Neptune Metal Trading v Wan Ismail Afiq Bin Wan Nor Azmi (BA-24-3-01/2025)

This judgment is delivered pursuant to the Plaintiff’s Notice of Appeal dated 14 January 2026 against my earlier decision dismissing the Plaintiff’s Originating Summons dated 21 January 2025 by which the Plaintiff sought declaratory relief concerning the detention and seizure of eleven (11) containers by officers of the Royal Malaysian Customs Department. The Plaintiff contended that the continued detention of the containers was unlawful under subsections 128(3) and 128(3A) of the Customs Act 1967 (henceforth, Act 235).

The appeal raises questions that extend beyond the facts of this particular case. It concerns the proper interpretation of the Customs Act 1967, the scope of enforcement powers conferred upon customs officers, the structure of seizure and forfeiture provisions within Act 235, and the extent to which civil jurisdiction may properly be invoked where criminal proceedings have already been instituted.

After hearing full submissions and considering the affidavits filed by both parties, I dismissed the Plaintiff’s Originating Summons. The Plaintiff has now appealed against that dismissal. These are my full grounds explaining why the application was rightly dismissed. S/N okmuXwxG/k6pVP9mnfKZrQ

The Plaintiff, Neptune Metal Trading, carries on business involving import and export of goods. On 15 April 2024, officers of the Royal Malaysian Customs Department issued notices of detention and inspection in respect of eleven containers bearing the numbers particularised in Enclosure 13. The containers had arrived in Malaysia pursuant to documentation submitted by or on behalf of the Plaintiff.

Following inspection, formal Notices of Seizure were issued on 17 April 2024 and 18 April 2024. The seizure was effected pursuant to section 114(1) of the Customs Act 1967. That provision states: “Any officer of customs may seize any goods in respect of which he has reasonable cause to suspect that an offence under this Act has been committed.”

The power is preventive in nature and is triggered by reasonable cause to suspect, not by proof of guilt. The suspected offence relied upon by the Defendants was one under section 135(1)(a) of the Act. That section criminalises the importation or exportation of goods contrary to any prohibition imposed under the Act or any other written law. The Customs (Prohibition of Imports) Order 2023 imposes regulatory controls S/N okmuXwxG/k6pVP9mnfKZrQ in respect of certain categories of goods, including scrap metal and related materials.

The affidavits filed by the Defendants set out, in detail, the matters that gave rise to suspicion. These included inconsistencies in contractual documentation concerning the country of origin, ZB1 forms reflecting import rather than transhipment, differences between declared goods and those found during inspection, inconsistencies between Proforma Bills of Lading and final Bills of Lading, listing of Port Klang as Port of Discharge, absence of finalised shipping documentation, classification under Inward Manifest, and regulatory issues concerning Certificate of Approval requirements.

The Plaintiff does not dispute that these matters were identified. However, the Plaintiff contends that the goods were properly declared and that confirmations from Jabatan Alam Sekitar and SIRIM demonstrate that the goods were not subject to environmental or COA restrictions. The Plaintiff therefore argues that the continued detention is unjustified.

It is also undisputed that criminal charges were subsequently preferred against the Plaintiff under section 135(1)(a) of the Act in respect of the same goods. The criminal proceedings remain pending. S/N okmuXwxG/k6pVP9mnfKZrQ

The Plaintiff’s principal argument is based on section 128(3) of the Act. The Plaintiff contends that where goods are seized and no action is taken within thirty days, the goods must either be released or referred to Court. Failure to do so, it is argued, renders the seizure unlawful.

Section 128(3) provides in material part: “Where any goods have been seized under this Act and no prosecution is instituted in respect thereof within thirty days from the date of seizure, the officer effecting the seizure shall refer the matter to the Director General…”

Section 128(3A) empowers the Director General to determine whether the goods shall be forfeited or released. The Plaintiff submits that the goods were not released within thirty days and were not referred to Court within that period. On that basis, it argues that the continued detention violates section 128(3). It further submits that continued detention amounts to unlawful deprivation of property contrary to Article 13 of the Federal Constitution.

The Plaintiff also seeks damages, quantified at RM417,294.28, on the basis that the continued detention has caused commercial loss. S/N okmuXwxG/k6pVP9mnfKZrQ

The Defendants submit that the seizure was lawfully effected under section 114(1) upon reasonable cause to suspect an offence under section 135(1)(a). They contend that the matters identified in the affidavits are substantial and justify suspicion.

The Defendants argue that section 128(3) does not create an automatic invalidation of seizure after thirty days. The subsection regulates procedure where no prosecution is instituted. In this case, prosecution has been instituted. Accordingly, the statutory premise relied upon by the Plaintiff does not arise.

The Defendants further rely on section 132 of the Act, which provides that no costs of damages shall lie against the Government or any officer unless it is proved that the seizure was made without reasonable or probable cause.

The issues for determination are:

Whether the seizure was lawfully effected under section 114(1);

Whether section 128(3) renders the seizure void after thirty days; S/N okmuXwxG/k6pVP9mnfKZrQ

Whether continued detention violates Article 13;

Whether declaratory relief ought to be granted in light of the pending criminal proceedings;

Whether damages are recoverable. FINDINGS

(A) Lawfulness of Seizure Under Section 114(1)

Section 114(1) authorises seizure where there is “reasonable cause to suspect” that an offence under the Act has been committed. The standard is objective. It does not require the officer to establish guilt, nor does it require the officer to be correct in hindsight.

In Public Prosecutor v Hamzain B Yusoff & 4 Ors [1991] 3 CLJ (Rep) 534, the Court recognised that enforcement officers may act upon reasonable grounds based on objective facts. The legitimacy of the seizure depends on the existence of such grounds at the time of seizure.

In the present case, the discrepancies identified are not superficial. Differences between declared and inspected goods are material. Documentary inconsistencies relating to origin and classification affect regulatory compliance. When considered S/N okmuXwxG/k6pVP9mnfKZrQ cumulatively, these matters provide objective grounds capable of supporting reasonable suspicion.

The Court’s function here is not to decide whether the Plaintiff is guilty of an offence. That question lies before the criminal court. The narrower question is whether the seizure was authorised when it was made. On the material before this Court, the answer is clearly in the affirmative.

(B) Proper Construction of Section 128(3)

Section 128(3) must be read in its proper statutory context. It applies “where no prosecution is instituted”. The language of the subsection is deliberate. It prescribes referral to the Director General in the absence of prosecution.

The subsection does not state that seizure becomes void after thirty days. It does not mandate automatic release. If Parliament intended to impose a rigid time limit extinguishing seizure power, it would have expressed that intention clearly.

Section 17A of the Interpretation Acts 1948 and 1967 requires a purposive interpretation. In Metramac Corporation Sdn Bhd v Fawziah Holdings Sdn Bhd [2006] 3 CLJ 177, the Federal Court emphasised that courts must give effect to legislative intention discerned from the words used. S/N okmuXwxG/k6pVP9mnfKZrQ

The Customs Act 1967 is a regulatory statute designed to safeguard public revenue. Investigations may involve examination of complex documentation and compliance with subsidiary legislation. It would be inconsistent with the statutory purpose to interpret section 128(3) as extinguishing seizure automatically after thirty days.

Furthermore, prosecution has been instituted in this case. The statutory condition for referral under section 128(3) does not arise. The Plaintiff’s reliance on that provision is therefore misconceived.

(C) Non-Interference with Criminal Proceedings

The existence of pending criminal proceedings is of significant importance. The same issues relating to legality of importation and compliance with prohibitions are central to the criminal charge under section 135(1)(a).

It is a settled principle that civil courts should not interfere with ongoing criminal proceedings unless exceptional circumstances exist. Challenges to enforcement action forming the basis of a criminal charge should be raised before the criminal court. S/N okmuXwxG/k6pVP9mnfKZrQ

There is no evidence of bad faith, mala fide conduct or abuse of statutory power. The Plaintiff’s grievance relates to the duration of detention. That, by itself, does not justify civil intervention.

Declaratory relief is discretionary. The Court may decline relief where it would serve no practical purpose or intrude upon matters already before another court. In this case, the issues can and should be determined in the criminal proceedings.

(D) Article 13 and Damages

Article 13 protects against deprivation of property save in accordance with law. Seizure under section 114(1) is authorised by law. There is therefore no constitutional breach.

Section 132 of Act 235 bars any action unless it is proved that the seizure was made without reasonable or probable cause. The Plaintiff has not established absence of reasonable cause.

The claim for damages is insufficiently substantiated and, in any event, barred by section 132 in the absence of proof that the seizure was made without reasonable cause. S/N okmuXwxG/k6pVP9mnfKZrQ

For the reasons set out above, I am satisfied that the seizure of the eleven containers was lawfully effected under section 114(1) of the Customs Act 1967. Section 128(3) does not render the seizure void after thirty days, particularly where prosecution has been instituted.

There is no breach of Article 13 and no basis for declaratory relief. The Plaintiff’s Originating Summons was therefore rightly dismissed.

The action is dismissed with costs. Dated 27 February 2026 -sgd-DATO’ ANITA BINTI HARUN JUDICIAL COMMISSIONER HIGH COURT OF MALAYA SHAH ALAM SELANGOR DARUL EHSAN S/N okmuXwxG/k6pVP9mnfKZrQ To the parties’ solicitors: For the Plaintiff : Sree Kanapathi a/l Nyanasegaran (Messrs J R Ravendren & Associates) For the 1st-5th Defendants: Dzaqiff Shauqi bin Mohammad Agus (Jabatan Peguam Negara, Putrajaya) S/N okmuXwxG/k6pVP9mnfKZrQ