This week’s selected highlights in the Customs and Excise environment:

  • Amendment of Rule 202 to the Customs and Excise Act, No 91 of 1964 (Act) to provide for form DA178 (environmental levy return for tyres) and its annexures. Further, substitution of form DA 185.4B2 (licensing of manufacturing warehouse) to include the manufacture of tyres (effective from 1 February 2017).
  • Reduction of duty for heading 17.01 (cane or beet sugar and chemically pure sucrose, in solid form) to a free rate.
  • In a judgment dated 3 February 2017 in the High Court of South Africa, Pretoria (JM Da Encarnacao N.O. and another vs CSARS, Case number: 33302/2014) rebate item 412.09 in Schedule 4 to the Act (Rebate Item) was considered by the honourable Prinsloo, J.

    The Rebate Item provides as follows:

Goods, excluding goods contemplated in rebate item 497.02, in respect of which the customs duty, together with the fuel levy (where applicable), amounts to not less than R2 500, proved to have been lost, destroyed or damaged on any single occasion in circumstances of vis major or in such other circumstances as the Commissioner deems exceptional while such goods are:

  1. in any customs and excise warehouse or in any appointed transit shed or under the control of the Commissioner;
  2. being removed with deferment of payment of duty or under rebate of duty from a place in the Republic to any other place in terms of the provisions of this Act; or
  3. being stored in any rebate storeroom, provided:
    • no compensation in respect of the customs duty or fuel levy on such goods has been paid or is due to the owner by any other person;
    • such loss, destruction or damage was not due to any negligence or fraud on the part of the person liable for the duty; and
    • such goods did not enter into consumption.

Cigarettes while in a customs and excise bonded warehouse were stolen by way of armed robbery. SARS demanded full duty thereon and the applicant relied on the Rebate Item for a rebate of full duty, which SARS refunded.

It was held that:

In both sets of circumstances (namely “vis major” and “such other circumstances as the Commissioner deems exceptional”) and all three situations [namely (a) to (c)], all three provisos [namely (i) to (iii)] must be met.

Vis major [according to Wille’s Principles of South African Law, (9th ed, page 849) does not only include “acts of nature, vis divina or “act of God”, but also the acts of man”] in a proper case can include armed robbery.

The third proviso (namely “provided … such goods did not enter into consumption”) must be interpreted to mean that the goods did not enter into consumption at the time of the (in this case) armed robbery, meaning the “operative and relevant time appears … to be before the robbery and not thereafter”. This has the effect that even if the goods were robbed and thereafter sold into the South African market, that the Rebate Item may still find application as the goods did not yet enter consumption at the time of the robbery.

At this stage there is uncertainty as to whether SARS will appeal the decision.

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