United Kingdom VAT & Duties Tribunals (Excise) Decisions

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Cite as: [2007] UKVAT(Excise) E1019, [2007] UKVAT(Excise) E01019

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Seamus Treanor v Revenue & Customs [2007] UKVAT(Excise) E01019 (22 February 2007)

E01019

Seizure of motor vehicle. review of decision not to restore . non-restoration confirmed . appeal dismissed

BELFAST TRIBUNAL CENTRE

SEAMUS TREANOR Appellant

and –

THE COMMISSIONERS FOR HER MAJESTY'S REVENUE & CUSTOMS Respondents

Tribunal: MS H GIBSON QC (Chairman)

MR A F HENNESSY

Sitting in public in Belfast on 17 August 2006

Ms Arleen Elliott, solicitor, for the Appellant

Mr James Puzey, instructed by the Solicitor for HM Revenue & Customs, for the Respondents

DECISION

This is an appeal under section 16(1) of the Finance Act 1994 against a decision on review by the Respondent dated 24^th October 2005 not to restore the Appellant's motor vehicle registration number O1 MN 1761.

We heard evidence from the Appellant, Mr Seamus Treanor and from Ms Wiggs, an officer of Her Majesty's Revenue and Customs. The witness The witness statements served by the Respondent were not objected to.

THE FACTS

On 28^th July 2004 the Respondents seized a motor vehicle registration number OI MN 1761 driven by the Appellant's son, Mr Darren Treanor. Darren Treanor confirmed under caution that his father was the owner of and normally drove the motor vehicle (a jeep). Darren Treanor stated that he had his own vehicle. On examination of the vehicle, the Respondents found an additional fuel point for green diesel. Mr Treanor indicated that he had filled the jeep 1 – 2 months ago with road diesel. He stated that he had travelled North of the border to purchase tools from McIntyres. One of the Respondent's officers tested the residue in the tank and found that the diesel was discoloured. The jeep was impounded at that stage. The following day the Appellant contacted the Respondents by telephone. He advised that the jeep was his own and he was unaware of a dual tank having been put in the vehicle. He stated that it had been put in the jeep by his son Darren without his knowledge or consent. The Appellant subsequently wrote to the Respondent setting out the foregoing.

A review was carried out by Ms Stokes on 11^th November 2004 when a decision was made not to restore the vehicle. Unfortunately Ms Stokes died shortly thereafter. The matter was considered again. In a decision dated 24^th November 2005 the decision not to restore was upheld by the Reviewing Officer. The Appellant has appealed against the Review decision not to restore the vehicle.

EVIDENCE

The Appellant, Mr Seamus Treanor, gave evidence. The Appellant is a farmer in County Monaghan, Republic of Ireland. He has two sons, Darren and Dermot. The Appellant entered into a finance agreement at a total cost of £15,280.83 for the jeep on 8th June 2001. He continued to make the hire purchase repayments until 1^st June 2006. From the time of purchase of the jeep, the Appellant and his wife Pauline were insured to drive the vehicle. From 21^st May 2004 the Appellant's son Darren also became a named driver. The Appellant also owns a Jaguar car which runs on petrol.

The Appellant stated that Darren used the jeep from May 2004 and his wife, Pauline used Darren's Vectra car. In particular she drove Darren's car to work. At this time Darren took over use of the jeep. Darren, who was an apprentice welder at this time, used the jeep to draw materials. The Appellant stated that Darren was to look after the service and fuelling of the jeep. He said this was to encourage him to take responsibility for the farm which the Appellant had leased to him for a five year period on 1^st November 2002.

The Appellant stated that there were two storage tanks at the farm, one for agricultural or green diesel and the other for white diesel or road fuel. All fuels were purchased from T Martin Fuels where the Appellant had an account. The Appellant stated that there was fuel in the tank when Darren became the named driver in May 2004 but he was not sure how much.

The Appellant stated that the first he knew of the adaptation was when Darren came home after the vehicle had been seized. He was not aware that a second fuel point had been put into the jeep. He said that he had no reason to suspect that Darren had tampered with the vehicle, otherwise he would have stopped it. The Appellant stated that he was very angry when Darren told him how the jeep had been seized. He contacted the Respondents the next day. He was advised that he would not get the vehicle back and was told to forward a letter, which he did. The Appellant stated that if the jeep were restored, he would remove the adaptation and would not permit Darren to use the jeep. Mr Treanor has bought a van to keep him going.

Under cross examination the Appellant stated that he had bought a couple of houses in Dublin which he was renovating. His son Darren worked full time at an engineering company five days per week, 9–5. After May 2004 the Appellant stated that he used the jeep occasionally. He said there was diesel in the fuel tank when his son took over the vehicle. The Appellant stated that he stopped putting diesel in the jeep and did not notice what level was in the tank. Darren did not warn him against filling the tank up with white diesel.

The Appellant then said that Darren used the jeep 99% of the time. He did say that the jeep was a good vehicle for the farm. The jeep was used to transport cattle from the home place. There was no need to transfer the jeep into his son's name. The Appellant stated that he had not transferred the tractor into Darren's name either. The Appellant accepted that he did go down to the suppliers in the jeep to buy materials. He said that between December 2003 and May 2004 he and his wife used the jeep and he also had the Jaguar car. In response to Mr Puzey pointing out that no road diesel had been bought by him since December 2003, Mr Treanor stated that there had been diesel in the storage tank. He stated this had lasted until July 2004.

Mr Treanor admitted that his explanation that Darren had carried out the adaptation had not been included in the correspondence. However, he stated that Darren had admitted carrying it out. He had no explanation as to why Darren had not come to the hearing to give evidence if he had indeed admitted making the adaptation. The Appellant stated that he had ceased to trade as a farmer from 1^st November 2002 (being the date upon which he leased the farm to Darren). However, he admitted that the fuel accounts were still in his name and also that he paid some of the fuel bills. He also paid for some other farm purchases. The Appellant stated that he did not do any reconciliations and Darren did not reimburse him for any farm expenses incurred by him. The Appellant stated that he did not notice the consumption of green diesel.

The Appellant stated that as the jeep was not available, he had bought the van. He and his wife were insured to drive the van.

Ms Wiggs gave evidence on behalf of the Respondents. She indicated that the customs officers had drawn fuel from the main fill point of the vehicle to test it. The sample they drew was discoloured, reddish brown colour and she indicating that it had been there for some time. However, she was not in a position to say how long it would have been there. Ms Wicks indicated that the pipe from the fuel tank had been disconnected. If an attempt had been made to refill it with road diesel, it would have poured out. After the vehicle was seized, Darren did not appear nervous or afraid. He did not seem concerned that his father would be annoyed at the vehicle having been seized.

The parties agreed that the value of the jeep was £5,000 sterling.

SUBMISSIONS

Mr Puzey referred the Tribunal to section 16 of the Finance Act 1994. He submitted that there were two questions, namely:

(a) Did the Appellant know of the modification?

(b) If he did not know, was it proportionate not to restore the vehicle?

Mr Puzey submitted that under section 16(6) the burden was on the Appellant

and that the evidence pointed overwhelming to the Appellant knowing of the adaptation. He said that the account given by the Appellant was not consistent with the evidence. Darren worked full time and was not able to look after the farm during the day. The Appellant was still paying the business expenses including the fuel. The derv and green diesel were bought in bulk and the Appellant had ready access to them. No white diesel was purchased after December 2003. This gave rise to the question what was the vehicle running on? If the jeep was still running on white diesel at this time, why did Darren need to adapt it? His father still paid the fuel bills.

Mr Puzey submitted that it was quite feasible for Darren to have converted the vehicle – after all he would have had the welding knowledge. However, it would not have been feasible for him not to have told the Appellant as he could have put fuel in the vehicle at any time. Mr Puzey suggested that the green diesel level was going down faster than normal but no ordinary road fuel was being purchased. This was a sophisticated adaptation intended as a long term measure. Mr Puzey drew attention to the fact that the Tribunal had not heard any evidence from Darren Treanor and in particular as to why he had lied at the interview. Mr Puzey said this was a case of flagrant dishonesty whose specific purpose was to use green diesel. Whilst it did not cost the Respondents anything, it was still an attempt to deceive the authorities by driving a car within this jurisdiction.

For the Appellant, Ms Elliott, stated that this was a case of the father bringing the son on in terms of running the farm. The Appellant still had the accounts in his name and paid some of the bills but his son, Darren contributed to payment of some of those bills. It was not unusual for farmers to have other jobs. The farm was not labour intensive. Ms Elliott said that fuelling was Darren's responsibility and he did pay some of the fuel on the Northern account. Accordingly, the Appellant would not have been aware of the adaptation. He was annoyed with his son.

Ms Elliott submitted that the decision not to restored was not proportionate. She said the loss was to the Customs in the Republic of Ireland. She reiterated that the Appellant would have the adaptation removed.

CONCLUSION

The powers exercisable by the Tribunal in relation to this appeal are set out in section 16(4) of the Finance Act 1994 viz. as follows:

In relation to any decision as to an ancillary matter, or any decision on the review of such a decision, the powers of an appeal tribunal on an appeal under this section shall be confined to a power, where the tribunal are satisfied that the Commissioners or other person making that decision could not reasonably have arrived at it, to do one or more of the following, that is to say—

(a) to direct that the decision, so far as it remains in force, is to cease to have effect from such time as the tribunal may direct;

(b) to require the Commissioners to conduct, in accordance with the directions of the tribunal, a further review of the original decision; and

(c) in the case of a decision which has already been acted on or taken effect and cannot be remedied by a further review, to declare the decision to have been unreasonable and to give directions to the Commissioners as to the steps to be taken for securing that repetitions of the unreasonableness do not occur when comparable circumstances arise in future.

The review decision is set out at pages 56 to 63 of the bundle. The restoration Respondent's policy for private vehicles adapted for the use of rebated fuels provides that a vehicle should be seized and not restored, unless there are exceptional circumstances.

Ms Wiggs asked a number of pertinent questions prior to reaching the decision under appeal. The Appellant did not to respond to same.

At the time of the decision the Appellant and his son Darren appeared to be in disagreement regarding ownership of the vehicle and who installed the dual tank system. For the first time it was asserted at the hearing by the Appellant that Darren had admitted carrying out the adaptation. However the Appellant was unable to provide a satisfactory explanation as to why this had never been mentioned before or why Darren had not attended the hearing. The Appellant admitted still using the vehicle sometimes. He also accepted that he still paid most of the fuel bills. It is not clear what Darren's motive was in making the adaptation since the Appellant paid for most of the fuel anyway. No Road diesel had been purchased since December 2003. This would be consistent with discoloured derv being found in the main fill point by customs officers suggesting that it had sat there for some time.

The Tribunal found the evidence of the Appellant to be unconvincing and lacking in credibility. It was implausible given that the Appellant still used the jeep that his son Darren would not have told him about the adaptation. If the Appellant had attempted to fill the vehicle with road diesel it would have poured out.

This vehicle was professionally adapted to disguise the fact that it was being run on rebated fuel. Derv was then placed in the main fill point. Whilst revenue had not been lost by the Respondents, the vehicle was nonetheless driven within Northern Ireland having been adapted to fraudulently use rebated fuel.

The review officer did not find there were exceptional circumstances justifying departure from the policy. She concluded that the vehicle should not be restored.

Having considered all the documents available and heard the evidence, the Tribunal is not satisfied that the Respondent could not reasonably have arrived at that decision. Accordingly the appeal fails.

The Respondents made no application for costs and we make no order.

HEATHER GIBSON

CHAIRMAN

RELEASED: 22 February 2007

LON/05/8121