Rahul Manubhai Patel v The Commissioners for HMRC

Mr Hall adopted his witness statement and explained the process from the receipt of a report from the Border Force through to the assessment of the penalties which are the subject of this appeal. Meaning no disrespect to Mr Hall, his evidence did not assist us in determining the issue before us.

Mr Patel explained that he had travelled alone to Agadir, returning on 21 January 2020. He took few clothes with him but threw them away so as to have more room to bring back tobacco, because it was so much cheaper than in the UK. He had found cheap Golden Virginia rolling tobacco. As he is a heavy smoker, he bought a significant amount of this tobacco. He was not aware of the duty and VAT implications of bringing products from outside the EU or of his allowances. Due to his lack of knowledge, he “assumed the word custom or duty is something similar to Tesco club card point”. When he entered the Green Channel at Manchester Airport, he did not have any knowledge of doing anything wrong. He admitted that he was careless in not asking Border Force agents, but he said he found them intimidating as they walked around like police officers with handcuffs and truncheons. He remembered their treatment of the Windrush Generation and this made him reserved and scared to approach them. He shrugged in response to Officer Patel’s questions about allowances and whether he knew what it meant to go through the Green Channel because he did not know; that was all he meant by that gesture.

Under cross-examination Mr Patel accepted that this was his fourth trip abroad on an aeroplane, although the previous trips had been some while ago. On all four times he had flown back through a UK airport, but he did not recall seeing information about customs import limits. On this particular occasion he did not see the large electronic signs by the baggage carousel. He was rushing to get out and following other passengers. He was tired; he had not slept during the flight, as he was seated next to a passenger who was “weird”. He just wanted to get home quickly. On being pressed by Mr Carey that he must have seen customs signs after he collected his bag or on previous trips, Mr Patel repeated that he had not seen or noticed anything.

In response to Mr Carey’s questioning, Mr Patel accepted that he had been to Morocco before, but said that he had not bought any cigarettes there. He had taken a few packets of cigarettes with him. Mr Carey suggested that, given that he smoked the equivalent of 20 cigarettes a day, Mr Patel would be short of tobacco and so he must have bought tobacco on his previous trip. Mr Patel replied that he did not understand Mr Carey’s question.

Mr Patel agreed that his suitcase had been largely empty when he left the UK. Shopping had been one of the reasons for his trip; he had intended to buy some leather items, possibly a jacket, but found them too expensive. At the airport he found a duty-free shop selling tobacco and had a discussion with the shopkeeper about how much tobacco he could buy. In correspondence with HMRC, Mr Patel had observed that the shopkeeper had not informed him of any customs limits. Mr Patel later explained that, when he discussed with the shopkeeper how much tobacco he could buy, he had not been asking for customs duty information. In fact, he had been asking how much tobacco was for sale, as the quantity on display in the shop was less than he would have liked to acquire. The tobacco cost around £1,100 and the quantity he purchased would give him around 6 months’ supply. This was a very good deal and it was there that he emptied his suitcase to make room for the tobacco. He paid for the tobacco by credit card. Mr Patel said that he earned around £1,600 a month as a school security officer and taxi driver.

Mr Carey took Mr Patel to the record of his discussions with Officer Patel. He suggested to him that his statement that he had “just a little tobacco” (see [14] above) was designed to mislead Officer Patel given the quantity of tobacco in the suitcase and the fact he had thrown away clothes to make room for it. Mr Patel denied this. Mr Carey suggested to Mr Patel that he had not answered Officer Patel’s subsequent questions because he did not want to lie to her. He had answered all her questions up to now, but why not these? Mr Patel said that he was tired, had drunk alcohol on the flight and didn’t have good English. Mr Carey suggested to Mr Patel that he only asked Officer Patel about his allowances once she had completed her search as he was now trying to pretend that he didn’t know the rules.

Towards the end of his cross-examination Mr Patel said that he had taken his suitcase onto the aeroplane as hand luggage. When asked why he had answered Mr Carey’s questions about the signs by the baggage carousel by saying he had not gone to the carousel to collect his luggage, Mr Patel said he had not understood Mr Carey’s questions. Mr Carey challenged Mr Patel that he would not have been allowed to take a medium-sized rigid suitcase into the cabin, but Mr Patel said he had been. Officer Patel’s notes were not detailed enough to cast any light on the point; as she used the term “medium sized”, it could describe an item of luggage at the very upper end of what would be allowed as cabin baggage.

In re-examination, Mr Patel said that as he went through the Green Channel he was talking with someone who was asking where the taxi were. It was then that Officer Patel called him over. He didn’t reply to Officer Patel’s questions because he was tired and didn’t understand what she was asking. He had no idea about what going through the Green Channel meant.

Mr Carey submitted that Mr Patel’s evidence was riddled with inconsistency and, whenever he was confronted by that, his answer was simply that he had not heard or understood the point. Issues arose late in his evidence. The suggestion that he had been drinking appeared for the first time in the hearing before us. Late in his evidence his story about the signs at the baggage carousel seemed to change from him not noticing the signs to his never having been beside the carousel at all. He had flown three times previously. How likely is it that he did not notice anything about customs limits? He had been to Morocco before and, just from the amount of tobacco he needed to buy, he must have known how much cheaper tobacco was there. He lied to Officer Patel. Clearly, there was more than “a little tobacco” in his suitcase. He tried to go through the Green Channel without drawing attention to himself. Once he had been stopped, he tried to avoid incriminating himself for as long as possible. It was clear from the way he gave evidence that he has a good command of English. It was not that he did not understand questions, so much as he did not want to answer them.

In short, Mr Patel had gone to Morocco to buy a large quantity of tobacco because he knew it was cheap. He also knew from his previous travels that the UK has customs and excise duties and travellers’ allowances. He knew he was importing more than was allowed and so he was dishonest.

Mr Member pressed us with Mr Patel’s central point, that he was not aware of the UK customs limits. He had visited Morocco before and bought tobacco, but had not brought any to the UK. He wanted to bring back as much tobacco as he could because he found it to be cheaper than in the UK and was not aware of any import limits. There were lots of signs at the airport, but why would he take any notice of them if he did not realise there were import limits and they were irrelevant? Although there was a “Red Desk”, there was no Red Channel, only one exit, and that is why, given that he was tired and keen to get home, Mr Patel just went out through that exit without stopping. He was anxious when he was pulled over and had no knowledge of what he was being asked about. That was why he said he only had a little tobacco and shrugged his shoulders. His suitcase was small and had been allowed into the cabin.

In short, Mr Patel had gone to Agadir for shopping and relaxation, found that his intended purchases were too expensive and bought as much cheap tobacco as he could instead. He was not aware of his obligations, and so was more likely to make a mistake. Mr Patel may have been careless in not exploring whether there were any applicable rules, but he had not been dishonest.

As we explained above, there is only one issue in dispute before us, which is whether Mr Patel was dishonest, by which we mean, taking into account Mr Patel’s experience and intelligence and his actual state of knowledge at the relevant time, was he was behaving in a way which was dishonest according to normally acceptable standards of honest conduct? If he was so behaving, whether he appreciated this or not is neither here nor there.

We regret to say that we did not find Mr Patel to be a particularly consistent or compelling witness. We have noted inconsistencies in his evidence. For example, between the reasons he gave for being tired on arrival, from being unable to sleep on the flight because of a “weird” passenger to having been drinking himself (which was itself a new suggestion). Also, he told us that the quantity of tobacco he purchased would give him around 6 months’ supply, whereas he told Officer Patel that the supply would last him 3 months. Assuming he smoked 100g a day (as he told Officer Patel) it would last him 4 months. Mr Patel’s assertion that he smokes 100g of tobacco a day seems hard to square with his earning £1,600 a month. Finally, we have the change in his account of why he did not notice the signs by the baggage carousels from being tired and the writing being small to never having been beside the baggage carousel in the first place. His explanation of a number of matters being that he did not understand what was being said is hard to accept. We found Mr Patel’s command of spoken English to be more than adequate when it came to participating in these proceedings. A letter he wrote to HMRC in the trial bundle would suggest his command of written English is perfectly adequate too. We therefore approach Mr Patel’s assertion that he was unaware of the broad effect of the UK customs and excise importation rules with a degree of circumspection.

Turning to other matters, this was the fourth occasion on which Mr Patel had flown back into a UK airport. We find it most unlikely that on none of those occasions had he noticed anything at all that would suggest the UK has limits on what can be imported without paying duty. Whatever the answer to the question whether Mr Patel had ever stood by the baggage carousel and seen the signage there, there were (as Officer Patel explained) other prominent signs drawing attention to the UK importation limits. We find it most unlikely that he did not see any of these signs as he made his way through the airport. They made their point with pictures as well as words and their import must have been clear to him, even if his command of written English was not as good as that of spoken English. We also find it hard to accept, given the sheer quantity of tobacco (over 53 times the limit) Mr Patel was importing and the large price differential between the UK and Morocco, that the question why this might be and whether there were any limits on what he was doing would not have occurred to him. Most importantly, his behaviour when confronted by Officer Patel also strongly suggests that he knew there were importation limits (even if he did not know exactly what they were) and that he was on the wrong side of them. Until her questions got to his understanding of the Green Channel and customs allowances, Mr Patel had answered all Officer Patel’s questions and then suddenly he had nothing to say for himself. His answer to her previous question, describing a suitcase almost entirely filled with 13.5kg of tobacco (on any basis, several months’ supply at a significant cost for someone on his salary) as “a little tobacco”, appears to us to be far from honest and designed to try to throw Officer Patel off the scent.

The cases on civil dishonesty indicate that choosing not to pay attention, or sufficient attention, to warnings does not negate dishonesty. As Lord Nicholls stated inRoyal Brunei Airlines Sdn Bhd v Tan, [1995] 2 AC 378 (at [106]):

“Nor does an honest person in such a case deliberately close his eyes and ears, or deliberately not ask questions, lest he learn something he would rather not know, and then proceed regardless."

We are not sure how that point, which was picked up by the First-Tier Tribunal in Zuned Osman v HMRC, [2016] UKFTT 524 (TC), would play out in a relatively simple situation like this. It is hard to see how someone could deliberately close their eyes to a simple sign about straightforward importation limits without already knowing about the limits. In any event, it was not argued before us that Mr Patel had an inkling that there might be customs limits and chose not to interest himself in them. HMRC’s case is that he knew full well that there were such limitations and that he was on the wrong side of them.

For the reasons set out above (in particular paragraphs [28] and [29]), HMRC have satisfied us on the balance of probabilities, and so we find as facts, that:

This tribunal has power under Finance Act 2003 and Finance Act 1994 on an appeal against a customs duty or excise duty penalty to quash or vary any decision and substitute its own decision for any decision quashed and to mitigate a penalty. There was no suggestion before us that the quantum of either penalty should be varied.

This appeal is dismissed and the total amount charged (£1,467) is confirmed.

This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. The application must be received by this Tribunal not later than 56 days after this decision is sent to that party. The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice.