Civil evasion penalties for Customs, Excise and VAT: legislation and legal advice on liability: excise
Section 8 (1) Finance Act 1994 states that in any case where
- any person engages in any conduct for the purpose of evading any duty of excise, and
- his conduct involves dishonesty
- that person shall be liable to a penalty of an amount equal to the amount of duty evaded or, as the case may be, sought to be evaded.
The reference in subsection (1) (a) to evading a duty of excise includes references to obtaining or securing without being entitled:
- any repayment, rebate or drawback of duty
- any relief or exemption from or any allowance against duty or
- any deferral or other postponement of liability to pay any duty or of the discharge by payment of any such liability.
It also includes references to any evading of the cancellation of any entitlement to, or the withdrawal of, any such repayment, rebate, drawback, relief, exemption or allowance.
Following a ruling in the case of Dansk Transport og Logistik v Skatteministeriet  STC 1711 HMRC has concluded that it is unable to apply Schedule 41 Wrongdoing penalties in cases where goods have been seized at importation from outside the EU prior to the excise duty point. Consequently, we can impose a penalty under S8 Finance Act 1994 for dishonestly evading Excise duties at the same time as applying S25 Finance Act 2003 penalties for dishonestly evading Customs duties.