A recent case(1) concerned a tariff determination in terms of Section 47(9)(a)(i)(aa) of the Customs and Excise Act 1964. The provision empowers the commissioner for the South African Revenue Service to determine under which tariff heading goods imported into South Africa are to be classified. While the attributes and physical characteristics of the goods concerned (terratile (terraflor) pitch protection tiles) were common cause, the tariff heading under which the tiles fell was not.

Having had the commissioner's determination overturned in the High Court, Terreplas (Pty) Ltd contended that the appropriate classification was 3918.90.40, on which the import duty rate was 1.3%. The tariff heading reads: "[f]loor coverings of plastics, whether or not self-adhesive, in rolls or in the form of tiles; wall or ceiling covering of plastics, as defined in Note 9 to this chapter". On the other hand, the commissioner contended that the tiles fell under classification 3926.90.90, with the tariff heading: "[o]ther articles of plastics and articles of other materials of headings 39.01 to 39.14", on which the import duty rate was 10%. The commissioner appealed the High Court decision to the Supreme Court of Appeal.

The essence of the case was the court's approach to tariff classification. Both the High Court and the Supreme Court of Appeal made reference to well-established principles aimed at ensuring uniformity in the interpretation and application of tariff classifications. What distinguished the Supreme Court of Appeal's approach from that of the High Court was its rejection of Terreplas's contention that the novelty of the goods should be considered in the interpretative process. Having considered objectively the relevant terms of the headings and section notes, the Supreme Court of Appeal ultimately agreed with the commissioner's classification and upheld the appeal.

The case rested on the wording of the relevant tariff headings. Given that the tiles were intended to protect turf in sports stadia on a temporary basis, the court held that the commissioner's classification was "to be preferred".

The Supreme Court of Appeal held that the classification of goods should not turn on their novelty – novel goods should not be classified simply under a heading which, on the face of it, the goods appear to fit under. Goods should be classified after having been objectively analysed, and by applying well-established precedents set in IBM and Thomas Barlow.

The most relevant aspect of the case is the confirmation and development of the approach that both the courts and the commissioner should take to classify goods. The court developed this approach by holding that the novelty of goods should not play a part in the interpretative process. The court held that:

"Questions of novelty of design are more appropriately addressed in patent infringement cases… There is no authority, nor would one expect there to be, indicating directly or even tangentially, that the novelty of an article renders a different interpretive process."

For further information on this topic please contact Virusha Subban at Bowman Gilfillan by telephone (+27 11 669 9000), fax (+27 11 669 9001) or email (v.subban@bowman.co.za).The Bowman Gilfillan website can be accessed at www.bowman.co.za.


(1) Commissioner for the South African Revenue Service v Terreplas South Africa (Pty) Ltd (375/2013) [2014] ZASCA 69 (May 23 2014).