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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 >> Gallagher v Revenue & Customs [2007] UKVAT(Excise) E01056 (30 July 2007)
URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2007/E01056.html
Cite as: [2007] UKVAT(Excise) E01056, [2007] UKVAT(Excise) E1056
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- The Appellant was owner and had the exclusive use of the van, registration no P925 RSC.
- On 18 April 2006 he was stopped by the Respondents' officers and the Police while driving the vehicle in Victoria Park Drive South, Glasgow.
- In the course of discussions between the Respondents' officers and the Appellant, he indicated inter alia that the van belonged to him and was for his own use; he was responsible for the vehicle; he knew it was an offence to run the vehicle on any rebated fuel; and he was unaware of what fuel was in the vehicle's tank. Further reference may be made to paragraph 7 of Mr Sked's witness statement.
- A sample of fuel was taken from the vehicle, which on analysis was found to be 97% vegetable oil. Excise duty had not been paid on this.
E01056
Hydrocarbon Oil Duties – vegetable oil on which no duty paid, used to fuel road vehicle – awareness and belief of owner/driver whether or not duty paid – imposition of civil penalty – HODA 1979, Sections 6A and 22 – FA 1994, Section 9(2) – Appeal fails.
EDINBURGH TRIBUNAL CENTRE
SIDNEY M GALLAGHER Appellant
- and -
THE COMMISSIONERS FOR
HER MAJESTY'S REVENUE & CUSTOMS Respondents
Tribunal: (Chairman): Mr Kenneth Mure, QC
for the Appellant Mr S M Gallagher
for the Respondents Ms J Strachan, Solicitor, Shepherd & Wedderburn WS
© CROWN COPYRIGHT 2007.
Introduction
This appeal relates to the imposition of a civil penalty in relation to the use of vegetable oil as fuel in the Appellant's van when he was stopped by the Respondents' officers on 18 April 2006. A civil penalty of £250 was imposed in terms of Section 9(2) FA 1994. (Doc 10).
The Law
Fuel used in a road vehicle must have borne excise duty in terms of Section 6A, HODA. It is illegal to use "rebated" oils, on which such duty has not been paid. Moreover, Section 22(1) HODA provides:-
"(1) a person who-
(a) puts to a chargeable use (within the meaning of Section 6A above) any liquid which is not hydrocarbon oil; and
(b) knows or has reasonable cause to believe that there is duty charged under Section 6A above on that liquid which has not been paid and is not lawfully deferred, shall attract a penalty under Section 9 of the Finance Act 1994 (Civil Penalties), and any goods in respect of which any person contravenes this sub-section shall be liable to forfeiture".
The Evidence
I heard evidence from three witnesses. Firstly, Ms Strachan called the Respondents' review officer, Ian Sked. He confirmed the terms of his witness statement (which was not in dispute) and elaborated somewhat upon it. He spoke to the terms of his letter reviewing the matter (Doc 5) upholding the penalty. He referred to the notebook of the officer involved (Doc 14). Mr Sked's evidence was to a great extent matter of fact and I found him credible and reliable.
Mr Gallagher, the Appellant, gave evidence as did Mr Kevin Sproull, a mechanic, working at Clyde Vehicle Services, a garage belonging to Mr Allan Walker, the Appellant's nephew. The Appellant produced a short letter dated 29 June 2007 from Edward McKenna, the yard manager at the garage, confirming that the Appellant had permission to take diesel from vehicles in the yard which were being dismantled.
On the critical aspect as to the Appellant's state of mind and knowledge as to the fuel used I did not find his and Mr Sproull's evidence convincing or satisfactory. In my view their evidence did not establish that the Appellant believed reasonably that duty had been paid on the fuel. The arrangements for filling the vehicle's fuel tank seemed casual and uncertain. According to the Appellant's account to the Respondents' officers when he was stopped, 6 or 7 different persons might fill the tank for him. Today in evidence the account was that it was usually, if not always, Mr Sproull, and on the last occasion before the van was stopped, it was he. Mr Sproull claimed that the fuel seemed to be diesel, which conflicted with the views of the officers who stopped the vehicle. In their view the fuel did not flow freely as diesel would have done.
According to the Appellant, the source of supply of fuel for some considerable time had been the tanks of vehicles being scrapped in the garage. Mr Sproull used a pump to extract this. Also, the Appellant explained that a spike would be used to "hole" the tank of a vehicle being scrapped and the contents then drained and collected in a bucket.
The Appellant claimed that he never checked the fuel. He relied on the actings of Mr Sproull and others who might fill the van's tank.
On analysis 97% of the contents of the tank were found to be vegetable oil. The absence of their being a significant mixture with another fuel could suggest successive fills of this fuel.
On the basis of that evidence I make the following Findings-in-Fact:-
Parties' Submissions
Ms Strachan submitted that in terms of Section 6A, HODA duty was payable on any fuel used in a road vehicle. Section 22(1)(b) prescribed that the civil penalty imposed was appropriate where a person knows or has reasonable cause to believe that duty has not been paid. In the present case the Appellant was aware of the liability to duty on fuel used in his vehicle. Section 154(2) CEMA 1979 indicates that the burden of proof is on the Appellant. The Appellant in the present case bore the responsibility to ensure that his van was fuelled legally. In the circumstances of this case he should have had grave suspicions that duty had not been paid on the fuel. His and Mr Sproull's evidence, Ms Strachan argued, lacked credibility.
The Appellant submitted that he had used the van over 3 or 4 years. He could not tell what sort of oil was used in it. When Mr Sproull was not present in the yard, other persons have filled the van for him. He did not have a sample of the fuel to test, and as a layman he could not categorise it.
Decision
I agree with the reasoning of the Respondents in this matter.
I am satisfied that the Appellant had reasonable cause to believe that excise duty had not been paid on the fuel used in the van. This is the inevitable inference in the whole circumstances. I agree with Ms Strachan that the Appellant bore some responsibility to ensure that the fuel used in his van was legal. I found the Appellant's apparent disinterest in what fuel was used, unconvincing. At a purely practical level, the wrong type of fuel could damage the vehicle's engine. I commented earlier on the very casual arrangements for fuelling the vehicle as narrated in evidence. These, I find, unconvincing. If, as the Appellant claimed, he did not know what fuel was being used, he had no reason to believe that it was diesel on which duty had been paid. Accordingly, I consider that the Respondents were justified in issuing the penalty in terms of Section 9 FA 1994.
In the course of the Hearing I raised the terms of the Respondent's letter to the Appellant dated 30 August 2006 (Doc 2) which accompanied the Penalty Notice. That letter (but not the Penalty Notice) refers to Section 13 HODA rather than to the correct reference viz Section 22(1). That error is corrected in Mr Sked's review letter (Doc 5) and in my view competently. The Penalty Notice, the crucial document, is unaffected. I was referred by Ms Strachan to Section 15(1) FA 1994 anent the review procedure, which bears to enable the Respondents to confirm, withdraw or vary the decision, and seems apt in the present case.
For these reasons I refuse this Appeal.
Costs
Ms Strachan indicated that in the event of success the Respondents did not seek costs and I make no such award.
Finally, I would thank both Mr Gallagher and Ms Strachan for their assistance at the Hearing.
EDN/07/8000