Department of Customs and Excise v Maybaker (SA) (Pty) Ltd

• Jurisdiction: South Africa
• Judge: Jansen JA, Joubert JA, Trengove JA, Cillié JA and Holmes AJA
• Judgment Date: 28 May 1982
• Citation: 1982 (3) SA 809 (A)
• Hearing Date: 18 May 1982
• Court: Appellate Division

Holmes AJA:

The question is whether certain imported photographic chemicals, known as Mydoprint - 2, arrived in this country 'packed for retail sale', or 'not packed for retail sale', under the Customs and Excise Act 91 of 1964 Schedule 1. At stake is the amount of customs duty payable: it is 10 per cent in the former case, but only 2,5 per cent in the latter case.

The facts are substantially common cause:

(i)

The respondent carries on business in Port Elizabeth. It is a

Holmes AJA

wholly owned subsidiary of May and Baker Ltd, England, from whom the respondent purchases and imports pharmaceutical, veterinary, agro-chemical, industrial and photographic chemical products.

(ii)

A One of the chemical products so imported by the respondent is Mydoprint - 2 Developer Compak. The 'Compak' or package comprises four plastic cans containing:

(a)

Developer Solution A - 4 litres;

(b)

Developer Solution B - 2 litres;

(c)

B Developer Solution C - 5 litres;

(d)

Developer Solution D - 5 litres;

These four solutions when mixed with water will make 100 litres of developer which in turn must be used with bleach/fix replenisher which is similarly packed, and needs 100 litres of water.

(iii)

C 100 litres of developer is sufficient to develop approximately 21 900 postcard-size prints. Once mixed in the specified quantities, the developer has a shelf life of approximately one week.

(iv)

The size of the 'Compak' is 56 x 20 x 32 centimetres, and it has a mass of 23 kg.

(v)

D After importation the 'Compak' is sold in the packaging in which it is imported, without any modification as to labelling or contents.

(vi)

The cost of the Mydoprint - 2 developer/replenisher in the 'Compak' is R74,70. The cost of the bleach/fix replenisher in the 'Compak' is R80,30. Thus the total cost of the 'Compak' is R155 for 100 litres of the system.

(vii)

E The 'Compaks' are supplied, as imported, to the respondent's customers, who appear to be predominantly, if not entirely, photo-finishing laboratories.

(viii)

The 'Compak' remains in its imported form until it is required for use by the end-user thereof, without any F repacking. It is not sold to wholesalers for resale.

(ix)

Mydoprint - 2 falls under s (vi) chap 37 para 37.08 of Schedule 1 to the Act, which reads:

'Chemical Products and Flashlight materials of a kind and in a form suitable for use in photographs'.

The paragraph has two subheadings, namely -

G 37.08.10 'Packed for retail sale'

37.08.50 'Not packed for retail sale'.

(x)

The appellant contends that respondent's 'Compak', Mydoprint - 2, should be classified as photographic chemicals H 'packed for retail sale' under the subheading '37.08.10.' with a rate of duty at 10 per cent. The respondent's contention is that the 'Compak' falls under photographic chemicals 'not packed for retail sale' under subheading '37.08.50', with a rate of duty at 2,5 per cent.

(xi)

The Secretary (now the Commissioner) for Customs and Excise determined under the provisions of s 47 (9) of Act 91 of 1964 that the respondent's 'Compak' was classifiable under subheading 37.08.10 of the Act, as photographic chemicals 'packed

Holmes AJA

for retail sale', thus attracting customs duty of 10 per cent of the value of the goods imported.

(xii)

This classification was objected to, but the A Secretary for Customs and Excise confirmed his ruling.

(xiii)

The respondent appealed to the Eastern Cape Division of the Supreme Court, contending that the 'Compak' Mydoprint - 2, should be classified under tariff heading number 37.08.50 ('not packed for retail sale').

(xiv)

The appeal was...