AMI Forwarding (Pty) Limited v Government of the Republic of South Africa (Department of Customs and Excise) and another

AMI Forwarding (Pty) Ltd was a clearing and forwarding agent that operated in South Africa until mid-1998 as a subsidiary of a Belgian company. Between October 2000 and October 2002, SARS made three demands for payment of customs duties: (1) R331,352.84 for three bills of entry alleged to be falsely acquitted; (2) R11,488,613.16 for 68 bills of entry allegedly not acquitted; and (3) R5,903,599.96 for 49 bills (after 19 acquittals were found). The demands related to goods cleared for export in bond or in transit between November 1990 and May 1998. AMI maintained all bills had been acquitted but could not locate original acquittal documents due to office relocations, merger with Micor Shipping, cessation of trading, destruction of documents, and absconding of its attorney who held many documents. AMI had provided three bonds as security totaling over R2m. The KwaZulu-Natal High Court dismissed AMI's action for a declaration that it was not liable, finding it had not proved acquittal.

• Whether AMI bore the onus of proving that bills of entry had been acquitted under sections 18 and 18A of the Customs and Excise Act 91 of 1964
• Whether AMI had discharged the onus of proof despite being unable to produce original acquittal documents
• What inferences could be drawn from circumstantial evidence including bond registers, acquittal registers, and SARS's poor record-keeping
• Whether SARS bore the onus of proving fraud in relation to allegedly falsified acquittals
• Whether the reverse onus in section 102(4) of the Act was constitutional
• Whether SARS's claims had prescribed
• Whether SARS's decision constituted unfair administrative action

The appeal was upheld with costs including those of two counsel. The High Court order was replaced with: (a) The plaintiff (AMI) is not liable to pay any of the customs duties and other charges reflected in Annexure B to the particulars of claim; (b) The first defendant (SARS) is to pay the costs including those occasioned by the employment of two counsel.

A clearing and forwarding agent can discharge the onus of proving acquittal of bills of entry under sections 18(3) and 18A(2) of the Customs and Excise Act 91 of 1964 through cumulative circumstantial evidence, even in the absence of original acquittal documents, where the totality of the evidence establishes on a balance of probabilities that acquittals occurred. Once an agent proves acquittal and thereby disproves the statutory assumption in section 102(4) that duty has not been paid, the ordinary rule applies to allegations of fraud: the party alleging fraud (SARS) bears the onus of proving it. The statutory reverse onus in s 102(4) does not shift the onus of proving fraud from the party making the allegation.

The court noted that AMI had abandoned its constitutional challenge to the reverse onus in section 102(4) on appeal, having conceded it bore the onus. The court did not decide the issues of prescription or unfair administrative action as these became moot once AMI succeeded on the merits. Lewis JA observed that the 1995 amendments to sections 18 and 18A removed the requirement that proof be 'to the satisfaction of the Commissioner', making it sufficient for agents to furnish evidence of removal in bond or transit to customs officials. The court commented on the 'parlous state' of SARS's record-keeping and noted that the moratorium on collections between 1998-2002 had resulted in 'chaos' with thousands of bills of entry being checked and documents admittedly lost. The judgment also noted that discrepancies between acquittal registers and bond registers could be explained by time lapses between actual acquittal and entry in the bond book.

This case clarifies important principles regarding the discharge of the onus of proof under sections 18 and 18A of the Customs and Excise Act. It establishes that clearing agents can discharge their onus through cumulative circumstantial evidence even where original documentation is lost, particularly where the State's own record-keeping is deficient. The judgment confirms that the ordinary rule regarding the onus of proving fraud applies even in the customs context: once an agent proves acquittal and disproves the statutory assumption under s 102(4), the party alleging fraud must prove it. The case also illustrates the importance of proper administrative record-keeping by SARS and the consequences of systemic failures. It demonstrates judicial willingness to draw appropriate inferences where both parties have lost documents but one party (the private litigant) has better maintained what records survived.