Delta Petroleum attorney Sir Fenton Ramsahoye QC argues at a July 12 hearing at the London-based Judicial Committee of the Privy Council that the Customs Department had no right to seize some 240,000 gallons of fuel from the company in 2012. Screenshot: PRIVY COUNCIL WEBSITE

The nearly four-year-long dispute between Delta Petroleum and the Customs Department was heard in the territory’s highest court last month, with the two parties arguing in front of the London-based Judicial Committee of the Privy Council over whether Customs had the right to seize a tank holding some 240,000 gallons of Delta Petroleum fuel at Pockwood Pond in September 2012.

Delta Petroleum attorney Sir Fenton Ramsahoye QC argues at a July 12 hearing at the London-based Judicial Committee of the Privy Council that the Customs Department had no right to seize some 240,000 gallons of fuel from the company in 2012. Screenshot: PRIVY COUNCIL WEBSITE
As the case has made its way through the High Court and the Eastern Caribbean Supreme Court of Appeal, customs officials have argued that the fuel was subject to seizure because Delta imported it unlawfully without the presence of customs officers and without paying duty.

But Delta has argued that because the fuel was earmarked for use by the BVI Electricity Corporation, it wasn’t subject to duty or liable for forfeiture.

The fuel company has also contended that it tried to contact two customs officers before the fuel was discharged, but those attempts were unsuccessful.

Those arguments were hashed out in greater detail at a July 12 hearing in London, a video of which can be viewed on the Privy Council’s website.

According to James Guthrie QC, who represented the Customs Department, Delta had the obligation to pay duty on the fuel it imported in September 2012 despite the fact that fuel delivered to the BVIEC is exempt from such fees.

That’s because the duty-free system with the BVIEC requires the importer to pay duty to Customs when the fuel arrives in the territory, and later apply for a reimbursement once evidence is presented to Customs that the fuel has been received by the corporation, the lawyer explained.

The system Mr. Guthrie described is similar to the duty-free scheme at Tortola Pier Park, where vendors pay duty on all goods imported and are then reimbursed the duty on items sold to cruise ship passengers.

“Fuel isn’t automatically duty free upon importation,” the lawyer said. “Any duty is to be paid up front. Once Customs is presented evidence of such sale, the duty is repaid.”

However, Delta attorney Sir Fenton Ramsahoye QC took issue with Mr. Guthrie’s contention that Delta should have paid duty on the fuel before delivering it to the BVIEC.

Delta did not have to pay duty on the fuel, he argued, because otherwise the company would have had to pay the tax even if the fuel was never delivered.

“Would Delta have been responsible for duty if it sent the fuel back?” Mr. Ramsahoye asked hypothetically.

The Privy Council has not yet rendered a decision on the case. The High Court previously sided with Customs in February 2013, but the ECSCA overturned that ruling in January 2014.

Later that year, the ECSCA granted leave for the case to be taken to the Privy Council.

Customs officials have estimated the seized fuel to be worth around $1.2 million, and the seized tank between $200,000 and $300,000.

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