Băncilă, Diaconu și Asociații SPRL is a member firm of Ernst & Young Global Ltd
Bucharest Tower Center, etaj 22 B-dul Ion Mihalache
nr. 15-17 011171 Bucuresti, sector 1, Romania
+40 21 402 4000
RO || EN

Taxation of products subject to excise duties that required reconditioning in a tax warehouse after having been placed on the market is illegal, the High Court of Cassation and Justice ruled

The legal team specialised in tax litigation with Radu și Asociații SPRL, EY’s associate law firm, has seen a new first, this time in a matter that has caused challenges in interpreting and applying the tax laws – reimbursement of the excise duties charged for an energy product that, not having met the standard parameters, was returned by the client to the tax warehouse for reconditioning and subsequent released on the market.

The Tax Code stipulates that excise duties may be reimbursed if a product that “has been accidentally contaminated or mixed” is subsequently recycled or reconditioned. However, the tax authorities denied reimbursement on the mere grounds that the de facto circumstances did not match the legal assumptions – more precisely, that there cannot be a case of accidental contamination or mixing when the substance causing the contamination is itself part of the production process.

This misinterpretation was even sustained by the Legal Directorate for Excise Duties with the Ministry of Finance. Although the legal provisions did not define the concepts of “accidental contamination” or “accidental mixing”, the tax authorities adhered to a restrictive manner of interpretation in that the legal provisions would be left without effects and applicability.

The legal team involved in this project was headed by Emanuel Băncilă, Partner, and Alex Slujitoru, Senior Manager, Radu și Asociații SPRL. Alex Slujitoru stated that “in order to obtain a favourable ruling in this case, product traceability was relevant, as it was under the strict supervision of the customs directorate staff throughout its entire movement.

Both the first-instance court and the appeal court confirmed the illegality of the refusal to reimburse the excise duties charged and therefore ordered the reimbursement. A contrary solution would have caused for the excise duties to be paid twice for the same energy product – first for the inadequate product and then for the reconditioned product, while this is a tax on consumption and that product was only placed on the marked for such purpose only after it was reconditioned,” said Emanuel Băncilă, Tax Policy and Controversy Leader with EY Romania.


Radu și Asociații SPRL is the only Romanian law firm short listed for the “European Tax Innovator Firm of the Year” category in 2015, 2017, 2018 and 2019, an acknowledgement of its contribution both to improving the procedural and tax legal framework and to developing and implementing innovative solutions for taxpayers (solutions that were first implemented only by Radu și Asociații SPRL).