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CUSTOMS ACT 1967 – CUSTOMS’ DELAY TURNS SEIZURE INTO COSTLY MISSTEP

1. Summary and Facts

In AGM Duty Free (Tengah) Sdn Bhd v Mohamad Hafiz bin Ishak & Ors [2025] 2 MLJ 474, Customs officers seized 2,430 cartons of beer from AGM Duty Free (Tengah) Sdn Bhd, suspecting violations under the Customs Act 1967. Despite AGM’s timely demand for return within the statutory 30-day period, Customs neither initiated prosecution nor referred the matter to a magistrate promptly. Instead, Customs held the goods without action for over nine months, finally notifying AGM of intended prosecution. The High Court dismissed AGM’s claim, ordering Customs to prosecute within two months or return the goods, prompting AGM’s appeal.

2. Legal issues

i. Whether Customs’ failure to prosecute or refer seized goods to a magistrate within the 30-day statutory timeframe makes the seizure unlawful.
ii. Whether the High Court usurped the Public Prosecutor’s powers by setting a prosecution timeframe, violating Article 145 of the Federal Constitution.

3. Court Findings

• The Court of Appeal unanimously held Customs breached statutory obligations under Section 128(3) of the Customs Act by neither prosecuting nor referring AGM’s claim to a magistrate within 30 days, making the seizure unlawful and wrongful.
• The High Court improperly infringed on prosecutorial discretion by imposing a timeframe on prosecution, contravening Article 145(3) of the Federal Constitution.
• The matter was remitted back to the High Court for damage assessment in favor of AGM.

4. Practical Implications

Customs and enforcement agencies must adhere strictly to statutory timelines for seizures and prosecution. Failure to comply not only renders actions unlawful but may also result in liability for significant damages. Courts reaffirmed that prosecutorial discretion cannot be limited or directed by judicial orders, preserving the separation of powers between judiciary and prosecution authorities.

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