(1980)1980 November 17 [A. Loizou, J.] IN THE MATTER OF ARTICLE 146OF THE CONSTITUTION CYPRIAN SEAWAYS AGENCIES LIMITED AND OTHERS, Applicants, v. THE REPUBLIC OF CYPRUS, THROUGH THE MINISTER OF FINANCE AND ANOTHER, Respondents. (CasesNos. 131/78, 351/78, 504/78). Import duty—"Dutiable goods"—"Goodschargeable with duty"— Distinction—Dutiablegoods intransit short landed—Theirabsence notaccountedfor tothesatisfaction of Collector—Can be charged with import duty—Section 30
(2)of the Customs and Excise Law, 1967 (Law 82/67) and section 3
(1)of the Customsand 5 Excise DutiesLaw, 1977(Law42/77)—Section 34 of Law 82/67 applies to goods which arepresent. The applicants, who were shipping agents, were representing ships calling at Limassol port. The customs' officers at the said port on checking the cargo landed by such ships against 10 the inward ship's Report, which was prepared under section 23 of the Customs and Excise Law, 1967 (Law 82/67) ("the Law"), and under the Ship's Report (Importation and Exportation by Sea) Regulations, 1968, ascertained that a quantity of goods described in each case declared "in transit" were not 15 landed. Thereupon the appligants were requested by the Collector of Customs, under section 30
(2)* of the Law and Section 30
(2)provides as follows:"
(2)If any dutiable goods which are included in the report of any aircraft or vessel shall not be accounted for to the satisfaction of the collector, the master or owner of the aircraft or vessel or the agent thereof,shall on demand by the collector pay the duty thereon,asestimated by the collector, at the rate in force when such goods were reported". 592 3 C.L.R. 5 10 15 20 25 30 35 Cyprian Agencies v. Republic section 3
(1)(b) of the Customs and Excise Duties Law, 1977 (Law 42/77), to account for the goods being short of report within three months failing which the applicants would be answerable for importduty onthe said goodson demand. The applicants failed to furnish the Collector with a satisfactory explanation and thereupon he forwarded to them demand notes with the list of short-landed goods set out therein demanding payment of the import duty involved in each case. Hence these recourses. Counsel for applicant mainly contended that the imposition of import duty was contrary to section 34 of the Law which provides as follows: "34. Where any goods are entered for transit or transhipment, the Director may allow the goods to be removed for that purpose, subject to suchconditions and restrictions as he sees fit, without payment of duty". Held, dismissing the recourses, that under section 3
(1)* of Law 42/67 duties are imposed and collected both on goods imported in the Republic and cleared from customs and on goods which are not imported but come under section 30 of the Law; that goods in transit, even if dutiable, will not be charged with duty if they are re-exported or transhipped; that they can be charged with duty, under section 30
(2)of the Law, if the prerequisites of this section are satisfied; that the said goods were dutiable goods, they were not landed and they were not accounted for to the satisfaction of the Collector; that therefore the prerequisites of section 30
(2)were satisfied; and accordingly the sub judice decisions will be upheld. Held,further, that section 34 of the Law relied upon by the applicants, applies to goods that are entered for transit or transhipment, but not to goods that are non existent and which are included in a Ship's Report but their absence cannot be accounted for to the satisfaction of the collector; and that it provides relief from import duty for goods entered for transit or transhipment, which entry presupposes the presence of such goods. Applications dismissed. * Quoted at pp. 596-97 post. 593 Cyprian Agencies v. Republic
(1980)Recourses. Recourses against the decision of the respondents to demand payment of import duly in respect of short-landed goods. E. Psillaki (Mrs.), for the applicants. A. Evangelou, Counsel of the Republic, for the respondents. 5 Cur.adv.vult. A. tx)izou J. read the following judgment. These three recourses have been heard together as they present common questions of Law andfact. With regard tofiveother recourses, namely 132/78, 133/78, 134/78, 232/78, 68/78, the respondents 10 haveundertaken to reconsider their decisionschallenged thereby in thelight of thedetermination ofthe legal issuesinthepresent recourses. The facts in all three cases are not in dispute and 1intend to avoid reference to the individual differences especially with 15 regard to the short-landed goods and the amount of import duty demanded thereon in each of them. The applicants are shipping agents carrying on business in Cyprus. On the respective dates set out in the applications three ships they represented called at Limassol port. The 20 customs'officers attheportoncheckingthecargolandedagainst the inward Ship's Report, which was made in accordance with section 23 of the Customs and Excise Law 1967, Law No. 82 of 1967, (hereinafter to be referred to as "the Law") and The Ship's Report, (Impoitation and Exportation by Sea), 25 Regulations of 1968, ascertained that a quantity of goods described in each case declared "in transit" were not landed. The Collector of Customs, Limassol, forwarded then the prescribed form "C. 168"known as "The ship's outturn report and discrepancies list", to the applicants in respect of the ships 30 they represented by which they were requested under section 30 subsection 2 of the Law and section 3(l)(b) of the Customs and Excise Duties Law 1977,(Law No. 42 of 1977), to account for the goods being short of teport within three months failing which the applicants would be answerable for import duty on 35 the said goods on demand. The applicants failed to furnish the Collector with a satisfactory explanation and thereupon the Senior Collector of 594 3 C.L.R. Cyprian Agencies v. Republic A. Loizou J. Customs, Limassol, forwarded to them demand notes (Form C. 30),withthe list of short-landed goods set out therein demanding the payment of the import duty involved in each case. Section 30 subsections 1 and 2 of the Law read as follows: 5 10 15 "30.—
(1)Save as permitted by or under this Law or any other enactment relating to customs, no imported goods shall be delivered or removed on importation until the importer has paid to the proper officer any duty chargeable thereon, and that duty shall, in the case of goods of which entry is made, be paid on making the entry.
(2)If any dutiable goods which are included in the report of any aircraft or vessel shall not be accounted for to the satisfaction of the collector, the master or owner of the aircraft or vessel or the agent thereof, shall on demand by the collector pay the duty thereon, as estimated by the collector, at therate in force when suchgoodswere reported.
(3)
(4)
(5)20 _ _ _ _ " It is the case of the applicants that in imposing such duty, respondent No. 2 acted in abuse and/or excess of his powers and that same is contrary to Law, namely to section 34 of the Law, which provides as follows: "34. Where any goods are entered for transit or transhipment, the Director may allow the goods to be removed for that purpose, subject to such conditions and restrictions as he sees fit, without payment of duty". 25 It was urged that goods entered for transit or transhipment come within the class of goods which are absolutely relieved from duty and that under the aforesaid section the discretionary powers of respondent 2 in respect of such goods do not include the power to impose the payment of duty even upon the master, 30 owner or agent of a vessel failing to account to the satisfaction of the collector after a demand made for that purpose. It was argued that the general obligation to pay import duty referred to in subsection 1 of section 30 is expressly reserved for cases other than those for which other provisions exist - 595 A. Loizou J. Cyprian Agencies v. Republic
(1980)in the law or any other law and that there could be no doubt that the aforesaid section 34 which refers to goods "entered for transit or transhipment" constitutes such other provisions as envisaged by this subsection; subsection 2 thereof being a consequence to subsection 1must be taken to apply also to 5 those goods, for which this other provision exists in the law. The express reference therein to "dutiable goods", counsel for the applicants said, shows that they are the only goods for whichthecollector maydemandexplanationsandimposeimport duty if they are not accounted for to his satisfaction, and that 10 goods in transit or transhipment are goods expressly relieved from duty and cannot betaken to be included among "dutiable goods" to which subsection 2 applies. "Dutiable goods" are defined in section 2 of the Law as meaning "goods of a class or description subject to any duty 15 of customs or excise, whether or not those goods are in fact chargeable with that duty, and whether or not that duty has been paid thereon". It is the submission of counsel for the respondents that the subjectgoodsare"dutiablegoods"withinthemeaningofsection 20 30
(2)of the Law inasmuch as they attract duty under the tariff being among those enumerated in the Schedule to the Customs and Excise Duties Law, 1977 (Law No. 42 of 1977) in force at the material time; it wasfurther said that, that they aredutiable goods, it is also born out by section 3 subsection 1of the 25 said Law, which to the extent that it is relevant to this point reads as follows: "Unless otherwise provided in this or any other Lawthere shall be charged, levied, collected, and paid for the general benefit of the Republic, upon all goods specified in the 39 Second Schedule— (
- a)which, after importation into the Republic are cleared for home use therein; or (
- b)which, being included in the report of any vessel or aircraft are not produced to the officer as in section 35 30 of the Customs and Excise Laws 1967-1977, the several duties (hereinafter ieferred to as 'customs duties') appearing in the said Schedule and set opposite 596 3 C.L.R. Cyprian Agencies v. Republic A. Loizou J. each item respectively in the column of the same Schedule which under section 4 or 5 is applicable to such goods" This section clearly distinguishes between imported goods cleared from customs for home use in the Republic and those 5 goods,which though included in a ship'sreport are not produced to the collector as provided in section 30 of the Law. Under section 3 duties are imposed and collected on both categories of goods, those under paragraph (
- a)which are imported in the Republic and cleared from customs and those 10 under paragraph (
- b)which are not imported in the Republic but come under section 30of the Law. The combined effect of this section with section 30 subsection 2 of the Law bear out the proposition that there exists, a distinction between dutiable goods which are all those enumerated in the tariffs and goods 15 which are in fact chargeable with such duty. Goods on transit or transhipment, if they are of the kinds set out in the Schedule are dutiable goods though duty will not be charged if they are re-exported or transhipped, but duty can be charged on them under section 30 subsection 2 of the Law, if the other prere20 quisites of this section are as in the present case satisfied. The definition of dutiable goods adds to the distinction between dutiable goods and goods chargeable with duty. There can be no doubt that the subject goods should have been included' in the Inward Ship's Report under section 23 25 of the Law which imposed an obligation in the preparation and delivery of inward reports by ships arriving at a port in a Republic from -any place outside the Republic or carrying any goods in such ship from a place outside the Republic and not yet cleared on importation. These goods must also be 30 included in an entry of goods on importation as provided for by section 24
(1)(c) of the Law which covers the cases of goods "for transit or transhipment". I do not agree with the submission of counsel for the applicants that these two sections are irielevant. 55 In the present case the subject goods were dutiable goods and they were included in the Inward Ships' Reports as they had to be so included under sections 23 and 24, though they were not chargeable with duty. They were not landed and they were not accounted for to the satisfaction of the collector •597 A. Loizou J. Cyprian Agencies v. Republic
(1980)when a demand was made to the agents of the respective ships for the payment thereof of the duty at the rate in force, when such goodswere reported. This in my view wasdone in accordance with the Law as explained in this judgment and therefore the sub judice decisions are upheld as good in Law and not 5 taken in excess or abuse of power as claimed bythe applicants. Section 34 of the Law relied upon by the applicants, applies in myjudgment, to goodsthat are entered for transit or transhipment, but not to goods that are nonexistent and which are included in a Ship's Report but their absence cannot be 10 accounted for to the satisfaction of the collector. It provides relief from Import Duty for goods entered for transit or transhipment, which entry presupposes the presence of such goods. If they are not present this section cannot apply as obviously section 30 subsection 2 is intended to safeguard the revenue 15 by imposing on the carriers duty to account for goods which have been loaded on their ships and are declared to the customs in the report but are not produced. Consequently the whole matter turns on the interpretation of section 30 subsection 2 of the Law alone and independently 20 of subsection 1 thereof, as there is no connection between these two subsections. It is clear that subsection 1 prohibits the delivery or removal on importation of imported goods until the importer has paid the duty chargeable thereon, whereas subsection 2 speaks of dutiable goods which are included in the 25 report, but which do not exist and their absence has not been accounted for to the satisfaction of the collector. For all the abovereasonstheserecoursesfail and are dismissed but in the circumstances and in view of the novelty of the legal point raised, I make no order as to costs. 30 Applications dismissed. No order as to costs. 598