Sars triumphs in wigs Supreme Court case

It’s been a busy few months
for the Supreme Court of
Appeal (SCA), with three
customs cases already
scheduled this year –
compared to two for the
whole of 2009.
The first, heard in
February, involved the
Commissioner for South
African Revenue Service
(Sars ) and Fascination
Wigs. It related to a dispute
in terms of Section 49(9)
(a)(i)(aa) of the Customs
and Excise Act over
whether certain synthetic
hair products imported
by Fascination Wigs were
classifiable under tariff
heading 67.03 or tariff
heading 67.04 of Schedule
No 1, Part 1”.
This part of the Act
relates to ‘ordinary customs
duty’ and tariff heading
67.03 refers to ‘human hair,
dressed, thinned, bleached
or otherwise worked; wool
or other animal hair or other
textile materials, prepared
for use in the making of
wigs or the like’. Tariff
heading 67.04
on the other
hand refers
to ‘wigs,
false beards,
eyebrows and
eyelashes,
switches and
the like, of
human or
animal hair
or of textile
materials; articles of human
hair not elsewhere specified
or included ’.
Earlier this month the
SCA upheld an appeal by
the Sars Commissioner
against a decision of the
North Gauteng High Court
concerning the correct tariff
classification for customs
duty purposes of synthetic
fibres, stitched as wefts, and
used to adorn hair.
The high court held that
the particular products,
imported from the People’s
Republic of China, were
used in the making of
wigs and were therefore
not dutiable, not being
finished products. The
SCA considered, however,
that the wefts in question,
which are used to create
the appearance of a wig
by attaching them to a
person’s own hair or to the
scalp, were not components
of a wig, or the like, but
finished articles. The fact
that expertise and time was
needed to attach them to
hair or to a scalp did not
mean that a new product
was made when the final
appearance of a wig was
achieved.
The SCA therefore upheld
the Sars’ Commissioner’s
contention that the particular
wefts should be classified
under a tariff heading that
attracted customs duty.