Excise guidelines for the tobacco industry
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This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
9 OFFENCES
| 9.1 PURPOSE |
| 9.2 INTRODUCTION |
| 9.3 OFFENCES |
| 9.4 PENALTIES |
| 9.5 INFRINGEMENT NOTICES |
| 9.6 APPLICATION OF THE CRIMINAL CODE |
| 9.7 TERMS USED |
9.1 PURPOSE
This Chapter deals with:
- •
- offences under the Excise Act
- •
- penalties
- •
- infringement notices, and
- •
- application of the Criminal Code.
9.2 INTRODUCTION
This Chapter is a general discussion on offences. It is not meant as legal advice and you are encouraged to seek independent legal advice in relation to your own individual circumstances.
There are a number of acts or omissions under the Excise Act that are offences.
A conviction for an offence may result in a penalty as provided for within the Excise Act. The penalty provided may be in the form of ' penalty units ', a term of imprisonment or an amount of money calculated by a set formula.
9.3 OFFENCES
Certain acts or omissions are offences under the Excise Act for which penalties are prescribed.
For penalties to apply to an offence (except where an infringement notice has been issued), you must first be convicted of the offence in a court of law following prosecution.
Certain offences under the excise legislation are strict liability offences as defined in section 6.1 of the Schedule to the Criminal Code. Essentially, strict liability means that the offence consists of the physical act or omission only. It is not necessary for the court to find that you knowingly committed, or were reckless or negligent in relation to, the act or omission.
Some sections of the Excise Act prescribe the following 2 levels of offence for similar conduct:
- •
- a higher penalty applies to an act or omission which was intentionally or recklessly committed, that is, there is a fault element, and
- •
- a lower penalty applies to the same act or omission on a strict liability basis, that is, there is no fault element.
For example, section 26 of the Excise Act prescribes that licensed manufacturers are to manufacture in accordance with the Act and their licence:
- (1)
- A licensed manufacturer must not intentionally manufacture excisable goods knowing, or being reckless as to whether, the manufacture contravenes this Act or the manufacturer licence.
- Penalty: 2 years imprisonment or 500 penalty units.
- (2)
- A licensed manufacturer must not manufacture excisable goods in contravention of this Act or the manufacturer licence.
- Penalty: 100 penalty units.
- (3)
- Strict liability applies to subsection (2).
Maximum penalties under the TAA for the unlawful possession, sale or manufacture of tobacco goods (including tobacco seed, plant and leaf), whether domestic or imported, are much greater than for those in the Excise Act which encompasses all excisable goods (alcohol, tobacco, fuel and lubricants).
9.4 PENALTIES
The Excise Act contains many provisions that include a penalty at the foot of the section or subsection. This means that if you are convicted of an offence against the particular provision, you can receive a penalty not exceeding the penalty mentioned. [260] The penalty listed is thus the maximum penalty but the courts can impose a lesser penalty.
Example 9A
A person manufactures excisable tobacco goods outside premises covered by their licence. This is a contravention of subsection 26(2) of the Excise Act which says that a licensed manufacturer must not manufacture excisable goods in contravention of this Act or the manufacturer licence. The penalty at the foot of subsection 26(2) is 100 penalty units. We bring a court action against the person and the court convicts the person. The penalty cannot exceed 100 penalty units but it can be less.
As indicated, certain offences provide for alternative penalties, for example, subsection 26(1) of the Excise Act provides for a penalty of 2 years imprisonment or 500 penalty units.
In some cases the courts can impose both penalties upon conviction. [261]
9.5 INFRINGEMENT NOTICES
We may issue an infringement notice [264] as an alternative to prosecution for unlawfully possessing, or unlawfully selling excisable goods. [265] An infringement notice imposes a penalty of 20 penalty units.
To issue an infringement notice, we must have a reasonable belief that you have committed the offence. Notices must be issued within 12 months of the commission of the offence. [266]
The penalty is payable on the day specified in the infringement notice which must be at least 28 days after the day the notice was issued. [267]
If you do not pay the penalty, we may withdraw the infringement notice and prosecute you.
You cannot be prosecuted for the same offence where an infringement notice has been issued unless the infringement notice is withdrawn.
If we withdraw an infringement notice after you have paid the penalty, we will refund it to you. [268]
9.6 APPLICATION OF THE CRIMINAL CODE
Chapter 2 of the Criminal Code applies to offences against the Excise Act. However, Parts 2.5 and 2.6, which are in Chapter 2 of the Criminal Code, do not apply. [269] In some courts, excise prosecutions are able to be treated as criminal matters, while in other courts they are treated as civil matters. This, obviously, has an effect on issues such as the burden and standard of proof required.
9.7 TERMS USED
The value of a penalty unit is contained in section 4AA of the Crimes Act 1914 and is indexed regularly. The dollar amount of a penalty unit is available at Penalties .
Amendment history
| Part | Comment |
|---|---|
| Throughout | Content checked for technical accuracy and currency.
Updated in line with current ATO style and accessibility requirements. |
Section 90 of the Constitution.
Ha v New South Wales & Ors [1997] HCA 34.
Ha v New South Wales & Ors [1997] HCA 34; 97 ATC 4674 at [4684], per Brennan CJ, McHugh, Gummow and Kirby JJ.
Section 5 of the Excise Tariff Act imposes excise duty on goods 'manufactured or produced'. In this Guide the term manufactured means manufactured or produced unless otherwise specified.
Gazette No. S144 of 4 June 1991.
See the prefatory notes to the Schedule to the Excise Tariff Act.
For an explanation of customs and excise tariff proposals, refer to About Tariff Proposals .
In the absence of a tariff amendment bill, tariff proposals then before the House may be affirmed towards the end of a period of sittings by means of a tariff validation bill.
Section 115 of the Excise Act.
Section 28 of the Excise Act.
Section 33 of the Excise Act.
Section 44 of the Excise Act.
Section 25 of the Excise Act.
Subsection 66(7) of the Excise Act.
Subsection 4(1) (definition of 'storage licence') and Part IV of the Excise Act.
Section 61A of the Excise Act.
Section 7 of the Excise Act and section 1A of the Excise Tariff Act.
Section 38 and 38A of the Excise Act.
Section 31 of the Excise Act.
Section 68 of the Excise Act excludes the curing process from being manufacture and the Schedule defines 'tobacco' as being tobacco leaf subjected to any process other than curing the leaf as stripped from the plant.
Section 36 of the Excise Act.
Note that the buyer or seller as applicable requires an appropriate licence.
Subdivision 308-A of Schedule 1 to the TAA makes it an offence to sell or buy tobacco leaf from a person who is not licensed to manufacture or deal. Regulation 4D of the Customs (Prohibited Imports) Regulations 1956 prohibits the importation of tobacco leaf unless the importer holds a manufacturer or dealer licence.
Section 4 of the Excise Act. The term 'licensed manufacturer' is defined to be 'a person or partnership who holds a manufacturer licence'.
Section 39D of the Excise Act.
Section 68 of the Excise Act.
Regulation 4D of the Customs ( Prohibited Imports ) Regulations 1956 .
Section 27 of the Excise Act.
Section 51 of the Excise Act.
Sections 30, 35 and 53 of the Excise Act.
Section 77AA of the Excise Act.
Section 60 of the Excise Act.
Section 62 of the Excise Act.
Sections 44 and 61A of the Excise Act.
Section 44 of the Excise Act.
Section 44 of the Excise Act and section 20 of the Excise Regulation.
Section 75 of the Excise Act.
Sections 26, 29 and 34 of the Excise Act.
Section 20 of the Excise Regulation.
Sections 58 and 66 of the Excise Act.
Section 54 of the Excise Act.
Section 49 of the Excise Act.
Section 52 of the Excise Act.
Section 76 of the Excise Act.
Section 77 of the Excise Act.
Subsection 86(2) of the Excise Act.
Section 87 of the Excise Act.
Section 6 of the Crimes Act.
Sections 11.1, 11.2, 11.2A and 11.5 of the Criminal Code.
Section 87AA of the Excise Act.
Section 91 of the Excise Act.
Section 46 of the Excise Act.
Section 106 of the Excise Act.
Section 50 of the Excise Act.
Section 39E of the Excise Act.
Section 39O of the Excise Act.
Subdivision 355-C of Schedule 1 to the TAA.
Section 39 of the Excise Act.
Sections 25, 28, 33 and 117 of the Excise Act.
Section 6A of the Excise Act.
Section 28 of the Excise Act.
Section 28 of the Excise Act.
Section 29 of the Excise Act.
Section 31 of the Excise Act.
Section 31 of the Excise Act.
Sections 28, 29 and 31 of the Excise Act.
Section 33 of the Excise Act.
Section 33 of the Excise Act.
Section 34 of the Excise Act.
Section 36 of the Excise Act.
Sections 33, 34 and 36 of the Excise Act.
Section 308-125 of Schedule 1 to the TAA.
Section 26 of the Excise Act.
Section 27 of the Excise Act.
Sections 25, 26 and 27 of the Excise Act.
Section 30 of the Excise Act.
Section 30 of the Excise Act.
Section 35 of the Excise Act.
Section 35 of the Excise Act.
Section 308-110 of Schedule 1 to the TAA.
Section 308-110 of Schedule 1 to the TAA, section 64A of the Taxation Administration Regulations 2017 , and section 21 of the Excise Regulation.
Section 308-110 of Schedule 1 to the TAA, section 64A of the Taxation Administration Regulations 2017 , and section 21 of the Excise Regulation.
Sections 30, 35 and 117 of the Excise Act.
Section 120 of the Excise Act.
Section 50 of the Excise Act.
Section 51 of the Excise Act.
Section 117I of the Excise Act.
Section 49 of the Excise Act.
Section 52 of the Excise Act.
Section 92 of the Excise Act.
The term used in section 58 of the Excise Act is 'entry for home consumption'.
Prefatory notes to the Schedule to the Excise Tariff Act.
Subsection 4(6) of the Excise Act.
Sections 39B and 39C of the Excise Act.
Paragraph 39A(2)(d) of the Excise Act.
Paragraph 39A(2)(c) of the Excise Act.
Paragraph 39A(2)(f) of the Excise Act.
Sections 39B and 39C of the Excise Act.
Sections 39B and 39C of the Excise Act.
Section 39B of the Excise Act.
Section 39C of the Excise Act.
Paragraphs 39B(e) and (f) of the Excise Act.
Moore, B (2004) The Australian Oxford Dictionary , 2nd edn, Oxford University Press, Melbourne.
Paragraph 39B(f) of the Excise Act.
Paragraph 39A(2)(f) of the Excise Act; section 995-1 of the Income Tax Assessment Act 1997 ; subsection 318(1) of the Income Tax Assessment Act 1936.
Section 995-1 of the Income Tax Assessment Act 1997 for definition of 'relative' for this purpose.
Subsection 318(1) of the Income Tax Assessment Act 1936.
Subsection 318(7) of the Income Tax Assessment Act 1936.
Subsection 318(2) of the Income Tax Assessment Act 1936.
Subsection 318(3) of the Income Tax Assessment Act 1936.
Subsection 318(4) of the Income Tax Assessment Act 1936.
Paragraph 39A(2)(fa) of the Excise Act.
Paragraphs 39A(2)(g) and (h) of the Excise Act.
Paragraph 39A(2)(i) of the Excise Act.
Paragraph 39A(2)(ia) of the Excise Act.
Paragraph 39A(2)(j) of the Excise Act.
Paragraph 39A(2)(l) of the Excise Act.
Martino and Australian Taxation Office [2002] AATA 1242.
Paragraph 39G(1)(k) of the Excise Act.
Subsection 39D(4) and section 39DA of the Excise Act.
Subsection 39D(1) of the Excise Act.
Subsection 39D(3)of the Excise Act.
Section 39Q of the Excise Act.
Sections 16 to 22 of the Excise Act.
Section 39F of the Excise Act.
Section 39Q of the Excise Act.
Subsection 39F(4) of the Excise Act.
Paragraph 120(1)(iv) of the Excise Act
Paragraph 120(2)(d) of the Excise Act.
Prefatory notes to the Schedule to the Excise Tariff Act.
Subsection 4(6) of the Excise Act.
Note that this is different to the consideration for granting a licence. In granting a licence, we can take into account any misleading statement or if you knowingly made a false statement in your application. For suspension or cancellation, we can consider any statement you make to us in relation to excise matters.
Subsection 39L(2) of the Excise Act.
Subsection 39L(4) of the Excise Act.
Subsection 39L(3) of the Excise Act.
Paragraph 39L(4)(b) of the Excise Act.
Subsections 39G(1) and 39L(1) of the Excise Act.
Subsection 39G(1) of the Excise Act.
Section 26 of the Excise Act.
Section 39K of the Excise Act.
Subsection 39K(6) of the Excise Act.
Section 39Q of the Excise Act.
Subsection 39L(4) of the Excise Act.
Subsection 39N(2) of the Excise Act.
Section 39M of the Excise Act.
Subdivision F of Division 1A of Part IX of the Excise Act.
Section 39Q of the Excise Act.
Subsections 39J(2) and 39L(5) of the Excise Act.
Section 39P of the Excise Act.
Subsection 39K(2) of the Excise Act.
Subsection 39K(2) of the Excise Act.
Subsection 39K(2) of the Excise Act.
Subsection 39K(2) of the Excise Act.
Subsection 39K(1) of the Excise Act.
Subsection 39K(3) of the Excise Act.
Subsection 39M(1) of the Excise Act.
Subsection 39M(2) of the Excise Act.
Subsection 39M(2) of the Excise Act.
Subsections 39K(4) and 39M(3) of the Excise Act.
Prefatory notes to the Schedule to the Excise Tariff Act.
Subsection 4(6) of the Excise Act.
Sections 44 and 61A of the Excise Act.
This does not mean movements within the premises covered by your licence, rather movements from premises covered by your licence to another place.
Section 66 of the Excise Act.
Subsection 44(3) of the Excise Act.
Subsection 44(2) of the Excise Act.
Section 75 of the Excise Act - this includes waste such as stalks and clippings arising from the manufacture of tobacco products.
Sections 16 to 22 of the Excise Act.
Section 77AA of the Excise Act for tobacco leaf.
While there is no specific provision in the Excise Act which allows permissions to be cancelled (unlike licences), in accordance with subsection 33(3) of the Acts Interpretations Act 1901, the power to grant the permission provides the power to cancel the permission.
Section 117D of the Excise Act.
Section 117D of the Excise Act.
Subsection 44(4) of the Excise Act.
Subsection 44(4) of the Excise Act.
Subsections 117D(2), 117A(2), 44(5) and 61A(6) of the Excise Act.
Prefatory notes to the Schedule.
Subsection 4(6) of the Excise Act.
Subsection 5(1) of the Excise Tariff Act.
Subsection 66(7) of the Excise Act.
Paragraphs 162C(1)(d), (e) or (f) of the Excise Act.
Subsections 66(5) and (6) of the Excise Act. Paragraph 1.21 of the Explanatory Memorandum to the Excise Amendment (Reducing business Compliance Burden) Bill 2011.
Subsection 4(6) of the Excise Act.
Section 6AA of the Excise Tariff Act.
Subsection 66(7) of the Excise Act.
For an explanation of customs and excise tariff proposals, refer to About Tariff Proposals .
Subsections 59A(1) and (2) of the Excise Act.
Subsections 59A(1) and (2) of the Excise Act.
Subsection 59A(5) of the Excise Act.
This allocation considers your normal delivery activity over a period of time. This period will take into account any aberrations and will be long enough to allow a representative average to be calculated.
Section 154 of the Excise Act.
Section 155 of the Excise Act and section 359-60 of Schedule 1 to the TAA.
Section 154 of the Excise Act.
Section 77AA of the Excise Act.
Section 60 of the Excise Act.
Section 77AA of the Excise Act.
Subsections 60(4) and 77AA(4) of the Excise Act.
ATO Interpretative Decision ATO ID 2004/61 Excise: goods given away without payment of excise duty ; but refer to ' Delivering samples without payment of duty ' in Chapter 7 Remissions, refunds, drawbacks and exemptions.
ATO Interpretative Decision ATO ID 2001/595 Excise: Liability to pay an amount equal to the duty on excisable goods stolen from a licensed premise .
ATO Interpretative Decision ATO ID 2004/62 Excise: goods sold without payment of excise duty .
For tobacco leaf, the amount is calculated by assuming the leaf had been manufactured into an equivalent amount of excisable tobacco goods.
Section 162C of the Excise Act.
The settlement period usually specified in a licence is 7 days with lodgment of your excise return required by 4:00 pm on the first working day after the end of your tobacco excise period.
You are required to lodge a return even if you do not manufacture any excisable tobacco goods during the period.
Paragraph 1.21 of the Explanatory Memorandum to the Excise Amendment (Reducing Business Compliance Burden) Bill 2011.
Section 67 of the Excise Act.
Section 54 of the Excise Act.
Section 61 of the Excise Act.
Paragraphs 120(1)(iv) and 120(2)(b) of the Excise Act.
Subsection 120(3) of the Excise Act.
Note: the legislation uses the term 'delivered for home consumption' (see, for example, sections 61 and 61C of the Excise Act).
See R v Lyons [1906] HCA 17; Collector of Customs (NSW) v Southern Shipping Co Ltd [1962] HCA 20; Carmody v FC Lovelock Pty Ltd [1970] HCA 35; Caltex Australia Petroleum Pty Ltd v Commissioner of Taxation [2008] FCA 1951.
The term used in section 58 of the Excise Act is 'entry for home consumption'.
Section 78 of the Excise Act.
Clause 2 of Schedule 1 to the Excise Regulation.
Table item 1 in clause 2 of Schedule 1 to the Excise Regulation.
Table item 2 in clause 2 of Schedule 1 to the Excise Regulation.
Table item 3 in clause 2 of Schedule 1 to the Excise Regulation.
Table item 4 in clause 2 of Schedule 1 to the Excise Regulation.
Table item 5 in clause 2 of Schedule 1 to the Excise Regulation.
Table item 6 in clause 2 of Schedule 1 to the Excise Regulation.
Table item 6(b) in clause 2 of Schedule 1 to the Excise Regulation.
Table item 3 in subclause 1(1) of Schedule 1 to the Excise Regulation.
Section 11 of the Excise Regulation.
Table item 5 in subclause 1(1) of Schedule 1 to the Excise Regulation.
Subsection 160A(1) of the Excise Act.
Section 11 of the Excise Regulation.
Table item 7 in subclause 1(1) of Schedule 1 to the Excise Regulation.
Subsection 10(2) of the Excise Regulation.
Table item 13 in subclause 1(1) of Schedule 1 to the Excise Regulation.
Section 79 of the Excise Act and Part 3 of the Excise Regulation.
Subsection 16(1) of the Excise Regulation.
Subsection 16(2) of the Excise Regulation.
Subsection 16(3) of the Excise Regulation.
Section 80 of the Excise Act.
Section 160A of the Excise Act.
Section 64 of the Excise Act.
Clause 2 of Schedule 1 to the Excise Regulation.
Section 55 of the Excise Regulation.
Section 10 of the Excise Regulation.
Section 11 of the Excise Regulation.
Section 20 of the Excise Regulation.
Table item 2 in subsection 16(1) of the Excise Regulation.
Table item 3 in subsection 16(1) of the Excise Regulation.
Paragraphs 120(1)(iv) and (2)(b) of the Excise Act.
Paragraph 120(1)(vi) of the Excise Act.
Note: the legislation uses the term 'delivered for home consumption' (see, for example, sections 61 and 61C of the Excise Act).
See R v Lyons [1906] HCA 17; Collector of Customs (NSW) v Southern Shipping Co Ltd [1962] HCA 20; Carmody v FC Lovelock Pty Ltd [1970] HCA 35; Caltex Australia Petroleum Pty Ltd v Commissioner of Taxation [2008] FCA 1951.
The term used in section 58 of the Excise Act is 'entry for home consumption'.
Prefatory notes to the Schedule to the Excise Tariff Act.
Subsection 4(6) of the Excise Act.
For example, a decision not to issue a movement permission under section 61A of the Excise Act.
Objections are governed by Part IVC of the TAA.
These are conducted in the Administrative Review Tribunal or Federal Court.
Section 39Q of the Excise Act.
Paragraph 162C(1)(c) of the Excise Act.
Paragraph 162C(1)(i) of the Excise Act.
Paragraph 162C(1)(j) of the Excise Act and subsection 14(3) of the Excise Regulation.
Section 14ZU of the TAA.
Section 359-5 of Schedule 1 to the TAA.
Section 5 of the Excise Act and section 4D of the Crimes Act.
Section 127A of the Excise Act.
Section 116 of the Excise Act.
Section 151 of the Excise Act.
Section 129B of the Excise Act.
Subsections 117(2) and 117B(2) of the Excise Act.
Section 129B of the Excise Act.
Section 129D of the Excise Act.
Section 129F of the Excise Act.
Section 6B of the Excise Act.
References
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