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

Plasmaview Technologies imported fully assembled television sets with plasma or LCD screens from Korea in 2006. Initially, Plasmaview imported screens and TV tuners separately, and obtained a tariff determination dated 20 December 2005 ('Plasma 1') from Mr Pool, a SARS tariff specialist, classifying the screens under tariff heading 8528.21.20, which allowed a full rebate under rebate item 460.16. After receiving this determination, Plasmaview arranged for the Korean manufacturer to fit the screens with TV tuners, and began importing fully assembled television sets, claiming the full rebate. On 27 July 2006, Pool amended the reasons for his classification ('Plasma 2') but did not inform Plasmaview. When SARS investigated through its Post Clearance Inspection team from May 2006, officials concluded that the fully assembled television sets had been cleared incorrectly and assessed Plasmaview for underpaid duty and VAT totaling approximately R15.5 million. Plasmaview believed Plasma 2 was the basis for the assessments, appealed them, and launched a review application to set aside Plasma 2.

• Whether 'Plasma 2' constituted a tariff determination capable of review under the Customs and Excise Act 91 of 1964
• Whether 'Plasma 2' constituted administrative action that was unfair to Plasmaview
• Whether a tariff determination made for goods in one condition (screens without tuners) could apply to goods in a different condition (complete television sets with tuners)
• Whether the schedules prepared by SARS officials constituted valid determinations under section 47(9)(a) and 47(11) of the Customs and Excise Act
• Whether complete television sets with tuners qualified for rebate under tariff heading 8528.21.20 and rebate item 460.16

The appeal was allowed with costs, including the costs of two counsel. The order of the high court was set aside and replaced with an order dismissing the application with costs, including the costs of two counsel.

A tariff determination under the Customs and Excise Act is the end result of classification of imported goods under the correct tariff heading. An amendment to the reasoning or motivation for a classification that does not alter the tariff heading determined does not constitute a new determination capable of review. A tariff determination made under section 47(9)(a)(iii) operates only in respect of the specific goods mentioned therein and the person to whom it is issued; when the nature of imported goods changes materially (such as from component parts to complete assembled products), the original determination ceases to apply. Schedules prepared by SARS officials during post-clearance inspections pursuant to sections 47(9)(a) and 47(11) of the Act constitute valid determinations of tariff classification.

The court commented that from the wording of section 47(11), it would appear prima facie that the Commissioner has no discretion that would allow him not to apply its provisions when an underpayment of duty is established, though this was not definitively decided as the issue was not properly raised in the lower court. The court also noted the principles from McCarthy Retail Ltd v Short Distance Carriers CC regarding postponements sought at the last moment without satisfactory reasons, particularly where sought to create a cause of action that did not exist when the appeal was heard.

This case establishes important principles regarding the scope and operation of tariff determinations under the Customs and Excise Act. It clarifies that: (1) a determination operates as a classification decision identifying the applicable tariff heading, not merely the reasoning behind it; (2) tariff determinations are specific to the goods as described and do not automatically extend to goods in a different condition or state; (3) amendments to the reasoning or motivation for a determination that do not change the classification itself do not constitute new determinations subject to review; and (4) SARS officials' schedules prepared during post-clearance inspections constitute valid determinations. The case reinforces the principle that importers cannot rely on determinations obtained for goods in one condition when importing goods in a materially different condition, even if from the same product line. It is relevant to customs law, administrative law relating to SARS decisions, and the interpretation of tariff classifications.