A cigarette manufacturer planning to set up an export business had to pay over €1 million in fines and taxes after failing to inform customs that 3,140 kilos of imported raw material had started being manufactured.
Frankie Apap had called customs authorities seeking direction about the necessary paperwork that was to be submitted together with some cigarette samples manufactured at his Zejtun factory.
He intended to send those samples abroad in line with his plans to set up a cigarette exportation business.
However, that call triggered an inspection at the factory in December 2020.
It emerged that the manufacturing process on some 3140 kilos of raw material previously imported by Apap, had begun without the necessary customs clearance and tax payments.
Once the tobacco started being processed, it was no longer considered as raw material and duties and taxes became due.
The manufacturer was targeted by criminal charges for unlawful manufacture, importation of the non-manufactured product, and taking the consignment in breach of customs and excise duty legislation.
Ignorance of the law is no excuse
The accused’s lawyer argued that this was a case of entrapment since his client had received no guidance from the relative authorities as to what was expected of him.
But the court rejected that argument, observing that the manufacturer himself had called customs for guidance, triggering the inspection.
The court also found it hard to believe how a witness, assisting the accused in his business venture, had claimed not to know that taxes were due once the tobacco was manufactured. That witness also said that he had followed a manufacturing course.
The accused also argued that customs officials had not told him about the taxes due.
But the court stated that ignorance of the law was no excuse.
It was also not contested that some three tons of tobacco were found inside the factory, that taxes had not been paid once manufacturing started and that no customs declaration had been made upon importation.
The prosecution had proved its case beyond a reasonable doubt, Magistrate Ian Farrugia said.
As for punishment, there was not much to say, the court observed.
Legislation lays down a specific formula which the court is bound to follow, no matter how disproportionate the end result might appear and no matter how shocking it could be for the accused and his financial stability.
In light of such considerations, the court condemned Apap to a one-month jail term suspended for two years and a fine of €1,149,240, a third of which was due immediately as a civil debt.
The court also ordered the confiscation of the tobacco.
Customs find contraband in a van
Another three other people also landed hefty fines for breaching tax laws on Tuesday.
Roy Joseph Cremona, whose Peugeot vehicle was targeted in a search related to a suspected drug deal, was condemned to a six-month jail term suspended for two years and a fine of €14,720.40.
The case dated back to January 2008 when the vehicle, parked near Crucifix Hill, Valletta, was found to contain four master cases of Rothmans Blue cigarettes.
Each case carried 50 cartons with 200 cigarettes each, with a total value of €913.20.
In a separate case, a company director landed a fine of €14,763 and a one-month jail term suspended for two years for failure to pay tax on imported cargo.
The bill of lading had indicated the merchandise as general cargo, T1, on which taxes were due in Malta.
But on the notice of arrival, the cargo was erroneously indicated as Status C, on which no tax would be due.
In a fourth case, George Vella was fined almost half a million euros over contraband merchandise found in his possession.
Searches inside his Peugeot Partner van and a rented garage at Qawra, yielded cigarettes, tobacco and alcoholic beverages in respect of which excise and other duties had not been paid.
The court concluded that the prosecution had sufficiently proved its case and declared the accused guilty, condemning him to an eight-month jail term suspended for three years and a fine of €450,554.73.