Redha v Director Of Border Revenue (EXCISE DUTY RESTORATION OF GOODS (see also EXCISE APPEAL) : Dismissed on facts) [2017] UKFTT 594 (TC)
FTT-Tax
Redha v Director Of Border Revenue (EXCISE DUTY RESTORATION OF GOODS (see also EXCISE APPEAL) : Dismissed on facts)
[2017] UKFTT 594 (TC) · 2017-07-26
[20]Any thing liable to 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. 15. Any challenge to a seizure on the grounds that the item seized is not liable to forfeiture must, by virtue s 139(6) and schedule 5 to CEMA, be notified to HMRC within one month of the date of the seizure. Where notice is given condemnation proceedings shall be commenced by HMRC in the Magistrates’ Court to determine whether the item seized was liable to forfeiture (see paragraph 6, schedule 5 CEMA). However, if HMRC are not notified of a challenge within one month the item seized “shall be deemed to have been duly condemned as forfeited” (see paragraph 5, schedule 5 CEMA). 16. It is clear from the decision of the Court of Appeal in HMRC v Jones & Jones [2012] Ch 414 that the Tribunal does not have the jurisdiction to consider the lawfulness of a seizure on the grounds that it was not liable to forfeiture irrespective of whether such a finding was made by a Magistrates’ Court or, as in the present case, deemed to have been made by virtue of the legislation. 17. However, under s 152 CEMA: The Commissioners may, as they see fit –(a) …(b) restore, subject to such conditions (if any) as they think proper, anything forfeited or seized under the Customs and Excise Acts.[18]Section 14(2) of the Finance Act 1994 provides: Any person who is –(a) a person whose liability to pay any relevant duty or penalty is determined by, results from or is or will be affected by any decision to which this section applies,(b) a person in relation to whom, or on whose application, such a decision has been made, or(c) a person on or to whom the conditions, limitations, restrictions, prohibitions or other requirements to which such a decision relates are or are to be imposed or applied, may by notice in writing to the Commissioners require them to review that decision.[19]Section 15(1) of the Finance Act 1994 states: 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 and take such further steps (if any) in consequence of the withdrawal or variation as they may consider appropriate.[20]Section 16(4) to (6) of the Finance Act 1994 sets out the powers of the Tribunal on an appeal against a decision as follows: (4) In relation to any decision as to an ancillary matter, or any decision on the review of such a decision, the powers of an appeal tribunal on an appeal under this sections 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. (5) In relation to other decisions, the powers of an appeal tribunal on an appeal under this section shall also include power to quash or vary any decision and power to substitute their own decision for any decision quashed on appeal; (6) On an appeal under this section the burden of proof as to – (a) the matters mentioned in subsection (1)(a) and (b) of section 8 above; (b) the question whether any person has acted knowingly in using any substance or liquor in contravention of section 114(2) of the Management Act, and (c) the question whether any person had such knowledge or reasonable cause for belief as is required for liability to a penalty to arise under section 22(1) or 23(1) of the Hydrocarbon Oil Duties Act 1979 (use of fuel substitute or road fuel gas on which duty not paid). shall lie upon the Commissioners, but it shall otherwise be for the appellant to show that the grounds on which any such appeal is brought have been established[21]Section 16(8) Finance Act 1994 and Schedule 5 paragraph 2(1)(r) provides that an “ancillary matter” is: … any decision under section 152(b) as to whether or not anything forfeited or seized under the customs and excise Acts is to be restored to any person or as to the conditions subject to which any such thing is so restored. Discussion[22]It is clear from s 16(4) of the Finance Act 1994 that the issue before the Tribunal is not whether the cigarettes should be restored to Mr Redha but whether, having regard to the facts, the decision taken by Border Force not to restore cigarettes is proportionate and one that could reasonably have been reached. It is not sufficient that we might have reached a different conclusion . 23. Whether a decision is one that could reasonably have been reached was considered by Lord Phillips MR (as he then was) giving the leading judgment in Lindsay v Commissioners of Customs and Excise [2002] STC 508 who said, at [40]:
“… the Commissioners will not arrive reasonably at a decision if they take into account irrelevant matters, or fail to take into account all relevant matters”
He continued, at [52], in relation to proportionality: “The commissioners’ policy involves the deprivation of people’s possessions. Under art 1 of the First Protocol to the convention such deprivation will only be justified if it is in the public interest. More specifically, the deprivation can be justified if it is ‘to secure the payment of taxes or other contributions or penalties’. The action taken must, however, strike a fair balance between the rights of the individual and the public interest. There must be a reasonable relationship of proportionality between the means employed and the aim pursued ( Sporrong and Lönnroth v Sweden (1982) 5 EHRR 35, para 61; Air Canada v United Kingdom (1995) 20 EHRR 150 , para 36). I would accept Mr Baker’s submission that one must consider the individual case to ensure that the penalty imposed is fair. However strong the public interest, it cannot justify subjecting an individual to an interference with his fundamental rights that is unconscionable.” 24. It has been necessary for us to set out the facts and explain the reasons behind our decision in legal terms but, for the benefit of Mr Redha, we address the specific grounds that raised in his appeal: (1) That the cigarettes should not have been seized as there were three people travelling together. As Mr Redha did not challenge the seizure of the cigarettes in the Magistrates’ Court they have been condemned as forfeited. We cannot interfere with that although we note that Border Force have explained why they think the seizure was right. (2) He is a sick man and needs the cigarettes to steady his nerves. The Review Officer did consider this but decided that it was not an exceptional circumstance. We agree that was a reasonable conclusion. Mr Redha could buy replacement cigarettes and so did not need these particular cigarettes restored for medical reasons. Conclusion 25. Having carefully considered all of the circumstances of the case we have concluded that the decision of Border Force not to restore the cigarettes to Mr Redha was both reasonable and proportionate. As such his appeal, cannot succeed and is therefore dismissed. Appeal Rights 26. 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. JOHN BROOKS TRIBUNAL JUDGE RELEASE DATE: 31 JULY 2017