The Commissioners for HMRC v Martyn Glen Perfect

A transporter who has physical possession of excise goods for delivery is liable for excise duty under article 33 of Council Directive 2008/118/EC and regulation 13 of the Excise Goods (Holding Movement and Duty Point) Regulations 2010. Liability does not depend on ownership, a beneficial interest, or actual or constructive knowledge that duty is due or being evaded.

A judgment of the CJEU on a United Kingdom reference made before the end of the transition period remains binding in the United Kingdom. The Withdrawal Agreement, as given domestic effect by section 7 A of the European Union (Withdrawal) Act 2018, prevails over the general rule concerning post-transition CJEU decisions.

A lorry driver collected beer in Calais under documentation containing an Administrative Reference Code. On arrival at Dover, Border Force found that the code related to an earlier consignment and that excise duty on the beer had not been paid. HMRC assessed the driver to excise duty and imposed a penalty.

The First-tier Tribunal allowed his appeal. The Upper Tribunal dismissed HMRC’s appeal: [2017] UKUT 476 (TCC). In an earlier judgment, this court dismissed HMRC’s appeal on the penalty but referred the excise-duty issue to the CJEU: [2019] EWCA Civ 465.

Following the CJEU’s ruling, the central issues were whether it bound the court after the United Kingdom’s withdrawal from the EU and whether an innocent courier physically possessing the goods was liable for duty.

1. Appeal allowed on the excise-duty issue. The court was bound by the CJEU’s ruling on the reference which this court had made before the end of the transition period. The earlier dismissal of HMRC’s appeal concerning the penalty was unaffected.

2. Section 6(1) of the European Union (Withdrawal) Act 2018 states the general position that domestic courts are not bound by CJEU judgments made after 31 December 2020. However, articles 86(2) and 89(1) of the Withdrawal Agreement require CJEU judgments on qualifying pre-transition United Kingdom references to have binding force in their entirety.

3. Section 7 A of the 2018 Act gives that obligation domestic effect. The words without further enactment do not exclude rights and obligations which require domestic legislation for implementation. They concern the effect of the Withdrawal Agreement between its international parties. A contrary construction would render section 7 A ineffective and would defeat the United Kingdom’s obligation under article 4(2).

4. Accordingly, article 33 of Council Directive 2008/118/EC and regulation 13 of the Excise Goods (Holding Movement and Duty Point) Regulations 2010 impose excise-duty liability on a person transporting goods for others who has physical possession when duty becomes chargeable. The person need not have any right or interest in the goods, nor know that duty is due, unpaid or being evaded.

5. The driver’s lack of actual or constructive knowledge of the smuggling could not exempt him from duty. HMRC’s appeal was therefore allowed insofar as it concerned the excise-duty assessment.

• Court of Appeal (Civil Division): Allowed HMRC’s appeal on the excise-duty assessment following the CJEU ruling: [2022] EWCA Civ 330.
• Court of Justice of the European Union: On a reference made by this court, ruled that physical possession of excise goods for delivery may make the transporter liable irrespective of knowledge or interest: EU:C:2021:473.
• Court of Appeal (Civil Division): Dismissed HMRC’s penalty appeal and referred the unresolved excise-duty question to the CJEU: [2019] EWCA Civ 465; [2020] STC 705.
• Upper Tribunal (Tax and Chancery Chamber): Dismissed HMRC’s appeal from the First-tier Tribunal: [2017] UKUT 476 (TCC).
• First-tier Tribunal: Allowed the driver’s appeal and discharged the duty assessment and penalty.