On 28 July 2015 the Commercial Court of Moscow rendered a
decision in case No. А40-102787/2016-33-887 under the claim
of Sodruzhestvo LLC (the "Company") against the Central
Excise Customs Authority ("CECA") to invalidate a CECA
departmental control decision cancelling a Vladimir Excise Post
decision on release of goods.
It follows from the court decision that the Company had placed a
motor vehicle under the customs procedure of outward processing to
perform warranty repair using the declaration for goods as a
document on the conditions for processing the goods (in accordance
with Article 253 of the Customs Union Customs Code, processing
permission is not required in this instance). Actually, though, in
addition to undergoing warranty repair outside of the customs
territory the vehicle was also armored and received several
upgrades (a fire alarm was installed, the tires were changed,
When the vehicle was returned to the customs territory of the
Eurasian Economic Union the Company placed it under the customs
procedure of release for domestic consumption, having calculated
and paid the customs payments based on the value of the work done
under the regime of outward processing. The vehicle was released
for domestic consumption by an official of the Vladimir Excise
Following departmental control done by the CECA, it was declared
that the decision to release the goods did not comply with the
effective customs legislation.
In the CECA's opinion, the work done to the vehicle
(armoring, upgrade/change of features) was not repair work and
could have been done only with duly issued permission to process
As, pursuant to Article 252(2) of the Customs Union Customs
Code, goods placed under the customs procedure of outward
processing and actually exported lose the status of Customs Union
goods, and the extra work done to the vehicle without the customs
authority's permission violates the terms of the declared
customs procedure and means that the returned vehicle cannot be
considered as a product of processing, therefore, Mercedes Benz
vehicle placed under the customs procedure of release for
domestic consumption should be considered as a foreign goods and
the customs duty and value added tax should be paid not on the
value of the work to process the goods, but on the full value of
the imported vehicle.
The court supported the CECA's arguments and dismissed the
Company's claims, holding that they were inconsistent with the
effective legislation of the Eurasian Economic Union and Russian
Federation customs laws.
The court decision in this case emphasizes once again that the
issue of applying customs procedures other than the well-known
procedures of release for domestic consumption and export should be
Dentons' lawyers have extensive experience advising
companies on issues of applying various customs
procedures—including rarely used procedures—which, in
turn, helps companies to not only enjoy the advantages of using
such customs procedures, but also to avoid potential negative
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