E00402

CIVIL PENALTY – Section 9 FA 1994 – Rebated fuel in vehicle – Whether reasonable excuse – Appeal dismissed – Duty assessment – Appeal dismissed

LONDON TRIBUNAL CENTRE

	STEWART ROXBOROUGH	Appellant

	- and -

	THE COMMISSIONERS OF CUSTOMS AND EXCISE	Respondents

				Tribunal:	R L BARLOW  (Chairman)
						R S SURI

Sitting in public in London on 11 March 2003

The Appellant in person

Mr M Angiolini of counsel, instructed by the Solicitor for the Customs and Excise, for the Respondents

© CROWN COPYRIGHT 2003

DECISION

1.	This is the unanimous decision of the tribunal concerning an appeal by the appellant against the imposition on him of a penalty in the sum of £250 under section 9 of the Finance Act 1994 in respect of conduct alleged to attract a penalty under that section by reason of section 13 of the Hydrocarbon Oil Duties Act 1979, as amended, such conduct being the use of rebated fuel contrary to section 12 of the Hydrocarbon Oil Duties Act 1979.  The appellant also appealed against an assessment of £7.68 made under section 12(2) of the Hydrocarbon Duties Act 1979 in respect of the rebated fuel alleged to be in the tank of his vehicle.  Those decisions were reviewed in a letter dated 18 April 2002 and the notice of appeal was received on 30 April 2002.

2.	We would like to thank Mr Angiolini for his careful and helpful submissions and for explaining the relevant legislation in a way which enabled the appellant to present his case to best effect.  We also thank both parties for presenting the case in a polite and gentlemanly manner.  Mr Roxborough clearly felt strongly about the matter but he did not allow that to affect his presentation of his case.      

3.	Mr Roxborough’s white Peugeot N381 JFB was stopped at Coquelles on 5 January 2002 and seized because of importation of excise goods which were allegedly not for his own use.  That seizure and the non-restoration of the vehicle have led to an appeal to the tribunal which, perhaps unfortunately, was not heard at the same time as this appeal and remains to be determined.  We make it clear that nothing we have decided in this appeal has any bearing on that appeal because the vehicle was not seized as a result of the presence of rebated fuel in the tank and indeed the fuel was not tested until 10 January 2002 after the seized vehicle had been returned to the United Kingdom.

4.	The evidence consisted of the Commissioners’ bundle of documents to which was added a copy letter from the appellant dated 21 January 2003 and the oral evidence of Mr Stephen Turner, officer of Customs and Excise, and that of the appellant.

5.	We find the following facts based on Mr Roxborough’s evidence.  He owned five ex-MOD fuel cans which he bought from an army surplus dealer in Baldon Hampshire and kept diesel fuel in them at his home.  They are 20 litre cans and he paid £5 each for them.  Before the trip to France and Belgium that gave rise to this appeal Mr Roxborough had filled up his vehicle fuel tank from the cans and took two of them with him, empty, to fill up on the continent.  He travelled about 110 miles from his home to the Channel Tunnel and then about a further 60 miles on the continent before filling up at a service station, having therefore travelled 170 miles.  He then travelled about 60 more miles before reaching Coquelles, where the vehicle was seized.  In total he had therefore travelled 230 miles after leaving home and before being stopped and he had topped up the vehicle shortly before the seizure.

6.	The remainder of the evidence was in dispute and we make the following findings based upon all the evidence.

7.	Customs and Excise stated in the road fuel offence report, confirmed by Mr Turner’s evidence, that Mr Roxborough’s vehicle tank capacity is 60 litres, though the source of their information was not apparent.  Mr Roxborough stated that he had never had to put more than 47 litres in the tank after the warning light had appeared in his vehicle and although he doubted that the capacity was as much as 60 litres he was unable to state what it was.  Although we find that the capacity was 60 litres the appeal does not ultimately turn on this, as we shall explain.  Mr Roxborough stated that his vehicle could travel 40 to 50 miles to a gallon and we make a finding to that effect.

8.	Mr Roxborough did not dispute that the test carried out by Customs and Excise showed that the tank of his vehicle contained fuel that was contaminated by the ‘markers’ which are added to rebated fuel in the United Kingdom.  His explanation was that there must have been some such oil in the cans when he bought them and that it must have been introduced into the vehicle innocently when he filled up from the cans.  In evidence in chief he stated that the amount of fuel in the cans when he bought them would be ‘small’ and when cross examined he said that there might have been £2 or £3 worth of fuel in the cans when he bought them (i.e. a gallon or so).  As the cans only cost £5 that might have been unlikely but, again, for reasons which will appear below, nothing turns on this either.

9.	At one point in his evidence Mr Roxborough seemed to admit that he had used the cans to fill up the vehicle tank on an earlier occasion than the relevant trip and to be suggesting that the test for the markers gave a positive result only because of traces left over from the earlier contamination.  However, Mr Turner’s evidence and the test results prove to our satisfaction, and we so find, that on 10 January 2002 thirty per cent of the fuel in the vehicle tank was rebated fuel of UK origin.  Even assuming the tank only holds 47 litres (about 10 gallons), which is a minimum figure, it follows that at least 3 gallons of non duty paid fuel must have been put in the tank before the journey began.  In fact, given that the vehicle had travelled 170 miles before being filled up on the continent, for it to contain 30% rebated fuel at the time of the test it must have been contaminated by more than 30% at the time of departure from Mr Roxborough’s home because the fuel bought on the continent would have diluted the proportion of rebated fuel in the tank.  Three gallons is therefore an underestimate of the quantity of rebated fuel placed in the tank.  If, as we have found, the tank holds more than 47 litres the quantity of rebated fuel originally introduced is further increased.

10.	We find that in excess of three gallons of rebated fuel was placed in the tank before Mr Roxborough left home and we reject his evidence about how the fuel came to be in the tank.  His account of accidental introduction of small quantities left in the cans when he bought them is not credible because the amount of fuel left in the cans when he bought them would have to have been such that it would be obvious that it was there but he denied that he knew there was any significant amount in the cans at all when he bought them.  We also find that he would certainly have checked the contents of the cans before using them to refuel his vehicle.  Indeed he implied that he had done so when it was put to him in cross examination that he would not have refuelled it without checking and he replied that he knew the smell of diesel and thereby implied that he had checked the contents of the cans.

11.	Section 10 of the Finance Act 1994 places the burden upon the appellant to prove that he has a reasonable excuse for the conduct giving rise to the penalty and we are not satisfied that he has discharged that burden.  Deliberately placing fuel into a vehicle knowing or suspecting it to be rebated oil clearly negates any possibility of there being a reasonable excuse in any but very exceptional circumstances (some kind of emergency for example) and our finding is that Mr Roxborough deliberately introduced oil from the cans into the vehicle knowing it to be rebated.  There are no exceptional circumstances and so accordingly we hold him liable to the penalty.

12.	Liability to the assessment for the duty follows our findings and holdings above.  

13.	The amount of the assessment is a matter for judgment and section 12 of the Finance Act 1994 requires the Commissioners to assess it to the best of their judgment.  We have no doubt that the assessment was to best judgment.  The only relevant issues were as to liability for the duty, which cannot be in dispute in the circumstances, and the amount of the duty.  As to the latter, although there has been some dispute as to the tank capacity of the vehicle and therefore what quantity of fuel the 30% of rebated fuel constituted, we have no hesitation in holding that the Commissioners acted in best judgment in assessing on the basis of a 60 litre tank.  In fact, the burden of proof to show the contrary rests upon the appellant and we hold that he has not proved the tank capacity to be other than 60 litres.  The calculation of the amount of duty therefore became a purely mathematical exercise.

14.	The appeal is dismissed both in relation to the penalty and the duty assessment and there is no order for costs.

RICHARD BARLOW
CHAIRMAN

RELEASED: 11 May 2003

LON/02/8121
££Stewart Roxborough v The Commissioners of Customs and Excise [2003] UKVAT(Excise) E00402 (11 April 2003)