March 15
In September 2013 the claimant, a lorry driver, collected from Calais a lorry which was loaded with 26 pallets of beer and with which there was documentation referring to an “Administrative Reference Code” (or “ARC”). When he reached Dover, the driver was stopped by UK Border Force officers who found that the ARC had been allocated to a previous consignment and that excise duty had not been paid on the goods he was carrying. In the circumstances, both the beer and the lorry were seized and the revenue subsequently assessed the driver to excise duty in the sum of £22,779 pursuant to regulation 13 of the Excise Goods (Holding Movement and Duty Point) Regulations 2010, which transposed chapters I to V of Parliament and Council Directive 2008/118/EC concerning the general arrangements for excise duty. The driver appealed to the First-tier Tribunal, which allowed his appeal and discharged the excise duty assessment, on the basis that (i) the driver had no interest of his own in the beer, was not part of any conspiracy and had simply followed instructions; (ii) the only information that the driver had was to be found in the documentation he collected when he picked up the goods; (iii) that documentation appeared to be consistent with the movement of goods subject to a valid duty-suspended arrangement; and (iv) the driver had no means of checking whether the ARC on the documentation had been used or not. The Upper Tribunal dismissed the revenue’s appeal. On a further appeal by the revenue, the Court of Appeal, on 19 March 2019, concluded that the assessment of excise duty issue raised a question of European Union law which was not acte clair and so should be referred to the Court of Justice of the European Union for a ruling. The Court of Justice received the reference on 3 April 2019, and gave judgment on 10 June 2021 to the effect that as a matter of European Union law a person in the position of the claimant was liable for the relevant excise duty. Under articles 4, 86 and 89 of the Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community, judgments of the Court of Justice handed down after 31 December 2020 would have “binding force in their entirety on and in the United Kingdom” if given in respect of references made by United Kingdom courts and tribunals before the end of 2020. That was given effect to by section 7A of the European Union (Withdrawal) Act 2018 which provided that all rights and powers arising under the withdrawal agreement were “without further enactment to be given legal effect … in the United Kingdom”. On the resumed appeal, the revenue contended that section 7A operated to make the Court of Justice’s judgment on the 2019 reference binding within the UK regardless of its withdrawal from the EU.
On the resumed appeal—
Held, appeal allowed. On its true construction the effect of section 7A of the 2018 Act was to make Court of Justice judgments given on a reference made by the courts and tribunals of the United Kingdom before the end of 2020, such as that in point in the present case, binding in the United Kingdom. The fact that section 7A spoke of aspects of the Withdrawal agreement being given legal effect “without further enactment” could not imply that, wherever domestic legislation was required for the Withdrawal agreement to be effective within the United Kingdom, the provision did not operate. The draftsman would have been well aware that, as a matter of domestic law, international obligations such as those which the United Kingdom undertook in the Withdrawal agreement were not directly applicable, and that implementation of the Withdrawal agreement would necessitate legislation. The reference to “without further enactment” therefore had to relate not to the domestic position, but to that on the international plane, as between the parties to the Withdrawal agreement, namely, the United Kingdom, the EU and the European Atomic Energy Community. If, by the Withdrawal agreement, the United Kingdom had undertaken an unconditional obligation, which was not under the terms of the Withdrawal agreement itself to be the subject of “further enactment” as between its parties, section 7A would be in point. That being so, the domestic court was bound by the judgment of the Court of Justice to hold that a person need not be aware that excise duty was being evaded to be “holding” or “making … delivery of” goods for the purposes of regulation 13 of the 2010 Regulations or article 33 of the 2008 Directive. It followed that the fact that the claimant had neither actual nor constructive knowledge of the smuggling of the beer he was carrying could not exempt him from liability from excise duty (paras 19–24, 25, 26).
Jessica Simor QC (instructed by Solicitor, Revenue and Customs) for the revenue.
The claimant did not appear and was not represented.