“26. Jones is clear authority for the proposition that the First-tier tribunal has no jurisdiction to go behind the deeming provisions of paragraph 5, Schedule 3. If goods are condemned to be forfeited, whether in fact or as the result of the statutory deeming, it follows that, having been bought in a Member State and then imported…, they were not held by the taxpayers for their own personal use in a way that exempted the goods from duty. The reasoning and analysis in Jones did not turn on the fact that the case concerned restoration of the goods and not assessment to duty. … 33. … It is clearly not open to the tribunal to go behind the deeming effect of paragraph 5 Schedule 3 for the reasons explained in Jones… The fact that the appeal is against an assessment to excise duty rather than an appeal against non-restoration makes no difference because the substantive issue raised by Mr Race [that the goods were in fact for own use] is no different from that raised by Mr and Mrs Jones. … 39…the First-tier Tribunal could no more re-determine, in the appeal against the Penalty Assessment, a factual issue which was a necessary consequence of the statutory deeming provision than it could re-determine a factual issue decided by a court in condemnation proceedings. The issue of import for personal use, assuming purchase in a Member State, has been determined by the statutory deeming.” 37. In HMRC v Susan Jacobson[2018] UKUT 18 TCC , the Upper Tribunal stated at [24]: “We respectfully agree with Warren J in Race that the reasoning and analysis in Jones applies to an appeal against a penalty in exactly the same was as it applies to an appeal against an assessment for excise duty. The deemed effect of Ms Jacobson’s failure to contest the seizure of the HRT was that it was duly condemned as forfeited as, in the terms of regulation 88 of the 2010 regulations, goods liable to excise duty which had not been paid in contravention of the Regulations.” 38. In view of the authorities cited above, I accept HMRC’s submission that, in both the excise duty appeals and the penalty appeals, it is not open to me to make a finding that the HRT was for own use. I have reached the conclusion that this is so regardless of the reason for the failure to challenge the legality of the seizure of the HRT. I note here that the reason that the taxpayers in Jones withdrew their notice of claim was because of advice received from their lawyers. Accordingly, even if I had been satisfied that a Border Force officer sought to discourage the Appellants from challenging the legality of the seizure, that would not have altered my view of the consequences of the statutory deeming provision. HMRC’s application to strike out the appeals against the excise duty assessments 39. Rule 8 of theTribunal Procedure (FTT) (Tax Chamber) Rules 2009 (“the FTT Rules”) provides in relevant part: “(2) The Tribunal must strike out the whole or a part of the proceedings if the Tribunal: (a) does not have jurisdiction in relation to the proceedings or that part of them; and (b) does not exercise its power under Rule 5(3)(k)(i) (transfer to another court or tribunal) in relation to the proceedings or that part of them. (3) The Tribunal may strike out the whole or a part of the proceedings if: … (c) the Tribunal considers there is no reasonable prospect of the appellant’s case, or part of it, succeeding.” 40. Given my conclusion at paragraph 38 above, I am satisfied that I have no jurisdiction in relation to the Appellants’ appeals to the extent that they are premised upon the HRT being for own use. In any event, I am satisfied that, to the extent the Appellants’ appeals are premised upon the HRT being for own use, the Appellants’ appeals have no reasonable prospect of success. 41. Accordingly, the Appellants’ grounds of appeal based on the HRT being for own use are struck out. However, I do not think it appropriate to strike out the excise duty assessment appeals in their entirety because the Appellants have also raised a time limit point in respect of which I do have jurisdiction, and to which I consider I should give substantive consideration. Evidence and findings of fact 42. Mr Bick gave sworn evidence. He confirmed the accuracy of the content of a letter dated 4January 2017 that he had written to the Tribunal, and gave a more detailed account of the events of6 November 2014 . Mr Bick was cross examined by HMRC’s counsel. 43. Ms Earwicker gave sworn evidence. She confirmed the accuracy of the content of two letters (both dated19 November 2015 ) that she had written to HMRC and the Border Force Complaints Team respectively, and gave a more detailed account of the events of6 November 2014 . Ms Earwicker was cross examined by HMRC’s counsel. 44. HMRC filed two witness statements (one relating to Mr Bick and the other relating to Ms Earwicker) from Helen Jennison, an officer of HMRC. Ms Jennison also gave oral evidence during which she confirmed the accuracy of her witness statements and elaborated on certain aspects of her evidence. Ms Jennison was cross examined by the Appellants. HMRC also relied upon documents that were included in the hearing bundle, in particular the notebooks of the Border Force officers who dealt with the Appellants on6 November 2014 . 45. In the letter of4 January 2017 , Mr Bick stated in relevant part: “On the 9th of Sept 2014 I was changed to inuslin control for my diabetes. DVLA were informed…I did not know if I would keep my licence, and if suspended when I would get it back. …I spoke with the wife [Ms Earwicker] and because of the uncertainty of the license situation decided to have a day trip to Belgium and buy a years worth of tobacco for ourselves. On the day in question we did so and called into a French hypermarket at Calais. At the time because of the migrant camp lots of British cars were being targeted and broken into. Because my car was a hatchback and easily looked into, we found every nook and cranny to keep the tobacco from view and what was left was covered with coats, shopping bags and other less valuable purchases. … On leaving the ferry I was not feeling well, which at the time I put down to a choppy crossing, but later realised I was close to a hypo-Glycemic reaction. When we were stopped I was asked how many packs of tobacco I had and I said 20. The wife was asked, she replied the same. I was asked and answered for me and did not because when I went to school 20 + 20 + 40. … I made a statement but because of my impending blood sugar problem was a bit confused and disorientated. Also, after a couple of hours waiting in the cold with no food and water, I was getting concerned for the wife as the stress had brought on an asthma attack so bad a paramedic had to be called [for Ms Earwicker]…whilst he was treating the wife, the female officer was in the wife’s face trying to con a confession from her. The paramedic told her to leave the room. … I asked about our tobacco and [the Border Force officer] said ‘Its gone. You could apply to Dover Court to get it back but it will cost you£750 and you have no chance. They always back us.’ She went on to say that paperwork would be passed on and we may hear from the powers that be. We did, 1 year and 3 days later. … We have insisted all along the goods were for personal use only. There is no evidence to suggest anything other than that…” 46. Mr Bick’s oral evidence in relevant part was as follows: (1) In 2013, after 18 years as a coach driver, he was made redundant. From his redundancy pay he purchased a new car; (2) In 2014, his diabetes became unmanageable by tablets so he was prescribed insulin. His doctor referred him to the DVLA. There was uncertainty as to whether Mr Bick would be able to retain his driving licence; (3) The Appellants would on average make two trips per year to other member states to purchase tobacco products for their own use. Due to the uncertainty in relation to his driving licence, he and Ms Earwicker decided to make a trip to Belgium to purchase enough tobacco to last them for a year. They had already made a number of previous trips that year but had not purchased tobacco on every occasion; (4) On6 November 2014 , the Appellants travelled to Calais and then on to Belgium where they purchased 40 “packets” of HRT. Mr Bick explained that a “packet” (or “carton”) is made up of ten 50 gramme “pouches” wrapped together in cellophane. So each packet contained 500 grammes meaning that the 40 packets totalled 20 kilograms – although Mr Bick said he did not think about the HRT in terms of weight but rather in numbers of packets; (5) Half of the HRT purchased was for Mr Bick’s use. The other half was for Ms Earwicker’s use. The HRT would have lasted the Appellants approximately one year. (6) On the way back to the ferry port at Calais, the Appellants stopped to purchase some other (non-excise) goods. They were advised by one of the retail establishments from which they bought goods that vehicles with British number plates were being broken into by people living in the migrant camp known as “the Jungle”; (7) The Appellants decided to cover up their purchases using coats and put the HRT in various places in the car. This was not to conceal any “smuggling” but to protect it from people that might break into the vehicle; (8) When first stopped and asked by a Border Force officer (Atmore) about tobacco purchases, Mr Bick said he had replied that he had purchased ten packs but corrected this to 20 “pretty much straight away”
“FA - Can you show me the tobacco please? Mr Bick opened the boot of the car and showed me two plastic bags. DB – Theres six in that bag and six in the other bag FA – is there any other tobacco anywhere in the car? DB – No … FA - Who is the tobacco for? DB – Us.”
“...[We] formally request that this case be reviewed and that…the sums detailed in the [HMRC] letter of3 November 2015 be terminated. The reasons are as follows: As we stated at the time, the tobacco was for our own use only: We bought 40kg as we are both smokers. My husband suffers from diabetes and is at risk of losing his drivers licence due to his deteriorating health. We decided to have a day out and ‘stock up’ as this may have been our last chance to do so. The border control officers were sceptical of this as when asked how much tobacco we had purchased, we both answered ‘20kg’; this was because 20kg was for my husband and 20kg was for me. This clearly led to a misunderstanding with the Border Control Officers thinking that we were attempting to conceal our total purchases of 40kg. This was compounded by the fact that some of the tobacco was concealed…to ensure that the goods were not visible through the car windows as they may be liable to theft... The Officers told us at the time that it would be pointless to appeal as we had ‘no chance’ of success and it would cost us around£700 to do so. I was traumatized by the episode and the behaviour of the officers involved. I suffered a panic attack, had difficulty breathing due to asthma and an ambulance was subsequently called…” 48. Ms Earwicker’s oral evidence in relevant part was as follows: (1) In relation to events prior to arrival at Dover, Ms Earwicker agreed with (and had nothing to add to) the evidence given by Mr Bick; (2) At Dover, Border Force stopped the car and asked Mr Bick to get out. The officer then proceeded to ask Mr Bick questions. Ms Earwicker stayed in the car; (3) Ms Earwicker has significant hearing difficulties (and did so as at6 November 2014 ); (4) Ms Earwicker did not hear all of the questions put by the Border Force officer to Mr Bick or all of Mr Bick’s answers; (5) Ms Earwicker signed as accurate Officer Atmore’s notebook (which recorded the questions asked by the officer of Mr Bick and Mr Bick’s answers) because she was traumatised and just wanted to get out of there. She is not someone that reads “small print” and did not fully read the notebook entries before signing to confirm their accuracy; (6) Half of the HRT (20 “packets”) belonged to Ms Earwicker. The other half belonged to Mr Bick. The references in the19 November 2015 letter to “40kg” were in error. Those references should have read “40 packets”; (7) Ms Earwicker had no recollection of being given Notice 12A; (8) A Border Force officer told Mr Bick, in Ms Earwicker’s presence, that a challenge to the seizure of the HRT would cost£750 and that the courts always find for Border Force; (9) The3 November 2015 letter did not arrive until12 November 2015 ; and (10) During cross-examination: (a) When asked why she had signed Officer Atmore’s notebook if she had not heard the questions and answers put to Mr Bick, Ms Earwicker said that she did so because the officer had talked to Mr Bick and so the notebook was accurate in that regard. Ms Earwicker repeated that she did not hear all that passed between Mr Bick and Officer Atmore because she was in the car (and the questioning took place outside of the car) and she suffers from hearing difficulties; (b) When asked why she had said in interview with a Border Force officer that her 20 packets would last 4-5 months when, on her own account, she smoked only two pouches per week, Ms Earwicker said she had a brother and brother-in-law who smoke HRT and she would have given some to them; and (c) When asked whether she knew that the seizure could be challenged in the magistrates’ court, Ms Earwicker confirmed that she did, but repeated that a Border Force officer had said that such a challenge would cost£750 and that the courts always find for Border Force. 49. In her witness statement in relation to Mr Bick, Ms Jennison said in relevant part: (1) “On26 October 2015 , I checked seizure referral papers for Mr David John Bick and his co-traveller Angela Karen Earwicker received from Border Force. The papers gave details of the goods seized, copies of seizure documents issued and a copy of the seizing officer’s notebook. Mr David John Bick was issued with seizure information notice BOR 156 the warning letter about seized goods notice BOR 162 and he signed both copies”; (2) “I considered the information within the officers notebook and made the decision that an Excise Duty Assessment was due…”; (3) “On3 November 2015 , I issued the Excise duty and Penalty preliminary notice letter, assessment£1804 and penalty£1072 , Officers Assessment/Civil Penalty Excise – EX601, the Penalty Notice (NPPS100), the Penalty explanation (NPPS100(S)), and the Excise Duty Schedule. The assessment was issued by virtue Part 2 Regulations 13(1) and 13(2) of theExcise Goods (Holding, Movement and Duty Point) Regulations 2010 .”; (4) “On4 December 2015 , I issued the Excise duty and penalty assessment letter, notice of penalty assessment…the penalty is calculated as a percentage of the Potential Lost Revenue, which in this case is the duty amount of£1804 . The calculations and reasons are shown on the NPP100(s) penalty explanation issued on 3 November. In considering the issue of the penalty, I decided that David John Bick’s behaviour was deliberate, but not concealed, as he under declared the amount of tobacco he had to the Border Force Officer and continued to do so. There was a potential element of concealment, as goods were packed in a manner to prevent detection but I considered the evidence insufficient to support a deliberate and concealed wrongdoing.”; (5) “The disclosure was prompted because the appellant did not tell us about the wrongdoing before he had reason to believe we had discovered it, or were about to. For this deliberate wrongdoing, with a prompted disclosure the minimum penalty chargeable is 35% and the maximum 70%.”; and (6) “In calculating the quality of disclosure, I looked at Telling, Helping and Giving. As he under declared the amount of tobacco, I gave him no reduction for telling 0%. Although he remained for interview with the Border Force he continued to be evasive, I gave him no reduction for helping 0%. I gave full reduction for Giving 30% as he could not assist with this. The total penalty charge is 59.5% of£1804 , which equals£1073 .”; 50. In her witness statement in relation to Ms Earwicker, Ms Jennison said in relevant part: (1) “On26 October 2015 , I checked seizure referral papers for Angela Karen Earwicker and her co-traveller Mr David John Bick received from Border Force. The papers gave details of the goods seized, copies of seizure documents issued and a copy of the seizing officer’s notebook. Angela Karen Earwicker was issued with seizure information notice BOR 156 the warning letter about seized goods notice BOR 162 and she signed both copies.”; (2) “I considered the information within the officers notebook and made the decision that an Excise Duty Assessment was due…” (3) “On3 November 2015 I issued the Excise duty and Penalty preliminary notice letter, assessment£1804 and penalty£947 , Officers Assessment/Civil Penalty Excise – EX601, the Penalty Notice (NPPS100), the Penalty explanation (NPPS100(S)), and the Excise Duty Schedule. The assessment was issued by virtue Part 2 Regulations 13(1) and 13(2) of theExcise Goods (Holding, Movement and Duty Point) Regulations 2010 .”; (4) “On4 December 2015 , I issued the Excise duty and penalty assessment letter, notice of penalty assessment…the penalty is calculated as a percentage of the Potential Lost Revenue, which in this case is the duty amount of£1804 . The calculations and reasons are shown on the NPP100(s) penalty explanation issued on 3 November. In considering the issue of the penalty, I decided that Angela Karen Earwicker’s behaviour was deliberate, but not concealed. Although Mr David John Bick answered the initial questions and under-declared the amount of tobacco he had to the Border Force Officer and continued to do so, Angela Earwicker was present and had the opportunity to answer. There was a potential element of concealment, as goods were packed in a manner to prevent detection but I considered the evidence insufficient to support a deliberate and concealed wrongdoing.”; (5) “The disclosure was prompted because the appellant did not tell us about the wrongdoing before she had reason to believe we had discovered it, or were about to. For this deliberate wrongdoing, with a prompted disclosure the minimum penalty chargeable is 35% and the maximum 70%”; and (6) “In calculating the quality of disclosure, I looked at Telling, Helping and Giving. As the amount of tobacco was under dclared, I gave no reduction for telling 0%. Although Angela Earwicker remained for interview with the Border Force and then admitted to the full amount, from where it was purchased but not why, I gave 20% reduction for helping. I gave full reduction for Giving 30% as she could not assist with this. The total penalty charge is 52.5% of£1804 , which equals£947 .” 51. Ms Jennison’s oral evidence in relevant part was as follows: (1) The excise duty assessments were made on3 November 2015 . They were notified to the Appellants by letters dated3 November 2015 ; (2) When cross examined by the Appellants and asked questions by the Tribunal, Ms Jennison: (a) In response to Ms Earwicker’s question “how can you say I misdeclared how much tobacco we had. I didn’t say anything until the interview?”, replied “I didn’t know that at the time”; (b) When asked by Mr Bick why the3 November 2015 letter had not arrived until12 November 2015 , replied “I can’t explain that, I put it in the postroom before midday on3 November 2015 . It would have been posted on the same day. That is how the system works”; (c) Stated that the3 November 2015 letter would have been sent by second class post; (d) Said she was unaware of when Border Force had sent the relevant papers to HMRC (although she only considered them in October 2015); (e) Said she was working on the basis that the excise duty assessments needed to be issued within one year of6 November 2014 ; and (f) Said she did not check with Border Force whether or not Ms Earwicker was present when Mr Bick was being asked questions by Officer Atmore. Rather, she simply relied on the notebook of Officer Atmore. 52. The documents relied on by HMRC included: (1) The Seizure Information Notice (Form BOR 156) which recorded that the Appellants had been issued with Notice 1, Notice 12A and a warning letter. The Appellants had each signed the Seizure Information Notice to acknowledge receipt; (2) A “Warning letter about seized goods” which materially stated: “the goods listed in the attached schedule…have been seized…This is without prejudice to any further action that may be taken against you in connection with this matter…HM Revenue and Customs…may take action against you such as issuing you with an assessment for any evaded tax or duty and a wrongdoing penalty…”
“FA: Where have you been? DB: Calais, Cite Europe to meet some friends for lunch. … FA: Have you purchased any cigarettes or tobacco? DB: Twelve packs of tobacco. FA: Is that 12 Kilos? DB: I’m not sure… FA: Can you show me the tobacco please? Mr Bick opened the boot of the car and showed me two black plastic bags. DB: There’s six in that bag and six in the other bag. FA: Is there any other tobacco anywhere else in the car? DB: No. FA: Do you have receipts for the tobacco? DB: No FA: Who is the tobacco for? DB: Us FA: Do you both smoke? DB: Yes.”
“RA: Are you fit and well to be interviewed today? DB: Yes … RA: Where [was the HRT] purchased? DB: PJ’s Chocolate Factory, Gistel RA: How much did they cost? DB:£53.30 a pouch RA: How many pouches do you have? DB: 40 or 36. Worked out at 9kg … RA: Can you remember the total sum you paid? DB:£2140 … RA: When did you last travel abroad? DB: August for a weeks holiday. RA: Where did you go? DB: Holland RA: did you purchase any tobacco then? DB: Yes, I bought cigarettes … RA: How many trips have you made in the last 12 months? DB: We went on a coach trip last November to Cologne Christmas markets. We went to Cite Europe – February, March time. So about 4 I think, with today. RA: Did you purchase cigarettes or tobacco on all of those trips? DB: I don’t think we did on the coach trip. I think we may have got a couple of cartons on the boat on the way back. … RA: What was your previous job? DB: I was a coach driver…[for] about 16 years. RA: Did you do continental trips? DB: Yes. RA: What’s the total amount in kilos the two of you brought in today between you. DB: About 9kg? A kilo is 1000g, yeah? RA: Do you have any receipts? DB: I looked for them but I couldn’t, I must have left them. RA: Is there anything else you’d like to add or clarify? DB: Basically, the reason that there so much is because of health problems. I have to have a doctors medical in December for the DVLA because I’ve gone onto insulin for my diabetes and I’m struggling to control it…I may lose my driving licence. This being the case I thought of making the trip over to get a years worth of tobacco as I thought there was unlimited control for personal use.”; and (7) The notebook of Officer Atmore (“FA”) which recorded the following relevant interview exchange with Ms Earwicker (“AE”): “FA: Are you fit to stay for an interview AE: Yeah FA: How much of the tobacco belongs to you? AE: Probably about 20 of them? FA: 20 of the packets wrapped in black? AE: Yeah, because then Ive got a whole lot of them to use. FA: How much is in the car in total? EA: 40 I think FA: Who is it for? EA: Me and David … FA: How many pouches do you smoke a week? EA: About 2 FA: How long do you expect the goods to last? EA: Until February or March next year if not longer. … EA: David next door has just had insulin and if he goes all clammy he’ll need jelly babies. Can you let them know? … FA: Do you have any receipts for the goods brought today? EA: No FA: Where did you buy them? EA: PJ’s FA: is that in Calais? EA: No, Belgium isn’t it. FA: Have you contributed towards the purchase? EA: Yeah…about£300 …well, it comes out of our account. … FA: Why was the amount of tobacco you have misdeclared? AE: Don’t know. FA: Why was it hidden around the car? AE: I didn’t think it was. Just put around the car that’s it.” 53. Having considered all of the evidence, I make the following findings of fact: (1) The accounts of the conversations between the Appellants and the Border Force contained in the Officers’ notebooks are accurate. Indeed, the Appellants signed the notebooks to confirm this; (2) The Appellants carried or otherwise dealt with excise goods on which duty was due and had not been paid (the HRT). Indeed, given it is not open to the Appellants to argue “own use”, I could not properly find otherwise. The Appellants were regular travellers to other member states, where they would buy tobacco products. I am satisfied that they knew that HRT brought into the UK from another member state other than for own use attracts UK excise duty. I am satisfied that the Appellants’ dealings with the HRT were deliberate – the goods were not for own use and yet the Appellants took a conscious decision to bring them into the UK without payment of UK duty; (3) Mr Bick did initially seek to mislead Border Force as to the amount of HRT in the car. He told Officer Atmore that he had purchased 12 packs of HRT. He then showed Officer Atmore two bags which he said contained those 12 packs. He was then asked the direct question “Is there any other tobacco anywhere else in the car?” to which he replied “No”
“Where an Act authorises or requires any document to be served by post (whether the expression “serve” or the expression “give” or “send” or any other expression is used) then, unless the contrary intention appears, the service is deemed to be effected by properly addressing, pre-paying and posting a letter containing the document and, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post.”