Introduction
On Wednesday, May 13, 2020 the Federal High Court of Nigeria
(Abuja Judicial Division), per Honourable (Mr.) Justice J. T. Tsoho, CJ, in the case of Kehinde
Ogunwumiju, SAN v Nigeria Customs Service Board
and Anor[1],
delivered a landmark judgment, holding that the demand and collection of customs
and other import duties by the Nigeria Customs Service on the personal luggage
of the Plaintiff which were not shown to have been intended for sale, barter or
exchange, was unlawful.
In the
light of the above, this treatise seeks to briefly examine and shed some light
on the relevant sections of the Customs, Excise Tariff, ETC. (Consolidation)
Act[2] interpreted
in the said Judgment.
[1] Kehinde Olamide Ogunwumiju, SAN v Nigerian
Customs Service Board and Nigeria Customs Service –
Suit No: FHC/ABJ/CS/1113/2019 (Currently unreported)
[2] Cap C49, Laws of the Federation of Nigeria, 2004.
Exemptions from Import Duty
The
Customs, Excise Tariff, ETC. (Consolidation) Act (“The Act”), provides that “goods
specified in the Second Schedule of the Act shall, subject to the
conditions set out therein, be
exempted from the Custom Duty Rate Column of the First Schedule of the Act” [1],
which primarily reflects the duties payable on goods imported into Nigeria.
Paragraph 7
of the Second Schedule to the Act, specifically provides as exemptions from import
duty the following:
7. Passenger’s Baggage
(1) Personal
and household effects, the property accompanying a passenger
(2) Personal
and household effects, the property of a passenger landed at any Customs Port,
Customs Airport or Customs Station within two months from the arrival of the
passenger or within such further period as the Minister, to the extent
permitted by the Minister, and subject to any conditions imposed by it; and
(3) Personal
and household effects, excluding jewelry, photographic equipment, and other
luxurious goods of a citizen of Nigeria who had been resident in a place
outside the limits of the jurisdiction of Nigeria for not less than 9 months
Provided
that ‘baggage’ shall not be intended to include any goods intended for sale,
barter or exchange.
In
the instant case, the Plaintiff had travelled to the United States of America
where he purchased a Louis Vuitton laptop bag for a retail price of $1,823.20
and upon his return to Nigeria, his luggage was searched by officers of the
Nigeria Customs Service at the Nnamdi Azikiwe International Airport, Abuja, who
upon seeing a Louis Vuitton laptop bag, insisted that the Plaintiff must pay
import duty, Value Added Tax (“VAT”) and other related charges in respect of the
said bag. Consequently, and notwithstanding the Plaintiff’s protest against
such demand, he was asked to pay the sum of N156,955.20 to satisfy these
charges before the said Louis Vuitton laptop bag was released to him. Being
dissatisfied with the demand and collection of these fees by officers of the
Nigeria Customs Service, the Plaintiff proceeded to institute a civil action against
the Nigeria Customs Service and its Board (“Defendants’). The Plaintiff sought
for the Court’s determination of some legal questions, chief among is, on
whether or not in view of the provisions of Section 8 of the Act and Paragraph
7 of the Second Schedule to the Act, he is liable to pay import duty and other
related charges in respect of the Louis Vuitton laptop bag which is his
personal effect to the Nigeria Customs Service.
The Plaintiff also sought for declarative and monetary reliefs against
the Defendants, inter alia:
a.
A
Declaration that in view of the provisions of Section 8 of the
Customs, Excise Tariff, Etc., (Consolidation) Act and Paragraph 7 of the Second
Schedule to said Act, the Plaintiff is not
liable to pay import duty and other related
charges to the Defendants in respect of his
personal effect (Louis Vuitton lap top bag).
b.
A
Declaration that the decision and action of the Defendants to demand and collect
from the Plaintiff Import Duty and other related Charges in respect of his
personal effect (a Louis Vuitton lap top bag) is unlawful, null and void.
c.
A
Declaration that the Plaintiff is not
liable to pay Value Added Tax (VAT) to the
Defendants in respect of his personal effect (A Louis Vuitton lap top bag).
d.
A
Declaration that the decision and action of the Defendants to demand and Collect from the Plaintiff Value
Added Tax (VAT) in respect of his personal effect (a Louis Vuitton lap top
bag) is unlawful, null and void.
e.
An Order directing the Defendants to
refund the total sum of N156, 955. 20k
in import duty, Value Added Tax (VAT) and other charges which was
unlawfully demanded and collected from the Plaintiff by the 2nd
Defendant upon his arrival at the Nnamdi Azikiwe International Airport, Abuja
on the 24th June,
2019. (Breakdown: Duty – N111 5 0.20, S/C 7%
– N7, 806.41, GSS 1% – N5, 576.01, CTLS
0.5%- N2, 788.01, VAT 5% – N29, 264.57)
f.
An
Order directing the Defendants to pay to the Plaintiff, N15,000,000.00
as general damages.
g.
An Order directing the Defendants to pay to the Plaintiff N15,000,000.00 as exemplary damages.
h.
Interest on
the Entire Judgment sum at the rate of 10%
per Annum from date of Judgment until the
Judgment sum is fully realized or liquidated.
The
Court upon entertaining submissions from the Plaintiff’s Counsel, found the
provision, “the property accompanying a passenger”, as contained in item 1 of Paragraph 7 of the said Second
Schedule to be outlandish and generally inapplicable, since same had
subsequently been qualified in item 3
as well as the proviso , except same were categorized as personal and household
effects, which were neither luxury goods, nor intended for sale, barter or
exchange. The Court also held that the nature and quantity of the baggage or goods
will also be significant in considering whether such goods fall under the
exemptions or not. Consequently, the Court held that there was no justification
for the officers of the Nigeria Customs Service to infer that a single Louis
Vuitton laptop bag in the personal baggage of the Plaintiff was intended for
sale, barter or exchange. Furthermore, in the reasoning of the Honourable
Court, the bag itself was not a complete gadget by itself, but only a component
of an item or gadget. The Court adjudged the conduct of the Defendants as being
unreasonable, arrogant, arbitrary and an oppressive use of power. Reliefs a, b, c, d, e and h above were
thus granted by the Court, and while the claim of general damages was refused,
exemplary damages of N5,000,000 was awarded against the Defendants for their
unreasonable, arrogant and oppressive abuse of power.
It
should be noted that neither the Nigeria Customs Services nor its Board, filed a
defence to the suit, despite the fact that there was evidence that the
Plaintiff’s Originating Summons and multiple hearing notices, notifying them of
the suit were served on them. It would have been quite interesting to see the
arguments and the legal basis the Defendants would have proffered, had they
defended the suit.
It is however, worthy to
note that the judgment did not specifically address or interpret the term “luxurious
goods”, and the specification on time, which can be found in the exclusion from
exemption, of ”jewelry, photographic
equipment, and other luxurious goods of a citizen of Nigeria who had been
resident in a place outside the limits of the jurisdiction of Nigeria for not
less than 9 months”, as contained
in Paragraph 7 (3) of the Second Schedule cited above. It is conceivable that the
term “and other luxurious goods” may
be interpreted to mean items in the classes of jewelry and photographic equipment which were mentioned before it (on an application of the Ejusdem Generis rule of interpretation).
While this is understandable, taking into consideration the claims of the
Plaintiff and the Defendants’ failure to challenge same and to file a defence,
it is hoped that this grey area will be determined by the Court in no distant
time.
Conclusion
It is noted
that this is an applaudable position of the law which for all intents and
purposes, is valid, binding and subsisting, unless successfully set aside on
appeal. It therefore brings great relief to Nigerian travelers and the likes,
who are on a daily basis imposed with these charges, on their personal effects
not meant for sale.
For further information on the foregoing (none of which
should be construed to be an actual legal advice), please contact:
Chinedu Anaje
Managing Partner
Contact
Ekene Ugbede
Associate
Contact
