Majestic Global FZ-LLC v The Commissioners for HMRC

A decision which HMRC stated was made under s 92(7) of the Customs and Excise Management Act 1979 (“CEMA”), by which HMRC imposed conditions on CMBC’s general storage and distribution warehouse approval such that CMBC was not permitted to dispatch or sell goods under duty suspension arrangements to Majestic Global FZE (“Majestic”), or make any duty paid supplies to Majestic with the intention of, or facilitating any party, claiming duty drawback (“the warehouse approval decision”).

A decision which HMRC stated was made under ss 41A and 47 of the Alcoholic Liquor Duties Act 1979 (“ALDA”) and Regulation 6(7) of the Beer Regulations 1993 (“the Beer Regulations”), by which HMRC imposed conditions on CMBC’s producer and holder of beer registration such that CMBC was not permitted to dispatch or sell goods under duty suspension arrangements to Majestic, or make any duty paid supplies to Majestic with the intention of, or facilitating any party, claiming duty drawback. (“the beerregistration decision”).

A decision which HMRC stated was made under s 88C(5) ALDA, by which HMRC imposed conditions on CMBC’s Alcohol Wholesaler Registration Scheme approval such that CMBC was not permitted to make any duty paid supplies to Majestic with the intention of, or facilitating any party, claiming duty drawback (“the AWRS decision”).

An appeal to the tribunal under s 16 FA can only be made in respect of the actual decision that has been made by HMRC not some other hypothetical decision (see Scandico Ltd v HMRC [2017] UKUT 467 (TCC), at [39]). A notice of appeal cannot change either the nature of the decision actually made, or the tribunal’s jurisdiction in respect of that decision (see FS Commercial Ltd v HMRC [2025] UKUT 00013 (TCC), at [78] and [79]).

Whether HMRC might have made different decisions, or whether different statutory powers might have been involved in making those different decisions, or whether the decisions are ultra vires the statutory power on which they are said to have been based, irrational or otherwise unlawful is not relevant to the tribunal’s consideration of whether the appellant has standing to appeal the decisions that were actually made. The tribunal must identify the actual decisions made and then determine the appellant’s standing to appeal against them, and therefore the tribunal’s jurisdiction to hear the appeal. It is not the function of the tribunal in deciding this application to determine whether the actual decisions made were lawful or not, since that would amount to determining the substantive appeal, not the question of standing and therefore jurisdiction.

Section 41A(1) ALDA provided:

“A person registered by the Commissioners under this section may hold, on premises so registered in relation to him, any beer of a prescribed class or description -

(a)

which has been produced in, or imported into, the United Kingdom, and

(b)

which is chargeable as such with excise duty,

without payment of that duty.

Under s 41A(5): “The Commissioners may register a person or premises under this section for such periods and subject to such conditions as they think fit.”

Under s 41A (6):

“The Commissioners may at any time for reasonable cause -

(a)

revoke or vary the terms of their registration of any person or premises under this section; or

(b)

restrict the premises which are so registered.”

Under s 47(1) ALDA:

“A person who produces beer on any premises in the United Kingdom must be registered with the Commissioners under this section in respect of those premises; and in this Act “registered brewer” means a person registered under this section in respect of any premises.”

Under regulation 6(7) of the Beer Regulations it is provided that:

“The Commissioners may, for reasonable cause, vary the registration of a registered brewer with respect to any registered brewery, provided that the Commissioners shall give 14 days’ notice in writing of such variation.”

HMRC cannot have imposed conditions pursuant to the provisions they cite as those provisions simply give HMRC the power to revoke or vary the terms of approval or registration. It is the underlying power to impose conditions which is utilised when any decision is made to vary the relevant approval to bear such conditions.

The appellant accepts that the beer approval decision at least partly falls within the terms of para 3(2B)(b) of schedule 5 which reads as follows:

“Any decision which is made under or for the purposes of section 41A or 47, or any regulations under section 49, of the Alcoholic Liquor Duties Act 1979 (regulation of the making of beer) and is a decision—

(a)

as to whether or not to register a person or premises under section 41A or 47;

(b)

as to the conditions subject to which a person is, or premises are, so registered…

(e)

as to whether or not to restrict or prohibit the movement of beer from one place to another without payment of duty.”

However, the decision must in part relate to s 42 ALDA in respect of the drawback element. The condition imposed here, in effect, is that drawback is allowable so long as the person claiming it is not Majestic. If HMRC are correct and are willing to restrict themselves to only reliance on the above provisions of ALDA, the appellant is willing to accept this. If, however, HMRC does not accept that, and it turns out this power was used, it would be a relevant decision under para 3(1)(j) of schedule 5 FA which reads as follows:

“(j)

any decision as to whether or not drawback is to be allowed in any case under section 42 (drawback on exportation etc.) or as to the conditions subject to which drawback is so allowed”

It is clear that the decision was made on the basis that HMRC were varying the terms of HMRC’s registration of CMBC and its registered premises to hold beer without payment of excise duty. That decision was as to the conditions subject to which a person is, or premises are, so registered which falls within the terms of para 3(2B)(b) of schedule 5 FA.

A decision as to whether or not to restrict or prohibit the movement of beer from one place to another without payment of duty is a different decision which most naturally falls within the provisions of para 3(2B)(e) of schedule 5 FA. HMRC did not make any such decision. No place to which any beer is to be moved is identified in either document.

A decision as to whether or not drawback is to be allowed in any case under s 42 ALDA or as to the conditions subject to which drawback is so allowed is a different decision which, as the appellant set out would fall within para 3(1)(j) of schedule 5. HMRC did not make any such decision. The decision in respect of duty paid supplies was to impose conditions on the approval of CMBC’s premises such that it was not permitted to make any duty paid supplies to Majestic with the intention of, or facilitating any party, claiming duty drawback. There was no need for HMRC to make any decision under para 1(j) of schedule 5: (a) no case under s 42 ALDA would arise because absent any supply by CMBC to the appellant there could be neither any exportation of any such beer nor any shipment as stores of any such beer (s 42(2) ALDA), and (b) since no case under s 42 ALDA would arise, there were no conditions subject to which drawback was to be allowed.

The relevant conditions are in effect imposed on CMBC. Under s 41A(1) ALDA the person must be registered by HMRC, and the premises must be registered in relation to that person. It is CMBC’s registration and premises registered to CMBC to which the varied terms of registration apply.

Section 93 CEMA is of relevance. This permits HMRC to make warehousing regulations which allow for conditions and restrictions on the deposit, keeping or removal of goods from a warehouse. Those regulations have been created in the Excise Warehousing Etc Regulations 1988/89 (“EWER”). Regulation 17 of EWER allows HMRC to impose conditions or restrictions on the removal of goods from an approved warehouse.

HMRC assert that the warehouse approval decision was solely made under s 92 CEMA. If this is correct, and this is the basis on which HMRC will restrict itself in these proceedings, the appellant is willing to accept this. It will therefore be a relevant decision under para 2(1)(n)(ii) of schedule 5 which reads as follows:

“(n)

any decision for the purposes of section 92 (approval of warehouses)—

(i)

as to whether or not any approval is to be given to any place as a warehouse or any consent is to be given to any alteration in or addition to any warehouse;

(ii)

as to the conditions subject to which any approval or consent is given

for the purposes of that section; or

(iii)

for the withdrawal of any such approval or consent;”

However, Majestic considers that the warehouse approval decision is made under s 93 CEMA or the regulations made by that power. If correct, and if HMRC do not commit to only relying on s 92 CEMA, it will be a relevant decision under para 2(2) of schedule 5 FA which reads as follows:

“(2)

Any decision which is made under or for the purposes of any regulations under any of sections 3, 31 or 93 of the Management Act (application to pipe-lines, control of movement of goods and warehousing regulations) and is-

(a)

a decision in relation to any goods as to whether or not they may be moved,

deposited, kept, secured, treated in any manner, removed or made available

to any person or as to the conditions subject to which they are moved,

deposited, kept, secured, treated in any manner, removed or made available

to any person;”

In this context the approvals for the person and the place are split: (a) personal approvals are “Authorised Warehousekeeper” approvals granted under regulation 3 of the Authorised Warehousekeepers and Owners of Warehoused Goods Regulations 1999 (“WOWGR”) subject to conditions are applied to those approvals by s100G(4) of CEMA, but (b) the conditions in this case have all been imposed on the approval for the place, and as such, it is solely the place that is restricted. The approval in this case is a confirmation that an identified warehouse has been approved to act as a place of security It is correct that CMBC, as the occupier of the warehouse, is not permitted to act contrary to any conditions on the place of security he occupies as confirmed by regulation 14(1)(a) WOWGR. However, that same regulation confirms that CMBC as the occupier could not act contrary to any conditions imposed on the “owner approvals” of any person they store goods for (see regulation 14(1)(d) and (e)). That CMBC has to abide by the conditions does not make them solely personal to CMBC. It may be that the conditions are found to be unlawful because in imposing them HMRC purport to restrict personal actions but the powers that grant HMRC the right to impose conditions on a warehouse approval such as this are not designed for that as it is an approval of a place. HMRC argue that CMBC is the person that must comply with the condition and is therefore the person in relation to whom the relevant decision. However, the fact that CMBC must abide by a condition does not make it a condition on CMBC personally. If HMRC intended this to be a personal condition that only affected CMBC, they used the wrong powers and placed it on the wrong approval. This appeal will not be governed by intentions, but by actions and whether those actions were lawful

It is clear that the decision made was to impose conditions on CMBC’s premises and that the amended approval was made under s 92 CEMA. That decision was as to the conditions subject to which any approval or consent is given for the purposes of that section which falls within para 2(1)(n)(ii) of schedule 5 FA.

A decision made under or for the purposes of any regulations made under s 93 CEMA is a different decision which, as the appellant set out, would fall within para 2(2) of schedule 5 FA. No decision was made by HMRC under, or for the purposes of, any regulations made under s 93 CEMA including regulation 17(3) of the Warehousing Regulations imposing conditions and restrictions on the removal of goods from an excise warehouse. The conditions do not refer to removal at all. Further, there was no need for HMRC to make any such decision as under the conditions imposed on the warehouse approval CMBC could neither sell any goods under duty suspension to the appellant at all, nor make any duty paid supplies to the appellant with the relevant intention. There was therefore no need to impose a condition solely on removal by reference to the Warehousing Regulations, nor would a condition based on removal have prevented such sales or supplies to the appellant as such.

Likewise, a decision as to whether or not drawback is to be allowed in any case under s 42 ALDA or as to the conditions subject to which drawback is so allowed is a different decision (under para 3 of schedule 5 FA). No such decision was made for the same reasons as set out above.

Majestic apparently accepts that premises approvals have been restricted, but then asserts that there is no person on which conditions have been applied. Whilst the conditions are not imposed directly on a person themselves, under s 92(8) CEMA, it is a person that must comply with a condition imposed under s 92 CEMA. That is because a warehouse itself is incapable of complying with anything. Hence it is a “person” who has the relevant right of appeal. The appellants’ points on WOWGR are not relevant and do not affect the analysis.

AWRS approval decision

Section 16(2A)(b) is not set in terms of which person(s) must comply with the effect of a decision. It is simply a question of who the decision is “about”. In this case the relevant decisions are about the two persons identified in each decision: (a) CMBC as the addressee of the approval, and (b) Majestic as the named person in relation to whom actions are restricted. There are two persons who are directly and expressly affected by the condition, limitation or restriction. CMBC as the occupier who may not dispatch or sell goods and Majestic as the named person that may not receive or buy those goods. They are equally affected because each sale or transfer has two parties, the sender at one end, the receiver at the other, as the buyer and the seller. Neither can exist without the other, and if any part of that process is prohibited at this place of security, both parties are entirely unable to act.

The same analysis applies to the personal approvals. It may be CMBC’s actions that are directly restricted, but in each case they are only restricted in relation to Majestic. CMBC may continue to take all those actions for any other customer or client, but it is the interactions between Majestic and CMBC that are prohibited. Each party is equally restricted in their activities, and each party has been made a subject or target of that prohibition which affects only them and not the rest of the world at large.

The only distinction as regards the warehouse approval decision is that where a restriction is added to a place, there is no person on whom conditions are applied. This is relevant to the gateway at s16(2A)(c). There are two persons indirectly restricted – the occupier who may not take action and the person whom they are prevented from acting for. The restriction on the place actually prevents both parties from pursuing what would otherwise have been lawful and permitted activity. Prior to the decisions Majestic was able to purchase from CMBC, it was able to instruct CMBC to send goods to its account in overseas warehouses. After the decision, Majestic was not able to do that any longer, and accordingly, a limitation or restriction was imposed on each of them. Majestic is as unable to act in the way it used to as CMBC is so limited. In circumstances where it is the place that is directly restricted and not the person, it becomes clear that a wider reading of the gateways is required.

Although it is not directly related to this appeal, there is important context for the tribunal to bear in mind. CMBC’s approved warehouse may or may not be operated solely for their own use (there is no evidence on this), but this is the main type of warehouse used by “third party warehousekeepers” who primarily store goods for other owners. As of 3 March 2025, all personal approvals to own duty suspended goods in such a warehouse have been scrapped. HMRC no longer regulates this activity under regulation 5 or 6 WOWGR. The only approvals are the warehouse and the warehousekeeper approval. Accordingly, the only way in which HMRC will be able to restrict the activity of taxpayers causing them concern will be to impose restrictions on the warehouse that stores their goods. If it is held that taxpayers do not have a right of appeal against those restrictions, there will be an enormous gap in the proper access to justice. That cannot be what Parliament intended here.

The same analysis can be applied to personal approvals as regards s 16(2A)(c). It does not restrict rights to persons that hold approvals that have conditions applied to them. There is nothing in its terms which requires only one perspective to be considered. It covers both the application of and the imposition of limitations, restrictions, prohibitions or other requirements howsoever they are applied or imposed. Apply and impose are not the same term. It does not make sense for them to both hold the same narrow definition of curtailing one’s activities only by action to approvals that have had their scope reduced. Even for the beer or AWRS approvals which are or might be personal, CMBC and Majestic are equally restricted. The conditions are imposed directly on the activities that CMBC is able to conduct using its personal approval, but the effect of the decision is still to limit CMBC and Majestic both from taking action that they could conduct before. Accordingly, even in those cases the effect of the decision is to impose limits on Majestic as the named target of the restriction. The decision was clearly ‘about’ stopping Majestic from benefiting from arrangements it previously enjoyed with CMBC.

The conditions themselves expressly state that the conditions will remain in place until HMRC are satisfied that the goods previously dispatched to Majestic have departed the UK. The focus of HMRC’s concern and the basis for the decision is squarely on Majestic.

Having restricted CMBC’s approval, HMRC took steps to ensure that Majestic could not trade with other UK suppliers. The strongest evidence can be found in the email of HMRC officer Andrew Sims of 2 November 2023 to a wholly separate supplier to Majestic. If the decisions had been made only “in relation” to CMBC, and if there was no decision to limit the activity of Majestic, they would have been free to purchase CMBC products from other sources. Instead, in this email HMRC stated as follows:

“We would consider that if you were to recommence trade with Majestic before matters have been resolved, this would bring into question your status as being Fit & Proper, as by coming to you, Majestic have directly taken steps to circumvent the restriction that was placed on CMBC, as mentioned in point 16 of Tristan Thornton’s letter of 31/08/23. We consider that if you were to recommence trading with Majestic either directly or indirectly, until the matter has been resolved you would be supporting Majestic in the circumvention of this restriction, we would have to place a condition on WOPI’s approvals to restrict any future sales to Majestic either directly or indirectly.”

HMRC have clearly and unequivocally demonstrated that their intention was, and remains, to prevent Majestic from being supplied. The aim of the condition is clearly to restrict supplies to Majestic so much so that HMRC will place equivalent conditions on other approvals to ensure that aim is achieved. HMRC confirmed they were prepared to restrict Majestic’s supplier World of Patria International Ltd, to prevent it from supplying Majestic or any indirect supplier to Majestic. This decision is and was always made in relation to Majestic with the intention to limit their ability to trade.

When the conditions were imposed, Majestic were in the process of conducting a purchase of two loads of beer from CMBC. The collection booking was requested by the haulier on 2 December 2022 and confirmed by CMBC within minutes. Preparation continued until by email of 5 December 2022 CMBC confirmed they had just been advised to hold the loads purchased by CMBC. That purchase was by that point contrary to the prohibition and Majestic was restricted from receiving the goods it had already paid for. Ultimately this had to lead to a refund to Majestic as indicated by email of 3 January 2023 at 9:37pm from CMBC to Majestic.

When the conditions were imposed, CMBC had Majestic registered as a collection only client who was responsible for completing the export from the UK – see the email from CMBC to Majestic on 26 January 2023at 6:45pm. This was an error as confirmed by Majestic in its reply of 27 January 2023. Accordingly, when HMRC restricted CMBC’s approvals because they were not satisfied the goods had been exported, CMBC had Majestic recorded as the exporter. HMRC have not disclosed the interaction between them and CMBC, but given what they are claiming to Majestic it is likely to reflect this. HMRC therefore restricted CMBC believing that to be the only way to require Majestic to prove they had completed their required actions.

By email of 15 March 2023 at 4pm CMBC’s agent described the background to HMRC’s decision as their “querying a number of movements from CMBC to Majestic”. They describe the decision itself as HMRC have “required CMBC not to supply any more goods to [Majestic] until the matter is resolved.” The decision was clearly seen by CMBC’s agents as being made in relation to the trade between CMBC and Majestic, and was therefore made in relation to both of them. The limitation was very clearly on that trade between the two of them, affecting both of them.

During a presentation by HMRC to Majestic’s supplier World of Patria International Ltd on 14 July 2023 HMRC confirmed that they had imposed a temporary condition on CMBC’s approvals in order to restrict supplies to Majestic. They went so far as to describe the basis of the decision as being a significant risk of outward diversion fraud “within the Majestic Global FZE supply chain”. It was not described as a CMBC supply chain, because the decision was made in relation to Majestic.

By email of 4 October 2023 CMBC confirmed to Majestic that the restriction was still in place, and so CMBC was still not able to supply Majestic. This confirms the ongoing prohibition against Majestic’s purchases.

By letter of 6 October 2023 HMRC wrote the only proactive letter they chose to send to Majestic. This letter was written “…to outline HMRC’s position with regards to the 20 loads Majestic Global FZ-LLC, formerly Majestic Global FZE, purchased from Carlsberg Marston Brewing Company in 2021.”In making this comment they properly acknowledge that any decision made in relation to a supply is about two people, and it is a matter of perspective whether one describes them as CMBC sales or Majestic purchases. Either way, the decision is about both. Also in this letter, in order to consider lifting the condition, HMRC requested that Majestic, “provide details of onward sales of the goods in relation to the 20 transactions…”Majestic’s onward sales, which CMBC had no part of, could only be relevant if HMRC’s concerns and their decision were in relation to Majestic as well as CMBC.

It is clear that CMBC and HMRC both considered these decisions to have been made in relation to Majestic. Whether or not the decisions applied conditions or other limitation to CMBC, does not prevent limitations, restrictions or prohibitions being imposed on Majestic. In circumstances where two-party activities are prohibited, they will usually so afflict both parties.

Decisions that directly affect a person or approval will usually affect the person whose approval it is, or the person responsible for operating the place that is approved. These persons will usually have standing to appeal and that will not be surprising. Decisions such as these which name a third party will often be as much “about” the person who controls the restricted approval as the person who they can’t take action in relation to. This will be a factual matter to consider looking at the decision itself and surrounding details. Decisions such as these which name a third party will usually affect that third party as much as they affect the person whose approval it is or who occupies the premises. This should not be surprising and there is nothing in the wording of the gateway provisions at s16(2A) to indicate Parliament intended to exclude these people from appeal rights. To the contrary, the structure of the appeal provisions within FA 1994 demonstrate an intention for other people to exercise their appeal rights.

A fair view of appeal rights where a warehouse or warehousekeeper is involved will likely be crucial for proper access to justice in the alcohol industry. This is now the only way by which limits may be formally imposed by HMRC on duty suspended trade where HMRC have concerns. Whilst it is right that HMRC retain the ability to act where they have concerns, it must also be right that the named and targeted taxpayers have recourse to the tribunal to test those concerns and challenge whether they are reasonable. A warehousekeeper will have its own relationship with HMRC and it is neither reasonable to require them to jeopardise that nor to incur the financial liability of appealing on their client or customer’s behalf. Those individuals must surely have the right to bring such challenges themselves.

Woodstream was a customer of a UK manufacturer, Grosvenor Chemicals Limited (“Grosvenor”). In November 2010 HMRC granted to Grosvenor an authorisation, subject to conditions, to receive at its premises a stated amount and type of Trade Specific Denatured Alcohol (“TSDA”) subject to it only being used to produce disinfectants. The authorisation covered receipt and use but not production.

In September 2016 Woodstream applied to HMRC to vary that authorisation for a change of use from using the relevant TDSA to manufacture disinfectants to using it to manufacture agrochemicals. Woodstream explained that it had selected Grosvenor to act as its toll manufacturer. HMRC informed Woodstream that the application should be made by Grosvenor. On 28 September 2016 Grosvenor submitted a request to amend its November 2010 authorisation, stating that it was applying in conjunction with Woodstream.

On 31 October 2016 HMRC refused that request. On 18 January 2017 HMRC notified Grosvenor that it had, as requested, reviewed its decision, and upheld it.

On 15 February 2017 Woodstream appealed to the tribunal against HMRC’s decision to refuse Grosvenor’s request to vary its authorisation.

HMRC applied to the tribunal to strike out the appeal for two reasons one of which was that Woodstream had no standing to bring the appeal before the tribunal as it was simply a customer of the person who was so entitled, namely Grosvenor.

As was recognised in Woodstream, the plain, natural meaning of the relevant wording in s 16(2A)(b) is that a decision has been made in relation to a person, where that person is the subject of the decision, in the sense, in this context, that it is that person’s statutory approval or registration (or other relevant status) that is subject to and affected by the decision. It does not apply to a person in relation to whom HMRC have not exercised any statutory right to make a decision but who is consequentially affected by the decision due to the nature of the decision made. I can see no relevant distinction between the circumstances of this case and those in Woodstream which would justify a different approach being taken in this case. The fact that HMRC may have power to make decisions made under the EWER in respect of a range of persons does not alter the nature of the particular decisions made in this case as set out above.

In my view, on its natural, plain meaning s 16(2A)(c) is intended similarly to capture “a person on whom” HMRC impose or apply conditions, limitations, restrictions, prohibitions or other requirements in exercise of their statutory powers to do so and not a different person who is consequentially affected by that imposition or application due to the nature of the conditions imposed. As HMRC put it, the conditions could not have been “imposed” or “applied” on Majestic, since it held no relevant approval or registration that those particular conditions could have been attached to.

It is plain from the covering letter and the nature of the conditions which HMRC have sought to impose that HMRC intended that Majestic would be affected as a consequence of the decisions they have made to impose conditions on CMBC in respect of the relevant approvals and registrations they hold. However, there is nothing in the wording of these provisions to suggest that the legislature intended to give the right to appeal against a relevant decision to a person other than the person in relation to whom HMRC exercise their statutory decision making powers and/or that these provisions are concerned with HMRC’s motivation and objective in making the relevant decision. On the contrary, that the interpretation set out above is correct is, in my view, reinforced by the fact that the legislature has not included in s 16(2A)(b) or (c) similar wording to that in s 16(2A)(a) to extend their ambit specifically to a person who “or is or will be affected” by the relevant decision or by the imposition of the relevant conditions, limitations, restrictions, prohibitions or other requirements.