Ali Khazaal v The Commissioners for HMRC
[2024] UKFTT 229 (TC)
Spas Ivanov v The Commissioners for HMRC
23 May 2024
[2024] UKFTT 433 (TC)
First-tier Tribunal
Someone got caught bringing in too many cigarettes without paying tax. They didn't appeal the seizure on time, so a court said they couldn't challenge the taxes afterward, even if they thought the rules were unfair. They had to pay.
Key Facts
- •Appellant, a Bulgarian national, was stopped at Stansted Airport with 15,600 cigarettes.
- •Cigarettes were seized due to suspected commercial importation.
- •Appellant failed to appeal the seizure within the one-month timeframe.
- •Excise duty assessment of £4,804 and penalty assessment of £1,681 (reduced from £1,849) were issued.
- •Appellant argued the cigarettes were for personal use, EU regulations should apply, and there was double taxation.
- •Appellant claimed he did not receive Notice 12A outlining appeal rights.
Legal Principles
Statutory deeming provisions (CEMA Schedule 3, paragraph 5) prevent the Tribunal from reviewing the legality of a seizure if no timely appeal is made.
Customs and Excise Management Act 1979 (CEMA)
The Tribunal lacks jurisdiction to consider challenges to the basis of a seizure once the statutory deeming period has passed.
HMRC v Jones [2011] EWCA Civ 824, HMRC v Race [2014] UKUT 0331, European Brand v HMRC [2016] EWCA Civ 90
Even if the seizure was unlawful, the deeming provision means the Tribunal must treat the seizure as lawful.
East End Dwellings v Finsbury BC [1952] AC 109
UK excise duty is payable on goods imported for commercial purposes, even if excise duty was paid in another EU member state.
Ferenc v HMRC [2020] UKFTT 8(TC)
The destruction of goods after seizure doesn't negate excise duty liability.
Ferenc v HMRC [2020] UKFTT 8(TC)
The burden of proof lies with the appellant to demonstrate grounds for appeal against the excise assessment.
s. 16(6) FA 1994
The burden of proof lies with HMRC to demonstrate the penalty assessment was correctly imposed.
HMRC has the power to reduce penalties based on special circumstances.
Schedule 41, Finance Act 2008, paragraph 14
The Tribunal's power to reduce a penalty is limited to cases where HMRC's decision was flawed under judicial review principles.
Schedule 41, Finance Act 2008, paragraph 19; Associated Provincial Pictures Houses Ltd. v Wednesbury Corporation [1948] 1 KB 223
Outcomes
Appeal dismissed.
The Tribunal lacked jurisdiction to review the seizure due to the appellant's failure to timely appeal. The Excise Duty Assessment and Penalty Assessment were deemed valid.
Excise Duty Assessment of £4,804 upheld.
The assessment was issued within the statutory time limit and the appellant failed to demonstrate an incorrect calculation.
Penalty Assessment of £1,681 upheld.
The penalty was deemed correctly imposed and its quantum appropriate, with no special circumstances justifying further reduction.