On 02 March 2026, the Registrar of the Supreme Court of Appeal of South Africa (SCA) released the SCA media summary on its judgement of 27 February 2026 on the tariff determination – the tariff classification of goods for customs duty – of imported seamless carbon steel pipes – whether the tariff subheading 7304.39.35 or the tariff subheading 7304.19.90, under the Customs and Excise Act, 1964 is the most appropriate tariff classification.
The media release reads:
The following summary is for the benefit of the media in the reporting of this case and does not form part of the judegments of the SCA.
The Commissioner for the South African Revenue Service (SARS) versus Mining Pressure Systems (Pty) Ltd,
The SCA handed down a judgement upholding an appeal against an order granted in the Gauteng Cape Division of the High Court, Pretoria.
The appeal concerns the tariff classification of seamless steel pipes imported from the People’s Republic of China (SARS) for supply to the mining industry. The classification of the pipes for that purpose by the Commissioner of SARS (the appellant) under tariff subheading 7304.19.90 was appealed by Mining Pressure Systems (Pty) Ltd (the respondent).
On 15 March 2023, the High Court upheld the respondent’s appeal. It made an order to the effect that (i) the appellant’s determination is set aside and is replaced with a tariff determination in terms of which the pipes are classified under tariff subheading 7304.39.35 as contended for by the respondent; and (ii) the appellant was ordered to pay the costs of the application.
The respondent had previously cleared the pipes duty-free under tariff subheading 7304.39.35, which applies to certain seamless pipes of iron or non-alloy steel. In January 2019, the appellant issued a tariff determination classifying the pipes under tariff subheading 7304.19.90 as ‘line pipe of a kind used for oil or gas pipelines’, which attracted a 10% customs duty.
The respondent successfully appealed that determination to the High Court under Section 47(9)(e) of the Act, 1964. The High Court set aside the appellant’s determination, substituted it with a classification under tariff subheading 7304.39.35, and ordered the appellant to pay the costs.
It was a common cause that the pipes fell within tariff heading 73.04 of Schedule 1 to the Act, 1964. The dispute concerned the correct subheading. The decisive question was whether the pipes were ‘line pipe of a kind used for oil or gas pipelines’ (tariff subheading 7304.19.90), as contended by the appellant, or whether they fell under tariff subheading 7304.39.35, as contended by the respondent.
The pipes were described in the import documentation and mill test certificates as carbon-steel seamless pipes manufactured to the American Petroleum Institute (API) specification API 5L (grade X42, PSL1). The experts agreed on the composition, dimensions and mechanical properties of the pipes. Still, they differed on whether pipes of that specification and size are used for oil or gas pipelines.
Coppin JA, writing for the majority of the Court, held that the High Court had erred in its application of the three-stage approach to tariff classification (interpretation of the headings and notes; identification of the goods; and determination of the appropriate heading). It impermissibly confined the meaning of ‘of a kind used for oil or gas pipelines’ to South African pipeline practice.
The SCA reaffirmed that classification is an objective enquiry based on the nature and characteristics of the goods at the time of importation, not on the importer’s intentions or particular local practices. The SCA further held that there was nothing in the wording of tariff subheading7304.1 that limited ‘pipelines’ to long-distance or high-volume systems in the South African context.
The SCA found that the pipes complied with the API 5L specification, a standard applicable to pipes used for the conveyance of oil and gas. The fact that they were of a lower strength grade (X42) or smaller diameter than those used in certain major pipeline projects did not disqualify them from being ‘of a kind used’ for oil or gas pipelines. The SCA held that suitability depended on design requirements and operating pressures, which may vary.
The SCA concluded that the pipes are seamless steel line pipes of a kind used in oil or gas pipelines and are properly classified under tariff subheading 7304.19.90. The SCA upheld the appeal with costs, including the qualifying expenses of the appellant’s expert and set aside the order of the High Court.
A separate minority judgement was penned by Matojane JA, who disagreed with the majority judgement but accepted the general legal framework for classification. Matojane JA held that, in his view, the Commissioner had erred in classifying these seamless carbon steel pipes under tariff subheading 7304.19.90 as ‘line pipe of a kind used for oil or gas pipelines’ and found the High Court was right to set that determination aside. The minority held that compliance with the API 5L standard alone did not bring a pipe within tariff subheading 7304.1. In its view, the phrase ‘of a kind used for oil or gas pipelines’ identifies a genus of goods defined by objective characteristics associated with oil and gas transmission pipelines.
Relying on expert evidence, it concluded that oil and gas transmission pipelines typically operate under high pressure and require higher-strength grades (such as X60 or X70). The X42 pipes in issue were suited to lower-pressure industrial applications rather than oil or gas transmission pipelines. He therefore considered tariff subheading 7304.39.35 to be the correct tariff classification and would have dismissed the appeal with costs.
The SCA judgement is accessible at: