E M Gaertner Trading CC (later converted to Rentreag Marketing (Pty) Ltd) imported cheese from Australia and Canada in 1996. The appellants described the cheese as "other" under tariff sub-heading 0406.90.90 for import purposes. The Commissioner of Customs and Excise determined that all the cheese was Gouda, attracting a substantially higher duty of 660c/kg under tariff sub-heading 0406.90.35, compared to 25% duty for "other" cheese. The corporation had imported cheese manufactured by Lactos (Pty) Ltd in Australia and Saputo Limited in Canada. Rentreag was wound up and its liquidator abided by the Court's decision. The remaining appellants, Patrick Gaertner and Rory Klemp, were members of the corporation and would be personally liable under s103 of the Customs and Excise Act 91 of 1964 if the Commissioner's determination was correct.
The appeal was dismissed with costs, including the costs consequent upon the employment of two counsel. The Commissioner's determination that the Australian cheese should be classified as Gouda under tariff sub-heading 0406.90.35 was upheld.
For purposes of tariff classification under the Customs and Excise Act: (1) Classification should be determined at the time of importation/entry for home consumption; (2) Goods that have not completed their full maturation or production process may nevertheless be classified according to their essential character rather than their final eating quality; (3) The absence of characteristics that are 'normal' or 'usual' for a particular classification does not necessarily disqualify goods from that classification if those characteristics are not essential; (4) Technical terms in tariff schedules must be interpreted in light of expert evidence from persons skilled in the relevant field; (5) An appeal under s47(9)(e) of the Customs and Excise Act is an appeal in the wide sense - a complete rehearing on the merits with or without evidence; (6) Where an appellate court is left merely in doubt as to the correctness of a determination by the Commissioner, it will uphold that determination (applying R v Dhlumayo principles).
The Court noted, without deciding, the question of whether s47(9)(b) of the Customs and Excise Act (which deems a determination to be correct subject to appeal) has relevance to the question of onus of proof in appeal proceedings. The Court also commented that the Commissioner may be bound to exercise fair administrative procedures in terms of s33 of the Constitution before making a determination, though the Act does not envisage a formal hearing. The Court observed that while the presence of 'eyes' may be normal in Gouda cheese, international variations exist (French and Japanese Gouda have no eyes) and manufacturing methods have changed considerably since the 1981 IDF catalogue, so characteristics specified then do not necessarily continue to apply in all respects.
This case is significant for customs and excise law in South Africa as it establishes important principles for the classification of imported goods for tariff purposes. It confirms that: (1) Technical or specialist terms in tariff headings must be interpreted with reference to expert evidence; (2) The classification of goods should be made at the time of importation, though subsequent events may lead to amendment of a determination; (3) Goods at an incomplete stage of production/maturation can still be classified according to their essential character rather than their final quality; (4) Manufacturing processes can be considered in determining classification; (5) International standards and characteristics for product classification are not immutable and may evolve with changing manufacturing techniques; (6) Appeals under s47(9)(e) of the Customs and Excise Act are appeals in the wide sense (complete rehearings). The case also demonstrates the application of appellate principles where expert evidence is evenly balanced.