Dispute over a baking tin provides a lesson in Customs classification

WHEN IS a baking tin not
a baking tin?
Although it sounds like a
study in basic philosophical
logic, it’s been a serious
legal question in recent
times, according to
Pre Prinsloo, partner in
Shepstone & Wylie.
The answer is that it’s all
in the eye of the beholder,
and that terrible word
“interpretation” comes into
the final equation.
The actual question,
Prinsloo added, was: "When
should an aluminium
container be considered a
kitchen article?" And that
was asked of the Supreme
Court of Appeal earlier this
month in a dispute between
the commissioner for the
SA Revenue Service (Sars)
and The Baking Tin.
“Anyone involved in the
process of classification
of goods for customs
duty purposes knows
that classification of the
applicable tariff heading
involves a three-stage
process,” said Prinsloo.
“The process to be
followed is firstly to
interpret the meaning
of the words used in
the headings. Secondly,
consideration must be
given to the nature and
characteristics of the goods,
and thirdly one should then
select the heading which
is most appropriate for the
goods.”
This three-stage process
was confirmed by the
court in its consideration
of the dispute, which
arose because there is a
difference in the customs
tariff applicable to certain
aluminium containers
(imported by The Baking
Tin) depending on whether
or not these containers
can be classified as kitchen
articles.
“The Baking Tin argued
that the aluminium
containers, used for
cooking or baking, were
consumables, thereby
attracting no duty,” said
Prinsloo, “whereas the
commissioner argued that
they were hollowware
for table or kitchen use
– dutiable at a rate of 30%
and liable to anti-dumping
duty.”
The Supreme Court
found that the intention
of the manufacturer
or importer was not
a determinant of the
appropriate classification of
the containers.
“The subjective
intention of the designer
or the intention of the
importer is irrelevant,”
Prinsloo said.
“Importers should note
that the decisive criterion
for customs classification
of goods is the objective
characteristics and
properties of the goods as
determined at the time
of their presentation for
customs clearance.”
And that led to the court
decision on September 14,
when it agreed with the
commissioner’s contention
that the containers were
hollowware for kitchen use.