The key question for the Upper Tribunal in the recent decision in Denley v HMRC was whether the Excise Goods (Holding, Movement and Duty Point) Regulations 2010 were in breach of the EU Excise Directive (Directive 92/12/EEC). The Appellant was stopped and questioned in Coquelles, the UK’s control zone by the entry to the Channel Tunnel in France, and found to have tobacco considerably in excess of the personal indicative levels. The goods were seized and an assessment to excise duty subsequently raised. The Appellant contended, in proceedings in the Tribunal, that as the Excise Directive indicated that a duty point only arose within the territory of another Member State, the UK and France could not, by bilateral international treaty, extend the scope of the UK’s territory for excess purposes as this was not permitted by the Excess Directive. HMRC argued that a conforming interpretation of the Excise Directive meant that the juxtaposed controls agreed between the UK and France in the Sangatte Protocol in fact gave effect to the aims of the Excise Directive rather than breaching it. In the event the UT agreed with HMRC’s prior point that the Appellant could not raise this argument in the FTT as the point should have been taken in the Magistrates Court by way of forfeiture proceedings, in accordance with the Decisions in Revenue and Customs Commissioners v Jones  EWCA Civ 824 and HMRC Race  UKUT 331. As the Appellant had not brought forfeiture proceedings, the UT considered that it should not express a view on the substantive question as to whether a duty point can arise when excise goods are held within the UK’s control zone in France. That will inevitably now be raised and considered by a Court in future forfeiture/condemnation proceedings.
Brendan McGurk was acting for the Respondents, instructed by the General Counsel and Solicitor to HM Revenue and Customs.
The full judgment can be found here.