In the context of a request for a preliminary ruling, the CJEU addressed an interesting question concerning the revival of a customs debt within the meaning of Article 116(7) of the Union Customs Code (UCC), in a case involving an error made by the customs authorities in the classification of goods (judgment of 30 April 2025, Case C-330/24).
I. The facts
The dispute concerned a company in the Czech Republic that imported goods and, in its customs declaration, originally classified them under a heading carrying a duty rate of 8.7%. The import duties were assessed accordingly. The company later applied for the tariff classification of the goods to be changed, and consequently for a refund of the duties paid. In doing so, it relied on a Binding Tariff Information issued to another company, under which identical goods had been classified under a duty-free heading (0%). The customs office granted this application.
At a later point in time, the customs administration carried out an audit to review the tariff classification of the goods in question. Following the audit, the customs office found that the goods had to be classified under the original heading and were therefore not duty-free. The customs office considered that the customs debt had been revived under Article 116(7) UCC and levied the duties retrospectively.
It based its decision, among other things, on the ground that the duties had been refunded as a result of an error on the part of the customs authority, since the authority had originally classified the goods in question under an incorrect tariff heading.
The company challenged the retrospective levy, arguing that, in its Czech-language version, Article 116(7) UCC covers only cases in which the customs authority refunded the duties by mistake. It therefore concerned situations resulting from an unintentional act on the part of the customs authority, and not situations in which the customs authority had deliberately made a tariff classification decision that later turned out to be incorrect.
The Czech court stayed the proceedings, taking the view that the outcome of the case depended on the interpretation of the term “in error” (zu Unrecht) contained in Article 116(7) UCC. It accordingly referred the following question to the CJEU:
Is the term “in error” in Article 116(7) of the Union Customs Code to be interpreted as meaning that the customs debt revives only where the refund of the duties was caused by an unintentional act of the customs authority, or can that term also cover an erroneous decision by the customs authority concerning the tariff classification of the goods?
II. The decision
The CJEU first noted that the UCC contains no definition of either “in error” or “granted in error” It found, from certain language versions of the provision, that the revival of the customs debt presupposes an act by the customs authority that was wrongly, but not intentionally, carried out. This was the case, for example, in the Czech-language version of the provision, which uses the term “omylem,” as well as in the Polish (“omyłkowo“) and Slovak (“omylom“) language versions.
By contrast, other language versions of Article 116(7) UCC use terms with a broader meaning, not limited to an unintentional act of the customs authorities. This was the case, for example, in the Spanish (“erróneamente“), German (“zu Unrecht“), English (“error”), French (“à tort“), Italian (“errore“), Dutch (“ten onrechte“), Portuguese (“erradamente“), and Swedish (“felaktigt“) language versions. The CJEU pointed out that, under settled case law, the wording used in one language version of a provision of EU law cannot serve as the sole basis for interpreting that provision, or be given priority over the other language versions. Provisions of EU law must be interpreted and applied uniformly in light of the versions existing in all the languages of the Union. Where the different language versions of an EU legal text diverge, the provision in question must, according to the CJEU, be interpreted by reference to the general scheme and purpose of the rules of which it forms part.
As regards Article 116(7) UCC, the Court found that the provision forms part of a series of provisions concerning the remission and repayment of the customs debt, which in turn form part of a broader set of provisions relating to the collection of import or export duties. Since remission of duties, under Article 124(1)(c) UCC, results in the extinguishing of the customs debt, it must be interpreted narrowly, since this provision reflects the need to protect the Union’s own resources. Conversely, it followed that the first subparagraph of Article 116(7) UCC, under which the original customs debt revives where the customs authorities have wrongly granted repayment or remission, must be interpreted broadly. The CJEU pointed out that the UCC is designed to ensure the proper collection of duties, referring in this connection to Article 28(1)(a), in Title I (“General Provisions”) of the UCC, under which a favourable decision is to be revoked or amended where one or more of the conditions for its issue were not, or are no longer, fulfilled. With regard to Binding Tariff Information, the CJEU had already held that, where customs authorities consider their own interpretation of the legal provisions applicable to the tariff classification of the goods concerned to be incorrect, they may revoke their decision and amend the tariff classification. This applies both where there has been an error of assessment and where there has been a change of view regarding the tariff classification.
In the CJEU’s view, these considerations supported an interpretation of Article 116(7) UCC under which customs authorities may cause the original customs debt to revive where they had first granted a refund of the customs debt on the basis of a tariff classification of the goods that subsequently proved incorrect.
This view was, the CJEU held, also supported by the case law on Article 78 of the former Community Customs Code. Since Article 116(7) UCC is based on the same underlying rationale, customs authorities must accordingly be able to cause the original customs debt to revive where it emerges that a refund had been granted on the basis of an incorrect tariff classification. This is not limited, the CJEU held, to cases of mistake alone. As regards the principle of legal certainty, the CJEU held that the possibility of causing the original customs debt to revive is subject to the condition that the customs debt has not become time-barred under Article 103 UCC. Under that provision, the limitation period generally expires three years after the date on which the customs debt was incurred. This serves the interest of legal certainty, which protects both the individual and the administration concerned. It does not prevent the individual from exercising the rights conferred by the EU legal order, meaning that the customs authorities must be permitted, within the limitation period, to amend the customs debt. A person liable for duty must therefore, before expiry of the limitation period, accept the risk that the customs authorities may revise their decision regarding the customs debt in light of new facts that have come to their knowledge. The CJEU therefore answered the question referred by holding that Article 116(7) UCC covers not only situations in which duties were refunded as a result of an error on the part of the customs authorities, but also situations in which those authorities deliberately made a tariff classification decision that subsequently proved incorrect.
III. Comment
The present case concerns a constellation that occurs quite frequently in practice, involving a dispute over the classification of goods in the customs tariff. Here, however, the issue was no longer the “correct” tariff heading as such, but purely the procedural question of whether a refund deliberately granted by the customs administration can be reversed, following an audit, within the limitation period. The reasons why the view taken on a classification may change are varied (for example, technical amendments, changes to the customs tariff, case law developments, etc.). In the result, it can be said that both the limit on retrospective assessment and the limit on refunds are set by the general limitation rules of Article 103 UCC. Within these limits (note: unlike the “year-end limitation” familiar from civil law, under which limitation occurs at the end of the relevant calendar year (31 December), the period under customs law is calculated to the exact day), both a retrospective assessment and a refund remain possible.
While retrospective assessment is usually carried out by the customs administration following audits or physical inspections, a refund of overpaid import duties, outside of an audit, can only be made upon application by the person liable for the debt, within the limitation period. Even though audits by the customs administration are, in principle, meant to review not only retrospective assessments but also potential refunds, experience shows that an audit will only rarely capture the full range of goods in detail, meaning that, although refund situations can also arise from an audit, they may in some cases “slip through.” Once the limitation period has expired, a refund is no longer possible.
As the CJEU sets out in its decision, the aim is for a correct customs law decision to be reached. Tariff classification should therefore always be kept under review for any given goods. In our practice, we find that even “unproblematic” tariff headings used over a long period of time are not always necessarily correct. This can, in individual cases, have consequences not only under duty law but also under administrative fine law, or even…
By Heiko Panke
