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.