United Kingdom VAT & Duties Tribunals (Excise) Decisions

Rapper v Customs & Excise [2003] UKVAT(Excise) E00463 (30 July 2003)

HYDROCARBON OIL DUTIES - penalties for using heavy oil as fuel for road vehicle and taking heavy oil into vehicle as fuel - vehicle purchased with fuel in tank - new owner ignorant of presence of fuel in tank - new owner liable for using vehicle with illegal fuel in tank but not for taking in such fuel - appeal allowed in part

MANCHESTER TRIBUNAL CENTRE

JOHN PAUL RAPER Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: Mr M S Johnson (Chairman)

Sitting in Newcastle upon Tyne on the 16th June 2003

The Appellant appeared in person

Mr B Haley, of the Solicitor's office of HM Customs and Excise, for the Respondents

© CROWN COPYRIGHT 2003


 


DECISION

1. This is an appeal against two penalties of £250 imposed pursuant to section 9(2) of the Finance Act 1994 ("the 1994 Act"). One penalty relates to the alleged use as fuel for a road vehicle of rebated heavy oil, contrary to section 12(2)(a) of the Hydrocarbon Oil Duties Act 1979 ("the 1979 Act"), and the other penalty to the alleged taking into the vehicle of the fuel, contrary to section 12(2)(b) of the 1979 Act. Section 13(1) of the 1994 Act provides for penalties to be attracted under section 9 of the 1994 Act in such circumstances.
2. The tribunal's jurisdiction arises under section 16(1) of the 1994 Act, the Appellant having required and received an adverse review of the decision to assess him to the penalties, as provided by section 14(1)(c) and 15 of the 1994 Act.
3. The ground of the appeal is that the Appellant purchased the vehicle in question with the fuel already in its tank. He therefore asserts that he is not responsible either for the fuel having been taken into the vehicle's tank or the vehicle having been used with the fuel in its tank.
4. The only witness who gave evidence was the Appellant himself. He was cross-examined by Mr Haley, appearing for the Commissioners of Customs and Excise ("Customs"). Mr Haley handed in a folder of relevant documents, including a record of the interview conducted between Mr Paul Reveley of Customs and the Appellant. The tribunal also had the benefit of an unchallenged witness statement from the reviewing officer of Customs, Mr John Raymond Rushforth.
5. I find that the facts of this case are as follows.
6. The vehicle in which the offending fuel was found by Customs was an old Ford Escort van, Registration No G895 UNS, the property of the Appellant. The Appellant purchased the van from an acquaintance in a public house, whom he had seen in the pub 2 or 3 times. The acquaintance is said to have been called Geoff or Colin or Steve Blair, but the Appellant was unable to give Customs or the tribunal his exact name and address. The Appellant paid the sum of £100 for the van, which was in need of a new clutch.
7. After buying the vehicle, the Appellant towed it to a local garage for the clutch to be replaced. A week later, following the repair, the Appellant picked the vehicle up from the garage and took it to his home. The garage did not point out to the Appellant that there was illegal fuel in the vehicle's tank. I find that the garage may or may not have become aware that such was the case.
8. The Appellant then went on holiday for a fortnight. He was afraid of car thieves, so he left the vehicle parked outside a friend's home whilst he was away. Meanwhile, Customs had received an anonymous "tip-off" that that particular vehicle was in use with rebated fuel oil. During the Appellant's absence, Customs discovered the location of the vehicle and tested the fuel in its tank. The test proved positive, but the amount of illegal fuel detected was small.
9. I find that the Appellant had not put fuel into the tank of the vehicle since he acquired it, nor had anyone else. It appears on a balance of probabilities that the "tip-off" related not to the Appellant but rather to the person from whom he had bought the vehicle, some 4 weeks previously.
10. When interviewed, the Appellant protested his ignorance of the contents of the fuel tank. Customs appear to have been sympathetic. They did not seize the vehicle. But they imposed the two penalties anyway, on the basis that the infringements of section 12(2) of the 1979 Act were matters of absolute liability.
11. The Appellant thereupon took the vehicle off the road, had the tank cleaned at a cost of £125, and disposed of the vehicle. I find that the Appellant was anxious to comply with the law, and having listened to the Appellant and considered his evidence and the manner in which he delivered it, I conclude that the Appellant did not deliberately breach the requirements of the 1979 Act.
12. The decision to impose and assess the penalties was notified to the Appellant by letter dated 24 July 2002. On 9 August 2002, the Appellant wrote to Customs indicating that he would like to appeal. That letter was treated as a request for a review, the result of which was communicated to the Appellant by letter dated 20 September 2002. The review upheld the assessment for the two penalties totalling £500, on the basis that the Appellant ought to have known about the illegal fuel in the tank, and was strictly liable in any event.
13. On behalf of Customs, Mr Haley submits that it was the responsibility of the Appellant to make himself aware whether or not the tank contained illegal fuel. He took the risk that it did. He carried out no checks one way or the other. Buying a vehicle from a person one scarcely knew in a pub, as a broken-down vehicle at a low price, should have put the buyer on notice that there might be something "wrong" with the purchase. Section 12(2) of the 1979 Act was correctly construed as giving rise to absolute liabilities, as to which the intention of the offender was irrelevant.
14. The Appellant submits that he should not be liable for either of the penalties in a situation in which he had no idea that the fuel tank of the vehicle contained illegal fuel. He does not deny that the tank did contain such fuel, or that he was the owner of the vehicle; but he says that he had nothing to do with that state of affairs. He submits that the person who should be pursued by Customs is the person who sold the vehicle to him, during whose ownership the infringements took place.
15. An examination of the 1979 Act shows that offences under section 12(2) attracting so-called "civil" penalties under section 9 of the 1994 Act are to be contrasted with such offences which attract criminal liability. Under sections 13(3) and (4) of the 1979 Act, a person who "with the intent that the restrictions imposed by section 12 above should be contravened" (italics added for emphasis) uses or (as the case may be) takes in heavy oil in contravention of section 12(2) is guilty of a criminal offence. It is clear that the scheme of the Act is that, for potential criminal liability, the offence must have been intentional; for civil liability, that is not so.
16. Therefore so far as the penalty for using the vehicle with illegal fuel in its tank is concerned, the situation is not dissimilar to those where a vehicle infringes the Road Vehicles (Construction and Use) Regulations, lacks an MoT certificate, is uninsured, or is otherwise unroadworthy. To the catalogue of matters that an owner is under an strict duty to check before using his vehicle is that the fuel powering the vehicle is legal. The law is designed in such a way that the use of illegal fuel can be policed without regard to whether infringements are intentional or not.
17. However, there are limits to the liability. The factual conditions for the penalty must still be met. I have found that the Appellant did not himself take illegal fuel into the tank of his vehicle, nor did anyone else put such fuel into the tank during his period of ownership. He was not therefore the person having the charge of the vehicle or its owner at the time the illegal fuel was taken in, as required by section 13(7) of the 1979 Act. On the facts of this case, the requirement of liability for the purpose of section 13(1)(b) is not therefore met, as Mr Haley in fairness conceded.
18. Contrast the strict liability simply for using the illegal fuel in the vehicle to which section 13(1)(a) gives rise. The Appellant does not deny owning and driving the vehicle at a time when it had a quantity of illegal fuel in its tank. In my judgment, on the proper construction of the wording of the 1979 Act, that suffices to render the Appellant liable to the penalty, even though I have found as a fact that the Appellant was ignorant of that state of affairs.
19. The appeal will therefore be dismissed as to the penalty arising by virtue of section 13(1)(a) of the 1979 Act, but will be allowed as to the penalty arising by virtue of section 13(1)(b). I hold that the Appellant is correctly assessed to a single penalty only under the former subsection. The assessment under appeal is hereby quashed and replaced by an assessment to that effect.

M S JOHNSON

CHAIRMAN

RELEASE DATE:

MAN/02/8274