travel with his girlfriend who fell ill on the morning they were due to leave and Mr. Wakeman therefore went alone.  The purpose of the trip was in part to purchase tobacco and cigarettes.  Mr. Wakeman was known to the Commissioners because he had been stopped on 22 January 2007 at Gatwick Airport, on his return from Grenada, when he was found to have been carrying 7,400 cigarettes through the Green Channel.  The allowance which he would have been permitted to bring in was 200.  Mr. Wakeman had also been stopped on one previous occasion but allowed to travel through and retain 1,200 cigarettes and 3kg of hand rolling tobacco at Dover.  Mr. Harris confirmed that the Commissioners were looking out for him and his interception was deliberate.  What happened after he was stopped was strongly disputed.  We heard no evidence from the intercepting officer but as Mr. Wakeman had lodged a complaint, we did have some information from the Complaints Division which was the nearest we got to the intercepting officer’s case.  The officer’s notebook merely records Mr. Wakeman’s name, address, date of birth, passport numbers, scant details of the goods carried and the following text:
“I explained to Mr. Wakeman that he had in excess of the guidance levels for tobacco goods and that I would like to interview him regarding this.  Mr. Wakeman refused to stay for an interview and left the controls.  Goods treated as abandoned.”
The note merely goes on to say that the goods were seized and bagged.  The notebook shows the interception taking place at 12 noon and the notebook being closed at 12.45.
3.	Mr. Wakeman’s version of what occurred is that the officer was rude and aggressive from the start; that he kept going backwards and forwards into another room; he repeatedly called Mr. Wakeman a smuggler and informed him that he would be taking the tobacco from him because he knew that he was a smuggler.  Mr. Wakeman said that the officer had offered him an interview but had told him that it would do him no good because the officer’s mind was already made up and the goods would not be returned whatever Mr. Wakeman said.  Mr. Wakeman told us that he told the officer that he was feeling unwell and that he already had a pre-booked taxi waiting.  In view of these two factors and the fact that the officer had told him that an interview would be of no avail, Mr. Wakeman declined the offer of the interview and left.  He had handed over to the officer his passport, all his travel documentation, including that for his girlfriend, and the receipts for the goods.  The officer returned his passport and three single packets of cigarettes but kept everything else, including the travel paperwork.  Mr. Wakeman was at no time given a receipt for the goods and neither was he given a Notice 12A.
The review procedure
4.	Mr. Wakeman’s evidence was somewhat confused as to exactly what happened next and it is of some importance as Mr. Wakeman only applied for restoration of the goods and did not appeal the seizure.  Having left the Airport with no information, when he returned home he apparently phoned Dover who gave him the address of the seizure unit in Liverpool, to whom he wrote the following day.  In his letter he merely set out his version of what had occurred, denied that he was a smuggler and said that he could not manage a futile interview.  He said nothing about the purpose for which the goods were purchased and merely said that the lady he had spoken to at Dover told him he “should write this letter asking for my goods to be returned to me”.  The Commissioners treated this letter as a request for restoration.  By letter dated 17 April, Mr. Wakeman was informed that the request had been considered and refused.  It was pointed out that Mr. Wakeman had declined to be interviewed and that without any information from Mr. Wakeman as to the intended purpose of the goods it was a reasonable conclusion that they may have been held for a commercial purpose.
5.	By letter 20 May 2009, Mr. Wakeman said that the goods were for himself and his girlfriend; he was not a dealer; it was not that he had declined an interview but he had been told by the officer it would do him no good and that the goods were for the personal use of himself and his girlfriend.
6.	It fell to Mr. David Harris to carry out the review and he was the author of the review letter dated 15 May.  Mr. Harris had before him the two letters from Mr. Wakeman, the original refusal of restoration and the officer’s notebook.  Mr. Harris also knew about the interception and seizure at Gatwick Airport and importantly he also had before him certain internal documentation surrounding the treatment of Mr. Wakeman’s complaint, which he had made to the complaints division about the behaviour of the officer.  The complaints unit had let Mr. Harris have a draft of their rejection of the complaint which was to be sent out on 27 May and he had the email correspondence which had taken place between the complaints officer and the intercepting officer.  The intercepting officer had quite simply denied that he had called Mr. Wakeman a smuggler but did accept that he had told him that he was known to the department.  He denied that Mr. Wakeman had told him he was feeling unwell or that he had a taxi waiting.  He concluded it had not been possible to issue Mr. Wakeman with any seizure paperwork as he left the controls before he could do so.
7.	Mr. Harris, in his review, expressly only looked at restoration and did not consider the legality or the correctness of the seizure as, in not applying for condemnation proceedings, the goods were deemed to have been purchased for a commercial purpose.  The time for contesting the seizure had passed.  In his review letter, Mr. Harris refers to Mr. Wakeman having refused to stay for interview thus leaving the officer with no alternative than to conclude the goods were brought in for a commercial purpose.  He also referred to the Gatwick Airport seizure and concluded that there were no exceptional circumstances which should give rise to restoration.  In his oral evidence, although this is not mentioned in the review letter, Mr. Harris told us that he also had in mind the outcome of the complaint.  He was aware from the draft letter and the emails that the complaints unit had rejected Mr. Wakeman’s version of events.  He told us that if the complaint had been upheld then it would have been untenable to have refused restoration but this was not the case.  Mr. Harris said that he had Mr. Wakeman telling him one thing and the complaints officer another.  Mr. Harris accepted the complaints unit’s conclusions that the officer had acted professionally and that there was nothing in the complaint.  Further, Mr. Harris was strongly influenced by the fact that if Mr. Wakeman had been unhappy with the outcome of the complaint, he had been informed by letter that he should have taken it further to the Adjudicator.  This he did not do and Mr. Harris therefore concluded that Mr. Wakeman accepted the position.
Own use
8.	It was Mr. Wakeman’s clear evidence throughout his correspondence and oral evidence that the goods had been purchased for his and his girlfriend’s personal use.  He told us that his girlfriend had asked him to bring some cigarettes back for her as she was too ill to travel and this he had done.  There was no question of money changing hands for the goods.  Mr. Wakeman’s view very much was what is hers is mine and what is mine is hers.  Mr. Wakeman readily and obviously had to accept that he had brought in multiple brands of cigarettes, another factor which had influenced the intercepting officer and Mr. Harris.  Mr. Wakeman explained that these were going to be gifts for his ex-wife, his daughter and his sick brother.  Again there would be no question of money changing hands for the goods.  To Mr. Wakeman, he had purchased the goods for himself and if he then chose to give them away, which was his intention, that would still be within his own personal use.
9.	Mr. Lodge argued that we the tribunal were not empowered to consider the question of own use.  That could only have been done by application for condemnation proceedings and as that had not been done, the goods were irrevocably deemed to have been purchased for a commercial purpose.
10.	Mr. Lodge’s interpretation of the statutory framework is correct.  However we took the view that if there was some outstanding and exceptional reason why Mr. Wakeman had not applied for condemnation proceedings then it was open to the tribunal to consider own use.  We put this argument to Mr. Lodge who accepted it as a principle but contended that in this case that situation did not arise.  We believe that in fact it does.  Mr. Wakeman, when he appeared before the tribunal, quite clearly had no understanding whatsoever of the process.  He did of course leave the interview without collecting any paperwork but did not know that had he stayed the paperwork which he would have been given would have explained what he had to do.  This, of course, would have been of no avail to Mr. Wakeman, had he deliberately and without good reasons just walked away but, for reasons which we explain in paragraph 12, we do not consider this to be such a case.  As Mr. Lodge pointed out, Mr. Wakeman had received the Notices after the Gatwick seizure but on that occasion, Mr. Wakeman never even had to refer to them because he fully accepted that what he had done was wrong and he had never applied for restoration.  On that occasion, he was not aware of the strict 200 limit but had thought that he could bring in whatever he liked for his own use.  Once it was pointed out to him by the officer that he could not, he readily accepted this and the matter was taken no further.  Mr. Wakeman would not therefore have had any understanding from that occasion of what his options now were.  He had not explained to the lady at Dover whom he telephoned what his case was and she therefore saw no reason to explain his options to him and had not done so.  We therefore take the view that Mr. Wakeman was not aware of the choices open to him.  He was not aware, for understandable reasons, that he should immediately have contested the seizure and he therefore missed the opportunity to do so.  Given all these circumstances we hold that he was entitled to raise before us the question of own use.
11.	Mr. Wakeman’s evidence had from the outset been unwavering.  We accept his oral evidence that the tobacco and cigarettes were purchased for himself and his girlfriend and that no money changed hands and we find that the goods were therefore purchased for his own use.
The reasonableness of Mr. Harris’s decision
12.	Mr. Harris’s decision was based, inter alia, on two factors but we believe the position with regard to these to be not quite as he thought they were.  First he believed, and indeed on what he knew was quite entitled to do so, that the complaints process was at an end.  The complaints unit had rejected the complaint and Mr. Wakeman had not applied to the Adjudicator.  However Mr. Wakeman told us that he had never received the letter dated 16 June 2009 which advised him that to take the matter further he had to apply to the Adjudicator.  We accept Mr. Wakeman’s evidence and find that he did not receive that letter.  He told us that had he received it he would have applied to the Adjudicator because he certainly did not accept the conclusions of the complaints officer.  Given this, it was an incorrect assumption of Mr. Harris’s that the complaints process was at an end and was accepted by Mr. Wakeman.  Secondly, Mr. Harris took the view that Mr. Wakeman had quite deliberately and voluntarily walked out on the intercepting officer.  This view was bolstered by the findings of the complaints unit that there was no justification in Mr. Wakeman’s complaint.  We have not heard the intercepting officer and cannot possibly therefore pass any form of judgment on what was and was not said.  However we were impressed by the vehemence of Mr. Wakeman’s evidence and the fact that his story has not changed from his very first letter.  Without making a finding as to what was actually said, we can and do find that, rightly or wrongly, Mr. Wakeman received the strong impression that to stay for interview would have been futile.  At the very least, his perception at the time was that the officer’s mind was made up.  This is far from the deliberate walk out which Mr. Harris had assumed.  Mr. Harris was fully entitled to take into account the earlier seizure at Gatwick Airport.  This was quite clearly a relevant factor.  However Mr. Harris had not had the benefit of hearing Mr. Wakeman’s evidence on this seizure.  His evidence to us was that he had had no knowledge that he was doing wrong.  We accept that evidence and indeed we are influenced in this view by the fact that, unlike this occasion, Mr. Wakeman did not then apply for restoration or challenge the seizure.  He accepted that he had been wrong and surrendered the goods without complaint.
13.	For all these factors we cannot find that Mr. Harris’s review decision was reasonable.  Our jurisdiction is limited to considering the reasonableness of the decision and if we find it not to have been reasonable then we have to send it back for a further review.  This we do and request that the review be carried out by an officer with no previous knowledge of the case and we also request that that officer should take into account our finding that the goods were purchased for Mr. Wakeman’s own use.
14.	The appeal is therefore allowed.  We make no order as to costs.
TC/2009/10956

LADY MITTING
JUDGE
Release Date: 10 March 2010