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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 >> Access Solutions (Scaffolding Contracts) Ltd v Revenue & Customs [2007] UKVAT(Excise) E01063 (07 September 2007)
URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2007/E01063.html
Cite as: [2007] UKVAT(Excise) E1063, [2007] UKVAT(Excise) E01063
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E01063
Hydrocarbon Oil Duties – fuel in Appellant's truck containing traces of kerosene and gas oil – vehicle seized, then restored on payment of civil penalties, uplift and storage charges totalling £1,040 – whether restoration fee should be upheld – HODA Sections 12(2), 13(1) – FA 1994 Sections 9, 14, 15 and 16 – Appeal refused.
EDINBURGH TRIBUNAL CENTRE
ACCESS SOLUTIONS
(SCAFFOLDING CONTRACTS) LTD Appellant(s)
- and -
THE COMMISSIONERS FOR
HER MAJESTY'S REVENUE & CUSTOMS Respondents
Tribunal: (Chairman): Mr Kenneth Mure, QC
(Member): James D Crerar, WS., NP
for the Appellant(s) Mr Dean Campbell, (Director)
for the Respondents Mr James Puzey, of Counsel
© CROWN COPYRIGHT 2007.
Introduction
This appeal relates to the justification for a restoration fee of £1,040 paid by the Appellant in relation to its truck, R995 HNS. The fee comprised civil penalties, uplift and storage charges as set out at p43 of the Documents. The truck's fuel tank was found to contain rebated fuel of between 3% and 5% of the total volume, being two-thirds kerosene and one-third gas oil. The Appellant's ground of appeal is that another party was responsible for adding the rebated fuel to its vehicle's tank.
The Law
In terms of Section 12(2) HODA rebated heavy oil may not be used as fuel in a road vehicle and penalties are imposed under Section 13(1) for putting such fuel into a road vehicle and also for using the road vehicle. The party liable is the person having charge of the vehicle or its owner, or the party (not the owner) entitled to possession of it: Section 13(7).
The vehicle is liable to forfeiture (Section 13(6)) but may be restored on payment of penalties and other charges: Sections 141 and 152 CEMA. There is provision for review of the Respondents' procedures and then for appeal to this Tribunal: Sections 14-16 FA 1994. The burden of proof is regulated by Section 16(6).
The Evidence
We heard evidence from two witnesses, Mr Ian Sked, the Respondents' review officer, and Mr Dean Campbell, a Director of the Appellant, who also presented its case.
Mr Sked's witness statement was not challenged (p19-24). He spoke to it, his decision on review to uphold the restoration offer (p4-8), and items in the Documents relating to the samples of fuel taken on 1 December 2006 from the Appellant's truck while at the premises of WC Recovery and from other vehicles and fuel tanks there (helpfully summarised at p71).
He explained that "coumarin" is marker added to kerosene, which is duty free, and that "quinizarin" is a marker added to rebated gas oil, again duty free, used in agricultural vehicles. In addition "euromarker" is added to each of these fuels and indeed all rebated fuels.
He was invited to comment on the Appellant's defence here (see Mr Campbell's letter of 19 March 2007 at p3) that WC Recovery added the rebated fuel as the truck's fuel level was low. Samples were taken from WC Recovery's premises 2 days after the likely date when Mr Campbell suspected the rebated fuel was added. However, the apparent supply of this mixture of rebated fuel in WC Recovery's premises was a "green balmoral tank" which contained on the basis of the markers different proportions of kerosene and gas oil from that found in the Appellant's truck. By reference to the findings summarised at p71 the rebated fuel held by WC Recovery contained 11 parts of kerosene to 1 part of gas oil. In the Appellant's truck the proportions were 2:1.
Also the contents of the lorry's tank suggested that it was not low on fuel when, as the Appellant suggested, the rebated fuel required to be added. It amounted to no more than 5% of the total volume by reference to the 3 markers. Had the tank been nearly empty when this was added, then the markers would have been much higher, reflecting the relative volume of rebated fuel added.
Mr Sked commented that this explanation was not suggested by Mr Campbell until after his review and some considerable time after the samples were taken. Further, no invoice for work done to the vehicle and particularly fuel supplied, had been produced.
In his evidence Mr Campbell explained that on about 24 November 2006 the truck broke down at Armadale, some distance from his company's premises at Dennyloanhead. The mechanics whom he used, Conway Commercials, could not repair it themselves. It required specialist repair work involving computer diagnosis which was carried out in Glasgow. The truck was delivered there by WC Recovery and returned by them to the Appellant on 29 November. The truck's Mot test was due on 30 November and Mr Campbell drove it to Conway Commercials for that purpose. They passed it to WC Recovery (located next door) for steam-cleaning before carrying out the test. On 1 December when the Respondents visited WC Recovery the truck was still there.
Mr Campbell's only explanation for the (low) level of rebated fuel is that as the truck had to be towed to Glasgow, its engine would have to be running to enable steering and brakes to work, and for that reason, he surmised, the extra (rebated) fuel had to be added.
On the basis of that evidence we make the following Findings-in-Fact:-
(i) the Appellant owned and used at all material times the truck, registered no R995 HNS.
(ii) It broke down in Armadale on about 24 November 2006. The Appellant's regular mechanic could not repair it as it required specialist attention. It was sent to a specialist in Glasgow for that purpose.
(iii) On 29 November 2006 the truck was returned to the Appellant by WC Recovery.
(iv) The truck's Mot was due on 30 November and for that purpose the Appellant's Director, Mr Dean Campbell, delivered it to Conway Commercials.
(v) Conway Commercials sent the vehicle to WC Recovery (located next door) for purposes of steam-cleaning before testing it.
(vi) On 1 December 2006 officers of the Respondents visited on the basis of anonymous information received the premises of WC Recovery. They took samples of fuel from vehicles and storage tanks there, including the Appellant's truck. Tests of the nature of the fuel samples were conducted and the results are summarised at p71 to show "markers" of rebated fuel found. No other road vehicle belonging to a third party on WC Recovery's premises contained rebated fuel.
(vii) On 4 December 2006 the Appellant's premises were visited. After checks no traces of rebated fuels were found in any vehicles there.
(viii) The truck R995 HNS was seized by the Respondents. It was restored to the Appellant after payment of £1,040 in settlement of an offer of restoration by the Respondents (see p43).
(ix) The Appellant requested a review of the terms of the offer of restoration. However, on review the terms of the offer were upheld by Mr Sked.
Submissions
On behalf of the Respondents Mr Puzey submitted that the issue was one of fact viz who added and who used the rebated fuel? The burden of proof rested on the Appellant. It was significant that the Appellant did not blame WC Recovery until after the Review. There is no mention of WC Recovery's having added rebated fuel in the request for Review dated 8 January 2007 (p44). The first reference to this is in the letter dated 19 March 2007 (p4).
Mr Puzey adopted the argument of Mr Sked arising from his summary of the "markers" found in the various fuel samples taken (summarised at p71). These were not consistent with Mr Campbell's suggestion that the fuel level was low and WC Recovery had to add fuel to keep the vehicle's engine running. Furthermore the Appellant had not produced any invoices or other documentation setting out the work done by the various parties allegedly involved in repairing and delivering the vehicle.
Mr Puzey invited us to refuse the appeal on the basis that the burden of proof on the Appellant in terms of Section 16(6) FA 1994 had not been discharged.
On behalf of the Appellant Mr Campbell argued that he believed that the explanation for the presence of the rebated fuel was the action of WC Recovery. He accepted that this had been suggested only at a late stage but earlier he had been upset and distressed by the allegations made by the Respondent's officers. The rebated volume was very small and there seemed to be no logical reason for adding only such a small amount of rebated fuel to the truck's tank. He stressed that his company's other vehicles which had been inspected on 4 December had all been free of rebated fuels. He argued that the Appellant had been a victim of circumstances.
Decision
The issue for the Tribunal is essentially whether there is some credible basis for Mr Campbell's inference that rebated fuel was added to the truck by WC Recovery. He could not, of course, speak directly to this. There is no documentary evidence by way of invoices of charges made by Conway Commercials, WC Recovery and the mechanic in Glasgow who repaired the vehicle. We agree with Mr Puzey that extra fuel, if required, could have been added and included in one or other repairer's bill. We note, of course, that this inference was not advanced by Mr Campbell until after the Review by Mr Sked, which was several months after the sample of fuel was taken from the truck.
We agree with Mr Puzey that the onus of proof is on the Appellant. That has not been discharged in our view. Moreover, the crucial evidence, which we consider is set out in the Summary at p71, does not support Mr Campbell's explanation that rebated fuel might have been added by WC Recovery. We do not find this reasonable or plausible. The rebated fuel formed only a small part of the overall volume in the vehicle's tank (about 5% maximum). Thus such fuel was not added to a near-empty tank. The proportion of kerosene to gas oil found in the Appellant's truck (2:1) is different from the mixture found in the green balmoral tank (11:1). We agree with Mr Sked's argument that had the truck's near-empty tank been filled up from that source, traces of "coumarin" near to 11% would have been found.
In any event according to Mr Campbell's evidence the vehicle was fuelled last on the day before it broke down. It had travelled only to the site where it had broken down, about 20-30 miles away. Accordingly the tank should not have required more fuel.
We note too that none of the other vehicles in WC Recovery's yard on 1 December belonging to third parties (i.e. persons other than the owner of WC Recovery and his parents) contained rebated fuel.
We appreciate that on 4 December when the Respondents visited the Appellant's premises, no unlawful traces of rebated fuel were found, and that the sample in the truck was very small. However, even that is sufficient to breach the provisions referred to.
Accordingly we consider that the basis for Mr Sked's review is sound. For these reasons we refuse this Appeal.
Costs
The Respondents indicated that in the event of success they did not seek costs. Accordingly we make no award.
EDN/07/8002