The Commissioners for Her Majesty's Revenue & Customs v B & M Retail Limited
| Jurisdiction | UK Non-devolved |
| Judgment Date | 10 October 2016 |
| Neutral Citation | [2016] UKUT 0429 (TCC) |
| Appellant | THE COMMISSIONERS FOR HER MAJESTY’S |
| Respondent | |
| Court | Upper Tribunal (Tax and Chancery Chamber) |
| Appeal Number | UT/2015/0035 |
[2016] UKUT 0429 (TCC)
Appeal number:UT/2015/0035
EXCISE DUTY – preliminary issue -whether person holding goods where
excise duty unpaid and the goods have previously been released for
consumption in the same Member State liable to be assessed for the unpaid
duty
UPPER TRIBUNAL
TAX AND CHANCERY CHAMBER
THE COMMISSIONERS FOR HER MAJESTY’S Appellants
REVENUE & CUSTOMS
- and –
B & M RETAIL LIMITED
Respondent
TRIBUNAL:
Mr Justice Henderson
Judge Timothy Herrington
Sitting in public at the The Rolls Building, Fetter Lane, London EC4A 1NL on
11 and 12 July 2016
Kieron Beal QC and Simon Charles, Counsel, instructed by the General Counsel
and Solicitor to HM Revenue and Customs, for the Appellants
Rupert Baldry QC and Jeremy White, Counsel, instructed by Fieldfisher LLP,
for the Respondent
© CROWN COPYRIGHT 2016
2
DECISION
Background
1. This is an appeal against a decision of the First-tier Tribunal (“FTT”) (Judge
Blewitt as she then was) in respect of certain preliminary issues released on 16 5 September 2014 (the “Decision”).
2. As found by the FTT in the Decision, the Respondent (“B & M”) trades as one
of the UK’s leading value retailers with many product ranges, including food & drink.
On 23 November 2011, the Appellants (“HMRC”) attended B & M’s warehouse and
detained a quantity of excise goods consisting of beer and wine that had been 10 purchased from a supplier, The Ruby Trading Company Limited. HMRC claimed to
detain the goods under section 139 of the Customs and Excise Management Act 1979
(“CEMA”) on the grounds that, in their judgment, on a balance of probabilities excise
duty had not been paid on the goods. Under B & M’s terms and conditions of business
B & M’s suppliers are required to warrant the sale of alcohol to B & M as “excise 15 duty paid”.
3. HMRC undertook an investigation during which they found no evidence to
show that any of the goods were duty paid. HMRC established that the supply chains
traced back to missing or de-registered traders. The goods were formally seized
pursuant to section 139(6) and paragraph 1 of Schedule 3 of CEMA and Part 16, 20 section 88 of the Excise Goods (Holding, Movement & Duty Point) Regulations 2010
(the “Regulations”).
4. HMRC subsequently assessed B & M for excise duty on the goods in an amount
of £5,875,143 and served a Notice of Penalty Assessment on B & M in the sum of
£1,175,028.60. The assessments were made on the basis that: 25
(1) an excise duty point had been created under Regulation 6 (1) (b) of the
Regulations; and
(2) B & M was a person liable to duty under Regulation 10 (1) of the
Regulations, as the person holding the excise duty goods at the excise duty
point. 30
5. B & M appealed to the FTT against the assessments and the penalty. The FTT
directed that the following issues should be determined as preliminary issues on the
appeal:
(1) whether there can be more than one excise duty point under the
Regulations; 35
(2) whether, after goods have been released for consumption, there can be a
further release for consumption without those goods being again charged with
duty by reason of some further production or some further importation; and
(3) whether a person holding goods can be liable for duty by virtue of
Regulation 6 (1) (b) of the Regulations, if before he held them, an excise duty 40 point arose under one of paragraphs 6 (1) (a), (c) or (d) of the Regulations.
3
6. By the Decision, the FTT decided the preliminary issues as follows:
(1) there cannot be more than one excise duty point;
(2) after the goods have been released for consumption at an identified point,
there cannot be a further release for consumption and therefore the goods cannot
be charged again with duty by reason of some further production or further 5 importation; and
(3) pursuant to Regulation 6 (1) (b) of the Regulations, a person cannot be
liable for duty if, before he held the goods, an identified excise duty point arose
pursuant to one of Regulations 6 (1) (a), (c) or (d).
7. On 14 January 2015 the FTT granted HMRC permission to appeal against the 10 Decision.
Relevant legislation
8. Section 1 (1) of the Alcoholic Liquor Duties Act 1979 (“ALDA”) provides that
certain alcoholic liquors (referred to in ALDA as “dutiable alcoholic liquor”) are
subject to excise duty. 15
9. Section 36 (1) ALDA provides:
“There shall be charged on beer –
(a) imported into the United Kingdom, or
(b) produced in the United Kingdom
a duty of excise at the rates specified in subsection (1AA) below.” 20
10. Section 54 ALDA so far as relevant provides:
“(1) There shall be charged on wine –
(a) imported into the United Kingdom; or
(b) produced in the United Kingdom by a person who is required by
subsection (2) below to be licensed to produce wine for sale, 25
a duty of excise at the rates shown in Schedule 1 to this Act …”
11. Council Directive 2008/118/EC (“the 2008 Directive”) lays down general
arrangements for excise duty which seek to harmonise the principles to be applied
across the EU Member States as regards the point at which excise duty should be 30 levied on excise goods. The 2008 Directive also sets out principles governing the
duty-suspended movement of goods between Member States. The 2008 Directive
replaced Council Directive 92/12/EEC (the “1992 Directive”) which formerly
governed these matters.
12. Recital 8 of the 2008 Directive sets out clearly the policy behind the Directive 35 as follows:
To continue reading
Request your trial