| REVENUE
— Customs and excise — Importation of dutiable goods — Importation
of perishable goods from Belgium by individuals for personal use — Goods
imported in excess of prescribed quantities presumed to be for commercial use
and seized and destroyed — Crown Court subsequently holding goods not liable
for forfeiture — Importer's entitlement to sum equal to "market value"
of goods destroyed at time of seizure — Customs
and Excise Management Act 1979, Sch 3, para 17(1)(c)
R (Revenue
and Customs Commissioners) v Machell
QBD: Stanley Burnton J: 21 November
2005
The
market value, for the purposes of para 17(1)(c) of Sch
3 to the Customs and Excise Management Act 1979, of tobacco goods personally
imported into the United Kingdom for the importer's own use which had been seized
and destroyed by Customs pursuant to para 16(b) of Sch 3 was the retail price
at the time of seizure of such goods in the country of purchase.
Stanley
Burnton J so held in a reserved judgment in the Administrative Court of the Queen's
Bench Division, granting the Revenue and Customs Commissioners a declaration to
that effect on their claim for judicial review of two decisions of Mr Raymond
Machell QC who, acting as statutory referee appointed under para 17(4) of Sch
3 to the 1979 Act on 27 January 2005, had determined the market value of tobacco
goods belonging to the interested parties, John Charles Parsons, Frances Owen
King, Robert Cusiter and Austin Henderson.
STANLEY BURNTON J said that
the interested parties had imported cigarettes and tobacco from Belgium in excess
of the customs guide quantities. The goods had been seized by Customs and destroyed
as being perishable under para 16(b) of Sch
3 to the 1979 Act, on the basis that they were intended for commercial use.
The interested parties had appealed successfully to the Crown Court. Para 17(1)(c)of
Sch
3 to the 1979 Act provided that where the commissioners had destroyed the
thing which was held in proceedings not to be liable to forfeiture at the time
of seizure they were required, on demand by the claimant, to tender to him, "an
amount equal to the market value of the thing at the time of its seizure."
The referee had determined the market value of the goods destroyed as the retail
price of similar goods in the United Kingdom. His Lordship said that by referring
to a market value Parliament referred to a price at which goods might be bought
and sold. It was not necessary that there should be a perfect market. Parliament
was referring to a value established by or from lawful transactions. Therefore
his Lordship excluded any unlawful or illegal transaction in tobacco or other
imported goods from consideration in determining the market value. That approach
was supported by Building and Civil Engineering Holidays Scheme Management Ltd
v Post Office [1966]
1 QB 247. The next question was: what were the goods the purchase and sale
of which was envisaged in determining market value? If one said, cigarettes of
a certain brand, one could take the price which such cigarettes were sold in the
United Kingdom as their market value. But that would be to refer to goods that
were materially different from those imported; which were cigarettes on which
United Kingdom duty had not been paid. It was for that reason that the cigarettes
could not be lawfully bought or sold in the United Kingdom. It followed that the
duty-paid price of similar cigarettes or tobacco in the United Kingdom was not
their market value for the purposes of para 17 of Sch
3 to the 1979 Act, but that did not mean that the goods had no market value.
Para 17 specified only the relevant date at which the market was to be determined;
not the location of the market. If there were no lawful market at the place of
seizure, one was driven to a market value at a place where similar goods might
be lawfully bought and sold. There was such a place, namely the country of purchase.
In his Lordship's judgment market value of cigarettes bought in retail quantities
in Belgium was their retail price in Belgium. His Lordship considered whether
travel costs were recoverable under para 17. The issue before the court was one
of statutory interpretation rather than application of common law principles applicable
to the measure of damages for torts or breaches of contract causing loss of goods.
Para 17 of Sch 3 did not confer a right to damages. It conferred a right to an
amount equal to market value. His Lordship could not see how it could be construed
as conferring a right to travel costs in addition to the value of the goods in
question on the relevant market.
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