A company of businessman Jack Huang, Jack’s Trading, should have paid N$49.3 million in cement import duties at the time of the imports, instead of having the payment of duties deferred.
The company should have paid this to the Namibia Revenue Agency (Namra) between 2012 and 2017.
This is one of the findings made by judge Esi Schimming-Chase in a judgement delivered in the Windhoek High Court on Tuesday.
In her judgement, Schimming-Chase directed Jack’s Trading to pay N$49.3 million in additional duties to Namra on cement the company imported between 2012 and 2017.
Schimming-Chase also ordered Jack’s Trading to pay the legal costs of the minister of finance, the executive director of the Ministry of Finance and the commissioner of Namra in the matter in which they sued the company for the payment of N$49.3 million.
Only one witness, Namra official Jaqueline Gawanas, testified during the hearing of the case, Schimming-Chase recounted.
She was the acting commissioner for customs and excise during periods in 2019 and 2020, including when the Directorate of Customs and Excise conducted an audit of customs declarations of Jack’s Trading in June 2020.
“The audit revealed that [Jack’s Trading] had not paid additional duty on the Portland cement it imported into Namibia,” Schimming-Chase summarised part of Gawanas’ testimony.
She noted that an additional import duty on Portland cement was imposed in Namibia in July 2012.
After the additional duty was imposed, a dispute arose with Jack’s Trading, with the company challenging the legality of the additional duty, which was an infant industry protection measure.
A lengthy legal battle ensued, with Jack’s Trading filing an urgent application in the High Court in 2013, and an appeal later also making its way up to the Supreme Court.
In 2013, Jack’s Trading, the finance minister and the commissioner concluded a written settlement agreement in terms of which the company agreed to withdraw its urgent application. It was also agreed that, pending the outcome of a Supreme Court decision on the interpretation of the Customs and Excise Act, the minister or commissioner would levy, but not collect, the additional duty on cement imported by Jack’s Trading.
The Supreme Court delivered a judgement on the matter in May 2020.
The court found that the additional import duty on cement was lawfully imposed, and declared that a part of the settlement agreement was unlawful, because it in effect deferred the collection of the additional duties that had to be paid by Jack’s Trading indefinitely.
That part of the agreement was in breach of the Customs and Excise Act, which requires the payment of duty at the time that goods enter the country.
Schimming-Chase remarked: “The Supreme Court’s decision […] was clear. The additional duty for the importation of Portland cement into Namibia was lawfully imposed. With the setting aside of clause 3 of the settlement agreement, which the defendant [Jack’s Trading] was a party to, the additional duty was deemed to be immediately payable.”
The additional duty was payable when Jack’s Trading imported the cement into Namibia, Schimming-Chase added.
She also noted that, despite extensive cross-examination of Gawanas, Jack’s Trading never denied the amount claimed by Namra or how it was calculated, but only disputed its liability to pay the amount.
Jack’s Trading also never denied that customs declarations presented to the court as evidence to show how the duties claimed from the company were calculated were prepared by Jack’s Trading’s own customs clearing agent, Schimming-Chase said.
“The truth of the documents was not placed in meaningful dispute by the defendant at the trial, especially because the defendant’s own agent made the declarations,” she said.
She concluded that it was evident the payment of import duty ought to have been done at the time that Jack’s Trading, acting itself or through its chosen agent, submitted the customs declarations.
Whether Gawanas’ appointment as acting commissioner for customs and excise was lawful or not, Jack’s Trading remained liable to pay the import duty, Schimming-Chase said.
Jack’s Trading was represented by lawyers Sisa Namandje and Sacky Kadhila Amoomo.
Tinashe Chibwana represented the minister, executive director and Namra commissioner.
