The South African Revenue Service (Sars) has published a Supreme Court of Appeal (SCA) judgment in the matter between Smith Mining Equipment and the commissioner Sars. The case was heard on September 17 and judgment was delivered on October 1.

The matter related to the tariff classification of Kubota RTV 900 utility vehicles and whether tariff subheading 8704.21.80 or tariff subheading 8709.19 is the most appropriate.

Over the years, this column has made the point that the South African Tariff Book (schedules of the Customs and Excise Act) is anything but static and that companies should not lose sight of this fact. For example, tariff subheading 8704.21.80 no longer exists, according to the tariff book (which is maintained by Sars). It is assumed, but should be confirmed, that the tariff classification could be under either tariff subheading 8704.21.81 or tariff subheading 8704.2183, depending on whether the vehicle in question is a double-cab or not. It might even be classified under tariff subheading 8704.21.90, which relates to ‘other’.

Tariff subheading 8704.21.80 reads: “Other, of a vehicle mass not exceeding 2 000 kg or a GVM not exceeding 3 000 kg, or of a mass not exceeding 1 600 kg or a GVM not exceeding 3 500 kg per chassis fitted with a cab.”

Tariff subheading 8704.21.81 reads: “Other, double-cab, of a vehicle mass not exceeding 2 000 kg or a GVM not exceeding 3 500 kg, or of a mass not exceeding 1 600 kg or a GVM not exceeding 3 500 kg per chassis fitted with a cab.”

Tariff subheading 8704.21.83 reads: “Other (excluding double-cab), of a vehicle mass not exceeding 2 000 kg or a GVM not exceeding 3 500 kg, or of a mass not exceeding 1 600 kg or a GVM not exceeding 3 500 kg per chassis fitted with a cab.”

The difference between tariff subheading 8704.21.80, tariff subheadings 8704.21.81 and 8704.21.82 is the wording: “. . . 2 000 kg or a GVM not exceeding 3 000kg . . .”, the ‘3 000 kg’.

The commissioner of Sars classified the utility vehicles under tariff subheading 8704.21.80, while Smith Mining Equipment disputed this, arguing the vehicles should be classified under tariff subheading 8709.19. The reason for the dispute could quite possibly be the different rates of customs duty.

The judge reminded of the proper approach to customs classification as set out in Interna- tional Business Machines vs Commissioner for Customs and Excise, in which Judge Nicholas stated: “Classification as between headings is a three-stage process: first, interpretation – the ascertainment of the meaning of the words used in the headings (and relative section and chapter notes) which may be relevant to the classification of the goods concerned; second, considera- tion of the nature and characteristics of those goods; and third, the selection of the heading which is most appropriate to such goods.”

The argument forwarded by Smith Mining Equipment’s counsel was that the utility vehicles had the main distinguishing features summarised in the explanatory notes to heading 87.09. The judge ruled that this was not the correct approach. He also considered the matter of evidence for the application and use of the utility vehicles in certain locations and, consequently, found in favour of Sars.

Uncoated Paper and Paperboard
On 18 October, Sars notified of a proposed increase in the ‘general’ rate of customs duty on uncoated paper and paperboard, classifiable in tariff subheadings 4802.56.20 and 4802.56.90, from free of duty to the World Trade Organisation bound rate of 5% ad valorem and 20% ad valorem respectively. Comment is due by November 15.

Blades for Windscreen Wipers
Sars has also proposed an increase in the ‘gene- ral’ rate of customs duty on blades for windscreen wipers, classifiable in tariff subheading 8512.90, from free of customs duty to 30% ad valorem, by way of creating an additional eight-digit tariff subheading under tariff subheading 8512.90, for blades for windscreen wipers.
Comment is due by November 15.

Wheel Hubs
Also proposed is a reduction (decrease) in the ‘general’ rate of customs duty on wheel hubs (excluding those of unmachined cast metal), classifiable in tariff subheading 8708.50.20, from 20% ad valorem to free of duty. Comment is due by November 15.

Methyl Ester Sulphate
Further, Sars has notified of the proposed rebate of the customs duty (through the creation of a rebate item) for methyl ester sulphate, classifiable in tariff subheading 3402.11, for the manufacture of washing preparations (detergents), classifiable in tariff subheading 34.02. Comment is due by November 15.

Garden Tools Dumping Duties
On October 18, Sars informed of the amendment of the antidumping duties (Schedule No 2, Part 1, of the Customs and Excise Act) as a result of a sunset review on spades and shovels, of a maximum blade width of more than 200 mm but not exceeding 320 mm (tariff subheading 8201.10); picks (tariff subheading 8201.30); rakes with more than eight prongs (tariff subheading 8201.30); and forks with a prong length exceeding 150 mm (excluding forks with eight or more prongs), originating in or imported from the People’s Republic of China.

The antidumping duties are effective from October 18 this year. The investigation took 357 days to complete.

It is interesting to note that the rates of the antidumping duties imposed are denominated in kilograms, while the previous duties were denominated in units. Another interesting issue is that the proposed Sars tariff phase-downs for 2014 indicate that, from January 1, 2014, the antidumping duties will apply to tariff subheading 8201.10.10 (spades and shovels of a maximum blade width of more than 200 mm but not exceeding 320mm); tariff subheading 8201.30.03 (picks); tariff subheading 8201.30.90 (rakes with more than eight prongs); and tariff subheading 8201.90.20 (forks with a prong length exceeding 150 mm, excluding forks with eight or more prongs).

Laminates of Phenolic Resin
Sars informed on October 18 of the deletion of tariff subheading 3921.90.05 (laminates of phenolic resins with a basis of paper or textile fibre, thermosetting) and the insertion of tariff subheading 3921.90.07 (laminates of phenolic resins with a basis of paper, thermosetting) and tariff subheading 3921.90.09 (laminates of phenolic resins with a basis of textile fibre, thermosetting).
All the rates of customs duty are free, with the exception of the ‘general’ rate of customs duty on tariff subheading 3921.90.09, which is set at 10% ad valorem.

The rates of duties are effective from October 18. The investigation took 147 days to complete.