[2009] UKFTT 266 (TC)

TC00213
EXCISE DUTY- appellant imported 792 litres of wine in small Mercedes van – having imported a similar amount three months previously –party insufficient explanation for large quantity – case dismissed.

First-tier Tribunal (Tax Chamber) 

 	
					JEAN SHERRY	Appellant

- and -

THE COMMISSIONERS FOR
				HER MAJESTY’S REVENUE AND CUSTOMS	Respondents

Tribunal: David S Porter Judge
						Susan Stott Member	
					
Sitting in public in Manchester on 9 September 2009

Appellant appeared in person 
 
Mr Vinesh Mandalia of counsel instructed by the acting solicitor for the Commissioners for H M Revenue and Customs, for the Commissioners

© CROWN COPYRIGHT 2009

DECISION

1.	Mrs Jean Sherry appeals against the review by Mr Graham Charles Crouch, the Reviewing Officer, contained in a letter dated 19 May 2008 refusing to return the Appellant’s wine. The Appellant says that the wine was purchased for her own and her family’s use. The Respondents say that as the goods had been purchased for commercial purposes, the wine should not be returned
2.	Mr Vinesh Mandalia of counsel, instructed by the acting solicitor for the Commissioners for H M Revenue and Customs, appeared for the Respondents. He produced a bundle of documents to the tribunal and called Mr Crouch as a witness. The Appellant appeared in person with her friend, Alison Burton, who had travelled with her to buy the wine, and contributed half of the cost. The Appellant also provided the tribunal with a summary of the issues as she saw them
   Preliminary issue
3.  Miss Burton told the tribunal that she had purchased a half share in the wine with the Appellant and had also appealed against the forfeiture of the wine. The Appellant wrote to the Respondents in the first instance indicating that she wanted the wine to be returned and both she and Miss Burton signed the notice.  Miss Burton is not a party to this appeal and we were informed that her case had previously come before Judge Demack, who had directed that her appeal should be adjourned sine die. Since it had not been possible to consolidate the appeals Miss Burton should apply to the tribunal for her case to be heard depending on the outcome of the Appellant’s Appeal. The tribunal agreed to hear this appeal as an appeal by the Appellant alone
  The facts
4      The Appellant and Miss Burton gave evidence under oath. The Appellant, who lives in Wigan, and Miss Burton, who lives in St Helens, travelled together in a Vito Mercedes Van, via Euro Tunnel, to France. It was agreed that the pair had travelled via the Euro Tunnel on six occasions in the previous twelve month period. The Appellant confirmed that they went on “girly weekends” to the continent. They usually left their homes at tea time in order to catch the night train to France. When they arrived they stayed overnight in a hotel adjacent to the Euro Tunnel station and usually went shopping the following morning, after lunch they purchased the wine and travelled home on the 10.50 pm train back home. Twice each year, in December and August, they purchased quantities of wine, but principally “Raphael Louis” red wine, which the families preferred, and which could not be purchased in the UK. They had decided to purchase the wine earlier in March as they intended to have a party to celebrate their respective Mothers’ birthdays. The Appellant said that there would have been no requirement to return to France in August to purchase further quantities of wine. The Appellant agreed that the following quantities had been purchased:-.
•	36 Litres Sparkling Wine
•	225 Litres of Red Wine (11% proof)
•	225 Litres of White Wine (10% proof)
•	225 Litres of Red Wine (10% proof)
•	81 Litres of Red Wine (11%)
     This amounted to 792 Litres. It was conceded by the Respondents that the 36 litres of sparkling wine was a replacement of the same number of bottles purchased in December which had been returned as undrinkable. The guide level for the quantity of wine, which might to be imported, is 90 litres. The Appellant also confirmed that she and her husband went to France from time to time in his car, and brought back a couple of case of wine. The Appellant was perfectly frank about the quantities that she and Miss Burton had purchased. She also agreed that the original receipt, prepared when they were stopped, had been inaccurate as it had identified a lesser amount of wine. She also volunteered that she and Miss Burton had imported a similar amount of wine in December 2007. They had been stopped on that occasion but they had been allowed to keep the wine. The Appellant was adamant that the Customs Officers had not said on that occasion that “there was sufficient wine for 12 months”.  We accept the Appellant’s evidence in that regard, but we are satisfied that she has seen Notice 1, and Notice 12 A, so that she is familiar with the requirements for bringing wine into the country.
5. On this occasion the Appellant was stopped at Coquelles and the wine and the vehicle were confiscated. The Appellant had offered to take the wine back or to pay the duty, but the Customs Officers had not allowed her to do so. The Appellant and Miss Burton were interviewed and both signed the interview notes confirming that the contents were correct. Whilst we accept that the Appellant and Miss Burton were both distressed and tired, the interviews having taken place at 3.00 am in the morning, we do not accept that they did not understand the issues relating to the contents of the interviews. Both parties gave similar information save that Miss Burton confirmed that the proposed party for their Mothers was to take place on 26 May 2008, and had been provisionally booked at the St Anne’s Club in St Helens. She explained, under oath, that she was involved with the church where the club was located, and that she had spoken to a representative to ask the church to reserve that date for her. She had not paid a deposit and she needed to consult the Appellant before confirming the booking. Surprisingly the Appellant made no reference to that provisional booking in her interview, and merely said that the wine was bought for a party.   

     Her interview note shows:
             Question: Has Alison looked into booking the Venue?
	       Appellant: No……
                   Question: Alison has said there is a provisional booking at St James (Catholic Club)
	        Appellant: No I have not booked it
	        Question: Could she have?
	        Appellant: No
    We accept, in view of the different responses to the suggestion that there was to be a party, that it was reasonable for Mr Crouch to take the view that this might not be the case. We were surprised that Miss Burton had not chosen to tell the Appellant at any time during the trip in March, that she had provisionally booked the club for the proposed celebration.
6. The Appellant and Miss Burton, neither in their interviews nor at the tribunal gave a satisfactory explanation as to the disposal of the wine. They accepted under cross- examination that in December they had purchase 780 bottles each. They also accepted that in spite of all the various parties over the Christmas period that they would have had 180 to 200 bottles remaining per person. In that case there would have been no necessity to travel to France again in March and purchase a further 1560 bottles. If there was to have been a party, it was conceded that no more than 200 would attend. As a result there would have been over 8 bottles of wine for every person attending. We accept that this was not credible. The vehicle had been returned to Rosebridge Motors Ltd on payment of a penalty of £1491 representing the duty which had not been paid on the wine. The Appellant has refunded that amount to the company.
7. Mr Crouch gave evidence under oath and stated that he had been provided with all the necessary information to reach his decision. He had not had details of the negotiations with regard to the return of the vehicle but he had not needed that for the purposes of his decision. He was still of the opinion that there had been no party and that the quantity of the wine was so excessive that it must have been purchased for commercial purposes. He was unable to say what the Appellant and Miss Burton had done with the wine, but it was proper for him to assume that they had both disposed of it commercially.

The Law
8. The Excise Goods (Holding, Movement, Warehousing and REDS) Regulations 1992 (SI 1992/3135) (the “Reds” Regulations) (as amended by the Excise Goods, Beer and Tobacco Products (Amendment) Regulations 2002 (SI 2002/2692) provide:
4	Excise Duty Point.
(1)	Except in the case of 1[(A)] to (6) below, the excise duty point in relation to Community excise goods shall be the time when the goods are charged with duty at importation
(1A) In the case of goods acquired by a person in another member State for his own use and transported by him to the United Kingdom, the excise duty point is at the time when the goods  are held or used for commercial purposes by any person.
(1B) For the purposes of paragraph I A above-
	(a)’…
	(b) “own use” includes use as a personal gift
(c) if the goods in question are –
   (i) transferred to another person for money or money’s worth  (including any reimbursement of expenses incurred in connection with obtaining them) or 	
(ii) the person holding them intends to make such a transfer, those
(d)……..
(e)  without prejudice to sub-paragraphs (c) and (d) above, in determining whether excise goods are to be regarded as being held or used for a commercial purpose by any person regard shall be taken of-
          (i)  that person’s reason for having possession or control of the    goods,
          (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 goods or any refusal to disclose his intended use of those goods,
(iv)  the location of the goods
(v)   the mode of transport used to convey those goods
(vi)  any document or other information whatsoever relating to those goods,
(vii)  The nature of those goods including the nature and condition of any package or container
(viii) The quantity of those goods, and in particular, whether the quantity exceeds the following quantities-
•	10 litres of spirit
•	20 litres of intermediate products (as defined in Article 17(1) of Council Directive 92/83/EEC)
•	90 litres of wine

(ix)	whether that person personally financed the purchase of the goods,

(x)   any other circumstances that appear to be relevant..
     Condemnation proceedings
      Section 139(6) of the Customs and Excise Management Act 1979
        Schedule 3 to this Act shall have effect for the purpose of forfeitures, and of proceedings for the condemnation of any thing as being forfeited, under the Customs and Excise Acts. 
     Schedule 3
 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/her claim in writing to the Commissioners at any office of customs and excise.
4.(1) and (2) ……….content of notice
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.
7. Where any thing is in accordance with either of paragraphs 5 or 6 above condemned or deemed to have been condemned as forfeited, then, without prejudice to any delivery up or sale of the thing by the Commissioners under paragraph 16 below, the forfeiture shall have effect as from the date when the liability to forfeiture arose.

Section 141 CEMA 1979 provides as follows-
		(1)…where anything has become liable to forfeiture under the 		Customs and Excise Acts –
(a) any ship, aircraft, vehicle…which has been used for the carriage handling ,deposit….of the thing so liable for forfeiture…and
(b) ..any other thing mixed, packed or found with the thing so liable shall also be liable to forfeiture.
Section 152(b) CEMA 1979 provides that the Commissioners may as they see fit , restore, subject to such conditions (if any) as they think proper, any thing forfeited or seized.
Submissions
10. Mr Mandalia submitted that he had not taken any issue with regard to the “deemed forfeiture” under Section 139(5) of the Customs and Excise Management Act 1979 and did not intend to do so. He was satisfied that Mr Crouch had acted reasonably in refusing to return the wine. The Appellant had agreed that she had imported a similar amount of wine in December 2007 to that import in March 2008 the subject of this appeal. The Appellant and Miss Burton must have had at least 200 bottles of wine each prior to the proposed party. It was inconceivable that they needed to return to France to purchase some more wine for the party. Mrs Sherry had not been told about the provisional booking for the party and her evidence was inconsistent with that of Miss Burton. In view of the quantity of the wine, 1560 bottles between them on two occasions and the inconsistencies with regard to the alleged party, Mr Crouch had acted reasonably in refusing to return the wine and the appeal should be dismissed.
11.  Mrs Sherry produced a document setting out the issues that concerned her. She submitted that no notice had been taken of her offer either to return the wine or pay the duty. Mr Crouch had not taken note of the fact that her husband had telephoned Mr McNab, the senior Customs Office at the scene, also offering to pay the duty on the wine and to ask that she could keep the van for her safe return home.  It appeared that Mr McNab never had any information with regard to the return of the vehicle. If, as suggested, she was selling the wine she would not have any left. All the wine was purchased for their personal consumption both at the party and over the next few months. In the circumstances, as Mr Crouch confirmed that customs still had the wine, it should be returned to her.

The decision
12	 We have considered the facts and the law and we are satisfied that the Reviewing Officer acted reasonably in refusing to return the wine. We doubt that there was to be a party and no satisfactory answer has been supplied either by the Appellant or Miss Burton as to how all the wine was disposed of. It is not credible that the two families have consumed 1560 bottles of wine over a period of 4 months. We do not doubt that some of the wine was consumed by the families and that the Appellant had made various gifts of wine. Mr Mandalia had, in his calculations, been very generous as to the consumption of the wine and even on his figures the remaining quantity was excessive. The offer by the Appellant to take the wine back to the supermarket where she had purchased it, or to pay the duty, has no relevance to this appeal. As far as the Respondents were concerned an offence had been committed, which has proved to be the case. The Appellant could not abrogate her position by paying the duty or returning the wine and thereby pretend that she had not purchased the wine for commercial purposes. We have decided that Mr Crouch acted reasonably in refusing to restore the wine and we dismiss the case.
	We were not asked to address the “deemed forfeiture” provisions under Section 139(6) of the Customs and Excise Management Act 1979 by Mr Mandalia and we have not therefore done so
14.  The Respondents made no request for costs and none are awarded.

JUDGE
Release Date: 16 October 2009
MAN/08/8073