R (Eastenders Cash and Carry Plc and Others) v HM Revenue and Customs (No 2)
| Jurisdiction | England & Wales |
| Judge | Mr Justice Sales |
| Judgment Date | 04 November 2010 |
| Neutral Citation | [2010] EWHC 2797 (Admin) |
| Docket Number | Case No: CO/1142/2010 |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 04 November 2010 |
[2010] EWHC 2797 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Before: The Honourable Mr Justice Sales
Case No: CO/1142/2010
Mr Geraint Jones QC, Mr George Woodhead (instructed by Anami Law) for the Claimants
Mr Neil Sheldon (instructed by HMRC Solicitors) for the Defendants
Hearing dates: 15/10/10
Mr Justice Sales:
There are two applications for judicial review before the court in relation to alcoholic goods detained by the Defendants (“HMRC”) on grounds of a suspicion that duty may not have been paid in respect of them.
Outline of the facts of the first claim
The relevant goods in the first application were detained when HMRC officers visited the warehouse of Eastenders (Coventry) Limited on 16 October 2009 and inspected a consignment consisting of 27 pallets of mixed beer, wine and whisky. Significant discrepancies were discovered in some of the paperwork relating to that consignment. At first the discrepancies appeared to relate only to the beer in the consignment, which led to the HMRC officers exercising their powers under section 139 of the Customs and Excise Management Act 1979 (“CEMA”) to detain the beer in the consignment on 16 October 2009. Shortly afterwards, as a result of further checks on the paperwork for the consignment, additional discrepancies came to light which led to HMRC officers exercising their powers on 19 October 2009 to detain the wine and whisky in the consignment as well.
HMRC continued their enquiries in relation to the goods, tracing along the chain of supply to the Claimants, to determine whether duty had or had not been paid on those goods. By 23 November 2009, HMRC concluded that duty had not been paid on a portion of the goods and so decided to exercise their distinct power under section 139(1) of CEMA to seize that portion of the goods with a view to their forfeiture for non-payment of duty. Once those goods were seized the provisions in Schedule 3 to CEMA became applicable, according to which the Claimants became entitled to give notice to HMRC of their claim to the goods, obliging HMRC to take proceedings in the magistrates' court for an order to condemn the goods as forfeited. In those proceedings there will be scope for evidence to be called by the Claimants in seeking to establish that duty has in fact been paid on the goods: see generally the review of the relevant provisions in Schedule 3 set out in R (Checkprice (UK) Limited (in administration)) v Revenue and Customs Commissioners [2010] EWHC 682 (Admin); [2010] STC 1153 at paras. [12]–[15].
It is common ground that the Claimants have an effective remedy in the proceedings contemplated by Schedule 3 to CEMA in relation to the goods which have been seized, so that it is unnecessary for any judicial review claim to proceed in respect of those goods; and in fact no permission for judicial review was granted in respect of those goods.
The other goods in the consignment were not seized. After HMRC had taken their investigations into their provenance as far as they considered they reasonably could, they remained unsure whether duty had been paid on them but decided to release them to the Claimants. The goods were released to the Claimants on 17 December 2009. The goods so released comprised 80 cases of Tennent's Super beer, 80 cases of Special Brew beer and 897 cases of various “Alpa” wines (together, “the Coventry goods”). Permission was granted to the Claimants to claim judicial review of the detention of the Coventry goods, since where goods are detained but not seized the court procedure under Schedule 3 to CEMA is not available and judicial review is an appropriate means of challenging the lawfulness of the exercise of HMRC's power of detention.
Outline of the facts of the second claim
On 4 December 2009 HMRC officers visited the warehouse of Eastenders (Birmingham) Limited. They requested documentation relating to stocks of Polish beer held in the warehouse. Their enquiries broadened to include certain other alcoholic drinks at the warehouse. Discrepancies were found in the documentation available and a quantity of Lech beer was seized by the HMRC officers later that day. Other goods at the warehouse were detained by the officers and left at the warehouse, on the basis that that they should be treated as detained and should not be removed.
HMRC investigated the supply chains relating to the detained goods to try to determine whether or not duty had been paid on them. As a result of these enquiries some of the detained goods were then seized, on the grounds that HMRC believed that duty had not been paid on them. As regards those goods, the Claimants are able to pursue a remedy in proceedings under Schedule 3 to CEMA and so, as in relation to the consignment in issue in the first claim, no judicial review claim is pursued in respect of them.
Others of the detained goods were eventually released to the Claimants, as HMRC's investigations concerning them proved inconclusive and left HMRC in doubt whether the duty had been paid, and HMRC thought it more appropriate to return the goods rather than seize them or detain them any longer. The relevant goods which were released comprised 1,956 cases of bottles of Zywiec beer (released on 21 December 2009), 117 cases and 22 bottles of Smirnoff vodka (released on 19 January 2010), 772 cases of Foster's beer (released on 3 March 2010) and 89 cases and 22 cans of Tennent's Super beer (released on 3 March 2010) (together, “the Birmingham goods”). The second claim before the court relates to these goods.
The legislative framework
Section 49(1) of CEMA provides:
“ 49 Forfeiture of goods improperly imported
(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 that duty —
(i) unshipped in any port,
(ii) unloaded from any aircraft in the United Kingdom,
(iii) unloaded from any vehicle in, or otherwise brought across the boundary into, Northern Ireland, or
(iv) removed from their place of importation or from any approved wharf, examination station or transit shed; or
(b) any goods are imported, landed or unloaded contrary to any prohibition or restriction for the time being in force with respect thereto under or by virtue of any enactment; or
(c) any goods, being goods chargeable with any duty or goods the importation of which is for the time being prohibited or restricted by or under any enactment, are found, whether before or after the unloading thereof, to have been concealed in any manner on board any ship or aircraft or, while in Northern Ireland, in any vehicle; or
(d) any goods are imported concealed in a container holding goods of a different description; or
(e) any imported goods are found, whether before or after delivery, not to correspond with the entry made thereof; or
(f) any imported goods are concealed or packed in any manner appearing to be intended to deceive an officer,
those goods shall, subject to subsection (2) below, be liable to forfeiture. …”
Section 139 of CEMA provides, so far as relevant, as follows:
“ 139 Provisions as to detention, seizure and condemnation of goods, etc
(1) 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.
(2) Where any thing is seized or detained as liable to forfeiture under the customs and excise Acts by a person other than an officer, that person shall, subject to subsection (3) below, either –
(a) deliver that thing to the nearest convenient office of customs and excise; or
(b) if such delivery is not practicable, give to the Commissioners at the nearest convenient office of customs and excise notice in writing of the seizure or detention with full particulars of the thing seized or detained.
(3) Where the person seizing or detaining any thing as liable to forfeiture under the customs and excise Acts is a constable and that thing is or may be required for use in connection with any proceedings to be brought otherwise than under those Acts it may, subject to subsection (4) below, be retained in the custody of the police until either those proceedings are completed or it is decided that no such proceedings shall be brought. …
(5) Subject to subsections (3) and (4) above and to Schedule 3 to this Act, any thing seized or detained under the customs and excise Acts shall, pending the determination as to its forfeiture or disposal, be dealt with, and, if condemned or deemed to have been condemned or forfeited, shall be disposed of in such manner as the Commissioners may direct.
(6) Schedule 3 to this Act shall have effect for the purpose of forfeitures, and of proceedings for the condemnation of any thing as being forfeited, under the customs and excise Acts.
(7) If any person, not being an officer, by whom any thing is seized or detained or who has custody thereof after its seizure or detention, fails to comply with any requirement of this section or with any direction of the Commissioners given thereunder, he shall be liable on summary conviction to a penalty of level 2 on the standard scale.
(8) Subsections (2) to (7) above shall apply in relation to any dutiable goods seized or detained by any person other than an officer notwithstanding that they were not so...
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