THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Case No: 647/09
In the matter between:

THE COMMISSIONER FOR THE SOUTH AFRICAN
REVENUE SERVICE
Appellant
and
PLASMAVIEW TECHNOLOGIES (PTY) LTD
Respondent

Neutral citation:
CSARS v Plasmaview Technologies (Pty) Ltd (647/09) [2010]
ZASCA 135 (1 October 2010)
Coram:
Mpati P, Cloete, Lewis and Tshiqi JJA and Bertelsmann AJA
Heard:
2 SEPTEMBER 2010
Delivered:
1 OCTOBER 2010
Summary:
Customs and excise – tariff determination – complete television sets –
whether importer may claim rebate.

______________________________________________________________________
ORDER
______________________________________________________________________
On appeal from: North Gauteng High Court (Pretoria) (Prinsloo J sitting as court of
first instance).
1.
The appeal is allowed with costs, including the costs of two counsel.
2.
The order of the court below is set aside and replaced with the following:
'The appplication is dismissed with costs, including the costs of two counsel.'
________________________________________________________________
JUDGMENT
________________________________________________________________
BERTELSMANN AJA (Mpati P, Cloete, Lewis and Tshiqi JJA concurring)

[1] The appellant is the Commissioner for the South African Revenue Service,
appointed in terms of the South African Revenue Service Act 34 of 1997. He is
responsible for inter alia the administration of the Customs and Excise Act 91 of
1964. The respondent is Plasmaview Technologies (Pty) Ltd (Plasmaview) a
company.

[2] The Commissioner appeals against a judgment and order of the court below
(Prinsloo J North Gauteng High Court Pretoria) which reviewed and set aside what
was said to be a determination, dated 27 July 2006, allegedly made by him in the
exercise of the powers conferred upon him by the Act.

[3] Plasmaview had imported fully assembled televisions sets with plasma or
liquid crystal display (LCD) screens from Korea during 2006. These sets were

declared under tariff heading 8528.21.20 which allowed a full rebate under rebate
item 460.16.

[4] Plasmaview relied on a tariff determination dated 20 December 2005 as
justification for declaring the television sets in the above manner. The tariff
determination was made at a stage when it imported the screens and TV tuners
separately. This determination was referred to as 'Plasma 1' in the court below and
this nomenclature will be retained in this judgment. The fully assembled TV sets
were only imported once a copy of 'Plasma 1' was made available to the respondent.

[5] On 27 July 2006, the author of that tariff determination, Mr Pool, amended his
reasons for classifying the screens without tuners under tariff heading 8528.21.20,
but did not amend the determination that that tariff heading applied to the screens in
the condition he had considered them. He did not inform the respondent of this
amendment, which is referred to as 'Plasma 2'.

[6] When the Commissioner investigated the importation of the assembled
television sets through his Post Clearance Inspection (PCI) team from about May
2006, his officials concluded that the fully assembled television sets had been
cleared incorrectly and assessed the respondent by issuing two schedules in the
amounts of R 8 924 191, 69 and R 6 591 987, 90 respectively, representing both
underpaid duty and VAT.

[7] Believing that 'Plasma 2' had formed the basis upon which these
assessments were made, Plasmaview lodged an appeal against them and at the
same time launched a review application to have this supposed determination set
aside. In the same proceedings, Plasmaview applied for a declaratory order that the
amounts assessed were not owing to the appellant.

[8] The court below accepted that 'Plasma 2' represented a determination that, in
the absence of prior notice to Plasmaview, amounted to administrative action that
was unfair to it and granted the relief sought. The Commissioner was ordered to pay
costs, including those of senior counsel.

[9] The Commissioner on appeal disputes the finding that 'Plasma 2' is a
determination; argues that it therefore does not constitute administrative action and
submits that the declaratory order should not have been granted. The appeal is with
the leave of the high court.

The salient facts
[10] During 2005, the respondent imported eight consignments of LCD screens
from Korea into South Africa. The port of entry was East London. The screens were
described by the respondent as computer monitors with 81cm or 94 cm screens.
They were cleared as 'input display units for automatic data processing' under tariff
heading 8471.60, under which they would not have attracted any customs duty.

[11] One of the SARS officials, Mr Putter, inspected the eight consignments. He
found screens that were not fitted with TV tuners on importation, but were equipped
with the tuners very soon after they had been delivered to the respondent’s agents in
East London.

[12] Putter was of the view that the LCD screens were dutiable. He referred the
question of the tariff applicable to these items to his head office, which determined
that the screens were incomplete reception apparatus for television sets, attracting
customs and ad valorem duty. They were classified under tariff heading 8528.21.30.
This classification, it was common cause, constituted a determination in terms of s
47(9)(a)(i)(aa)of the Act ('the LCD determination'). Plasmaview duly amended the

tariff heading under which these screens became subject to duty by submitting
correcting vouchers in respect of the eight consignments.

[13] While importing LCD screens, Plasmaview also imported 11 consignments of
plasma screens. Its agent requested Pool, a tariff specialist employed at that time at
the Commissioner's head office, to determine the correct tariff applicable to these
screens. Pool concluded on 20 December 2005 that the plasma screens were
'reception apparatus for television' and ought to be cleared under tariff heading
8528.21.20.

[14] This tariff heading reads:

Head-
ing

Sub-
Heading

CD

Article Description

Stati
stical
Unit

Rates of Duty

Reference

General

EU

SADC
85.28

8528.2
8528.21

.10

.20

Reception Apparatus
for Television,
Whether or Not
Incorporating Radio-
broadcast Receivers
or Sound or Video
Recording or
Reproducing
Apparatus; Video
Monitors and Video
Projectors:
* Refer to General
Rebates of Customs
Duties and Fuel Levy
460.16 Temporary
Rebates of Customs
Duties
* Refer to Ad Valorem
Excise Duties from
Page 691
▬Video monitors:
= Colour:
- With a screen
size
exceeding
3m x 4...........
- With a screen
size not
exceeding 3 m x 4

u

u

free

25%

free

22%

free

free

A1/1/1273
w.e.f. 1/1/05

m

[15] Pool added that it was the view of his office that 'television monitors are video
monitors' and that 'television receivers incorporating screens . . . qualify as video
monitors’. He motivated his determination in part as follows:
'CLASSIFICATION:
To qualify as a television set, a video monitor must either incorporate a tv tuner or be
otherwise designed for completion into a television set. No evidence of this nature has been
presented by your office. Classification within TH 8528.21.20 cannot be challenged on the
basis of the available information.
It should be noted that it is in any event the position of this office, in line with the Explanatory
Note to heading 85.28, that television monitors are video monitors and would qualify for
entry under rebate item 460.16, providing that they comply with all the other requirements of
the rebate item. EN 85.28 reads in pertinent part: "This heading covers television receivers
(including video monitors and video projectors)" . . . . The meaning of this syntax could
hardly be plainer: included under television receivers are video monitors and video
projectors.
. . . .
HOLDING
TH8528.21.20 applies to the goods at issue. They are admissible under rebate item 460.16
insofar as they comply with all the other requirements of this rebate item.
Tariff Determination
Tariff Code 8528.21.20/460.16
Determination
Reception apparatus for television, whether or not incorporating radio-broadcast receivers or
sound or video recording or reproducing apparatus; video monitors and video projectors:
Video monitors: Colour: With a screen size not exceeding 3m x 4m Video monitors: Provided
that a certificate from the South African Bureau of Standards is presented at the time of entry
that the video monitors have more than 600 resolution lines.
Description
Plasma screens (42 inch) not incorporating tv tuners: PV 4201 S and PV 4201
. . . .'

[16] By virtue of this determination, these screens qualified for a full rebate of duty
under rebate item 460.16. Pool’s advice was sent to the respondent’s clearing
agents by way of an e-mail on 3 January 2006. Plasmaview then applied to the

Controller at East London on 5 January 2006 for leave to substitute the bills of entry
of the LCD screens to reflect tariff heading 8528.21.20 rather than 8528.21.30, in
order to qualify for the full rebate. This request was granted on 13 March 2006
subject to the payment of penalties.

[17] It must be emphasised that the plasma screens to which Plasma 1 applied
were imported, as the LCD screens had been up to that time, without TV tuners.
Upon receiving Pool’s determination, Plasmaview arranged with the manufacturer in
Korea to fit both the LCD as well as the plasma screens with TV tuners, so that they
were imported as fully assembled television sets. The assembled sets were imported
from January 2006. The full rebate was claimed under rebate item 460.16 as before.

[18] Pool’s view that television receivers were screens that without tuners qualified
as video monitors for a full rebate was not uncontroversial and was debated with him
by his colleagues. On 27 July 2006, Pool amended the 'Law and Evidence' portion of
'Plasma 1'. This document is 'Plasma 2'. In essence, Pool changed his stance that
television receivers could be classified under tariff heading 8528.21. This change in
his approach was not communicated to Plasmaview until October 2006.

[19] The determination made on 20 December 2005, identifying the applicable
tariff heading as 8528.21.20 for screens that had not been equipped with TV tuners,
was not affected by Pool's amended comments.

[20] During May 2006, unaware of Pool’s original determination and unaware of
'Plasma 2', Ms Spies of the SARS PCI in Johannesburg began an inspection and
audit process into Plasmaview’s imports of television sets and the possible
underpayment of duty and tax in respect thereof. These imports came to Spies'
notice as part of an ongoing investigation into imports of television sets generally,
when the repayment claims lodged by the respondent with the Controller in East
London after Pool’s determination were inspected.

[21] Suspecting that duty had been underpaid, Spies telephoned a Plasmaview
representative to inform her of the inspection and pending audit and to request
relevant documentation from the company. This call was made on 23 May 2006. The

discussion was confirmed by e-mail the same day. The respondent provided the
documentation Spies had called for.

[22] Further literature on the screens was requested in writing on 9 June 2006.
Some of it was delivered to Spies the next day. The balance was to be supplied at a
personal meeting between Spies and Plasmaview's representatives. This meeting
was held on 5 July 2006. Spies informed the respondent of her prima facie view that
duty had been underpaid. Respondent handed a copy of 'Plasma 1' to Spies, placing
reliance upon this document for the proposition that complete television sets could
be imported under full rebate of duty.

[23] On 29 September 2006, after having discussed the respondent’s importation
of television sets with her colleague Lester Millar, and having been provided with a
copy of 'Plasma 2', Spies served a notice of intention to demand outstanding duties
on Plasmaview, based upon the prima facie evidence in her possession. This notice
invited the company to make representations in respect of the alleged liability for
underpaid duty. On 2 October 2006, Plasmaview reacted to Spies' notice by letter,
placing reliance on Pool's original determination, Plasma 1, which was annexed to
the letter together with the LCD determination.

[24] On 5 October 2006, the customs supervisor of East London gave notice to
Plasmaview of his intention to revoke the authorisation to present substituted bills of
entry relating to the LCD screens because of the fact that the Johannesburg PCI
Office had discovered that the imported screens had been declared under the
incorrect tariff and did not qualify for a rebate. Plasmaview was invited to make
representations before 3 November 2006 why this step should not be taken.

[25] A meeting on 4 October 2006 followed at which the respondent was provided
with a copy of 'Plasma 2'. On 23 October 2006, Plasmaview, through its attorneys,
gave formal notice in terms of s 47(9)(e), read with s 96(1)(a)(i) of the Act, of its
intention to appeal against 'the determination' of 27 July 2006, which it had identified
as the cause of the demand for underpaid duties. At the same time, representations
were made to the Commissioner's Pretoria office in an effort to persuade the latter to
abandon the claim.

[26] Spies was unaware of the submissions made to the Pretoria office. She
issued the schedules reflecting the claim for underpaid duties and tax on 9
November 2006 and had them delivered on 13 November 2006.

[27] Although the respondent had delivered its notice of appeal and its
representations to SARS in October 2006, almost a year passed before the review,
the appeal and the application for a declaratory order were launched in one
application. Negotiations between the parties conducted prior to litigation had come
to naught.

[28] The court below upheld the respondent's contention that 'Plasma 2' was a
determination, constituted unfair administrative action and granted the orders
referred to above. The commissioner challenges these findings and contends that
'Plasma 2' is no determination at all, but merely an amendment of the motivation that
Pool provided in 'Plasma 1'. The Commissioner adopts the stance that the claim for
underpaid duties is not based upon 'Plasma 2' but upon the schedules produced by
the PIC team.

Is 'plasma 2' a determination?
[29] A determination for purposes of Chapter V of the Act is the end result of the
classification of imported goods under the correct tariff heading: Colgate Palmolive
(Pty) Ltd v Commissioner, South African Revenue Service 2007 (1) SA 35 (N) para
1; Commissioner, South African Revenue Services v Komatsu Southern Africa (Pty)
Ltd 2007 (2) 157 (SCA) para 8 and the authorities there cited.

[30] The provisions of Chapter V of the Act were summarized by Cloete JA in
Commissioner, South African Revenue Service v Trend Finance (Pty) Ltd & another
2007 (6) SA 117 (SCA) para 5:
‘Chapter V deals with clearance of goods and liability for payment of duties. Every importer
of goods is obliged in terms of s 38(1) to make due entry of those goods in terms of s 39.
That latter section requires the person entering any imported goods for any purpose to

deliver a bill of entry to the controller in the prescribed form; to declare that the particulars
contained in the bill of entry are correct; and to pay all duties due on the goods. Section
40(1) provides that no entry shall be valid unless the true value of the goods on which duty is
leviable or which is required to be declared under the provisions of the Act, has been
declared; a correct invoice has been produced to the controller in the case of goods
consigned to any person in the Republic; and the correct duty has been paid. Section
44(6)(c) provides that in all cases except those specifically mentioned, the liability for duty on
any imported goods is that of the importer or owner of such goods (or any person who
assumes such liability for any purpose under the provisions of the Act). Section 44(10)
provides that any duty for which any person is liable in terms of s 44 shall be payable upon
demand by the Commissioner. Section 47 provides that duty shall be paid on all imported
goods in accordance with the provisions of Schedule 1.’

[31] 'Plasma 1' identifies, through the accepted process of classification – see
International Business Machines SA (Pty) Ltd v Commissioner for Customs and
Excise 1985 (4) SA 852 (A) at 863F–864C – the heading under which the imported
screens should be classified. 'Plasma 2' differs from 'Plasma 1' only in respect of the
amended comment prepared by Pool under the heading 'Law and Analysis', in which
he suggests that a plasma screen or a LCD screen incorporating a TV tuner could
'… never be regarded as a video monitor', and could not qualify for a rebate under
item 460.16. The tariff determination made in respect of the screens (without tuners)
in December 2005 was expressly not altered by the amended comment. The date of
the original determination was not affected and the document specifies that it (still)
applies to plasma screens not incorporating TV tuners.

[32] 'Plasma 2' is therefore no tariff determination. Once this fact is established, it
is clear that the claim for underpaid duties does not, and could not, arise from the
amended comment prepared by Mr Pool.

The review of 'Plasma 2'
[33] As 'Plasma 2' is not a determination, it is not a decision capable of being
reviewed, nor can an appeal be lodged in terms of s 47(9)(e) against its contents.
The court below erred in this regard. Counsel for the respondent was constrained to
concede during argument that the high court's findings could not be supported.

The importation of complete TV sets
[34] 'Plasma 1' was prepared at a stage at which the respondent imported screens
without TV tuners, with specific reference to plasma screens. Section 47(9)(a)(iii) of
the Act reads:
'Any determination made under this subsection shall operate –
(aa) only in respect of the goods mentioned therein and the person in whose name it is
issued…'

[35] It is common cause, as I have said, that the respondent, once it received
'Plasma 1', imported both LCD and plasma screens with TV tuners already fitted by
the Korean manufacturer. It therefore began to import complete TV sets.

[36] While screens imported without tuners were at the time correctly classified
under tariff heading 8528.21.20, qualifying for a full rebate under rebate item 460.16
– see CSARS v LG Electronics (428/09) [2010] ZASCA 79 (28 May 2010) – the
determination fell away once the nature of the imported item changed. Not only did
'Plasma 2' therefore not amend the earlier determination, it simply did not apply any
longer to the respondent’s imports once the tuners were fitted prior to shipment of
the sets to South Africa. This fact was overlooked in the judgment appealed against.

The schedules prepared by the PIC
[37] Ms Spies prepared two schedules relating to bills of entry submitted by the
respondent in respect of the screens imported during 2005 and 2006. The schedules
were prepared in the exercise of the powers granted to the appellant by section
47(9)(a) and 47(11):
'(9) (a) (i) The Commissioner may in writing determine-
(aa)
the tariff headings, tariff subheadings or tariff items or other items of any Schedule
under which any imported goods, goods manufactured in the Republic or goods exported
shall be classified; or ….
(11) (a) Notwithstanding the provisions of subsection (10), any determination made under
subsection (9) (a) as a result of or during the course of or following upon an inspection of the
books, accounts and other documents of an importer, exporter, manufacturer or user of
goods, shall, subject to the provisions of section 44(11)(c), be deemed to have come into

operation in respect of the goods in question entered for the purposes of this Act two years
prior to the date on which the inspection commenced.
(b) The expression "inspection of any books, accounts and other documents", or any other
reference to an inspection in this Act shall be taken to include any act done by an officer in
the exercise of any duty imposed or power conferred by this Act for the purposes of the
physical examination of goods and documents upon or after or in the absence of entry, the
issue of stop notes or other reports, the making of assessments and any pre- or post-
importation audit, investigation, inspection or verification of any such books, accounts and
other documents required to be kept under this Act.'

[38] The schedules prepared by Spies are determinations as intended in the Act.

Alternative relief
[39] Once it was clear that the appeal had to succeed, respondent’s counsel
sought to rely on alternative relief envisaged during the hearing before the court
below when Plasmaview was granted an amendment of the notice of motion. Prayer
5 was amended to include the words 'Annexures FA 17 and FA 18 [Spies'
schedules] are hereby set aside and' before the original prayer 'it is declared that the
amounts demanded by the respondent [the present appellant] from the applicant [the
present respondent] in Annexures “FA 17” and “FA 18” to the founding affidavit,
being respectively R8 924 191,69 (together with interest thereon) and R 6 591
987,90 (together with interest thereon), are not owing by the applicant to the
respondent.' Although the amendment was granted 'provisionally', the court below
couched its declaratory order in the form in which it was worded originally.

[40] The Commissioner’s reliance on the schedules was introduced into the court
below by an additional affidavit filed without opposition. Although Plasmaview did file
a further affidavit in reply to the additional affidavit, the schedules were not dealt with
at all.

[41] Faced with these difficulties, Plasmaview's counsel requested the indulgence
of a postponement in order to supplement the papers to enable it to deal with the
schedules. The Commissioner objected. The schedules were not disputed in the
court below, either in respect of the correctness of the calculations of duty and tax, or
in respect of the validity of the decision to prepare them. There is no explanation
before this court why, if these aspects were in issue, the dispute was not ventilated
before and why available evidence was not placed on record. There is consequently
no basis upon which a postponement could be granted.

[42] Finally, Plasmaview argued that the commissioner does have a discretion
whether or not to apply the provisions of s 47(11) once an underpayment of duty is
established. It sought a postponement for the purpose of making representations to
the appellant to persuade him not to exercise the powers given to him in terms of this
section. Again, the Commissioner opposed the request.

[43] From the wording of the section quoted above it would appear prima facie that
the appellant has no discretion that would allow him not to apply its provisions. No
postponement could alter this fact. But even if the appellant could exercise a
discretion not to apply s 47(11), this issue was not raised in the court below. There is
no basis upon which the appeal could be postponed to accommodate a request to
make further representations at this stage. The remarks by Schutz JA in McCarthy
Retail Ltd v Short Distance Carriers CC 2001 (3) SA 482 (SCA) paras 27 to 33 are
applicable in this case. The postponement was sought at the last moment after the
appeal had been conceded; no satisfactory reasons were advanced for the lateness
of the hour at which it was sought; and the Commissioner has a right to have the
appeal disposed of. The principal reason for refusing the postponement is the fact
that it was sought in order to allow the respondent to create a cause of action where
none existed when the appeal was heard. The request for a postponement could
therefore not be entertained.

[44] 1.
The appeal is allowed with costs, including the costs of two counsel.

2.
The order of the court below is set aside and replaced with the
following:
'The application is dismissed with costs, including the costs of two counsel.'
___________________
E BERTELSMANN
ACTING JUDGE OF APPEAL

APPEARANCES:

For appellant:
C Puckrin SC

T Khatri

Instructed by:

The State Attorney, Pretoria

The State Attorney, Bloemfontein

For respondent:
J P Vorster SC

Instructed by:

Wolvaardt Inc, Pretoria

Matsepes Inc, Bloemfontein
SUPREME COURT OF APPEAL OF SOUTH AFRICA

MEDIA SUMMARY – JUDGMENT DELIVERED IN SUPREME COURT OF
APPEAL

FROM:
The Registrar, Supreme Court of Appeal

DATE :
1 October 2010

STATUS:
Immediate

Commissioner, South African Revenue Service v Plasmaview Technologies
(Pty) Ltd

Please note that the media summary is intended for the benefit of the media
and does not form part of the judgment of the Supreme Court of Appeal

The Supreme Court of Appeal (SCA) today upheld the Commissioner’s
appeal against a judgment of the high court, which set aside an amendment
to the motivation of a tariff determination on review as if it were a decision by
the Commissioner. The Commissioner had demanded payment from
Plasmaview of underpaid duties and tax calculated in two schedules served
on the latter. The high court held that the amounts claimed were not owing
and due.

Plasmaview imported partially assembled TV sets. It requested a
determination from the Commissioner’s office to identify the applicable tariff
heading under which the sets had to be declared. The determination identified
a tariff heading that allowed a full rebate of duties paid on the partially
assembled sets.

The importer then began to import fully assembled TV sets, but still declared
them under the same tariff heading that no longer applied to their imports, and
claimed the full rebate. When the Commissioner demanded underpaid duty
and tax in respect of these fully assembled sets, Plasmaview applied to the

high court for a declaratory order that the amounts determined by the
Commissioner were not owing and due. It mistakenly identified an internal
memorandum relating to the correctness of the motivation for the original
determination it had requested, as an amendment of the determination itself.
A review of this amendment was sought as if it were a decision taken by the
Commissioner, on the grounds that Plasmaview was not consulted before the
amendment was effected. It also sought an order declaring that the amounts
demanded by the Commissioner were not owing and due by Plasmaview. The
high court granted the relief claimed.

On appeal, the SCA held that the high court had erred. No new determination
had been made by the amendment of the original determination’s motivation.
There was thus no decision that could be set aside. Fully assembled TV sets
did not qualify for a rebate. The Commissioner was entitled to claim underpaid
duty and tax.

The order of the high court was set aside and substituted with an order
dismissing Plasmaview’s application.