TC09657 - [2025] UKFTT 01208 (TC)

The preliminary question referred here was about the extent to which customs authorities are entitled to apply the results of the examination of samples taken from the goods covered by customs declarations to earlier declarations covering goods, to all appearances identical, from which samples were not and can no longer be taken. Greencarrier imported crackers, biscuits and chocolate bars from Russia. In 2007 the tax authorities carried out an inspection of the customs duties paid by Greencarrier based on 35 declarations. It took and analysed samples relating to 6 declarations and, based on those results and its assertion that the other 23 declarations related to identical goods, it concluded that 29 declarations were incorrect.

The Advocate General in his Opinion referred to Article 78 of Code, which provides for post clearance examinations. He noted that the Code did not deal with extrapolating the results of examinations of one declaration to others but considered that it is essential to allow the authorities to do this where identical goods are concerned. In the context of a discussion of the need for the goods to be identical, the Advocate General commented (at [51]-[52]):

“I would add, so far as this point is relevant, that there is not a shadow of a doubt that the burden of proof of the identity of those goods, a question also debated before the Court, rests on the party which seeks to rely on that identity for the purpose of revision of the declarations, namely, the customs authorities.

Where, as in the case in the main proceedings, the goods can no longer be physically examined, those authorities are entitled, under Article 78(2) of the Customs Code, to rely on all the documentary evidence which they have been able to obtain and which supports that identity.”

By “identity” the Advocate General here means “identicality”. So, the authorities must prove identicality; if they want to extrapolate, they need an evidential basis. The alleged debtor does not need to prove a negative.

At [31] the Court agreed that extrapolation was permitted where goods are identical to those examined. It said:

“There is nothing to prevent the customs authorities from applying, for that purpose, the results of a partial examination of goods covered by a customs declaration to goods covered by earlier customs declarations which have already been released by those authorities where those goods are identical, which it is for the referring court alone to ascertain. A finding that the goods are identical may be based, inter alia, on the inspection of the commercial documents and data relating to the import or export operations in respect of the goods concerned or to subsequent commercial operations involving those goods and, in particular, on the particulars supplied by the customs declarant stating that the goods come from the same manufacturer and are identical as regards their name, appearance and composition to the goods covered by those earlier customs declarations.”

At [38] the Court stressed the importance (“essential” was its word) of the putative debtor being able to challenge the extrapolation.