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Silverback Technologies CC & Others v Commissioner, South African Revenue Services - (09 Oct 2023)

Reliance on headings and explanatory notes, when classifying goods must be understood as providing explanations and guidance; they were not intended to override or contradict legislation


The appeal revolved around the classification of imported bicycle parts destined for assembly and the related customs duty payable on such imports. The high Court determined that,Commissioner for the South African Revenue Service (SARS) was correct in determining that the goods were liable for import duty and this Court was tasked with determining whether the high court was correct in confirming SARS' determination.

In order to determine whether the imported goods attracted import duties, this Court considered which of the two relevant tariff headings, namely, 8712.00.10 or 8714.9 applied. If the former tariff heading applied, customs duty would be payable and not in the case of the latter. The state of the law in regard to classification of goods for purposes of import duty is well-established: the Court must have regard to the ascertainment of the meaning of the words used in the relevant tariff headings, as well as the nature and characteristics of the goods, and the Court must, in addition, consider the heading which is most appropriate to such goods. To determine the question posed, this Court held that reliance on headings and explanatory notes when classifying goods must be understood as intended to provide explanations and guidance; they were not intended to override or contradict legislation. The Act held that, any interpretation shall be subject to the International Convention on Harmonized Commodity Description and Coding Systems adopted in Brussels on 14 June 1983.

This Court highlighted that the Harmonized System was the product of international agreements between states and should be interpreted uniformly by courts. As such, courts are enjoined to interpret the Act and any tariff headings in a manner that is consistent with international law. It held that the expression ‘the essential character of a bicycle’ must be interpreted purposively and contextually.

The wording of tariff heading 8712.00, as well as the interpretive notes, were clear and unambiguous with regards to an incomplete or unfinished vehicle, namely a bicycle. The tariff heading, as well as the explanatory notes did not refer to a collection of parts constituting a bicycle, but to parts that have the ‘essential character’ of a bicycle. Finally, in regard to the expert evidence presented by the parties, the Court held that it was satisfied that SARS' expert witness possessed sufficient training and experience, and that there was nothing militating against the acceptance of such evidence. Appeal dismissed.


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