Jerzy Wesolowski v The Commissioners for HMRC [2026] UKFTT 1110 (TC)

[2026] UKFTT 01110 (TC)Case No TC 09970
FIRST-TIER TRIBUNAL
TAX CHAMBER
Venue ManchesterHearing Heard on: 18 June 2026Date Judgment date: 31 July 2026
Appeal reference: TC/2019/01930
EXCISE DUTY - whether the Appellant was "holding" or “making the delivery of” the goods at the excise duty point where Appellant not in physical possession – whether the Appellant had de jure or de facto control – whether Appellant liable – appeal dismissed
Before
TRIBUNAL JUDGE JENNIFER DEANMISS SUSAN STOTT
Between
JERZY WESOLOWSKIAppellantTHE COMMISSIONERS FOR HIS MAJESTY’S REVENUE AND CUSTOMSRespondentMr M. Gut, Attorney at Law for AppellantMr R. Davies of counsel, instructed by the General Counsel and Solicitor to HM Revenue and Customs for RespondentsDECISION

Introduction

[1]The Appellant appeals against an assessment of excise duty in the sum of £279,728.00 arising out of a seizure of 1,333.5 kg of hand rolling tobacco from the Appellant’s vehicle at Dover Docks on 3 April 2017.[2]An excise penalty in the sum of £153,850.00 was withdrawn and therefore this appeal is only concerned with the liability to excise duty.

Background and evidence

[3]The facts were not in dispute and the following is taken from the parties’ helpful written submissions.[4]On 3 April 2017 Border Force Officers stopped a 7.5 tonne lorry at Dover Eastern Docks. It was driven by Mr Dariusz Kostka (“Mr Kostka”). The load was manifested as car parts but upon being searched, the vehicle was found to be carrying 64 brown tape-wrapped boxes containing 1,333.5 kg of hand rolling tobacco. The goods and vehicle were seized.[5]Mr Kostka was arrested and questioned by Border Force Officers. Officer White’s evidence was that Mr Kostka confirmed he was employed by “Uslugi Transportowe”, Poland, the trading name of the Appellant. He was at a service station in Luxembourg when he was approached by a man called Peter and asked to take a load of car parts to the UK. Mr Kostka stated that he does not get involved with freight forwarding and that Peter would need to speak to his freight agent, Mr Przemyslaw Milasz (“Mr Milasz”), whom he also referred to as “Shermak.” It is not disputed that Mr Milasz was also employed by the Appellant.[6]Mr Kostka phoned Mr Milasz and asked him to contact Peter regarding the request, giving him Peter’s number. Mr Kostka then left to buy some personal tobacco. On his return, Mr Milasz called him and instructed him to do the delivery to Dover for €500 cash.[7]Mr Kostka was then directed to a warehouse by Peter, situated one exit from the Luxembourg to Brussels motorway, where the boxes were loaded. He did not assist with the loading and he was told that the boxes contained car parts. He was not given any paperwork.[8]Mr Kostka then gave Peter a blank CMR to fill out. Mr Kostka says that the first CMR had the wrong weight and number of boxes (he could tell by looking at the tyres) and a second CMR was completed. Mr Kostka confirmed that it was his handwriting that appears in boxes 16, 11 and 23, and that he stamped boxes 16 and 23.[9]The CMR contains the following information:a. Sender (box 1): Veritas AG (stamped)b. Consignee (box 2): Clear Ways Ltd, unite 5, West Road, Capel UK, TN14 5RJc. Carrier (box 16): stamped “Uslugi Transportowe Jerzy Wesolowski”d. Marks/number of packages/nature of goods (boxes 6-9): 36 boxes scheuertuche. Gross weight (box 11): ok 850kgf. The stamp and signature of the sender (box 22) is included as well as that of the carrier (Uslugi Transportowe Jerzy Wesolowski) (box 23).[10]When asked by Border Force during interview on 4 April 2017 why car parts were not detailed on the CMR, Mr Kostka said that he did not pay attention to what is said on a CMR.[11]Mr Kostka stated that the ferry he used to travel to the UK was organised by Mr Milasz.[12]On 17 January 2018 a letter was sent to Mr Kostka stating that enquiries were being made pending assessment. The letter asked for further information. Mr Kostka’s wife replied by letter (undated). She gave the following information (on Mr Kostka’s behalf):(a) He had been employed by the Appellant for 36 months and was salaried.(b) The seized vehicle was owned by the Appellant, which also taxed and insured it.(c) Mr Milaz accepted the order on behalf of the company. Mr Milaz had not commented on the situation except to say he was “shocked.”(d) The delivery address was the one on the CMR; he had checked to see that it existed and it did.[13]A reply was also received from Dorota Jarosz on behalf of the Appellant dated 30 January 2018. It stated, inter alia, that:(a) Mr Milasz had been (at the time of the seizure), but was no longer, employed by the Appellant as a forwarding agent.(b) He was asked to leave due to the decision he had made in accepting the load of unknown origin which led to the seizure of the vehicle on 3 April 2017. His decision to take the load was taken without the Appellant's knowledge or confirmation.(c) Mr Kostka was an employee of the Appellant's at the time of the seizure and was employed between 25 November 2015 to 31 December 2017 and was paid a monthly salary in cash.(d) The Appellant stated that Mr Kostka was no longer in his employment as his fixed term contract ended on 31 December 2017 and was not renewed due to the lack of explanation regarding the seizure.(e) The company did not have any information regarding who it was that contacted them about the load. They learned that the load and the vehicle had been seized on the 3 April 2017, when the driver contacted then to say he had been arrested.(f) In response to a question asking what due diligence had been carried out, the Appellant stated that the only person with knowledge of the contact was Mr Milasz.(g) The company never accepts work in the manner that it had been accepted on the day of the seizure and they did not know why Mr Milasz had done so. No further work had been accepted from the contact either before or after the date of seizure.(h) Mr Kostka had told the Appellant that he was asked by Mr Milasz to drive to an address given by the contact, but they could not be sure as all information and instructions were given to Mr Milasz and Mr Kostka. Mr Milasz told them that the job was paid for in cash in the amount of 500 euros.[14]Mr Milasz was also sent an enquiry letter dated 12 February 2018. In a letter dated 21 February 2018 by way of reply, Mr Milasz stated that:(a) He was employed by the Appellant from August 2016 to October 2017 and finished working for him because the nature of the business's activity changed.(b) He did not have contact details for Peter and did not know the exact location of the loading as the car was not equipped with GPS.(c) The driver received 500 Euros from Peter after loading. Drivers do not participate in negotiating rates, they are told what amount to collect from the customer.(d) He did have permission to accept loads and usually informed the Appellant if a client paid cash. He spoke to someone in the office to arrange the ferry but did not remember if he told the Appellant about this cargo.(e) He was informed about the seizure from Mr Kostka and he informed the Appellant, who he said was shocked. He tried to contact Peter but the telephone was off.(f) He was not aware that tobacco was in the load, if he had had such knowledge he would not have agreed to transport the load.[15]On 8 March 2018 the Respondents wrote to the Appellant raising questions regarding the circumstances of the transportation. The Appellant responded by letter dated 19 March 2018, stating:• Mr Milasz had been previously employed as a forwarding agent. He was responsible for organising the transport for the seized vehicle which was driven by Mr Kostka. Mr Milasz worked on his own in an independent position and was responsible for transport offers on his own. He should ask for permission or authorisation from Mr Wesolowski only when the load was different or suspicious from the standard one.• Mr Milasz had contacted the Appellant’s administrative staff and told them about the index load and that he needed a ferry to the UK to be organised. The ferry was arranged via a ferry agent, “SKAT Transport z.o.o. S.p.k” and the invoice was paid by Mr Wesolowski.• The case was not reported to the police.• Whilst Mr Milasz employment was terminated on the 30th of September of 2017, his employment was initially continued after the seizure because there was no evidence that he was guilty.• Mr Milasz worked from home so it was very difficult to control or audit his work whilst he was dealing with clients and getting transport jobs.• Prior to the seizure Mr Milasz had worked for the Appellant for a year and “did not disappoint my trust being a model employee.” The trust was breached when he did not complete all the paperwork for this particular job.[16]The Appellant sent a further letter to the respondents dated 8 May 2018 which explained that the Appellant employed forwarding agents who were responsible for the conclusion of contracts, the checking of third parties, ordering work and the supervision of the driver. It further stated that Mr Milasz ought to have obtained permission directly from Mr Wesolowski for this order, but did not. It argued that Mr Wesolowski was not culpable for the smuggling attempt.[17]The assessment was made under regulation 13 of the Excise Goods Holding Movement and Duty Point Regulations 2010 on 6 November 2018 and upheld on review on 25 January 2019.[18]HMRC called two witnesses to give evidence. Ms White was the Border Force Officer who stopped and interviewed Mr Kostka. She confirmed the facts as set out above in relation to the information provided at the time Mr Kostka was intercepted. In cross-examination she confirmed that Mr Kostka did not contact the Appellant when he was stopped. The remainder of Ms White’s evidence (as summarised above) was not challenged, and we accepted it in full.[19]Mr Whitaker, an Officer of HMRC who adopted the statement of his colleague Ms Henderson who had issued the assessment, was also called to give evidence. Mr Whitaker was not cross-examined and consequently we accepted his evidence as summarised above.[20]Prior to the hearing, the Appellant had adduced statements from the following witnesses:(1) Mr Dorota Adamska who worked as a freight forwarder for the Appellant between 2017 and 2019 and was responsible for finding a freight to transport on the Trans.eu transport exchange, arranging loading and unloading dates, agreeing price and overseeing the driver throughout the operation. Mr Adamska never issued any financial documents on behalf of the Appellant and the form of payment for services was agreed with Mr Wesolowski who decided, together with the accounting department, that payment was received by bank transfer to the Company bank account based on an invoice issued by the accounting department based on transport documents received by the driver when loading the goods. In the operations he undertook, Mr Wesolowski never instructed a driver to collect payment, and he has no knowledge of any situations where this happened or in which the driver decided on the form of payment.(2) Mr Krzysztof Bartnikiewicz was a driver for the Appellant between 2013 and 2020. He explained that in performing his duties, he had no time or opportunity to acquire a customer himself. He was trained by the Appellant, and drivers were constantly reminded of the rules by Mr Wesolowski personally and by the freight forwarders. He is unaware of any incidents in which a driver arranged transport and took payment.(3) Mr Leszek Szwed was a forwarding agent employed by the Appellant at the time of the seizure. He had no direct knowledge of the incident. He stated that transport could not take place without acceptance of the terms of service and to do so would be contrary to the principles of cooperation which Mr Wesolowski was strict about. The driver’s only task is to drive the truck, supervise loading an unloading and transport documents. Mr Szwed was informed about the rules before starting employment. A driver cannot accept an order without knowledge and approval from Mr Wesolowski because he was not able to issue an invoice or receipt for payment for the invoiced service. Mr Wesolowski did not allow it as it was against accounting and tax rules in Poland.[21]None of the witnesses attended on behalf of the Appellant, nor did Mr Wesolowski. The witness statements were not accepted by HMRC and, in the absence of the witnesses, HMRC submitted that the statements should be excluded or no weight should be attached to the statements. We set out our decision on this below under the heading “Discussion and Decision”.[22]The Appellant appealed and the matter was stayed behind the determination of the reference to the Court of Justice of the European Union (“CJEU”) in the appeal of The Commissioners for Her Majesty’s Revenue and Customs v WR Case C-279/19 (“WR”). Following the CJEU’s decision, the Appellant clarified the grounds of appeal as follows: the WR ruling stated that the liability to pay the excise duty fell upon a person that was “transporting excise goods AND who was in physical possession” of the goods. The Appellant denied being in physical possession of the goods and stated that the driver of the seized vehicle was acting completely independently.

Issues

[23]The issue for us to determine in this appeal is whether the Appellant is liable to pay the excise duty on the grounds that it was holding or making the delivery of the goods at the excise duty point.

Legislative provisions and authorities

[24]There was no dispute between the parties about the relevant legal provisions, which we will set out briefly, as the parties’ submissions focussed on the application of those provisions by reference to the relevant authorities.[25]Council Directive 2008/118/EC (“the 2008 Directive”) sets out the principles governing the point at which excise duty should be levied on excise goods.[26]Article 1 states that the 2008 Directive lays down general arrangements in relation to excise duty which “is levied directly or indirectly on the consumption of... [excise goods]”. Article 2 states that excise duty shall be charged on the production of excise goods or on their importation into the EU territory.[27]Article 7 makes provision for the time and place of chargeability of excise duty when goods are released for consumption. Article 8 defines who is liable to pay the excise duty when the goods depart from, or are held outside, a duty-suspension arrangement. In the case of the “holding” of excise goods under Article 7(2)(b), the person liable to pay is “the person holding the excise goods and any other person involved in the holding of the excise goods.”[28]Article 33 defines who is liable to pay the excise duty when the goods have already been released for consumption in another member state:
“The person liable to pay the excise duty which has become chargeable shall be, depending on the cases referred to in paragraph 1, the person making the delivery or holding the goods intended for delivery, or to whom the goods are delivered in the other Member State.”
[29]The Excise Goods (Holding Movement and Duty Point) Regulations 2010 (“HMDP”) as then in force, gave effect to the 2008 Directive. Most relevantly, Regulations 13(1) and (2) set out the persons liable to pay the excise duty where the goods have already been released for consumption in another member state:
“(1) Where excise goods already released for consumption in another Member State are held for a commercial purpose in the United Kingdom in order to be delivered or used in the United Kingdom, the excise duty point is the time when those goods are first so held. (2) Depending on the cases referred to in paragraph (1), the person liable to pay the duty is the person (a) making the delivery of the goods; (b) holding the goods intended for delivery; or (c) to whom the goods are delivered.”
[30]“Holding” is not defined in the legislation but the parties cited a number of cases in which it was considered. We have not referred to each and every one of the cases cited but we have taken them all into account in reaching our decision. We set out below those which we found most helpful to us.[31]WR confirmed that actual or constructive knowledge (either of the fact that a person was carrying excise goods or that they were liable for duty) was not a requirement for “holding” goods, the only requirement being physical possession of the liable goods:
“The concept of a person who ‘holds’ goods refers, in everyday language, to a person who is in physical possession of those goods. In that regard, the question whether the person concerned has a right to or any interest in the goods which that person holds is irrelevant. Moreover, there is nothing in the wording of Article 33(3) of Directive 2008/118 to indicate that the status of person liable to pay the excise duty, as being ‘the person holding the goods intended for delivery’, depends on ascertaining whether that person is aware or should reasonably have been aware that the excise duty is chargeable under that provision. (WR at [24] –[25]) .. However, like Article 33(3) of Directive 2008/118, Article 8(1)(b) of that directive does not contain any express definition of the concept of ‘holding’ and does not require the person concerned to be the holder of a right or to have any interest in relation to the goods which that person holds, or that that person be aware or that he should reasonably have been aware that the excise duty is chargeable under that provision. [CJEU/28]”
[32]In his opinion for the CJEU in WR, the Advocate General noted (at [29]) that the aim of the 2008 Directive is to seek to guarantee that tax debts are paid and therefore the wording of the classes of persons liable to pay the excise duty in article 33 is broad.[33]Pending the CJEU judgment in WR, the UT in Dawson's (Wales) Limited v HMRC [2019] UKUT 0296 (TCC) (“Dawson’s UT”) found the following principles applied at [131]: “(1) A person who is able to exercise legal or de facto control of excise goods in respect of which duty remains unpaid, and intends to assert that control against others, whether temporarily or permanently, is to be regarded as "holding" those goods for the purposes of the 2008 Directive and the Regulations. (2) Depending on the circumstances, a person having physical possession of such goods, and sharing legal possession of them with the person mentioned in(1) above, may be regarded as holding them for those purposes. (3) An innocent agent of a person mentioned in (1) or(2) above having physical possession of such goods is not to be regarded as holding those goods for those purposes. (4) Actual or constructive knowledge of physical possession of such goods might be sufficient to constitute "holding" for those purposes and take such a person outside the status of "innocent agent".[34]The UT in Dawson's UT had held (obiter) on the question of whether an earlier "holder" of the goods could be identified that this was a mixed question of fact and law and required the answer to four questions (see [149]):(i) who had physical possession of the goods at the time when the alleged earlier excise duty point occurred?(ii) who is the person alleged to have had de facto or legal control over the goods who it is said should be assessed rather than the subsequent holder (if it is the case that it is not appropriate to assess the person who was in physical possession of the goods) and how is that person said to have had control and on what basis was it being exercised?(iii) the time at which the excise duty point arose; and(iv) where the goods were being held at the relevant time.[35]It should be noted that question (ii) above was not disputed by the Appellant in that case and no view was expressed on the question of whether de facto or legal control of goods, without physical possession, could be sufficient to amount to "holding" for the purposes of the Directive and the Regulations (at [72]).[36]That issue did arise in Agniezska Hartleb t/a Hartleb Transport v HMRC [2024] UKUT 00034 (TCC) (“Hartleb”), where the UT considered the liability of the employer of a driver found to be carrying non-duty paid excise goods. The employed driver was found to be in physical possession of the goods, and the employer was found to be in control, but not in physical possession. The UT held at [81]:
“The approach of the UT and Court of Appeal in Dawsons demonstrates that the determination of “holding” is a question of law and fact. Although the initial focus, given the scheme and wording of the legislation together with the case law, is necessarily on the physical location of goods so giving weight to physical possession – that is not the end of the matter and a more detailed consideration of the facts is needed.”
[37]At [79] the UT stated:
“We find the factors identified by the UT in Dawson to be a useful guide in determining who to regard as holder in circumstances where physical possession and de facto and/or legal control are separated as they are in our situation, noting in this regard that the second factor must now be seen in the context of Perfect and WR.”
[38]At [90] - [95] the UT concluded that the Appellant was liable to the assessment, noting: “90. On this straightforward combination of facts we consider it legally correct and consistent with the operation of the Excise Directive and so the HMDP Regulations to treat the Appellant and not her employee as holder. Put simply, the circumstances in which the Appellant had control outweigh the fact that physical possession of the excise goods was with her employee.91. We are reinforced in this view by the comments of the Advocate General in WR, who stated that: “The word “holding” in Article 33(1) and (3) of Council Directive 2008/118/EC of 16 December 2008 concerning the general arrangements for excise duty … is to be interpreted as including simple physical possession such as the situation of WR in the case in the main proceedings” [58] (our italics)92. “Simple physical possession” was not, in his view, the only way in which a person can be found to be holding.93. More specifically, and relevant to the issue in this case, we also note his further comments (our italics); “As the United Kingdom Government added, to import a knowledge requirement into the concept of ‘holding’ or ‘making the delivery’ in Article 8(1)(b) and Article 33(3) of the Directive would undermine its object and purpose. It would create a means by which excise duty could be evaded relatively easily. Thus an individual found in physical possession of chargeable goods, could – such as WR had done here – simply fail to identify the person who had employed him or her to transport the goods or any other details concerning ownership of the goods (either wilfully or because he or she had been given false details). [37] Again, this would make it difficult to combat fraud and abuse, whereas the scheme of the Directive itself and recitals require that the national authorities must ensure that the tax debt is in fact collected …” [38]94. His acknowledgment of and response to the following submission made by WR is also instructive (again our italics): [the submission] “A decision that someone in WR’s position is liable to excise duty would cause commercial chaos because it would mean that a delivery driver (say, working for DHL) who collected a case of wine from point A and delivered it to point B would (simply because he knew or should have known from the markings on the package that it contained wine) be liable to account for duty if it turned out that no duty had been paid on that case [15]” [the response] 39. “The argument raised by WR in relation to the example of a DHL driver (in point 15 of the present Opinion) can be easily dismissed, A person making a delivery for DHL would not be liable, but DHL – the undertaking itself – would. As the Netherlands Government pointed out, WR is to be regarded as self employed and thus as an entrepreneur who accepted to work without any written contract and to be paid in cash. Entrepreneurship involves entrepreneurial risk and that includes an entrepreneur being personally responsible for the persons with whom he or she does business and from whom he or she accepts commissions. Furthermore, an entrepreneur can protect himself or herself against such risks through insurance or by assigning those risks contractually to the clients” [39]95. It seems clear to us that the Advocate General would have expected an employer to have been liable had the driver in WR been an employee and the employer identifiable.” “The word “holding” in Article 33(1) and (3) of Council Directive 2008/118/EC of 16 December 2008 concerning the general arrangements for excise duty … is to be interpreted as including simple physical possession such as the situation of WR in the case in the main proceedings” [58] (our italics) “As the United Kingdom Government added, to import a knowledge requirement into the concept of ‘holding’ or ‘making the delivery’ in Article 8(1)(b) and Article 33(3) of the Directive would undermine its object and purpose. It would create a means by which excise duty could be evaded relatively easily. Thus an individual found in physical possession of chargeable goods, could – such as WR had done here – simply fail to identify the person who had employed him or her to transport the goods or any other details concerning ownership of the goods (either wilfully or because he or she had been given false details). [37] Again, this would make it difficult to combat fraud and abuse, whereas the scheme of the Directive itself and recitals require that the national authorities must ensure that the tax debt is in fact collected …” [38] [the submission] “A decision that someone in WR’s position is liable to excise duty would cause commercial chaos because it would mean that a delivery driver (say, working for DHL) who collected a case of wine from point A and delivered it to point B would (simply because he knew or should have known from the markings on the package that it contained wine) be liable to account for duty if it turned out that no duty had been paid on that case [15]” [the response] 39. “The argument raised by WR in relation to the example of a DHL driver (in point 15 of the present Opinion) can be easily dismissed, A person making a delivery for DHL would not be liable, but DHL – the undertaking itself – would. As the Netherlands Government pointed out, WR is to be regarded as self employed and thus as an entrepreneur who accepted to work without any written contract and to be paid in cash. Entrepreneurship involves entrepreneurial risk and that includes an entrepreneur being personally responsible for the persons with whom he or she does business and from whom he or she accepts commissions. Furthermore, an entrepreneur can protect himself or herself against such risks through insurance or by assigning those risks contractually to the clients” [39][40]It is clear, therefore, from the UT in Hartleb, which is binding upon us, that the four questions in Dawson's UT were just as applicable in circumstances where an appellant was claiming that there was no liability to duty on the basis that there was no physical possession (and therefore no "holding" the goods) as they were in Dawson’s CA and Dawson’s UT.[41]In Kerrie Brennan v HMRC [2025] UKUT 00310 (TCC) (“Brennan”) the UT confirmed that the principle from WR under which neither actual or constructive knowledge is necessary before a person could be said to be “holding” excise goods applied as equally to situations in which the holder was not in physical possession of the goods, as it did to those in which there was physical possession.[42]We have borne the principles and guidance from the relevant authorities in mind as we turn to consider the parties submissions and the facts as found.

HMRC’s submissions

[43]Mr Davies submitted that HMRC’s case is twofold: first HMRC rely on the Appellant’s working practices and the fact that the freight forwarder Mr Milasz was semi-autonomous and worked at arm’s length. Second, the agents were acting in the Appellant’s name and consequently the Appellant is bound by that fact and is deemed to be holding the goods.[44]Mr Davies highlighted that HMRC have been unable to test the level of control and authority of the Appellant because Mr Wesolowski did not attend to give evidence. Furthermore, Mr Davies submitted, the Tribunal should exclude or attach no weight to the statements of the Appellant’s witnesses who did not attend the hearing and as a consequence their (disputed) evidence was untested.[45]Mr Davies submitted that the approach is to first establish who has physical possession of the goods but then to consider whether the circumstances of that possession are such that it is inappropriate for that person to be considered to be “holding” the goods (per Hartleb at [83] as endorsed by the UT in Qais Majeed Ali V The Commissioners for His Majesty’s Revenue and Customs [2024] UKUT 00176 (TCC)).[46]Mr Davies contended that the argument in Hartleb proceeded on the basis that the driver had physical possession of the goods (the converse was not argued), however HMRC submit it is arguable that where goods are carried in an employer’s vehicle under a contract with the employer, the employer is also in physical possession of the goods. This alternative analysis follows naturally and logically from established law that attributes of an employee may be attributed to an employer, depending upon the circumstances. Mr Davies noted the position in civil law where an employer is vicariously liable for the actions and faults of an employee acting in the course of their employment, drawing the analogy that in circumstances such as the present appeal, where an employer is bailee of goods that are located in a vehicle that is owned and operated by that employer, and driven by an employee acting in the course of their employment, it is reasonable, and consistent with the opinion of the Advocate General, to attribute physical possession to the employer.[47]Mr Davies submitted that Mr Kostka and Mr Milasz, as agents of the Appellant, were acting on his behalf and therefore, for the Company as a whole. Control is assigned to the Company as a unit rather than specifically to Mr Wesolowski. The vehicle was owned and insured by the Company, the load was arranged by Mr Milasz acting on behalf of the Company, Company resources were used to book the ferry and Mr Milasz’s letter to HMRC dated 21 February 2018 stated that the payment was intended to be given to the Appellant after expenses:
“I knew that the driver would received 500 euros as a cover for the ferry crossing costs and for fuel etc from this money had to settle accounts with the boss.”
[48]The proposition that physical possession may be enjoyed by an employer gains support from the Court of Appeal decision in Taylor and Wood [2013] EWCA Crim 1151 in which physical possession of the goods was attributed to the transporting company. The case was concerned with liability of two people who had arranged to transport smuggled cigarettes to the UK. Neither had ever had physical control of the goods: instead they had arranged for a firm of hauliers, Yeardley, to bring the cigarettes from Belgium to the UK. Yeardley had, in turn, sub-contracted the job to a Dutch firm, Heijboer. The Court held (at [29] & [30]):
“[29]… Possession is incapable of precise definition; its meaning varies according to the nature of the issue in which the question of possession is raised (a good example being Re Atlantic Computer Systems plc [1990] BCC 899, CA). But it can broadly be described as control, directly or through another, of the asset, with the intention of asserting such control against others, whether temporarily or permanently: see, for example, Goode on Commercial Law, Fourth Edition, p 46. In a case of bailment, the bailee has actual, or physical, possession and the bailor constructive possession. In other words, if the bailee holds possession not for any interest of his own but exclusively as bailee at will, legal possession will be shared by bailor and bailee. [30] In this case Heijboer had physical possession of the cigarettes at the excise duty point, but Heijboer was acting as no more than the agent of the primary carrier, Yeardley. Yeardley was, therefore, in law the bailee of the cigarettes at the excise duty point and, not apparently having any interest of its own in the goods, shared legal possession with the person having the right to exercise control over the goods, as explained above. If Yeardley had known, or perhaps even ought to have known, that it had physical possession of the cigarettes at the excise duty point, its possession might have been sufficient to constitute a “holding” of the cigarettes at that point. However, Yeardley had no such knowledge, actual or constructive, and was entirely an innocent agent. That important fact then turns the focus on the person or persons who were exercising control over the cigarettes at the excise duty point. There is no doubt that Wood (through Events) was such a person. Wood, as a matter of fact, under the contract with Yeardley gave instructions throughout the transportation to the carrier. Wood was correctly shown on Yeardley's invoice to be Yeardley's client and the consignee of the goods that were being transported. Under the Convention, as a matter of law, Wood (through Events) had the legal right of control over the goods. It is also known that Taylor (through TG) was acting together with Wood in exercising control over the cigarettes throughout the transportation. TG was shown on the CMR to be the consignee, a designation which represented accurately, if incompletely, the true state of affairs. There is no good reason to distinguish the position, in this context, of the two appellants.”
[49]In relation to “making the delivery”, Mr Davies highlighted that a useful summary of the UT’s findings on the issue is found in Kent Couriers Ltd v Revenue and Customs Commissioners [2024] UKFTT 145 (TC) at [32]:
“Making the delivery” 32. As for the question of whether the Appellant should be regarded as “making the delivery” of the alcohol at the excise duty point, the Upper Tribunal in Hartleb: (1) noted that: (a) there is no legislative definition of the term “making the delivery” for the purposes of the Directive and the Regulations and there is little authority on the meaning of the term; (b) in line with the approach which it considered to be correct in relation to the meaning of “holding”, the words “making the delivery” should be interpreted in accordance with their normal meaning unless that interpretation is contradicted by the purpose of the provision or by general principles of law and should be interpreted in context; and (c) to its knowledge, the meaning of the term had not been considered juridically. Although there was a suggestion in the Advocate General's opinion in WR at paragraph [43] that physical possession was necessary in order to be “making the delivery”, the Advocate General had not elaborated on this and the CJEU's decision in WR was focused solely on the question of “holding”; (2) went on to say as follows: “111. We would expect the determination of whether someone is “making the delivery” of excise goods to follow a similar approach to the determination of whether a person is “holding” excise goods. Regs. 13(2)(a), (b) and (c) are, in effect, tracking the physical movement of goods from leaving a duty suspension arrangement to being in the possession of the end user and are sequential. 112. Given the Excise Directive's focus on the physical location of the excise goods we would, therefore, expect physical possession of the excise goods to form an important part of the determination of whether a person is “making delivery of” those goods although, as with “holding”, for physical possession to not be definitive.”
[50]Following Hartleb, the process for us is therefore to apply the four “Dawsons” factors and then to consider the wider circumstances to determine whether it is appropriate to consider that person to be holding the goods or making the delivery of the goods.

Factor 1

[51]As regards physical possession, the Appellant’s employee and driver Mr Kostka was the person in immediate proximity to the goods at the duty point. Under the primary analysis in Hartleb, he would be considered to be the person in physical possession.[52]However, the Appellant was arguably also in physical possession of the goods, the goods were in the Appellant’s vehicle, the Appellant was the bailee of the goods, and the driver, Mr Kostka, was acting in the course of his employment (and therefore the Appellant would also have been vicariously liable for his actions).[53]Whilst the Appellant may contend that Mr Milasz acted against company protocol in arranging for Mr Kostka to transport the goods, that would not impugn this analysis. Firstly, there is no good evidence that neither Mr Kostka nor Mr Milasz were aware that they were transporting excise goods or were otherwise complicit in the smuggling attempt. Secondly, the Appellant has further conceded that Mr Milasz worked on his own in an independent position and was responsible for transport offers on his own. In such circumstances, Mr Milasz had at least ostensible authority to accept transportation jobs on behalf of the Appellant company. In accepting the index transportation job on behalf of his employer, his employer became contractually liable for the goods and became bailee of the goods.[54]Mr Davies highlighted the following factors which he submitted are relevant in determining the issue in the case. First, a letter dated 19 March 2018 from the Appellant to HMRC stated that neither Mr Kostka nor Mr Milasz were reported to the police because they “insisted that the vehicle was seized as a result of a misunderstanding”. It was only after the Appellant became aware of the assessment that the matter was reported to the police notifying of a suspected criminal offence of a breach of trust. HMRC submit that the inference to be drawn is that the assessment to duty was the catalyst for escalating the matter in the Appellant’s mind and that, until that point, there was little concern over the actions of the Appellant’s employees.[55]Furthermore, neither employee was dismissed immediately as a result; Mr Kostka’s contract ran its course and Mr Milasz remained employed for a period. Although the Appellant argues that dismissal was not possible under Polish law because there was no gross misconduct by the employees, it follows that the employees should be taken as acting under the Appellant’s authority. HMRC have been unable to explore this evidence further in the absence of witnesses on behalf of the Appellant.[56]Mr Davies submitted that it appears from the letter that, irrespective of the Appellant’s asserted company policy, Mr Milasz’s practice was to accept loads for cash and inform Mr Wesolowski after the event. Moreover, there is no evidence of the asserted Company Policy nor any contract of employment with Mr Milasz setting out the remit of his role. The Appellant relies on the assertion that suspicious loads required permission from Mr Wesolowski, however there is no evidence of what was deemed an “suspicious load” nor any evidence of training about such matters within the Company. It therefore remains unknown whether this was a suspicious load in the context of the Appellant’s everyday working practices.[57]Mr Davies submitted that if the employees were acting under the Appellant’s authority, the case falls squarely within Hartleb and WR. However, even if the Tribunal does not agree, HMRC contend that the Appellant is caught by vicarious liability as its employee was tasked with obtaining work by which the Company is the bound.

Factor 2

[58]As regards de jure and de facto control, Mr Davies submitted that by virtue of the fact that the Appellant’s employees directed the transport job (in the case of Mr Milasz), organised and paid for the ferry crossing (in the case of the Appellant’s administrative staff and the Appellant himself) and drove the vehicle containing the goods (in the case of Mr Kostka), the Appellant would also have had de facto control of the goods.[59]It is submitted that it is only if Mr Kostka was acting wholly outside the scope of his employment and completely independently of the Appellant, that he would have had de facto control. As it was, he was acting under the direction of Mr Milasz, who, in turn was acting in the course of his employment by the Appellant.

Factor 3

[60]There was no difference in the timings between the duty points for either Mr Kostka or the Appellant; the goods were first held in the UK as per regulation 13(1) at the same time they were held in the Appellant’s vehicle that was driven by Mr Kostka.

Factor 4

[61]There was no difference in the location: the goods were on the lorry

The wider circumstances

[62]If it is accepted that the Appellant had both physical possession of the goods and de facto and de jure control of them, it is not necessary to consider the matter any further; the Appellant was holding the goods.[63]If, in the alternative, it is found that Mr Kostka alone had physical possession, it is then necessary to consider the circumstances in respect of which HMRC contend that the Appellant (the person in control) rather than the employee (the person with physical possession) should be regarded as holder and that those circumstances outweigh the Appellant’s lack of physical possession (per Hartleb at [88]).[64]HMRC contend that the Appellant should be regarded as the holder of the goods because the Appellant was a contractual party to the agreement to transport the goods, and he was the bailee of the goods. Whereas it may be the case that Mr Milasz did not follow the Appellant’s protocols properly when the job was agreed, Mr Milasz was employed to operate independently for the benefit of the Appellant in obtaining jobs, which he did in this case. It was the Appellant’s responsibility to not only put in place suitable protocols for acquiring jobs, but to train his employees and ensure that they understood and put those protocols into practice. The risk of an employee failing to follow protocol is an inherent risk of being an employer and delegating responsibility to employees. It is part of the “entrepreneurial risk” associated with running a transport company referred to by the Advocate General in his Opinion at [39]. It is irrelevant that the Appellant was unaware his vehicle was transporting excise goods.[65]In the alternative, the same points may be made in support of the contention that the Appellant was making the delivery of the excise goods..

Appellant’s submissions

[66]Mr Gut clarified that the Appellant’s case was advanced on two related but independent bases. First that HMRC have failed to prove that the Appellant accepted, authorised or exercised control over the index transportation contract. Second, the evidence shows that, to the extent that the transportation was arranged at all, it was arranged by Mr Milasz and carried out by Mr Kostka outside of the ordinary course of the appellant’s business and contrary to procedures by which the business normally operated.[67]Mr Gut submitted that it is not sufficient for HMRC to show that the Appellant owned the vehicle or that Mr Milasz and Mr Kostka were employed by him. HMRC must prove that the Appellant was the relevant statutory person.[68]The Appellant accepts following WR that knowledge is not a precondition to liability. The question here is different: whether HMRC have identified the correct person upon whom liability may be imposed under Regulation 13 and the facts must be examined with care.[69]Mr Gut submitted that Hartleb is distinguishable on the basis that the factual foundation in Hartleb is absent here, namely that the transport undertaking had accepted the carriage and the employed driver was carrying out the delivery under the undertaking’s direction and control. Here HMRC seek the Tribunal to draw the inference of acceptance and control from factors of employment and vehicle ownership alone. That submission goes further than the evidence permits.[70]The Appellant accepted that Mr Kostka and Mr Milasz were employees, that the vehicle was owned and operated by the Appellant, the CMR bore the Appellant’s stamp, the ferry crossing was organised through arrangements associated with Appellant’s business and the ferry invoice ultimately paid by Appellant.[71]However, Mr Gut submitted, although the evidence may show that the Appellant’s employees were involved in the events, it does not show that the Appellant accepted the transportation contract, authorised a specific load, directed Mr Kostka to carry it, communicated with Peter, knew the identity of the sender or consignee, or received remuneration for the carriage. There is insufficient evidence to support the central liability-founding inference invited by HMRC.[72]Although Mr Milasz had permission to accept loads, he usually informed the Appellant if a client paid in cash but his letter stated he could not recall if he told the Appellant about this cargo. Furthermore, a general role in finding loads does not prove that this job, which was unusual, was accepted in the ordinary course of the Appellant’s business or accepted with the Appellant’s authority. The submission by HMRC that the Appellant was the contractual carrier and bailee of the goods requires proof that through an authorised act, the Appellant accepted the contract. There is no direct proof in this case. Mr Gut highlighted that there is no written order, no invoice, no instruction from the Appellant, no evidence of payment to the Appellant and no evidence of communication between the Appellant and Peter.[73]The CMR which identified the carrier by the Appellant’s stamp is not conclusive, and the CMR was generated in highly irregular circumstances as Mr Kostka provided a blank document to Peter and Mr Kostka completed parts of it and stamped it. The ferry cost was paid because the Appellant’s vehicle had used the ferry service; payment does not establish knowledge or acceptance of or control over the load.[74]That both employees remained employed for a time does not assist; immediate dismissal is not straightforward in Poland without proof and in light of the explanations given by the employees.[75]The evidence of the Appellant’s witnesses explain the ordinary operation of the business and the irregularities here. Ms Adamska’s evidence shows that the arrangement of an undocumented cash arrangement with the payment handed to the driver and a CMR completed in irregular circumstances was not part of the ordinary way in which the Appellant’s business was run. Mr Bartnikiewicz’s evidence demonstrates that drivers did not acquire customers themselves and that he was trained about the rules which applied. Mr Szwed’s evidence shows that carriage of goods without accepting terms of service was contrary to the principles of cooperation with the Appellant and that Mr Wesolowski’s approval was needed to accept an order.[76]It is accepted that the witnesses were not present on the date of seizure but the evidence proves the commercial context in which the Tribunal should assess whether it is more likely than not that the Appellant accepted and controlled the particular transportation.[77]The statutory language of the Regulations does not impose liability on every employer of a person involved in the transportation of excise goods nor does it impose liability on a vehicle owner. Rather, it identifies specific functional categories of liability. It is not for the Appellant to prove who Peter was, who owned the tobacco or who ultimately stood behind the smuggling attempt. If the question of whether the Appellant accepted or controlled the transportation is left unresolved, then HMRC has not discharged its burden.[78]It is accepted following WR and Perfect that knowledge is not determinative in this appeal. It is also accepted following Taylor and Wood that, in a proper case, de jure or de facto control may be sufficient. However, the authorities do not dispense with proof of control. The Tribunal must identify who had the relevant control over the goods at the duty point. Dawson’s is authority for the proposition that the question of holding is fact sensitive.[79]The Appellant accepts that in Hartleb the UT held the employer could be treated as holding the goods where the goods were in the physical possession of the driver, however the question is fact sensitive and whether it is established on the facts of this case. In Hartleb, the UT held that the Appellant had accepted the relevant transport which is distinguishable from the present case in which the acceptance and control of the transport is not proved.[80]In response to HMRC’s alternative argument that Hartleb allows for the attribution of physical possession to an employee, the Appellant submits that such attribution, if available at all, is not automatic and depends on the circumstances. The alleged bailment and course of employment conclusion are disputed. The irregular use of the CMR may show that the company’s paperwork was misused; it does not show that the proprietor accepted possession of the goods.[81]The Appellant submits that HMRC’s formulation on de jure and de facto control is too narrow; the question is not whether Mr Kostka alone was a rogue in every respect, the question is whether HMRC has proved that the Appellant exercised control over the relevant goods. The more unusual and undocumented the transaction, the less safe it is to infer that the Appellant accepted and controlled it.[82]HMRC rely on Mr Milasz’s authority to accept loads but this is not decisive as many employees have authority to act within a defined area. The relevant question is whether the employee acted within that authority in relation to the transaction in question. The Appellant’s evidence is that unusual or suspicious loads require the Appellant’s authorisation. Mr Milasz did not say that such authorisation was obtained; he said he could not recall. Furthermore, payment for the ferry after the event does not prove acceptance or control, it is consistent with paying an invoice for a service. Informing administrative staff that a ferry was required is also insufficient; it is not proof that the Appellant authorised, accepted or controlled the load.[83]HMRC’s case on “making the delivery” requires the same factual premise in relation to acceptance and control of the carriage. Here, there is no evidence that the Appellant directed the delivery route, communicated with the alleged sender or alleged consignee, instructed the driver or received payment. HMRC’s alternative case should therefore be rejected.[84]Reg 13 (2)(c) expressly contemplates liability of the person to whom the goods are delivered which illustrates that the statutory scheme requires identification of the relevant participant in the movement of the goods, not just the most visible transport business connected to the vehicle. The incompleteness of the investigation into Peter, the true sender and true recipient is relevant as HMRC seeks to impose liability on the Appellant by inference.

Discussion and Decision

[85]It was common ground that the goods were not excise duty paid. Therefore, the issue for us to determine is whether the Appellant was holding or making the delivery of the goods for the purposes of for the purposes of the 2008 Directive and the Regulations.[86]We attached no weight to the Appellant’s witness statements. None of the witnesses attended the hearing to be cross-examined and we were provided with no cogent or good reasons as to why they did not attend. In circumstances where the evidence could not be tested, we concluded that it was not in the interests of justice and fairness to attach any weight the evidence. We should also note that none of the witnesses had any direct involvement with the seizure and therefore the general nature of the evidence was of no relevance to our analysis of the actions and conduct of Mr Kostka, Mr Milasz and the Appellant and therefore provided no material assistance in determining the issues in this appeal.[87]The CJEU made it clear in WR that the starting point for who is considered to be holding the goods is the person with physical possession of those goods. In this case that was Mr Kostka the driver, and not the Appellant.[88]However, following the UT decision in Hartleb, there are circumstances in which a person who is not in physical possession of goods can properly be considered as holding the goods (at [81]).[89]The authorities make clear that the correct approach to this issue is to consider the four factors set out in Dawsons. As the UT in Hartleb explained at [88]:
“It is then necessary for us to consider the circumstances in respect of which the Respondents contend that the Appellant (the person in control) rather than the employee (the person with physical possession) should be regarded as holder and whether those circumstances outweigh the Appellant's lack of physical possession.”
[90]In this regard, we agreed with the submissions of Mr Davies on behalf of HMRC for the reasons set out below.[91]The driver was acting in the course of his employment when he was approached by Peter. On the material before us, we are satisfied that Mr Kostka continued to act in the course of his employment by not arranging the load, but rather passing the contact to Mr Milasz, whose job it was as the Appellant’s freight forwarder and, who we found had the authority, to accept and arrange the transportation and delivery of the load on behalf of the Appellant. In doing so, we consider that both Mr Kostka and Mr Milasz were acting in accordance with their employment. The load was then collected using the Appellant’s vehicle and the ferry transport was organised and subsequently paid for by the Appellant. We are therefore satisfied on the material before us that the Appellant, like the appellant in Hartleb (see[89]), had entered into an arrangement with Peter for the transportation and delivery of the goods.[92]We did not accept that the absence of evidence of direct contact between Peter and Mr Wesolowski means that this finding is not open to us. We found on the evidence before us that Mr Milasz, in his employment by the Appellant, had a significant degree of autonomy. We considered that the Appellant’s own evidence in a letter from Mr Wesolowski dated 19 March 2018 to HMRC supported our finding:
“All my forwarders work in a home office system so it is very difficult to carry out any controls or audits at the stage of their work when dealing with their clients and getting the transport jobs. They are responsible for their work beginning with acquire a client to complete the transport paperwork passing me all the paperwork after the job is finished. Unfortunately Mr Milasz has failed my trust not completing all paperwork regarding this particular job which led to a situation. I assume now that he did not check the client at all….”
[93]In those circumstances, we consider that accepting the load on behalf of the Appellant fell within the remit of Mr Milasz’s employment therefore the company was bound as a contractual party irrespective of the lack of formal documentation. We also found that Mr Wesolowski’s acceptance in his letter that it was “very difficult to carry out any controls or audits” on the freight forwarders was indicative of some acceptance by him that there was a degree of risk involved in the level of autonomy given to the freight forwarders. In considering this factor we drew an analogy with the comments Advocate General in his Opinion (at [39]) that:
“Entrepreneurship involves entrepreneurial risk and that includes an entrepreneur being personally responsible for the persons with whom he or she does business and from whom he or she accepts commissions.”
[94]We considered the Appellant’s submissions that the driver and freight forwarder acted contrary to the company’s usual procedure and that the Appellant had not accepted or authorised the load. Mr Wesolowski’s letter claimed that: “Dealing with any suspicious or different from oridinary transport offers (as this one) he was obligated to get my opinion before getting the job. He failed that. I do not have the ability to prevent the crimes commited by cmpoyecs working from home.” (sic)[95]However, there was no evidence before us to support the assertion that this load was “suspicious or different”, no documentary evidence of any company policies or procedures in place and, to the contrary, we found, in addition to the risk accepted by Mr Wesolowski that we have identified above, that the contemporaneous documentary evidence of Mr Milasz, namely a letter to HMRC dated 21 February 2018, indicated that he was permitted, and did accept loads for cash without seeking prior authorisation from the Appellant:
“…the driver is always informed what amount to collect from the customer if there is a cash payment…I had permission to collect loads. I usually informed Mr Jerzy about the fact that the client pays cash…I do not remember if I informed my boss about this cargo.”
[96]The fact that Mr Milasz “usually” informed Mr Wesolowski about a cash payment does not support the claim that there was any company policy requiring him to do so, and we concluded that even if there were such a policy, it was not rigorously imposed or adhered to.[97]We were satisfied on the basis of that evidence that the Appellant’s freight forwarders had a significant amount of autonomy and that the evidence did not support the Appellant’s submissions.[98]The Appellant sought to argue that Mr Wesolowski did not expressly authorise the contract nor was he aware of the load. However, as is clear from WR, (and which the Appellant accepted) knowledge is not a relevant factor in the test of “holding” and the Appellant’s argument on this point must fail (see also Brennan at [38]). We also rejected the Appellant’s submission that acceptance of the load or exercise over it must be express; each case is to be determined on its own facts and we are satisfied that, in acting in the course of their employment, there was implicit authorisation from the Appellant for the reasons set out above.[99]The Appellant claimed that express authorisation was required in circumstances where a load was unusual. However, as we have stated, there was no evidence before us upon which we could conclude that the obtaining of the load or manner in which the CMR was completed was unusual, nor any evidence of the business practices operated by the Appellant at the relevant time. In the absence of such evidence, we consider that the findings we have made and inferences we have drawn are reasonably open to us on the facts of this case.[100]Having made our findings on the facts, we turn to the four questions posed in Dawson’s.[101]Mr Kostka had physical possession as the driver of the vehicle.[102]We will address Mr Davies’ submissions on an alternative analysis of Hartleb by which physical possession could be vicariously attributed to the Appellant below.[103]In circumstances where we are satisfied that the driver and freight forwarder were acting in the course of their employment and that there was authorised acceptance of the load, that the vehicle used was owned and operated by the Appellant, that the Appellant paid for the ferry transportation and that the Appellant was identified as the carrier by the stamp on the CMR and had legal control of the goods in transit (see Taylor at paragraph [9] and Dawson's UT at paragraph [124]), we find that the de factoand/or legal control the Appellant had outweighs the fact that physical possession of the load was with the driver and consequently it was holding the goods pursuant to r13(2)(b) HMDP.[104]Neither party suggested that either Mr Kostka or Mr Milasz were knowing parties to the smuggling attempt and we made no such finding.[105]We concluded that Mr Kostka was acting under the direction of Mr Milasz and did no more than drive and pick up a load as instructed in the course of employment and therefore had no control over the load. In those circumstances, we concluded that Mr Kostka was not the appropriate person to assess despite having physical possession of the goods because, as we have set out above, the de facto and legal control was with the Appellant.[106]For the sake of completeness, we also considered that Mr Milasz also did not have legal control of the goods as he was acting only as an employee and was not a party to the contract for transportation. Nor did Mr Milasz have de facto control as he was only responsible for brokering the transportation agreement and informing the Appellant’s administrative staff. He did not arrange or pay for the ferry crossing which was also handled by the Appellant nor was he named on the CMR which recorded the Appellant as the carrier.[107]These questions can be dealt with together as the time there was no difference in timing between duty points between the Appellant and the driver and the location of the goods was the same.

Making the delivery

[108]In view of our findings on the issue of “holding”, it is not strictly necessary for us to address this point, however we do so for the sake of completeness.[109]In relation to “making the delivery”, the UT in Hartleb noted that there is no legislative definition of the term for the purposes of the Directive and the Regulations and there is little authority on its meaning. However, the term should be interpreted in accordance with the normal meaning unless that interpretation is contradicted by the purpose of the provision and should be interpreted in context. The UT noted the suggestion in the Advocate General's opinion in WR (at [43]) that physical possession was necessary in order to be "making the delivery", however the Advocate General had not elaborated on this and the CJEU's decision in WR was focused solely on the question of "holding".[110]At [111] and [112] the UT stated:
“111. We would expect the determination of whether someone is "making the delivery" of excise goods to follow a similar approach to the determination of whether a person is "holding" excise goods. Regs. 13(2)(a), (b) and (c) are, in effect, tracking the physical movement of goods from leaving a duty suspension arrangement to being in the possession of the end user and are sequential. 112. Given the Excise Directive's focus on the physical location of the excise goods we would, therefore, expect physical possession of the excise goods to form an important part of the determination of whether a person is "making delivery of" those goods although, as with "holding", for physical possession to not be definitive.”
[111]On our reading, the absence of physical possession is a significant factor in reaching the conclusion that the person in question is not "making the delivery" in any particular case but is not definitive.[112]On the facts of this case, we consider that the facts as found above in relation to “holding” also support the conclusion that the Appellant was “making the delivery”. In so finding, we did not accept the Appellant’s submission that evidence is required to demonstrate that the Appellant directed the delivery route or communicated with sender or instructed the driver. We were satisfied that Mr Kostka and Mr Milasz were acting in the course of their employment and consequently, as legal and de facto control lay with Appellant, that is sufficient to satisfy the provisions on the facts as found.[113]We agree that it was not for the Appellant to prove who Peter was, who owned the goods or who was in charge of the smuggling attempt; the question is whether the Appellant falls within the provisions as the person liable. For the reasons we have given and following the principles set out in the authorities, we are satisfied that the Appellant is liable for the duty

Conclusion

[114]The decision in Hartleb is binding upon us, however each case rests on its own facts and the UT’s Decision in Hartleb does not mean that de facto and/or legal control of the goods will always be sufficient to amount to "holding" the goods. In reaching our Decision we have considered all of the relevant facts by reference to the four questions set out in Dawson's UT. In applying the facts as found we are satisfied that the Appellant’s de factoand/or legal control of the goods outweighs the physical possession of the driver.[115]We consider our conclusion is supported by the Advocate General's opinion in WR (at [37] to [39]) which suggested that where an employee was making a delivery of goods on behalf of his employer and was therefore in physical possession of the goods, it was the employer with de facto or legal control over the goods who would be the person liable for the duty and not the employee. It is also consistent with the purpose of the Excise Directive which was described by the Advocate General in his opinion in WR as follows (at [29]:
“As far as the aims of the Directive are concerned … the broad wording of the provisions at issue, which concern a series of persons potentially liable for the duties without any order of priorities being established, and who are jointly liable, seeks to guarantee that the tax debt is paid effectively and for this purpose someone must be held responsible.”
[116]Our finding that de facto and/or legal control rested with the Appellant is sufficient for the purposes of determining the appeal, however we considered Mr Davies’ submissions relying on the obiter comments of the UT in Hartleb at [98]:
“98. We note that there is an alternative analysis which could be applicable in the circumstances. This analysis relies on the proposition that in suitable circumstances an employee’s physical holding of goods can be “attributed” to its employer. This would lead to the same result and would also not be inconsistent with the Advocate General’s views in WR. However, this point was not raised by the parties or argued before us and so we have not made our decision on this basis.”
[117]Further support for this proposition can be found in the Court of Appeal’s judgment in Taylor& Wood (see [48] above) which refers to the concept of possession being considered “according to the nature of the issue in which the question of possession is raised” and which can include control either directly or indirectly.[118]In this case, interpreting “holding” or “making the delivery” in accordance with the normal meaning of the words, we have found that the Appellant, through his employees, accepted the contract with Peter and, to use the words in Taylor & Wood was arguably the bailee of the goods. Even if we were to accept that Mr Milasz did not follow the Appellant’s protocols, we agreed with HMRC’s submission that Mr Milasz was employed to operate independently for the benefit of the Appellant in obtaining jobs and that the risk of an employee failing to follow protocol is an inherent risk of being an employer delegating responsibility to employees. We have also found that Mr Kostka, in following the directions of Mr Milasz, was acting within the scope of his employment and we consider it is arguable that his physical “holding” or “making the delivery” of the goods could be attributed to the Appellant which would lead to lead us to the same conclusion.[119]Accordingly, for the reasons set out above he appeal is dismissed.

Right to apply for permission to appeal

[120]This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. The application must be received by this Tribunal not later than 56 days after this decision is sent to that party. The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice. Release date: 31 July 2026