Kemtek Imaging Systems Ltd v Commissioner for Customs and Excise

• Jurisdiction: South Africa
• Judge: McCreath J
• Judgment Date: 27 June 1997
• Hearing Date: 27 June 1997
• Docket Number: 13255/96
• Citation: 1997 JDR 0697 (T)
• Court: Transvaal Provincial Division

Mc Creath J:

The appellant is an importer of rolls of photo-sensitised emulsion on an aluminium sub-strate (the imported product). By letters dated 9 April 1996 and 24 April 1996 the first respondent determined that the imported goods should be classified under tariff-heading 37.01 part 1 of schedule 1 to the Customs and Excise Act 91 of 1964 (the Act). The imported product had previously been classified under tariff-heading 37.02 of part 1 schedule 1 to the Act in consequence of a prior determination by the first respondent.

The second respondent, a competitor of the appellant, sought by way of review proceedings to set aside the prior determination. In consequence of legal advice obtained by the first respondent inter alia from senior counsel, those proceedings were settled and the determination under heading 37.01 made.

This precipitated the present proceedings which were

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Mc Creath J

launched in the form of both a review and an appeal. However the review has been settled and this court is called upon to decide only the appeal. In terms of the notice of appeal the appellant seeks an order in the following terms:

2.2.1

Setting aside the first respondent's determination dated 9 April 1996 as amended on 24 April 1996 in terms of which he classified certain photo-sensitised aluminium coils imported into South Africa as falling under tariff sub-heading 37.01 part 1 of schedule 1 to the Customs and Excise Act 91 of 1964 (as amended).

2.2.2

Declaring that the sensitised aluminium coils in question fall to be classified under tariff sub-heading 37.02 part 1 of schedule 1 to the Customs and Excise Act 91 of 1964 (as amended)."

The duty payable in respect of goods imported into the Republic of South Africa is set out in schedule 1 to the Act. Section 47(8)(a) of the Act provides that:

"the interpretation of part one of schedule no 1 shall be subject to the explanatory notes to the harmonised system and to the customs Co-operation Council nomenclature issued by the Customs Co-operation Council Brussels from time to time."

The "co-operation council nomenclature" was superseded by the "harmonised system" on 1 January 1988. The principles laid down in the authorities regarding the nomenclature have application to the "harmonised system." The "explanatory notes" are generally referred to in the authorities as the "Brussels notes."

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In regard to schedule 1 to the Act TROLLIP JA had the following to say in Secretary for Customs and Excise v Thomas Barlow and Sons Ltd 1970 (2) SA 660 (A) at 675(D)-676(F):

"This schedule is a massive part of the statute in which all goods generally handled in international trade are systematically grouped in sections, chapters and sub-chapters, which are given titles indicating as concisely as possible the broad class of goods each covers. Within each chapter and sub-chapter the specific type of goods within the particular class is itemised by a description of the goods printed in bold type. That description is defined in the Schedule as a "heading". Under the heading appear sub-headings of the species of the goods in respect of which the duty payable is expressed. The Schedule itself and each section and chapter are headed by "notes", that is, rules for interpreting their provisions.

It is clear that the above grouping and even the wording of the notes and the headings in Schedule 1 are very largely taken from the Nomenclature compiled and issued by the Customs Co-operation Council of Brussels. That is why the Legislature in sec. 47(8)(a) has given statutory recognition to the Council's Explanatory Notes to that Nomenclature. These Notes are issued from time to time by the Council obviously, as their name indicates, to explain the meaning and effect of the wording of the Nomenclature. By virtue of sec. 47(8)(a) they can be used for the same purpose in respect of the wording in Schedule 1. It is of importance, however, to determine at the outset the correct approach to adopt in

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"interpreting the provisions of the Schedule and in applying the explanations in the Brussels Notes. Note VIII to Schedule 1 sets out the "Rules for the Interpretation of this Schedule"."

With reference to the first rule of interpretation as it then read (the occurrent equivalent being contained in the first rule in note A of the general notes to the schedule) TROLLIP JA went on to say:

"That, I think, renders the relevant headings and section and chapter notes not only the first but the paramount consideration in determining which classification, as between headings, should apply in any particular case."

The learned judge of appeal found support for this view in the commentary to the...