EO00907
EXCISE DUTY — vehicle used for importation of tobacco goods to give to workmen in return for services rendered — importation was commercial and for profit — original Tribunal directed re-review relating to hardship and proportionality — whether re-review refusing restoration of vehicle was reasonable — appeal dismissed

MANCHESTER TRIBUNAL CENTRE

 
 	
TAJ SINGH	Appellant

- and -

HER MAJESTY’S REVENUE AND CUSTOMS	Respondents

			Tribunal:	Ian E Vellins (Chairman)
					Marjorie Kostick BA FCA CTA 	

Sitting in public in Birmingham on 5 July 2005

Mrs B Johal for the Appellant 

Mr B Mills, of counsel, instructed by the Acting Solicitor for HM Revenue and Customs for the Respondents 

© CROWN COPYRIGHT 2005

DECISION

1.	The Appellant is appealing against the decision of the Respondents taken on re-review dated 4 January 2005 to refuse restoration of a motor vehicle registered number W248 AJW to the Appellant, the vehicle having been seized on 23 October 2003.  
2.	At the hearing of this appeal at Birmingham on 5 July 2005, the Appellant was represented by his wife, Mrs B Johal, and the Respondents were represented by Mr B Mills of counsel.  
3.	We heard oral evidence from the Appellant himself and on behalf of the Respondents, from the re-review officer, Mr Raymond Brenton.  
4.	The Appellant has had a previous hearing of his appeal against a previous decision of the Respondents taken on review dated 16 January 2004 to refuse restoration of excise goods and the motor vehicle to the Appellant.  This appeal was heard by the Tribunal under reference MAN/04/8019 following hearings in Birmingham on 9 June 2004 and 11 October 2004.  At those hearings, the Tribunal decided that that the original review officer was reasonable in viewing the importation as being commercial in nature and for a profit and concluded that the refusal of restoration of the goods was perfectly reasonable and was one which the Tribunal upheld.  However, in relation to the vehicle, the Tribunal found that the manner in which the original review officer considered hardship was not reasonable and also that the original review officer should have given some consideration to proportionality.  The Tribunal therefore directed that the Appellant should forward to the Respondents such further information as he wished them to consider in relation to his finances and his father’s medical appointments and that the Respondents should carry out a further review of the decision to refuse restoration of the vehicle, such a review being limited to the questions of hardship and proportionality.
5.	In accordance with that direction, the Appellant forwarded further information and documentation to the Commissioners with a letter of 15 November 2004.  A further review officer of the Respondents, Mr Raymond Brenton, carried out his re-review on 4 January 2005 in which he considered the issues of proportionality and hardship in connection with the vehicle, and in which Mr Brenton concluded that the vehicle should not be offered for restoration to the Appellant.  It is against that further review decision dated 4 January 2005 that the Appellant now appeals.
6.	At the commencement of the hearing of the appeal, both parties agreed that they were not contesting the findings of fact of the previous Tribunal, and that the only issues in this appeal were whether the review officer, Mr Brenton, had reasonably considered the evidence of hardship and proportionality submitted by the Appellant, and whether his decisions relating to hardship and proportionality leading to his decision not to restore the vehicle to the Appellant were a reasonable exercise by the Respondents of their discretion.  
Findings of fact by previous Tribunal
7.	On the 23 October 2003, the Appellant was intercepted at the UK Customs Control at Coquelles.  At the time of the interception, the Appellant was driving his Peugot 406 motor car registration W248 AJW and travelling with him was his brother Mr Pardep Singh.  On interception, the Appellant underdeclared the volume of goods being transported and had attempted to conceal the volume of goods being carried.  Some of the goods were found in the wheel well of the vehicle and some in the panels of the vehicle.  The occupants of the vehicle were importing without payment of duty 18.5 kg of hand-rolling tobacco, 1,600 cigarettes, 62.1 litres of beer and 15.42 litres of spirits.  
8.	Mr Pardep Singh, at his interview, stated that he had paid in the region of £200 for the part of the goods that were his, namely 7.5 kg of the tobacco, 800 cigarettes and some of the beer and the spirits.  The Appellant, at his interview, claimed that he had spent approximately £900 on the remainder of the goods.  The Appellant had confirmed to the interviewing officer that he did not himself smoke but that the tobacco was for paying people who had done work for him, and that the cigarettes were for his older brother who would repay him at cost.  The original review officer, Mr Harris, had concluded the restoration should not be offered.  The reasons he gave were the initial false declaration as to quantity, that the cigarettes were for the Appellant’s brother, who would pay cost for them and that the tobacco was to be used as payment for work done, neither of these uses being within the definition of “own use”, and finally the implausibility of the reason given for placing the tobacco in the wheel well.
9.	The value of the vehicle had been £5,800 and the total revenue evaded on all goods was £2,539 of which £1,621 related to the Appellant’s goods.  
10.	The Tribunal concluded that the Appellant had made a deliberate under-declaration on interception and had attempted to conceal the value of goods carried.  The Tribunal found there to be a wilful and deliberate under-declaration, and that the concealment of the goods and under-declaration were intended for officers not to be alerted to the volume of goods carried.
11.	The Tribunal also concluded that the Appellant had made a commercial purchase and importation, and for profit, of the goods.  The Tribunal concluded that the Appellant had paid less for the tobacco than the labourers were charging and that he had saved money. The Tribunal concluded that the tobacco was purchased with specific labourers in mind in that different brands were purchased for each according to their choice and that the labourers had stated the price and tobacco of choice which was purchased for them at a lesser cost to the Appellant.  The Tribunal concluded “this can only be viewed as a commercial purchase and importation and for profit”.  
12.	The amount involved in relation to the Appellant of 11 kg of tobacco fell outside the discretionary power of the Respondents to restore and within their policy of non-restoration.
13.	In his plea of hardship, the Appellant had relied on three factors at the previous hearing.  First, his very unsocial hours of work, necessitating the use of taxis; secondly his need to take his father to and from hospital appointments; and thirdly the financial loss to himself when he cashed in part of his pension scheme to pay for a new vehicle.  The Tribunal concluded that, in his review, the original review officer Mr Harris had addressed none of these matters and the Tribunal believed that Mr Harris should have specifically addressed the points raised by the Appellant.  The Tribunal concluded:
 “We believe the decision in so far as Mr Harris rejected the plea of hardship was unreasonable and should be the subject of reconsideration.  We also believe that before reconsideration, the Appellant should be given the opportunity to put in further evidence.  …  We therefore wish to give the Appellant the opportunity to provide evidence of his father’s hospital appointments for a three month period beginning with the date of seizure.  We also will allow the Appellant to put in detailed and substantiated evidence of his and his wife’s joint income and their expenditure.”
14.	With regard to proportionality, the Tribunal concluded that it felt that Mr Harris should have given proportionality some consideration and afforded it a mention in his review letter.  The Tribunal took the view that the Appellant was not importing large quantities in order to offer them for sale and that was a distinction which was worth making.  Furthermore, the Tribunal took the view that the figure to be used in any balancing act was not just the excise duty evaded on the Appellant’s goods but also that duty evaded on his passenger’s goods, namely the entire contents of the vehicle.
15.	In conclusion, the Tribunal allowed the Appellant’s appeal in respect of the vehicle and directed that the Appellant should forward to the Respondents such further information as he wished them to consider in relation to his finances and his father’s medical appointments and that the Respondents should carry out a further review of the decision to refuse restoration of the vehicle, such a review being limited to the questions of hardship and proportionality.
Information supplied by Appellant to Re-Review Officer
16.	On 15 November 2004, the Appellant wrote to the Respondents in accordance with the direction of the Tribunal, enclosing a statement of joint income of expenditure of the Appellant and his wife, a document relating to the closure of a savings scheme, a stock valuation in relation to share dealing at Halifax, and documents from hospitals relating to appointments for his father.  
17.	In the letter, he stated that his father was housebound and was in receipt of a disability living allowance as a result of medical conditions.  He needed to take his father to regular appointments at three different hospitals.  Language problems prevented anyone else from taking him.  His father is 74 years old and does not speak English. The Appellant’s wife is able to speak both English and Punjabi and so attends the appointments with the Appellant in order to translate for his father and for hospital staff.  Culturally it would not be acceptable for his wife to attend with his father on her own and with anyone other than the Appellant himself.  
18.	The statement of joint monthly income and expenditure stated that there was a joint income of the Appellant and his wife from their salaries of £2,200 per month.  The statement detailed expenditure of mortgage £800, gas and electricity of £70, house insurance of £65, water rates of £45, council tax of £120, telephone of £40, mobile telephones of £30, out of school child care of £100, living costs for food, bus fares, clothing and life insurance policies of £600 and car expenditure of £150.  He stated that the income was for a family of four including two children aged 9 and 12.  He stated that in order to pay for another vehicle, he had to cash in his ‘save-as-you-earn’ scheme two years early which caused him to loose in the region of £500 - £600.  He stated that he did not have any savings to draw upon as he invested £6,600 in shares four years previously which are now only valued at £520.  
19.	The statement from Nationwide indicated that the Appellant had closed an account on 30 October 2003 and had received £3,458.62.  The Halifax share dealing valuation for 5 October 2004 indicated that the Appellant had purchased stock at a book cost of £6,647 which had a market value at 5 October 2004 of £520.  
20.	An out-patient appointment card for the Appellant’s father at Nottingham City Hospital contained an appointment on 27 May 2004.  A further letter from Nottingham City Hospital indicated a waiting time for appointments in the Urology Department for the Appellant’s father of approximately three months, and a later letter gave an appointment on 27 May 2004.
21.	Further letters from the Nottingham Hospital refer to ENT appointments on 27 May 2004 and 3 June 2004, and an appointment with an audiologist at the Hearing Services Centre on 11 January 2005.  A communications book at Sherwood Day Hospital for the Appellant’s father contained a note dated 13 October 2003 that the Appellant’s father would be attending on Mondays and Thursdays, that transport has been booked, and that the Appellant’s father should ask his son to contact the hospital and speak to a doctor.
The Review by Mr Brenton
22.	Following the letter from the Appellant dated 15 November 2004, and in accordance with the direction of the Tribunal, the further review officer, Mr Brenton, reviewed the non-restoration of the seized vehicle, and set out his review in a letter to the Appellant dated 4 January 2005.  In that letter, Mr Brenton set out the background, the previous interviews of the Appellant and his passenger when intercepted, the findings of the Tribunal, and the documents sent by the Appellant with his letter of 15 November 2004.  Mr Brenton also set out the applicable legislation and the restoration policy of the Respondents.
23.	In the review letter, Mr Brenton addressed the issue of proportionality.  He referred to the decision in the Court of Appeal of Lord Philips in the case of Lindsay v Commissioners of Customs and Excise in which he stated:
“Those who deliberately used their cars to further fraudulent commercial ventures in the knowledge that if they are caught their vehicles will be rendered liable to forfeiture cannot reasonably be heard to complain if they lose those vehicles.  Nor does it seem to me that, in such circumstances, the value of the car used need to be taken into consideration. Those circumstances will normally take the case beyond the threshold where that factor can carry significant weight in the balance.  Cases of exceptional hardship must always, of course, be given due consideration …”.
In the same case, Lord Justice Judge stated:
“Given the extent of the damage caused to the public interest, it is, in my judgment, acceptable and proportionate that subject to exceptional individual considerations, whatever they are worth, the vehicles of those who smuggle for a profit, even for a small profit, should be siezed as a matter of policy …”.
Mr Brenton concluded that it was his opinion that it was wholly proportionate not to restore the vehicle to the Appellant irrelevant of its value.  
24.	Mr Brenton considered the question of hardship caused by the loss of the vehicle, as claimed by the Appellant.  The Appellant in correspondence with the Respondents had previously stated that the loss of the car might mean that the Appellant would lose his job.  He also claimed that he was incurring taxi costs of £28 per day in order to get to work at 3 am.  He also stated that he needed to take his housebound father to medical appointments and visits.  The original review officer had noted from records available to him that several other vehicle had been registered to the Appellant at his home address.   At the original Tribunal, the Appellant had given evidence that Mr Pardep Singh and Mr Rajpal Singh ran two vehicles respectively as plated taxis.  Mr Brenton concluded that it was not plausible that the Appellant would be incurring taxi costs of £28 per day if he had two family members running taxis that belonged and were registered to him.
25.	With regard to the hospital appointments, Mr Brenton noted that the appointment for the Urology department was for one visit to Nottingham City Hospital on 27 May 2004 and an appointment for the ENT on the same day.  The only regular visits appear to be at the Sherwood Day Hospital on Mondays and Thursdays, with the appointment card notated “transport booked”.  
26.	Mr Brenton stated that hardship was a natural consequence of having a vehicle seized and it was exceptional hardship that he had to look at in order to find a reason to deviate from the non-restoration policy.  He considered that one must expect a considerable inconvenience as a result of having a vehicle seized by the Respondents and perhaps considerable expense in making other transport arrangements or even in replacing the vehicle.  Mr Brenton did not regard either the inconvenience or expense in the case of the Appellant to be exceptional hardships over and above what one should expect.  In the circumstances, he did not consider that the Appellant had suffered exceptional hardship by the loss of the vehicle and concluded that there was no reason to dis-apply the Respondents’ policy of not restoring the car in all of the circumstances.  He concluded that the vehicle should not be offered for restoration. 
Evidence of Appellant at hearing
27.	The Appellant gave oral evidence at the hearing of his appeal.  He complained that Mr Brenton had made no reference in his review decision to the income and expenditure information that he had provided to help put his income into context and to support his plea of hardship.  He confirmed that at the previous hearing he had told the Tribunal that he had worked as an HGV driver for Tibbett and Britten for the previous twenty years and the combined income of himself and his wife had been £40,000 per annum.  He said that this was the gross amount and this was comparable with his latest statement of joint monthly income where he gave the joint net salaries of himself and his wife as £2,200 per month.  He still worked as a HGV driver and his wife worked for a firm of solicitors.  He agreed that he had failed to send to the Respondents proof of his expenditure such as bills and statements, and said that he had not provided the proof of his expenditure as he had not realised that this was necessary.  He had not produced wage slips. 
28.	The Appellant agreed that he had told the previous Tribunal that he had only been able to buy a replacement vehicle four weeks after the seizure of the vehicle by cashing in a bond.  He said that he bought a cheap Rover vehicle for £700, and then in April 2004 he had sold the Rover and paid £3,000 for a Peugot 406 vehicle.  The purchase of the Rover and the later purchase of the Peugot had taken place before the previous appeal hearing.  He said that he cashed in a savings scheme with Nationwide on 30 October 2003, receiving £3,458.  He used part of this money to purchase the Rover vehicle and the remainder towards the purchase of the Peugot vehicle.  He stated that in order to pay for the Rover, he had to cash in the Nationwide scheme two years early which caused him to lose in the region of £500 - £600.  He also stated that he had suffered a drop in the value of his shares with Halifax, but this was not a consequence of the seizure of his vehicle by the Respondents.  He complained that Mr Brenton had made no comment in his review decision of the fact that the Appellant had to cash in his savings scheme in order to purchase the Rover.  
29.	The Appellant claimed that for the four week period after the seizure of his vehicle before he purchased the Rover, he had to take taxis to work.  He denied that the other members of his family, who were taxi drivers, took him to work during that period without charging him.  He did not have any receipts for taxi fares.  
30.	The Appellant claimed that hardship was suffered because during the four week period when the Appellant was without a vehicle, he had had to arrange for transport for his father to attend hospital appointments.  The Appellant had no documentation relating to his father’s hospital appointments during the four weeks when the Appellant was without a vehicle, except the communications book which he had produced to the re-review officer which indicated that his father would be attending hospital on Mondays and Thursdays.  The Appellant could not explain why that communications book referred to “transport has been booked”, and he could not explain why that book contained the note that his father should ask him to contact the doctor, when that note should not have been necessary if the Appellant had accompanied his father to the hospital on 13 October 2003.  The Appellant said that he did not know if he had accompanied his father to the hospital on that date.  The Appellant said that he usually took his father to hospital appointments but sometimes other brothers or a member of the family would take his father to hospital but they would not use an outside taxi.  He said that his father had difficulty getting in and out of the Rover car as his father was very fragile.  
Evidence of Mr Brenton at hearing
31.	Mr Brenton gave evidence at the hearing of the appeal that he had fully taken into account the directions of the previous Tribunal and the information which the Appellant had provided with his letter of 15 November 2004.  He was aware that there had been a commercial importation for profit, an under-declaration of goods and a concealment of goods.  He said that he had looked at the question of whether there was exceptional hardship and the question of proportionality. He had expected to receive from the Appellant documentation in the form of wage slips and proof of outgoings.  That had not been forthcoming from the Appellant.  He said that he had seen no evidence that would prove exceptional hardship to the Appellant.  The Appellant had provided a list of finances and a declaration of income and expenditure.  The Appellant had stated that he and his wife had joint net salaries of £2,200 per month, and details of expenditure, which were not exceptional.  He had considered those details even though they had not been supported by documentary evidence.  He had also considered the fact that the Appellant had cashed in early a savings account at Nationwide.  He considered that it would be a normal and usual occurrence for a person who had had his vehicle seized to use savings to purchase a replacement vehicle.  He considered that there was nothing exceptional about the Appellant’s means of financing the purchase of a Rover car.  The fact that the Appellant had held shares in Halifax which had deteriorated in value was not the consequence of the seizure of the vehicle, but he had taken into account the fact that the Appellant had had a capital loss.  He considered that the Appellant and his family had a normal family income and expenditure.  He had taken into account the fact that the Appellant had lost monies by cashing in his save-as-you-earn scheme at Nationwide two years early.
32.	Mr Brenton had said that he considered that it was not plausible that the Appellant was claiming expenditure of £28 per day on taxis for the four weeks when he was without a vehicle when he was a member of a close family where members of the family were involved in driving taxis which at some stage had been owned by the Appellant himself.  He did not consider that the Appellant had provided reasonable evidence that he had had the expenditure of £28 per day on taxis for that four week period.  Even if that expenditure had been incurred by the Appellant, he did not consider that this amounted to an exceptional hardship.
33.	Mr Brenton said that he did not believe that the Appellant had in fact suffered exceptional hardship in arranging for transport for his father to hospital during that four week period.  Mr Brenton considered that members of the family would have taken the father to the hospital and the hospital note had indicated that transport had been provided.  He did not consider that in any event the difficulties in the travel arrangements for the father to and from hospital during that four week period amounted to exceptional hardship.
34.	Mr Brenton gave evidence that he had considered the question of proportionality, but had considered that the seizure of the vehicle was proportionate.  Following the Lindsay decision, he had not considered that the value of the Appellant’s seized vehicle was relevant but even taking into account the value of the vehicle, and the value of the goods being imported and the duty evaded, he said that he considered the seizure to be proportionate.
Conclusions
35.	Our function is to determine whether the Respondents’ decision on review not to restore the vehicle is a decision which no reasonable body of Commissioners could have arrived at.  We find that the review officer, Mr Brenton, has taken into account all relevant matters and none which were irrelevant.  We find that his decision was not a decision which no reasonable body of Commissioners could have arrived at.  We find his decision to have been reasonable.
36.	The previous Tribunal had directed that the Appellant should forward to the Respondents such further information that he wished them to consider in relation to his finances and his father’s medical appointments.  We find that Mr Brenton properly and reasonably re-reviewed the decision in relation to hardship and proportionality, taking into account the further information supplied by the Appellant with his letter of 15 November 2004.  
37.	The previous Tribunal had considered that it was not apparent that the previous review officer, Mr Harris, had taken into account the income of the Appellant and his wife and to how much of it was freely available to the Appellant. We find that Mr Brenton did consider the income and expenditure details sent by the Appellant to him.  The Appellant provided no evidence by way of wage slips or proof of his expenditure, but Mr Brenton has concluded that there is nothing in the figures provided by the Appellant, even though they were not backed up by documentary evidence, for him to reasonably conclude that there was financial hardship to the Appellant.  Indeed, we find that Mr Brenton’s conclusions in that regard were reasonable.  We find that the income and expenditure stated by the Appellant are quite normal and to be expected for a normal working family with two children.  We find no financial hardships which might be considered relevant in this appeal.
38.	We find that the Appellant four weeks after the seizure of his vehicle by the Respondents, purchased a Rover car for £700.  In order to provide the finance to purchase the vehicle, the Appellant chose to cash in a savings scheme with Nationwide two years early.  This enabled him to spend £700 on the Rover vehicle and sometime later purchase a Peugot car using the remainder of that capital.  Mr Brenton considered that it was normal and usual for a person whose vehicle had been seized to need some capital to purchase another vehicle. We agree.  We find that any loss of £500 - £600 incurred by the Appellant in cashing in that savings scheme early does not amount to any exceptional hardship.  The reduction in the value of the Appellant’s stocks and shares with Halifax is part of the Appellant’s financial position.  It was not a consequence of the actions of the Respondents.  We do not consider that the Appellant had exceptional financial hardship that would justify the restoration of the vehicle to him.
39.	The Appellant has claimed that his unsocial hours of work necessitated the use of taxis during the four week period when he was without a vehicle.  He claimed that he expended £28 per day on taxis during that period. Mr Brenton doubted that that expenditure had, in fact, been made, bearing in mind the other vehicles available to members of his family who would hardly charge the Appellant a taxi fare.  We share Mr Brenton’s doubts .  We find that the Appellant has not satisfied us that he did in fact incur that expenditure during that four week period.  However, even if he had incurred that expenditure, in our view, that would not amount to exceptional hardship during that limited period.
40.	The Appellant had claimed hardship in having to take his father to and from hospital appointments during the four week period when the Appellant was without a vehicle.  The documentary evidence supplied by the Appellant does not provide to our satisfaction evidence that he incurred expense during that period in taking his father to and from hospital.  We find that we are satisfied that the vehicles in the family were sufficient to take the Appellant’s father to hospital without incurring expenditure to the Appellant.  Again, however, any expenditure so incurred by the Appellant would have only been for that limited period of four weeks.
41.	For all these reasons we find that the review officer, Mr Brenton, did reasonably consider the information supplied by the Appellant and reasonably concluded that he did not consider that there was exceptional hardship suffered by the Appellant by the loss of his vehicle.  We find that his conclusions in that respect were reasonable and that he reasonably concluded that there was no reason to disapply the policy of the Respondents of not restoring the vehicle.  
42.	We find that Mr Brenton considered the question of proportionality.  He considered that the seizure of the vehicle was proportionate and that non-restoration was not disproportionate.  He has applied the principles set out in the Lindsay judgment.  He has taken into account that although the Appellant was importing for a profit, he was not importing large quantities in order to offer them for sale.  We find that Mr Brenton’s conclusions as to proportionality are reasonable.  Mr Brenton did not consider that the value of the Appellant’s vehicle was relevant when the Appellant was commercially smuggling.  However, Mr Brenton did conclude that the seizure of the vehicle was proportionate, bearing in mind the value of the goods carried in the vehicle, the amount of duty evaded and the fact that the vehicle had been used for commercial smuggling.  We find that it was proportionate for the vehicle not to be restored to the Appellant. 
43.	In summary, therefore, we find that Mr Brenton acted perfectly reasonably in refusing to restore the vehicle to the Appellant and that he has reasonably and properly considered the issues of hardship and proportionality as directed by the previous Tribunal.  We find that he has reasonably taken into account the findings of the previous Tribunal and the further representations made by the Appellant.
44.	Accordingly, we dismiss the appeal.  The Respondents did not request an order for costs and we make no order.

IAN VELLINS
CHAIRMAN
Release Date: 20 July 2005
MAN/05/8004