United Kingdom VAT & Duties Tribunals (Excise) Decisions

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URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2008/E01151.html
Cite as: [2008] UKVAT(Excise) E01151, [2008] UKVAT(Excise) E1151

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Barry Atkinson v Revenue & Customs [2008] UKVAT(Excise) E01151 (24 November 2008)

E01151

Excise duty-red diesel-alleged contamination from jerry can or from use by Customs of contaminated equipment- approximately 20% of red diesel found in fuel in the Appellant's tank- allegations that Customs officers lied- vehicle seized - restoration offered on payment of £250- appeal against amount of restoration fee- hardship- appeal dismissed.

MANCHESTER TRIBUNAL CENTRE

BARRY ATKINSON Appellant

and

COMMISSIONERS OF REVENUE AND CUSTOMS Respondents

Tribunal: Elsie Gilliland (Chairman)

Carole Roberts (Member)

Sitting in public in Manchester on 22 September 2008

No attendance by or on behalf of the Appellant

Miss Katy Jones counsel instructed by the Solicitors Office of HM Revenue and Customs for the Respondents

© CROWN COPYRIGHT 2008
 


DECISION

1. The appeal is that of Barry Atkinson (the Appellant) against a decision on review on 3 April 2008 to uphold the decision of Customs made on 8 February 2008 to require payment of a restoration fee of £250 on the restoration of the Appellant's vehicle.
2. The Appellant did not attend the hearing. The tribunal determined to proceed under Rule 26 (2) of The Value Added Tax Tribunals Rules 1986 as requested by Counsel for Customs.
3. Counsel assisted the tribunal by outlining the background of the appeal and Julie Wiggs the Review Officer gave evidence.
4. We were told that on 8 February 2008 the Appellant was stopped in his vehicle which was a Ford Mondeo registration number M349 BLW (the vehicle) by officers from the Road Vehicle Testing Unit who were on duty with the police at a road check in Fitzwilliam Road in Rawmarsh Rotherham. Tests were carried out on the fuel in the running tank. The fuel tested positive for rebated fuel.
5. The Appellant was interviewed under caution and a copy of the interviewing officer's notebook is in the bundle of documents produced to the tribunal by Customs. We have noted that this was signed at the bottom and dated by the Appellant beneath a declaration that the record was read to him and that it was an accurate account.
6. The vehicle was seized under s139 (1) of CEMA as being liable to forfeiture under s141(1) (a) of the Act and the fuel as liable to forfeiture under s13 (6) of the Hydrocarbon Oils Act 1979. Under the provisions of the Hydrocarbon Oil Duties Act 1979 a tax rebate is not allowed on fuel for road vehicles (s13) and the penalty for misuse of rebated heavy oil is forfeiture. In addition s141 of the Customs and Excise Management Act applies.
7. Restoration of the vehicle was offered on 8 February 2008 in the sum of £250 but this was declined by the Appellant and the vehicle was removed to storage. Subsequently on 27 February 2008 a civil penalty in the sum of £250 was issued on form EX601 by Customs. There was no appeal against this before us at the hearing.
8. In the record in the notebook the Appellant had said that he was responsible for fuelling the vehicle but had not put red diesel into the tank. He said that he had put fuel in the tank the previous day from a jerry can. He had first tipped out the contents of the can filled it with £5 worth of derv and put that into the vehicle. He was aware that it is an offence to fuel a road vehicle with red diesel and he stated also that the fuel in the vehicle had been checked 5 weeks earlier and there had been no problem.
9. The Appellant submitted a Notice of Appeal to the tribunal on 27 April 2008. His grounds of appeal were set out in an enclosed letter. He drew attention also to a number of inaccuracies he had identified in the paperwork of Customs. He had prior to this supplied copies of his driving licence and insurance and other documentation and expressed annoyance at the difficulty he and his wife had had in ascertaining from Customs the site to which the vehicle had been taken.
10. In his letter the Appellant stated that there had been contamination as the testing equipment had not been washed out from a previous test on a Honda Accord or a clean testing bottle used by the officer before the test done on the vehicle. There could also have been the risk of contamination from the jerry can which he said was not kept in the vehicle but at the side of his house. He drew attention also to his financial circumstances and the expense incurred in bus fares and the prohibitive cost of taxi fares.
11. Mrs. Wiggs in her evidence confirmed her witness statement of 11 June 2008 which corrected three errors in her review letter to which the Appellant had referred. She confirmed that these did not affect the decision she had made. She explained to the tribunal the policy of Customs when there is a first offence involving the use of rebated fuel as in the present case. Restoration is offered in the amount of the civil penalty which is £250 for the taking in of the fuel and £250 for its use in a road vehicle. This is subject to the value of the vehicle which in this case was taken to be more than £250 but less than £500. It was later found from the insurance document that the vehicle was valued at £1000.
12. The Appellant had said that he had used a jerry can to fuel the vehicle. Mrs. Wiggs stated that this meant that approximately 1 gallon of derv had been put in. However at the time the officers estimated the level of contamination as 20% which was high for the size of the can and the amount of fuel. She could not see how the contamination could have occurred as the Appellant had said.
13. The Appellant had alleged that contaminated equipment had been used when the testing was undertaken and referred specifically to a Honda Accord which had been tested before the vehicle and which had tested red and been impounded. Mrs. Wiggs told the tribunal that she had checked the officers log and found that no Honda Accord had been examined that day and that the vehicle had been the only positive result from a testing on that day at that site. In any event the officer had stated that all testing equipment had been cleaned thoroughly.
14. The Appellant had in correspondence referred to the needs of his children but Mrs. Wiggs pointed out that this had not been mentioned in the signed interview notes and no evidence of these nor of hardship had been produced. She was satisfied that the decision taken was reasonable.
15. The Appellant's grounds of appeal are set out in the letter dated April 2008 annexed to the Notice of Appeal dated 27 April 2008. It is the Appellant's contention that the information he has supplied "proves that the C&E officer has been dishonest in the information he has given". The officer referred to appears to be the officer who tested the fuel in the Appellant's vehicle. Neither the Appellant nor the officer has attended before us to give evidence. The Appellant also appeals on the grounds of "reasonable excuse".
16. In his grounds of appeal the Appellant has referred to 3 alleged factual errors in the decision of Mrs. Wiggs. None of these matters however in our view supports any suggestion that any officer of Customs has been dishonest nor do they invalidate Mrs. Wiggs's decision. The errors referred to are at most immaterial inaccuracies. The place where the Appellant was stopped has never been in dispute. It is clearly stated in the notes of the officers who stopped the Appellant that he was stopped at Fitzwilliam Road and not at Aldwarke Lane as stated by Mrs. Wiggs. It is also clear that she wrongly stated the date of the Civil Penalty Notice as 27 March 2008 and not the correct date of 27 February 2008. It is less clear whether the vehicle on seizure was taken to a compound at Aston or whether it was taken directly to Immingham but even assuming that the Appellant is correct, nothing turns on the point. Mrs. Wiggs also accepts that she was not justified in saying in her decision letter that the Appellant had kept the jerry can in the vehicle. There is no evidence that the jerry can was ever kept in the car. The Appellant's case was that it had been kept at the side of his house where presumably someone other than himself could have had access to it. It was Mrs. Wiggs's evidence before us that this error did not affect her decision. Having seen and heard Mrs. Wiggs give evidence, we are satisfied and find that she was an honest witness. Further we are satisfied that this error was not an essential step in her reasoning to confirm the imposition of a restoration fee of £250.
17. There is in our view no doubt when the Appellant was stopped on 8 February 2008 and the fuel in his tank was tested that red diesel was detected. The officers notes refer to the fuel sampled being red or pink in colour which they attributed to the presence of red diesel in the fuel. A subsequent analysis by the Laboratory of the Government Chemist of the sample taken from the Appellant's tank confirmed the presence of red diesel in the fuel and that the fuel was pink in colour. The analysis of the amount of quinizarin indicated that there was 21% of red diesel present. The analysis of solvent yellow 134 indicated 16% of red diesel. We are satisfied and find that when the Appellant was stopped the fuel in the Appellant's tank consisted of an admixture of approximately 20% of red diesel.
18. The Appellant has given 2 different explanations for the presence of red diesel in his fuel tank. The first explanation given when he was interviewed by Customs officers on 8 February was that the contamination had been caused because he had put £5 worth of ordinary (non rebated) diesel into the jerry can after emptying out whatever had been in the jerry can. The second explanation which was only raised subsequently was that the Customs officer who had drawn the fuel out of his tank had not cleaned out his equipment after having tested a Honda Accord which had been stopped before the vehicle and which had tested positive for red diesel. We agree with Mrs. Wiggs that neither of these explanations is credible. Neither explanation can in our view account for the significant proportion of red diesel found in the Appellant's fuel. Any contamination arising from any red diesel which may still have been adhering to the inside of the jerry can after it had been emptied out as the Appellant said could not in our view have caused the level of contamination to approach 20% or even 16% or colour the mixture as it did. Similarly even if, as the Appellant has alleged, the Customs officer had not cleaned out his equipment before testing the vehicle, the level of contamination would not in our opinion have been like the level found on analysis. In fact however it is apparent from Customs log that no Honda Accord tested positive for red diesel that day and the notes of the Customs officer concerned clearly state that clean equipment was used. We are satisfied and find that this second explanation for the presence of red diesel in the Appellant's fuel was a fabrication on the part of the Appellant and that it has no basis in fact. The allegation that the Customs officer lied is a blatant attempt to discredit the statement of the officer and we have no hesitation in rejecting it. We are satisfied and find that the Appellant did put a significant quantity of red diesel into his fuel tank and also that Mrs. Wiggs was fully justified in concluding that the Appellant had been knowingly using red diesel in the vehicle when he knew he was not entitled to do so. We are also satisfied that Mrs. Wiggs was correct in considering that the Appellant had sought to mislead by claiming that the contamination found was due to a failure to clean out the equipment used to draw fuel from the Appellant's fuel tank. In our view the Appellant did not have any reasonable excuse for the presence of red diesel in the fuel.
19. The decision to offer restoration of the vehicle on payment of a fee of £250 was fully in accordance with Customs practice for a first offence and where Customs were of the view that the vehicle was worth over £250 but less than £500. The Appellant has claimed that he had bought the vehicle for £150 but no evidence of the purchase price has been produced and it is inconsistent with the Appellant's insurance documents which give a value of £1,000 for the vehicle. We are satisfied that the value of the vehicle when seized was in excess of £250 and that Mrs. Wiggs was entitled to take that view.
20. The Appellant also seeks to rely on hardship caused by the requirement to pay a fee of £250 for the restoration of the vehicle. No details of any hardship were provided to Mrs. Wiggs before she confirmed the amount of the restoration fee. In the papers before us the Appellant now says that he is unemployed and in receipt of benefit of £224 a week out of which he has to pay £75 a week for bus fares for his 3 children to travel to and from school because he no longer has the car. No details of his other outgoings have been provided and there is no indication whether or not there is any other money coming into his household. We note that the Appellant does not actually say that he cannot raise the restoration fee of £250. As we have already stated, we are satisfied that the Appellant was knowingly using an admixture of red diesel in the vehicle. A person who knowingly uses red diesel in his vehicle when he is not entitled to do so must in our view expect to suffer some inconvenience and some financial detriment if he is found using red diesel when not entitled to do so and his vehicle is seized. The imposition of a restoration fee of £250 was in our opinion reasonable in amount. The Appellant has not established that he has suffered any undue or unreasonable hardship as a result of the requirement to pay a restoration fee of £250 before the vehicle is returned.
21. The appeal is dismissed. No application has been made for costs and we give no direction as to costs.

Elsie Gilliland

CHAIRMAN

Release date: 24 November 2008

MAN/2008/8079