Smith Mining Equipment (Pty) Ltd v The Commissioner: SARS (728/12)  ZASCA 145
08 October 2013
Posted by: Author: SAIT Technical
Author: SAIT Technical
The Supreme Court of Appeal (SCA)
heard the matter between Smith Mining Equipment (Pty) Ltd (‘appellant’)
and The Commissioner for the South African Revenue Service (‘respondent’) on 17
September 2013. The judgment was delivered on 1 October 2013.
This matter is an appeal from the
North Gauteng High Court and concerns a dispute relating to the classification
of an imported Kubota RTV Utility Vehicle for Customs Duty purposes.
The respondent classified the
vehicle under tariff heading (‘TH’) 8704.21.80 (comprising motor vehicles for
the transport of goods), whilst the appellant argued that the vehicle falls
within the ambit of TH 8709.19 (types of vehicles used in factories,
warehouses, dock areas or airports).
The appellant submitted that the
vehicle had the main distinguishing features summarised in the explanatory
notes to heading 87.09 and therefore it was indicative of classification of the
vehicle under that heading. However, the onus was on the appellant to convince
the court of the latter.
The main issue was to determine
the accurate approach in classifying goods for Customs Duty purposes. Reference
to former case law indicated that the meaning of the relevant headings as well
as section and chapter notes (in section XVII of Part 1 of Schedule 1 to the
Customs and Excise Act 91 of 1964) should be used to classify goods. In
difficult or doubtful cases reference may be made to the Brussels Notes.
However, the purpose of the before mentioned explanatory notes is not to
override or contradict the tariff headings, but rather to explain such
The court determined that the
primary question when classifying the appellant’s vehicle for Customs Duty
purposes is whether the vehicle complies with the general meaning of tariff
heading 87.09. The approach used by the appellant was incorrect since it relied
mainly on the distinguishing features summarised in the explanatory notes.
These notes only play a secondary role in the classification process.
As a result of the appellant’s
failure to provide sufficient evidence that the vehicles contained features
similar to those used in factories, warehouses, dock areas and airports (as
described in the tariff heading), the appeal was dismissed with costs including
the costs of two counsel.
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