On January 16, the Department of Administrative Cases of the Supreme Court left unchanged judgment of the Administrative Regional Court, with which the decision of the State Revenue Service imposing an obligation on the applicant to pay the customs duty, the anti-dumping duty and value added tax, was canceled. The Supreme Court found that the conclusions of the judgment of the Regional Court on significant deficiencies in the administrative act issued by the State Revenue Service were justified.

In its judgment (Case C-46/16), the Court of Justice of the European Union, in answer to the questions referred by the Supreme Court on the choice of method of determining the customs value of goods, has concluded that the customs authorities, in their decision determining the amount of import duties payable, are under an obligation to state the reasons, as a result of which they have rejected the methods for determining the customs value provided for in Sections 29 and 30 of the Customs Code before they were able to draw a conclusion on the application of the method provided for in Section 31 of the Customs Code.

In the opinion of the Supreme Court, the reasons for the decision of the State Revenue Service had material deficiencies which were not possible and admissible to be corrected during the judicial proceedings. The applicant was not given an adequate opportunity to verify and submit information which would allow the application of other methods for determining the customs value of goods, nor to examine and object to the method and calculation chosen by the customs authority. In particular, it was not possible for the applicant to compare the customs value of which goods exactly (amount of comparable goods)were used in the calculation. The judgment of the Supreme Court cannot be appealed.

The applicant, company “LS Customs Services” Ltd., in customs control “Rīgas brīvostas MKP” point (customs control point of Riga Free Port) processed a customs transit declaration for transit of goods – children’s bicycles and spare parts thereof – from the People’s Republic of China to the Russian Federation. Transit procedure was not finished, because the consignee’s customs authority – Terekhovo customs control point – had not received arrival notice in term, when it should be presented goods.

The State Revenue Service carried out verification of unfinished customs procedure, namely, transit, and concluded that there was unlawful evasion to subject goods chargeable with customs duty to customs control and, therefore, customs debt occurred. In result of verification, the Service calculated customs tax, antidumping duty and value-added tax to be paid additionally to the budget by the applicant. The decision, along with another considerations, includes indication that it is impossible to determine customs value of goods, which were intended for sale in the Russian Federation, in accordance with provisions of the Section 29 of the Council Regulation (EEC) No 2913/92, and the Service does not possess information, which is necessary in order to use assessment methods indicated in subparagraphs “a”, “b”, “c” and “d” of the section 30 (2) of the Customs Code.

By judgements of the Administrative District Court and the Administrative Regional Court, the application was satisfied and the decision of the State Revenue Service was abolished.


Information prepared by Baiba Kataja, the Press Secretary of the Supreme Court

Tel.: +371 67020396; e-mail: baiba.kataja@at.gov.lv