United Kingdom VAT & Duties Tribunals (Excise) Decisions

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Cite as: [2007] UKVAT(Excise) E1060, [2007] UKVAT(Excise) E01060

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Paul Midgley v Revenue & Customs [2007] UKVAT(Excise) E01060 (10 August 2007)

E01060

EXCISE DUTY — vehicle with rebated fuel in fuel tank — seized — released on payment of restoration fee of £250 — jurisdiction of tribunal considered — valuation of vehicle — appeal dismissed

MANCHESTER TRIBUNAL CENTRE

PAUL MIDGLEY Appellant

- and -

THE COMMISSIONERS FOR

HER MAJESTY'S REVENUE AND CUSTOMS Respondents

Tribunal: Elsie Gilliland (Chairman)

Gilian Pratt

Sitting in public in Manchester on 13 June 2007

The Appellant appeared in person

Katie Jones, counsel, instructed by the Solicitor and General Counsel for HM Revenue and Customs for the Respondents

© CROWN COPYRIGHT 2007

DECISION

The appeal before the tribunal was that of Paul Midgley (the Appellant) against a fee of £250 imposed for the restoration of his Citroen BX motor car (the vehicle) which had been seized by Customs officers in respect of a misuse of rebated fuel.

The facts are that on 6 February 2006 Customs officers on duty at Chappell Fuels, Owl Lane, Ossett with the consent of the Appellant who was present in the vehicle tested the fuel in its running tank which they found to contain rebated fuel. The Appellant agreed to be interviewed and a copy of the notes of that interview duly signed by him and dated 6 February 2006 is in the bundle of documents produced to the tribunal by Customs. At the conclusion of the interview the vehicle was seized and immediate restoration offered to the Appellant for a fee of £250. The Appellant has told us that he was able to pay that sum as a friend who came to collect him lent him the money.

The Appellant by letter of 1 March 2006 requested a review and Julie Wiggs the review officer on 23 June 2006 confirmed the decision of the Customs officers. The Appellant on 10 August 2006 appealed the review decision to the tribunal.

Mr. Midgley presented his own case and gave evidence under oath. He confirmed that because of a previous situation he was aware of the prohibition against the use of rebated fuel in a road-going vehicle. So far as the vehicle was concerned sometimes he obtained diesel from a filling station or sometimes he received a supply in jerry cans from an unnamed friend. He used kerosene in his domestic central heating system and due to the expense of filling his 2000 litre oil tank he used the 20 litre jerry cans for filling up with kerosene. His explanation was that the fuel in the vehicle must have been contaminated due to him using the same cans for both derv and kerosene. Although the Customs officers had given him part of the sample extracted from the tank he did not have the funds to arrange for his own test but his view was that there could only have been a trace in the sample arising from the double use of the jerry cans.

The Appellant contested the amount of the restoration fee and we note from the grounds of his appeal on 10 August 2006 that he stated that the amount of money in dispute was £200. In his evidence he contended that the penalty imposed should not exceed the value of the vehicle; that he had purchased the same on eBay with a bid of £50 on 6 December 2005; that that was the value of the vehicle; and that he had produced confirmation of this. As to the valuation of £260 from Glass's guide said to have been used by Customs this had not adequately taken into account the condition of the vehicle on seizure which was not "average". He had purchased the vehicle on eBay knowing that it did not have an MOT and that it required a considerable amount of work which he himself proposed to undertake over a period of time. He acknowledged that he had recently sold the vehicle on eBay at a price of £310 but considered that this price merely reflected the cost of parts and his labour which he put at £1500. The vehicle now had a new full exhaust system a windscreen (which was broken at the time of his purchase) and had an MOT certificate to May 2008.

The relevant statutory provision is in the Finance Act 1994 section 14 and Schedule 5. Section 2(1) (r ) of the Schedule makes reviewable by Customs:

"any decision under section 152 (b) [of the Customs and Management Act 1979] as to whether or not anything forfeited or seized under the customs and excise Acts is to be restored to any person or as to the conditions subject to which any such thing is so restored".

The case for Customs was that there were two relevant breaches in the case before us namely the taking in and the using of rebated fuel in a vehicle each of which was subject to a civil penalty of £250. The officers did not consider the vehicle was worth £500. Had the matter not been dealt with by the imposition of a restoration fee after seizure and an alternative course had been taken to release the vehicle without fee the two breaches would still have been pursued as civil penalties. Whilst in matters of the penalties themselves the tribunal has an appellate jurisdiction and may look at "reasonable excuse" a challenge to the terms of the restoration fee as in the instant case comes within the Finance Act 1994 Section 16 (4) as an ancillary matter and the tribunal is in essence restricted to directing a further review should we be satisfied that the decision of Customs "could not reasonably be arrived at". The approach we adopt in considering the exercise by Customs of their discretion is to examine whether they took into account all matters to which they should have given weight disregarded irrelevant ones and directed themselves properly in law. Further we are not entitled to look at the legality of the seizure since that is dealt with in condemnation proceedings in the magistrates courts which the Appellant did not pursue. We do consider however that we are able to look at the background and circumstances surrounding the same.

The restoration policy of Customs was set out by the review officer in her letter of 23 June 2006. It provides (inter alia) that a vehicle cannot be restored for more than its value. The Appellant was aware of this from the restoration paperwork and had he told us drawn the same to the attention of one of the Customs officers. Mrs Wiggs said in her evidence that although not initially supplied by the Appellant she did subsequently inspect copies of an email winning-bid confirmation from eBay and a handwritten receipt for the vehicle. Customs obtained also a confirmatory letter from the seller and the review officer looked up the car description in the auction bid on 26 September 2006. As a result she again reviewed her decision in a letter of 4 October 2006 but did not change her mind.

On the issue of the value of the vehicle the relevant valuation is not that at the date of purchase but at the time of seizure 2 months later. The purchase price on the eBay transaction was established at £50 but as was pointed out by Mrs Wiggs that may have been a bargain as that is what those using eBay seek or there might have been other personal reasons why a purchaser would wish to buy a particular car. The Appellant sought to suggest that the vehicle was less satisfactory than it appeared though he nevertheless gave a "perfectly described" rating to it on the eBay feedback.

On the issue of valuation we accept that Glass's guide is an appropriate standard for Customs to follow unless there are other clearly significant factors such as condition which would remove the vehicle from the classification of "average" for its year. The Appellant has not produced to the tribunal any evidence to replace this valuation with an alternative. He appeared to be suggesting that at the time of the seizure he was driving an untaxed uninsured vehicle; that of the work known of two months previously as essential if the vehicle were to be roadworthy little had been done; and that thus the value of the vehicle had remained unchanged since purchase. This we do not find plausible. Nor is there any indication that the officers who were at the vehicle and saw it considered that its appearance was other than "average".

We dismiss the appeal.

We make no direction as to costs.

ELSIE GILLILAND

CHAIRMAN
Release Date: 10 August 2007

MAN/06/8039