On recognition as illegal and cancellation of notification of the results of the audit
No. 6001-23-00-6ap/923 dated 31.10.2023
Plaintiff: "E" LLP (hereinafter referred to as the Partnership)
Defendants: Russian State Institution "Department of State Revenue" (hereinafter referred to as the Department) State Revenue Committee of the Ministry of Finance of the Republic of Kazakhstan (hereinafter referred to as the Committee)
The subject of the dispute: on the recognition as illegal and cancellation of the notification of the results of the audit dated July 4, 2022 and the decision dated August 11, 2022
Review of the cassation complaint of the Department
PLOT: The Department conducted an inspection of customs and other documents and (or) information regarding the customs declaration, documents confirming the information stated in the customs declaration and (or) contained in the documents provided to the customs authorities.
Based on the results of the audit, notification No. 22KZ55100000178A7/135 dated July 04, 2022 (hereinafter referred to as the notification) was issued. The notification accrued to the plaintiff customs payments and taxes totaling 1,886,157 tenge, of which import customs duty (VAT) 795,398 tenge and penalties 36,711 tenge, value added tax (VAT) 1,007,699 tenge and penalties 46,289 tenge. on the basis of:
failure to submit documents confirming the customs value to declarations on goods:
No. 55101/290322/0003524, No. 55101/290322/0003527, No. 55101/290322/0004306, in connection with which, the reserve 6 method of determining the customs value was applied, based on information available in the customs territory of the Eurasian Economic Union.
Disagreeing with the notification, on July 21, 2022, the Partnership filed a complaint with the Committee. Based on the results of consideration of the complaint, the Committee issued a decision dated August 11, 2022 to dismiss the complaint (hereinafter referred to as the decision).
In support of the claim, it is stated that the partnership has submitted an exhaustive list of documents confirming the purchase of goods for the amount actually indicated, the conclusion of the tax authority that it is impossible to determine the value of the transaction using method 1 is premature, and therefore the requirements of the law regarding the procedure for determining the customs value and the sequence of application of appropriate methods have not been met.
Judicial acts:
1st instance: the claim is satisfied. The notification and the decision were declared illegal and cancelled.
Appeal: the decision of the court of first instance has been changed. Regarding the satisfaction of the claim for recognition as illegal and cancellation of the decision, it was canceled, the claim in this part was returned.
Cassation: the appeal ruling has been changed.
Regarding the recognition of the notice as illegal and cancellation, it was canceled with the referral of the case for a new hearing to the court of appeal in a different composition of the court. The rest of the resolution remains in force.
Conclusions: resolving the dispute and satisfying the claim, the local courts concluded that the customs value should be determined on the basis of all relevant payments according to the submitted documentation. The plaintiff submitted a full package of documents to confirm the customs value, allowing the Department to apply method 1 in determining the customs value of goods: contracts, general agreement and agreement on the carriage of goods by road on international routes, and other documents.
The defendant, bearing the burden of proof in accordance with subparagraph 1) of part 2 of Article 66 129 of the CPC, did not prove the impossibility of applying method 1 in relation to the customs value of goods imported by the plaintiff. The Board considers these conclusions of the local courts to be premature and inconsistent with the factual circumstances of the case. By virtue of the requirements of Article 154 of the CPC, the court's decision must be lawful and justified. A court decision is recognized as legitimate if it is made in compliance with all the requirements of the law and on the basis of the law.
A decision is considered justified if it is made on the basis of a comprehensive and objective examination of the evidence presented to the court at a court hearing. In accordance with paragraph 6 of the regulatory resolution of the Supreme Court of the Republic of Kazakhstan dated November 29, 2019 No. 7 "On certain issues of the application of customs legislation by courts", when considering a dispute, courts should correctly determine the range of circumstances to be proved, including: the presence of signs of unreliability of determining the customs value.; the validity of the decision on the inadmissibility of the declarant's use of the first method of determining the customs value - at the transaction price of imported goods, taking into account the requirements of Article 39 of the EAEU Customs Code; the use of a certain method of customs value with the justification of the impossibility of consistently applying all previous methods; the validity of the use of the reserve method.
By canceling the Department's notification, the local courts did not analyze and did not give a legal assessment to the documents available in the case to confirm the application of the first method of determining the customs value of goods. Thus, in the case file on the goods declaration No. 55101/290322/0003527, there are no documents confirming payment for the goods and the plaintiff's expenses for their transportation; at the time of drawing up the reconciliation report, the due date for payment of the cost of the goods had passed, however, the act did not reflect information on the availability of arrears for the delivery of this batch of goods.; The submitted specification No. 3 reflects the cost of goods in the amount of 9280 euros (two sellers are indicated), whereas according to the invoice, the cost of goods is 9,994 euros.
According to declaration No. 55101/290322/0004306, payment for the goods was made in the amount of 18,091 euros (transfer request dated March 10, 2022), however, according to the invoice, the amount is 13,957 euros. The reasons for the discrepancies and inconsistencies in the documents have not been clarified by the courts, and the justification for the legality of such discrepancies has not been provided in judicial acts.
Taking into account the failure of the courts to ensure the completeness and objectivity of the consideration of the case, the fundamental principles of administrative proceedings established by Articles 7 and 16 of the CPC, the appealed decision in the satisfied part is subject to cancellation and referral for a new hearing to the court of appeal in a different composition of the court.
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