Assmang (Pty) Ltd v The Commissioner for the South African Revenue Service and Others

Assmang (Pty) Ltd operates mining activities in the Northern Cape and claimed refunds of fuel levies and Road Accident Fund levies under the Customs and Excise Act 91 of 1964 in respect of diesel used by contractors performing mining services at its Khumani mine. Assmang purchased diesel and supplied it on site to contractors, deducting the cost of diesel from contractors’ invoices. SARS conducted a diesel refund audit and determined that the claimed refunds did not qualify under rebate Item 670.04 of Part 3 of Schedule 6, issued a demand for repayment with interest and penalties, and rejected Assmang’s internal appeal. Assmang challenged SARS’ determination in the Gauteng Division of the High Court, also raising a constitutional challenge to sections 47(9)(c) and 75(1A)(f) of the Act relating to interest on refunds. The high court dismissed the application, finding that the contracts were effectively on a ‘wet’ basis and that Assmang failed to comply with statutory record-keeping requirements. Assmang appealed to the Supreme Court of Appeal.

The appeal was dismissed with costs, including the costs of two counsel where so employed.

This judgment reinforces a substance-over-form approach in the interpretation of diesel refund claims under the Customs and Excise Act. It confirms that contractual labels and accounting mechanisms cannot disguise wet contracts as dry contracts for purposes of rebate eligibility. The decision underscores the strict compliance required with record-keeping and logbook obligations and affirms SARS’ powers to deny refunds where such compliance is lacking. It provides authoritative guidance from the Supreme Court of Appeal on diesel refunds in the mining sector.