Justice Obiora Egwuatu of the Federal High Court, Abuja, has ruled that the Nigeria Customs Service (NCS) must cease collecting excise duty on non-alcoholic carbonated sweetened beverages from members of the Nigeria Employers’ Consultative Association (NECA).
The ruling benefits NECA members, including the Nigeria Bottling Company Limited (NBC) and Seven-Up Bottling Company Limited (SBC).
According to the court, the prohibition will remain in effect until the provisions of Section 13 of the Customs, Excise Tariff, etc. (Consolidation) Act, Cap C49 LFN, are fully adhered to.
The judgment was delivered on January 30 in suit number FHC/ABJ/CS/2004/2022, filed by NECA, NBC, and SBC as plaintiffs against the Nigeria Customs Service Board (NCSB) and the Minister of Finance, Budget, and Economic Planning as defendants.
The case, initiated on October 28, 2022, challenged the Finance Act of 2021, which imposed a tax of N10 per litre on non-alcoholic carbonated beverages starting in 2022.
This levy was strongly opposed by the Organised Private Sector of Nigeria (OPSN), particularly NECA and the Manufacturers Association of Nigeria (MAN).
In his ruling, Justice Egwuatu declared the implementation of the 2022 Fiscal Policy Measures and Tariff Amendments issued by the Minister of Finance as null and void.
The court also ruled that the NCS had no authority to demand transport and feeding allowances from the plaintiffs.
He stated that the NCS lacks the power to administer, assess, or enforce excise duties on non-alcoholic, carbonated, and sweetened beverages without explicit statutory authority.
Additionally, the phrase “non-alcoholic, carbonated, and sweetened” in Section 17 of the Finance Act, 2021, must be interpreted conjunctively rather than disjunctively in determining excisable beverages.
The court found that the circular titled “Approval for the Implementation of the 2022 Fiscal Policy Measures and Tariff Amendments,” issued on March 1, 2022, was invalid and beyond the legal powers of the Minister of Finance.
Under Section 124 of the Customs and Excise Management Act, Cap. C45, Laws of the Federation of Nigeria, 2004, the NCS is not authorised to demand transportation, feeding, or monthly allowances from NECA members, including NBC and SBC, for costs incurred by its officers.
The court directed the NCS to immediately stop collecting excise duties on non-alcoholic, carbonated, and sweetened beverages from NECA members until the requirements of Section 13 of the Customs, Excise Tariff Act are met.
Additionally, the court awarded a cost of N200,000 in favour of the plaintiffs.
Justice Egwuatu emphasised that non-compliance with statutory procedures renders any actions taken null and void.
He further noted that when a law prescribes a specific method for implementing a service, failure to adhere to it invalidates the service itself.
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