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Savewell Stores Pty Ltd v Commissioner of Customs [1998] PGNC 1; N1669 (12 January 1998)

Unreported National Court Decisions

N1669

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

O.S. N0. 33 OF 1997
SAVEWELL STORES PTY LTD V COMMISSIONER OF CUSTOMS, DIRECTOR OF CUSTOMS & THE STATE

Waigani

Kapi DCJ
17 December 1997
12 January 1998

CUSTOMS ACT (Cap. 101) (as amended), s 176 - Dispute as to amount of duty payable - amount not paid under protest - cause of action has not yet arisen under the Act - the notice of motion is misconceived.

Counsel

G Garo for the plaintiff

L Keria for the defendants

12 January 1998

KAPI DCJ: By originating summons the plaintiff sought various orders including a declaration for a mandatory injunction directing the Commissioner of Customs to release certain containers of merchandise forthwith to the plaintiff upon payment of a sum of K13, 186.29 being the duty payable on the goods. The summons is pending.

In the meantime, the plaintiff took out a notice of motion seeking the release of the said containers of merchandise upon payment of the sum of money referred to above.

I take this to be an interlocutory order pending the trial of the cause of action set out in the originating summons. It is this notice of motion which has come before me for determination.

The background to this motion is as follows. The plaintiff imported 3 containers of general merchandise from Singapore. Following the arrival of goods from Singapore the plaintiff’s customs agent submitted a customs entry. This entry shows a duty calculated at K13, 168.29 for the said goods. The first defendant disputed this amount on the basis that the goods were undervalued and instead determined the duty at K50, 998.32. No payment has been made and the goods have been detained by the first defendant.

The motion before me seeks an order for the release of the goods upon payment of K13, 186.29. This raises two issues, namely, whether the goods are detained lawfully and whether the amount K13, 186.29 is the correct duty payable on the goods in question.

The power of the Collector to detain goods is set out in the Customs Act (Cap. 101) (hereinafter referred to as the Act). Where the Collector has a doubt as to the proper value of the goods in question he is empowered to detain the goods for the purposes of assessing the value of the goods (s 99 (1) of Act). The goods detained in the present proceedings were detained for the purposes of assessing the proper value of the goods. Therefore, the goods have been detained lawfully.

The major issue in this case relate to the question of the proper duty payable for the goods in question. In this regard counsel for the plaintiff submitted that the proper value for the goods in accordance with the provisions of the Act and the Customs (Ad Valorem Duties) Regulation 1987 (as amended) is determined in accordance with the “transaction value” of the goods. He submitted that this is based on value of the goods when they were sold for export to Papua New Guinea. He submitted that the amount K13, 186.29 has been calculated on this basis and therefore is the correct amount determined in accordance with the law.

Counsel for the defendants has submitted that the motion before me is misconceived in that the proper cause of action that is open to the plaintiff in the circumstances is set out in s 176 of the Act. He submitted that the conditions for giving rise to the cause of action have not yet arisen and therefore the motion should be dismissed.

The circumstances in the present case come within the terms of s 176 of the Act:

“176. Payment under protest.

(1) If a dispute arises as to-

(a) the amount or rate of goods; or

(b) the liability of any goods to duty under any Customs tariff,

the owner of the goods may pay under protest the sum demanded by the Collector as the duty payable in respect of the goods.

(2) A protest under Subsection (1) shall be made by writing on the entry of the goods the words “Paid under Protest” and adding a statement of -

(a) the grounds on which the protest is made; and

(b) if the entry relates to more than one description of goods-the goods to which the protest applies,

followed by the signature of the owner of the goods or his agent.

(3) The sum paid under Subsection (1) shall, as against the owner of the goods, be deemed to be the amount of the proper duty unless the contrary is determined in proceedings brought under Subsection (4).

(4) Within the period prescribed by Subsection (5)(b), the owner of the

goods may bring proceedings against the Collector in any court of competent jurisdiction for the recovery of the whole or any part of the sum paid.

(5) Proceedings do not lie for the recovery of any sum paid to the Customs, as the duty payable in respect of any goods in respect of any goods, unless-

(a) the payment is made under protest under Subsection (1); and

(b) the sum is paid as the duty payable under the Customs tariff, and the proceedings are commenced within six months after the date of payment.

(6) .....”

It is clear that a dispute has arisen within the meaning of s 176 of Act. This provision states that the owner of the goods may pay the duty determined by the Collector under protest. The amount so determined by the Collector is deemed to be the proper duty payable on the goods (s 176 (3)). The goods would be released upon payment of the amount determined by the Collector.

However, the owner of goods has a cause of action to sue for any amount that is in excess of the proper amount payable under the law. This cause of action has not yet arisen because the plaintiff has not yet fulfilled the conditions set out under s 176 of the Act (see Smith v Hudson (1921) SR (NSW) 557). It is clear from a brief survey of this provision that the owner of the goods must pay for the duty as determined by the Collector in order for the goods to be released. As the owner disputes the amount of duty determined by the Collector, he should pay under protest in accordance with the terms of s 176 and subsequently issue proceedings under s 176 (4) of the Act to recover any excess.

The present motion is misconceived and I would therefore dismiss it with costs.

Lawyers for the Applicant/Plaintiff: Henaos

Lawyer for the Respondents/Defendants: Solicitor-General