Mills  v  Revenue & Customs [2007] UKVAT(Excise) E1008 (04 January 2007)

E01008
Excise Duties Non-restoration of car used to carry seized goods - Appellant’s goods mixed with goods belonging to another passenger - whether question of legality of forfeiture open for consideration by the tribunal - whether, if the question of the legality of forfeiture deemed to be determined against the Appellant, the question of Own Use was open for consideration by the tribunal - reasonableness of decision on review

LONDON TRIBUNAL CENTRE

MARK MILLS	Appellant

- and -

THE COMMISSIONERS FOR HER MAJESTY’S
REVENUE AND CUSTOMS	Respondents

Tribunal:	Charles Hellier (Chairman)
George Miles

Sitting in public in Bristol on 22 November 2006

Mr Mills in person 

Fiona Darrock of counsel instructed by the Acting Solicitor for HM Revenue and Customs, for the Respondents

© CROWN COPYRIGHT 2006

DECISION
A. Introduction

1.	Mr Mills appeals against the Respondents’ decision not to restore to him his Volvo S60 registration number BL51 2DJ which the Respondents seized on 20 January 2006.
2.	We heard oral evidence from Mr Mills himself, from his travelling companion on 20 January 2006, Mr Robert Kerry, from Mr Mills’ wife, and from Mrs Deborah Gillespie, the Respondents’ officer who made the decision on review on behalf of the Respondents not to restore the car. We also saw copies of the notes of the Respondents’ officers who interviewed Mr Mills and Mr Kerry on 20 January, copies of [bank statements and ATM receipts], copies of the insurance certificates relating to the car, and a letter from Melody Mitchell which related to a Peugeot 406 owned at the relevant time by Mr Mills.
3.	In this decision we set out first our findings of fact, then we deal with the law relevant to the appeal. After that we set out our conclusion as to whether the tobacco imported by Mr Mills was for his own use or not. Then we deal with the review officer’s letter and the issues raised by it before setting out our final conclusion.
B. Findings of Fact
4.	From that evidence we find the following facts:
(1)	Mr Mills is a fairly heavy smoker of roll-up cigarettes. His preferred tobacco is Golden Virginia.  This comes in pouches of 50 grammes each. Mr Mills gets through 3 or 4 pouches of tobacco a week. Mr Mills does not know how many cigarettes he gets from a pouch of tobacco, but on the basis of Mrs Gillespie’s evidence which we accept, that generally a smoker will get 80 to 100 cigarettes from a pouch of tobacco, we find that it is likely that Mr Mills smokes between 35 and 55 cigarette a day.
(2)	Mrs Mills also smokes. She too smokes roll-up cigarettes but when she goes out in company she prefers to smoke manufactured cigarettes. She does not smoke as heavily as Mr Mills, getting through between 1 and 2 pouches of tobacco a week or, again on the basis of Mrs Gillespie’s evidence between 12 and 26 roll-up cigarettes a day. Her preferred brand of rolling tobacco is also Golden Virginia. She tends to roll thicker cigarettes than Mr Mills.
(3)	Mr Kerry smokes too. With his partner he gets through about 4 or 5 pouches a week.
(4)	None of Mr Mills, Mrs Mills or Mr Kerry knew within any degree of  certainty or comfortable margin how many cigarettes they would get for a pouch of tobacco. We do not find this surprising.
(5)	Mr  Mills and Mr Kerry were at one time taxi drivers. At some time before 2006 they decided to give up taxi driving and go into business together in the building industry. Mr Kerry was better with figures and such like than Mr Mills, so Mr Kerry looked after the finances of the business.
(6)	Mr Mills and Mr Kerry were drawing about £15,000 net p.a. from this business or about £300 - £350 per week. The cash flow of the business was lumpy. Their ability to make drawings depended upon when they were paid for the work done. In some weeks they would not be able to draw anything; in other weeks they might catch up. (We should note at this stage that we preferred Mr Kerry’s evidence of the profitability of the business to the evidence of the account Mr Mills gave when they were stopped. Mr Kerry was better with figures than Mr Mills.)
(7)	On 19 January 2006 Mr Mills and Mr Kerry were laying a concrete floor. When they had finished there was not much they could do on the job the following day. Their tobacco supplies were running out. The plasterer on the site suggested that they go to France to get some tobacco. They made a decision to go.
(8)	The next morning at 8.00 am they left Weymouth (where Mr Mills lives) together in the Volvo S60 car. Mrs Mills learned that morning that they were taking the Volvo. She assumed that they would be bringing back enough tobacco for a year or more.
(9)	They drove to Poole. There they split up: Mr Mills went to Southern Newspapers to deliver some 15,000 leaflets; Mr Kerry went to the bank to get some money. They had recently received payment of a bill and there was money in the business account. He withdrew from the business account £2,497.37. He exchanged £1,497.37 for €2,080 at the bank exhausting their supply of euros, and then went to the Post Office where he exchanged £1,008.57 for a further €1,400. Then he rejoined Mr Mills and, with a good supply of euros in hand, they set off for the Ferry to France.
(10)	From France they went to Belgium where they went to the “Belgium Chocolate Factory” at Ostend. There they purchased 43.5 kilos of Golden Virginia tobacco - a total of 870- pouches - , 400 manufactured cigarettes (Marlborough Lights [GM1]) and 2 litres of spirits. (Southern Comfort and Bacardi). The Appellant’s share of the purchases comprised 435 pouches of the tobacco, at least half the manufactured cigarettes and the bottle of Southern Comfort. The remainder was for Mr Kerry.
(11)	Mr Mills and Mr Kerry agreed that each would take half the tobacco. They agreed to divide it up when they got back to Weymouth. The Tobacco was placed in the car for the journey home. It was not concealed.
(12)	Mr Kerry intended to transfer about half the tobacco he had acquired to his family for reimbursement of the amount paid. The balance of his tobacco he intended to smoke himself or between himself and his partner. He did not intend to sell it at a profit.
(13)	They were stopped by Customs in the control zone at Coquilles in France before they reached the ferry. They were asked what the purpose of their trip had been, and they replied that it was to buy tobacco. They were asked how much they had brought back. Mr Mills replied “82 sleeves”; “Is that 82 cigarettes?” asked the officer, “No,” said Mr Mills, “tobacco”.”
(14)	After a few more questions, they were asked to wait by the Respondents’ officer then asked to attend an interview. In his interview:
(i)	Mr Mills was asked how much his half of the tobacco was. He is recorded as saying “42, 45 something like that I’m not sure” and that his share was “420 or 430 pouches”.

(ii)	Mr Mills was asked about his income. He replied that the income of the business was £35,000 to £40,000 (but that was not his personal income). In his interview Mr Kerry indicated that his net take from the business was £15,000 p.a.

and Mr Kerry indicated that half of the tobacco belonged to him, and that he would distribute half of the tobacco amongst his family, for the cost which he had paid, which he thought was about €3500. 
(15)	The copies of the officer’s Notebooks before us record that after being stopped by Customs and being asked the purpose of his travel, the Appellant was asked how much tobacco they had bought. His reply is recorded as “82 sleeves”. He was asked for receipts by the officer and provided two receipts, the first was for 82 sleeves for a price of €3,444, and the second for a further 5 sleeves for £142.50.
(16)	The Respondents officers then seized the tobacco, the cigarettes, the spirits and the car. Mr Mills was given a booklet by the Respondents’ officers which explained the effect of seizure and the courses of action open to him following seizure. He passed this booklet to his solicitors when he returned home.
(17)	After the decision to seize the car had been communicated to Mr Mills and Mr Kerry, they asked to see the Customs officer in charge. Mr Mills explained the circumstances: the amount of tobacco, the receipt, where they had been and the seizure of the car, and Mr Kerry explained that in relation to his share of the tobacco some was for his own consumption and some he would give to relations for reimbursement of the cost of acquisition. Mr Mills asked how he could get the car back. The officer told him he had to write a suitably apologetic letter explaining the hardship the loss of his car would cause him and said that he should get his car back.
(18)	Mr Mills had last travelled abroad when he and his wife went to Egypt in 2005, and his last trip to Europe had been in August 2003 when he travelled with his wife to France. On that occasion he and his wife brought back a substantial quantity of (30 kilos) of rolling tobacco which they had kept under the stairs at home. It lasted Mr and Mrs Mills for about two years. They had brought back only a modest amount after their trip to Egypt. Mr Kerry’s last trip abroad had been to Egypt in 2005 with Mr and Mrs Mills. His last trip to France had been in 1988.
(19)	On 30 January 2006 Mr Mills’ solicitors Mustoe Shorter wrote to the Respondents. They requested the return of his car suggesting that there was no basis to retain it. They noted that some Golden Virginia tobacco, cigarettes and spirits had been seized and indicated that they were for Mr Mills’ personal use.
(20)	The Respondents replied by return on 31 January 2006. They said that they took the request as an appeal against seizure so that the case would be prepared for condemnation proceedings. They indicated that if Mr Mills did not wish such proceedings to take place the Respondents should be notified without further notice. Then they said:
“Customs will continue to consider your client’s request for restoration on the basis that the things were seized legally, for example, that intra-EU purchases of excise goods were being brought into the UK for a commercial purpose. Now is your client’s opportunity, if you have not already done so, to send us anything that your client would like us to consider in support of his request for restoration.”
(21)	On 9 February Mr Mills’ solicitors replied. The one material paragraph of their letter was this:
“Our client simply wants his car returned to him and that is what we seek from you.”
(22)	On 23 February 2006 the Respondents wrote to Mr Mills’ solicitors setting out the nature of the goods seized, stating that Customs’ policy was generally not to restore seized goods but indicating exceptions, and setting out the Respondents’ decision not to restore the goods. The letter made clear that the writer had not considered the legality of the seizure itself. The writer said:
“If you have contested the legality of…the seizure… the appeal will be heard in the Magistrates Court in due course…”
(23)	On 14 March 2006 Mr Mills’ solicitors wrote to the Respondents asking for a review of the decision in their letter of 23 February 2006. They sought further information, and gave further information and made representation on behalf of Mr Mills. We note the following remarks:
“As far as Mr Mills is concerned, the application for restoration relates purely to the motor vehicle. We are not seeking to challenge on behalf of Mr Mills the legality of the seizure of the motor vehicle concerned.”
“We understand that Mr Carey (sic) indicated that he would retain some of his share of the tobacco for his own personal use, and would give some of the tobacco to members of his family and receive back the cost of purchase.”
“Mr Mills’ share of the excise goods was for his own personal use and there is no evidence to contradict that assertion.”
(24)	On 26 April 2006 Mrs Gillespie wrote to Mr Mills’ solicitors with a review of the decision. Her conclusion was that the vehicle should not be restored. We will return to the detail of Mrs Gillespie’s letter later.
(25)	The Volvo S60 had been bought for about £12,000 about 12 months before the seizure. The registered keeper was Mr Mills but the insurance policy was in the name of Mrs Mills with Mr Mills as a named driver. This was because Mrs Mills was the main user of the car. She used it to go to work as a pharmaceutical assistant and also in the pursuit of her own beauty therapy business. She had obtained qualifications in some beauty therapy practices and, prior to the seizure of the car had had a handful of clients to whom she drove in the car. Following the seizure of the car she had been able to get to work by bus but she had no longer been able to service her clients without a car. She has not been able to make up the lost income. The lack of a car also caused Mrs Mills difficulty in visiting her family where members lived at some distance from Weymouth. Mrs Mills became depressed after the seizure of the car.
(26)	Mr Mills also owned at the time of the seizure a Peugot 406 (SJ04 UFN). He had acquired the car prior to going to the Middle East to work for 6 months. Whilst he had been away it had not been used. He had agreed with Melody Mitchell that she could acquire the car from him. Melody Mitchell used and at all relevant times was using the car for the purposes of her business as a taxi driver. Her deal with Mr Miller was that she would pay him in instalments and that at the end of the payments she would become owner of the car. Until that time Mr Mills remained owner and registered keeper. Following the seizure of the Volvo Mr Mills did not feel able to require Melody Mitchell to return this car to him for his own use or that of his wife.
5.	The tobacco acquired by the Appellant comprised 435 pouches (or 21.75 kg). Between the Appellant and his wife, who jointly get through 4 to 6 pouches per week, this would have lasted them between 19 months and 2 years if it had been consumed only by them. Mrs Gillespie’s evidence, which we accept, was that even in ideal conditions, tobacco deteriorates after having been kept for 12 months. Mrs Mills told us that the tobacco they had purchased in 2003 and smoked more than a year later had been fine.  Mr Mills said that the tobacco was packed in an airtight manner and did not go out of date. One member of this tribunal regularly eats tinned and processed food which is many years past its sell by date, and recalls his father enjoying a Christmas cigar brought 5 or 6 years previously (having been kept in a small non-airtight wooden box in a desk drawer). It seems to us that, just as, once opened, a jar of instant coffee deteriorates, so that 6 to 12 months after opening, the granules which make up the last cup deliver a vastly inferior drink as compared with the first cup from the new jar, so will tobacco deteriorate with age: but we do not believe that that deterioration would have been so marked 18 months or 2 years after purchase to cause either Mr or Mrs Mills to regard it as so inferior to new tobacco that they would be prepared to throw it out and buy new tobacco (any more than the deterioration in the coffee granules would be to induce the old coffee jar owner generally to throw out his old jar unfinished).  And, we find as fact that both Mr Mills and Mrs Mills would have regarded sealed packets of Golden Virginia tobacco that were 18 months to 2 years old as being satisfactory for smoking even though possibly not quite as good as freshly brought tobacco.
C.  The Statutory Provisions and Relevant Case Law
(1)  The imposition of duty 
6.	(Miss Darrock directed us to the provisions of the Excise Duties (personal Reliefs) Order 1992 as amended. But this appears to us to have been repealed with effect from 1 December 1992. The provisions referred to below however substantially replicate the provisions Miss Darrock to which Mrs Darrock referred us.)
7.	Section 2 of the Tobacco Products Duty Act 1972 provides that excise duty is payable on the importation of cigarettes and hand rolling tobacco into the UK. The Tobacco Products Regulations 2001 are made in part under the provisions of that Act: Regulation 13 provides that the person liable to pay the duty is the person holding the goods at the excise point, and Regulation 14 that the duty is to be paid at the excise point. Regulation 12(1) provides that the excise point is the time when the goods are charged with duty. But this is subject to Regulation 12(1A) which provides that where tobacco products are acquired in a member state for a person’s “own use… the excise duty point is the time where those products are held or used for a commercial purpose.”
8.	Thus if goods are acquired in Belgium for a persons “own use” and are never held for a commercial purpose, there is never an excise duty point, and duty does not become payable. But if they are not acquired for a persons own use, or later become held for a commercial purpose duty will become payable. We use the capitalised “Own Use” elsewhere in this decision, to mean goods acquired for own use and not held for a commercial purpose.
9.	The Regulations provide some further provisions on the question of “Own Use” and “commercial purpose”. By Regulation 12(1B)(b) own use [GM2] includes use as a personal gift. Thus if the Appellant acquired the goods to give to his wife or mother, that would be for her “Own Use” for these purposes, and provided that the goods did not then become held for a commercial purpose no duty would be exigible. On the other hand, sub-paragraph (c) provides that if the goods are, or are intended to be, transferred to another person for money or money’s worth (including for the reimbursement of their cost) then they are to be regarded as held for a commercial purpose
10.	There is a further point to make however. For sub-paragraph (c) to have effect the transfer or proposed transfer must be “for” money or money’s worth. This to our mind indicates a requirement for new consideration directly linked to the transfer. That consideration can be provided before the transfer as well as after but it must be “for” the transfer. Thus the transfer of the goods because the recipient has in the past provided or is expected in the future to provide gifts, cash or assets, or support  to the holder is not enough: there has to be a giving of money or money’s worth for the transfer.
11.	Thus if the Appellant intended to transfer some of the tobacco to his brother because he hoped or expected his brothers would do the same for him, that would not be enough to cause the tobacco to be regarded as held for a commercial purpose.
12.	Sub-paragraph (e) sets out factors to which regard must be had in determining whether goods are held for a commercial purpose. Those factors are:
“(i)  	that person’s reasons for having possession or control of those products,
(ii)   	whether or not that person is a revenue trader (as defined in Section 1(1) of the Customs and Excise Management Act 1979),
(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 any 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 (cigars weighing no more than 3 grammes each),
200 cigars,
3 kilogrammes of any other tobacco products,
(ix)	whether that person personally financed the purchase of those products,
(x)	any other circumstance that appears to be relevant.”
13.	We note that those factors need to be taken into account both when they suggest that the goods are held for a commercial purpose and when they suggest the contrary. Thus, for example, the unconcealed carriage of the products through Customs may suggest that the goods were not being held for a commercial purpose.
14.	Because the requirement to consider these factors is mandatory, no decision as to whether the goods were held for a commercial purpose could be properly made unless any and all evidence relating to each heading is considered.
(2)  Seizure and Forfeiture
15.	The power to forfeit goods imported without payment of the proper duty is provided by section 49 of the Customs & Excise Management Act 1979 (CEMA):
 “Where -
(a)	except as provided by or under the Customs and Excise Acts 1979, any imported goods, being goods chargeable on their importation with customs or excise duty, are, without payment of that duty -
(i)	unshipped in any port,
(ii)	unloaded from any aircraft in the United Kingdom,
…or
(b)	any imported goods are concealed or packed in any manner appearing to be intended to deceive an officer,
those goods shall, subject to subsection (2) below, be liable to forfeiture.”
16.	Section 139 CEMA gives an officer the power to seize anything liable to forfeiture:
 “Any thing liable for forfeiture under the customs and excise Acts may be seized or detained by any officer or constable or any member of Her Majesty’s armed forces or coastguard.”
17.	And section 141 CEMA makes other items liable to forfeiture:
(1)	 “Without prejudice to any other provision of the Customs and Excise Acts 1979, where any thing has become liable to forfeiture under the customs and excise Acts -
(a)	any ship, aircraft, vehicle animal, container (including any article of  passengers’ baggage) or other thing whatsoever which has been used for the carriage, handling, deposit or concealment of the thing so liable to forfeiture, either at a time when it was so liable or for the purposes of the commission of the offence for which it later became so liable; and
(b)	any other thing mixed, packed or found with the thing so liable,
shall also be liable to forfeiture.”
18.	Thus if some of Mr Mills tobacco was mixed or packed with Mr Kerry’s tobacco, and Mr Kerry’s tobacco was held for a commercial purpose (and thus liable to forfeiture), then Mr Mills’ tobacco even though held for his Own Use would be liable for forfeiture if they were mixed or packed or found with the other cigarettes; and if Mr Mills car was used for the carrying of Mr Kerry’s goods, Mr Mills’ car would be liable to forfeiture.
(3)  Appeal against forfeiture
19.	Schedule 3 of CEMA provides a mechanism for an appeal against Customs’ seizure of goods considered liable to forfeiture. The relevant provisions are these:
 “3	Any person claiming that any thing seized as liable to forfeiture is not so liable shall, within one month of the date of the notice of seizure or, where no such notice has been served on him, within one month of the date of the seizure, give notice of his claim in writing to the Commissioners at any office of customs and excise…
“5	If on the expiration of the relevant period under paragraph 3 above for the giving of notice of claim in respect of any thing no such notice has been given to the Commissioners, or if, in the case of any such notice given, any requirement of paragraph 4 above is not complied with, the thing in question shall be deemed to have been duly condemned as forfeited.
“6	Where notice of claim in respect of any thing is duly given in accordance with paragraphs 3 and 4 above, the Commissioners shall take proceedings for the condemnation of that thing by the court, and if the court finds that the thing was at the time of seizure liable to forfeiture the court shall condemn it as forfeited….
“10(1)	In any proceedings for condemnation instigated in England, Wales or Northern Ireland, the claimant or his solicitor shall make oath that the thing seized was, or was to the best of his knowledge and belief, the property of the claimant at the time of the seizure.
“(2)	In any such proceedings instituted in the High Court, the claimant shall give such security for the costs of the proceedings as may be determined by the Court.
“(3)	If any requirement of this paragraph is not complied with, the court shall give judgment for the Commissioners.”
20.	Thus the taxpayer is given one month from the seizure to give notice of a claim. If he gives the notice, the Respondents are required to commence condemnation proceedings to test the liability of the goods to forfeiture. But if no notice is given the goods are deemed to have been liable to forfeiture.
21.	The Appellant’s solicitors’ letter of 30 January 2006 was taken by the Respondents as such a notice. We believe that they were right to do so. We note that there is no provision in Schedule 3 for the withdrawal of a notice. The Act simply provides that if a notice is served then the Respondents are required to take condemnation proceedings.
22.	The suggestion that the withdrawal of a notice is contemplated by the Act gives rise to a number of questions unanswered by the words of the Act: in what period would the withdrawal have to be made? What if the notice is given within the one month period and withdrawn after the expiration of that period? If a notice is withdrawn within the period, can it be given again within the month?  The fact that such questions are not addressed suggests that the withdrawal of a notice was not contemplated by the Act.
23.	The appellant in condemnation proceedings may always indicate that he or she does not wish to contest them. In such circumstances judgment will generally be given for HMRC.
24.	Does fairness or administrative convenience or consideration relating to the waste of public authorities time compel a different conclusion? We understand that when condemnation proceedings are brought there is a stage when the importer is asked if he still wishes to contest the case. If he does not, he is asked to agree “to Customs asking the court to give them an order enabling them to keep the goods selected” and to do so by ticking a box and signing a form. Further the hearings tend to be in two stages - an initial hearing to see if the appellant really wishes to contest the condemnation and a substantive hearing. The actual procedure adopted does not therefore call for the ability to “undo” a notice and release the Commissioners from their obligation under Schedule 3. The provisions of paragraph 10 of Schedule 3 reinforce this view: if the appellant does not turn up to make oath as required judgment is to be given for the Commissioners. We therefore see no reason either in the language of Schedule 3 or in the practice of the Courts to write into Schedule 3 provision permitting the “ungiving” of a notice.
25.	The Appellant’s solicitors’ letter of 9 February said “our client simply wants his car back”. That did not read to us like an unambiguous notification that condemnation proceedings should be stopped (even if that were possible). Neither did the Respondents seem to take it as such - see the quoted paragraph from their letter of 23 February 2006. It was only on 14 March 1006 that Mr Mills’ solicitors unequivocally indicated that they were not seeking to challenge the legality of seizure. But by that time notice had been well and truly given.
26.	Thus it seems to us that paragraph 5 of Schedule 3 CEMA does not apply to deem forfeiture proceedings to have been concluded in the Respondents’ favour: notice was given in the 30 day period, and even if it was possible to undo the notice, the undoing was not due in that period. It is difficult to countenance undoing, but even more difficult to treat a letter sent 4 months after the end of the statutory period as retrospectively undoing something within that period. 
(4) Restoration
27.	Section 152(b) CEMA confers a discretion on the Respondents to restore seized goods (whether or not liable to forfeiture) . It provides:
“the Commissioners may, as they see fit - …(b) restore, subject to such conditions (if any) as they think proper, any thing forfeited or seized under those Acts;”
28.	The Respondents in their letter of 23 February 2006 decided not to restore the car. There was no appeal against that decision, but section 14 Finance Act 1994 permits a person by written notice to require the Commissioners to review a decision, and section 15 Finance Act 1994 provides that:
“(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 the decision; or
(b)	withdraw or vary the decision…”
29.	Section 16 provides for an appeal to this tribunal in relation to that review. The Appellant’s solicitors applied for a review and Mrs Gillespie’s review letter of 26 April 2006 represented the result of that review. This is an appeal against that letter.
30.	In relation to such an appeal the tribunal’s powers are circumscribed by section 16(4) which provides:
“(4) In relation to any decision, as to an ancillary matter [which includes a decision not to restore], 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 may 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)	in the case of a decision which has already been acted on or taken effect and cannot be remedied by a further review, to declare the decision to have been unreasonable and to give directions to the Commissioners as to the steps to be taken for securing that repetitions of the unreasonableness do not occur when comparable circumstances arise in future.”

31.	Thus the tribunal is not empowered to substitute its own decision for that of the Respondents. Instead it has to consider whether the Respondent’s decision could reasonably have been arrived at, and if it decides it could not reasonably have been made it may make one of the orders set out above. 
(5)  The reopening of the legality of forfeiture
32.	In Gascoyne v Customs & Excise Commissioners (2005) Ch 215, the Court of Appeal considered (for the third time in 18 months) the question of whether, where either condemnation proceedings had taken place and the Commissioners succeeded, or where such proceedings had been deemed to have been concluded pursuant to paragraph 5 Schedule 3 CEMA, it was open to the tribunal to consider the question of Own Use as part of its consideration of the issues under section 16.
33.	After considering the issues first purely as a matter of domestic law unaffected by the provisions of the Human Rights Act, the Court turned to the affect of that Act and the Conventions on the interaction of paragraph 15 Schedule 3 and section 16. Buxton LJ said:
“52.	…[the Convention] jurisprudence itself creates a great deal more difficulty in relation to the deeming provisions under paragraph 5 of Schedule 3. One’s instincts, if no more, suggest that the extent to which it was held in Gora that those provisions necessarily prevent any further consideration of the legality of the seizure was an excessive limitation.
53.	… Lord Phillips in Lindsay at paragraph 64 of his judgment: [states] that the principle of proportionality requires that each case should be considered on its particular facts. …
54.	As it seems to me, for an importer to be completely shut out in the only tribunal before which he has in fact appeared from ventilating the matters that are deemed to have been decided against him because of paragraph 5 of Schedule 3 does not adequately enable him to assert his Convention rights.
55.	In my view, therefore, in a case where the deeming provisions under paragraph 5 are applied, the tribunal can reopen those issues: though the tribunal will always have very well in mind, considerations of, or similar to, abuse of process in considering whether such issues should in fact be ventilated before it.
56.	The mere fact that the applicant has not applied to the Commissioners, and therefore there have been no condemnation proceedings, would not in may view, be enough. But, in my judgment, it goes too far to say that the deeming provisions have always, in every case, got to be paramount”
34.	In Johnstone v Chairman of the VAT and Duties Tribunal 2005 EWHC 115 (Admin) where the magistrates court had found goods were liable to forfeiture, Moses J said:
“If all someone importing cigarettes such as this does is to persist in saying they are for personal use, the correct response is to say: “You have advanced no ground whatever for restoration in exercise of the powers under Section 152(b)””.
35.	In Commissioner of Customs and Excise v David Weller [2006] EWHC 237 (Ch) where the High Court refused to interfere with the Tribunal’s decision to permit the validity of forfeiture to be contested. Evans-Lombe J said that the question of whether an Appellant could raise the validity of forfeiture on review and on appeal under section 16 depended upon two questions:
“first did the importer have a realistic opportunity to invoke the condemnation procedure and, secondly, if he did, are there nonetheless reasons disclosed by the facts of the case which should persuade the Commissioners or the Tribunal to permit him to re-open the question of the validity of the original [forfeiture]….”
36.	The Respondents’ letter of 26 April 2006 cites Gascoyne and Albert Smith as authority for the proposition that the Appellant “having had an opportunity to raising the lawfulness of seizure in Magistrates Court [does] not have a second chance of doing so at tribunal or statutory review.”
 (6) Our decision on the re-opening issue
37.	We take the view that it would not be an abuse of process for us to consider the legality of forfeiture. That is for the following reasons:
(1)	first, as noted at  paragraphs 20 to 24 above, we see nothing in Schedule 3 which permits a notice, once given, to be ungiven. If that is right then the Respondents remain under a duty to take condemnation proceedings and paragraph 5 does not apply. There is therefore no presumption that the goods are legally forfeited which binds us;
(2)	second, even if our first reason is wrong, we do not read the Appellants’ solicitors’ letter of 9 February 2006 as the cancellation of the original notice. Or the letter of the March 2006 as being capable retrospectively of withdrawing the earlier notice.
38.	We conclude that it would not be an abuse of process for the Appellant to re-open the issue of legality of forfeiture or for us to consider it. However, for the reasons set out in Section D below we find, on the facts as we have found them, that the car was lawfully forfeit. But for the reasons also set out below we are not precluded from considering whether Mr Mills’ 21.75 kilos of tobacco were for his Own Use. And that is the case notwithstanding our finding that the car was lawfully forfeit, and even if we are wrong in concluding that notice was given under para 3 Schedule 3 CEMA or wrong in concluding that if it was given it was not withdrawn.
(7)	The nature of our jurisdiction
39.	Section 16(4) permits us to make one of the specified orders only if we are satisfied that the person making the decision could not reasonably have arrived at it.
40.	The nature of this jurisdiction was considered by the Tribunal in Jason Thomas Bowd (1995). The Tribunal said this:
“On a literal application of those words it might be argued that they are only directed at the result of the review and that the Tribunal could only intervene if the decision were unsustainable in the light of the facts and the law. The Tribunal would only be concerned with the actual decision and section 16(4) would only apply if the only possible decision was contrary to that of the Commissioners on the review.
“On this view the Tribunal would not be concerned by a failure to consider all relevant material. It must be remembered that section 16(4) also applies to Customs appeals and such a restrictive interpretation might well be incompatible with the obligations of Member States under Article 243 of the Community Customs Code. Furthermore it is difficult to see what purpose would be served by the provision in section 16(4)(b) for a further review if there was only one possible conclusion.
“As noted above Mr Bartlett did not contend for a narrow construction of Section 16(4).
“In our opinion the word “reasonably” is to be construed in the wider sense used by Lord Greene MR in Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KG 223, …	
“The approach to be adopted by a Tribunal in reviewing the exercise of a discretion conferred on the Commissioners (albeit a different discretion) was put in this way by Lord Jane in Customs and Excise Commissioners v JH Corbitt (Numismatists) Ltd [1980] 2 WLR 653 at 663,
“It 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”.
“That approach was adopted by the Court of Appeal in John Dee Ltd v Customs and Excise Commissioners.
41.	On this basis we ask ourselves the following questions:
(1)	Did the officers reach a decision which no reasonable officer could have reached?
(2)	Did she take into account all relevant considerations?
(3)	Did she leave out of account all irrelevant considerations?
42.	In Golobiewska v Commissioners of Customs & Excise (2005) VAT DT 267 the Court of Appeal considered the nature of the jurisdiction of the tribunal under section 16(4). Lloyd LJ cited paragraphs 57 to 59 of the tribunal’s decision in Gora and Others v Customs & Excise Commissioners and its approval by Pill LJ in the Court of Appeal. Pill LJ had agreed that the tribunal cannot decide whether a decision qualified as reasonable in the relevant sense unless it examines the facts asserted by the parties and substantiates whether those facts exist. Although it appears that under section 16(4) the Tribunal would be limited to considering whether there was sufficient evidence to support an officer’s finding, in practice, given the powers of the Tribunal to carry out a fact-finding exercise, the Tribunal should decide the primary facts and in the light of its findings then go on to consider whether the decision on restoration is reasonable. 
43.	We thus are required to determine whether a decision made by the officer on the basis of evidence available to her is reasonable by reference to facts found by us.
D. 	Discussion: Own Use
44.	Mr Kerry intended to receive payment of the transfer of ownership of part of his tobacco. That part of his tobacco was therefore not for his Own Use for the purposes of Regulation 12. That tobacco was therefore liable to forfeiture under Section 49 CEMA.
45.	Mr Mills’ tobacco was mixed and packed with that of Mr Kerry. Therefore, whether or not Mr Mills tobacco was on its own for his Own Use and so legally imported by him, it was liable to be forfeited (and seized) - see para 18 above.
46.	Accordingly had an appeal by Mr Mills against forfeiture in relation to his tobacco been heard by the Magistrates in condemnation proceedings it would, on the facts found by us, have failed.
47.	But it would not necessarily have failed by reason of any finding that the goods were not for his Own Use. It would have failed because Mr Mills’ goods were found mixed and packed with those of Mr Kerry.
48.	Therefore, even if we were bound to consider Mr Mills’ tobacco duly forfeit we would not be bound to consider that it was not for Mr Mills’ Own Use. That question is therefore open to us to consider and it is right and proper that we should make a finding in relation to it, because it is in our view relevant to the relief sought in this appeal.
49.	In our opinion, it is clear that the tobacco was for Mr Mills’ Own Use. That is for the following reasons:
(i)	Mr Mills was in possession of the tobacco because he was bringing it back for his wife and himself;

(ii)	Mr and Mrs Mills would happily have smoked their supply of 21.75 kg of tobacco over the two years after its acquisition;

(iii)	in the context of their rate of consumption this amount of tobacco was not an unbelievably large purchase even though it exceeded the guidelines in Regulation 12(1B)(e)(vii);

(iv)	we did not hear any evidence that led us to believe that Mr Mills intended to dispose of any of it for a consideration;

(v)	Mr Mills was not a revenue trader;

(vi)	Mr Mills’ conduct at and prior to the interview with Customs on 20 January 2006 and his disclosure of the amount of tobacco and the  provenance of the goods gave no reason to conclude that he intended them otherwise than for his own use; instead the reverse;

(vii)	the location of the products in Mr Mills’ car and the use of his car to convey the tobacco did not indicate to us any commercial purpose in their importation;

(viii)	in particular - the method of financing of the purchase from monies of Mr Mills and Mr Kerry’s partnership did not seem to us to indicate anything other than that it was financed by money earned by each of them respectively and which was otherwise available to them for such use as they might individually think fit; and

(ix)	having heard Mr Kerry we did not find it suspicious that he and Mr Mills were smoking manufactured cigarettes on their journey home.

50.	These factors encompass in our view all those required, on the facts as we have found them, to be considered (Regulation 12(1B)(e)).
51.	Mr Mills’ Volvo S60 was used for the carriage both of Mr Kerry’s goods and his own. Although we have found that Mr Mills’ goods were for his Own Use, Mr Kerry’s were not wholly so. As a result, both Mr Kerry’s and Mr Mills’ goods were liable to forfeiture. As a result, section 141 CEMA makes Mr Mills’ Volvo liable to forfeiture.
52.	As a result an appeal in the Magistrates Court against the forfeiture of the Volvo would (disregarding any possible arguments relating to proportionality or restriction on the exercise of EU rights) have failed. Mr Mills’ only practical or possible course of action to get his car back is through restoration proceedings.
53.	It seems to us that the questions: (i) whether or not the tobacco which belonged to Mr Mills imported in the car was for Mr Mills’ Own Use; and (ii) whether tobacco imported in the car which belongs to Mr Kerry was for his Own Use, or was for sale at cost to others, or was otherwise for a commercial purpose; are both relevant to the issue of whether the Volvo S60 should be restored.
E. The Review Officer’s Letter
54.	Mrs Gillespie’s letter of 26 April 2006 carefully sets out the facts then available to her. She sets out the Commissioners’ policy on restoration (indicating that her decision would be guided but not fettered by it), and then sets out the reasons for her decision. 
55.	Under the heading “Consideration”, the first point she makes is that the legality or correctness of the seizure itself has not been considered. For the reasons set out in paragraph Section C(3) above we doubt the deeming provisions of paragraph 5 Schedule 3 CEMA applied to treat the goods and the car as duly forfeit. We therefore doubt that it was proper not to consider that issue. 
56.	Mrs Gillespie then says:
“If your client is claiming that the goods are for “Own Use” - then he should have appealed to a Magistrates Court…
…having had an opportunity of raising the lawfulness of the seizure in the Magistrates’ Court, and does not have a second chance of doing so at a tribunal or statutory review.”
57.	It is clear that the Respondents are in this passage treating the question of the legality of forfeiture as the same as a decision that goods were not for Own Use. They are assuming that the effect of a deemed decision by virtue of paragraph 5 Schedule 3 CEMA is that the goods cannot be for the relevant person’s Own Use. This is plainly wrong.
58.	It is wrong because a conclusion that Mr Mills’ tobacco was or was not for Mr Mills’ Own Use was not necessary to a finding that it or his car was duly forfeit. The deeming of paragraph 5 is specific: the thing which is deemed to be decided against the relevant appellant is simply that the thing is forfeit: only if a finding that the thing was not for Own Use would have been a necessary precondition to a finding that the thing was forfeit can that be deemed to be the case by paragraph 5.
59.	It is only where such a finding of Own Use would be necessary to such a finding that the question as to whether it would be an abuse of process to raise that question again in a different forum be relevant.
60.	As a result, on the basis of the facts we have found, the review officer failed to consider a materially relevant question - namely whether or not Mr Mills’ goods were for his Own Use.
61.	The review officer then notes that the Appellant mis-declared the quantity  of tobacco being imported:
“Initially Mr Mills declared 82 sleeves [(of 10 pouches each)] (41 kilos) when he actually had 43.5 kilos thus misleading the officer about the true quantity of them. If he had nothing to hide there was no need to mislead the officer, and, on those grounds alone, I have good reason to doubt his credibility. Furthermore, as he was carrying receipts for the full quantity, he clearly knew he was misleading the officer.”
62.	We have set out at paragraphs 4(13) and 4(14) above our findings of fact in relation to what was said about the quantity of tobacco when the Appellant was stopped. It seems to us that the conclusion drawn by the review officer in the paragraph cited above is not one which could reasonably have been drawn from the evidence before the review officer in April 2006, or which could be drawn on the basis of the facts we have found. We were to the contrary impressed by the accuracy of his answer. A difference of 1.5 kilos is an under-declaration of about 6%; the Appellant could scarcely be said to be trying to convince the officer that his importation was materially smaller than it really was, or that the quantity as a whole was within or close to the guideline limits, by making such an under-declaration in these circumstances. Indeed the fact that Mr Mills and his companion tendered receipts shortly afterwards for the whole 43.5 kilos suggests quite the contrary conclusion. Since the review officer’s conclusion was not one which could be reasonably drawn from the evidence, it was not a matter which should have been taken into consideration on the review.
63.	The letter then notes that a total import of 43.5 kilos was seven times the guide level of 3 kilos per person. That is a proper consideration.
64.	But the letter then considers the tribunal report in Robert Hardie (MAN/03/8116) where the tribunal said “…Nevertheless on any view, 36 kilos is a commercial quantity of tobacco.”. The writer of the review letter concludes “It is my view therefore that 43.5 kilos is a commercial quantity.” Insofar as this conclusion is based on 36 kilos being a commercial quantity it seems to us not adequately to distinguish between the quantity imported by Mr Mills and that imported by Mr Kerry.
65.	For these reasons, in particular those in paragraph 60 and 62 above, we find on the facts before us that the decision of the Respondents could not reasonably have been arrived at: a relevant issue was not considered and an irrelevant one was. We have not dealt here with all the considerations addressed by the review officer and put to us by Miss Darrock. Such considerations are however potentially relevant to any further view by the Commissioners and we address them in that context below.
Other Issues
66.	In this section we deal with a number of issues which were raised before us or in the review letter. These issues are relevant to the reconsideration which we shall direct. They are issues where generally our ability to see and hear all the witnesses and other evidence has led us to form views different from those which Mrs Gillespie formed on the basis of the more limited evidence available to her.
(1)	Vagueness as to consumption rates
67.	The Respondents rely upon Mr Mills and Mr Kerry being vague as to their consumption rates when questioned by the Respondents’ officers when they were stopped.
68.	Mr Mills is reported in the officer’s notes as saying that he consumed “3 or 4 pouches a week”. That was also his evidence before us. We did not find it vague.
69.	The Respondents rely upon Mr Mills not knowing how many cigarettes they get from a pouch. Mr Mills was reported as saying “I’ve never really counted. 120 or 100 I suppose”. This figure we note is not vastly different from Mrs Gillespie’s figure of 80 to 100 per pouch. Having seen and heard Mr Mills in person we do not find this inability to say with accuracy how many cigarettes he obtains from a pouch either suspicious or indicative that he did not in fact smoke roll-ups. It was clear to us that Mr Mills was a fairly heavy roll-up cigarette smoker.
(2)	What Mr Mills was smoking on the journey
70.	The Respondents note that in the car when stopped Mr Mills was smoking Marlborough Lights and Mr Mills and Mr Kerry did not have an open pouch of tobacco with them. The Respondents suggest that most tobacco smokes would prepare roll-ups in advance of driving or that Mr Kerry could have prepared roll-ups for Mr Mills.
71.	Mr Kerry told us that he didn’t hand roll cigarettes because he had a rolling machine at home. He and Mr Mills had taken a packet of cigarettes each for the journey back. We accept Mr Kerry’s evidence on their points and took the issue into account in our conclusion in paragraph 49 above. It does not seem to us otherwise to be relevant to the question of restoration.
(3)	Payment
72.	The Respondents suggested that the fact payment had been made in cash suggested that they had been paid in advance by those to whom they would sell the goods on.
73.	We saw clear evidence that the cash came from the partnership business account. It seemed to us that taking money from that account was a perfectly sensible way of financing their purchases. This was their own money withdrawn in order to spend it. It did not suggest to us that the goods were to be used for the purposes of their business.
(4)	Shelf Life
74.	We have set out our conclusion about the deterioration of tobacco at paragraph 5 above. We believed that Mr and Mrs Mills would happily have smoked the Golden Virginia 18 months to 2 years after its acquisition.
(5)	Risk and Reward
75.	The Respondents say that Golden Virginia is a popular brand which could easily have been disposed of commercially. They assert that the 43.5 kilos could have been sold for a profit of £2,000. They say that that might well have been a big enough profit for which to risk forfeiture of the car.
76.	We do not dispute the Commissioners reasoning and considered this possibility in coming to our decision on whether the goods were for Mr Mills’ Own Use, and our decision on Mr Kerry’s purposes. Having come to the decision we did on that issue, this issue is not relevant to any further consideration of restoration.
(6)	The lawful Forfeit of the Car
77.	The Respondents rely upon the lawful forfeit of the car.
78.	We have held that it was lawfully forfeit. This is a relevant issue, which needs to be considered.
(7) 	The Commissioners’ Policy
79.	Mrs Gillespie sets out the Commissioners’ policy on restoration of vehicles involved in smuggling “not for profit” but not-for-Own-Use excise goods. It appears that that policy is that where a case is the first “aggravated” detection in a 12 month period the goods would normally be restored for 100% of the revenue involved. It appears that a case is “aggravated” if it involves large quantities.
80.	Mr Gillespie says later in her letter, after having decided that the goods were for profit (so that the policy above did not apply) that for first offences involving small quantities restoration would be considered, but that this offence did not involve a small quantity.
81.	On the basis of our findings on the evidence before us, the Commissioners’ policy on “not for profit” restoration would now be the applicable one.
82.	One of Mr Mills’ submissions to us raised the issue of the reasonableness of the Respondents’ policy. In the light of our conclusions on other issues we did not find it necessary to consider this issue further.
Conclusion
83.	We direct that the review decision shall cease to have effect from the date of the release of this decision, and that the Respondent shall conduct a further review of the original decision on the basis of the evaluation of the evidence set out in this decision.
84.	In particular we direct that, in considering the proper application of their policy for the restoration of private vehicles, the Respondent shall have regard to the following:
(i)	the only goods being carried in the car which were not for Own use were some of those of Mr Kerry;

(ii)	those of Mr Kerry’s goods which were not for his own use were destined to be supplied on a “net for profit” basis;

(iii)	their policy distinguishes between aggravated and non-aggravated offences. In determining whether there were aggravating circumstances the Respondents should bear in mind:-

(a)	that there was no evidence of any previous offences by either Mr Kerry or Mr Mills;

(b)	that the quantities of tobacco imported by Mr Kerry and Mr Mills were respectively 21.75 kg, and not 43.5 kg;

(c)	that the whole of Mr Mills’ import was for his Own Use;

(d)	that some part of Mr Kerry’s import was for his Own use; and

(e)	the other evaluations made above;

(iv)	that even in the case of an aggravated offence the Respondents’ stated policy is that vehicles will normally be restored for 100% of the revenue involved - if it is a first aggravated detection. In considering the application of this part of their policy the Respondents should have regard in particular to the fact that there was no evidence that this was anything other than a first detection, and that the “revenue involved” might reasonably be considered to be the revenue relating to part of Mr Kerry’s import but that none would be involved in  Mr Mills’ import;

(v)	that Mr Mills and his wife have been deprived of their car for almost 11 months;

(vi)	that Mr Mills, because his own tobacco was forfeit at the same time as his car, has already suffered a financial penalty;

(vii)	that the Peugot 406 was not and should be treated as available for Mr and Mrs Mills’ use at any relevant time.
85.	

Charles Hellier

CHAIRMAN
RELEASE DATE: 4 January 2007

LON/2006/8045