THE LEGALITY OF THE IMPOSITION OF IMPORT DUTY ON PERSONAL BELONGINGS

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 2^nd Defendant upon his arrival at the Nnamdi Azikiwe International Airport, Abuja on the  24^th  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.