Hammad Baig appeared for the Appellant in Dharmesh Sangani Ltd v Director for the Border Force  UKFTT 0318 (TC) (20 May 2019).
This appeal concerned a decision of the Director of the Border Force, confirmed by formal review, not to restore to the Appellant 7.412.00 kg of 22 KT (carat) Asian (India / Pakistan) gold jewellery that had been seized at Heathrow Airport on 4 September 2016 from its director Dharmesh Sangani.
Mr Sangani carried on business as a wholesale jeweller, supplying retailers in the UK, France and Mauritius. Some of the jewellery is manufactured in India and Dubai. As part of his business, he has for some years exported gold from the UK under the “Outward Processing Relief” provisions for making into jewellery and then re-imported the finished jewellery into the UK, claiming relief from duty in respect of the cost of the gold so re-imported.
On 21 August 2016 the Appellant had exported 8.879 kg of gold bars and grains by means of DS carrying them on a flight from Heathrow to Dubai. A customs declaration was made stating that “OPR” (outward processing relief) would be claimed on re-importation of the gold as jewellery.
Mr Sangani was intending to fly back to the UK on 4 September 2016, along with his wife and children. He was intending to carry some of the Appellant’s jewellery back with him from Dubai, in addition to a consignment that his wife would be carrying back from Mumbai via Dubai. He flew from Mumbai to Dubai on 2 September 2016 without his family.
Mr Jha, Mr Sangani's assistant, handled all documents/paper work for the import and export of gold and gold jewellery. The tribunal accepted Mr Jha’s evidence that he only had knowledge of the consignment travelling from India which was to be carried by Mrs Sangani from Mumbai to London via Dubai.
As part of his duties, Mr Jha was responsible for contacting Mr Sharma and arranging for him to assist with the import formalities in the UK. He sent Mr Sharma by email a copy of a different invoice for the jewellery being carried by Mrs Sangani; this was an invoice issued by Rizan Jewellery LLC of Dubai (the same entity as had been named on the export declaration for the gold some two weeks before) and it was addressed to the Appellant as “consignee”. It set out precisely the same description and value of goods as was shown on the documents he had given to Mrs Sangani, but stated the country of origin of the goods was “UAE”. The layout of this invoice was exactly the same as the invoice from Kalanee which was being carried by Mrs Sangani, and the invoice number was identical. It did however show a credit of £74,643.17 being the value of the gold (against the invoice value of £75,729.17), resulting in a net balance of £1,086 as the cost of making the jewllery.
On the basis of this invoice, an import declaration in the name of the Appellant in respect of the re-importation of the jewellery with the benefit of OPR, meaning that only a small amount of VAT and duty was payable (essentially on the £1,086 value of the processing involved in turning the gold into jewellery).
In arriving at its decision, the Tribunal did not accept Mr Jha's evidence that he spoke to Mr Sangani by telephone at some point on 4 September, and that he had only delayed reporting the Dubai jewellery as it was already after business hours in India. The Tribunal also did not accept his evidence that he received a text from Mr Sangani providing him with the weight to be sent to Mr Sharma in relation to the Dubai jewellery.
The Tribunal decision took in to acocunt the following:
Outward Processing Relif
Restoration of gold jewellery under-declared
Jewellery seized as liable to forfeiture
Whether decision not to restore was one that could reasonably have been arrived at
Hammad was instructed through LawLane Solicitors.
Hammad practices tax law and commercial litigation with a specific interest in VAT and Customs and Excise Law.
Further articles on topics relating to Hammad's practice areas, can be read under his Insights, and on Hammad’s blog. Should you wish to instruct Hammad, then please do not hesitate to contact his clerk Mark Byrne.