Millennium Cash & Carry had 40% of its stock, worth around £150,000, impounded in the February raid.
Customs officers suspected the goods were evading duty but at a High Court hearing HMRC made a climbdown and the drinks were handed back. It must also pay £150,000 in legal costs and could be asked to find more if it is successfully sued by Millennium.
Counsel for Millennium Philip Coppel QC said: “I cannot overstate the catastrophic effect the detention has had on this business and its employees. This is a prolonged and deliberate misuse of highly invasive powers.”?An HMRC spokesman said the service did not comment on individual cases but defended the tactics used by its officers.
“HMRC are responsible for collecting the right amount of tax and duty at the right time, and our use of detention, seizure and forfeiture are established legal principles that the courts have acknowledged are legitimate and necessary to protect the revenue and remove counterfeit or potentially dangerous goods from circulation.
“These powers and our use of them are compatible with European human rights legislation as upheld in a number of recent court judgements.”?The Federation of Wholesale Distributors has been encouraged by the number of raids on cash and carries, after more than a year of campaigning for action against the proliferation of warehouses offering suspiciously cheap stock.
Chief executive James Bielby said: “The message to wholesalers is if they have nothing to hide, they have nothing to fear. There will be collateral damage, but people who have done nothing wrong only have to prove that their goods are legitimate within 14 days.”?Bielby questioned whether wholesalers would suffer damage to their reputation after a raid. “HMRC are doing lots of raids but we don’t hear about them because they deliberately don’t publicise them.”