Excise Duty (Hydrocarbon Oil)

Regarding FA95 s105, 23 AC 2000

 Tax Type:     Excise Duty - Hydrocarbon Oil

Issues: Whether the Appellant is entitled to a repayment of duty on hydrocarbon oil claimed under Paragraph 12(11) of S.I. No. 307 of 1975 [Imposition of Duties (No. 221)(Excise Duties) Order, 1975].

Whether an Appeal Commissioner can exercise a statutory discretion granted to the Revenue Commissioners by Paragraph 12(11) of S.I. No. 307 of 1975 [Imposition of Duties (No. 221)(Excise Duties) Order, 1975].

Facts:  The Appellant operated a school bus service under a contract with Bus Eireann. The remuneration of the Appellant was calculated in accordance with the contract on a per diem basis, Claims for repayment of duty paid on hydrocarbon oil used in the supply of the school bus service were made by the Appellant for the period 1986 to 1998. The Revenue Commissioners disallowed all claims relating to periods prior to 1st January 1997 on the grounds that the claims were not made within a four month period from the date on which the oil was used. The Revenue Commissioners declined to operate the discretion available to them under the legislation.

Legislation:   Paragraph 12 (11) of S.I. No. 307 of 1975 [Imposition of Duties (No. 221)(Excise Duties) Order 1975]: 
"Where a person who carries on a passenger road service, within the meaning of Section 2 of the Road Traffic Act, 1932 (No. 2 of 1932), and who either is the licensee under a passenger license granted under Section 11 of that Act in respect of the passenger road service or is exempted from the application of Section 7 of that Act shows to the satisfaction of the Revenue Commissioners that hydrocarbon oil on which the duty of excise imposed by this Paragraph has been paid has been used by him for combustion in the engine of a mechanically propelled vehicle used in the passenger road service, the Revenue Commissioners may, subject to compliance with such conditions as they may think fit to impose, repay to him duty at the rate of £11.41 per hectolitre on hydrocarbon oil so used on receipt of a claim therfor made by him in such form as they may direct, subject to the proviso that no repayment may be made unless the claim is made within 4 months from the date on which the oil was used, or within such longer period as the Revenue Commissioners may in any particular case allow."

Section 2 of the Road Traffic Act, 1932 (No. 2 of 1932), as amended:

 "the expression "passenger road service" means a service of one or more mechanically propelled vehicles traveling wholly or mainly on public roads and carrying passengers (whether passengers' luggage, merchandise, and mails, or any of them are or are not also carried) between specified terminal points or along a specified route or otherwise for separate charges in respect of each passenger"

Arguments:   Appellant: 

The Appellant argued that the Revenue Commissioners had acted unreasonably in refusing to exercise their discretion in respect of claims for periods prior to 1st January 1997. The Appellant asserted that the Appeal Commissioners had the same discretion as the Revenue Commissioners and that the Appeal Commissioners should operate it in favour of the Appellant.

Respondent:

The Respondent conceded that the service provided is not a "passenger road service' as defined in Section 2 of the Road Traffic Act, 1932 (No. 2 of 1932), as amended. That definition requires, inter alia, that there must be a "...separate charge ... in respect of each passenger..." The Appellant's contract with Bus Eireann is on a per diem basis; the amount paid by Bus Eireann for the journeys does not vary even if some of the children do not travel,

The Respondent, while accepting that the service supplied by the Appellant was not a "passenger road service", noted that an administrative decision had been taken by the Respondent to concessionally treat the service supplied as a "passenger road service".

The Respondent allowed the Appellant's claims in respect of periods from 1st January 1997 but not in respect of any earlier period.

Decision:        The service supplied by the Appellant is not a "passenger road service" as defined in Section 2, Road Traffic Act, 1932 (No. 2 of 1932), as amended, because there is not a separate charge by the Appellant in respect of each passenger.

The Appellant is therefore not entitled to succeed with a claim under Paragraph 12(11) of S.I. No. 307 of 1975 [Imposition of Duties (No. 221)(Excise Duties) Order, 1975] which is only available to a person who carries on a "passenger road service" within the meaning of Section 2 of the Road Traffic Act, 1932.

The Appellant's application for a repayment of duty on hydrocarbon oil claimed under Paragraph 12(11) of SI No. 307 of 1975 [Imposition of Duties (No. 221)(Excise Duties) Order, 1975] is therefore refused.

The Appellant's application having been refused on the above grounds it was unnecessary to consider any further arguments.

Dissatisfaction was expressed by the Appellant.

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