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United Kingdom VAT & Duties Tribunals (Excise) Decisions

You are here: BAILII >> Databases >> United Kingdom VAT & Duties Tribunals Decisions >> United Kingdom VAT & Duties Tribunals (Excise) Decisions >> F Loendersloot Internationale Expeditie NV v Revenue & Customs [2006] UKVAT(Excise) E00948 (24 March 2006)
URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2006/E00948.html
Cite as: [2006] UKVAT(Excise) E948, [2006] UKVAT(Excise) E00948
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F Loendersloot Internationale Expeditie NV v Revenue & Customs [2006] UKVAT(Excise) E00948 (24 March 2006)
    EO00948
    EXCISE – Duty suspended movement – Assessment on consignor – Theft during transit following release from detention – Guarantee provided by warehousekeeper of dispatch which was consignor – Release after journey time on AAD – Whether Appellant still guarantor – Appellant not notified of release – Compatibility of DSMEG Regs 2000 reg 7(1) with Excise Directive 92/12/EEC Arts 15.3 and 20.1 – Powers of Tribunal under FA 1944 s.16(5) – Appeal dismissed

    LONDON TRIBUNAL CENTRE

    F LOENDERSLOOT INTERNATIONALE EXPEDITIE NV Appellant
    • and –

    THE COMMISSIONERS FOR HER MAJESTY'S REVENUE & CUSTOMS Respondents

    Tribunal: THEODORE WALLACE (Chairman)

    MRS CATHERINE FARQUHARSON ACA

    Sitting in public in London on 8-10 March 2006

    Richard Barlow, instructed by Chiltern plc, for the Appellant

    Kieron Beal, instructed by the Acting Solicitor, for the Respondents

    © CROWN COPYRIGHT 2006

     
    DECISION
  1. This appeal concerned an assessment to excise duty on 12,902 litres of Grants Vodka reported stolen following its release from detention at Dartford Thames Europort.

  2. The Appellant was the owner of the tax warehouse in Holland from which the vodka was dispatched and provided the guarantee covering the duty suspended movement to the consignee, London Bridge Vaults.

  3. The assessment was made on the Appellant under regulation 7(1) of the Excise Duty Points (Duty Suspended Movement of Excise Goods Regulations 2001 ("DSMEG Regs") as the consignor/guarantor, the duty arising as a result of an irregularity during a duty suspended movement.

  4. The appeal raised a number of different issues, the most important of which was the compatibility of regulation 7 with the Excise Directive, Council Directive 92/12/EEC which Mr Barlow submitted was not correctly transposed into UK law. In addition it was contended that the Appellant was not informed of the release of the vodka from detention by Customs which occurred after the expiry of the journey time of 7 days shown on the Administrative Accompanying Document ("AAD").

  5. There were four witnesses : Frits Loendersloot, managing director of the Appellant; Raymond Steele, manager of the Customs Detection Discreditation Team ("DDT") based at Canterbury responsible for excise movement fraud in the South Region; Christopher Pratt, the assessing officer, and Craig Clark, the review officer.

  6. The bundle of documents included the AAD, the CMR, Notice of Goods Detained (C 125), notice of assessment in Dutch with English version and Officer's Assessment (Ex CO1(1)), Customs' computerised case logs, an intelligence report from Kent Constabulary, copy entries from the notebook of the detaining officer, report from DDT to review officer, the review decision confirming the assessment and other correspondence.

  7. There was no real dispute as to the facts. This was fortunate since a computerised log is not by itself a satisfactory method of establishing disputed facts. Furthermore the log was only a partial record.

  8. The Appellant company was an authorised warehousekeeper under the Dutch legislation implementing the Excise Directive and provided a guarantee to the Dutch tax authorities to cover the movement of excise goods under duty suspension; this was a general guarantee rather than a guarantee specific to the movement.

  9. The vodka had been held in the Appellant's warehouse in the name of Ringo's Import Export.

  10. The AAD, which is a standard form EU document, showed the Appellant as consignor in box [1], London Bridge Vaults Turnstem as consignee [7], the Appellant as transporter [9], the Appellant as guarantor [10], date of dispatch as 9.10.2001 [16], journey time as 7 days [17] and was certified as correct and signed by Mr Loendersloot on 9 October in box [24]. It also showed the container number and the description of goods.

  11. The CMR showed IWT Logistic and Expeditie as transporter. The letters "ECS" appeared in manuscript in the same box; those are short for European Container Services, the owner of the container used. IWT was the freight forwarder and had sub-contracted the transport to ECS of Bruges.

  12. The container with the vodka arrived at Dartford Europort which is operated by Dartline, the approved port operator, in one of its vessels.

  13. At 8.00am on 11 October Andrew Jefferies, of Customs' Frontier Control Unit ("FCU") put the container on hold with another container consigned to London Bridge Vaults; it appears that the AAD was not in the ship's bag. The container was opened at 1.20pm and found to contain boxes of vodka with paperwork including the AAD. The AAD for the other container with Bacardi rum could not be found. The log at Mr Steele's DDT at Canterbury recorded that the consignments apart from the product were identical to a load intercepted at Dover on the previous night.

  14. A notice of detention was issued by Mr Jefferies at 1.30pm on 11 October to Dartline. The notice specified as the reason for detention: "No AAD accompanying load." This was not correct. Mr Steele's evidence was that the notice would have been taken by Mr Jefferies to the office of Dartline within the gate complex of the secure area of the port; Customs have access to Dartline's computer system and would have flagged the detention on the computer; in addition a seal was placed on the container which was left within the secure area.

  15. The Appellant company was not directly informed of the detention. The practice of Customs is to issue the notice of detention to the driver or to the shipping company in the case of a container.

  16. Mr Loendersloot learned of the detention from IWT on 11 October and after a number of attempts contacted Mr Steele by telephone. Mr Loendersloot was concerned as guarantor about the security of the goods being detained at the container terminal and asked whether the containers could be taken to London Bridge Vaults being held under Customs' control until the AAD problem was resolved. Mr Steele said that this was not possible. Although Mr Steele told us that he had no recollection of such conversation, we accept Mr Loendersloot's evidence that it did take place although it was not noted on the DDT log.

  17. On 12 October Mr Loendersloot sent a fax to Mr Steele referring to the telephone conversation on the day before. The fax referred to six containers including the vodka container and to a self-drive trailer. It confirmed that all AADs were issued by the Appellant with transport effected via IWT Logistics. It set out a series of checks which were standard policy including that of the receiving bond's licences. The fax asked for the self-drive trailer to be released even if the other containers were detained. The trailer was released on that afternoon.

  18. Inquiries as to the six containers continued for a considerable time while Customs investigated the transaction chains. Customs' log recorded concerns as to Turnstem.

  19. On 25 October Customs informed the owner of the Bacardi container, Ringo's Import Export, that the container was being released. ECS was told on 31 October that release papers had been issued on 25 October.

  20. On 1 November a member of the DDT sent a fax to Awards Drinks, the owners of four containers which were consigned to Trapps Cellars, informing them that the containers would be released on confirmation that the load was rebooked into Trapps Cellars and with details of the haulier and vehicle details for collection from Dartford with collection times being provided.

  21. Mr Loendersloot meanwhile had contacted Customs on a number of occasions and had been told that the investigations had not been finalised. He was not informed of the release of the Bacardi container or of the release of the containers for Trapps Cellars.

  22. On 22 October Customs informed Ringo's Import Export of the reason for the delay and on 1 November they were informed that a decision was expected on the next day.

  23. On 6 November DDT advised Customs at Dartford that the vodka container should be released.

  24. On the same day Mr Jefferies endorsed "Released" on a copy of the Notice of Detention with the date. Mr Steele's evidence was that it is not the practice of Customs to obtain a receipt for the released goods. There was no witness statement as to the release. No receipt had been given by Customs for the paperwork including the AAD and no receipt was obtained for its return. Mr Steele's evidence was that Customs would have removed the block on Dartline's computer, the documents would have been returned to Dartline and the seal on the container removed.

  25. On 8 November the Appellant was informed by Ringo's Import Export that the goods had been released.

  26. On 8 November the container was reported stolen to the police at Sittingbourne by John Millen, of John Smith Transport, who said that the container had been stolen from their yard on the night of 7/8 November and that he had collected it from Dartford.

  27. Dartline told Customs that a PIN number was needed to collect the container and that the driver had given the correct PIN number.

  28. ECS told the police that the PIN number was computer generated by ECS and available to all ECS staff. No haulier had been assigned to collect the trailer from Dartford. ECS also said that the paperwork sent to IWT had inadvertently been endorsed with the PIN number.

  29. The empty container was recovered by the police at Chatham. No one was prosecuted.

  30. Whether or not the release was obtained dishonestly from Dartline, it is clear that the container was released by Customs before the theft occurred.

  31. The Appellant was informed of the theft by IWT on 9 November.

    32. The witnesses
  32. Mr Brett said that, having considered a report dated 8 January 2002 from Mrs Flaxman-Kennett of the DDT team, he made the assessment on 6 February for £94,639.10 based on 12,902 litres at 37.5 per cent proof and £19.56 per litre of alcohol. Form EX 601(1) gave the period/default dates as 1 to 31 October 2001.

  33. Mr Loendersloot said that he had dealt with London Bridge Vaults about 20 times before without any problems. He had not had any prior dealings with Turnstem; on this occasion the Appellant was merely asked to deliver to Turnstem's account. He said that he was not informed by Customs of the reason for the investigation, its progress or of Customs' concerns about Turnstem. He said that if he had been informed of the proposed release he would have asked Customs not to release the container to Dartline until new arrangements had been made for transport with a new AAD and CMR and maybe a new seal number on the container. He had not known that IWT had sub-contracted to ECS. He said that he considered that the goods had been stolen from the container terminal. He regarded Customs as being responsible for the loss.

  34. He said that under Dutch law when there is a tax suspended movement the authorised warehousekeeper is automatically the consignor on the AAD. He also stated that Dutch customs will not accept the AAD as being valid beyond the time stated in Box [17].

  35. Mr Steele said that it would not be normal for him to speak to a warehousekeeper in another Member State because of protocols. He would normally be very restricted in what he said.

  36. He said given the cost of movement and warehousing at a certain point it was uneconomic to reimport the vodka which was manufactured in Scotland. Such products had been carouselled around Europe.

  37. He said that he did not regard the period of detention as extraordinarily long. At the time of detention it was thought that goods could be detained for up to 30 days without special arrangements. The reviews every 5 days which were explained to the Court of Appeal in Gora v Customs and Excise Commissioners [2003] 3 WLR 160 at [42 ] had only just been introduced at that time and did not apply in 2001.

  38. He said that it would have been contrary to practice to advise the Appellant as a warehousekeeper in another Member State of enquiries regarding London Bridge Vaults. In October 2001 he was not aware of any such enquiries.

  39. He said that the fax to Awards Drinks prior to release was not normal practice and was because of concern at possible misdirection following release. He said that the release of the container to Dartline was normal.

  40. Asked by Mr Barlow whether there was no consideration by Customs as to the position of the warehouse as guarantor, he said, "That is correct, yes."

  41. Mr Craig Clark, the Review Officer, said that the review contained information from the case logs and police report although those were not included in the List of Documents. In addition he had spoken to Mr Steele's team and corresponded with them to confirm various points.

  42. Asked by Mr Barlow whether he considered whether there was anyone else who should be assessed, he said that he did not consider that there were other persons on whom Customs could impose joint and several liability.

    43. The date on the assessment
  43. Mr Barlow submitted that the period/default dates on the Officer's Assessment were incorrect. He accepted that there is no statutory requirement for the notification under section 12(1) of the Finance Act 1994 to state the excise point or the period covered by the assessment. He pointed out however that there is a time limit under section 12(4)(a) and that it is not possible to tell whether the time limit is exceeded unless the date when the liability arose is given. He said that it is irrelevant that in this case the Appellant knew the date.

  44. Mr Beal relied on House v Customs and Excise Commissioners [1996] STC 154 where the Court of Appeal held that an assessment was not invalid because the period assessed was not stated on the notice of assessment.

  45. We hold that the incorrect dates did not make the assessment invalid. The letter notifying the assessment was accompanied by a letter headed "Report on assessment for UK duty against an Other Member State Trader." This report specified the irregularity namely theft in the UK although it did not state the date. In our judgment the basis of the assessment was specified with sufficient clarity although the date of the irregularity was not stated. Thee is no interest on excise assessments.

    46. The journey time on the AAD
  46. It was contended by the Appellant that the AAD had expired because the journey time of 7 days specified in Box [17] of the AAD had expired. Mr Barlow said that the guarantee covers "the risks inherent in intra-community movement." These did not cover detention followed by release when the journey time had expired. Such risk was not predictable.

  47. Mr Beal relied on the wording of the Explanatory Notes on the reverse of the AAD which take effect under Commission Regulation 2719/92/EEC. The note to Box [17] reads,

    48. "Journey time : the normal period of time necessary for the journey taking into account the means of transport and the distance involved."
  48. Regulation 2719/92/EEC was made under Article 18 of the Excise Directive. Nothing in that regulation or the Excise Directive specifies that the AAD shall only be valid for the journey time stated in Box [17]. Box [17] provides for the normal period necessary. A normal period will obviously be exceeded on occasion for a variety of reasons. There would clearly be difficulties if the originator of the document which might well be many hundreds of miles from a delayed vehicle had to issue a further AAD. Furthermore it would be arguable that the expiry of an AAD during a movement would itself constitute an irregularity.

  49. On the other hand if an AAD has no time limit this may give rise to the risk of abuse.

  50. Mr Loendersloot stated that the Dutch authorities will not accept an AAD beyond the time stated in Box [17]. He was not however an expert witness as to Dutch law.

  51. It is not clear whether the Directive empowers a Member State to prescribe the time for which an AAD is valid. Furthermore if the Directive allows this, there was no evidence as to whether Holland has so provided.

  52. If Dutch law can and does provide that the validity of an AAD is limited to the specified journey time under Box [17] then it would be arguable that the AAD was no longer operative and that the Appellant had ceased to be the guarantor, particularly if the wording of the guarantee given by the Appellant under Article 15.3 was given by reference to the AAD. Surprisingly there is nothing in the Directive apart from the opening words of Article 15.3 referring to the risks inherent in intra-community movement which specifies what the guarantee is to cover and nothing to specify the form or content of the guarantee.

  53. In the absence of any evidence that under the Dutch legislation implementing the Directive the validity of the AAD is limited to the time specified in Box [17], we conclude that the AAD is not so limited and that the Appellant remained the guarantor at the time of the theft. We strongly suspect that there is in fact no Dutch legislation so limiting the AAD.

    54. Failure to notify the Appellant of release from detention
  54. Detention is not covered by the Directive and unless disproportionate is not contrary to Community law.

  55. Although section 139 of the Customs and Excise Management Act 1979 provides for seizure or detention of anything liable to forfeiture, the Act makes no provision for release of such thing although Customs clearly must be under a duty to return goods detained as soon as it is concluded that they are not liable to forfeiture.

  56. Detention for a short period of time when seizure is being considered is a regular occurrence. In such a case the goods will in practice be released to the individual from whom the goods or vehicle were seized. If an employee of the owner, the driver will be the agent of the owner. In the present case Dartline, the shipper and port operator, was clearly acting as the agent for ESC which was acting for IWT which was acting for the Appellant.

  57. In our judgment there is no legal obligation on Customs to do more than to release the goods to the immediate person or entity from whom they were seized. The position may well be different if they are given specific notice by the owner or consignor as to whom the goods should be released. No such notice was given here. Nor do we consider that there was any legal obligation on Customs to inform the Appellant as guarantor prior to the release. That is not to say that it would not have been good practice to do so after such a lengthy detention, if only to minimise the possibility of diversion on release as with the containers for Trapps Cellars. We do note that the owner was informed of the impending release.

  58. We do however find it most surprising that the container was released by Customs to Dartline without obtaining any signature for the release. We find it equally surprising that the documents were uplifted by Customs without issuing a receipt and were returned without obtaining a receipt. It seems to us that this is asking for trouble, particularly if the container had been damaged or any of the documents were said to have been missing.

    59. Compatibility of DSMEG reg 7 with Excise Directive
  59. Mr Barlow submitted that regulation 7(1) which makes the person shown as consignor on the AAD liable to pay the duty, or if different the person shown in Box [10] as having arranged for the guarantee, does not correctly transpose the Directive. Article 20.1 provides that in the event of an irregularity the duty is due from the person who guaranteed the payment of the duty under Article 15.3; Article 15.3 provides that the guarantee shall be provided by the authorised warehousekeeper of dispatch or, if need be, by a guarantee jointly binding on both the consignor or transporter. This was not a case where a need had arisen. He said that regulation 7(1) contains no reference to the authorised warehousekeeper and makes the consignor solely liable as opposed to jointly liable with the transporter. He submitted that the reference at paragraph 31 of Re The Arena Corporation Ltd [2004] EWCA Civ 371 to the guarantee being issued "by the consignor and/or the transporter" was obiter and was incorrect.

  60. He said that "guaranteed" in Article 20.1 must mean provided the guarantee and "provided" in Article 15.3 must mean procured the guarantee. He said that the first sentence of Article 15.3 provides for two options, both of which must be open. The compulsory guarantee by an authorised warehousekeeper under Article 13(a) is subject to the other possibilities under Article 15.3.

  61. Mr Barlow said that the consignor is not the same as the warehousekeeper of dispatch. Article 19.4 also refers to them separately; if they had the same meaning, Article 19.5 should have referred to the warehousekeeper. Article 15.3 should not be interpreted as involving the same concept when using different words. Since the UK had failed to implement Article 15.3 correctly, Customs could not rely on the fact that it makes no difference on the facts of this case. Furthermore the UK has failed to implement the second option in the first sentence. Although if the Directive had been partly implemented the UK legislation could be applied to a person falling within the implemented part, here the Directive had not been implemented at all. The consignor could only be made liable jointly with the transporter. He said that the taxation of the Appellant could not depend on the wording of the AAD form; in any event Regulation 2719/92/EEC does not define the consignor. He said that Van de Water v Staatssecretaris van Financiλn (Case C-325/00) [2001] ECR I-2729 at [41] does not mean that member States have carte blanche to disregard Article 20.1.

  62. Mr Beal said that although Article 15.3 refers separately to the authorised warehousekeeper of dispatch and the consignor they are necessarily the same since a duty suspended movement must always start with an authorised warehousekeeper. Article 13(a) requires an authorised warehousekeeper to provide a compulsory guarantee to cover movement. The authorised warehousekeeper and consignor referred to in Article 19.4 must be the same entity since it provides for the certified copy to be sent "back to the consignor." Article 18.1 provides for the AAD to be drawn up by the consignor and Articles 19.1 and 19.2 provide for it to be returned to the consignor for discharge.

  63. He said that the provision of the guarantee under Article 15.3 may be by the consignor or by another. The note to Box [10] on the AAD refers to the party responsible for arranging the guarantee. Mr Loendersloot's evidence was that the Appellant did provide the guarantee.

  64. He submitted that the words "if need be" in Article 15.3 give a discretion to the Member State as to the provision of a joint guarantee with the transporter. The UK has not used this power.

  65. Mr Beal said that the Excise Directive does not specify who should pay the excise duty, this being left to Member States, see Greenalls Management Ltd v Customs and Excise Commissioners [2005] 1 WLR 1754 at [7] citing Van der Water. There was nothing unreasonable in making the warehousekeeper liable on an irregularity, see Lord Hoffman at [17].

    66. The legislation
  66. Under Article 6.1 of the Excise Directive duty is chargeable on any irregular departure from a suspension arrangement. Article 6.2 provides that duty shall be levied and collected according to the procedure laid down by each Member State.

  67. Article 13(a) of the Excise Directive requires an authorised warehousekeeper to provide a compulsory guarantee to cover movement subject to Article 15.3, the conditions being set by the authorities of the Member State where the warehouse is authorised. "Authorised warehousekeeper" is defined in Article 4; however there is no definition of consignor.

  68. Article 15.1 provides that the movement of excise products under duty suspension shall take place between tax warehouses. The first paragraph of Article 15.3 provides,

    69. "3. The risks inherent in intra-community movement shall be covered by the guarantee provided by the authorised warehousekeeper of dispatch, as provided for in Article 13, or, if need be, by a guarantee jointly and severally binding on both the consignor and the transporter. The competent authorities in the Member States may permit the transporter or owner of the products to provide a guarantee in place of that provided by the authorised warehousekeeper of dispatch. If appropriate, Member States may require the consignee to provide a guarantee."

    The last paragraph provides for the detailed rules for the guarantee to be laid down by Member States and for the guarantee to be valid throughout the Community.

  69. Article 15.4 provides,

    70. "4. Without prejudice to the provisions of Article 20, the liability of the authorised warehousekeeper of dispatch and, if the case arises, that of the transporter may only be discharged by proof that the consignee has taken delivery of the products, in particular by the accompanying document referred to in Article 18 under the conditions laid down in Article 19."
  70. Article 18.1 provides that all excise products moving under duty suspension arrangements "shall be accompanied by a document drawn up by the consignor." This is an AAD or a commercial document.

  71. Article 19.1 provides for the document to be in quadruplicate with a copy retained by the consignor, a copy for the consignee, a copy to be returned to the consignor for discharge and a copy for the Member State of destination. Article 19.2 makes more specific provision for return of a copy of the AAD to the consignor for discharge. The only reference in Article 19 to an authorised warehousekeeper of dispatch is in Article 19.4 which applies to exports via other Member States and provides for a certified copy of the AAD to be sent "back to the consignor." Under Article 19.5 if there is no discharge the consignor must inform his tax authorities within a time limit to be fixed at not more than three months.

  72. Article 20.1 provides,

    73. "1. Where an irregularity or offence has been committed in the course of a movement involving the chargeability of excise duty, the excise duty shall be due in the Member State where the offence or irregularity was committed from the natural or legal person who guaranteed payment of the excise duties in accordance with Article 15.3, without prejudice to the bringing of criminal proceedings.
    …"
  73. The form and content of the AAD is to be established in accordance with the procedure laid down in Article 24. That provides for measures necessary for the application of (inter alia) Articles 18 and 19 to be adopted.

  74. Commission Regulation 2719/92/EEC, prescribing the form and content of the AAD with Notes, was adopted on 11 September 1992 and entered into force on 1 January 1993 the same day as the Excise Directive. Article 3 refers to goods moving between "the consignor warehouse and the consignee warehouse."

  75. Boxes [1] and [2] are for the consignor's name, address, and "excise registration number (if any)". Box [9] is the transporter, "the person responsible for arranging the first movement, if different from the consignor." Box [10] "Guarantee" states in the Notes "identify the party responsible or parties responsible for arranging the guarantee. Only 'consignor', 'transporter' or 'consignee' need be entered, as appropriate." The note for Box [15] "Place of dispatch", reads, "the authorisation number (if any) of the warehouse." Box [16] "Date of dispatch" requires the date "at which the goods leave the consignor's warehouse." The AAD is to be signed by or on behalf of the consignor.

  76. The Excise Duty Points (Duty Suspended Movements of Excise Goods) Regulations 2001 adopt a series of definitions from the Excise Directive. Regulation 3 provides that there is an excise duty point when an irregularity occurs in the UK during a duty suspended movement. Regulation 7 provides,

    77. "(1) Subject to paragraph (2) below, where there is an excise duty point as prescribed by regulation 3 or 4 above, the person liable to pay the excise duty on the occurrence of that excise duty point shall be the person shown as the consignor on the accompanying administrative document or, if someone other than the consignor is shown in Box 10 of that document as having arranged for the guarantee, that other person.
    (2) Any other person who causes or has caused the occurrence of an excise duty point as prescribed by regulation 3 or 4 above, shall be jointly and severally liable to pay the duty with the person specified in paragraph (1) above."
  77. Although regulation 10 of the Excise Goods (Holding, Movement, Warehousing and REDS) Regulations 1992 provides that excise goods may not be moved under duty suspension unless the duty is secured by an approved guarantee or bond, the regulation does not specify who shall provide the guarantee or bond. The regulation does provide that there must be an accompanying document issued by the consignor.

    78. Discussion
  78. The drafting of Article 15.3 is to say the least somewhat obscure. We do not find it at all clear whether the words "if need be" in the first sentence give the Member States a discretion as to whether to provide in the implementing legislation for the possibility of a joint and several guarantee or whether those words require Member States to afford that option to traders. Whichever is correct, the UK legislation does not give the option.

  79. The sole question here is whether in providing in regulation 7(1) that the consignor shall be liable the UK has correctly implemented the provisions of Articles 20.1 and 15.3 which read together provide for the authorised warehousekeeper of dispatch to be liable unless the second half of the first sentence applies or unless the second or third sentence applies.

  80. Regulation 7(1) imposes liability on the consignor or if different the person shown on the AAD as having arranged for the guarantee. Mr Beal's case was that the consignor in Article 15.3 is the same as the authorised warehousekeeper and in effect that the terms are used interchangeably.

  81. As already pointed out there is no definition of consignor in the Excise Directive. As a matter of pure language, the two concepts are not the same. "Consignor" is defined in the Shorter Oxford English Dictionary as " a person who dispatches goods to another." The question here however is the sense in which the terms are used in Article 15.3. Normally, particularly in a legal document, when different words are used in the same sentence, their meaning is not the same.

  82. The terms "Authorised warehousekeeper of dispatch" and "consignor" are both used in the first sentence of Article 15.3 and the former term is repeated in the second sentence.

  83. On the other hand the wording of Article 15.4 suggests that the terms do have the same meaning in Article 15.3 since otherwise Article 15.4 would not apply to the discharge of the consignor. However Article 15.4 does not in any event apply to the liability of the owner or the consignee.

  84. Articles 19.1 and 19.2 both provide for the AAD to be returned to the consignor for discharge and Article 19.5 provides for the consignor to inform the tax authorities if there is no discharge within the time limit. If the only potential liability of the consignor is on the joint and several guarantee with the transporter provided "if need be", it is difficult to see any logic in the third copy of the AAD being returned to the consignor in all cases. This points to the references to consignor in the Excise Directive as being to the authorised warehousekeeper.

  85. It is not clear whether it is permissible to refer to the Commission Regulation on AADs made under the Directive when interpreting the Directive. However they came into effective at the same time and the travaux preparatoires for the Directive must have been available when the Regulation was drafted.

  86. Article 3 of the Regulation refers to "the consignor tax warehouse" which clearly assumes that the consignor will be an authorised warehousekeeper. The use of the definite article is to be noted. The note to Box [10] on the AAD, reads,

    87. "Guarantee : identify the party or parties responsible for arranging the guarantee. Only 'consignor', 'transporter' or 'consignee' need be entered, as appropriate."

    If the authorised warehousekeeper of dispatch is not necessarily the same as consignor, then the Note fails to mention the person primarily responsible under Article 15.3 for providing the guarantee.

  87. On the other hand the words "if any" in Box [2] suggest that the consignor may not have an excise registration number and the same words in Box [15] suggest that the warehouse of dispatch may not have an authorisation number.

  88. With some hesitation we conclude that the words "consignor" and "authorised warehousekeeper of dispatch" in Article 15.3 have the same meaning. It follows that in imposing liability on the person shown as consignor on the AAD, regulation 7(1) complies with the Directive.

    89. Section 16(4) and (5) of the Finance Act 1994
  89. Mr Barlow submitted that, even if the Appellant did not establish under section 16(5) that it is not liable to the duty assessed, the Tribunal has power to direct a new review under section 16(4) and should do so on the basis of a finding that Customs failed in certain obligations to the Appellant particularly in failing to notify the Appellant before release.

  90. He submitted that the word "also" in section 16(5) refers back to the powers in section 16(4). We do not accept this submission. The powers under sections 16(4) and section 16(5) are entirely different. Those under section 16(4) are in relation to appeals as to ancillary matters whereas those under section 16(5) are in relation to other decisions. If the word "also" in section 16(5) had the effect of importing the powers under section 16(4) then the reference to "an ancillary matter" in section 16(4) would be pointless and section 16(5) would have referred to "decisions other than decisions as to an ancillary matter."

  91. In our judgment the word "also" in section 16(5) is otiose.

  92. Even if we were incorrect as to the interpretation of section 16(5) this is not a case where we would direct a further review.

  93. The result is that the appeal is dismissed.

    94. THEODORE WALLACE
    CHAIRMAN
    RELEASED: 24 March 2006

    LON/02/8171

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