Does IAA render section 91 meaningless?

The Internal Administrative Appeal ("IAA") procedure came into effect some time ago, but is still giving rise to a few unexpected anomalies. You may recall that the settlement and appeal procedure was first published under section 93A of the Customs & Excise Act (the Act) in 2001, but was repealed a short while later. It then reappeared in Chapter XA, which is divided into Part A, B and C. This now provides for IAA, Alternate Dispute Resolution (ADR) and settlements. The IAA process allows a right of appeal against any decision, including: ● Any determination or other act of an administrative nature for the purposes of the Act; ● Any amendment or withdrawal or making of a decision; and ● Any refusal to take a decision. Section 91 is an entirely separate section that provides for administrative penalties. In short, it allows someone who has failed to comply with the Act to be dealt with administratively if they agree to abide by the Commissioner's decision and deposit whatever sum may be required by Customs. The idea is that the Commissioner will deal with the matter summarily and then order forfeiture in full or in part of the sum that was deposited by way of a penalty. Section 93(2) of the Act goes on to provide that the Commissioner may on good cause shown mitigate or remit any penalty. Logically, section 91 read with section 93 provides for a procedure in respect of penalties that is entirely separate to the IAA procedure provided for in section 77A to 77HA. This notion is supported by the fact that neither section 91 nor section 93 make any reference to the IAA sections and vice versa. That said, Customs has interpreted the sections in such a way that any application for mitigation of section 91 must be done by following the IAA process. In other words, you will have to lodge a DA51 and grounds of appeal against any decision taken in terms of section 91. It is very important to remember that the procedure is formalistic and that an appellant must comply with the specified time periods. Should you require any further information in this regard, do not hesitate to contact us. We are also pleased to advise that in the event that your appeal in terms of the IAA procedure is unsuccessful, you will have further recourse under the ADR process. We will, however, discuss ADR in our next article.