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	Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Customs & Excise v Vat & Duties Tribunal Decision [1999] ScotCS 67 (5 March 1999) URL: http://www.bailii.org/scot/cases/ScotCS/1999/67.html Cite as: [1999] ScotCS 67

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In this appeal under section 11 and Schedule 1 of the Tribunals and Inquiries Act 1992, the appellants seek to set aside a decision of the VAT and Duties Tribunal dated 30 November 1998 and to restore the decision of the appellants that the respondent, Alexander McConnachie, did not have a reasonable excuse for taking in and using gas oil as fuel in a road vehicle. As a consequence of that decision two civil penalties, each of £250, were imposed by the appellants upon the respondent. The matters in respect of which these penalties were imposed were said to be under (first) section 12(2)(a) of the Hydrocarbon Oil Duties Act 1979 as amended ("the Act") and under (second) section 12(2)(b) of the Act.

The respondent asked for a review of the original decision of the appellants on the ground that he had good reason to use gas oil as fuel. The tribunal found as a fact that the respondent had been supplied with and had used rebated gas oil (known as "red diesel") on 9 December 1997 in his own vehicle, a Ford Transit van registered number D40 BKS having a current PLG excise licence. They disbelieved evidence presented for the respondent to the effect that he had had good reason to use the "red diesel". The tribunal went on to find that the respondent knew that he was not permitted to be supplied with or to use "red diesel" in his road vehicle; that he was supplied with and used said "red diesel" and that he had no reasonable excuse for so doing. On the basis of the above findings the tribunal held that it had been established that fuel on which rebate had been allowed had been used in the respondent's vehicle. Having so held the tribunal then determined that upon a proper construction of sections 12 and 13 of the Act, the penalties provided for in section 13(1) in relation to a single individual were alternative, not cumulative. Accordingly since use of fuel on the part of the respondent had been established, the appropriate penalty might be applied in that respect only.

The appellants seek to challenge the tribunal's decision on the following ground:

Before this court only the appellants appeared as parties. There was no appearance for the respondent.

In terms of section 11 of the Act, subject to sections 12 and 13 , where heavy oil charged with the excise duty on hydrocarbon oil is delivered for home use, a rebate of duty is allowed at a specified rate. Section 12 provides that rebate is not allowed on fuel for road vehicles and is in the following terms:

Section 13 provides for the penalties for misuse of rebated heavy oil. It is in the following terms:

In terms of section 27(1) "road vehicle" means a vehicle constructed or adapted for use on roads but does not include any vehicle which is an excepted vehicle within the meaning given by Schedule 1. The exceptions include unlicensed vehicles not used on public roads and other specified vehicles, such as tractors, digging machines and the like, used on public roads solely for certain purposes.

Section 9 of the Finance Act 1994 ("the 1994 Act") sets out the penalties for contraventions of statutory requirements. Subsection (1) provides that the section applies "to any conduct in relation to which any enactment....provides for the conduct to attract a penalty under this section". Subsection (2) provides that "any person to whose conduct this section applies shall be liable.....(b) in any other case, to a penalty of £250."

The submissions for the appellants, shortly put, were that, under reference to the deeming provisions contained in section 12(3) of the Act, separate and distinct prohibitions were to be found in section 12(2) of the Act. Breach of these prohibitions arose from separate and distinct actions, namely the taking of heavy oil on which rebate has been allowed into a road vehicle as fuel and the use of such heavy oil as fuel for that road vehicle, not being an excepted vehicle, without payment of any amount as provided for in that subsection. These separate and distinct prohibitions found expression in section 13(1)(a) and (b) of the Act respectively for the purpose of attracting civil penalties under section 9 of the 1994 Act and as the constituents of separate and distinct offences created by the terms of section 13(3)(a) and section 13(4) of the Act. Accordingly where an individual had taken rebated heavy oil into a road vehicle as part of the supply of fuel for the engine of the vehicle, without having paid rebate to the appellants on like oil as provided for in section 12(2) of the Act, his conduct served to attract a penalty in terms of section 13(1). If it could be established that he did so with intent that the restrictions imposed by section 12(2) should be contravened, he could be found guilty of an offence in terms of section 13(4). In that event, on conviction he became liable to a penalty which could be measured by the value of the oil in question: measurement of the quantity of the oil to be valued would be the same as in the case where the appellants sought recovery of rebate on like oil in terms of section 13(1). If that same individual thereafter drove the road vehicle with the same rebated heavy oil as part of its supply of fuel without having paid rebate to the appellants on like oil as provided for in section 12(2), he attracted a further penalty in terms of section 13(1). If the necessary intent was proved, he could be found guilty of an offence in terms of section 13(3)(a) and would become liable to a penalty similar to that in the case of conviction in terms of subsection (4). If charged cumulatively with an offence under section 13(3)(a) and (4), the double jeopardy rule would not apply, since the two charges were concerned with contraventions of two separate and distinct statutory offences which in either case could only proceed on a consideration of supplementary facts (Harris v. Adair 1947 J.C. 116). Reference was also made to Kyle v. H.M.A. 1988 SLT 601.

The submissions for the appellants proceed on the factual basis that the respondent took in the "red diesel" to his vehicle and thereafter drove the vehicle using it as fuel for the engine propelling the vehicle. While there is no precise finding to that effect in the tribunal's decision, we are content to proceed on that basis since it formed part of the original decision of the appellants and the tribunal rejected the exception of reasonable excuse for his conduct which the respondent put forward in relation to penalty in terms of section 10 of the 1994 Act. Because the respondent was the owner of and in charge of the vehicle at the time when the rebated fuel was taken into it, he was, by virtue of section 13(7) of the Act, a person who was liable for the oil being taken into his vehicle. The gravamen of the restrictions which are imposed by section 12(2) is that rebated oil shall not be taken into the fuel supply of a road vehicle and used in a road vehicle, not being an excepted vehicle, unless rebate on "like oil" has been paid to the appellants. "Like oil" must mean the quantity of oil taken in to the vehicle's fuel supply which then becomes available for use as fuel. The contravention of section 12(2) by an individual as a person liable for taking oil into a road vehicle arises upon his failure to pay an amount as specified in subsection (2) in respect of like oil to the oil taken into the vehicle's fuel supply. That failure continues if he then uses the oil as fuel for the vehicle without such payment. Of course, where an individual, not being the person liable for taking oil into the road vehicle, uses the oil as fuel for the road vehicle, it is his failure to pay the amount specified in subsection (2) in respect of like oil to the oil used that gives rise to his contravention of section 12(2). This distinction between the person liable for heavy oil being taken into a road vehicle in contravention of section 12(2) and the person who uses heavy oil in contravention of that subsection, is recognised in section 13(1). Section 13(1) is framed to cover both the case where the user of the oil is not the person liable for taking in the oil and the case where the same person is both the person liable and the user. The subsection opens with the phrase "where any person". Then follow paragraphs (a) and (b), one or other of which, but not both, have to apply to that person. The conduct which attracts a penalty under section 9 of the 1994 Act is then determined by whether it is his use of oil in terms of paragraph (a) or his becoming liable in terms of paragraph (b) which is founded on by the appellants, as is made clear by the phrase "as the case may be". That this is the proper construction is made the clearer by the latter part of the subsection which enables the appellants to seek recovery of a single amount measured by reference to "like oil" at a rate in force "at the time of the contravention". The time of the contravention will be related to the act of taking in or to the use of the oil as the case may be. This conclusion is also consistent with the purpose of section 9 of the 1994 Act which is to impose a single penalty upon "any person" to whose conduct any enactment applies. We therefore agree with the conclusion of the tribunal that only one penalty could competently be imposed upon the respondent in respect of his conduct which constituted a contravention of section 12(2). However we would not agree with the tribunal that the appropriate penalty which fell to be applied could only be one in respect of the respondent's use of oil since it was plain on the facts that as the owner and having charge of the vehicle when the oil was taken into the vehicle, he was for the purposes of section 13 a person liable for the oil being taken into the vehicle by virtue of subsection 7 and so his conduct as such a person could giv

We would only add that we find nothing in subsections (3)(a) and (4) of section 13 of the Act to indicate that a person who has acted as did the respondent in the present case, could competently be charged cumulatively with an offence under both subsections. In this regard we do not consider it necessary or helpful to look back to the legislative history or the changes of past statutory provisions out of which these subsections emerged. In the case of each offence the intent which requires to be established is the same, namely, intent that the restrictions imposed by section 12 should be contravened. Those restrictions extend to prevent misuse of rebated heavy oil by taking it into the fuel supply of a road vehicle and its use in that vehicle as fuel. In the case of an offence in terms of subsection (4) it would be necessary to establish that the person charged, namely the person liable for heavy oil taken into a road vehicle, intended that it be used as fuel for the vehicle in contravention of section 12(2). If he was also the individual who used the oil as fuel for the vehicle into which he taken the oil, evidence of that fact would serve as much to prove an offence under subsection (4) as it would if he had otherwise been charged in terms of subsection (3)(a) and vice versa. Accordingly the fact of use by that individual of that same oil as fuel for the vehicle would not amount to that kind of supplementary fact to which reference was made in Harris v. Adair or Kyle v. H.M.A., such that it made the one offence separate and distinct from the other so as to avoid the rule against double jeopardy. Where the person liable for taking the oil into the road vehicle's fuel supply and the person using the oil as fuel in that vehicle in contravention of section 12(2) are different, no such considerations arise.

In the circumstances we do not consider that the tribunal erred in law in reaching its decision on the ground that it did. We shall accordingly refuse the appeal.