By Ann O'Loughlin
Two bonded warehouse companies have won High Court cases over excise demands for €2m and €1m respectively which arose after they said they were the innocent victims of fraud committed when consignments of alcohol did not arrive at their mainland Europe destinations.
Citywest Logistical Ltd (formerly Cassidy Wines), faced a €2.1m demand over nine consignments, mainly of Glen's vodka, which left its bonded warehouse in Dublin between July and December 2008 for delivery to equivalent warehouses in France and Spain.
Monaghan Bottlers of Tirkeenan, Co Monaghan, faced a €1m demand over five consignments of mixed spirits which were also to be delivered in 2008 to the same French and Spanish bonded warehouses.
The export of alcohol between bonded warehouses in the EU means excise duty is not payable, though in some countries certain documentation is also required to be endorsed by the national authorities as part of the consignments.
In both cases, the consignments never arrived.
Gardaí who investigated the matter believed that in both cases a fraud was organised by a criminal group with a subversive background and heavy involvement in smuggling all types of produce.
A Garda Bureau of Fraud Investigation detective inspector attempted to speak to the driver of the lorry in the Citywest consignments, but he was a native of Fermanagh, outside the jurisdiction and would not make himself available for interview.
Investigators in Monaghan were told by the driver's father that the driver's life was under threat in relation to the fraud.
Revenue investigators were unable to speak to the drivers of two trucks used in the Monaghan Bottlers' consignments because they were also outside the jurisdiction.
Gardaí said in the past such consignments were taken by the criminal group and sent to private clubs in the UK.
After an Appeal Commissioner determined the companies were liable for the tax demands made by Revenue, both matters were referred to the High Court by way of case stated.
Today, Mr Justice Paul McDermott found, in the Citywest case, the Appeal Commissioner was incorrect to conclude that the absence of a national endorsement on certain paperwork by the French and Spanish authorities was sufficient to result in non-compliance with the provisions governing discharge of liability for the duty.
The judge was also not satisfied that France and Spain were lawfully specified under the 2001 Finance Act which defined the evidence required to specify a discharge from liability.
He did not accept Citywest's argument that, under principles of proportionality, legal certainty or legal expectation, whether based on case law or the presence of the French and Spanish warehouses on a Revenue database, would have precluded Revenue from imposing liability for the excise duties.
He was satisfied it was appropriate to raise the demand in Ireland, having regard to EU law, if the duty was otherwise lawfully due.
In the Monaghan Bottlers case, he found the Appeals Commissioner was incorrect in upholding the assessment against it.
The Appeals Commissioner was not entitled to conclude that the existence of a list of countries requiring stamping of paperwork by their national authorities, and the availability of such a list on request, was sufficient to comply with the 2001 Finance Act and EU regulations, he said.
However, he found Ireland was the correct jurisdiction to raise the excise demand in this case also if the duty was otherwise lawfully payable.
The judge found Revenue did not infringe the principle of equal treatment (of Monaghan Bottlers) arising out of comments in 2008 by then-Revenue chairman, Frank Daly, to the Oireachtas Public Accounts Committee in relation to treatment of similar cases involving fraudulent deliveries which left innocent Irish warehouse keepers with a potential excise liability.
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