E00599

EXCISE DUTIES — large quantity of cigarettes bought in France transported to UK — cigarettes and car used for transport seized — owner of car not present — restoration of car refused — refusal upheld on review — whether refusal reasonable — yes — appeal dismissed.

MANCHESTER TRIBUNAL CENTRE

KELLY HUGHES

DEAN FRANCIS DOLAN

SCOTT WOODAppellants

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISERespondents

Tribunal:Colin Bishopp (Chairman)

Marilyn Crompton

Sitting in public in Manchester on 17 November 2003

The Appellant Kelly Hughes in person.

The Appellants Dean Francis Dolan and Scott Wood did not appear and were not represented

David Gilchrist of counsel instructed by the Solicitor for the Customs and Excise for the Respondents

© CROWN COPYRIGHT 2003

DECISION

1.In this appeal Kelly Hughes challenges the Commissioners’ refusal to restore to her a Fiat Punto car which was seized on 13 September 2001. On that day the two other appellants, Dean Dolan and Scott Wood, arrived at Dover on a cross channel ferry from Calais in Miss Hughes’ car. They had with them 78 cartons of cigarettes (that is, 15,600 cigarettes). The Customs officers who stopped them – we were not given any reason for their being stopped - did not believe that the cigarettes were for their own consumption but instead concluded that they were being brought to the country for the purposes of resale and were liable to forfeiture. It was for that reason that both the goods and the car were seized.

2.Although Mr Dolan and Mr Wood are recorded on the Notice of Appeal as appellants, they have not taken any active part in the matter and, as we were to learn, they had not sought a review of the Commissioners’ refusal to restore their goods. In the absence of a review, there is nothing against which they can appeal; see sections 14 to 16 of the Finance Act 1994. In those circumstances we must formally dismiss their appeals.

3.Miss Hughes did, however, seek a review of the decision to refuse to restore her car and that review was undertaken by Gillian Hurrell, whose decision is set out in a letter of 12 April 2002. We did not hear evidence from Mrs Hurrell but a statement made by her had been served in the course of the appeal and Miss Hughes had not objected to its being read at the hearing.

4.The circumstances surrounding the seizure, which Miss Hughes did not dispute, were that Mr Dolan and Mr Wood had borrowed Miss Hughes’ car for the purpose of travelling to the continent in order to buy cigarettes. Miss Hughes did not suggest that she was in any way ignorant of that purpose. Mr Dolan is, or at least was, her boyfriend and they were living together. Mr Wood was Mr Dolan’s friend. According to the notes of their interviews at Dover which were available to us, they had each bought 39 cartons of cigarettes in Calais, paying £750 each. Mr Dolan is recorded to have said, when interviewed at Dover, that he intended to give 2,800 of the cigarettes away to members of his family, as Christmas presents, and that he would smoke the remaining 5,000 he had bought himself. At his consumption rate of 55 per day, he estimated they would last 6 months. As the officer who made the decision to seize the goods calculated, they would in fact last only three months. Mr Wood is recorded to have said that he was proposing to give away 3,000, as Christmas presents for his family, leaving 4,800 for himself. He claimed to smoke 40 cigarettes a day, but was not asked how long he estimated they would last.

5.Mrs Hurrell’s letter and statement indicated that she was surprised that the two travellers would buy cigarettes in September for the purpose of giving them away at Christmas, three months later; she thought it more likely that the cigarettes would be bought much closer to Christmas so that they would be fresher. We are not convinced by that argument; we do not think it would occur to many that cigarettes would deteriorate to any significant extent in a period of three months.

6.More important, we think, is Mrs Hurrell’s conclusion drawn from the admission made by the two travellers that each had made a similar trip within the preceding week. This particular trip was undertaken on a Thursday. Mr Dolan said that he had travelled to France on the previous Monday, and Mr Wood said he had done so on the preceding Thursday. Mr Dolan claimed that on his previous trip he had bought only lager and a bottle of spirits and had not bought cigarettes, since he did not want to overload the vehicle. He was not asked with whom he had travelled on that occasion. Mr Wood said that on his previous trip he had bought nothing at all. Mrs Hurrell though it improbable that Mr Dolan would have bought no cigarettes, which are comparatively light, when he had the opportunity to do so and she thought his explanation implausible. She also thought it implausible that Mr Wood would have bought nothing at all, and she did not accept that the two men would have incurred the cost of making two trips in quick succession, when particularly in Mr Wood’s case they had little money to spare. She indicated in her letter that she suspected that in reality both Mr Dolan and Mr Wood had travelled on those two previous occasions, and that they were intending to conceal the frequency of their travel from the Customs officers. We were to hear evidence from Miss Hughes, however, that she had accompanied Mr Dolan on his previous trip, without Mr Wood, and she confirmed that the decision had been taken on that occasion not to buy cigarettes for fear of over loading the car. While we cannot criticise Mrs Hurrell for being sceptical, we are ourselves prepared to accept Miss Hughes’ evidence on that point.

7.By the time Mrs Hurrell came to take her decision, she was aware that in December 2001 Mr Dolan and Mr Wood had been stopped at Manchester Airport, when returning from Spain, and found to have 20,000 cigarettes in their possession, which were also seized. As Miss Hughes correctly said at the hearing, that seizure had nothing to do with her but we share Mrs Hurrell’s view that it lends support to her conclusion that Mr Dolan and Mr Wood were engaged in commercial importations. It is evident from what they are recorded to have said at Dover that the trip in September had exhausted their savings; we agree with Mrs Hurrell that it is improbable that they could afford to pay for a trip to Spain in December, and to purchase 20,000 cigarettes, from legitimate income.

8.Mrs Hurrell’s letter deals with the question of proportionality. Miss Hughes’ letters did not put forward any value for her vehicle, but Mrs Hurrell indicated that her own inquiries led her to the view that it was worth about £1,750. The duty sought to be evaded, by contrast, was £2,640. That fact led Mrs Hurrell to the conclusion that it was not disproportionate to deprive Miss Hughes of her car.

9.The question that we must decide is whether Mrs Hurrell’s decision was one at which she could reasonably arrive, as it is only if it was not that we may allow the appeal: see section 16(4) of the Finance Act 1994. In this case we have no doubt that Mrs Hurrell’s conclusion that the car was being used for a commercial importation is one at which she could reasonably have arrived. All of the available evidence points in that direction. The Commissioners’ policy regarding seizure of vehicles used for commercial importation is set out in the statement of Gerry Dolan, a copy of which, again unchallenged by Miss Hughes, was available to us. The policy is that such cars will be seized, even if they are owned by people not present at the time of seizure, unless the owners are truly innocent of any involvement in the illicit importation. That policy was approved in general terms by the Court of Appeal in Lindsay v Customs and Excise Commissioners [2002] STC 588. Exceptional hardship must be considered but Miss Hughes has not contended, either before us or in her letters, that she is suffering anything which might be classed as exceptional hardship. It also cannot be said that she is entirely innocent in the sense that she did not know and had no reason to know that her vehicle would be used in this way. She told us, quite candidly, that during the course of the trip which she and Mr Dolan undertook together, they discussed his second trip and the fact that he would buy cigarettes. It seems to us that the Commissioners are right in their contention that in those circumstances it is she who bears the risk that the borrower of the car will abuse her generosity. Mrs Hurrell has correctly addressed her mind to the issue of proportionality and in our view her conclusion that the car should not be restored is clearly one at which she could reasonably have arrived.

10.The appeal must be dismissed.

COLIN BISHOPP

CHAIRMAN

Release Date:16 December 2003

MAN/02/8083