Secretary for Customs and Excise v Thomas Barlow & Sons Ltd

• Jurisdiction: South Africa
• Judge: Steyn CJ, Rumpff JA, Botha JA, Trollip JA and Miller AJA
• Judgment Date: 25 March 1970
• Citation: 1970 (2) SA 660 (A)
• Hearing Date: 16 February 1970
• Court: Appellate Division

G Steyn, C.J.:

The issue in this appeal is the liability of the respondent under the Customs and Excise Act, 91 of 1964, as amended, for customs duty on so-called 'Drott Go-Devils', alleged by the appellant to be crane lorries, liable to duty under heading 87.03 of Part 1 of the Schedule 1 to that Act, and by the respondent to be mobile cranes liable H to duty under heading 84.22 of that Schedule. An initial contention by the appellant that two models of these Go-Devils are liable to duty under heading 87.07 was abandoned at the hearing in the Court below.

The respective headings are the following:

84.22:

'Lifting, handling, loading or unloading machinery, telphers and conveyors (for example, lifts, hoists, winches, cranes, transporter cranes, jacks, pulley tackle, belt conveyors and teleferics) (excluding machinery falling within heading No. 84.23).'

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87.03:

'Special purpose motor lorries and vans (such as breakdown lorries, fire-engines, fire-escapes, road sweeper lorries, snow-ploughs, spraying lorries, crane lorries, searchlight lorries, mobile workshops and mobile radiological units), but excluding the motor vehicles of heading No. 87.02.'

A In terms of sub-heading 40 under the first heading, the rate of duty on cranes is 7 per cent and in terms of sub-heading 90 under the second heading the rate of duty on 'Other vehicles', which would, in the context, include crane lorries, is 20 per cent. Except perhaps for the mention of snow-ploughs which are not self-propelled, in heading 84.23, B the exclusion in heading 84.22 is irrelevant for present purposes. The exclusion in heading 87.03 refers inter alia to 'motor vehicles for the transport of persons, goods or materials'.

Each of these 'Go-Devils', of which there are three models, has as a base a heavy welded steel frame on wheels, on which an upper structure is mounted. This structure contains a vertical pillar or mast, a boom or C jib, and a winch consisting of a drum with a cable wound around it and passing over a pulley at the end of the jib. At the end of the cable there is a hook. The jib can be extended and raised to a vertical position. The whole of this upper structure can be fully rotated about a vertical axis. This swivelling upper assembly is operated by means of a D special self-contained tandem hydraulic pump driven off the engine which propels the base. It has the characteristics of a crane. The frame, which is rectangular, rugged and strong, has a flat upper surface in the shape of a platform or deck, described by the makers as 'the exclusive carry deck'. The upper structure is mounted on this flat surface. The frame further has four hydraulic outriggers, one at each E corner, which serve, when lowered to the ground, to stabilise the whole structure for the lifting of a heavy load or the use of an extended jib. In one model the upper structure is outside and next to a cab, in another outside and next to an open operator's compartment, and in a third model, in front of and adjacent to such a compartment. Apart from F the engine, the base or frame contains the usual automobile features, such as a gear-box and controls for changing gears, for braking and for steering. The steering wheel is, of course, inside the cab or operator's compartment, and it may be assumed that the other controlling equipment, also that of the upper structure, is likewise operated from there. According to advertisements included in the record, the makers claim G that 'All Drott Go-Devil maximum capacity figures are mobile capacity figures: whatever you can lift you can move with'. Crane capacity ranges from 2,000 to 16,000 lbs. In the case of two models the deck capacity is the same as the crane capacity and in the case of the other model it is twice as much. The platforms allow of transport, from the point of H pick-up to the point of delivery, by carriage on deck instead of by suspension from the cranes.

Sec. 47 (8) (a) of the Act provides that the interpretation of Part 1 of Schedule 1, in which these headings occur, shall be subject to the Explanatory Notes to the Brussels Nomenclature issued by the Customs Co-operation Council, Brussels, from time to time. In deciding the issue raised, therefore, regard is to be had not only to the provisions of the Act and the Schedule, but also to these notes, as existing at the relevant time. Preceding the Schedule, there are certain notes. Under

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Note VIII, headed 'Rules for the interpretation of this Schedule', there is the following:

'Interpretation of this Schedule shall be governed by the following principles:

(1)

The titles of sections, chapters and sub-chapters are provided for ease of reference only; for legal purposes, classification (as between A headings) shall be determined according to the terms of the headings and any relative section or chapter notes . . . '

This corresponds verbatim with Rule 1 of the Interpretative Rules of the Brussels Notes.

The heading 84.22 is in sec. XVI of the Schedule. According to Note 1 B (f) to that section, it does not, inter alia, cover vehicles. From the terms of Notes 2 to 6 it is apparent that this section is intended, generally, to cover machines. Note 7 states that for the purposes of the section notes, the expression 'machine' means any machine, apparatus or appliance of a kind falling within this section. The same intention appears from the notes to Chap. 84. Of these, Note 2 refers C specifically, inter alia, to a machine or appliance which answers to a description in heading 84.22, and the latter, of course, deals expressis verbis with machinery.

The heading 87.03 is in sec. XVII of the Schedule. In section Note 4 there is an incidental reference to road vehicles and to motor vehicles. D Note 1 of the chapter notes mentions vehicles. Of the headings in this chapter, No. 87.01 deals with tractors, No. 87.02 with motor vehicles for the transport of persons, goods or materials, No. 87.03, as indicated above, with special purpose motor lorries and vans, Nos. 87.04, 87.05 and 87.06 with chassis fitted with engines, bodies (including cabs) and parts and accessories, for 'the motor vehicles falling within heading No. 87.01, 87.02 or 87.03'.

E From the above it is clear that for present purposes the heading 87.03 is to be taken to cover motor vehicles and the heading 84.22 machines in each case of a particular kind. It is not contended that a 'Drott Go-Devil' is an apparatus or appliance. This general distinction is F confirmed by the Brussels Notes to these sections, chapters and headings. Some of these are of more particular relevance to the present dispute. They are the following:

In the Notes to sec. XVI, 'Transport equipment (sec. XVII)' is mentioned as one of the main exclusions from that section. Under the heading 'Motors', there is the statement:

'Electric motors or other power units for machinery of this section are G classified with the relative machine:

(1)

Provided they are fitted to the machine (i.e. actually incorporated in the machine, mounted on the framework, or on a bracket attached to the machine, or on a common base with the machine).'

A Note to heading 84.22 explains, with reference to 'self-propelled and other 'mobile' machines', that in general the heading covers not only fixed or stationary machines,

H 'but (with certain exceptions referred to below concerning machines mounted on transport equipment of the type falling within sec. XVII) also mobile machines, whether or not self-propelled'.

As one of the exceptions to this heading, the Notes mention

'machines mounted permanently on lorry or similar automobile type chassis',

and then proceed to explain:

'Cranes (e.g. breakdown cranes), conveyor-loaders, mechanical loaders, winches, elevating platforms, etc., are often mounted on lorries or chassis, which are essentially complete and of the automobile type in that they contain all the essential automobile features including travelling motor, gear-box, controls for

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gear-changing, braking, steering. Such machines (i.e. lorries or chassis with the machines mounted thereon) are classified as a whole in heading 87.03 as special purpose vehicles, whether the lifting or handling machine is simply mounted on the vehicle or whether the machine and the vehicle constitute one integral mechanical unit.

On the other hand, the present heading includes self-propelled cranes, A etc., in which the crane, etc., unit houses one or more of the essential automobile features referred to in the preceding paragraph.'

As to sec. XVII, in which the heading 87.03 falls, the Brussels section notes mention as an exception: 'Certain mobile machines (see Part II below)'. Part II, which is headed 'Self-propelled or Other mobile machines', contains the following observations:

B 'Many machines or equipment (in particular of the type falling within sec. XVI) can be mounted on the vehicle chassis . . . of sec. XVII; the classification of the resultant mobile machine depends on various factors, in particular on the type of base . . . For the classification of mobile machines formed by mounting equipment on vehicle chassis of Chap. 86 or 87, reference should be made to the Explanatory Notes on headings 86.06, 87.01, 87.03, 87.07 and 87.14.'

The Notes on heading 87.03 commence with the statement that it

C 'covers motor vehicles specially constructed and equipped with various devices to enable them to perform certain special non-transport functions; i.e., the primary purpose of the vehicles of the present heading is not the transport of persons or goods'.

One of the items enumerated as including in the heading, is:

'Crane lorries (i.e., cranes mounted on motor vehicle chassis of sturdy construction).'

D With reference to 'lorries, etc., fitted with other machinery', there is the following:

'It should be noted that to be classified in this heading...