Justice Obiora Egwuatu of the Federal High Court, Abuja, has ruled that the Nigeria Customs Service (NCS) should stop the collection of excise duty on non-alcoholic carbonated sweetened beverage from members of the Nigeria Employers’ Consultative Association (NECA).
The NECA members included Nigeria Bottling Company Limited (NBC) and Seven-Up Bottling Company Limited (SBC).
According to the court, the ruling barring NCS from collecting the excise duty would be in force pending when the provisions of Section 13 of the Customs, Excise Tariff, etc. (Consolidation) Act, Cap C49 LFN are complied with.
Egwuatu gave the order in a judgement he delivered in Suit No: FHC/ABJ/CS/2004/2022 on January 30, in a case between NECA, NBC and SBC, as first, second, and third plaintiffs, respectively, and Nigeria Customs Service Board (NCSB) and Minister of Finance, Budget and Economic Planning, as first and second defendants, respectively. The case was filed on October 28, 2022.
The Finance Act of 2021 imposed the collection of N10 per litre of non-alcoholic, carbonated and sweetened beverages meant to take effect from 2022, but was vehemently opposed by members of the Organised Private Sector of Nigeria (OPSN), especially NECA and Manufacturers Association of Nigeria (MAN).
The court further declared the implementation of the 2022 Fiscal Policy Measures and Tariff Amendments of March 1, 2022 that was issued by the Minister of Finance, Budget and National Planning as null and void.
Besides, it said NCS was not entitled to demand transport and feeding allowances from the plaintiffs.
After three years of legal fireworks, the presiding judge, Egwuatu, in his judgement, made the following orders:
“A declaration is made that the First Defendant (NCS) lacks the power to administer, assess, or enforce the collection of excise duties on non-alcoholic, carbonated, and sweetened beverages without enabling statute specifically empowering the first defendant to do so.
“A declaration is made that that the elements of the phrase ‘non-alcoholic, carbonated, and sweetened’ as used in Section 17 of Finance Act, 2021 is to be read and applied conjunctively and not disjunctively in determining excisable beverages.
“A declaration is made that the circular entitled ‘Approval for the Implementation of the 2022 Fiscal Policy Measures and Tariff Amendments’ dated March 1, 2022 (the circular) issued by the Second Defendant (Honourable Minister) and which purports, inter alia, to amend the schedule to the Customs and Excise Tariffs (consolidation) Acts is invalid, ultra vires the powers of the Second Defendant and, therefore, null and void.”
Egwuatu also declared that by Section 124 of the Customs and Excise Management Act, Cap. C45, Laws of the Federation of Nigeria, 2004, the first defendant was not empowered to demand and collect from members of the First Plaintiff, including the second and third plaintiffs, transportation, feeding and monthly allowance for costs and expenses incurred by its officers while carrying out their statutory duties.
“A declaration is made directing the first defendants forthwith to stop the collection of excise duty on non-alcoholic, carbonated and sweetened beverages from members of the first plaintiff, including the second and third plaintiffs, pending when the provisions of Section 13 of the Customs, Excise Tariff, etc. (Consolidation) Act, Cap C49 LFN are complied with.”
The court awarded a cost of N200,000 in favour of the plaintiffs.
According to Egwuatu, “The law is settled that when a law makes provision for the procedure of doing an act, non-compliance renders the act done null and void. In the same vein, where a statue prescribes how services is to be affected, the non-compliance with the provisions of the statue renders the service void.”