United Kingdom VAT & Duties Tribunals (Excise) Decisions

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URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2008/E01140.html
Cite as: [2008] UKVAT(Excise) E1140, [2008] UKVAT(Excise) E01140

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David Blaikie v Revenue & Customs [2008] UKVAT(Excise) E01140 (07 October 2008)

E01140

EXCISE DUTY – use of 'red diesel' – one vehicle dipped –a second r vehicle included - insufficient and conflicting evidence provided by appellant - original assessment approximately halved as a result of correspondence – appellant failed to attend - assessment correct – appeal dismissed

MANCHESTER TRIBUNAL CENTRE

DAVID BLAIKIE Appellant

- and -

THE COMMISSIONERS FOR HER MAJESTY'S

REVENUE AND CUSTOMS Respondents

Tribunal: DAVID S PORTER (Chairman)

J P M DENNY (Member)

Sitting in public in Manchester on 4 September 2008

Julian Winkley of counsel instructed by the acting solicitor for the Commissioners for HM Revenue and Customs, for the Respondents

No one appeared for the Appellant

© CROWN COPYRIGHT 2008

DECISION

David Blaikie ("the Appellant") appealed against an assessment in the sum of £3053.38 in respect of rebated excise duty which had been confirmed on a review contained in a letter dated 8 August 2007.

The Appellant did not appear at the tribunal but Miss A Cook, the reviewing officer, having considered the evidence provided by the Appellant in correspondence, amended the assessment, on both the vehicle which had been stopped and on a second vehicle owned by the Appellant, to the sum of £1453.21at the time of the hearing.

Julian Winkley, of counsel, appeared on behalf of Her Majesty's Revenue and Customs and produced a bundle of documents for the tribunal. James Toft, Kenneth Goodliffe and Angela Cook attended as witnesses for the Respondents. As no one appeared for the Appellant this tribunal determined to proceed under rule 26(2) of the Value Added Tax Tribunal Rules 1986 (as amended)

The Facts

We found the following facts: The Appellant is the sole-proprietor trading as Dave's Building Services and on 23 June 2007 he was stopped by the Macclesfield police for a routine traffic inspection.The running tank of vehicle L547 JSG was dipped and the fuel appeared red in colour. At the subsequent interview the Appellant indicated that he did not know why there was red diesel in the tank. He was also told that the Respondents would wish to examine his books to see if there was any other misuse of red diesel. His vehicle was restored to him on the same day on the payment of £500. In the absence of the Appellant at the hearing we have relied on the evidence from the witness statements and the correspondence passing between Miss Cook and the Appellant. We must commend Miss Cook for the thoroughness of her investigation and the consideration shown to the Appellant. According to the correspondence it appears that the Appellant put the red diesel into the vehicle from a petrol can which he said belonged to a colleague who used it for his chain saw. This differs from his original comment at the interview. He also gave evidence as to the ownership of vehicle L547 JSG and L311NYC the other diesel van that he owned at the time. His evidence as to the dates of ownership and the use of those vehicles did not agree with the evidence deduced by Miss Cook from her own enquiries. We are satisfied that the periods used for her assessment as eventually amended, are correct. The assessment was calculated as follows:

Ford Transit 120 D L547 JSG

Ownership 24.06.06 to 23.06.07

Average miles covered for period 14,000 miles (The Appellant admitted to approximately 15,000 in his correspondence)

Approximate MPG for vehicle 21.5 mpg 14,000 miles required 651.16 gallons

651.16 gallons at 4.54609 per litre = 2960.2 litres

Nissan Vanette L 311NYC

Ownership 201/11/03 to 19/10./6

Average miles covered for period 26,235 miles

Approximate MPG for vehicle 30.3 mpg 26,235 miles required 865.84 gallons

865.84 gallons at 4.54609 per litre = 3936.3 litres

Total litres required to perform estimated mileage of both vehicles 6896.40

Schedule of fuel receipts submitted for both vehicles 472.82

----------

Litres unaccounted for 6423.60

Duty was therefore payable on that amount (ie) £3053.38

The Appellant had to have an operation and due to his recuperation period Miss Cook agreed to allow an 8 month period during which he could not use the vehicles. We consider that to be very generous not least because the Appellant stated in one his letters that a friend had driven the vehicle for him when they went fishing. We consider that it is likely that similar arrangements were made for his work. Miss Cook also agreed to reduce the mileage on the two vehicles to correspond with his suggested ownership periods. This in spite of the fact that the Appellant was unable to identify the actual date when vehicle L 311 NYC was scrapped. As a result the assessment has been reduced to £1453.21.

The Law

Section 6 of the Hydrocarbon Oils Duties Act 1979 ( "HODA") provides for the levy of excise duty on hydrocarbon oil delivered for home use and by virtue of section 11 a rebate of duty is allowed at the time of delivery.

Section 12 of HODA prohibits the taking in or use of that heavy oil in road vehicles.

Under section 13 where such heavy oil is taken into or used in a road vehicle with the intent of contravening section 12A the Commissioners may assess an amount equal to the rebate on like oil at the rate in force at the time of contravention as being excise duty due from any person who used the oil or is liable for it being taken into the road vehicle.

The assessment is issued pursuant to the provisions of section 13.

Summing up

Mr Winkley said that James Toft, Kenneth Goodliffe and Angela Cook had attended at the hearing as the Appellant had not indicated that he had agreed their statements. Miss Cook travelled from Edinburgh for the hearing. We agreed to treat the evidence from the witnesses as evidence in chief and did not require them to give evidence under oath. Mr Winkley submitted that it did not matter that the second vehicle had not been dipped to ascertain if it also contained red diesel. He referred us to the decision of Mr Justice Mann in Thomas Cornell -v- Her Majesty's Revenue and Customs [2007] EWCH 715(ch). Mr Justice Mann decided that further vehicles could be assessed within the terms of section 13 of HODA. He said:

(At paragraph 30) " It does not seem to me that the terminology of section 12 (1)(a) requires that one has to catch a particular vehicle with red diesel in its tanks or anything like that. An assessment can be made where it is demonstrated that oil has been "used or is taken into a road vehicle" in contravention of section 12(2) It is not possible to read into part of the section any particular evidential requirements as to how closely one has to tie in any particular fuel to any particular vehicle. All one can say about the quality of the evidence that underlies such an assessment is that there has to be enough".

In the circumstances of the present case Miss Cook had made an appropriate assessment based upon information that she had discovered for herself and from information provided by the Appellant. The reduction of the assessment to £1453.20 was more than reasonable and the tribunal should uphold the assessment.

The decision

We have considered all the facts and the law and have decided that the assessment must stand. We are satisfied that Miss Cook has obtained all the information that she could reasonable have done and, in fact, that she has been generous in the reductions she has allowed. In the absence of the Appellant, and on the basis that he could only produce a few receipts for the entire diesel he has purchased for the two vehicles, we accept that he must have been using red diesel in both vehicles. Further at no point in the correspondence has he denied that he was not using red diesel in vehicle L 311 NYC. In fact the evidence in his correspondence has been contradictory and less than believable. We therefore dismiss the appeal.

Mr Winkley asked that cost be awarded against the Appellant as all the witnesses had to come to the hearing and he had failed to attend. He asked for costs of £500 which we award.

David S Porter

CHAIRMAN

Release date: 7 October 2008

MAN/07/8093