Supreme Court dismisses finance ministry appeal

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Roland Routh

Windhoek-The Supreme Court this week dismissed an appeal by the finance ministry, and its customs and excise department, to set aside the High Court order that the Treasury ought to compensate a Botswana company for losses incurred after an impounded cargo of cigarrettes of the company went bad while in government custody.

The ruling essentially found that the finance ministry and customs and excise officials overstepped their boundares in the matter and should not have held on to to the consignment of cigarrettes after the company had paid its dues. As a result the Supreme Court found that the finance ministry must compensate the Botswana company for the loss of nearly N$1.2 million.

The matter stems from the case in which the Botswana company, Benson Craig, took the ministry and the customs and excise commissioner to court after customs officials impounded a consignment of 579 boxes of cigarettes destined for a duty-free concern in Oshikango.

The cigarettes were sent on February 13, 2013 to a bonded warehouse, but the consignment was detained by customs officials at the border between Namibia and Botswana. This is because the clearing agent of the Botswana company wrongly declared that the cigarettes were destined for consumption in Namibia, which would have led to less duties being paid.

When the company realised the mistake they immediately rectified it and withdrew the incorrect declaration. However, customs officials refused to release the cigarettes unless a penalty of 25 percent of excise duty was paid, which exceeded N$800,000 and had been calculated with reference to the purchase price of 928,000 pula (approximately N$1.2 million) for the cigarettes.

According to Benson Craig it sold the cigarettes in a “cost and freight” transaction with the bonded warehouse, Southern African Duty-Free Namibia, for the amount of 928,000 pula (N$1.2 million).

After futile attempts to have the consignment released by customs, the Botswana company instituted a legal suit in the High Court to have the consignment returned. They also asked for an alternative compensation claim of 928,000 pula or the Namibian equivalent of N$1.2 million, as compensation, as well as N$30,000 for transport costs.

The finance ministry and the customs and excise commissioner defended the action and denied the detention of the cigarettes was unlawful, and invoked provisions of the Customs and Excise Act to justify the detention and imposition of the penalty.

However, High Court Judge Kobus Miller found in favour of Benson Craig and ordered the return of the consignment. Yet, in the meantime the entire cigarette consignment has become useless as it lost its fragrance and taste and became dry and unsellable as it has a shelf life of six months once packed, wrapped and sealed.

The minister and the commissioner appealed the ruling to the Supreme Court and filed their notice of appeal a few weeks late. But the Supreme Court agreed to hear the matter.

The only issues raised in the appeal was on the monetary value put on the consignment as it was proved on a factual basis that the consignment was worth N$1.2 million.

Yesterday Supreme Court Judge Dave Smuts, with Chief Justice Peter Shivute and Acting Judge of Appeal Yvonne Mokgoro concurring, ruled the appeal is without any merit and enjoyed no prospect of success.

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