Commissioners of Customs and Excise v Newbury
| Jurisdiction | England & Wales |
| Judge | Lady Justice Hale,LADY JUSTICE HALE,MR JUSTICE MOSES |
| Judgment Date | 03 April 2003 |
| Neutral Citation | [2003] EWHC 702 (Admin) |
| Docket Number | Case No: CO/4941/2002 |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 03 April 2003 |
[2003] EWHC 702 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
ON APPEAL FROM MAIDSTONE CROWN COURT
Royal Courts of Justice
Strand,
London, WC2A 2LL
Lady Justice Hale and
Mr Justice Moses
Case No: CO/4941/2002
Gerald Barling QC and Andrew Bird (instructed by Solicitor's Office, H M Customs and Excise) for the Appellants
Jessica Simor (instructed by Nelson's Solicitors) for the Respondent
This is the judgment of the court.
1. The Commissioners of Customs and Excise (‘the Commissioners’) appeal by way of case stated from the decision of HHJ Simpson sitting with two justices in Maidstone Crown Court on 18 August 2002. They allowed Mr Newbury's appeal from the order of the Channel Magistrates’ Court on 4 April 2002 that certain goods seized by customs officers on 7 April 2001 be condemned as forfeit.
2. The case raises issues of everyday importance. If someone goes on a shopping trip to the continent and brings back tobacco or alcohol not for their own consumption but to pass on to family or friends in return for no more than what they cost are those goods liable to forfeiture? And if so, are other goods being brought back in the same car for their own use by other people in the car also liable to forfeiture? And is the car also liable to forfeiture even though neither the owner nor the driver was aware of the position?
3. Obviously, for so long as the United Kingdom wishes to levy excise duties on tobacco and alcohol at a much higher rate than those levied elsewhere in the Community, it will be anxious to detect and deter those who take advantage of the improved communications between these islands and the continent of Europe to import such products without paying United Kingdom rates of duty. The underlying issue in this case is the part played by the individual's rights, both under European Community law and under the European Convention on Human Rights, in determining how far the authorities can go in pursuit of this legitimate aim.
4. The facts found by the Crown Court are set out in the stated case:
(a) On 7 April 2001 Mr Newbury arrived in the UK travelling with three others, Mrs Reed, Mr Hodivalla, and Mrs Spink: between them they imported into the UK the following excise goods (“the goods”): 8 kg handrolling tobacco, 3200 cigarettes, 50 cigarillos, 25.2 litres of beer, 9 litres of wine, 1.2 litres of spirits.
(b) The goods were being carried in an Austin Montego car registration L402JNK.
(c) They were stopped and checked by Customs. The officer, Miss Levitt was unable to recall why the car had been stopped. We found that it was random stop.
(d) One of the fellow travellers, Mrs Reed, had purchased 30 pouches (1.5 kg) of the tobacco and 600 cigarettes, but they were not for her own use: she had been given the money to purchase them by her daughter and son-in-law, who had not travelled. She admitted this to the officers and we found this as a fact.
(e) No UK duty had been paid on the goods.
(f) The goods were valued at about £400 and the car was valued at some £3000.
The car belonged to Mr Newbury's wife. The court, as is clear from the judgment of HHJ Simpson, accepted that Mr Newbury had told his passengers that they could only buy goods for their own consumption or gifts.
5. The main issue before the Crown Court was whether liability to forfeiture depended upon the lawfulness of the seizure, which in turn depended on the lawfulness of the initial interception of the travellers. The Crown Court, relying on the Divisional Court's decision in R (Hoverspeed) v Commissioners of Customs and Excise [2002] EWHC 1630 Admin [2002] 3 WLR 1219, held that it did. Questions (1)(a) to (d) in the stated case relate to that question. It is now common ground in light of the Court of Appeal's decision in Hoverspeed [2002] EWCA 1804 (‘ Hoverspeed’) that it did not.
6. The second question in the stated case is:
“Whether excise goods are liable to forfeiture in a case where they are imported without payment of duty and the importer or holder of the goods holds them not for herself, but for others who have given her the money to buy them, in the context of paras 17 and 18 of the judgment in Lindsay v Customs and Excise Commissioners [2002] 1 WLR 1766.”
The Crown Court held that they were not.
7. The third question in the stated case is:
“Whether, notwithstanding the apparently mandatory terms of s 141 of and paragraph 6 of schedule 3 to the Customs and Excise Management Act 1979, the Court has a residual discretion not to order condemnation of a thing which is liable to forfeiture, if it considers it disproportionate to do so.”
The Crown Court held that it had such a jurisdiction. It is also fairly plain from the transcript that they would have found forfeiture on the facts of this case disproportionate, although the ground of their decision was that the goods should not have been seized in the first place.
The statutory provisions
8. Section 49(1) of the Customs and Excise Management Act 1979 (‘CEMA’) provides when goods are liable to forfeiture:
“(1) Where —
(a) except as provided by or under the Customs and Excise Acts 1979, any imported goods, being goods chargeable on their importation with customs or excise duty, are, without payment of duty —
(i) unshipped in any port, ….
those goods shall …. be liable to forfeiture.”
Section 141(1) provides that (a) any vehicle used for the carriage of any thing liable to forfeiture, and (b) any other thing mixed, packed or found with the thing so liable, shall also be liable to forfeiture. Section 139(1) gives customs officers a discretion whether or not to seize any thing liable to forfeiture. Under schedule 3, para 3, if a thing is seized anyone claiming that the thing is not liable to forfeiture can give notice of his claim. Under para 6, the Commissioners then have to 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.’ However, although the Commissioners must bring proceedings if the thing is to be forfeit, they also have power under section 152 (a) to stay or compound the proceedings, or (b) to restore subject to such conditions (if any) as they think proper, any thing forfeited or seized under the Act. Under section 14(1)(d) and schedule 5, para 2(1)(r) of the Finance Act 1994, a claimant can ask for a review if this is refused and under section 16 of the 1994 Act can challenge the review decision before the VAT Tribunal. The Tribunal's powers are defined by section 16(4):
“(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 section shall be confined to a power where the tribunal are satisfied that the Commissioners or other person making that decision could not reasonably have arrived at it, to do one or more of the following, that is to say —
(a) to direct that the decision, so far as it remains in force, is to cease to have effect from such time as the tribunal may direct;
(b) to require the Commissioners to conduct, in accordance with the directions of the tribunal, a further review of the original decision; and
(c) in the case of a decision which has already been acted on pr 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.”
The scope of the Tribunal's powers has been much debated before us but is currently the subject of a pending appeal to the Court of Appeal in the case of Gora v Commissioners of Customs and Excise [2002] VAT and Duties Tribunal Reports 49.
Mr Newbury's goods
9. Ms Simor for the respondent has sensibly concentrated on the position of those whose goods were not liable to forfeiture under section 49(1): ie Mr Newbury, whose goods were only seized because they were mixed, packed or found with Mrs Reed's goods, and Mrs Newbury, whose car was only seized because it was used for the carriage of Mrs Reed's goods, under s 141(1)(b) and (a) respectively. The Commissioners have since decided to return Mrs Newbury's car but not Mr Newbury's goods. Ms Simor argues that for different reasons neither of these was liable to forfeiture and the Crown Court was right to decide that it had power to deal with the matter. Only if that fails does she argue the logically prior question of whether Mrs Reed's goods were liable to forfeiture under section 49(1) in the first place.
10. Her argument in respect of Mr Newbury's goods is squarely based on European Community law. He has the right personally to import goods for his own use by virtue of article 8, EEC Council Directive 92/12 of 25 February 1992, on excise duties (‘the Directive’). This reads:
“As regards products acquired by private individuals for their own use and transported by them, the principle governing the internal market lays down that excise duty shall be charged in the Member State in which they are acquired.”
That is a directly effective right Community right. As such it takes precedence over any provision of domestic law which may conflict with it. Domestic courts have to give effect to that right: see European Communities Act 1972, s 2(1) and Amministrazione della Finanze dello Stato v Simmenthal [1978] ECR 629. Hence even though the terms of...
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