Stern v Director of Border Revenue

For the private-use exception to excise duty, goods must be transported personally by the purchaser. Use of an employee or other agent prevents reliance on that exception, even where the goods are genuinely acquired for private use and the transport is non-commercial. The requirement in Article 32 of the Directive 2008/118/EC therefore applies to Regulation 13(3)(b) of the Excise Goods (Holding, Movement and Duty Point) Regulations 2010. Factual distinctions from earlier decisions cannot avoid that conclusion. The court also indicated that condemnation may be discretionary and that proportionality may be relevant when considering forfeiture, particularly where the importer accepts liability for the duty.

The appellant bought 540 bottles of wine in France for distribution without payment to members of his family during Jewish religious festivals. He arranged for his employee and driver to transport the wine to the United Kingdom. The magistrates found that the wine was held for a commercial purpose because the appellant was not physically present when it entered the United Kingdom. They ordered the goods to be condemned as forfeit under Regulation 88 of the Excise Goods (Holding, Movement and Duty Point) Regulations 2010.

The appeal by way of case stated concerned whether Regulation 13(3)(b) required the importer to be physically present at the moment of importation.

1. Appeal dismissed. The question stated by the magistrates was answered in the affirmative. Regulation 13(3)(b) required the appellant personally to accompany the goods during their transport from another Member State.

2. The regulations had to be read conformably with the implementing directive. Article 32 of the Directive 2008/118/EC materially reproduced Article 8 of the earlier Directive 92/12/EEC. In R v Customs and Excise Commissioner, ex parte EMU Tabac SARL [1998] ECR1-11605, the Court of Justice had held that the exception did not apply where purchase or transportation was effected through an agent. Staatssecretaris van Financien v Joustra [2007] 1 CMLR 831 reaffirmed that conclusion.

3. The same interpretation was adopted in Customs and Excise Commissioners v Newbury [2003] 1 WLR 2131. The three requirements were that the products were acquired by a private individual, acquired for that individual’s own use, and transported by that individual. The fact that the employee was transporting the wine in the ordinary course of employment, and that the importation was not in substance commercial, did not satisfy the personal-transport requirement.

4. The court expressed concern that the result was surprising and potentially disproportionate. It observed that condemnation appeared to be discretionary and that proportionality could be considered where the court accepted that the goods were genuinely for private use, especially if the importer undertook to pay the duty. The goods had in fact been restored after payment of the duty. No costs were sought in the Divisional Court.

• Magistrates’ Court: On 9 February 2012, the magistrates found the wine liable to forfeiture under section 49(1)(a) of the Customs and Excise Management Act 1979 and Regulation 88 of the Excise Goods (Holding, Movement and Duty Point) Regulations 2010.
• High Court (Administrative Court): The appeal by way of case stated was dismissed. The magistrates’ interpretation of Regulation 13(3)(b) was upheld.