United Kingdom VAT & Duties Tribunals (Excise) Decisions

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You are here: BAILII >> Databases >> United Kingdom VAT & Duties Tribunals Decisions >> United Kingdom VAT & Duties Tribunals (Excise) Decisions >> Roberts v Revenue and Customs [2005] UKVAT(Excise) E00928 (01 December 2005)
URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2005/E00928.html
Cite as: [2005] UKVAT(Excise) E928, [2005] UKVAT(Excise) E00928

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Andrew Roberts v Revenue and Customs [2005] UKVAT(Excise) E00928 (01 December 2005)

E00928

EXCISE DUTY — HYDROCARBON OIL — CIVIL PENALTY — use of red diesel in road vehicle — Appellant failed to check the contents of the container before fuelling his vehicle — knew that the containers may contain red diesel — Appellant made stupid mistake — no reasonable excuse — appeal dismissed — sections 9 and 10 Finance Act 1994

MANCHESTER TRIBUNAL CENTRE

ANDREW ROBERTS Appellant

- and -

THE COMMISSIONERS FOR

HER MAJESTY'S REVENUE AND CUSTOMS Respondents

Tribunal: Michael Tildesley OBE (Chairman)

Mohammed Farooq

Sitting in public in Birmingham on 7 November 2005

The Appellant appeared in person

Rupert Baldry, counsel, instructed by the Acting Solicitor for HM Revenue and Customs for the Respondents

© CROWN COPYRIGHT 2005


 


DECISION

The Appeal

1. The Appellant was appealing against the Respondents' decision on review dated 29 March 2005 confirming the imposition of civil penalties in the sum of £500 for the taking in and using rebated heavy oil in a road vehicle.

The Issue in Dispute

2. The Appellant is not liable to pay the civil penalties if he can satisfy the Tribunal on the balance of probabilities that he had a reasonable excuse for the taking in and using rebated heavy oil in a road vehicle.
3. The issue in dispute was whether the Appellant's mistake in fuelling his vehicle with rebated heavy oil and thereafter using his vehicle amounted to a reasonable excuse having regard to all the circumstances.

The Law

4. Section 12(2) of the Hydrocarbon Oils Duties Act 1979 (1979 Act) provides that no rebated heavy fuel shall:

(a) be used as fuel for a road vehicle;

(b) be taken into a road vehicle as fuel.

5. Section 13(1) of the 1979 Act provides that where any person –

(a) uses heavy oil in contravention of section 12(2) of the 1979 Act; or

(b) is liable for heavy oil being taken into a road vehicle in contravention of section 12(2),

shall attract a penalty under section 9 of the Finance Act 1994.

6. Section 9 of the Finance Act 1994 stipulates a penalty of £250 for each contravention. Section 10 of the same Act provides that a person can avoid liability to pay a penalty if he can satisfy the Tribunal that there was a reasonable excuse for his conduct. Section 10(3) provides that insufficiency of funds or reliance placed on another person to perform any task shall not amount to a reasonable excuse.

The Evidence

7. We heard evidence from

(1) the Appellant

(2) David Cawthraw of HM Revenue and Customs who carried out the review of the original decision to impose civil penalties.

8. The Respondents provided the Tribunal with a bundle of documents.
9. Red diesel is the common name for rebated heavy oil. White diesel is the common name for heavy oil upon which duty has been paid and used as fuel for road vehicles. We have used the terms "red and white diesel" in the facts found and decision rather than the technical terms of rebated and unrebated heavy oil.

The Facts Found

10. The Appellant was a self employed heavy goods vehicle driver principally engaged in the collection of vehicles from auctions for commercial dealers.
11. On the 24 January 2005 he was employed to collect a flatbed lorry from Manchester which was about 100 miles from his employer's yard. Before setting off from the yard the Appellant was allowed by his employer to fill up his vehicle, a Citroen C15D van, registration number M411 VRN, with diesel as it was low on fuel. The Appellant also borrowed £10 from his employer.
12. The Appellant filled up his vehicle with diesel from a three gallon container which was dark blue and not transparent using an electric pump. The Appellant collected the container from a shed in his employer's yard which housed the steam cleaner. The Appellant was aware that red and white diesel fuel were kept in separate containers in the shed. The red diesel was for use in the steam cleaner, whereas the white diesel was kept for trucks that were to be sold or taken for MOT.
13. The Appellant drove his vehicle to Manchester, filling it up with £10 of white diesel at a petrol station just outside Manchester. When he arrived at his destination he loaded his vehicle onto the back of the flat bed lorry which he drove back to his employer's yard. On his return journey the police at Britannia Stadium lay-by, Stoke on Trent, stopped him. Customs officers took fuel samples from the lorry and the Citroen van owned by the Appellant. The sample taken from the van was found to contain red diesel, which was later confirmed by laboratory analysis. When interviewed the Appellant explained that he fuelled his van from his employer's yard which contained separate cans of white and red diesel and that he must have picked up the wrong can. The Appellant knew that there was a price difference between white and red diesel and that farmers, steam cleaners and off-road vehicles used red diesel. The Appellant accepted in interview that it was an offence to use and fuel a road vehicle with red diesel. The Appellant confirmed he was the owner of the Citroen van and the only person responsible for fuelling it.
14. After the interview with the Appellant the Customs Officer seized the Appellant's Citroen van which was then immediately restored to the Appellant without charge. On 7 February 2005 the Respondents notified the Appellant that he was required to pay two civil penalties amounting to £500 for using red diesel in a road vehicle and for the fuelling of red diesel.
15. On 15 February 2005 the Appellant requested a formal review of the decision to impose civil penalties which was carried out by Mr Cawthraw on 29 March 2005. Mr Cawthraw found that the Appellant had put forward no reasons which would amount to a reasonable excuse. He confirmed the civil penalties.
16. The Appellant admitted in cross examination that he knew that there was red diesel in the store in his employer's yard and that he failed to check which type of diesel he fuelled his van with. The Appellant assumed that it was white diesel.

Our Decision

17. The Appellant submitted that he made an honest mistake in filling his van with red diesel. He only used three gallons of red diesel and had filled up later with white diesel at a filling station. The Appellant had nothing to gain from using red diesel in his van because he was entitled to claim his fuel expenditure as an allowable business expense when computing his taxable profit. The Appellant considered that a penalty of £500 was excessive for his stupid mistake.
18. We accept that the Appellant co-operated fully with the Customs Officer when he was stopped. He admitted his responsibility for fuelling and using his Citroen van with red diesel and did not seek to deceive the Officer. We accept the Appellant's explanation that he made a stupid mistake and that it was an isolated incident with no intention to avoid paying the tax due on diesel. We, however, have no power under the legislation to mitigate or reduce a civil penalty imposed for unlawful use of red diesel. Section 10 of the Finance Act 1994 gives jurisdiction to the Tribunal to eliminate the civil penalty if the Appellant can satisfy the Tribunal that he had a reasonable excuse for the unlawful use of the red diesel. Reasonable excuse is strictly construed and essentially relates to conduct outside the control of the Appellant. In this instance the Appellant admitted that he was careless. He knew that there was red diesel in his employer's shed and that he did not check whether he used the correct fuel container when fuelling his Citroen van. The Appellant assumed that white diesel was in the container. We find that the Appellant's careless conduct of failing to check the contents of the container knowing that it may contain red diesel cannot amount to a reasonable excuse.
19. We, therefore, dismiss the Appeal. We make no order for costs.

MICHAEL TILDESLEY OBE

CHAIRMAN
Release Date: 1 December 2005

MAN/05/8023