[2009] UKFTT 147 (TC)

TC00115
Appeal Number: Man/08/8119 

FIRST TIER TRIBUNAL TAX

 EXCISE DUTY – RESTORATION OF MOTOR VEHICLE SUBJECT TO CONDITIONS – HMRC Officers discovered red diesel in the fuel tank of a vehicle – Appellant contended that the red diesel was already in the vehicle when he bought it and that he never used the vehicle on the public road – the vehicle had a current tax disc and parked in a yard with ready access to red diesel – review decision reasonable – Appeal dismissed

DECISION NOTICE (FULL REASONS)
Rule 35(2) The Tribunal Procedure (First Tier Tribunal) (Tax Chamber) Rules 2009 

	MARSHALL GORMAN	Appellant

	- and -

         THE COMMISSIONERS FOR
	HER MAJESTY’S REVENUE and CUSTOMS	Respondents

			Tribunal: MICHAEL TILDESLEY OBE	 (Chairman)
				      PETER WHITEHEAD                (Member)	  

Sitting in public at Manchester on 22 May 2009

Appellant appeared in person

Josh Shields counsel instructed by the Solicitor’s office  of HM Revenue & Customs, for the Respondents

© CROWN COPYRIGHT 2009

DECISION
The Appeal
1.	The Appellant was appealing against HMRC’s decision on review dated 29 August 2008 offering restoration of a Ford Transit Tipper registration number PN03 VBP LKA (hereinafter known as “the vehicle”) subject to payment of a fee in the sum of £700.
The Dispute
2.	The Appellant contended that he should not have to pay the fee because he never used the vehicle on a public road and that the red diesel in the fuel tank was already there when the vehicle was delivered to the Appellant’s address. 
The Evidence
3.	The Tribunal heard evidence from the Appellant and Mr Collins, the Review Officer. A bundle of documents was presented to the Tribunal.
Summary of Facts and Arguments
4.	On 25 October 2007, as part of a police operation, HMRC Officers attended at Riverside House, Over near Gloucester with the purpose of examining several vehicles suspected of running on red diesel. The Officers found a large green fuel tank, marked gas oil, and a fuel gravity pump in two sheds at Riverside House. The Officers took samples of fuel from several vehicles parked at Riverside House. The sample taken from the vehicle which was the subject of this Appeal was red in colour, and tested positive for containing duty-rebated marked fuel. At the time of the search the ignition keys were in the vehicle. Three other vehicles on the site were also found to contain red diesel. The Officers seized the vehicle and served Notice of Seizure on the registered keeper, which was not the Appellant.
5.	The Officers checked the details of the vehicle with DVLA which established that the vehicle was taxed as a road vehicle and that a SORN declaration had not been completed to confirm that the vehicle was off-road.  The Officers recorded the vehicle as taxed in their notebooks. Further, the Appellant’s solicitors in a letter dated 30 July 2008 admitted on behalf of their client that the vehicle was taxed. The Appellant in his evidence before the Tribunal asserted that there was no current tax disc for the vehicle. The Tribunal decided on balance that the vehicle was taxed as a road vehicle.
6.	On 19 February 2008 the Appellant’s solicitors contacted HMRC requesting restoration of the vehicle. The Appellant claimed that the vehicle was being advertised for sale in the local newspaper. The Appellant attended for interview on 5 June 2008, at which he produced a receipt for purchase of the vehicle from a Mr Price on 21 July 2007 for the sum of £5,300. HMRC accepted that the Appellant was the owner of vehicle. 
7.	On 23 June 2008 HMRC offered restoration of the vehicle in return for a fee of £700. The fee was calculated from the penalties under section 9 of the Finance Act 1994, £250 for taking in the red diesel and £250 for using red diesel plus £200 removal costs. On 24 July 2008 the Appellant sought a review of the decision. On 24 October 2008 the Appellant recovered the vehicle by paying the fee without prejudice to his right of Appeal.
8.	No valid application was made to challenge the seizure of the vehicle. HMRC letter dated 24 June 2008 stated that an Appeal against seizure had been received from the Appellant but was rejected as being out of time.
9.	The Review Officer concluded from the above facts that
“The vehicle was taxed for road use, and the SORN declaration had not been completed to say the vehicle was off-road. On the same site that Customs seized your client’s vehicle, they also seized a further three vehicles containing rebated fuel. There was also a green plastic tank on the same site marked gas oil with a gravity pump in addition to various fuel paraphernalia. In the light of those details and on balance of probabilities I would have to conclude that the vehicle was fuelled with duty rebated gas oil at the site it was detected and tested by Customs. I am satisfied that the seizure of the vehicle and the restoration fee levied is both fair and reasonable in this case”.
10.	The Appellant had a working yard at Riverside House where he kept several vehicles which were used for agricultural work. The tank of gas oil supplied the fuel for the agricultural vehicles. The Appellant purchased the vehicle in question with the intention of converting it to a horse box. He denied using the vehicle on public roads. The vehicle was delivered on the back of a lorry to the Appellant’s yard, where it laid idle until seized by HMRC. The Appellant stated that he did not fuel the vehicle with red diesel which must have already been in the vehicle’s fuel tank when he bought it. The Appellant did not call evidence from the previous owner of the vehicle. In interview he was unable to provide copies of  fuel receipts for October 2007. The Appellant was very critical of HMRC. He accused them of trying to sell his vehicles without authority. He also believed that HMRC should have provided him with a sample of the fuel taken from the vehicle.
Reasons
11.	The jurisdiction of the Tribunal is to find the primary facts and to decide whether in the light of those findings Mr Collin’s decision was reasonable. In order for the decision to have been reasonable Mr Collins must have considered all relevant matters and must not have taken into consideration irrelevant matters.
12.	The Tribunal finds on balance the following facts :
(1)	The Appellant had owned the vehicle for three months before it was seized. The ignition keys were in the vehicle at the time of seizure.
(2)	During the three months of ownership no work had been carried out on the vehicle by the Appellant to convert it to a horsebox.
(3)	 Red diesel was found in the fuel tanks of the vehicle and three other vehicles parked in the yard at Riverside House.
(4)	The vehicle was taxed for use on public roads. No SORN declaration had been completed to confirm that the vehicle was off-road.
(5)	The Appellant had ready access to red diesel which was stored in a fuel tank in the yard at Riverside House.
13.	The Tribunal concludes from the above facts that it was highly unlikely that the vehicle was left standing in the yard for three months, and that the Appellant had used the vehicle on the public road with red diesel in its tank. 
14.	The Tribunal’s findings of fact accorded with the facts relied upon by Mr Collins when upholding the decision to offer restoration subject to a payment of a fee of £700. The Tribunal found no evidence of Mr Collins taking into account some irrelevant matter, or disregarding something to which he should have given weight. The Appellant put forward no grounds of suffering exceptional hardship from the conditional restoration of the vehicle.
15.	The Tribunal considers that a fee of £700 was proportionate to the Appellant’s culpability and the value of the vehicle.
Decision
16.	The Tribunal is satisfied that HMRC decision on review dated on review dated 29 August 2008 offering restoration of the vehicle subject to payment of a fee in the sum of £700 was reasonably arrived at within the meaning of section 16(4) of the Finance Act 1994.  The Tribunal, therefore, dismisses the Appeal.

            

                                 MICHAEL TILDESLEY OBE
CHAIRMAN
RELEASE DATE: 24 June 2009

MAN/

Notes
17.	A party wishing to Appeal this decision to the Upper Tribunal must seek permission by making   an application in writing to the Tribunal within 56 days of being provided with full written reasons for the decision. An application for permission must identify the alleged error(s) in the decision and state the result the party making the application is seeking.