United Kingdom VAT & Duties Tribunals (Excise) Decisions

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URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2008/E01089.html
Cite as: [2008] UKVAT(Excise) E1089, [2008] UKVAT(Excise) E01089

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Morag Jackson v Revenue & Customs [2008] UKVAT(Excise) E01089 (27 February 2008)

E01089

Excise duties – rebated fuel found in Appellants vehicles – whether restoration fee appropriate – failure by Appellant (on an appeal against a second review decision) to establish a reason for the presence of fuel sufficient to rebut the presumption in HODA 13(7).

EDINBURGH TRIBUNAL CENTRE

MORAG JACKSON Appellant

- and -

THE COMMISSIONERS FOR

HER MAJESTY'S REVENUE & CUSTOMS Respondents

Tribunal: (Chairman): T Gordon Coutts, QC

Sitting in Aberdeen Sheriff Court on Monday 11 February 2008.

for the Appellant Mrs Morag Jackson

for the Respondents Mr J Pusey

© CROWN COPYRIGHT 2008.

DECISION

The Appeal

Mrs Jackson now appeals against the decision of the Respondents' review officer Liam Byrne undertaken on a direction by the Tribunal for a further review following upon that of Ian Sked. Both these reviews confirmed the procedure whereby restoration of two vehicles L808 JMS and P114 MSE seized on 31 July 2006 was offered for the sum of £750 on that very day. It was paid. The Appellant on the next day wrote requesting a review of restoration fee and provided various pieces of information.

The First Tribunal Hearing

At that Hearing, to the decision in which reference is made for background, the Appellant gave evidence but the Respondents led no evidence other than a witness statement from Ian Sked and in particular no evidence in relation to alleged previous Excise offences. The Tribunal found the entire procedure unsatisfactory and, on the evidence before it so far as it went, was able to regard the Appellant as a credible clear and reliable witness. As a result of the further evidence heard at the second appeal, however, that certificate of credibility and reliability requires to be modified.

At the second appeal the Tribunal was given evidence from the Customs officer who made the seizure, Mr Abercrombie and from Mr Byrne the second review officer.

It should be noted that the factual basis narrated by Mr Byrne tended to confuse as had that of Mr Sked in that there was a failure to separate the roles of Mr and Mrs Jackson. They were not partners in a farming enterprise at Upper Auchnagorth Farm.

The jurisdiction of the Tribunal in an appeal such as this was narrated in the first decision and it is unnecessary to repeat that.

There requires to be added for consideration however the provision in Section 13(7) of the Hydrocarbon Oil Duties Act 1979 that reads:

"(7) for the purposes of this section, a person is liable for heavy oil being taken into a road vehicle in contravention of Section 12(2) above if he is at the time the person having charge of the vehicle or is its owner, except that if a person other than the owner is, or is for the time being, entitled to possession of it, that person and not the owner is liable".

It requires to be further noted that there having been no challenge to the forfeiture of the vehicles in question the only matter for the consideration of the Tribunal was whether the Appellant had established that the decision to confirm the offer to restore the vehicles for the sum quoted was one which could not reasonably be arrived at. In the present case that means whether there was an innocent reason for the presence of the fuel in the vehicles. The onus in that regard of establishing that matter lies on the Appellant.

The facts as now presented

From the Respondents' officers notebook compiled by officers Allan and Abercrombie, and from the oral evidence of Mr Abercrombie about 10 am on 31 July 2006 the officers arrived at Upper Auchnagorth Farm, New Blyth, Turriff, Aberdeenshire and tested the fuel in the above noted vehicles. In the samples of the fuel they obtained they found markers indicating that rebated fuel was present. The rebated fuel consisted of 10% of the fuel in L808 JMS and 30% of the fuel in P114 MSE.

Having found these traces the officers felt they should and indeed were entitled to seize the vehicles and further in terms of Section 152(d) of CEMA 1979 the Commissioners to restore the vehicles subject to the conditions above noted i.e. payment of £750 allocated as to £500 to the Vauxhall and £250 to the Ford. They purported to relate these figures to the civil penalty which would have been appropriate had it been applied if the forfeiture had been found valid.

The vehicles were examined on the farm and in the evidence before the first Tribunal Hearing there was no evidence that the diesel had in fact been used as fuel. That was corrected by the admission of the Appellant and, in his statement by Mr Jackson that L808 JMS had been utilised a day or two previously to attend a funeral and that P114 MSE had been used on the day in question. There is therefore no doubt that rebated fuel had been used to power the vehicles in question. There was then a question for the Tribunal about whether the Appellant had established that there were reasonable grounds for not demanding a restoration fee in that she had not been responsible for the taking in of the fuel.

At the first Hearing Mrs Jackson gave a graphic account of the troubles she and her neighbours had been having over a period of time from an extended family, no strangers to the Sheriff Court, who had come to live nearby. The Jackson's had been subjected to repeated acts of vandalism, which had never taken place previously such as the smashing of window glass in agricultural vehicles, the disabling by interfering with the fuel tank of a tractor and a combine harvester and digger. Additionally their son's petrol engined vehicle had had red diesel put into it thereby ruining the engine. Fence wires had been cut, gates destroyed or stolen and in short the said extended family were apparently wholly evilly disposed.

Her troubles have, it appears, continued because she produced to the second Tribunal further photographs and evidence of acts of vandalism perpetrated against her or her husband.

The burden of the Appellants story was that since she had not put rebated fuel in the vehicles and, she asserted, her husband had not done so the reasonable inference was that it was a further act of vandalism by the said neighbours. It has to be noted that other members of her family also were present at the farm from time to time.

In addition however she said at the first Hearing and in correspondence that she was not a person who had previously contravened the legislation and that there had been examinations of her vehicles by officer Abercrombie over the course of several years who had found no rebated fuel. That contention was made to reinforce the allegation that the visit by the officers to the farm was not routine as stated by the reviewing officer but induced by others. There was she thought an earlier visit by the officers to the neighbours at which information must have been given.

Before the second Tribunal convened a Direction was issued requesting certain productions from the Respondents because of the obvious conflict of evidence. In response, which was somewhat dilatory, there was produced, however a letter addressed to Ms McBain c/o Upper Auchnagorth Farm, New Blyth containing a warning about the use of rebated fuel following a visit by officer Abercrombie. The Appellant denied that she had ever received such a letter and stated that at its date she was not in fact living at the farm but elsewhere and that she had disposed of the vehicle in question KMA 76T prior to the visit in January. She was unable to produce any document vouching the disposal of the vehicle.

There were also placed before the Tribunal a copy of the officer's notebook relating to that January 1994, visit where it appears, that at no time was the Appellant seen or spoken to. It was plain from the interview of Mr Jackson that she did not in fact live at the farm but at a given address. The letter however was according to Mrs Jackson never seen by her which may explain the attitude adopted at the previous Hearing.

In relation to that, somewhat peripheral matter on the evidence before it the Tribunal finds that a vehicle which may on the face of it have been owned by the Appellant was present on Mr Jackson's farm and was examined there. There was no evidence as to the knowledge of the Appellant of those circumstances and no evidence that she had ever seen or received a letter which was sent. The Tribunal did not regard that letter as seriously affecting the Appellants credibility but what it did do was to demonstrate that Mr Jackson the person plainly in charge of the vehicle at that time and also involved in the use of the vehicles in question at the present appeal was aware that an offence had been committed on his premises.

Mr Jackson kept a supply of rebated fuel on his farm for agricultural use.

In upholding the restoration fee invoked both officer Byrne and officer Sked were guilty of some loose thinking in amalgamating Mr and Mrs Jackson as an individual as though they were partners. They should not have done so. Mrs Jackson was the owner, Mr Jackson used the vehicles from time to time. The reasons given for not accepting Mrs Jackson's oft repeated assertion that she had not used rebated fuel had to do with the statement put forward by the Jackson's of the trouble with their neighbours and, in particular in the case of officer Byrne, expressing disbelief at the vehicles being unlocked which said officer Byrne would not have taken place in Ireland. The matters with which the Tribunal are concerned took place in North East Scotland where a different attitude pertains to the knowledge of the Tribunal Chairman. Additionally, conjecture about the potential activities and the motivation of vandals cannot be conclusive in disregarding the account given by the Appellant of trouble with her neighbours.

Mr Pusey for the Respondent in his cross-examination attacked the reliability and credibility of Mrs Jackson. He said she was either confused or deliberately evasive giving glib answers when it suited her. He pointed to the various apparently contradictory statements she had given in writing and in evidence he also pointed out the unsatisfactory nature of the evidence in relation to the previous offence where it was asserted that a vehicle had been sold for scrap but no receipt was available despite there being a multiplicity of receipts for fuel at or about the same time.

In the end of the day however after some discussion he basically confined his remarks to a question of failure to discharge the onus by the Appellant.

Decision

The Tribunal found no reason to regard officer Abercrombie as a witness unworthy of credit. He said that there had only been two visits to the Appellants farm one in 1994 and one in 2006. The Tribunal accepted that evidence preferring it to that of the Appellant. It also established that there was no visit to or "tip off" given by her neighbours. He produced the type of record with which he was able to refresh his memory and said that he had no record of any visit or any testing of fuel in relation to vehicles belonging to the Appellant. He spoke to his records and made it clear there required to be recorded every challenged vehicle whether guilty or otherwise. Indeed that must be so because otherwise he could not justify his trip and claim for expenses he being stationed in Dundee. If he were to record nothing anytime he challenged a vehicle which did not contain rebated fuel his superiors would have had reason to question what he was doing. Accordingly the records are likely to be accurate. They do not show any previous challenge of the Appellants vehicles other than 1994. Whether or not the vehicle which was undoubtedly present at the farm belonged at that time to the Appellant or to a scrap merchant or whatever is neither here nor there. The purpose of requiring the production of the letter was to ascertain that the recent visit was as a result of a previous offence as Mr Jackson had said in his interview.

Additionally the neighbouring vandals did not on examination of their premises have any red diesel, they specialised in using Kerosene to supplement their fuel, the visit to the neighbours followed that of the Appellant and at that visit the officers encountered a measure of trouble and difficulty.

These matters are of marginal significance in relation to the question now properly placed before the Tribunal. The Tribunal approaches the matter in this way; the onus of establishing an innocent reason for the presence of rebated fuel lies on the Appellant. There is a statutory presumption under HODA 13(7) noted above that the owner is liable unless somebody entitled to possession of the vehicle can be found liable. In this case the Appellant was the owner. Mr Jackson may also have been entitled to possession. The result is however that on the evidence now before the Tribunal it cannot be held that there has been established on the balance of probabilities an innocent reason for the presence of the rebated fuel in the vehicles.

At the first Hearing there was a question about whether the fuel had been taken in for use the evidence at the second Tribunal indicated that this was indeed the case and accordingly the Appellant has failed to establish that the second review decision was one which no reasonable officer could have arrived at and the appeal is dismissed.

The Tribunal received after the Hearing a letter from Mr Jackson dated 12 February 2008 in which assertions were made that a signature on a statement which was put before the Tribunal relating to the events in January 1994 had been forged. This assertion is truly of no significance to the Tribunals decision since there was clearly established at both the first and second Hearings that Mr Jackson had admitted to the receipt of a notice of warning, i.e. that of 10 February 1994. Whether this document was ever communicated to the Appellant may be thought doubtful in the light of her adamant denial of ever having seen it.

T GORDON COUTTS, QC

CHAIRMAN

RELEASE: 27 FEBRUARY 2008

EDN/07/8006