Civil Court Orders a Private Company to Pay Over MVR 20 Million for Unpaid Duty on Cigarettes

The Civil Court has ordered a private company to pay more than MVR 20 million after failing to settle import duties on cigarettes that were allegedly removed from a bonded warehouse without authorisation.

The case was filed by the Maldives Customs Service in connection with two consignments imported on 27 April and 4 June 2018. Court records indicate that 430 cases of American Legend cigarettes and 250 cases of Afzal Molasses pipes were stored in the bonded warehouse of SGM Company at Maafannu New Sunnyway, but were removed on 20 September 2018 without the required duty being paid.

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According to Customs, SGM Company had issued a dated cheque to cover the duty, but it later bounced due to insufficient funds. After several unsuccessful attempts to recover the payment, officials—acting on a court order—opened the warehouse on 29 September 2024, only to discover the goods missing.

Under customs regulations, bonded warehouse operators are liable for duties on goods, regardless of whether they are damaged, lost or stolen while under storage. The court ruled that SGM Company had failed to pay import duty amounting to MVR 20,720,415.54, and ordered that the sum must be settled within 14 days.

The court noted that repeated attempts to serve summons and case documents at the company’s address went unanswered. Efforts to locate the company and its directors also failed, resulting in the case being heard in their absence.

Records from the business portal identify Mohamed Farseed and Yoosuf Umar as directors of SGM Company, which is currently undergoing winding-up proceedings.