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	United Kingdom VAT & Duties Tribunals (Excise) Decisions
You are here: BAILII >> Databases >> United Kingdom VAT & Duties Tribunals Decisions >> United Kingdom VAT & Duties Tribunals (Excise) Decisions >> Williams v Customs and Excise [2004] UKVAT(Excise) E00715 (04 May 2004) URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2004/E00715.html Cite as: [2004] UKVAT(Excise) E715, [2004] UKVAT(Excise) E00715

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RESTORATION – Appellant imported 10kg tobacco and 6,200 cigarettes – Appellant stated that foods were intended as gifts to family who had been generous to him when he was bankrupt – Goods paid for out of money recently inherited – Commissioners decided goods imported for sale at profit because (inter alia) expenditure not commensurate with income – Whether decision reasonable – No – Appeal allowed: further review ordered

RESTORATION APPEAL – Whether appellant may adduce evidence as to whether goods imported for own use – Whether Tribunal may find such facts – Effect of decision of CA in Gora v Customs and Excise Commissioners

LONDON TRIBUNAL CENTRE

JAMES ROYSTON WILLIAMS Appellant

and –

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: ANGUS NICOL (Chairman)

ANGELA WEST, FCA

Sitting in public in Bristol on 11 March 2004

The Appellant appeared in person

Mr Sorabjit Singh, counsel, instructed by the Solicitor for the Customs and Excise, for the Respondents

© CROWN COPYRIGHT 2004


 


DECISION

1. The Appellant, James Royston Williams, is appealing against the review decision, contained in a letter dated 28 May 2003, of Mr David Harris upholding the decision of the Commissioners not to restore to the Appellant a quantity of excise goods imported by him on 4 February 2003.

The evidence

2. On 4 February 2003 the Appellant arrived by air from Palma, Majorca, at Bristol airport, where he was stopped by Mr Tattersall, an officer of Customs because excise goods were detected by x-ray. He was asked some questions, and told Mr Tattersall that he had been away for one day and had spent the night in Magaluf. He said that he had brought some tobacco and cigarettes which were in two suitcases which he was carrying. The Appellant said that he had come into some money and had decided to purchase some goods as gifts for his family. He said that he had previously been abroad two weeks previously. He signed the officer's notes as a true record.
3. A statement was read to the Appellant by Mr Tattersall. It included the following words:

"I intend to ask you some questions to establish whether these goods are held for a commercial purpose. If no satisfactory explanation is forthcoming or if you do not stay for questioning it may lead me to conclude that the goods are not held for your own use but held for a commercial purpose and your goods may be seized as liable to forfeiture."

Both the statement of case and the review letter refer to this as a statement "that the officer was required to be satisfied that the goods were for own use and were not being imported for a commercial purpose".

4. In the interview that followed, the Appellant gave the following information. He said that he had purchased the cigarettes and tobacco, for which he had paid roughly £800. Asked whom the goods were for, he said, "Family, purely and simply family." He said that he was not going to receive any money for the goods, which were all for presents, nor had he been given any money with which to buy them. He said that he had been left £6,000, and had travelled abroad with exactly £1,000, which included the cost of the flight. He was asked why he was giving away the goods, and replied, "No reason really; just a gift to my lads, save them money." He said that when he received the £6,000 he thought it would be a nice idea to do it, and his wife had agreed. Then he was asked, "The list you had in your possession, did you write that?" The Appellant said that he had. Then came the following exchange:

"Tattersall: On what is it based?

Appellant: This is what my family use.

Tattersall: How do you know what your family smokes, or was it an

approximation?

Appellant: Approximation.

Tattersall: So no-one asked you to get some goods for them?

Appellant: No-one, except my wife. She asked me to get some perfume."

After that, the Appellant was asked whether he worked. He said that he was on income support, receiving about £600 a month, and had been made bankrupt in 1990, until when he had been working in the fruit business all his life. He said that he had no savings apart from the inheritance. He said that he had been abroad a month, and that he had some money, about £800, in Magaluf. On that previous visit he had brought back "bits, nowhere near as much" as this time. He intended to go again on 14 May for a week. The Appellant said that he had not yet worked out what was what, that is, what part of the goods were to be his, and that if there was any left over he would put it in the garage. He said that he had not been stopped by Customs before and had never seen Notice 1. Lastly, he was asked, "Why did you decide to spend part of an inheritance on these goods?" To which he replied "Just a spur of the moment thought, my wife agreed. We've never given them much over the last ten years."

5. The goods were then seized. The officer gave the following reasons for seizure: "Goods excess guidelines; Multiple brands; Income versus expenditure; [Passenger] giving away £800 worth of goods." The goods seized were: 2,000 Benson & Hedges, 2,000 Lambert & Butler, 200 Lambert & Butler menthol, 400 Lambert & Butler lights, 400 Mayfair, 400 Super King Size, 600 Silk Cut, 200 Embassy, 2 kg Old Holborn tobacco, 7½ kg Golden Virginia tobacco, and ½ kg Drum tobacco.
6. At some stage, before being interviewed, the Appellant handed over a hand-written list. This had been so badly copied that it was only partly illegible, and for some reason the Commissioners did not produce the original exhibit. In the review letter the list was set out, and it was agreed by the Appellant that that version was factually correct. The list was as follows (in his oral evidence, the Appellant told us who each of those named was):

"Me 3 Silk Cut

4 O Hol

Paul 5 B H Eldest son

5 G V

Gary 5 L B Second son

5 G V

Dean 2 May Third son

1 Drum

Jerry 5 G V Son-in-law

John 3 L B Son-in-law

3 G V

G/? 5 L B Gabby and Moses (friends)

any tobacco

Bob 2 Superkings Brother

any

Howard Brother

any

In the original refusal letter, the officer, Mr Matthews, said that the list "was found", which the Appellant strongly denied. Where he got that information is not clear. Mr Tattersall said that it was wrong, and that the Appellant had handed the list to him voluntarily, at some time before the interview, he thought. The Appellant felt that to say that it had been "found" suggested that he had attempted to conceal it. We consider that there was some justification for that view. However, we are satisfied that that was not the case and we accept that it was handed over voluntarily.

7. The Appellant gave evidence in support of his appeal. He said that before going to Majorca he had asked "a ministry man" about the limit on the amount of tobacco that one could bring into the country. He was told that there was no limit, but that it depended upon being for his own use. The Appellant said that he had told the officer that that was exactly what it was, for himself and to be divided amongst members of his family. "Own use" included being given away as a gift. He said that he had inherited some money, £6,700, from an aunt, and decided that it would be a nice gesture to give presents to those who had helped him and his wife when he went bankrupt. The officer said that he could have brought in the same amount the month before when he went to Majorca, but, the Appellant said, they would have known if he had because they x-ray all the cases. The officer had mentioned that he had a number of brands, and he had said that the tobacco was between ten of them and everyone did not smoke the same. The officer said that it looked as if it was to order. The Appellant said, that in a funny kind of way it was, in that his wife had worked out, before he went, what everyone would have wanted. Asked about his income, he said that he had a state pension of £600 a month, and also got help from their sons and daughters. The officer asked him, "How can you give £800 away?" He said, "I wasn't giving it away; I had inherited it and it was a rare chance to repay kindness." As to the addresses of the people on the list, he said that two of his sons lived in flats and one in a maisonette: he knew where they lived and could go there, but he did not know the numbers of the houses. The list of people was accurate.
8. "G/?" Stood for Gabby and Moses. These, the Appellant said, were two very nice people, old friends, who had been extremely kind to him and his wife. He did not know where they lived except that it was near Stroud. The brands mentioned in the list were guesswork, not accurate. The Appellant said that his wife had suggested what he should buy, and had made a list of people at home. The list given to the Customs officer was just "doodling" by him on the aeroplane. The people on the list knew nothing about it at all, and thought, when they heard what had happened, that the Appellant was very stupid. He said that he would not have accepted a penny from any of them, even if penniless himself. The answers that he had given to the officer were in all cases accurate. Only Gabby and Moses were not family members. When Mr Harris telephoned on 27 May 2003 he asked for names and addresses. The Appellant could only provide six. He was not sure if brothers were family or just relatives. He said that he had not said on the telephone that he was unsure of any names, only the addresses. If his wife had been there she could have given the addresses straight away, and he had suggested to Mr Harris that he ring back a bit later when his wife would be there. Mr Harris never had rung back. He had not told Mr Harris about Gabby and Moses, as he got a bit flustered. Mr Harris had not explained what the importance of the names and addresses was, and the Appellant had not understood. He was not sure that he knew what "approximation" meant. What he meant when he agreed that it was approximation was that it was guesswork.
9. The Appellant was asked about Mr Harris's letter of 4 August. He said that he did not give the names and addresses because the hearing had been arranged and it seemed pointless. Mr Harris did not say that he wanted the names and addresses in any case, if he had the Appellant said that he would have sent them: there was no reason why he should not have done so. Mr Harris did not explain for what purpose he wanted the names and addresses. He did not think that Mr Harris was intending to compromise. The Commissioners had taken no notice of any of his earlier letters. The Appellant said that he had not brought any of the people named in the list to court. He said that his sons had wanted to come but he told them not to and thought that it was irrelevant. Out of his inheritance, the Appellant said, he kept £1,000 for himself and gave the rest away. He paid £4,000 off his mortgage, and gave £1,000 to his wife, and she had the extra £700 as well. He said that he had paid £29 return for the flight to Palma, and had stayed overnight there with friends.
10. After the seizure of the goods there followed correspondence. This began with a letter from the Appellant dated 7 February, which included the following:

"Four weeks ago I was left £6,000 by my late aunt. I gave £500 to my wife, had £1,000 for myself and paid the Halifax Building Society £4,500 to reduce my mortgage slightly. I am not paying any mortgage as the council pays the interest on it, so my mortgage remains the same year after year. I am receiving the State pension and have no other income. I went bankrupt in 1990 and received income support thereafter.

On receiving this money from my late aunt's will my wife and I thought it would be a nice gesture to give the family a little present with my £1,000 and decided on cigarettes and tobacco as they are expensive in England and we have'nt given them anything since my bankruptcy.

I have five children two son in laws, two brothers, a father-in-law plus myself all smokers so the goods in my suitcase were to be shared between all of us so it wasn't a vast amount, I certainly would not have let them pay one penny for them."

The Commissioners replied in an unsigned letter from the Post Seizure Unit dated 13 February 2003. The contents of the Appellant's letter were ignored, and the Commissioners' letter asked if he was appealing against the seizure or requesting restoration.

11. The Appellant replied on 14 February 2003. In his letter he said that he had truly believed that he was not committing any offence in bringing the cigarettes and tobacco back, and still believed that. He said that he would like to have his goods returned without any court appearance if possible. He also said that he had, before going to Magaluf, asked the advice of "a trade and industry man" what the limit was that he was allowed to bring in, and was told that there was no limit. He added that on no account would he have sold any of it.
12. The Appellant's next letter was dated 21 March 2003. It referred to a letter from the Commissioners dated 20 March, which was not included in the Commissioners documents and was never produced. The Appellant quoted from it. In his letter he said,

"Thank you for your letter dated 20th March regarding the seizure of my goods by one of your officers. Your letter was very informative and I know now I was completely in my rights which I believed all along.

Your letter states, 'In simple terms own use means that the traveller may bring home Excise goods for their own use or give away" That is exactly what I was doing - as I told your officer they were for my own use and close family as a gift from my wife and I as a show of appreciation for looking after us for the last ten years."

This was answered by Mr Matthews of the Post Seizure Unit, who asked for evidence of the inheritance, such as a bank statement shewing the money being paid in, and evidence of the payment towards the mortgage. That letter ended by saying, "Once this information is received then I will ensure a decision on restoration of the goods will be given." The Appellant replied on 11 April enclosing proof of receipt of the inheritance and of payment towards the mortgage, corrected to £4,000 rather than £4,500.

13. Mr Matthews replied to that letter and to the letters of 7 February and 14 February in a letter dated 17 April 2003, which was in fact the original decision letter. In that letter he ignored the information that the Appellant had given, and for which he had specifically asked, relating to the inheritance. He said,

"The following circumstances have been taken into account when considering the request for restoration.

1. You were found to be carrying a large quantity of excise goods.

2. You had made a previous trip two weeks earlier which gave you the opportunity to purchase a similar quantity of excise goods.

3. You were carrying mixed brands of cigarettes, showing no loyalty to a particular brand.

4. The officer was not satisfied that the goods were for personal use as a shopping list was found listing excise goods and names."

That letter also contained, as all such letters do, a list of five matters the presence of any one of which, the letter explained, would militate against restoration of the goods:

"Any evidence of previous smuggling or failure to comply with legal requirements.

Any evidence that the person involved knew what they were doing was wrong.

Any evidence that the person was paid to make the journey.

Large quantities of goods which might damage legitimate trade.

Any evidence that the goods were for a commercial purpose."

Apart from the quantity of goods (and experience has taught this Tribunal that official views as to what would damage legitimate trade vary widely) none of those was present. The amount of goods is the starting point, and if that alone were conclusive there would be no need for the other four items. It is to be noticed also that Mr Tattersall did not mention the list of names as a reason for not being satisfied that the goods were for personal use. If that decision had been the decision under appeal we would have had no hesitation, for the reasons above, in finding it to be unreasonable. However, the decision under appeal is that of Mr Harris of 28 May 2003, not Mr Matthews's decision.

14. The Appellant wrote back on 29 April 2003, an indignant letter in which he deals with the points made in that of Mr Matthews. This letter was treated as being a request for a review. In it the Appellant said:

"... Your officer took from me illegally my goods knowing I had stated from the very beginning they were for me and my family.

I have read your reasons for not returning my goods and it is clear that you think I was going to sell them for an illegal profit - so I suggest if you have any proof of this please say and it would put an end to this saga.

I will go through your letter and once again explain and give reasons how ridiculous your reasons are.

Restoration Policy. 1. Evidence of previous smuggling - answer none - unless you know differently.

2. Evidence of knowing I was doing wrong - Answer - I did not, in fact quite the opposite. I even asked someone before making this trip to clarify I was in my rights

3. Evidence I was paid to make the journey. Answer By whom - unbelievable!

4. Large quantities of goods which might damage legitimate trade. Answer. Two suitcases, not a van load - once again unbelievable!

5. Any evidence that the goods were for commercial purposes. Answer. Have you any evidence? If you can produce evidence against me this case is over.

The following circumstances have been taken into account when considering your decisions. Again, I can hardly believe it.

Large quantity.

Answer Two suitcases between 10 family members.

I made a previous trip earlier which gave me the opportunity to bring a similar amount back.

Answer I made this trip for private and personal reasons which I will only say if it comes to a court case. Why was I not stopped on this occasion? If you were suspicious why did you not? I had not received my inheritance of £6,000 then so I could not afford to buy goods.

3 & 4. I was carrying mixed brands and the officer was not satisfied they were for me and a shopping list was found - wrong - I gave him the list of my family names willingly, which he said could he keep - I agreed. He is a LIAR - would I have been so stupid to volunteer a note if I had anything to hide or if I was doing anything illegal? As for mixed brands - again unbelievable - if 10 people smoke, it's obvious they all have their choice and not everyone likes the same brands - this reason of yours I could not believe."

15. The response to that letter was an acknowledgment, dated 1 May 2003, saying that it had been treated as a request for a review. The review letter of 28 May 2003 followed. In the background section of the letter a very abbreviated summary of the initial conversation with Mr Tattersall was given, which included the bare essentials of that conversation. Mr Harris then summarised the interview. After that he referred to the correspondence, which he said he summarised, though he omitted all mention of the points which the Appellant was seeking to make to shew that the goods were for his own use. Having set out his interpretation of the legislation, including article 12(1B)(e)(i) to (x) of the Tobacco Products Regulations 2001, which, he stated, are factors taken into consideration in determining whether a person has goods for a commercial purpose. At the beginning of the "Consideration" section of the review, Mr Harris said,

"It is for me to determine whether or not the contested decision is one that should be upheld, varied or withdrawn. In doing so, I considered the decision afresh, including all the material that was before the Commissioners at the time the decision was made, and I also examine and consider any representations that have subsequently been received."

16. From the review letter it appears that the matters upon which Mr Harris based his refusal were the following. Having set out the text of the list, the review letter continued:

"If I assume that G/? relates to two people that would make ten people on the list and what appears to be what their preference is and quantity of goods that they require. During the interview you told the officer that this list represented an 'approximation' of what your family smoked. I am not persuaded of this especially when I see that specific quantities are mentioned. You had left the UK with £1,000 in cash in order to purchase gifts for your family. If that was your intention then why did you only purchase £800 worth of goods? I am of the view that all of the people mentioned on the list had given you their order for goods and that you were going to be reimbursed for the goods you purchased for them."

In an earlier part of the letter Mr Harris thanked the Appellant "for your help concerning my review during our telephone conversation of the 27th May 2003." That was the day before the date of the review letter. After the paragraph cited above, the letter continued:

"In order to ascertain as many facts as possible I contacted you by telephone. The purpose of this contact was so that you could give me the names and addresses of all 10 of the family members which you assert were to be the intended recipients of these gifts. You were however only able to provide me with six names and 3 addresses. You admitted to me that there were not in fact 10 family members who the goods were for and that some were for friends, the names of whom you were unsure. I am not persuaded that you have been entirely honest in what you told the officer on the day and in your correspondence to H.M. Customs."

Why he expressed thanks for the Appellant's help on the telephone, when he clearly considered that he had not been helpful, is obscure. It seemed to us that either this was heavy irony, or that he was thanking the Appellant for, as he apparently considered, supporting the Commissioners' case.

"You told the officer that your income consisted of £600 per month. Therefore that would mean that you intending to give away as gifts over a month's worth of income to ten different people for the sole purpose of altruism. Some of these goods were not intended for family members and that would mean you were going to give away as gifts goods to the value of £800 to family as well as non-family members. My view is that when all of the above is viewed as a whole that on the balance of probabilities you were supplying excise goods to people from whom you were expecting recompense."

It is clear that "all of the above" embraces those facts which Mr Harris considered established that the goods were imported for a commercial purpose. The wording refers, evidently, to that paragraph and the two paragraphs preceding, and appears to omit any reference to those facts which tend to support the Appellant's case. The letter concluded by expressing the view that there were no exceptional circumstances that would warrant departure from the Commissioners' policy of non-restoration.

17. Mr Harris wrote to the Appellant on 4 August 2003, in the following terms:

"I write to you concerning your application to the VAT & Duties Tribunal to appeal the non-restoration of goods seized from you on the 4th February 2003 at Bristol Airport.

I invite you to provide me with the details of the names, addresses and phone numbers of the people shown on the list you had with you at the time of seizure or to provide any other evidence that they are related to you. I need this information if we are going to come to any compromise concerning your goods."

Mr Harris said that he had expected a reply to that letter. He was, he said, writing as a review officer. The Appellant did reply declining to give such information, since he had already appealed and had heard from the Tribunal that a hearing date was being prepared, and that it therefore seemed pointless, particularly as most of those named would be at the hearing. In fact none of them attended the hearing.

18. Giving oral evidence, Mr Harris said that he had telephoned the Appellant on the day before he signed the review letter, because if the Appellant had been able to demonstrate that the goods were for gifts he might have been able to restore them. The list gave details of names, preferences and quantities. He said that the Appellant had been able to give him six names and four addresses, and said that not all were family, and was unable to give names or addresses of those who were not family. The Appellant said that he had not said on the telephone that he was unsure of any of the names, only some of the addresses. Mr Harris conceded that the names that he was given did correspond with those on the list. He stressed that the amounts were specific, not approximate. The purpose of the letter of 4 August was to come to an amicable resolution of the matter. He said that he was giving the Appellant an opportunity to establish that the people named in the list were family or close friends and that they were getting free gifts. In cross-examination he admitted that the Appellant had asked him to ring back when his wife was at home, as she would have the addresses. Mr Harris said that he did not ring back. He said that if he had known the names and addresses he might have contacted some of them, which might have resulted in the Appellant getting his goods back. He had used the word "compromise" because that was the word used by the Appellant in his letter of 9 June 2003, in answer to the review letter. In that letter the Appellant expressed annoyance at the insinuation that he was a liar and a smuggler and of devious character, and stating that in all his 68 years he had never been summonsed or questioned by the police. He continued:

"Mr Harris questioned my giving away £800 with me having so little income. In 1990 I was made bankrupt and the people I intended giving these goods to had helped supported and looked after my wife and I at that very unpleasant time and continued thereafter. The inheritance I received was the first time I could repay their kindness.

I still cannot understand why I haven't had my goods returned. I was honest and helpful with the customs officer and even volunteered information I need not have, showing I had nothing to worry about as I considered what I was doing was perfectly legal.

. . .

When Mr Harris contacted me by telephone he was surprised I could not give the addresses of all the people I intended the goods for. Again I challenge him or anyone to remember brothers sisters friends addresses without looking them up. (Had he spoken to my wife she would have answered with no hesitation - as women do.)"

The Appellant then asked for advice as to how to appeal, and then appended the following postscript:

"P.S. I would like to suggest a compromise. I would be prepared to pay the duty on the goods you consider over my limit."

19. Mr Tattersall also gave evidence. He had made a statement, which set out the initial conversation, the "commerciality statement", and the interview. In answer to the Appellant, he said that the list of names had been volunteered to him, prior to the interview. He did not know why Mr Matthews had said that it was "found", since it had been given to him by the Appellant.

The law

20. Both European and domestic legislation apply to the importing of excise goods. Article 8 of Council Directive 92/12/EEC provides:

"As regards products acquired by private individuals for their own use and transported by them, the principle governing the internal market lays down that excise duty shall be charged in the Member State in which they are acquired."

Article 9.1 provides:

"Without prejudice to Articles 6, 7 and 8, excise duty shall become chargeable where products for consumption in a Member State are held for commercial purpose in another Member State.

In this case, the duty shall be due in the Member State in whose territory the products are and shall become chargeable to the holder of the products."

Article 9.2 provides for certain matters to be taken into consideration in establishing whether goods are intended for commercial purposes, which correspond with the matters set out in regulation 12(1B)(e) of the Tobacco Products Regulations 2001. The Customs and Excise Management Act 1979 ("CEMA") provides, in section 49(1), that any imported goods which are chargeable on importation with excise duty and are unloaded from any aircraft in the United Kingdom without payment of duty shall be liable to forfeiture. Section 139(1) of CEMA provides that any thing liable to forfeiture may be seized or detained. Section 141(1) provides that where any thing has become liable to forfeiture, any other thing mixed or packed or found with it is also liable to forfeiture. Under section 152 of CEMA, the Commissioners may, as they see fit, restore any thing forfeited or seized, subject to such conditions as they may think proper.

21. Regulation 12(1B)(e) provides that in determining whether tobacco products are held or used for a commercial purpose by any person, regard shall be had to the following:

"(i) that person's reasons for having possession or control of those products;

(ii) whether or not that person is a revenue trader...;

(iii) that person's conduct, including his intended use of those products or any refusal to disclose his intended use of those products;

(iv) the location of those products;

(v) the mode of transport used to convey those products;

(vi) any document or other information whatsoever relating to those products;

(vii) the nature of those products including the nature and condition of an package or container;

(viii) the quantity of those products, and in particular, whether the quantity exceeds any of the following quantities:

3,200 cigarettes

400 cigarillos

200 cigars

3 kilogrammes of any other tobacco products

(ix) whether that person personally financed the purchase of those products

(x) any other circumstances that appear to be relevant."

22. The powers of this Tribunal are and the review procedure are dealt with in sections 15 and 16 of the Finance Act 1994. The relevant provisions are as follows:

"15-(1) Where the Commissioners are required in accordance with this Chapter to review any decision, it shall be their duty to do so and they may, on that review, either—

(a) confirm that decision; or

(b) withdraw or vary the decision and take such further steps (if any) in consequence of the withdrawal or variation as they may consider appropriate.

. . .

16-(4) In relation to any decision as to an ancillary matter, or any decision on the review of such a decision, the powers of an appeal tribunal on an appeal under this section shall be confined to a power, where the tribunal are satisfied that the Commissioners or other person making that decision could not reasonably have arrived at it, to do one or more of the following, that is to say—

(a) to direct that the decision, so far as it remains in force, is to cease to have effect from such time as the tribunal shall direct;

(b) to require the Commissioners to conduct, in accordance with the directions of the tribunal, a further review of the original decision; and

(c) . . ."

23. In the context of section 16(4), "reasonably" means reasonably in the sense in which that word was used in Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223. In that case, Lord Greene MR said, at page 229,

"A person entrusted with a discretion must, so to speak, direct himself properly in law. He must call his own attention to matters which he is bound to consider. He must exclude from his consideration matters which are irrelevant to what he has to consider. If he does not obey those rules, he may be said, and often is said, to be acting 'unreasonably'."

That passage was quoted in Customs and Excise Commissioners v J H Corbitt (Numismatists) Ltd [1981] AC 22, by Lord Lane, who then said,

"[The Tribunal] could only properly [review the discretion] if it were shown that the Commissioners had acted in a way in which no reasonable panel of Commissioners could have acted; if they had taken into account some irrelevant matter or had disregarded something to which they should have given weight."

The Commissioners' contentions

24. The Commissioners were represented by Mr Sorabjit Singh. He contended, first, that, following Gora v Customs and Excise Commissioners [2004] QB 93, the Tribunal has no jurisdiction to look at the validity of the seizure, even where no condemnation proceedings have taken place. The Tribunal cannot, therefore, find facts as to whether the goods were for the Appellant's own use. Mr Singh referred also to the more recent decision in Dickinson v Customs and Excise Commissioners (The Times, 16 October 2003), in which it was held that the Tribunal can make findings of fact which would be binding on the Commissioners if the matter were remitted to them for a further review. Mr Singh contended that the Tribunal should prefer the decision in Gora, since it was a decision of the Court of Appeal. To find that the goods were for the Appellant's own use would be to challenge the decision in Gora, and the Tribunal must, therefore, accept the deemed fact that the goods were held for a commercial purpose. The Tribunal was, therefore, he contended, confined to considering any information or evidence that needed to be considered relating to the Commissioners' policy on restoration, and, so far as finding facts was concerned, to determining whether there may be any factors which mitigate in favour of restoration. The Tribunal could consider, he said, whether the goods were purchased for family or friends at cost price or for a profit motivation.
25. Mr Singh relied upon the decision in the High Court in Gascoyne v Customs and Excise Commissioners [2003] Ch 292 in saying that this is a case in which the burden of proof did not play any real part in the matter, and that therefore that could not take the matter further forward in favour of the Appellant. In Gascoyne also the Court held that the Tribunal could consider the validity of seizure, but that was no longer good law following Gora.
26. If the Tribunal did not accept that it could not find facts as to the Appellant's intention to import the goods for his own use, the Commissioners contended that he attempted to import the goods for commercial purposes. Mr Singh relied upon the following. He referred to the list of names, and said that the Appellant had imported 11 different brands of tobacco for ten people including himself. In fact, we observe, the list names only eight different brands. The list, Mr Singh said, named ten people "with an indication of their preferred brands and required quantities." It was reasonable, he contended, for the Commissioners to conclude that this list represented an order for goods and that the Appellant would be reimbursed. Secondly, Mr Singh contended, the Appellant's explanation for importing the goods was not plausible; having said in interview that it was all for his family, he later admitted that some was for non-family and he could only give the names of six and the addresses of three. It was reasonable to conclude from that that he had not been wholly honest. Further, the list cannot have been an "approximation" since it set out the precise quantities that the people on the list required. The Commissioners relied also upon the failure of the Appellant to give names and addresses in answer to Mr Harris's letter of 4 August 2003. It was further contended that it was unconvincing that the goods were for friends and family who had helped the Appellant and his wife after he went bankrupt, since that was inconsistent with his having said that the goods were for his family only and that he had no reason for giving the goods to them. Finally, the Commissioners relied upon the fact that the Appellant's expenditure was not commensurate with his income.
27. Mr Singh relied upon the quantities of goods as shewing the probability that they were imported for a commercial purpose. He also relied upon the decision in Alzitrans SL v Customs and Excise Commissioners [2004] VRD 000 as authority that the Commissioners were entitled to rely upon the quantities and the failure to answer the letter of 4 August as additional reasons for non-restoration although they were not raised in either the review letter or the statement of case.

The Appellant's contentions

28. The Appellant relied upon the facts as he had told them to the officer, in correspondence, and to the Tribunal. When he told the officer that the goods were for family only, he had not thought it was all that important because he had not thought that the goods would be seized. He said that he had been quite at ease in shewing the list to the officer, though he need not have done so. It was common-sense that he would buy several brands, since not everyone smokes the same. He said that his sons and daughters had given him and his wife a lot when they were in need, and he would have liked to give the whole of his inheritance away.

Conclusions

29. One of the primary issues before us in this case is that of the Appellant's credibility. He gave an account of his importing of the tobacco which did not significantly vary from the time of his interception until the hearing. If the Commissioners' case is correct, then the Appellant was knowingly telling lies in respect of several important matters: principally, in saying that he had imported the goods for himself and to give away to members of his family. Again, if the Commissioners are right, the Appellant lied about the list, saying that it was of intended family recipients when in fact it was a list of brands and quantities which had been ordered. Thirdly, he must also have lied when saying that he was not going to receive any money for the goods. Fourthly, in saying that the goods were for family only, and then saying that some was for non-family, he was being "less than honest". Presumably by that the Commissioners mean that he was lying: they do not say whether he was lying when he said that the goods were for family, or when he said that some was for friends.
30. We have seen and heard the Appellant give evidence, and had the opportunity of assessing whether he was telling the truth or not. In our judgment, he was a witness of truth, and we accept his evidence. We also accept as being the truth what he said to Mr Tattersall, except where that has been admitted by him to be in error. The Commissioners, in the persons of Mr Tattersall and Mr Harris, on the other hand, appear to have accepted as true only those things which tended to support their own case; the other things, which were demonstrably true, they have simply ignored. For instance, the matter of the Appellant's inheritance was clearly proved, as was the fact that he had paid £4,000 towards his mortgage debt, and yet the Commissioners relied heavily upon the fact that his income was only £600 a month and therefore he could not afford to buy the goods for his own use. Indeed, the Commissioners do not seem to have considered the possibility that the Appellant was telling the truth. That is clearly a relevant matter.
31. We come to the question of whether we are permitted to come to a finding of fact on the issue of whether the Appellant imported the goods for his own use. Mr Singh referred to the passage beginning in paragraph 54 of the decision of Pill LJ in Gora. In that paragraph Pill LJ said,

"What is described as a cross-appeal arises by reason of a finding of the Tribunal in Gora (paragraph 57) that in certain circumstances the Tribunal has a jurisdiction in relation to forfeiture. These appeals are in relation to findings on preliminary points upon which this issue did not arise. That being so, the Court cannot pass judgment upon it but it is in my view appropriate that the Court should express a view on what is a fundamental point for the guidance of the Tribunal. For the Appellants, Mr Cordara seeks to uphold the finding of the Tribunal on the basis that it must be able to find facts on the question whether duty on the goods has been paid."

Then in paragraph 56, Pill LJ continued:

"56. The Tribunal accepted that where liability to forfeiture has been determined by a court in condemnation proceedings, 'there is no further room for fact finding by the Tribunal' and it has no jurisdiction. However, the Tribunal went on to hold that Mr Gora did not give a notice under paragraph 3 [of Schedule 3 to the Customs and Excise Management Act 1979] 'and as a result the law took its course and the goods were treated as property seized and so liable to forfeiture. No finding of fact resulted. A deemed fact is not a real fact. It cannot consequently rank as a consideration relevant to the subsequent decision on restoration until determined by the Tribunal or conceded to exist'. It was held to be open to the Tribunal to determine the question of fact whether the goods were seized.

I do not agree with that conclusion. Jurisdiction to decide whether any thing forfeited is to be restored under section 152(b) is with the Tribunal. The jurisdiction in condemnation proceedings is, by virtue of Schedule 3, with the courts. If the deeming provision in paragraph 5 of the Schedule operates, the thing in question shall be deemed to have been duly condemned as forfeited. The effect of this deeming provision is to provide that the thing is to be treated as forfeited. The purpose of the provision is to treat the deemed fact as a fact and I cannot accept that it can be treated as 'not a real fact'.

While the division of jurisdiction between the courts and the Tribunal may arguably be curious, and is probably retained because of the long standing jurisdiction of the courts in proceedings for condemnation, the division is clear and it is not intended that the Tribunal should have jurisdiction to reconsider the condemnation of goods as forfeited...."

The context in which the jurisdiction of the Tribunal was considered was as to whether the Tribunal has a jurisdiction in forfeiture, and to find facts on the question of whether duty on the goods in question has been paid.

32. In Dickinson, Peter Smith J cited paragraphs 54 to 58 of Gora in full, and continued as follows:

"44. There the judgment appears firmly to require the issue as to forfeiture to be determined in the condemnation proceedings and the issue not to be determined in the Tribunal. Otherwise, it is said (paragraph 58) the court could be chosen by the person in question.

Does that mean that Mr Dickinson is unable in the restoration proceedings to adduce evidence of own use to seek the restoration remedy? It would be very odd if every non-profit commercial case was capable of being received in the restoration proceedings except the one based entirely on his own use. Take this example. Mr Dickinson said he bought the goods entirely for the purposes of redistribution between friends and relatives at no profit, he would undoubtedly be able to invoke the procedure even if the forfeiture notice had not been challenged, conversely, if some were for his use and others for friends he could only challenge pro tanto presumably.

It is unfortunate that the Lindsay case was not cited to the Court of Appeal. Nor was the comprehensive review of the interrelation between the two procedures of Neuberger J in Gascoyne v Customs and Excise Commissioners [2003] 2 WLR 1311 cited to it.

Further the Gora decision in this respect is obiter.

In Gascoyne (paragraph 117) Neuberger J made it clear that as far as he was concerned, whether there was an election for condemnation proceedings of the review procedure there would be a judicial determination as to whether or not the goods concerned were for own use or held for commercial purposes. Accordingly one starts with the proposition that there is ample and full protection for a person whose goods have been seized in relation to his primary liability and one is therefore considering the powers of the tribunal in circumstances where the primary liability has been or at least can be judicially determined. Lindsay was cited to him and he referred to the judgment of Lord Phillips MR.

I have come to the conclusion that it is open to Mr Dickinson in the restoration proceedings to raise the issue of private use for the purpose of seeking to invoke the discretionary procedure of restoration. That does not involve a challenge to the forfeiture, which cannot be done per Gora save in condemnation proceedings. I see nothing difficult in that. First it enables the matters to be dealt with whichever course of action is taken by the person seeking restoration of the goods. Otherwise there would be an injustice. The failure to issue the notice would preclude Customs and Excise and the Tribunal on review from considering restoration when evidence is later produced which shows that it was an own use purchase. Second of course the procedures are different. The forfeiture results in the deemed findings that the goods were commercial. I do not see why it should not be possible within the ambit of the required explanation of the nature of the commercial transaction that Mr Dickinson could not bring the matters in. The restoration procedure is discretionary, whereas the challenge to the forfeiture is not. In the former case Mr Dickinson would be seeking a review of the decision of the Customs and Excise, and one factor in that exercise would be the fact that the transaction he establishes was not for profit. By way of contrast, in the condemnation proceedings, if he establishes it, he establishes that the forfeiture was not valid." [The emphasis in paragraphs 48 and 49 appears in the judgment.]

Having set out paragraph 119 of the judgment in Gascoyne, which analyses the different functions referred to, in which Neuberger J said that the purpose of forfeiture of a vehicle was to prevent its use for subsequent smuggling, not to punish the smuggler, Peter Smith J continued:

"52. It seems to me that if Mr Dickinson would not be allowed to raise by way of mitigation and in seeking to invoke the discretionary restoration procedure the fact that the goods were purchased for own use that would punish him and be disproportionate."

Later, in paragraph 71 of his judgment, Peter Smith J said,

"... I do not see, having heard Mr Dickinson, how it can be said that the Tribunal were not entitled to conclude the decision of the Commissioners was one which no reasonable panel of Commissioners would have acted upon. Mr Dickinson's evidence was not challenged. He was not cross-examined on his evidence that the purchase was for private use only. I was not provided with any notes of the evidence, but it is quite clear from (for example) paragraphs 24 and 30 of their judgment, that they concluded, having heard him that the tobacco was for personal or family use. I accept Mr Smith's (who appeared for Mr Dickinson before me) submission that whilst the Tribunal decision is limited to review, it does have a fact-finding status in view of the Gora decision. Thus whilst it cannot impose its own order it can make findings of fact, which upon remission to the Commissioners for further consideration, are binding on the Commissioners...."

33. In Gascoyne, in paragraph 117, Neuberger J said,

"... A person in [the Appellant's] position is given full recourse to a judicial tribunal in relation to the question of whether the goods were properly forfeited: he can serve a notice under paragraph 3, seeking condemnation proceedings, or he can apply for a review and an appeal under sections 14 to 16 of the 1994 Act, or he could invoke both courses. Whether he elects for condemnation proceedings or the review procedure, he will be entitled to access to a judicial tribunal and there will therefore be a judicial determination, effectively de novo, as to whether or not the goods concerned were for own use or held for commercial purposes."

34. From those passages it is clear, first, that in Gora forfeiture was under consideration, whilst in Dickinson restoration was the issue, and that the same considerations do not apply to both. Secondly, as Peter Smith J pointed out, the relevant passages in Gora were obiter. It would be a strange thing if an appellant were not permitted to endeavour to establish, in a restoration appeal, that the goods were imported by him for his own use, including use as a gift. If that were the case he would have no means of challenging the facts upon which the original decision or the review decision was based, and therefore of shewing that the Commissioners' decision was unreasonable in the Wednesbury sense. Nor would the Tribunal be able to find that that decision was unreasonable if it was unable to come to a conclusion on the facts. Mr Singh contended, indeed, that the Tribunal could not do that, and that it must confine its consideration to the extremely narrow ambit of the operation of the Commissioners' policy. The result would be, it seems to us, that there would really be no need for an appeal hearing at all, since, as is usual, the "exceptional matters" which might enable a departure from the Commissioners' policy are dealt with in correspondence. That that is not correct was stated and underlined in Dickinson, in a decision which we respectfully adopt.
35. Mr Singh also referred to a passage in Gascoyne dealing with the matter of the burden of proof. That passage is to be found in paragraphs 83 and 84:

"83. It is clear from paragraph 170 of the judgment in Hoverspeed that the PRO wrongly imposes the burden of proof on the alleged smuggler. However, in my judgment, unless it can be shown that the burden of proof so far as establishing whether the goods were for the personal use of Mr Gascoyne and/or Miss Gifford, played a part in the determination of the issue by the Customs Officers in seizing the goods, or in the decision of the Commissioners to refuse restoration, or in the review carried out by Officer Tooke, the point can take matters no further forward so far as Mr Gascoyne is concerned. Although the burden of proof can be crucial in some cases, there will be many cases where, in practice, it plays no real part at all. Indeed the point is well illustrated in connection with the PRO itself by what the court said at paragraph 173 in Hoverspeed:

'[A]s Lord Woolf CJ pointed out..., no one is in a better position to know whether the goods are to be used for private or commercial purposes than the person in possession of them and, if Customs Officers do not believe him, there is in practical terms not much difference between his failing to satisfy them that they are not being held for his own use (the PRO test) and them being satisfied that they are being held for "commercial" (the test under the Directive). In a borderline case, however, the location of the burden of proof may well make a difference.'

The present case appears to me to be a paradigm example of what Lord Woolf CJ is there quoted as having had in mind. Whether the goods were for the personal use of Mr Gascoyne and Ms Gifford, or whether they were being imported for commercial purposes was an issue which the Customs Officers (and in due course the Commissioners on the section 152 application, and Officer Tooke on the review procedure) had to consider by reference to the quantity of goods imported, the statements made by Mr Gascoyne and Ms Gifford, the extent to which those statements were believable, and common sense. In light of what was said by Mr Gascoyne and Ms Gifford to the Customs officers, it seems to me that, to put it at its lowest, the Customs Officers and Officer Tooke were plainly entitled to reach the conclusion that they did on this issue simply on the basis that the did not believe Mr Gascoyne."

In Gascoyne the appellant was seeking to import 32 kg of tobacco and 10,000 cigarettes. The report of the judgment of Neuberger J does not set out what the appellant in that case said to the Customs officers, but it mentions that the Tribunal found that the appellant did try to mislead the officers, and that "his actions were not those of a shopper who was purchasing goods for his own use in good faith".

36. In the case before us the amounts of goods are nowhere near so great. In the initial conversation with Mr Tattersall nothing was said by the Appellant that was not capable of belief. Immediately after that the commerciality statement was read to the Appellant (see paragraph 3 above), which demanded an explanation from him failing which his goods would be seized. It is quite clear that the Appellant was being asked to prove that the goods were for his own use. This fact was also in the mind of the review officer, who referred to it (misquoting what the officer had said) without criticism on the second page of the review letter. It appears to us, therefore, that the Commissioners were in effect imposing upon the Appellant the burden of proving that the goods were imported for his own use.
37. We take into account that the Commissioners are entitled to disbelieve an appellant in such circumstances. But there must be grounds for that disbelief, and that disbelief must, in our judgment, be such that what the appellant has said relating to the reason for importing the goods ought to be disbelieved. It is not enough for the Commissioners, at whatever level, to listen to statements by an appellant which are capable of belief (even if also capable of disbelief) and may contain trivial mistakes and simply dismiss them out of hand. Trivial mistakes do not necessarily denote dishonesty or a desire to deceive.
38. The review officer relied upon the following matters (se paragraph 16 above). First, the use and significance of the word "approximation". That must be considered in its context. Mr Tattersall asked the Appellant, "How do you know what your family smokes, or was it an approximate?" He was clearly asking about the brands which the Appellant's family smoked. The word "approximate" appears to be a misuse of the word, and, as the Appellant said, he did not understand it. When he answered "approximation" he was simply using the word that had been put to him, and he said that he meant "guesswork". That, it appears to us, would make sense. The fact that specific quantities were mentioned appears to us to have no bearing upon the brands preferred by individuals. In any case, writing down the quantities that he intended to purchase appears to us to be at the least equivocal. It is not clear how that passage caused Mr Harris to consider that the goods were imported for sale at a profit. The very list itself was no more than equivocal: the Appellant said that it was of family members and what he was proposing to give them as presents; it could also possibly have been a list of orders as Mr Harris supposed. Another point which Mr Harris considered adverse to the Appellant's case was the fact that he took £1,000 with him and only spent £800 on the goods. That seems to us to be a non sequitur. In the first place, the Appellant said that the £1,000 was used also to pay his own expenses as well as the goods, and in the second place £800 was clearly what the goods cost. From those two points Mr Harris concluded that the list was a list of orders for goods for which the Appellant was to be reimbursed. There appears to us to be no necessary logical connexion.
39. Mr Harris also said that on the telephone on 27 February the Appellant had only been able to give him six names and three addresses of those ten named in the list. In the first place, there were only nine names in addition to the Appellant himself. In the second place, in his oral evidence Mr Harris said that the Appellant gave him four addresses. Trivial mistakes, no doubt, but not without significance. Then Mr Harris said that the Appellant had admitted that there were some (two, according to the evidence) who were not family. To use the word "admitted" here appears to us to be tendentious; it makes it sound as if this were a fact that the Appellant was trying to conceal. Yet if the Appellant were really trying to deceive and conceal the fact, there was nothing to stop him continuing to do so on the telephone. There are further facts. Mr Harris admitted in evidence that the Appellant had asked him to ring back later when his wife was at home, she being able to provide the addresses: Mr Harris never did so. Further, Mr Harris said that his purpose in asking for the names and addresses was so that he could contact some of them and discover whether they were in fact family or were in fact to have been given gifts of tobacco. He never did so, even though he was given four names with addresses whom he could have contacted. The evidence before us, like that before the Commissioners, was that all but Gabby and Moses were members of the Appellant's family. We accept that evidence. It is of course open to the Commissioners to make such inquiries as they think proper to verify that evidence: here, with the means of doing so, Mr Harris decided not to. He also relied upon the Appellant's failure to answer the questions set out in his letter of 4 August. Why he did not explain the purpose of the questions he was unable to explain. The Appellant's reason for not answering was simple, that a date had been fixed for the hearing, and there was no point. He also mentioned that some of the bearers of the names would be coming to the hearing, which they did not. But, in any case, that was some months after the review decision had been made and notified to the Appellant. Was Mr Harris considering rescinding that decision, if he had power to do so? It almost appeared that he was having second thoughts about his decision. This was urged as a further reason for upholding the decision not to restore the goods; it appears to us to be no reason at all.
40. The final point relied upon by Mr Harris was the implausibility of the Appellant, whose income was £600 a month, giving away £800 worth of cigarettes and tobacco. That was in the face of the Appellant's evidence that he had spent £800 of his inheritance on the goods. Indeed he made it clear that had he not received that inheritance he would not have bought the goods. Again, we accept the Appellant's evidence on that point, and the reasons for his intending to give the gifts to those for whom he intended them. It is difficult to see how the matter of the Appellant's income is, in the circumstances of any relevance.
41. For the above reasons, we have come to the conclusion that the matters mentioned above which were taken into account by the review officer in reaching his decision were not relevant or were matters which should not have been taken into consideration. It is also clear that the Commissioners did not consider the possibility at any point that the Appellant was or may have been telling the truth. It was also clear that the matters raised by the Appellant in his letters, and which he relied upon, were ignored. We are aware that Mr Harris said that he took everything into consideration, but he gave no reason for considering that all the matters raised by the Appellant were untrue or of no assistance to him.
42. For the above reasons we have come to the conclusion that the review decision was unreasonable in the Wednesbury sense. This appeal is therefore allowed.

DIRECTION

NOW THIS TRIBUNAL DIRECTS

43. that this appeal be allowed
44. that the Commissioners do carry out a further review of the decision to refuse restoration of the Appellant's goods; such further review is to be carried out by an officer who has had no previous involvement with this matter, and is to be completed not later than 30 days after the date of release of this decision
45. that the further review decision, if adverse to the Appellant, shall give rise to a further right of appeal to the Tribunal
46. that in the event of the goods having already been disposed of, the further review should be undertaken on the basis that restoration would be by way of compensation
47. that the Appellant shall be entitled to his costs of the appeal (if any), and that the parties shall be at liberty to apply to the Tribunal in default of agreement on the matter of costs

ANGUS NICOL

CHAIRMAN

RELEASED:

LON/03/8140