BAT (Uk and Export) Ltd v Her Majesty's Revenue & Customs

Facts

BAT (UK and Export) Ltd despatched a consignment of 13,000 kg of "cut rag tobacco" from its Darlington factory to the factory of an associate company in Prague for secondary processing into cigarettes, the goods moving under the external Community transit procedure. On 12 September 2002 the Commissioners wrote to a company in the appellant's group demanding £27,653.08 customs duty and £1,258,530 excise duty because evidence had not been received that the goods had been presented in Prague under Article 96 of the Community Customs Code; it was common ground that the letter, though it did not say so, constituted notification of an assessment to excise duty under section 12 of the Finance Act 1994. BAT maintained that cut rag tobacco bore no excise liability under the Tobacco Products Duty Act 1979 and requested a departmental review by letter of 20 September 2002. Unknown to BAT, the demand had already been withdrawn by a notification dated 18 September, the evidence having been received. The review was closed, then re-opened at BAT's request, and on 11 November 2002 the review officer ruled that cut rag tobacco fell within the definition of a "cigarette" in the Tobacco Products (Cigarettes and Cigars) Order 1977. BAT appealed; a further purported review decision followed on 29 May 2003. Two days before the hearing the Commissioners applied for the appeal to be struck out for want of jurisdiction.