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09-1-2017 5:04 pm  #21

Re: Duty demands and Article 37 of EU directive 2008/118/EC

eezyrider wrote:

Anyway, the appeals that have gone before the tribunal have all been dismissed. I have only read the reasons for dismissal in one case and quite frankly they are gibberish. The tribunal chairman stated something to the effect that whilst he agreed Article 37 does appear to offer a valid defence, it does not reflect what the law was intended to achieve. In other words Article 37 should not be relied upon as a defence against the issue of duty demands and penalties.


I have been doing a little research here. I assume the case referred to by eezyrider above is that of STANISZEWSKI v HMRC. To say that the reasons given by Judge Brooks for rejecting the Article 37 argument are “gibberish” is to put it very mildly indeed.

 38. Article 37, therefore, can only apply to goods that have been “totally destroyed” or “irretrievably lost” in specific circumstances at a point prior to that at which a liability to excise duty would otherwise arise. This is not the position in the present case as the cigarettes, which were released for consumption in Poland, were held for a commercial purpose in the United Kingdom and therefore, in accordance with Article 33 (and Regulation 13 which implements Article 33 into United Kingdom domestic law), were subject to and became chargeable to excise duty in the United Kingdom when held in the United Kingdom (see Article 33(1) and Regulation 13(1)). 

I have tried very hard, but I am quite unable to comprehend how goods that have ceased to exist could ever subsequently become liable to duty.. However, Judge Brooks proceeds to attain new heights of absurdity:

 I also agree with Mr Macnab’s [HMRC Counsel] submission that any argument to the effect that seizure of the goods could constitute “the total destruction or irretrievable loss of the excise goods during their transport … as a consequence of authorisation by the competent authorities of that Member State” would lead to excise goods being seized and forfeited because they were liable to unpaid excise duty ceasing to be liable to that duty by reason of their seizure and forfeiture and, in the absence of liability to excise duty, the goods would no longer be liable to seizure and forfeiture. If this were the case it would lead to the absurd position that goods could never be seized and subject to forfeiture as the very act of seizure and forfeiture would render the goods not liable to seizure or forfeiture in the first place. 

The Judge evidently needs to enrol on a course of elementary logic as he has completely confused cause and effect. It's rather like this:

 1. An importer arrives in the UK holding excise goods on which UK duty has not been paid

2. He is intercepted by a BF officer who considers that the goods are liable to duty.

3. The goods are seized on the basis that the duty has not been paid. The act of seizure does not in itself render the goods “irretrievably lost” as the importer may successfully challenge the seizure in the magistrates court.

4. Even if the importer does not challenge the seizure within 1 month or loses in court , the goods are still not necessarily “irretrievably lost” since the BF could restore the goods under the provisions of CEMA 152(b).

5. Therefore neither the act of seizure nor the act of forfeiture is in itself sufficient to render the goods “ irretrievably lost”. It is only if the BF decide to destroy the goods that the liability to duty is discharged.

The “logic” of the judge's position appears to be that for Article 37 to apply, the BF would have to travel abroad and seize and destroy the goods before they even entered the UK !!! 

“Learned judges” indeed!!! 


09-1-2017 9:38 pm  #22

Re: Duty demands and Article 37 of EU directive 2008/118/EC

When you consider this it's hardly surprising that the success rate at tribunal is only 18% (2015/16 financial year).

What is surprising though is that 57% of cases were overturned or varied at the review stage. This includes all types of tax and not just excise duty.

Please ensure you do not divulge any information which could identify you as Border Force will use your posts here as evidence against you in court.


17-1-2017 8:42 pm  #23

Re: Duty demands and Article 37 of EU directive 2008/118/EC

eezyrider wrote:

Update in relation to Article 37

As a consequence 4 appeals are going to the upper tribunal. They are being ''stacked'' in order until the 1st can be heard which will set a precedent for any following. As far as I know a date has not yet been set.

All these cases involve alleged “holding” of excise goods by delivery drivers who have been charged duty on seized goods that they were transporting. Three of the appeals were dismissed by the FTT. Their appeals to the UT were joined and have all been dismissed McKeown & Ors v Revenue And Customs [2016] UKUT 479. All the appellants now seek leave to appeal again (to the Court of Appeal). At no stage has any of the appellants raised the Article 37 argument.

The  Article 37 argument was first raised inWilliams v Revenue & Customs  . In that case, however, the FTT found that the appellant was not “holding” the goods for the purpose of an assessment and allowed the appeal without considering the Article 37 point. HMRC have appealed to the UT. Despite being listed on 25 November 2015, no hearing date has been set. 

All in all it looks like its going to be a long time before the Article 37 argument reaches the UT ... 

     Thread Starter

03-11-2017 9:29 am  #24

Re: Duty demands and Article 37 of EU directive 2008/118/EC

NoMoTax wrote:

To help a friend I contacted a european legal advice centre to get this issue clarified (a bit like citizens advice for EU issues). Here are some quotes from the response.

Article 37 of the Directive provides :

"1. In the situations referred to in Article 33(1) and Article 36(1), in the event of the total destruction or irretrievable loss of the excise goods during their transport in a Member State other than the Member State in which they were released for consumption, as a result of the actual nature of the goods, or unforeseeable circumstances, or force majeure, or as a consequence of authorisation by the competent authorities of that Member State, the excise duty shall not be chargeable in that Member State.

The total destruction or irretrievable loss of the excise goods in question shall be proven to the satisfaction of the competent authorities of the Member State where the total destruction or irretrievable loss occurred or, when it is not possible to determine where the loss occurred, where it was detected.

2. Each Member State shall lay down its own rules and conditions under which the losses referred to in paragraph 1 are determined."

Article 38 of the Directive provides, by contrast:

"1. Where an irregularity has occurred during a movement of excise goods under Article 33(1) or Article 36(1), in a Member State other than the Member State in which they were released for consumption, they shall be subject to excise duty and excise duty shall be chargeable in the Member State where the irregularity occurred."

The UK courts have previously considered that excise duty is payable at the point of importation which logically pre-dates its destruction (case Hoverspeed [2002] EWCA Civ 1804, para. 16 under the previous Directive). You can find this at the following website:


6. The position is that Article 37 of the Directive should be read disjunctively so that "the total destruction... as a consequence of authorisation by the authorities of the member state" should not entitle them to charge excise duty.

You can find out more about this Directive at the following website:


You may wish to take legal proceedings, and should seek specific legal advice. This is because the rules applied by the UK authorities do not match the rules set out in the Directive, and would need to be disapplied in the national courts.

So if someone else is being charged Duty on goods that have been destroyed, either get in touch with me or one of the mods and we will advise on where to get help.

That should be me too. Sending you a PM now.


07-11-2017 2:16 am  #25

Re: Duty demands and Article 37 of EU directive 2008/118/EC

Have PM'd you a few places you might be able to get some help, hope it gets sorted.  I really hate that it seems like people are being almost tricked into accepting large fines without them knowing that is what they are doing.  I always thought a fixed penalty system was supposed to give small penalties in exchange for an admission of guilt.  This seems as if they are giving huge fines in exchange for an assumption of guilt. I really do hate it.


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