E00464

EXCISE DUTY — Respondents refusal to restore cigarettes seized from first and third appellants — whether decision not to restore reasonable — no evidence adduced by respondents showing that appellants held goods for a commercial purpose — appeals allowed

EXCISE DUTY — Respondents refusal to restore car seized from second appellant as having been used to carry first appellants’ cigarettes — finding that appellant innocent of any involvement of importation of excise goods by third appellant — appeal allowed

MANCHESTER TRIBUNAL CENTRE

PHILLIP EATOCK

LILIAN EATOCK

JOSEPH SPEAKMANAppellants

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISERespondents

Tribunal:Mr J D Demack (Chairman)

Mrs G Pratt

Sitting in public in Manchester on the 12 and 13 May 2003

Mr Michael Talbot, solicitor of Messrs Pearson Hinchcliffe, Oldham, for the three appellants

Mr D Mohyuddin of counsel instructed by the Solicitor for the Customs and Excise for the Respondents

© CROWN COPYRIGHT 2003

DECISION

  1. Mr Philip Eatock and Mr Joseph Speakman each appeal against a decision of the Commissioners of Customs and Excise not to restore excise goods seized from them. Mrs Eatock appeals against a decision not to restore her car. We dealt with the appeals together as the appellants were treated by Customs as having been involved in a joint smuggling operation.
  2. When the appeals were called on, Mr Mohyuddin, counsel for the Commissioners, submitted that we had no jurisdiction to deal with them. He observed that for the tribunal to have jurisdiction there must be a decision “on review” of an original decision not to restore goods etc, seized. He accepted that each appellant had asked the Commissioners for an original decision, but observed that they had, incorrectly, responded by making a decision said to be on review and indicated that it was appealable. Not surprisingly the appellants did appeal (and the tribunal processed the appeals). Nevertheless, he maintained that we should direct that the appeals be struck out. We pointed out that it ill became the Commissioners to pursue such a point as late as the substantive hearing, particularly when the fault was entirely theirs. Having taken instructions at our insistence, Mr Mohyuddin indicated that the Commissioners were content for the hearing to proceed on the basis that each decision appealed was “on review”. We proceed accordingly.
  3. The decision letters in the cases of Mr and Mrs Eatock were addressed to their MEP and MP respectively, their parliamentary representatives having been asked to write to Customs by their constituents. We regard that as a most unsatisfactory state of affairs, and trust it will not occur in other cases. Decision letters should be addressed to the persons concerned where they are acting in person, or to their professional representatives.
  4. We should also mention that the excise goods and car were the subject of condemnation proceedings. Notwithstanding that magistrates condemned both goods and car as forfeit, the Commissioners later applied for the proceedings to be re-opened to enable certain additional evidence to be adduced. It would appear, and we proceed on the basis, that the proceedings were not re-opened and that the Commissioners have agreed both that the appellants may pursue their appeals against non-restoration through this tribunal, and that we should take no account of the outcome of the original condemnation proceedings .
  5. Before considering the decisions treated as having been made on review, it is convenient to set out the facts we find from the evidence presented to us.
  6. Shortly after noon on 18 November 2000, Mrs Eatock went to Blackpool Airport in her Peugeot 406 car to collect Mr Eatock. (He was then her husband: they have since divorced). He had travelled to Spain a week earlier with about 15 friends for a week’s holiday. She parked her car on the car park before going to the lounge to await his plane’s arrival.
  7. When his flight arrived Mrs Eatock went to the “Arrivals” area. There she saw Mr Speakman, whom she knew as a friend of her husband. She asked him where her husband was. He replied, “In Customs”. She realised he had been drinking.
  8. Mr Speakman is 59 years old. He is a very sick man. He was exposed to prolonged carbon monoxide poisoning 8 or 9 years ago. It has left him with some mental incapacity, an inability to walk more than a short distance, epilepsy, asthma and other problems. In dealing with him, we found that he “half-answered” questions, and gave answers that were not at all easy to understand.
  9. Mr Speakman told Mrs Eatock that whilst in Spain he had arranged with her husband for her to take him home, his son’s car having broken down so that he, his son, was unable to collect him.
  10. As Mrs Eatock’s parking ticket was by then about to expire, she took Mr Speakman’s suitcase and hand luggage, left him and went to her car. She placed his luggage in the car boot and renewed her parking ticket. On returning to Mr Speakman, and whilst awaiting the emergence of Mr Eatock ,the two went to the café for a drink.
  11. Meanwhile, Mr Eatock had been stopped by Miss Byrom, a Customs officer, as he came through Customs. She first asked him if he was aware of the prohibitions and restrictions on importing drugs, guns, etc. He said he was and had no such items. She then asked whether he had any cigarettes, tobacco or alcohol. He replied, as per her notes, “Yes I have 52 cartons of cigarettes plus 2 bottles of whisky”. As that quantity of cigarettes exceeded the then minimum indicative level of 800 for personal use, she told him she would have to question him “as to commerciality”. He was told he was free to leave, but without his cigarettes. He explained that he had been abroad on holiday – “a gang of us go [to the fiesta] every year”. Next Miss Byrom asked if he had receipts for the cigarettes. On his producing them, she asked if he had further goods “as the receipts showed more goods purchased than in his suitcase.” At that Mr Eatock said that the receipts be someone else’s as the only goods he had were in his suitcase.
  12. The next entry in Miss Byrom’s notes reads thus: “I asked again, do any of the goods that the other passenger is carrying belong to you. He said no and that he must have picked up the receipts in the apartment [where he had stayed]”. That entry must be incomplete: there is nothing in it to introduce “the other passenger”, and Mr Speakman had not entered into the picture at that point.
  13. In evidence, Miss Byrom admitted, and we find (from our own examination of Mr Eatock’s copy receipts), that the receipts he had were for 53 packets of 200 Lambert and Butler cigarettes and one packet of Silk Cut. (Mr Eatock had only 52 full packets of Lambert and Butler with him as he had earlier opened one. We ignore the difference between his stated 52 cartons, and the 53 he did in fact have (including one carton of Silk Cut)). Miss Byrom further admitted that she had been mistaken in alleging that Mr Eatock’s receipts related to more cigarettes than he possessed, and accepted she had proceeded to deal with matters on the basis that Mr Speakman was carrying goods belonging to Mr Eatock.
  14. Mr Eatock told Miss Byrom that he received a disability pension of £800 per month, and that his wife had a pension of about £1200 per month. He added that he had paid for the cigarettes himself, and expected them to last about a year at a consumption rate of 50 a day. He also disclosed that he had previously travelled abroad in March 2000 but said he did not return with any cigarettes as he still had some from an earlier trip.
  15. As further evidence that Mr Speakman was carrying cigarettes belonging to Mr Eatock, Miss Byrom claimed that Mr Eatock had failed to identify Mr Speakman as he passed through Customs, although asked to do so. She did, however, accept that the failure might have been due to his having been distracted by her questions. When all the other passengers had cleared Customs, Miss Byrom asked Mr Eatock to go into “Arrivals” and identify his companion. Mr Eatock did so.
  16. Having confirmed Mr Speakman’s identity herself by inspecting his passport, Miss Byrom asked him to show her his suitcases, i.e. his luggage. He replied, “It’s gone: it’s gone”. (This is a good example of Mr Speakman half-answering a question).
  17. At this point in events, we have to deal with a conflict of evidence. Miss Byrom claimed and noted, “He [Mr Speakman] said he didn’t have any [suitcases]. I repeatedly asked Mr S to identify his suitcases. Both he and the female he was sat with, later identified to me as Mrs Eatock (wife of Philip) both agreed that suitcases had left. I explained that it was ridiculous to believe that the suitcases had gone on their own. Only after I was persistent did they eventually [after what in evidence she estimated at some 15 minutes] say that the suitcases were in the car R802 XBV.” In contrast, Mr Speakman maintained that after saying his luggage had “gone”, he added that he did not know where it was, and at that point, i.e. without delay, Mrs Eatock told Miss Byrom that it was in her car. It was common ground that she then asked if she should go for it, and that Miss Byrom and another Customs’ officer, Mr Long, went with her to the car, which on Miss Byrom’s instructions officer Long seized. On the points of disagreement Mrs Eatock’s evidence confirmed that of Mr Speakman, as did that of Mr John Gary McMahon, an independent witness who happened to be at the Airport on business and overheard the relevant exchanges. The evidence given by Mr Speakman, Mrs Eatock and Mr McMahon bears all the hallmarks of truth, and we accept it as such. We reject that of Miss Byrom.
  18. Mr Speakman freely admitted to Mrs Byrom having 10,000 Regal Cigarettes, 400 Silk Cut cigarettes, and 1000 grams of Golden Virginia hand rolling tobacco, claiming that they were all his. Miss Byrom then noted that she said to him, “You told me outside that all these were Christmas presents”, he responded, “Oh yes, some are for Christmas presents”. She then said, “How much?” and he replied, “I don’t know”. Mr Speakman was not required to produce receipts for his excise goods, nor was he questioned about the way in which he had financed his purchases.
  19. Miss Byrom then seized the excise goods of both Mr Eatock and Mr Speakman. She noted the following reasons for seizure of both goods and car:

“ 1) Inconsistent stories with co-travellers, i.e. receipts

2)Receipts held do not agree with goods and owner

3)Vague about travelling companions

4)Mr S unsure exactly what goods were for

5)Mr S lied about whereabouts of his suitcases

6)Knowledge of law

…

Both Mr S and Mrs E denied that goods were in vehicle … Mr E was argumentative although not aggressive in any way. I further explained to him that he had confirmed to me that the receipts he produced did not relate to his goods and his explanation had been that the receipts must relate to his co-traveller’s goods (prior to me questioning co-traveller). The receipts did not relate to his or co-traveller’s goods. He could not explain why he held receipts for so many goods or who is carrying them.”

  1. In view of Miss Byrom’s acceptance that the receipts produced by Mr Eatock related to his goods, and to no others, we may ignore her first two reasons for seizure. We have to confess to being unable to understand her third reason – vague about travelling companions – but assume it relates to Mr Eatock and refers to his alleged failure to point out Mr Speakman in Customs. In our judgment, the point takes matters nowhere. Miss Byrom’s fourth and fifth reasons relate only to Mr Speakman. The fourth we presume to have a bearing on commerciality, but without properly dealing with that matter: the fifth is her personal interpretation of events which we find unsubstantiated. In evidence, Miss Byrom said of her sixth reason - knowledge of law – that she simply assumed that everyone who travelled regularly, including annual travellers, knew about the restrictions on the importation of excise goods, but admitted that she had not raised the matter with Mr Eatock or Mr Speakman. We might usefully add at this point that Miss Byrom also said that she never asked Community travellers whether they were importing excise goods for their own use for she “knew what the answer to such a question would invariably be”.
  2. Miss Byrom directed the seizure of Mrs Eatock’s car because “both Mr S and Mrs E denied that his goods were in the vehicle”. We are unable to find any evidence whatsoever of such a denial either in Miss Byrom’s notes or in her evidence; and neither Mr Speakman or Mrs Eatock made such an admission in evidence. Consequently, we find that Mr Speakman and Mrs Eatock did not deny that the former’s goods were in the latter’s car.
  3. Whilst, for the reasons we have just given, we have doubts about the validity of the seizures, since, as the Court of Appeal observed at para 57 of its judgment in R (Hoverspeed Ltd & Others) v CEC [2003] 2 WLR 950, “courts should be reluctant to interfere on the facts with decisions by Customs whether to seize . . .”, we proceed on the basis that they were valid.
  4. We make the following further findings of fact:

1)Mr Eatock purchased the excise goods he declared for himself with his own money, and not on behalf of any other person;

2)He imported his cigarettes for his own use;

3)Mr Speakman purchased the excise goods he declared for himself with his own money, and not on behalf of any other person;

4)Mr Speakman imported his cigarettes for his own use;

5)Mrs Eatock did not know the contents of Mr Speakman’s suitcase and handbag until after they were seized by Customs (In evidence, Miss Byron admitted she had no proof that Mrs Eatock knew those contents).

6)Mrs Eatock was completely blameless in events: she did not hinder Miss Byrom in any way, but rather assisted her;

7)Mrs Eatock bought the Peugeot car for £8,995 on 1 June 2000;

8)If the goods imported by Mr Speakman were held for a commercial purpose, they attracted UK excise duty of £1,527.45;

9)If the goods imported by Mr Eatock were held for a commercial purpose, they attracted UK excise duty of £1,430.41;

10)Mr Speakman’s social life consists in his being taken to a local bingo club by his relatives when those attending take it in turn to pay for the whole evening’s entertainment, i.e. not only for entrance fees etc, but also for drinks. A night’s entertainment for the group usually costs Mr Speakman £15;

11)Mr Speakman’s income consists of incapacity benefit, disability living allowance and mobility allowance. (Figures Mr Speakman gave in evidence of those three items were £87 per week, £270 per month and £40 per week respectively. We believe the figures to be those currently payable, but they are unlikely to be much different from those payable at the end of 2000). He made no claim to have any capital. He has no liability for rent of the flat in which he lives, his only regular expenses being those for gas, electricity and food.

12)Mr Speakman’s excise goods cost approximately £700. He has a Barclaycard account. The statement for the account produced to us shows that he had an account balance of approximately £600 in mid November 2000, and a credit limit of £1,250. He thus had readily available credit facilities approaching the full cost of his goods. We therefore find that he had the ability to pay for them. (From the statement it would appear that the minimum payment on a balance of £1,250 would have been £36 per month – a figure we consider Mr Speakman could have afforded).

  1. No evidence was adduced by the Commissioners to indicate that Mr Eatock had pre-financed Mr Speakman’s purchases, or that arrangements were in place for Mr Eatock subsequently to finance those purchases. In its absence, and in view of denials of any such arrangements by Mr Eatock and Mr Speakman, we find that there were no such pre-financing or post-financing arrangements in place.
  2. Miss Logan’s review in each case is dated 29 December 2000. Although she wrote a letter in relation to each appellant, the core content of all three is the same, so that we are able to deal with them together.
  3. We first comment on the following two sentences of Miss Logan’s decision relating to Mr Eatock.

“He was asked whether he was aware of the prohibitions and restrictions to which he replied he was and held nothing. He then told the officer he was carrying 52 cartons of cigarettes plus 2 bottles of whisky”.

  1. Those sentences convey the impression that initially Mr Eatock was less than honest with Miss Byrom. But, as we earlier found, when Miss Byrom asked about his awareness of prohibitions and restrictions, it was in the context of drugs, guns, etc, and not tobacco and alcohol. We find that Mr Eatock correctly and honestly answered Miss Byrom’s question about “prohibitions and restrictions”.
  2. Miss Logan then dealt with the other events of 20 November 2000 as noted by Miss Byron, so that she interpreted the events upon which we had conflicting evidence as Miss Byrom had done. Miss Logan upheld the seizure of the excise goods and indicated that they could not be restored to Mr Eatock and Mr Speakman, saying:

“They [the cigarettes held by Mr Eatock] were seized as liable to forfeiture under section 139 of the Customs and Excise Management Act 1979. There were inconsistent stories with the co-travellers regarding quantities of goods and receipts. The receipts did not agree with the owners or the goods with no explanation for this. Mr Speakman was unsure exactly what his goods were for and he lied about the whereabouts of his suitcases. It was unclear who had paid for the goods and who was carrying the additional goods shown on Mr Eatock’s receipts. The officer was not satisfied that each traveller had paid for, and was able to pay for, his own goods and that they were to be used solely by that person for his own use or as the gift for another.”