[2011] UKFTT 331 (TC)
TC01191
Appeal number
TC/2010/03052
Excise
Duty – alleged breach of S.13 HODA – seizure of vehicle containing evidence of
rebated fuel – S.139 and S.141 CEMA – Appeal against review decision to levy
fee for restoration – Appeal Allowed.
FIRST-TIER TRIBUNAL
TAX
MACWASTE
LIMITED Appellant
-
and -
THE
COMMISSIONERS FOR HER MAJESTY’S
REVENUE
AND CUSTOMS ("HMRC") Respondents
TRIBUNAL:
IAN WILLIAM HUDDLESTON, TRIBUNAL JUDGE
Sitting in public at Bedford House, Belfast on 8 February 2011
Mr. Barry McCoy, in person for
the Appellant
Mr. Mandalia BL, instructed by
the General Counsel and Solicitor to HM Revenue and Customs, for the
Respondents
© CROWN COPYRIGHT
2011
DECISION
Appeal
1. The
subject matter of this Appeal is the decision, on review, to restore a Mercedes
HGV vehicle, registration number R264 OJR ("the Vehicle") which was
seized by HMRC on the 12 December 2009 subject to payment of a fee in the sum
of £840. The Vehicle was seized pursuant to the provisions of Sections 139 and
141 of the Customs and Excise Management Act 1979 ("CEMA") on the
basis that on inspection it was found to contain evidence of rebated fuel.
Section 13(1) of HODA provides that civil penalties may be levied pursuant to
Section 9 of the Finance Act 1994 ("FA") subject to reasonable
excuse, if established pursuant to Section 10 FA. Section 15 FA empowers
review officers to confirm, vary or withdraw a reviewable decision on behalf of
the HMRC. In this case, the review officer, Mrs. Maria Finnelli reviewed the
original decision to restore the Vehicle subject to payment of the fee and
upheld it, and communicated her decision in a letter of the 24 February 2010.
In that letter she gave reasons for upholding the original decision and it is
that review decision which is the subject matter of this appeal.
2. The
powers of this Tribunal in relation to such a matter are supervisory and it is
on that basis that this Appeal comes before this Tribunal.
Facts
3. The
facts of the case are as follows:
(1)
the Vehicle was seized when it arrived (unaccompanied) at Heysham Docks
on the 9 December 2009;
(2)
a fuel sample that was taken tested positive for Euromarker, and it
seems to the Tribunal that that test result, together with the fact that the Vehicle
was taxed to the 30 April 2010, led HMRC to conclude that the Vehicle had been
fuelled with rebated fuel for use on a public road in breach of S.13 HODA, and
accordingly HMRC detained the Vehicle under the powers vested in them under
CEMA;
(3)
on 12 December 2009 HMRC advised the Appellant by telephone that rebated
fuel had been detected and that the Vehicle had been seized under Section 139
CEMA as being liable to forfeiture under Section 141(1)(a) CEMA.;
(4)
a notice of seizure and a notice of sampling were faxed to the Appellant
on that date. At the hearing there was some dispute as to whether or not the
Appellant ever received that fax, but what is clear is that in or around the 14
December 2010 the Appellant paid the £840 restoration fee which HMRC had asked
for as a condition for the return of the Vehicle. That fee was made up of £250
for using rebated heavy oil as road fuel; £250 for putting rebated fuel into
the Vehicle and £340 for removal and storage costs.
4. On
the 15 December 2009 a Restoration Agreement was faxed to the Appellant and,
whilst that does not appear to have been signed, certainly as has been noted
the Appellant did make payment of the restoration fee, and the Vehicle was
accordingly returned to Heysham Docks.
5. On
the 21 December 2009, the Appellant asked for a review of the Decision.
6. That
review was undertaken by Mrs. Maria Finnelli and the result communicated by way
of a letter of the 24 February 2010 where the original decision was upheld.
7. In
that letter Mrs. Finnelli seems to have noted that the Appellant had, in the
telephone conversation of the 12 December 2009, alerted HMRC to the fact that
the Vehicle had been previously off road and untaxed until the beginning of
November 2009. Although that fact was obviously noted (because it is referred
to in her correspondence) it did not appear to form part of her decision making
process.
8. In
a witness statement which was provided, Mrs. Finnelli set out the following
reasons why she upheld the original decision, namely:
(1)
that the Appellant did not offer a reasonable excuse for fuelling the
Vehicle with rebated fuel;
(2)
that the Appellant did not offer any grounds for a formal review, asking
only for evidence that led to the seizure (ie. the sampling tests);
(3)
that the sample taken from the Vehicle had established Euromarker with a
high sulphur content of 45 parts per million which, as she said "is much
more than would be expected to be found in fuel that is used to propel a road
vehicle".
9. Mr.
Barry McCoy gave evidence on behalf of the Appellant.
10. He explained
that the basis of the Appeal was not that he wanted to challenge the amount of
the penalty per se, but to clear the name of the Appellant lest it have a
negative impact on its ability to undertake certain types of work in the
future.
11. Mr. McCoy did
not dispute the factual matrix outlined above, but argued that he had not been
given a complete sample at any point in the process, although clearly he was
entitled to ask for one (as the Notice of Sampling had confirmed).
12. There did appear
to be some dispute on the evidence as to whether or not he received faxed
notification of the original detention on the 9 December 2009, but in any event
this Tribunal finds that nothing much turned on that fact.
13. The main thrust
of Mr. McCoy's case and evidence to the Tribunal was as follows:
(1)
that the Vehicle had been acquired for a specific purpose to fulfil a
two year contract which the Appellant had at Ballylumford Power Station in
Northern Ireland;
(2)
that the contract required the Vehicle to be on site at Ballylumford Power
Station throughout that period, and it was Mr. McCoy's evidence that during the
period in question the Vehicle had been fuelled with rebated fuel simply
because it at no stage needed to be on a public road and was not used on a
public road;
(3)
that whilst the Vehicle was being used at Ballylumford, he was
approached by a Mr. Paul Atkinson from Petrotech Services in Yorkshire who
agreed to purchase the Vehicle.
14. Mr. McCoy gave
evidence that a condition to which that sale was subject was that the Vehicle
be licensed in Northern Ireland to accord with the PSV licence which had issued
on the 6 November 2009 (for a year). Mr. McCoy gave evidence that he thus
taxed the Vehicle for a six month period, expiring in April 2010, and it was
for that reason only that the Vehicle appeared at Heysham Docks to be
"roadworthy" in the sense that it had both a vehicle test
certificate, and a valid road tax licence.
15. Mr. McCoy's
evidence, however, was to the effect that after the sale had been agreed, the
Vehicle was transported by low loader from Ballylumford to Warrenpoint Docks
where it was then transported by Sea Truck as freight carriers to Heysham Docks
where the Vehicle was subsequently tested and seized.
16. As Mr. McCoy did
not have any documentary evidence to support this assertion, the Tribunal
adjourned its decision pending receipt of confirmatory documentary information.
17. That information
was provided by Macwaste Limited on foot of their letter of the 18 February
2011 to the Tribunal Service, a copy of which was directed to have been made
available to HMRC.
18. The additional
documentary information provided confirmed:
(1)
that the Vehicle had a vehicle test certificate from the 6 November 2009
to the 5 November 2010;
(2)
that an invoice was raised on the 30 November 2009 against Pertrotech
Services relating to the sale of the Vehicle;
(3)
that an invoice from Heaney Transport dated the 4 December 2009 was
raised and purported to document the collection of the Vehicle from
Ballylumford Power Station and its delivery to Warrenpoint Docks for onward
transmission to Sea Truck.
19. From the oral
evidence of Mr. McCoy during the Tribunal Hearing and the documents
subsequently made available, the case for the Appellant, therefore, distils to
a blank rebuttal of HMRC's position, insofar as the Appellant makes the case
that at no time was the Vehicle used on a public road. Indeed, in support of
that proposition, Mr. McCoy indicated that the insurance on the Vehicle had
been cancelled with effect from the 4 December 2009 – which again was advanced
as another reason for the Vehicle being transported by third party haulage from
the site at Ballylumford to Warrenpoint Docks.
Decision
20. As mentioned at
the beginning of this decision, the Tribunal's jurisdiction in matters such as
this is supervisory. On the facts of the present case as outlined, I find that
HMRC were perhaps understandably but too readily influenced by:
(1)
the detection of the rebated fuel;
(2)
the fact that the Vehicle had a roads fund licence, which was valid and
due to expire in April 2010.
21. From that
position, therefore, I am of the opinion that the Review Officer took the view
the Vehicle had been used on a public road notwithstanding that she had been on
notice from her conversation with Mr. McCoy that that was possibly not the
case. There was no subsequent investigation (nor am I suggesting that there
should have been, because the onus was on the Appellant), but I do consider
that the Appellant who was not represented at any stage was not actually
invited at that stage to substantiate the position that he had advanced in that
conversation – namely that the Vehicle had not been used on the public road.
22. I further,
therefore, find that the Appellant had raised the case in his conversation of
the 12 December 2009 that the Vehicle had not, in fact, been used on a public
road, that little or no credence had been given to that assertion in either the
initial decision or, more relevant to this Appeal, the review decision. I do
not blame HMRC for that, because the Appellants, for whatever reason, did not
advance any of the documentary evidence to support their contention.
23. Nonetheless, it
was a valid contention which merited more consideration than appears to have
been given to it.
24. In the events
which have occurred, the Appellant has now produced documentary evidence
supporting its original argument and I find that documentary evidence to be
credible.
25. Taking all of
that into account, I allow the Appeal and quash HMRC's decision to restore the
Vehicle subject to the fee that was demanded.
26. This document
contains full findings of fact and reasons for the decision. Any party
dissatisfied with this decision has a right to apply for permission to appeal
against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal)
(Tax Chamber) Rules 2009. The application must be received by this Tribunal
not later than 56 days after this decision is sent to that party. The parties
are referred to “Guidance to accompany a Decision from the First-tier Tribunal
(Tax Chamber)” which accompanies and forms part of this decision notice.
27. No direction as
to costs.
IAN WILLIAM HUDDLESTON
TRIBUNAL JUDGE
RELEASE DATE: 18 May 2011
