Christopher Convey Wins Key Alcohol Duty Case in Tax Tribunal

Christopher Convey won this "hard-fought case" which was ultimately resolved on the grounds of a breach of the Appellant’s legitimate expectation to receive Duty Drawback payments amounting to almost £1.25 million from HM Revenue and Customs.

The case related to a topic that has been before the High Court and the Lower Tier Tax Tribunal on a number of recent occasions: namely claims that HMRC had wrongly refused to refund Alcoholic Liquor Duty when duty drawback claims have been submitted by a trader claiming to be exporting “duty paid” beer - the ground for refusal being that the drawback claimant has failed to demonstrate to HMRC that the reclaimed duty had been paid.

In this case the Appellant, a legitimate duty trader, appealed against the refusal, in August 2006, of HMRC to meet just under £1.25 million of claims for duty repayments that were properly made.

This is believed to be the first and only such success for an Appellant against the Revenue following its change of position with regard to the Duty Drawback scheme in 2006.

A summary of points raised follows:

  • Excise Duty;
  • Reclaim of excise duty on exportation of beer;
  • Whether the Appellant had satisfied the condition of demonstrating that the beer that it had exported had been "eligible beer", namely beer in respect of which duty had been paid and not previously refunded;
  • Whether the First-tier Tribunal had jurisdiction to hear a legitimate expectations argument;
  • Whether the Tribunal could and should consider whether the way in which HMRC was applying the drawback Regulations breached any principle of European Law;
  • Whether the manner of applying the drawback Regulations offended the principle of free movement of goods;
  • Whether the conduct of HMRC breached the Appellant’s Human Rights within the meaning of Article 1 of Protocol 1 of the European Convention on Human Rights.The judgment makes for essential reading on the topic, the jurisdiction of the first-tier tax tribunal to hear human rights issues, EU matters and First Protocol rights generally.

The judgment makes for essential reading on the jurisdiction of the First Tier Tax Tribunal to hear public law arguments – in particular in relation to legitimate expectation – both at common law and arising under the European Convention on Human Rights and EU law.

It also makes for compelling and informative reading in relation to the actions of HM Revenue and Customs.

Christopher Convey was instructed by Andrew Benson of Byrne and Partners and led David Yates of Pump Court Tax Chambers.

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