Lindsay v Commissioners of Customs and Excise

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
Judgment Date20 February 2002
Neutral Citation[2002] EWCA Civ 267
Date20 February 2002

[2002] EWCA Civ 267





Royal Courts of Justice


London WC2A 2LL


The Master of the Rolls

(Lord Phillips)

Lord Justice Judge

Mr Justice Carnwath

John Richard Lindsay
Commissioners of Customs and Excise

MR HUGH MCKAY and MS NICOLA SHAW (Instructed by The Solicitor for the HM Customs & Excise, London, SE1 9PJ) appeared on behalf of the Appellants.

MR PHILIP BAKER and MS CLAIRE SIMPSON (Instructed by Edward Woodcraft, Essex, IGI 4NF) appeared on behalf of the Respondent.




In March 2000 Mr Lindsay, the respondent, bought himself a beautiful new car. It was a Millenium Special Edition of a Ford Focus, coloured yellow. He paid about £12,000 for it, a discount of £3,000 on the showroom price, granted to him because his father had worked for Ford. On 23 July 2000 he was about to drive onto the Shuttle in Calais to return to England after an early morning shopping expedition. When he entered the 'control zone' he was stopped by a British Customs Officer. She found that he was carrying a substantial quantity of cigarettes and tobacco. He said that he had purchased some of this for members of his family with money provided by them. She then said that he should have paid duty on the goods. She purported to forfeit both the dutiable goods and Mr Lindsay's car, in which those goods were being carried.


Mr Lindsay challenged the Customs' right to forfeit his car, following a procedure which I shall describe in due course. His challenge was successful. On 1 November 2001 the VAT & Duties Tribunal ('the Tribunal') ruled that the decision to deprive him of his car was disproportionate and would cause him undue hardship. His car should be restored to him or he should be paid compensation in lieu.


This case raises issues of principle which arise in hundreds of similar cases which are 'in the pipeline'. For this reason permission has been given by the single judge to the Commissioners for Customs and Excise to appeal against the Tribunal's decision direct to the Court of Appeal. The appeal has been given an expedited listing. This course was rendered possible because the Tribunal indorsed its decision with a certificate that the decision involved a point of law relating wholly or mainly to the construction of an enactment, a statutory instrument and the Community Treaties and Community Instruments which had been fully argued before it and fully considered by it: see the Value Added Tax Tribunals Appeals Order 1986, Article 2(b).

The statutory framework


The Commissioners have a considerable armoury which they can bring to bear against those who bring excise goods into this country without paying duty on them. Criminal proceedings can be brought pursuant to section 170 of the Customs and Excise Management Act 1979 ('CEMA'). Under that section the Commissioners have to establish that the defendant fraudulently intended to evade the payment of duty. Their policy is, however, only to bring a criminal prosecution in the most serious cases. Their normal course is to rely, by way of sanction, upon statutory powers of forfeiture and condemnation, which do not involve a finding that a criminal offence has been committed. That is the course that they adopted in the present case.


The statutory scheme, which covers both substance and procedure, is complex. The best place to start is with the Excise Duties (Personal Reliefs) Order 1992, as amended by the Excise Duties (Personal Reliefs) Amendment Order 1999 and the Channel Tunnel (Alcoholic Liquor and Tobacco Products) Order 2000 ('the 1992 Order'), which deals with the circumstances in which relief from liability to pay duty is, and is not, available.


The 1992 Order applies to goods subject to excise duty ('excise goods') which are imported into the United Kingdom. It includes provisions which deal specifically with 'shuttle train goods'. These are goods brought into the 'control zone' at Calais by a passenger who is about to embark in the shuttle train ('the Shuttle") for passage from France to England. Such goods are treated as having been imported into the United Kingdom for the purpose of the regulations. This case is concerned with such goods, and accordingly I shall extract from the 1992 Order the relevant provisions that relate to them. These are as follows:

"2. Interpretation

(1)In this Order—

'Community traveller' means a person who makes a journey between a member State and the United Kingdom …. or a person who is about to embark or has embarked on a shuttle train in France for a journey to the United Kingdom;


'cross-border shopping' means the obtaining of excise goods duty and tax paid in the Economic Community provided that payment has not been, and will not be, reimbursed, refunded or otherwise dispensed with;


'own use' includes use as a personal gift provided that if the person making the gift receives in consequence any money or money's worth (including any reimbursement of expenses incurred in connection with obtaining the goods in question) his use shall not be regarded as own use for the purpose of this Order.


3. Relief from duty of excise—cross-border shopping

Subject to the provisions of this Order a Community traveller entering [a control zone or] the United Kingdom shall be relieved from payment of any duty of excise on excise goods which he has obtained for his own use in the course of cross-border shopping and which he has transported.

[3A Relief from duty of excise—conditions—shuttle train goods

(1) In relation to shuttle train goods, this article shall have effect for the purpose of determining whether relief has been treated as having been afforded under article 3 above.

(2) No relief shall be treated as having been afforded if the goods are held for a commercial purpose.

(3) Where the shuttle train goods exceed any of the quantities shown in the Schedule to this Order the Commissioners may require the person holding the goods to satisfy them that the goods are not held for a commercial purpose.

(4) In determining whether or not any person holds shuttle train goods for a commercial purpose regard shall be taken of the factors listed in sub-paragraphs (a) to (j) of article 5(2) below.

(5) If the person holding the goods is required so to do but fails to satisfy the Commissioners that he does not hold them for a commercial purpose, it shall be presumed that the goods are held for a commercial purpose.

(6) Where the person holding the goods so fails to satisfy the Commissioners that he does not hold them for a commercial purpose, for the purpose of any proceedings instituted in accordance with paragraph 8 of Schedule 3 to the Customs and Excise Management Act 1979 or any appeal under section 16 of the Finance Act 1994, his failure shall cause the goods to be treated as 'goods held for a commercial purpose'.


The factors listed in Article 5(2) are the following:

(a) his reasons for having possession or control of those goods;

(b)whether or not he is a revenue trader;

(c)his conduct in relation to those goods and, for the purposes of this sub-paragraph, conduct includes his intentions at any time in relation to those goods;

(d)the location of those goods;

(e)the mode of transport used to convey those goods;

(f)any document or other information whatsoever relating to those goods;

(g)the nature of those goods including the nature and condition of any package or container;

(h)the quantity of those goods;

(i)whether he has personally financed the purchase of those goods; and

(j)any other circumstance which appears to be relevant."


Finally, the Schedule referred to in Article 3A provides:

"Tobacco Products

(a)800 cigarettes;

(b)400 cigarillos (that is to say cigars weighing not more than 3 grammes each);

(c)200 cigars;

(d)1 kilogramme of tobacco products other than in a form mentioned in paragraph (a), (b) or (c) above;

Alcoholic beverages

(e)10 litres of spirits;

(f)20 litres of intermediate products (that is to say products defined as intermediate products in Article 17(1) of the Council Directive 92/83/EEC);

(g)90 litres of wines (but only 60 litres may be sparking wines);

(h)110 litres of beer."


I now turn to the statutory provisions which lay down the consequences of importing excise goods without paying duty. Section 49 of CEMA provides that goods that are imported without payment of duty chargeable on them are subject to forfeiture. Section 141 provides, so far as material, that where anything becomes liable to forfeiture, any vehicle which has been used for its carriage also becomes liable to forfeiture. Section 152 provides, so far as material, that the Commissioners may, as they see fit, restore, subject to such conditions as they think proper, any thing forfeited or seized under CEMA.


Finally, I turn to the provisions that deal with procedure. Under Schedule 3 to CEMA if the Customs' right to forfeit is challenged, the Customs have to take out condemnation proceedings in the Magistrates Court. Although he initially made such a challenge, Mr Lindsay subsequently withdrew this. Instead he has pursued a challenge, not of the Commissioners' statutory powers, but of the manner in which they exercised those powers. The avenue that he pursued was open to him by virtue of certain provisions of the Finance Act 1994 ('the 1994 Act'). Sections 14 to 16 of the 1994 Act, when read together with Schedule 5 to that Act, provide for a two-tier system of review and appeal of decisions which include that taken to forfeit Mr Lindsay's car. The first stage was...

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