Citywest Logistical Ltd(Formerly know as Cassidy Wines Ltd) v The Revenue Commissioners

JurisdictionIreland
CourtHigh Court
JudgeMr. Justice McDermott
Judgment Date12 January 2018
Neutral Citation[2018] IEHC 18
Date12 January 2018
Docket Number[2015 No. 263 R]

[2018] IEHC 18

THE HIGH COURT

REVENUE

McDermott J.

[2015 No. 263 R]

[2015 No. 266 R]

IN THE MATTER OF A CASE STATED PURSUANT TO SECTION 941 OF THE TAXES CONSOLIDATION ACT, 1997

BETWEEN
CITYWEST LOGISTICAL LIMITED (FORMERLY KNOWN AS CASSIDY WINES LIMITED)
APPELLANT
AND
THE REVENUE COMMISSIONERS
RESPONDENT
BETWEEN
MONAGHAN BOTTLERS LIMITED
APPELLANT
AND
THE REVENUE COMMISSIONERS
RESPONDENTS

Revenue – S. 99(3) of the Finance Act, 2001 – Council Directive 92/12/EC – Legal framework – Public issue – S. 941 of the Taxes Consolidation Act, 1997 – Imposition of excise duties – Accompanying Administrative Document ('AAD')

Facts: Two sets of proceedings came by way of a case stated for the opinion of the High Court. In both the cases, the respondent asked the High Court as to whether he was correct in law to hold that the appellants were liable to discharge the tax as sought. The respondent in both the cases held that there was non-compliance with the provisions of art. 19(2) of the Council Directive 92/12/EEC as there should have been national endorsement by the French and Spanish authorities on the copy 3 of the AADs. The respondent also raised questions pertaining to the principle of legal certainty and equal treatment.

Mr. Justice McDermott held that in both the cases, the respondent was incorrect in holding that the assessments should stand. In relation to the first proceedings, the Court further held that the respondent was incorrect in holding that the absence of national endorsement by the relevant authorities was sufficient to result in non-compliance with the provisions of discharge. The Court also held that had AADs been insufficient to result in the appellant's liability, the principle of legal certainty would not have precluded the respondent from imposing the tax liability. The Court, however, ruled that the demand was properly raised. In relation to the second proceedings, the Court held that France and Spain were not specified in the regulations made by the respondent. The Court observed that the respondent did not make the list available to the second appellant. The Court further answered that even if France and Spain were so specified in regulations made by the respondent under s. 99(4)(a)(ii) of the Finance Act 2001, it would not have been the breach of principle of equal treatment and legal certainty to seek to recover the excise duty. The Court held that there was sufficient evidence that entitled the respondent to conclude that the French and Spanish authorities had undertaken to carry out the endorsement within the meaning of s. 99(3) of the Act of 2001.

JUDGMENT of Mr. Justice McDermott delivered on the 12th January, 2018
1

Both of the above entitled cases concern a case stated pursuant to s. 941 of the Taxes Consolidation Act 1997 which allows an appellant if dissatisfied with a determination as being 'erroneous in point of law' to require the Appeal Commissioner to state and sign a case for the opinion of the High Court. Under s. 941(4) the case stated must set out the facts and the determination of the Appeal Commissioner. Section 941(6) provides:-

'The High Court shall hear and determine any question or questions of law arising on the case, and shall reverse, affirm or amend the determination in respect of which the case has been stated, or shall remit the matter to the Appeal Commissioner with the opinion of the Court on the matter, or may make such other order in relation to the matter, and may make such order as to costs as to the Court may seem fit.'

The High Court may cause the case to be sent back for amendment to the Appeal Commissioner following which judgment should be delivered after the case has been amended.

2

The court approaches both cases on the basis that the relevant facts are those found by the Appeal Commissioner as set out in each case stated. The Appeal Commissioners, as they were obliged to do, set out the findings of fact which underpin their respective decisions. These findings must be accepted by the court unless there was no evidence at all to support them (see Mitchelstown Co-Op Society Ltd v. the Commissioner for Valuations [1989] I.R. 210 and Inspector of Taxes v. Hummingbird [1982] ILRM. 421, and McGinley v. Deciding Officer, Criminal Assets Bureau (Unreported, Supreme Court, 30th May 2001)).

The Citywest Case Stated - Background
3

The Revenue Commissioners made a demand for excise duty in the amount of €2,117,844.41 against Citywest in respect of deliveries of alcohol consigned from a bonded warehouse which it owned and operated to warehouses in France and Spain. These consignments were dispatched from between the 2nd July, 2008 and 3rd December, 2008. The first consignment on 2nd July was sent to Lauvie Distribution in France. A further eight consignments were sent between the 21st July and 24th November, 2008 to Gran Mariscal in Spain and the tenth consignment left the warehouse on the 3rd December, 2008 for Tracasa de Gestion in Spain. Consignments were mainly of a cheap form of vodka known as Glen's Vodka made by a company known as Glen Catherine in Ayrshire, Scotland.

4

In 2008 Citywest was approached by a representative of Euromax, a Waterford based company with which the appellant previously conducted business with a proposal whereby Euromax would introduce sellers and buyers to the appellant. The appellant would be invoiced by the sellers from whom it would purchase alcohol products. The appellant would then invoice purchasers for these goods which it would sell on to them. Euromax represented that it wished to keep the buyers and sellers apart and would act as a commissioned sales agent. The alcohol consignments would be exported to the client purchasers. Prior to July 2008 the appellant had only engaged in importing excise goods. This was its first venture into the export trade.

5

The appellant was an authorised warehouse keeper and stored excisable goods in its warehouse under a regime of duty suspension regulated in accordance with the provisions of Directive 92/12/EEC which facilitates the trade in goods between Member States of the European Union. It provides for a system whereby goods can be released and transported from one authorised warehouse to another while under a process of 'duty suspension'. Authorised warehouses in Member States of the Community are tightly controlled. Under the terms by which the appellant was approved as an authorised warehouse keeper, the appellant undertakes to comply with all relevant provisions of the law and general conditions and requirements as set down by the Revenue Commissioners in Notice No. 1877 issued in November 1998. This notice was replaced in September 2008 by notice no. 1890 in the same terms. The appellant in Monaghan Bottlers was subject to the terms of the same Notice. The appellant in accordance with the terms of the approval put in place a bond of a minimum of €400,000.00 designed to provide security for duty on goods removed to, deposited in or removed from the appellant's warehouse and under duty suspension arrangements.

6

The conditions attaching to the approval include inter alia a condition that the appellant comply with all relevant provisions of the law and with the general conditions, directions and requirements set down by the Revenue Commissioners in the respective notices.

7

In 'The Excise: Authorisation of Warehouse Keepers and Approval of Tax Warehouses Notice No. 1890' (September 2008) Article 42 provides that all intra-community deliveries of duty suspended excisable goods must be covered by an 'Accompanying Administrative Document' (AAD). The provisions of Part V of the Excisable Products Regulations 1992 ( S.I. 430 of 1992) must be complied with. Goods may be dispatched to a Member State under duty suspension to tax warehouses approved by the fiscal authority in that Member State. Article 42 states:-

'You should not dispatch goods under duty suspension arrangements to other Member States unless you have satisfied yourself that the consignee holds the appropriate authorisation or has secured the duty in his/her own country. A register (SEED) of all authorised traders in the EU is maintained by Custom and Excise and if you require confirmation of the status of a consignee, you should contact your Custom and Excise Administration Unit.'

Article 43 requires that on dispatch of duty suspended goods an AAD must be completed. Copy 1 must be retained, copy 5 must be delivered to the Custom and Excise Administration Unit and copies 2, 3 and 4 must travel with the goods to the consignee. Article 44 provides that the approved warehouse-keeper is 'responsible' for the excise duty on consignments moving to other Member States until such time as a proper receipt in the prescribed form is received on copy 3 of the AAD (if appropriate endorsed by the fiscal authorities of the Member State of destination). This reflects but does not add to the legal requirements applicable to such consignments.

The Citywest Case Stated- Facts Proved or Admitted
8

Apart from the facts already referred to a number of other important facts were said to be proved or admitted by the Appeal Commissioner:-

'3.8 The appellant's logistics manager testified that he posted each of the ten relevant copy 3s to the respondents as soon as each was returned to him and also that he had handed two or three of such copy 3s to Ms. Nolan, an officer of the respondent, during her visit to the appellant's premises. I accept the evidence of Ms. Nolan that she did not receive any of the ten relevant copy 3s either by post or in person. It is not a statutory requirement that the copy 3 is sent to the respondent.

3.9 The respondents maintained a list of the countries requiring endorsement of the copy 3 of the AAD by their national authorities but this list was not available on the Respondent's website. Mr. Corrigan of the Revenue Commissioners testified and I...

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    ...was cited with approval by McDermott J. in Citywest Logistical Limited (formerly known as Cassidy Wines Ltd.) v Revenue Commissioners [2018] IEHC 18 in concluding that an argument based upon legitimate expectation, being an issue of public law, could not be considered by the High Court in a......

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