On recognition as illegal and cancellation of the notification on elimination of violationsNo.6001-22-00-6ap/1330 dated 12/01/2023
Plaintiff: OT LLP (hereinafter referred to as the Partnership, Declarant)
Respondent: RSU (hereinafter referred to as the Department) "Department of State Revenue"
Interested parties: D-T LLP, RSU "State Revenue Committee of the Ministry of Finance of the Republic of Kazakhstan"
The subject of the dispute: on the recognition as illegal and cancellation of the notification on the elimination of violations dated June 22, 2022 and the decision of August 2, 2022 on the recognition of the notification as unfulfilled
Review of the plaintiff's cassation appeal
PLOT: On February 25, 2014, the Partnership and BOSS signed contract No. 1 for the purchase and sale of car spare parts on the terms of delivery CIF Istanbul (hereinafter referred to as Contract 1). 70 On October 31, 2019, the Partnership and EBS, Ltd signed contract No. 3 for the purchase and sale of car spare parts on the terms of delivery DAT Almaty. By an additional agreement dated May 20, 2021, the terms of delivery were changed to EXW Manchester (hereinafter referred to as Contract 2).
On February 18, 2021, the Declarant and LKVTOIveDT Ltd.Sti signed a contract No. 01/02 for the purchase and sale of car spare parts on the terms of supply to FCA Istanbul (hereinafter referred to as Contract 3). When imported into the territory of the Eurasian Economic Union (hereinafter referred to as the EAEU) The declarant made a customs declaration on the declarations for goods (hereinafter referred to as DT) 57201/180422/0005474, 57201/080422/0004926. No.57201/260522/0007519, the Department sent a notification to the Partnership on the elimination of violations No. 5901F62000158 dated June 22, 2022 (hereinafter referred to as the notification). The notification to the Partnership indicates a violation in the amount of 635,951 tenge.
Disagreeing with the notification, the Partnership sent an explanation to the defendant on the violations identified. On August 2, 2022, the Department issued a decision recognizing the notification of the elimination of violations as unfulfilled No. D5901F6200015001 (hereinafter referred to as the decision).
The claim is motivated by the fact that the Department, when issuing the notification, did not indicate which suppliers' supplies were accepted as samples of identical and homogeneous goods under comparable import conditions.
In order to confirm the accuracy of import pricing when determining the customs value of goods, price lists of commercial offers are provided along with an explanation to the notification.
The Department ignored the evidence presented by the Declarant when making the decision. The declared customs value of the goods is 11,741,052 tenge, which is confirmed by the primary documents and reflected in the Department's database.
However, the newly determined customs value of the goods, established by the defendant's desk control, is not confirmed by facts and primary documents, and amounts to KZT 15,394,533. The decision states that the buyer is obliged to bear all the costs of customs clearance. The partnership applied to T-L NG LLP with a request to provide a transcript on forwarding services based on the contract concluded between it and the plaintiff.
According to the response, the freight forwarding service of T-L NG LLP was provided on the basis of the submitted application. Accordingly, these freight forwarding services are included in the customs clearance to the declared customs value of the goods. Having clarified the claim, the plaintiff asked to recognize the defendant's actions on the issued notification as illegal, illegal and to cancel the decision.
Judicial acts:
1st instance: the claim is partially satisfied.
The decision of August 2, 2022 on recognizing the notification as unfulfilled was declared illegal and canceled. The rest of the claim was denied.
Appeal: the decision of the court of first instance has been changed. Regarding the recognition of the illegal decision of August 2, 2022 on recognizing the notification as unfulfilled, the decision was canceled with the issuance of a new decision to dismiss the claim.
Cassation: the decision of the judicial board is canceled.
The decision of the court of first instance was upheld.
Conclusions: the right of the customs authority to send a notification to the person being checked on the elimination of violations during a desk customs inspection is provided for in paragraph 3-1 of Article 417 of the Code "On Customs Regulation" (hereinafter referred to as the Customs Code).
At the same time, the purpose of sending such a notification is to grant the person being checked the right to independently eliminate the identified violations by making changes and (or) additions to the customs declaration and (or) paying customs duties, taxes, special, anti-dumping, countervailing duties, penalties, and interest.
It was established that the reason for sending the notification was the automatic activation of the risk management system under DT No.57201/260522/0007519, 57201/180422/0005474, 57201/080422/0004926 due to the low declared value of goods in declarations in comparison with the cost of identical and similar goods under comparable import conditions.
In this regard, the local courts came to the correct conclusion about the legality of the defendant's actions in sending the plaintiff a notice corresponding to his competence and assigned control functions. By virtue of subparagraph 2) of paragraph 3-2 of Article 417 of the Customs Code, the execution of a notification of the elimination of violations is recognized in case of disagreement with the violations indicated in the notification - the submission by the person being checked of an explanation of the violations in the form of an electronic document or a paper document with supporting documents, including information stated in the customs declaration.
By virtue of the requirement of paragraph 3-3 of Article 417 of the Customs Code, the customs authority has the right to make a decision on recognizing the notification as unfulfilled no later than ten working days from the date of the submission of explanations and documents by the person being checked.
Resolving the dispute and satisfying the claim for declaring illegal the decision to declare the notification unfulfilled, the court of first instance, applying the provisions of subparagraph 2) of paragraph 3-2 of Article 417 of the Customs Code, came to the correct conclusion about the plaintiff's execution of the notification by sending an explanation with supporting documents on July 21, 2022. The form and content of the explanation comply with the requirements of the legislation.
In accordance with the third part of Article 129 of the CPC, the defendant may refer only to those grounds that are mentioned in the administrative act. In addition, it follows from the contested decision that the customs authority recognized the notification as unfulfilled as a whole.
However, in fact, the defendant agreed to the execution of the notification under DT No.57201/260522/0007519, 57201/080422/0004926, and the explanation was not accepted in part of DT No. 57201/180422/0005474 due to discrepancies in the declared value of the goods. In this regard, the board considers correct the conclusions of the court of first instance on the inconsistency of the contested administrative act with the factual circumstances of the case and the requirements of the law, which entails its illegality. By overturning the decision of the court of first instance and rejecting the claim, the appellate instance, having considered the dispute on the merits, concluded that the declarant had failed to comply with the structure of the customs value of the goods due to the lack of evidence of incurred transportation and logical costs.
And as a result, she pointed out the legality of the conclusion of the court of first instance on the correct application by the defendant of the reserve method for determining the customs value of goods. The Board as a whole does not agree with the resolution by local courts of the dispute on the merits of the legality of determining the customs value, since when verifying the legality of the decision to declare the notification unfulfilled, the court does not have the right to prejudge the results of an unscheduled on-site customs inspection, the right to conduct which is provided for in paragraph 10 of Article 418 of the Customs Code.
When considering a dispute about the legality of a decision to declare a notification unfulfilled, it is enough for the courts to find out whether the explanation in form and content meets the requirements of subparagraph 2) of paragraph 3-2 of Article 417 of the Customs Code and the availability of attached documents to which the declarant refers in support of his arguments.
By virtue of the imperative requirement of subparagraph 2) of paragraph 3-2 of Article 417 of the Customs Code, the submission of such an explanation is recognized as the fulfillment of the notification. Based on the above, the decision of the appellate instance is subject to cancellation, while the decision of the court of first instance remains in force, with the exclusion from its reasoning of the conclusions on the merits of the dispute about the legality of the customs value of imported goods declared by the declarant.
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