Commissioner for Customs and Excise v Capital Meats CC (In Liquidation) and Another

• Jurisdiction: South Africa
• Judgment Date: 25 September 1998
• Citation: 1999 (1) SA 570 (SCA)

Commissioner for Customs and Excise v Capital Meats CC (In Liquidation) and Another
1999 (1) SA 570 (SCA)

1999 (1) SA p570

Citation	1999 (1) SA 570 (SCA)
Case No	529/96
Court	Supreme Court of Appeal
Judge	Vivier JA, Howie JA, Schutz JA, Streicher JA, Melunsky AJA
Heard	September 21, 1998
Judgment	September 25, 1998
Counsel	AP Joubert (with him NJ Louw) for the appellant; CE Puckrin (with him JA Meyer) for the respondents

Flynote : Sleutelwoorde

Revenue — Customs and excise — Classification of articles for customs duty — Packaged frozen portions of sheep E covered with breadcrumbs — Commissioner contending that goods to be classified under tariff heading 02.04 of Schedule 1 to Customs and Excise Act 91 of 1964 ('meat of sheep or goats, fresh, chilled or frozen'), while respondents contending that tariff heading 16.02 ('other prepared or preserved meat, offal or blood') the appropriate classification — Explanatory notes of both chaps 2 and 16 providing that meat prepared by process not provided for in F chap 2, 'including those merely covered with batter or bread crumbs', falling under chap 16 — Preparation conclusive as both preparation and preservation constitute processes and preservation not relevant in casu — Scattering of crumbs on large hunks of meat not amounting to 'preparation' in sense of 'to make ready for eating' — G Item 0204.42 accordingly clearly appropriate classification for goods in question.

Revenue — Customs and excise — Customs and Excise Act 91 of 1964, Schedule 1 — Interpretation of for purposes of classification of goods — Certain principles set out. H

Headnote : Kopnota

The interpretation of Schedule 1 of the Customs and Excise Act 91 of 1964 for purposes of classification must be effected, first, with reference to the headings and their subheadings falling under the chapters and subchapters of the Schedule. The second source of interpretation is the notes to each section or chapter. These notes are a guide I to interpretation. Once a meaning has been given to the potentially relevant words and the nature and characteristics of the goods considered, the heading most appropriate to the goods must be selected. (At 573B—D/E.)

The issue in the instant case was whether frozen sheep carcasses, each cut into six portions and covered with breadcrumbs, qualified as frozen mutton, as contended for by the appellant, or prepared mutton, as contended for by the respondents. Schedule 1 of the Customs and Excise Act sets out the J

1999 (1) SA p571

rates of duty payable on imported goods. The appellant contended that the appropriate classification was under A heading 02.04 of Schedule 1 ('meat of sheep or goats, fresh, chilled or frozen'), item 0204.42 ('other cuts with bone in'), while the respondents contended that the appropriate classification was under heading 16.02 ('other prepared or preserved meat, offal or blood'), item 1602.90.90 ('other'). A Provincial Division agreed with respondents. The chapter notes pertaining to chap 2 of the Schedule provide that 'meat and offal cooked in any way . . . or B otherwise prepared by any process not provided for in this chapter, including those merely covered with batter or bread crumbs' do not fall under chap 2 but under chap 16. The chapter notes to chap 16 in turn state that 'meat and offal prepared or preserved by other processes not provided for in chap 2, including those merely covered in C batter or bread crumbs' fall under heading 16.02. Counsel for the appellant argued that once meat was preserved by freezing, as had happened in the instant case, it fall under chap 2, and that that was the end of the matter. Counsel for the respondents, on the other hand, argued that there could be uncertainty whether the meat in question had been 'frozen' (in which case chap 2 applied) or 'prepared' (in which case chap 16 applied) so that it D was legitimate to have regard to the phrase 'including those merely covered with bread crumbs' in the notes to chaps 2 and 16, the effect of which was to make the goods subject to chap 16. The appellant replied that the phrase did not have this effect when read in context. He relied particularly on the phrase 'otherwise prepared or preserved by any process not provided for in this chapter' in the notes to chap 2, which constituted his alternative E argument.

Held, that the goods were clearly 'other meat of sheep frozen' rather than 'other prepared or preserved meat', but that it was not necessary to decide the merits of the appellant's submission that once meat was frozen it automatically fell under chap 2. (At 575B—C.) F

Held, further, as to the appellant's alternative argument, that the word 'otherwise' in the phrase 'otherwise prepared or preserved by any process not provided for in this chapter' related to processes for the cooking of meat. Chapter 2 made provision for some of these processes, the others falling under chap 16. (At 575E/F—F/G.)

Held, further, that the words 'prepared' or 'preserved' read with the word 'process' were defining words that also G governed that which followed. (At 575F/G—G.)

Held, further, that the respondents' argument that the word 'including' in the notes to chaps 2 and 16 elevated the phrase 'merely covered' etc out of the sentence to give it a substantive existence independent of the preceding words had to be rejected: it was trite law that the word 'including' indicated that the specified list was illustrative, H not exclusive. The effect of this rule was that the included words were subject to the requirements of preparation, preservation and process. (At 575H/I—I/J.)

Held, further, that the word 'prepared' was the important governing word (preservation being irrelevant to the instant case) and that in the context of the instant case it meant 'to make ready for eating'. (At 576B—C/D.) I

Held, further, that the scattering of crumbs on large hunks of meat did not constitute preparation in the culinary sense. (At 576D/E.)

Held, accordingly, that item 0204.42 was clearly the appropriate item. (At 576F/G.) Appeal allowed.

The decision in the Transvaal Provincial Division in Capital Meats CC and Another v Commissioner for Customs and Excise reversed. J

1999 (1) SA p572

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