[2011] UKFTT 11 (TC)

TC00888

Appeal number: TC/2009/14440

Platinum sponge – Refusal of Restoration – Whether refusal reasonable and proportionate in the circumstances

FIRST-TIER TRIBUNAL

TAX 

	CLEAR PLC	Appellant

	- and -

           THE DIRECTOR OF BORDER REVENUE
           (Formerly
	THE COMMISSIONERS FOR HER MAJESTY’S
	REVENUE AND CUSTOMS)	Respondents

		TRIBUNAL: 	MISS J. BLEWITT (TRIBUNAL JUDGE)						MR G. N. BENNETT (MEMBER)			

Sitting in public at Manchester on 18 and 19 November 2010

 Mr B. Stuart, Counsel for the Appellant

Mr R. Jones, Counsel instructed by The Director of Border Revenue, for the Respondents

© CROWN COPYRIGHT 2010

DECISION

1.	This is an appeal by the Appellant against the decision of the Respondents dated 15 January 2010; that decision being that on a re-review under Section 14(5) of the Finance Act 1994 the previous decision not to restore 40.8kg of Platinum Sponge seized by the Respondents on 1 July 2009, should be upheld.
Preliminary Issues
2.	A preliminary point was raised by Mr Stuart on behalf of the Appellant. The Tribunal was invited to exclude the evidence of Mr Martin Silvester, Mr Ross Alastair Paul McLachlan and part of the Respondent’s Statement of Case which related to the evidence of Mr Silvester. The Tribunal considered the written application and oral submissions of Mr Stuart and oral submissions opposing the application from Mr Jones. 
3.	In respect of the evidence of Mr McLachlan contained in a witness statement dated 30 March 2010  the Tribunal directed that the evidence be excluded as it related to information which was not known to Mr Harris, the Reviewing Officer at the time of making his decision on 15 January 2010. The Tribunal concluded that the details contained within the statement as to the dangers of carrying Platinum Sponge in hand luggage while flying, which had not come to light until over two months after the decision was made and were not pleaded in the Respondent’s Statement of Case should not be relied upon as part of the Respondent’s case.
4.	As regards the application in respect of the evidence of Mr Silvester and the related part of the Respondent’s Statement of Case, the Tribunal directed that the evidence should be admitted and the Tribunal would assess what, if any weight to attach to it. In regard to the evidence relating to the Appellant’s history of VAT compliance, it was unclear from the Reviewing Officer’s witness statement whether or not the information was known to him at the time of making the decision. The Tribunal therefore concluded that following the oral evidence of Mr Harris, the Reviewing Officer, the Tribunal would be in a position to determine whether the information contained within Mr Silvester’s witness statement and referred to in the Respondent’s Statement of Case had formed part of the decision making progress adopted by Mr Harris and would be relevant in determining this appeal. 
Grounds of Appeal
5.	The Appellant’s Grounds of Appeal dated 11 February 2010 and letter in support dated 10 March 2010 contained the following points of appeal;
(a)	That the matter to be re-reviewed was in respect of ownership/title in the goods following production by the Appellant to the Respondent of a written agreement between the Appellant and Midas dated 31 March 2009. The review letter makes no mention of this document.
(b)	The re-review extended beyond the specific issue of ownership (which the Appellant assumed was not disputed) in contravention of Section 14(5) of the Finance Act 1994.
(c)	That the two individuals responsible for importing the Platinum Sponge on 1 July 2009, namely Mr Irshad Kara and Mr Sean Christopher Thompson, pleaded guilty to absolute offences of failing to declare goods contrary to Section 78 (3) Customs and Excise Management Act 1979. The Appellant submits that these offences do not involve any element of dishonesty and therefore the basis of the Review Decision not to restore; namely that the goods were smuggled into the UK, is wholly misconceived.
(d)	That evidence had been produced by the Appellant to show that goods of this value had previously been imported into the UK in the same manner and that this had been declared on the Appellant’s VAT returns. 
Facts
6.	The Appellant is a Public Limited Company which trades from 545 Hyde Road, Belle Vue, Manchester as an import/export business. On 1 July 2009 Irshad Kara and Sean Christopher Thompson, Co-Directors of a Company called “Mydas” were stopped by Officers of the Respondents after entering the green “nothing to declare” channel at Manchester Airport having returned on a flight from Zurich. The two men confirmed that they were carrying 40.8kg of Platinum Sponge contained in sealed tins in their hand luggage. Mr Kara stated that the value of the goods was approximately £800,000, that he had been involved in this type of business for 2 months and that he had made 2 or 3 previous importations. Mr Thompson stated to Officers of the Respondent that he and Mr Kara had made 5 previous trips, bringing in 5 – 10kg of Platinum Sponge on each occasion. 
7.	The goods were seized as liable to forfeiture on 1 July 2009.
8.	Both men were arrested and interviewed the following day. Mr Kara gave a prepared statement and thereafter made no comment. In the prepared statement, Mr Kara denied being involved in the evasion of VAT on any metals, he admitted that he is the director of a Swiss based company called Mydas which is involved in the sourcing and supply of precious metals, particularly Platinum to UK customers, particularly the Appellant. Mr Kara stated that on some loads Mydas transports the metals direct to the customer and on other loads the customers arrange their own collection and transportation. It was stated that when the metals leave Switzerland they are delivered in full to Swiss Customs at the airport and the papers accompany each load, as they had in this case. Mr Kara stated that on 1 July 2009 he was travelling into the UK with his co-director Mr Thompson transporting Platinum for the Appellant. He stated that when stopped by an officer of HMRC he was forthright in explaining the load and his role in the transport arrangement.
9.	Mr Thompson gave a full interview in which he stated he was a Co-Director of Mydas, a Swiss “off the shelf” company which had been purchased by himself and formatted to supply the Appellant, with a view to expansion to supplying other companies in the future, with precious metals. Mr Thompson stated that the Platinum was sourced from America and imported into Switzerland using Brinks, a Company specialising in the secure transport of goods. Mr Thompson stated that he had developed the system of meeting the Brinks courier at Zurich airport personally to import it into the UK in his hand luggage. Mr Thompson said that this manner of importation was used to avoid security issues and delay in importing the goods which would have a knock-on effect on the price which is set as a fixed price twice a day. Mr Thompson said that he had made previous trips with both his co-director Irshad Kara and the Director of the Appellant Company, Irshad Kara’s brother Imran Kara. Mr Thompson explained that when Mydas was set up it had no assets and the platinum was paid for by the Appellant with Mydas being paid 1% commission for arranging the importation.
10.	The Appellant appealed the seizure and requested restoration by letter dated 8 July 2009. The request for restoration was refused by the respondents in a letter to the Appellant dated 14 July 2009. A review was requested on 15 July as the initial decision not to restore the goods to the Appellant dated 25 August 2009 was made on the basis that the goods were owned by Mydas not the Appellant.
11.	The Appellant appealed the decision not to restore the goods by way of Notice of Appeal dated 23 September 2009. A document entitled “Agreement for the Supply of precious metals” (“the Agreement”) and dated 31 March 2009 was supplied by the Appellant to the Respondent on 28 October 2009. The document confirmed that the Appellant had ownership of the goods at the time of importation and formed the basis of the request for a re-review.
Review and Re-Review Decision
12.	The initial review decision dated 25 August 2005 dealt with the issue of non-restoration on the basis that the owner of the goods was Mydas. The Agreement confirmed that the Appellant, not Mydas, was the owner of the goods at the time they were brought into the UK. The Respondent did not take issue with the Agreement and agreed to carry out a re-review. 
13.	The Re-Review Decision dated 15 January 2010 upheld the original decision of 25 August 2009 not to restore the goods. The Review Officer Mr Harris concluded that there had been an attempt to smuggle high value goods into the UK without payment of tax. 
14.	Mr Harris sets out his reasons in his decision letter to the Appellants which was contained within the bundles provided for the Tribunal. Mr Harris took into account correspondence from the Appellant in which it was claimed that the Directors had mistakenly believed Switzerland was an EFTA country and therefore there were no Customs restrictions on bringing such goods into the UK and concluded that such a belief was implausible for a company involved in the regular importation of such high value goods. Mr Harris also noted that ignorance of the law provides no excuse. 
15.	The commercial rationale behind the importation was also considered by Mr Harris who concluded that the movement of the goods from the USA to Switzerland where they were placed in transit, collected by Mr Thompson and Mr Kara, placed in hand luggage for and transported to the UK was so unusual as to arouse suspicion. Mr Harris states that Mr Kara and Mr Thompson had no intention of declaring the goods, as evidenced by their attempted exit through the green “nothing to declare” channel. Mr Harris had seen no evidence that the goods were insured and concluded that no proper method of moving such a commercial amount of goods had been employed nor any effort to make preparations for the correct Customs clearance made; such an omission being either reckless or complicit with the smuggling attempt. Mr Harris noted that Mr Thompson and Mr Kara had been arrested and charged with the attempted smuggling of the goods, although at the date of the decision the matter had not yet reached trial at the Magistrates’ Court.
16.	Mr Harris considered the admissions by Mr Kara and Mr Thompson that they had made previous importations and concluded that this was an indication of an ongoing intention to smuggle large quantities of goods into the UK without payment of tax. Mr Harris makes reference in his review decision to the fact that Mr Imran Kara, Director of the Appellant Company and brother of Irshad Kara had also imported goods into the UK on 16 April 2009 and 27 April 2009 which makes Mr Kara liable to prosecution for non payment of tax.
17.	Mr Harris concluded that, on the balance of probabilities, the Appellant was complicit in the attempt by Mr Thompson and Mr Irshad Kara to smuggle goods into the UK. Mr Harris states in the review letter that his views and conclusions are reinforced by his knowledge of current investigations by HMRC into Mydas and the Appellant’s alleged VAT irregularities.
Evidence
18.	In oral evidence to the Tribunal Mr Harris stated that he had taken the original review decision into account in the re-review and in applying the correct policy he had found no exceptional circumstances upon which restore the goods. Mr Harris confirmed that he had seen no insurance documents for the goods and found the method of transporting the goods in hand luggage unusual given the high value of the goods. Mr Harris stated that he had read the interviews of Mr Kara and Mr Thompson and was aware that the two men subsequently pleaded guilty to offences of failing to declare goods contrary to Section 78 (3) Customs and Excise Management Act 1979. Mr Harris was shown a letter from the Crown Prosecution Service (“CPS”) to Solicitors for Mr Kara and Mr Thompson dated 12 April 2010 which stated that “...as conceded at the earlier hearings it is not suggested that the defendants acted dishonestly...”.This was not a letter which had been seen by Mr Harris who clarified that the CPS are a separately run department. Mr Harris stated that the letter did not alter the conclusions in his Re-Review Decisions as the CPS deal with criminal litigation which has a higher standard of proof whereas Mr Harris reaches his conclusions based on the balance of probabilities. 
19.	Mr Harris explained that the reference in his Re-Review decision to “other investigations” related to information he had requested from Mr Silvester. Mr Harris stated he had made a point of checking whether any investigations had been made into the Appellant Company and asked Mr Silvester to provide a complete summary. Mr Silvester sent a memo to Mr Harris dated 11 January 2010 with the subject heading “Clear Plc – Background for Non-Restoration” which had formed part of his decision not to restore the goods and to which he had referred in his decision letter. 
20.	The memo from Mr Silvester outlined the background to the Appellant Company’s trading history and the fact that it previously traded in wholesale computer components and mobile telephones in a manner characteristic of companies involved in MTIC fraud. Details were provided as to information the Appellant Company had received in relation to the Company’s 02/05 VAT repayment claim, which was paid after verification. The information given to the Appellant was that a missing trader, tax loss and third party payments were found in the supply chain of marketing data.  
21.	Mr Silvester provided information as to the Appellant’s pending appeal to the Tax Tribunal relating to VAT repayment claims for computer chips and mobile telephones where input tax claimed has been denied on the basis that the Appellant ought to have known that their dealing were part of an MTIC fraud. The memo also set out a VAT repayment claim in respect of a vehicle the Appellant Company asserted it was hiring out. The claim was denied when it became apparent that the vehicle was not insured for business use. 
22.	Also as to an outstanding assessment issued by HMRC in respect of Platinum purchased in the period 02/08 and sold to Cooksons in February 2009. Mr Silvester comments on the subject matter of these proceedings, the close relationship between Mr Thompson and Mr Irshad Kara who imported the goods, and Mr Imran Kara, a shareholder and sole Director of the Appellant Company. Mr Silvester also comments on the knowledge of those involved and the fact that the Appellant Company had imported goods in the past. 
23.	Information was provided by Mr Silvester as to ongoing enquiries into the small repayment claims made by the Appellant Company covering the periods May and June 2009. During that period the Appellant purchased data from a Company called Ansari London Ltd who charged the Appellant VAT of £550,372.50. In the same period the Appellant sold platinum to Cooksons charging VAT of £550,035.46 on a total of 8 transactions. 
24.	Mr Silvester summarised the paperwork provided by the Appellant to the Respondent relating to 9 importations of platinum which included invoices and purchase orders between Mydas, the Appellant and Cooksons, a Swiss Customs declaration and delivery documents. Documents are also held by HMRC relating to the Appellant’s trade in platinum following the arrests of Mr Kara and Mr Thompson which shows that the Appellant began using a different supplier to Mydas in Switzerland, namely Mydas AG which is based in Denmark. 
25.	In cross-examination by Mr Stuart, Mr Harris stated that he had concluded that the importation was an attempt at smuggling, which he defined as bringing goods into the UK without payment of tax and with the aim of avoiding such payment. Mr Harris stated that his area of expertise was not VAT and therefore he could not comment on the potential benefit to the Appellant but on looking at the facts, tax was due on importation of the goods which was not paid by the Appellant as Mr Thompson and Mr Kara had gone through the green channel. Mr Harris stated that he was aware that the goods had been sold onto Cooksons who were charged VAT on the platinum, however his decision did not take into account facts which post dated the importation. Mr Harris stated he had taken no view as to whether dishonesty had been present in the importation but had reached his decision on the evidence available to him and on the balance of probabilities. Mr Harris stated that inquiries into the criminal proceedings was outside of his remit and that the letter from the CPS to Mr Thompson and Mr Kara’s solicitors dated 12 April 2010 did not form part of his review. Mr Harris stated that he had spoken with the case officer in the criminal proceedings which were still ongoing at the time he concluded his review on 15 January 2010. Mr Harris explained that he had not specifically referred to Mr Silvester’s memo in his Decision as he had been instructed that the memo was sensitive and was marked “do not disclose”. Mr Harris accepted that there were inaccuracies in dates but that he had tried to be accurate. Mr Harris was asked to identify the loss to the exchequer as a result of the importation, to which he stated that he did not consider how there may be loss but simply the issue as to whether or not to restore the goods. Mr Harris stated that he had sought information on other investigations into the Appellant Company in order to assess the credibility of the accounts given by Mr Kara and Mr Thompson. Mr Harris stated that he questioned the security of the items being transported in hand luggage in an overhead locker and stated that he found the method used unusual for a company involved in transporting goods internationally. 
26.	Mr Harris was subsequently recalled to confirm that a document produced by the Respondents was the policy he referred to in his Decision. Mr Harris stated that if goods are properly seized and forfeited then the goods are deemed as seized. Mr Harris explained to the Tribunal that different regimes exist for consideration of restoration, for example where a vehicle is used to transport goods and both the vehicle and items are seized. In this case however Mr Harris stated that the policy applicable is that if goods are properly seized then in the absence of exceptional circumstances they will not be restored. 
27.	Mr Thompson was the first witness to give evidence for the Appellant. Mr Thompson stated that he had been employed by the Appellant between 2005 and 2007 then returned to the Company in 2009. Mr Thompson stated that he had known Mr Imran Kara’s father since 1990 when he became an insurance broker for the petrol station owned by Mr Kara’s father. Mr Thompson explained to the Tribunal that he had generally been involved in administration and health and safety matters for the Appellant and assisted with looking after the interests of the family’s businesses. Mr Thompson stated that the Appellant Company trades in commodities and his role was to manage the administration as Mr Imran Kara carried out the deals. 
28.	Mr Thompson explained that the Appellant had previously been involved in the platinum trade however the first deal had been delayed due to shipping the goods. Due to the significant delay in delivery of the goods arrived 10 days after sent from Austria where they had been purchased and the value during the intervening period had dropped substantially because of price fluctuations. As a result the goods were held by the Appellant for several months until the price increased. Six months later Mr Kara sold the goods to Cooksons and made a loss.
29.	Mr Thompson stated that following the Appellant’s loss, Mr Imran Kara made the decision that he had neither the time nor inclination to continue with the platinum trade but he and Mr Thompson agreed that the trade would be profitable if the delivery process could be quickened. Mr Thompson stated he had discussed with Mr Kara that he (Mr Thompson) would be interested in setting up a business for his (Mr Thompson’s) own benefit and he suggested to Mr Kara that a business be set up (Mydas) from which the Appellant could purchase platinum. Mr Thompson stated that Rochet, a company from whom the platinum was purchased was a contact of Mr Kara and Mr Thompson had used this contact. Mr Thompson explained to the Tribunal that an agreement was reached to trade with Rochet and he then took the decision to base the company in Switzerland as he considered it to be the optimum location for future expansion into trading in Europe. Mr Thompson stated that in order to set the business up in Switzerland Swiss national bank accounts were required together with a personal guarantee of 100,000 Swiss Francs. 
30.	Mr Thompson stated that he approached Mr Kara’s father with a view to obtaining investment in the company and Mr Kara’s father took the view that if Mr Thompson included Mr Imran Kara’s brother, Irshad Kara in the business then he would be willing to invest in the business as an opportunity for his son when he left university.
31.	Mr Thompson explained to the Tribunal that he had checked the tax regime of Switzerland as he was aware it was not an EU country. Mr Thompson stated that as Switzerland was an EFTA country he had read documents published by HMRC and concluded that it had the same financial benefits as EU countries. Mr Thompson stated that he had called HMRC’s helpline in relation to other matters and had checked Switzerland was an EFTA country during the call. Mr Thompson stated that he had assumed that Switzerland was treated as an EU country for the purpose of importing goods and the harmonisation of VAT, although he now accepted that he had been mistaken in this assumption. 
32.	In respect of the method of transport, Mr Thompson stated that in order to combat the problem of delays as previously encountered he spoke to handlers at Zurich airport who raised no concerns as to the proposal of carrying the goods in hand luggage. Mr Thompson stated that the platinum sponge was contained in sealed tins and transferred into hand luggage in front of Swiss Customs. The men then passed through security where they identified the goods to Customs Officers, showed the paperwork and were allowed to travel. Mr Thompson stated he was not aware of a duty to declare the goods due to his mistaken belief that Switzerland was treated as an EU country when importing goods and that he had been guided by ATM Logistics, a courier company, who were aware that it was intended to transport the goods in hand luggage and raised no objections. 
33.	Mr Thompson stated he had no involvement with VAT returns submitted by the Appellant and denied that he had any intention to avoid payment of tax on the goods, stating that he had failed to put proper procedures in place as he had misunderstood the regulations. Mr Thompson confirmed that Mydas was paid 1% of the sale price for its role.
34.	In cross examination it was put to Mr Thompson that he had contradicted his witness statement in which he stated he was employed by the Appellant by stating in interview that he was self-employed. Mr Thompson stated that at the time of interview he was unsure about his status as terms had not been agreed but that he tried to answer all questions to the best of his abilities. Mr Thompson stated that he became aware soon after that he was employed and accepted that he had stated in interview that he had invoiced the Appellant but in fact he had not. 
35.	Mr Thompson accepted that he had previously worked in insurance and was knowledgeable about insuring high value goods, but confirmed that the platinum had not been insured. Mr Thompson explained that given the method of transporting the goods in hand luggage, the platinum was uninsurable and that the risk was taken as a commercial decision in order to speed up the process. When asked about the health and safety implications of placing platinum sponge in hand luggage, Mr Thompson stated that a large number of people more knowledgeable than himself were involved in or knew about the process. Mr Thompson stated that he did not look at HMRC’s website or aviation rules for guidance. 
36.	Mr Thompson accepted that he had stated in his witness statement that precious metals must be transported by secure handlers, and repeated that the decision to transport the goods in hand luggage was a commercial decision taken as a guard against delays between shipping agents. Mr Thompson stated that airports are secure environments and it was his belief that there could be no better security than transporting the goods personally. Mr Thompson was unaware as to whether shipment would be quicker had the goods been sent directly from the USA to the UK, rather than passing through Zurich. It was accepted by Mr Thompson that Mydas added nothing to the trading which was funded by the Appellant. 
37.	Mr Thompson stated that in making the decision to base Mydas in Switzerland he had not sought advice from either an accountant or obtained legal advice. He stated he had spoken to ATM Logistics and called HMRC’s advice line, although he could not recall if he had asked whether VAT would be payable on the goods. Mr Thompson put his mistake down to naivety as opposed to negligence or recklessness but accepted that the Appellant Company had imported goods in the past and were aware of the procedures. 
38.	Mr Thompson stated that Mr Imran Kara had been the first person to test the method of transporting the goods in hand luggage. He accepted that it was an unusual method to adopt but contended that it was not uncommon. Mr Thompson denied any deliberate intention to import the goods without paying VAT. 
39.	The final witness for the Appellant was Imran Kara, shareholder and sole Director of the Appellant Company. Mr Kara explained that his father is co-shareholder of Clear Plc which has existed for approximately 7 or 8 years. 
40.	Mr Kara told the Tribunal that he had started “Global Worldwise Enterprises” which subsequently became the Appellant Company in 2002 when electronic commodities were profitable and that his father had funded the business. Mr Kara explained that he recognised the potential profit in platinum while working in the jewellery quarter in Birmingham. 
41.	Mr Kara stated that he was introduced to a contact at Rochet and took time to visit the Company and reach a trading agreement with them. Mr Kara explained that during that time he arranged the first import of platinum from Austria, however due to delays he was forced to hold the goods for 6 months before selling at a loss and as a result Mr Kara stated he lost some interest in trading in platinum.
42.	Mr Kara stated that Mydas was set up following discussions between himself and Mr Thompson. Mr Kara stated that he oversaw the Mydas although there was no advantage to him other than what good Mydas could supply to the Appellant Company. Mr Kara confirmed that Mydas was paid 1% of the sale value for its involvement. 
43.	Mr Kara stated he had little involvement in the decision to base Mydas in Switzerland, although when Mr Thompson mentioned this to him he thought it was a good idea. Mr Kara stated that from documents he had read he too believed that there was free trading with the UK due to Switzerland’s EFTA status. Mr Kara stated that even if he had known that tax was payable on imports from Switzerland, he still believed it to be a good location to base a business. 
44.	Mr Kara stated that following the arrest of his brother and Mr Thompson he had been cooperative and supplied documentation to the Respondent relating to all of the Appellant’s platinum trading. 
45.	Mr Kara confirmed that Mr Thompson is an employee of the Appellant Company, and that an accountant is also employed. Mr Kara accepted that the assessment raised by HMRC in respect of Platinum imported in 2008 had not been appealed by the Appellant and explained that he had fallen out with the Company’s accountant at that time. 
46.	Mr Kara stated that he had initially carried out 2 imports on his own in order to assess the security factor as it was the Appellant Company which was paying for the goods. Mr Kara stated that thereafter he took a smaller role, although he did check whether VAT was payable on the goods. Mr Kara explained that he had looked at the EFTA status of Switzerland but had been mistaken in his belief that as a result of the country’s status VAT was not due on importation of the goods. Mr Kara stated that he was not speaking to the Appellant Company’s accountant at the time and had not taken any professional advice. Mr Kara stated that he had been naive but did not accept that his actions amounted to negligence or recklessness. Mr Kara stated that he was aware the goods were uninsurable but that he had taken the commercial decision for the goods to be transported in hand luggage as he believed it to be the safest and most secure method. Mr Kara stated that he is aware from experience that it would not have been quicker or less costly to transport the goods directly from the USA. Mr Kara accepted that he was aware of the systems in place for importing and paying VAT on goods. 
Legal Issues
47.	There was no dispute by the Appellant as to the fact that the goods were properly seized, that the burden in this appeal rests on the Appellant or that the test of reasonableness as set out in Ware v Customs and Excise Commissioners (E00735) applies; namely (i) is this a decision that no reasonable person could arrive at; (ii) has some irrelevant matter been taken into account; (iii) has some matter which should have been taken into account been ignored and (iv) has there been some error of law?
48.	The Tribunal considered the legal issue raised by the Appellant as to the interpretation of Section 14(5) of the Finance Act 1994 and whether on a re-review the Reviewing Officer is entitled to take into account any matter other than the material produced by the Appellant.
49.	Section 14 (5) of the Finance Act 1994 sets out that:
(5)A person shall be entitled to give a notice under this section requiring a decision to be reviewed for a second or subsequent time only if—
(a)the grounds on which he requires the further review are that the Commissioners did not, on any previous review, have the opportunity to consider certain facts or other matters; and
(b)he does not, on the further review, require the Commissioners to consider any facts or matters which were considered on a previous review except in so far as they are relevant to any issue to which the facts or matters not previously considered relate
50.	The Tribunal considered the wording of the legislation carefully and took the view that the legislation allowed the Appellant to request a re-review on the basis that following the initial review decision, the Appellant produced documentation which showed that the ownership of the goods lay with Clear Plc as opposed to Mydas. This was not an issue considered in the original decision not to restore the goods and therefore Section 14 (5) (a) of the Finance Act 1994 was fulfilled. The Tribunal took the view that Section 14 (5) (b) of the Finance Act 1994, in referring to “he” (that being the Appellant) relates solely to the Appellant’s application for a re-review and does not limit the Reviewing Officer in deciding what factors to take into account; to interpret the legislation so could lead to relevant considerations being wholly ignored on re-review and the Tribunal found that this would not have been the intention of the legislature. In applying the legislation to facts of the case, the Tribunal took the view that the Reviewing Officer was entitled to take into account all matters relevant to the Appellant’s claim of ownership, and that included consideration of all issues relating to the Appellant Company.

Submissions
51.	The Tribunal considered the submissions of Mr Jones for the Respondent and Mr Stuart for the Appellant carefully. The submissions for the Respondent can be summarised as follows:
(a)	That the general policy of the Respondents not to restore the goods where properly seized is reasonable. The policy is tailored to specific circumstances, such as where a vehicle is involved in the import of goods and seized as a consequence, however such circumstances did not apply to the facts of this case. The Reviewing Officer took into account matters of proportionality, reasonableness and exceptional circumstances and his decision cannot be said to be unreasonable.
(b)	The Reviewing Officer considered all relevant issues in his re-review and the credibility of the evidence on behalf of the Appellant, including the fact that no checks were undertaken as to whether VAT was payable, the lack of insurance for the goods, the failure by the Appellant to consider health and safety issues of transporting the goods, the long history of trading and previous importations and the lack of commercial rationale behind the importation.
(c)	That the consideration as to whether there was any loss to the Revenue is irrelevant.
(d)	That the decision s proportionate bearing in mind the number of previous importations where goods were not seized.
(e)	That Mr Harris was entitled to reach his conclusions that the Appellant’s actions were either reckless or dishonest on the balance of probabilities.
52.	For the Appellant, Mr Stuart submitted the following:
(a)	That Mr Harris on his re-review should have restricted his considerations to the information in the original review decision and the issue of ownership only.
(b)	If Section 14 of the Finance Act 1994 is not applied in such a way, then the Appellant submits that the decision is not reasonable.
(c)	That having received the memo from Mr Silvester, Mr Harris should have opened further lines of inquiries before reaching his decision.
(d)	That there was no dishonesty involved as shown by the criminal charges which did not involve such an element and the fact that the Appellant had made previous importations and continued to so do which would not have occurred had the Appellant been aware that VAT was payable.
(e)	That the decision not to restore is not proportional given the high value of the goods, estimated as £800,000. 
(f)	That the Reviewing Officer failed to look for exceptional; circumstances and only considered prejudicial factors, using the information from Mr Silvester to justify his conclusion.

Decision
53.	The Tribunal found as a fact that the general policy of the Respondents not to restore the goods where properly seized is reasonable. It is clear that the policy allows for situations where a distinction can be drawn between primary seizure of goods and secondary seizure, for example where an innocent driver has had his vehicle cynically made use of by others to import excise goods and in the Tribunal’s view it has to be correct that a policy on restoration should draw the type of distinctions addressed in the Commissioners' policy. 
54.	The facts of this case relate solely to goods seized on importation which the Appellant accepted were properly seized. In such circumstances the general policy adopted by the Respondents is not to restore the properly seized goods unless exceptional circumstances apply. The Reviewing Officer makes clear in his decision that he is guided by the policy and the Tribunal found as a fact that the policy and Mr Harris’ use of it could not be said to be unreasonable. The Tribunal found Mr Harris to be a credible witness who had ensured he had taken into account all relevant factors, both mitigating and aggravating, in reaching his decision. The Tribunal accepted that Mr Harris had considered whether exceptional circumstances existed and whether his decision was reasonable and proportionate.
55.	The Appellant had not pointed to any exceptional circumstances in this case. The Tribunal found as a fact that the issue of no identifiable loss to the Revenue did not amount to an exceptional circumstance. 
56.	The Tribunal accepted Mr Harris’ evidence that he had made inquiries into the criminal proceedings but noted that at the date of the decision, 15th January 2010, the proceedings were still ongoing. The Tribunal noted that Mr Thompson and Mr Irshad Kara were initially arrested on suspicion of being concerned in the fraudulent evasion of VAT. The Tribunal found that Mr Harris had made all reasonable enquires but was not bound by the separate proceedings particularly bearing the lower standard of proof which applied to his review. The Tribunal did not accept that the sentence imposed on Mr Thompson and Mr Irshad Kara had any effect on the decision or the reasonableness of the decision not to restore the goods. The criminal charges were a wholly separate matter and sentence did not occur until after Mr Harris reached his decision. The Tribunal did not find that a lenient sentence could amount to exceptional circumstances such as would justify restoration. 
57.	The Tribunal accepted Mr Harris’ evidence, that his conclusion; that this was an attempt at “smuggling” referred to the non payment of VAT and that he had made no finding on the issue of dishonesty. This did not, in the Tribunal’s view make his decision unreasonable. 
58.	The Tribunal accepted Mr Harris’ evidence that he had received Mr Silvester’s memo prior to making his decision. The Tribunal noted that Mr Harris had used the information provided by Mr Silvester to complete his enquiries and provide a clearer picture as to the history and experience of the Appellant Company. The Tribunal accepted that this was necessary and reasonable for Mr Harris to assess the credibility of the accounts given by Mr Thompson and Mr Kara. The Tribunal noted the information which was not received by Mr Harris until after his decision and accepted that the inclusion of the evidence in his witness statement was no more than a mistake. The Tribunal did not attach any weight to this evidence but in doing so did not find that it rendered Mr Harris’ decision unreasonable. The Tribunal found that Mr Harris had been fair in his use of the information, which had not formed the sole justification for his decision, rather a broader picture of the Appellant’s knowledge of trading and tax obligations. The Appellant had sought to argue in the appeal that it tried to ensure that all of its tax obligations were complied with, and therefore the Appellant’s history of contact with HMRC including the assessment to VAT raised in respect of disallowed input tax on the purchase of platinum in 2009 was a relevant consideration for Mr Harris in assessing the credibility of the Appellant’s assertions. 
59.	 Having heard evidence from Mr Thompson and Mr Imran Kara but not Mr Irshad Kara, the Tribunal found that the contention that both men had been naive rather than reckless was wholly implausible given the experience of the Appellant Company in the import trade and the fact that Mydas had been set up for the specific purpose of importing platinum. The Tribunal found the assertion that both men would be mistaken in their research as to the VAT status of Switzerland untenable and implausible.
60.	Given the care and consideration put into setting up Mydas, the fact that neither Mr Thompson nor Mr Kara took any professional advice as to tax obligations on imports, particularly when the Appellant employed an accountant, is unreasonable for men with significant experience in the business of imports. 
61.	The Tribunal found that the method of transportation was highly unusual and was likely to arouse suspicion. Having heard oral evidence from Mr Thompson that no inquiries were made into the health and safety issues of using such a method the Tribunal found that such actions were at the very least reckless. The Tribunal found the inability to insure the goods due to their transport in hand luggage lacked any commercial rationale given the high value of the goods and rejected the evidence of Mr Kara and Mr Thompson that the decision was made in order to avoid delays in delivery as implausible.
62.	The Tribunal found the evidence of Mr Thompson and Mr Kara to be contradictory in terms of how and by whom Mydas was set up. Mr Thompson had indicated that Mydas was set up at his suggestion due to Mr Kara’s waning interest in importing platinum, yet the evidence of Mr Kara suggested that he had played a significant role and acted as decision maker in the business. The Tribunal found that Mydas was an unnecessary part in the import, as the funding and organisation came from the Appellant and there was no obvious commercial reason for its involvement in the supply chain. 
63.	The Tribunal found that Mr Harris had taken all reasonable steps to ensure he had sufficient information before him upon which to base his decision. There was no obligation upon Mr Harris to await the conclusion of criminal proceedings or commence an open ended inquiry, which would have no doubt caused significant and unnecessary delay to restoration proceedings.
64.	The Tribunal found that Mr Harris had considered the issues of proportionality and reasonableness and did not find his decision, nor the manner on which he arrived at the decision contravened either principle. The Tribunal found no exceptional circumstances applied to this case and accepted Mr Harris’ evidence that this issue had been considered. 
65.	The Appeal is dismissed
66.	In reaching this decision it was unnecessary for the Tribunal to go on to consider the point raised by the Appellant as to the Tribunal’s powers should the appeal be allowed.
67.	This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009.   The application must be received by this Tribunal not later than 56 days after this decision is sent to that party.  The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice.

TRIBUNAL JUDGE
RELEASE DATE: 16 December 2010