The Customs Appeal Tribunal or Tribunal Rayuan Kastam (the Tribunal) is an independent judicial body established to provide a fair, transparent and speedy procedure for dissatisfied persons to appeal against the decision of the Director General of Customs (the DG) and to enhance the efficiency of the tax administration appeal system to make it more business and client friendly. It was established on 1 June 2007.

As the Tribunal enters its fifth year, MLTIC Executive Editor Rajesh C Muttath caught up with the Tribunal’s Chairman Mr. Rungit Singh [photo] at the latter’s office in Putrajaya. 

This is the second part of the two-part interview, parts of which are edited for this publication. For the first part, click here.

We have four officers in the Tribunal. Two of us including myself are from the Judicial Service. The other two are a retired customs state director and a retired officer from the Tax Analysis Division of the Ministry of Finance.

Under the Customs Act 1967, the Minister of Finance can appoint Tribunal members who have retired from government departments. These are officers who have experience in specialised areas like customs and taxation. At the Tribunal, they are trained to judicially consider matters involving both facts and law in an independent manner.

The Tribunal needs a mix of officers from different backgrounds because we not only focus on law and procedure but also on technical customs and taxation issues. Therefore, the experience of members exposed to handling complex technical issues is in fact an asset to the Tribunal. Of course, just like for any other judicial post, Tribunal members retired from government departments cannot use their past work experience to colour their judgments. And of course they are required to write grounds of judgement to justify every decision in fact and in law. The grounds of judgement are subject to the appellate jurisdiction of the High Court and this should further spur all Tribunal members to make fair and correct judicial rulings.

This situation is in fact created by law. Section 141P of the Customs Act 1967 mandates the Tribunal to assist the parties to negotiate an agreed settlement. In the same section, the law requires the Tribunal to proceed to determine the appeal where the parties are unable to reach an agreed settlement. There is no provision for a different member to hear the appeal.

I think the question of judicial maturity is very important here. If positively approached, you can see that the gains of discussion or negotiation for settlement can subsequently be used to formulate a fair judgment for the parties. It also enables the Tribunal to come up with hybrid decisions i.e. decisions that incorporate issues and facts agreed during negotiation as well as those matters decided by the Tribunal. On the other hand, where the parties want to proceed to trial from a purely adversarial position, it is for the presiding member not to refer to the earlier discussions during negotiation. In fact, every member of the Tribunal should possess wide judicial skills so as to give the parties the maximum benefit of this negotiation/hearing approach.

Since no lawyers are involved in the hearing and parties are self-represented, it is not necessary to have a different presiding member for negotiation and for the hearing proper. It is in the interest of parties to narrow down the issues for hearing as much as possible because ultimately the parties expect a quick resolution at the Tribunal. Furthermore, after having gone through the negotiation process the presiding member would be in a better frame of mind to understand the disputed issues; he would know the background to the appeal. He can then either choose to completely ignore that background knowledge or he can get the parties to agree on what should be in the official record. 

There is a remote possibility that a party may not be frank in the negotiations for fear that the information revealed in such negotiations may prejudice the presiding member if the appeal eventually goes for trial but in practice this issue seldom arises. In the experience of the Tribunal in hearing the past 35 appeals this point was never an issue.  Nevertheless, presiding members are trained to conduct negotiations in a manner that would build the parties confidence in the Tribunal’s process.  In the rare instance that negotiations may impact on a fair trial, the presiding member can always recuse himself or even the parties can apply for such recusal.  Conversely, in spite of the telling evidence during negotiations, the parties may yet agree that the same presiding member continues with the hearing.

Tribunals the world over deal with very specific disputes. When you come to a Tribunal, you are already familiar with the facts of your case and the nature of the dispute. All that you want the Tribunal to hear are disputed issues. You do not want the Tribunal to bring in the formal procedures of evidence, rules of court, etc. You want quick justice; a quick resolution of your dispute. This is what ADR mechanisms are geared for and Tribunals practise the ADR mechanism. With lawyers participating in the ADR mechanism there would be a tendency to bring in more formal procedures, legal technicalities and complexities in the proceedings which may not be necessary for the resolution of the actual dispute.  With the participation of lawyers, Tribunals may go the way of the civil courts thereby defeating the very purpose of creating them as ADR bodies.

On the other hand, consultants are allowed to represent parties because they are technical experts; specialists in a particular area.  They can also adduce informal expert evidence and such expertise may be critical to the proceedings.  Again, the law only disallows legal representation and not representation by consultants.

Mr. Rungit Singh is very clear about his objectives. He enumerates them as follows:

First, the awareness issue.  More parties should know about the Tribunal’s service. So, the Tribunal is constantly reaching out to the relevant stakeholders. In that sense, educating the Customs Department on the role of the Tribunal is as important as educating the appellants. We therefore conduct briefings on the Tribunal’s role and functions to customs officers at all levels. We acknowledge that creating awareness is a continuous exercise and for that reason we conduct briefings throughout the country with different target groups. This far we have already organised 32 briefings nationwide.

Second, the Tribunal should grow in its legal role by dispensing justice on the ADR platform. The Tribunal should not become another civil court. The presiding members must jealously guard the Tribunal’s role as an ADR body. The essence of the Tribunal i.e. the transparency and flexibility it offers for dispute resolution must always be retained.

Third, the Tribunal through its decisions must develop customs jurisprudence i.e. judge-made laws to resolve customs issues in a just manner.  In doing so, the Tribunal should take into consideration the present day practices and functions of the Customs Department and the needs of its clients particularly in the area of cross border trade.  The Tribunal’s decisions can thus be used to streamline better practices in disputed areas of customs work.

Fourth, being a new body the Tribunal itself should be managed efficiently.  For example, we have just introduced online filing for the parties to file appeals at their convenience.  A preliminary case management procedure by letter has also been introduced to encourage the settlement of disputes even before an appeal comes up for the first mention in the Tribunal.

Fifth, wherever possible, the Tribunal sittings should be held at a place convenient to both parties.  This could even be close to the customs office or port where the dispute originated.  The law allows for this since it is the Chairman of the Tribunal who has to decide the place of hearing of each appeal.  Combined with online filing, a convenient place of hearing would literally take the Tribunal’s service to the doorstep of the disputing parties.  Needless to say the savings in time and costs would be immense.

Sixth, the Tribunal should keep a concise record of its decisions for posterity. In this regard, we have already published the first volume of the Tribunal’s Legal Journal which reports a digest of the first 30 appeals heard and decided by the Tribunal.  The digest of each appeal is presented in a similar format such as to capture the legal ratio of every decision.  This digest is also available online in the Tribunal’s portal.  In the future, we are looking forward to disseminate information on the Tribunal’s contribution to the Malaysian legal system through other forms of legal reporting like your tax information centre (MLTIC).

We tell the appellants the Tribunal is not set up to encourage litigation between the business community and the Customs Department. Therefore, the appellants should not file frivolous appeals in the Tribunal. On the other hand, where there is a serious legal or factual dispute with the Customs Department, the appellants should make full use of the facility provided by the Tribunal to settle such disputes by way of a formal hearing. The appellants are assured of a just decision in every appeal filed.

Similarly, we tell the Customs Department that although that you may have your own mechanism for settling disputes as for example the round table discussions (RTD), if any party is still not satisfied with the final decision of the Customs Department it is best that the matter is heard in the Tribunal.  Unlike the civil courts, the Tribunal works in a niche area of resolving disputes that arise as a result of the decisions made by the Customs Department. In that context, even the Customs Department can be assured of the professionalism of the Tribunal’s service.