UT (Tax & Chancery) UT/2023/000087 - [2025] UKUT 00176 (TCC)

End-use under the CCC provisions involved the application of a “favourable tariff treatment” and was subject to customs supervision and customs controls.

Article 4(13) CCC defined “supervision by the customs authorities” as action taken by the customs authorities to ensure that customs rules for goods subject to customs supervision were observed. Article 4(14) defined “customs controls” as specific acts performed by customs authorities in order to ensure the correct application of customs rules including those governing the end-use of goods.

Article 4(16) CCC listed various “customs procedures”, including release for free circulation, customs warehousing and inward processing. End-use relief did not involve a customs procedure under the CCC, but became a “special procedure” under the UCC (see paragraph [30] below).

Article 6 CCC made provision for where a person requires the customs authorities to take a decision relating to the application of customs rules, which would include a decision on authorisation for end-use. The decision was required to be taken and notified to the applicant at the earliest opportunity and within a period laid down by the provisions, which was 30 days from when all information requested by the customs authority had been provided.

Article 21 CCC provided that favourable tariff treatment by virtue of end-use was subject to certain conditions. Where an authorisation was required, Articles 86 and 87 were to apply. Relief for end-use for civil aircraft fell within the term “favourable tariff treatment” pursuant to the CCC.

Section 3 of the CCC made general provisions for several customs procedures, such as inward processing and temporary importation. Article 85 provided that the use of any “customs procedure with economic impact” was conditional on authorisation by the customs authorities. Those procedures were specifically defined by Article 84(1)(b) and included customs procedures such as customs warehousing and inward processing. Article 86 provided that authorisation should only be granted to persons “who offer every guarantee necessary for the proper conduct of the operations” and where customs could supervise and monitor the procedures without disproportionate administrative arrangements. Article 87 provided that the conditions under which the procedure in question was to be used should be set out in the authorisation. Article 88 provided that the customs authorities “may” make the placing of goods under a suspensive arrangement conditional upon the provision of security to ensure that any customs debt which may be incurred in respect of the goods would be paid.

Article 243 CCC made provision for appeals. Article 243(1) provided that a person who had applied to the customs authority for a decision but had not obtained a ruling within the required time period should be entitled to exercise a right of appeal. The UK did not implement that aspect of Article 243 in its domestic law.

The 2016 Tariff provided that end-use as a favourable tariff treatment was subject to conditions, and specifically cross-referenced Articles 291 to 300 CCC IP. These provisions applied where it was provided that goods released for free circulation with a favourable tariff treatment on account of end-use were subject to end-use customs supervision. Article 292 required written authorisation for favourable tariff treatment and set out the procedure for applications. This included the procedure for “single authorisations” which were defined by Article 1(13) CCC IP as authorisations involving customs administrations in more than one member state.

Article 293 set out the general conditions for authorisation. These included the applicant offering every guarantee necessary for the proper conduct of the operations to be carried out and undertaking to assign the goods to the prescribed end-use. Adequate records were required to be maintained and security was to be provided “where the customs authorities consider this necessary”.

Article 294 CCC IP made provision for customs authorities to grant retroactive authorisation. In the ordinary course this would take effect from the date the application was submitted. However Article 294(2) provided that where an application concerned “renewal of an authorisation for the same kind of operation and goods”, then it may be granted from the date the original authorisation expired.

Article 294(3) provided that in “exceptional circumstances”, the retroactive effect could be extended further where a proven economic need existed, but not more than one year before the date the application was submitted. This was also conditional on the application not being related to attempted deception or to obvious negligence.

Article 300 CCC IP provided that goods imported under an end-use authorisation should remain under customs supervision until first assigned to the prescribed end-use.

Favourable tariff treatment applied not only to civil aircraft, but also to certain goods imported for use in civil aircraft. Separately, where aircraft parts and components were imported with an airworthiness certificate, Council Regulation (EC) No 1147/2002 provided for duties to be suspended.