Murray v Revenue & Customs (EXCISE DUTY APPEALS : Jurisdiction)

Factual and Procedural Background

The Appellant was assessed to excise duty following the seizure of cigarettes and hand-rolling tobacco by officers of the UK Border Force at a port after arriving from an EU Member State. The goods were seized on the basis that they were not for personal use. The Appellant claimed they were for personal consumption. The seized goods were not returned, and the Appellant was issued an excise duty assessment and informed of potential wrongdoing penalties, although no penalty was ultimately charged. The Appellant did not initially challenge the seizure via condemnation proceedings but later appealed the excise duty assessment to the Tribunal. The Respondents applied to strike out the appeal on the basis that the Tribunal lacked jurisdiction and the appeal had no reasonable prospect of success.

Legal Issues Presented

1. Whether the Tribunal has jurisdiction to hear an appeal against an excise duty assessment following the deemed condemnation of seized goods under paragraph 5, Schedule 3, Customs and Excise Management Act 1979 (CEMA).
2. Whether the appeal should be struck out on the basis that there is no reasonable prospect of success given the legal effect of deemed condemnation and relevant case law.
3. Whether the Appellant may raise alternative grounds of appeal such as the "Consumption point" and the "Proportionality point" related to compliance with the Excise Directive and the reasonableness of the excise duty assessment.

Arguments of the Parties

Respondents' Arguments

• The Tribunal lacks jurisdiction to consider factual disputes about whether the goods were for personal or commercial use because these issues are conclusively determined by the deemed condemnation provisions under paragraph 5, Schedule 3, CEMA.
• Following the Court of Appeal decision in Revenue and Customs Commissioners v Jones and the Upper Tribunal decision in Nicholas Race v HMRC, the Tribunal cannot go behind the deemed condemnation to re-examine the legality of the seizure or the use of the goods.
• The appeal should be struck out as it has no reasonable prospect of success if based solely on the ground that the goods were for personal use and no condemnation proceedings were initiated.
• However, if the Appellant raises alternative grounds such as the "Consumption point" or "Proportionality point," the appeal may not be suitable for strike out.

Appellant's Arguments

• The Appellant contended that the goods were for personal use and questioned why he should pay excise duty on goods that were seized and not returned.
• The Appellant expressed confusion and dissatisfaction with the process and the imposition of excise duty without the return of goods or penalty being charged.

Table of Precedents Cited

Court's Reasoning and Analysis

The Tribunal considered the Respondents' application to strike out the appeal on jurisdictional grounds and the absence of a reasonable prospect of success. It noted that the deemed condemnation provisions under paragraph 5, Schedule 3, CEMA, as interpreted in the Court of Appeal and Upper Tribunal decisions, conclusively determine the status of seized goods in the absence of actual condemnation proceedings. Consequently, the Tribunal lacks jurisdiction to reconsider whether the goods were for personal use or commercial purposes once deemed condemnation applies.

The Tribunal acknowledged that the Appellant's appeal, grounded solely on the contention that the goods were for personal use, had no realistic chance of success and would normally warrant strike out. However, the Tribunal expressed concern about the complexity and potential unfairness of the statutory regime governing forfeiture and excise duty assessments, referencing judicial commentary on the need for reform.

Furthermore, the Tribunal recognized that the Appellant might raise alternative grounds of appeal, such as the "Consumption point" (challenging the assessment's compliance with the Excise Directive on the basis that duty should not be charged on destroyed or lost goods) and the "Proportionality point" (arguing that the duty assessment is disproportionate as a remedy). The Tribunal found that these alternative grounds could provide a legitimate basis for appeal beyond the personal use argument.

In light of the overriding objective to deal with cases fairly and justly, the Tribunal refused the strike-out application and directed the Appellant to reconsider and, if advised, amend his grounds of appeal to include alternative arguments.

Holding and Implications

The Tribunal REFUSED the Respondents' application to strike out the appeal.

This decision allows the Appellant to amend his grounds of appeal to include arguments beyond the personal use claim, particularly the Consumption and Proportionality points. The ruling does not establish new precedent but confirms existing authority that appeals based solely on personal use grounds without condemnation proceedings lack jurisdiction. The Tribunal's refusal to strike out reflects a commitment to procedural fairness and the opportunity for the Appellant to pursue potentially valid alternative legal arguments.