The Genesis of Innoson Vs Customs Court Case

Innoson established the first indigenous motorcycle assembly plant in Nigeria and based on this effort, the Federal Government, through the Federal Ministry of Finance gave a concession to him to pay 5% on his imported motorcycle CKDs.

The approval is in form of a certificate. The certificate runs for 12 months after which it is renewed.

Between October and December 2004, Innoson imported about 25 containers of motorcycle CKDs, his certificate was yet to expire. The certificate expiration was on 12th July 2005.
When the goods arrived in Nigeria, Innoson made efforts to clear the goods.

 He paid the required duty as calculated by COTECNA- the inspection agent and he was issued a Clean Report of Inspection (CRI) which showed the duty he was expected to pay.

His bank, GTB paid the money to the Federal government. And then he was issued with a Customs Revenue Receipt. The Receipt was issued by GTB that made the payment. The original copies were handed over to the customs.

After the payment of the duty, Innoson submitted all relevant documents to the Nigerian customs but the customs failed to release the goods.
The goods were not released because they alleged that Innoson under paid the duty. When Innoson learnt of this, he referred them to the concession certificate which allowed him to clear its goods based on 5% duty rate.

In spite of showing the certificate to them, Customs refused to release the goods and showed his clearing agent a circular letter which removed the name of Innoson from the list of companies enjoying such concession.

Upon receiving the letter, Innoson protested by sending a written protest to the Minister of Finance. The Minister of Finance gave a directive through a letter to The Nigerian Customs to allow Innoson clear its goods.

The Nigerian Customs then instructed their officers to allow Innoson clear its goods at the concessioned rate of 5%. The directive was also done in writing vide a letter dated 13/12/2005.

With the letter from the Minister of Finance as well as The Nigerian Customs, Innoson re-submitted its documents to the Nigerian Customs officials to enable him take delivery of the goods.

After the submission of the documents, they still delayed in the processing the documents. After the delay, he was given approval to take its goods as overtime cargo through a written approval dated 1st Feb 2006, 2nd Feb 2006 and 9th Feb 2006 for the three bill of laden respectively.

After receiving the written approvals, Innoson made attempts to clear the goods. After customs had passed the entry, Innoson could not locate the goods at the wharf. His clearing agent continued searching for the goods at the wharf until the 1st of March, 2006 when they learnt that 18 of the 25 containers had been sold by the customs.

Upon hearing the goods had been sold by the customs, Innoson contacted its solicitors to write to the Ministry of Transport, Finance and the Comptroller-General of Customs which they did.

After sending the letter, the Minister of Finance invited Innoson to a meeting. At the meeting, Innoson was referred to the Chairman of the Presidential Special Committee on Port Decongestion and the Comptroller-General of Customs.

The meeting between the three parties was held on 12th May, 2006 at Customs office in PZ Complex, Ikorodu Town, Lagos.

At the meeting of 12th May 2006 with the Hon. Minister of Finance, Transport and the Assistant Comptroller General of Customs and other stakeholders, the Chairman of the Presidential Special Committee on Port Decongestion referred Innoson to the Assistant Comptroller-General of Customs.

 The Assistant Comptroller-General directed Innoson to forward all relevant documents to his office so that he can be compensated.

On 18th May, 2006, Innoson forwarded the documents requested for by the Assistant Comptroller General of Customs through his solicitors.

The Customs ignored the documents that was forwarded and sold the remaining containers. Innoson is yet to come to terms why customs sold his containers. First of all, he was not notified that his container was seized. He was not informed that his containers were to be sold.

The said containers never contained any contraband goods but contained motorcycle CKDs. He did not at any time abandon the containers containing the motorcycle CKDs at the port.

He was never taken to court. Innoson was not aware that there was a court order to sell his goods. The Federal Government gave him a concession to pay less duty because he owns an automated assembly line and as a result of the promise to increase the local output. The assembly line had a workforce of about 750 workers.

The questions that remained unanswered include:

• Whether the Customs has the right to refuse the release of the goods as stated in the CRI? The CRI reflected the 5% concession.

• How long do goods stay before it is declared as an overtime cargo? Do goods stay in the port for 3 months and thereafter become overtime?

• Were the Customs Officials actually carrying out their official duties or was there a conspiracy to destroy Innoson by some people?

• There was a time lag between the periods the goods were to be cleared. Innoson never applied for an overtime clearance at any time. His goods were never gazette before they were sold.

Innoson had paid the duty as stated in the CRI but the customs insisted that Innoson must pay 30%.

Innoson was not given any notice to the effect that its containers were to be sold as overtime cargo after the approval granted to him to clear the containers as overtime cargo.

Even as an overtime cargo, there are procedures to be followed in selling it. These procedures were not followed. The usual procedure when there is conflict of figures for payment is for customs to lodge a protest.

Innoson is not aware that any committee was set up to sell his containers. The customs equally did not advertise the sale of his container in any newspaper.

The procedure the presidential Special Committee on Ports and the Customs for selling good by auction is as follows;

(a) To notify the owner of their intentions to sell the goods by auction.
(b) To give notice of the intended auction sale to the public through newspaper publication.
(c) Set up a joint disposal committee to sell the goods by auction.

None of these provisions of the law was adhered to in auctioning his goods for sale. Therefore the Presidential Special Committee and Ports decongestion had no basis for auctioning Innoson’s goods after all genuine efforts by him to clear its goods.

Based on the damages that were incurred by the seizure and subsequent auction of his goods by the customs, Innoson through his solicitors sued the Nigerian Customs to the Federal High Court, Lagos division.

The trial court therefore ordered the Custom to pay Innoson the sum of N2.4B being the cost of his goods and damages incurred.

Furthermore, Innoson got a garnishee order from the Court ordering GTB to pay the judgment debt of N2.4B to him.

GTB decided to cry more that the bereaved by appealing the court ruling on the garnishee to the Court of Appeal, Ibadan Division.

However in a unanimous judgment, delivered on 6th February 2014, the Court of Appeal dismissed the appeal and affirmed the judgment of the trial Court and ordered the GT Bank to pay the said sum of N2.4B to Innoson.

Still aggrieved, GTB appealed to the Supreme Court. The Supreme Court is yet to deliver its judgment.

It is interesting to state here that GTB has withdrawn the money due to be paid to Innoson from Customs account with it and has held the money till date, doing business with it and has been making profit out of it.

Why The Arrest?
Why using Efcc to intimidate him?

Priceless Lessons For Young And Upcoming Nigerian Entrepreneurs.

1. Embrace Honesty: make honesty part of your business policy in your dealings with Government, your bank, customers, suppliers and even business partners. It will become your best defense in turbulent times.

2. Have Faith In Judiciary: the judiciary is the last hope of the common man. If you are standing on the foundation of truth, no matter how hard your opponent fights to defeat you, the truth through judiciary will prevail.

3. When Right, Don’t Be Afraid To Fight For Your Right: no one, not even the Government should be too big to confront when fighting for your right. That’s why you should never undermine the next lesson.

4. Have A Sound Solicitor: business is warfare; there’s constant battle in the marketplace for brand visibility and loyalty, and there’s battle off the marketplace when disagreements arises between your company and other parties. This is why always enlisting the services of a sound solicitor that will defend you in court is a business necessity.

5. Always Demand For Written Documents: the world of business is full of countless promises and failures, so never accept any agreement verbally. Always demand for written documents to back up any claim, agreement, arrangement or contract. They are strong evidences in the court of law that will vindicate you when trouble arises.

Innocent Ifediaso Chukwuma