Tribunal Upholds HMRC Decision to Not Restore Seized Goods in French Sole Case: Key Legal Principles and Outcomes

Citation: [2023] UKFTT 913 (TC)
Judgment on


In the case of French Sole (Marylebone) Ltd v The Commissioners for HM Revenue and Customs ([2023] UKFTT 913 (TC)), the First-tier Tribunal (Tax Chamber) was called upon to review HMRC’s decision not to restore, or pay compensation for, seized goods, specifically 517 pairs of shoes that were imported incorrectly. The original decision had been previously challenged, and HMRC was directed to undertake a further review, factoring in considerations that were not addressed initially. This article examines the legal principles applied and outlines the critical aspects adjudicated upon in this case.

Key Facts

French Sole (Marylebone) Ltd (the “Appellant”) imported a consignment of shoes which was subsequently seized by HMRC due to misclassification under the incorrect Commodity Code (“CC”) and undervaluation. The Appellant did not contest the seizure through condemnation proceedings but requested restoration, which was refused by HMRC resulting in the initial tribunal hearing. Following the First Appeal Judgment, HMRC was directed to conduct a fresh review, which upheld the decision not to restore the seized goods.

The second review was contested in this tribunal hearing. The Appellant argued that the decision was unreasonable due to the administrative nature of the errors, the financial hardship suffered due to the loss of stock, and the lack of clarity in the duty calculations by HMRC.

The tribunal’s jurisdiction in this case did not extend to the legality of the seizure itself but was confined to the reasonableness of HMRC’s decision on the subsequent review. The key legal principles discussed in this case encompass:

  1. Responsibility for Accurate Declaration: Under Article 15 (2) (a) of the Union Customs Code, importers are responsible for the accuracy and completeness of customs declarations.

  2. Forfeiture under Customs and Excise Management Act 1979: Goods are subject to forfeiture under Section 49 (1) (e) of CEMA if found not to correspond with the entry made thereof. Condemnation proceedings are the proper avenue to legally contest the correctness of seizures under Schedule 3 of CEMA.

  3. Deemed Condemnation: As per Paragraph 5 of Schedule 3 of CEMA, failure to contest seizures through condemnation proceedings results in goods being deemed duly condemned as forfeited.

  4. Restoration Policy: HMRC’s policy generally opposes the restoration of misdeclared goods unless there are exceptional circumstances such as humanitarian reasons or demonstrable financial hardship.

  5. Judicial Review Standards: The tribunal’s review followed standards set in case law such as John Dee v Commissioners of Customs & Excise [1995] STC 941, Jones & Jones [2011] EWCA Civ 824, and European Brand Trading Ltd v HMRC [2016] EWCA Civ 90, assessing whether HMRC’s decision considered all relevant factors, excluded irrelevant considerations, and was not so unreasonable that no reasonable officer could have made it.


The tribunal concluded that HMRC’s decision in the second review was reasonable. It found that:

  • The Appellant’s failure to provide evidence of financial hardship directly resulting from the forfeiture weakened their claim.
  • HMRC’s decision was grounded on the significance of the undervaluation error, which had the potential to affect legitimate trade unfairly.
  • HMRC’s policy regarding forfeiture under Section 49 CEMA is stringent, and no exceptional circumstances were evidenced to deviate from this policy.
  • Even if HMRC had considered partial restoration based on the duty paid, the decision not to restore would have been the same, given the absence of concrete identification of goods correlating with that duty payment.


The case exemplifies the importance of accurate customs declarations by importers and the consequences of non-compliance. It reaffirms the limitation of the tribunal’s jurisdiction to consider the reasonableness of HMRC’s discretionary decisions and not the legality of seizures, which must be challenged via condemnation proceedings. The decision underscores the strictness of HMRC’s restoration policy regarding misdeclared goods and clarifies that financial difficulties resultant from seizure, without additional compelling evidence, do not constitute exceptional circumstances. This case serves as a definitive guide for legal professionals in navigating similar disputes regarding the restoration of seized goods and the nuances of challenging HM Revenue and Customs decisions.