EXCISE DUTY  — Hydrocarbon Oil Duties Act 1979 — penalties — whether reasonable excuse — no — appeal dismissed

MANCHESTER TRIBUNAL CENTRE

 
 	
	LEONARD A COFFEY	Appellant

	- and -

	THE COMMISSIONERS OF CUSTOMS AND EXCISE	Respondents

				Tribunal:	Lady Mitting (Chairman)
						Mr N F Townsend (Member)	

Sitting in public in Birmingham on 12 January 2004

The Appellant appeared in person

Mr Bernard Haley of the Solicitor’s Office of HM Customs and Excise for the Respondents

	© CROWN COPYRIGHT 2004
DECISION

1.	 The decision under appeal is that of the Commissioners dated 27 June 2002, taken on review, to uphold the imposition of two civil penalties under sections 13(1)(a) and (b) Hydrocarbon Oil Duties Act 1979 (HODA).

2.	We heard oral evidence from Mr Coffey and also from Mr A C Baker, the reviewing officer.

3.	Mr Coffey carries on business buying, selling and repairing forklift trucks.  On 2 May 2002, in Lincoln Road, Acocks Green, Birmingham, Mr Coffey was intercepted and samples of fuel were taken from his vehicle, a Leyland Daff, registration number L713 HON.  On testing, the samples proved positive to the presence of rebated fuel.  Mr Coffey was interviewed at the time and admitted putting rebated fuel in his vehicle and using it on the public road.  He also admitted that he knew is was an offence to do so.  Mr Coffey explained to the officer that he had accidentally ruptured the original fuel tank in his vehicle whilst lifting it to repair a broken handbrake cable.  He subsequently purchased a replacement tank which he found to be dirty and he swilled it out with red diesel.  He then attempted to run the vehicle on white diesel but it kept cutting out and he put some further red diesel in to clean it through and test the system.  He had been driving on red diesel for about a week.  The officer told Mr Coffey that the vehicle would be seized and restored for nil but that two penalties of £250 each would be imposed.

4.	By letter dated 10 May 2002, Mr Coffey wrote to Mr Baker seeking a review of the penalties.  With his letter, Mr Coffey enclosed a copy of the invoice for the purchase of the replacement tank which was dated 28 December 2001.  He explained that his sole intention had been to clean out the fuel tank.  He had tried to do this with normal fuel but unsuccessfully and he therefore used the rebated fuel solely to try and clear the tank and test it.  He explained that he worked within a five mile radius of home; did a very low mileage and had no intention to make any financial gain.

5.	Mr Baker, on his review, was fully satisfied that by Mr Coffey’s own admission both in interview and in correspondence, the circumstances established that an offence had been committed which would justify the issue and imposition of penalties.  He went on to consider whether or not the circumstances revealed a reasonable excuse but considered that the use of red diesel as a flushing agent did not amount to a reasonable excuse.  He was particularly influenced by the fact that Mr Coffey had at all times admitted that he was aware that he was quite deliberately using rebated fuel and was equally aware that he should not be doing so.  Mr Baker added in his evidence that white derv would have served an equally useful purpose.  Mr Coffey admitted to us that he agreed with that and that he probably would not have used red fuel had it not been more convenient for him to do so having it on site as he did for a perfectly legitimate use within his business.

6.	Mr Coffey added little in his oral evidence to us other than to emphasize that he was using the fuel not so much as a flushing agent but rather more as a testing agent to see if the fuel system was in fact working properly or whether it was going to malfunction again.

7.	Mr Coffey really made no closing submissions to us other then to reiterate the evidence that he had already given.

8.	Paragraph 12 HODA prohibits the use of rebated heavy oil in road vehicles unless the amount rebated has been repaid to the Commissioners.  Paragraph 13(1) provides for penalties for filling a road vehicle with such fuel and for taking it onto a road.  Section 9 Finance Act 1994 sets the penalty at £250 for each of these two infringements.

9.	Section 10 Finance Act 1994 provides that there shall be no liability to a penalty if either the Commissioners or, on appeal, the tribunal, are satisfied there was a reasonable excuse for the conduct.

10.	It is clear to us from the circumstances and from Mr Coffey’s evidence that he knowingly filled his vehicle with rebated fuel and went on to use the vehicle on the road. Equally he knew what he was doing was prohibited.  We are therefore perfectly satisfied that the penalties were properly raised in the first place.  We accept totally the evidence given to us by Mr Coffey and we equally accept that he did not act with the intention of making any financial gain.  We cannot however find that the circumstances constitute a reasonable excuse.  Mr Coffey even conceded in his evidence that white derv would have served his purpose just as well but it was rather more convenient for him to use the red diesel which he had on site.  We regret that we do not have the power to mitigate the penalties.  Mr Coffey has at no time sought to evade responsibility for his actions and he struck us as being a truthful straightforward man.  Unfortunately however, given the absence of any reasonable excuse for his conduct, we do have to uphold the penalties in full.

11.	Mr Haley made no application for costs.  He also made it clear that given Mr Coffey’s financial circumstances, the Commissioners would allow Mr Coffey a reasonable time to pay the penalties and we would merely ask that they agree a reasonable payment schedule with Mr Coffey.

12.	Therefore the appeal is dismissed and there is no order as to costs.

LADY MITTING
CHAIRMAN
Release Date:

MAN/02/8194