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[2016] ZASCA 138
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Commissioner, South African Revenue Service v Van der Merwe and Others (598/2015) [2016] ZASCA 138; 2017 (3) SA 34 (SCA); [2017] 2 All SA 335 (SCA); 79 SATC 283 (29 September 2016)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case no: 598/2015
Reportable
In
the matter between:
COMMISSIONER,
SOUTH AFRICAN
Appellant
REVENUE
SERVICE
and
VAN
DER MERWE, LIEBENBERG DAWID
First Respondent
RYK
NO
MONYELA,
KHASHANE CHRISTOPHER NO
Second Respondent
JACOBS,
WELCOME NORMAN NO
Third Respondent
LUKHELE,
MOTSWANA GRACE NO
Fourth Respondent
MAHANYELE,
JOHANNA NINI NO
Fifth Respondent
PELA
PLANT PROPRIETARY LIMITED
Sixth Respondent
(IN
LIQUIDATION)
UTI
SOUTH AFRICA PROPRIETARY LIMITED
Seventh Respondent
TRANS-MED
SHIPPING CC
Eighth Respondent
Neutral
Citation:
CSARS
v Van der Merwe NO
(598/2015)
[2016] ZASCA 138
(29 September. 2016)
Coram:
Lewis,
Theron, Wallis, Petse and Dambuza JJA
Heard:
31
August 2016
Delivered
29
September 2016
Summary
:
Customs and Excise Act 91 of 1964 - ss 20(4), 38, 39 and 114 do not
create an embargo in favour of the
Commissioner preventing a
liquidator from taking possession of property in terms of the
Insolvency Act 24 of 1936
until duty and VAT is paid.
ORDER
On
appeal from
:
KwaZulu-Natal
Division of the High Court, Durban (Annandale AJ sitting as court of
first instance):
The
appeal is dismissed with costs,
including
the costs
of
two counsel.
JUDGMENT
Theron
JA (Lewis, Wallis, Petse and Dambuza JJA concurring):
[1]
The appellant is the Commissioner for the South African Revenue
Service (the Commissioner). The first, second, third,
fourth and
fifth respondents are the duly appointed liquidators (the
liquidators) of the sixth respondent, Pela Plant Proprietary
Limited
(in liquidation) (the company). The company was placed under
winding-up because it was unable to pay its debts. A provisional
winding- up order was granted on 20 July 2014 and a final order was
granted on 16 September 2014. The effective date of the commencement
of the winding-up, in terms of s 348 of the Companies Act 61 of 1973
(the 1973 Companies Act), was 18 July 2014.
[2]
Prior to its winding-up the company concluded instalment sale
agreements in terms of which it purchased certain items of heavy
duty
earthmoving equipment. Twenty three items of this equipment form the
subject matter of this appeal (the equipment). The company
had sent
the equipment, to the value of some R25 million, to the Democratic
Republic of the Congo (DRC) for operations in that
country. Fourteen
items were subject to credit sale agreements concluded between the
company and Absa Bank Ltd, First Rand Bank
Ltd and Bidvest Bank Ltd,
the fourth, fifth, and sixth respondents, respectively, in the court
a quo (the banks), and as such those
items were subject to the usual
reservation of ownership. These items became the property of the
company by virtue of the provisions
of s 84(1) of the Insolvency Act
24 of 1936 (the
Insolvency Act) and
the banks obtained a hypothec
over the equipment to secure any outstanding indebtedness. The
remaining nine items always belonged
to the company.
[3]
When the company’s operations in the DRC were complete the
equipment was returned to South Africa. In the ordinary course,
when
the equipment was returned from the DRC, customs duty would have been
payable in terms of s 39(1) of the Customs and Excise
Act 91 of 1964
(the Customs Act) and VAT would have been payable in terms of s
7(1)(b) of the Value Added Tax Act 89 of 1991 (the
VAT Act). The
company appointed the seventh respondent, UTI South Africa
Proprietary Ltd (UTI), as its clearing and forwarding
agent in
respect of the importation of the equipment. During March and June
2014, the equipment arrived in the country and was
duly entered into
the warehouse of the eighth respondent, Trans-Med Shipping CC, acting
as UTI’s sub-agent, with deferment
of customs duty and VAT
pursuant to s 20(1)(
a
)
of the Customs Act and s 13(6) of the VAT Act, respectively.
[4]
The goods remained in the warehouse under the control of UTI. UTI’s
freight costs and disbursements amount to approximately
R2,7 million.
UTI has also charged and continues to charge a storage fee of R12 000
per day to store the goods. As at October
2014, the storage charges
amounted to R767 000 but have since escalated to almost R6
million. The duty and VAT said to be
payable ‘to clear’
the equipment is R8,5 million although this is disputed by the
liquidators.
[5]
The liquidators endeavoured to secure the release of the equipment
from UTI and the Commissioner. These endeavours were unsuccessful.
They instituted proceedings in the court a quo for an order directing
that the equipment be released to them without payment of
duty and
VAT. They contended that they were obliged, in terms of s 391 of the
1973 Companies Act, and s 61, read with
s 83(3)
of the
Insolvency
Act, to
take possession of the equipment. The Commissioner and UTI
opposed the application contending that the equipment could only be
released to the liquidators after compliance with certain provisions
of the Customs Act, namely, ss 20(4), 38, 39, 47A, 19(1),
19(6), 19(7), 19(9), 20(4), 107(2)(
a
)(
i
),
114(aC) and 114(1)(
b
)(
i
).
The Commissioner claimed that these sections precluded him from
releasing the equipment (and the court from making an order that
he
do so) unless and until the customs duty and VAT in respect of the
equipment was paid in full. In the court a quo, UTI aligned
itself
with SARS’ contention but did not participate in this appeal.
[6]
The application was successful in the court a quo (Annandale AJ). It
ordered that the equipment be released to the liquidators
to be dealt
with in terms of the laws of insolvency. It found that upon a proper
interpretation of the Customs Act, read with the
Insolvency Act, the
1973 Companies Act and the common law, none of the sections in the
Customs Act relied upon by the Commissioner precluded the latter
from
releasing the equipment to the liquidators. The Commissioner appeals
to this court with the leave of the court a quo.
[7]
On appeal, the Commissioner and the liquidators agreed, in terms of
rule 8(8) of the rules regulating the conduct of the proceedings
of
the Supreme Court of Appeal of South Africa, that a decision on the
following question would be determinative of the appeal:
‘
Whether
the law relating to insolvency in respect of the winding up of a
company unable to pay its debts permits a liquidator of
such a
company to take possession of property of the company in the custody
and/or under the control of the Commissioner for the
South African
Revenue Service (“the Commissioner”) and to deal with
such property as provided for in the law relating
to insolvency even
though duty has not been paid in respect of such property in terms of
section 20(4), 38 and/or 39 of the Customs
and Excise Act 91 of 1964.
. . and/or value added tax has not been paid in respect of such
property as required in terms of section
7(1)(
b
)
of the Value Added Tax Act 89 of 1991 . . . Put differently, do
sections 20(4), 38 and/or 39 of the Customs and Excise Act or
section
7(1)(
b
)
of the VAT Act constitute an embargo in favour of the Commissioner
preventing the liquidator of a company being wound up and unable
to
pay its debts from taking possession of property of the company in
the custody and/or under the control of the Commissioner
and dealing
with such property as provided for in the law relating to insolvency,
unless duty and/or value added tax has been paid
on such property.’
[8]
The main complaint of the Commissioner on appeal was that Annandale
AJ erred in approaching the matter as if the Commissioner
was simply
a creditor of the company and by determining whether, qua creditor,
the Commissioner was entitled to be treated otherwise
than in terms
of the
Insolvency Act. It
was argued on behalf of the Commissioner
that while the Customs Act is primarily a fiscal measure it is also a
means of promoting
the State’s economic and other interests. It
was further argued that duty is imposed on imported goods not only
for fiscal
purposes but also to protect local manufacturers. In this
regard reference was made to Chapter VI of the Customs Act which
deals
with anti-dumping, countervailing and safeguard duties.
Reference was made to the Customs Act being used to implement State
policy,
for example, the power of the National Executive to conclude
agreements with the government of any territory in Africa in terms
of
s 51 of the Act and Chapter VII which provides for the imposition of
environmental levies.
[9]
The court a quo considered the scope and purpose of provisions
relating to the winding-up of companies unable to pay their debts
in
terms of the 1973 Companies Act, the
Insolvency Act, the
Customs Act
and the VAT Act and came to the conclusion, correctly in my view,
that the ranking of claims within the
Insolvency Act does
not
countenance any creditor being granted a preference such as that
contended for by SARS. The court reasoned as follows (paras
12 and
13):
‘
The
fundamental principle of insolvency law
is
that
all creditors are subject to its provisions, save in exceptional
cases where statutes specifically provide otherwise. This
fundamental
principle is given effect to in two ways. Firstly by the creation of
a
concursus
creditorum
in
terms of which the claims and rights of all creditors of an insolvent
company are determined as at the date of insolvency, with
the result
that one creditor is not entitled to improve its position in relation
to others after the date of the
concursus.
Secondly,
by ensuring that every asset belonging to the insolvent company is
properly realised by its liquidator so that the proceeds
can be
distributed amongst the company's creditors in the order of
preference dictated by insolvency law and determined as at the
concursus.
So
it is then that
section
391
of the old Companies Act obliges a liquidator to recover
"all
the assets and property"
of
the insolvent company “
all”
being
a word of the widest possible import.
The
purpose of the
Insolvency Act as
recorded
in
the preamble thereto is “
to
consolidate and amend the law relating to insolvent persons and to
their estates”.
The
aim of consolidation suggests that the
Insolvency Act is
intended to
deal comprehensively with what will happen upon insolvency. It
reflects and gives effect to the fundamental principle
of insolvency
law and contains an array of detailed provisions regarding the
ranking of claims and how security claimed in respect
of claims must
be dealt with’. [Footnotes omitted.]
[10]
Counsel for the Commissioner relied on various provisions of the
Customs Act which, so the argument went, create an embargo
on the
relief sought by the liquidators. Reliance was placed on s 47(1)
[1]
which provides for duty to be paid on entry for home consumption as
well as s 47A(1)
[2]
which
prohibits any person from dealing with imported goods unless they
have been duly entered. According to the Commissioner,
there is
nothing contained in the Customs Act that entitles liquidators of
companies to be excused from these provisions.
[11]
While the Commissioner accepted that payment of customs duty and VAT
can be deferred under certain circumstances (ss 20(1),
39(1)(
b
)
and 107 (2)(A)(
i
)),
he maintained that such duty had to be paid in full at some stage in
the future. It was also submitted that while the Commissioner
may in
the appropriate circumstances waive or reduce the imposition of
penalties, in terms of s 93, his power to do so is extremely
limited.
[3]
He may only waive
duties where there is a ‘dispute’ and forms the view that
it is ‘to the best advantage of the
State’ to settle that
dispute taking into account the factors listed in s 77M.
[4]
Reliance was also placed on s 77K(1) which specifically
records that it is the duty of the Commissioner to assess and
collect
taxes, duties and other amounts due according to the laws enacted by
Parliament and not to forgo any such amounts properly
chargeable and
payable.
[12]
In my view, the answer to the question whether there is an embargo as
contended for by the Commissioner, which prevents the
liquidators
from taking possession of the equipment in order to deal with it
according to the laws of insolvency without first
having to pay duty
and VAT thereon, is to be found in ss 20(4)(
a
), 38, 39 and 114
of the Customs Act. It is useful to refer to these sections. Section
20(4)(a) reads:
‘
Subject
to section 19A, no goods which have been stored or manufactured in a
customs and excise warehouse shall be taken or delivered
from such
warehouse except in accordance with the rules and upon due entry for
any of the following purposes-
(a)
home
consumption and payment of any duty due thereon;’
[13]
Section 38(1)(
a
) deals with the entry of goods to be made
within seven days of the date of importation and provides that:
‘
Every
importer of goods shall within seven days of the date on which such
goods are, in terms of section ten deemed to have been
imported
except in respect of goods in a container depot as provided for in
section 43(1)
(a)
or
within such time as the Commissioner may prescribe by rule in respect
of any means of carriage or any person having control thereof
after
landing, make due entry of those goods as contemplated in section
39.’
[14]
Section 38(4)(a) provides:
‘
The
Commissioner may by rule permit any excisable goods or fuel levy
goods and any class or kind of imported goods, which he may
specify
by rule, to be removed from a customs and excise warehouse on the
issuing by the owner of such goods of a prescribed certificate
or an
invoice or other document prescribed or approved by the Commissioner,
and the payment of duty on such goods at a time and
in a manner
specified by rule, and such certificate, invoice or other document,
shall for the purposes of section 20(4), and subject
to the
provisions of section 39(2A), be deemed to be a due entry from the
time of removal of those goods from the customs and excise
warehouse’.
[15]
Section 39(1)(
a
) requires that:
‘
The
person entering any imported goods … shall deliver … to
the Controller a bill of entry … setting forth
the full
particulars …, and according to the purpose (to be specified
on such bill of entry) for which the goods are being
entered, and
shall make … a declaration … as to the correctness of
the particulars and purpose shown on such bill
of entry’.
[16]
Section 39(1)(
b
) provides that:
‘
At
the same time the said person shall deliver such duplicates of the
bill of entry as may be prescribed …. and shall pay
all duties
due on the goods: Provided that the Commissioner may, on such
conditions, including conditions relating to security,
as may be
determined by him, allow the deferment of payment of duties due in
respect of such relevant bills of entry and for such
periods as he
may specify’.
[17]
Section 39(2A)
(a)
provides that:
‘
Any
person who removes goods from a customs and excise warehouse by means
of the issuing of a certificate, invoice or other document
referred
to in section 38(4) shall present to the Controller a validating bill
of entry in the prescribed form at the time and
in the manner
specified by rule in respect of any such certificate, invoice or
other document, and shall pay at the prescribed
time to the
Controller the duty due on the goods to which such certificate,
invoice or other document relates’.
[18]
Section 114 stipulates that any duty payable under the Act is a debt
due to the State.
[5]
In terms of
s 114(1)(
a
C)
SARS is given a statutory lien over the goods in a customs and excise
warehouse. This section provides:
‘
Any
dutiable goods of whatever nature, which are stored in any customs
and excise warehouse licensed for any purpose under this
Act shall be
subject to a lien, as if the goods are detained in accordance with
the provisions of subsection (2), as security for
the duty on such
goods from the time of receipt of such goods in such warehouse until
such goods have been duly entered for any
purpose under this Act and
any liability for duty of the licensee of such warehouse in respect
of such goods has ceased in terms
of this Act’.
[19]
In terms of s 114(1)(
a
)(
iv
)(
aa
)(A) SARS has the
right to exercise a lien over goods which are subject to a duty
whenever they may be found as further security
for its debt:
‘
Any
imported or excisable goods, vehicles, machinery, plant or equipment,
any goods in any customs and excise warehouse, any goods
in a rebate
store room, any goods in the custody or under the control of the
Commissioner and any goods in respect of which an
excise duty or fuel
levy is prescribed, and any materials for the manufacture of such
goods, of which such person is the owner,
whether imported, exported
or manufactured before or after the debt became so due and whether or
not such goods are found in or
on any premises in the possession or
under the control of the person by whom the debt is due, may be
detained in accordance with
the provisions of subsection (2) and
shall be subject to a lien until such debt is paid’.
Section
114(1)(
b
)(
i
)
provides that SARS’ claim over the property subject to a lien
has priority over the claims of all other persons.
[6]
Section 114(1)(
b
)(
iii
)
deals with execution over goods subject to SARS’ lien.
[20]
The important aspect of these provisions is that they are all
addressed to the ordinary situation where goods are brought into
the
country and attract a liability to pay customs duty. They are
directed at the obligation of the importer and others liable
to pay
duty, and do not address the special situation of insolvency. That is
not surprising because that is dealt with in the
Insolvency Act, a
general statue intended to deal with all cases of insolvency. In
brief, when one looks at the liability to pay customs duty in
the
ordinary course, one looks to the provisions of the Customs Act
alone. When insolvency intervenes one turns to the
Insolvency Act.
[21
]
In circumstances of insolvency our common law provides that a trustee
has to realise all the assets of an insolvent including
those subject
to a lien and as such the trustee is entitled to demand delivery
thereof. If it were otherwise the lienholder would
be able to
frustrate the winding-up of the estate.
[7]
The common law position is preserved in
s 47
of the
Insolvency
Act.
[8
]
The common law is
somewhat altered by
s 83
of the
Insolvency Act which
permits a
creditor, who holds as security for his claim any movable property,
to realise that security under certain prescribed
conditions prior to
the second meeting of creditors.
[9]
This section is not, however, relevant in this appeal since the
circumstances in which a creditor may do that are not applicable
to
the Commissioner’s claim in this case and since the
Commissioner relies solely on an ‘embargo’. It is
unnecessary
for the purposes of this judgment to determine whether
the statutory liens afforded by the Customs Act constitute security
as specially
defined in the
Insolvency Act and
I refrain from
entering upon that difficult question.
[22]
There is nothing in either the Customs Act or the
Insolvency Act
which
expressly (or by necessary implication) provides that goods
subject to a lien in favour of SARS do not fall to be dealt with
under
the laws of insolvency. This is to be contrasted with s 10 of
the Admiralty Jurisdiction Act 105 of 1983 which excludes the vesting
of certain property in the trustee on insolvency and
s 90
of the
Insolvency Act in
terms of which the Land Bank retains its powers in
relation to any property belonging to an insolvent estate. Such
property is
expressly excluded from the provisions of the
Insolvency
Act.
[23
]
It was argued on behalf of the Commissioner that if an ‘embargo’
is not inferred, this will result in an anomaly since
he can still
hold UTI (as the licensee of the warehouse) liable for payment of the
duty and VAT by virtue of the provisions of
s 19(6) of the Customs
Act. I do not agree with this argument. Section 19(6) must be read
with ss 19(7) and 19(8). These sections
provide:
‘
(6)
In addition to any liability for duty incurred by any person under
any other provision of this Act, the licensee of a customs
and excise
warehouse shall, subject to the provisions of subsection (7), be
liable for the duty on all goods stored or manufactured
in such
warehouse from the time of receipt into such warehouse of such goods
or the time of manufacture in such warehouse of such
goods, as the
case may be.
(7)
Subject to the provisions of subsection (8), any liability for duty
in terms of subsection (6) shall cease when it is proved
by the
licensee concerned that the goods in question have been duly entered
in terms of section 20(4) and have been delivered or
exported in
terms of such entry.
(8)
If the licensee concerned fails to submit any such proof as is
referred to in subsection (7) within the period for which goods
of
that class or kind may be stored or kept in a customs and excise
warehouse or if the licensee commits an offence under this
Act in
respect of any goods stored or kept in such warehouse he shall upon
demand by the Controller forthwith pay the duty due
on such goods’.
[24]
It is apparent that the purpose and effect of these sections is to
give the Commissioner additional security if goods are removed
from
the warehouse without payment of duty. In any event, these sections
have no application where SARS itself is obliged to release
the goods
from its statutory lien under the laws of insolvency. I agree with
the court a quo’s finding, as set out below,
that s 114 of the
Customs Act was not intended to create an embargo against clearance
for home consumption unless duty and VAT
were first paid in full, but
serves to provide the Commissioner with additional security (paras 41
and 42):
‘
The
genesis of section 114(1)(
a
C)
is also instructive. It
appears
to
have
been introduced to accord SARS security in goods where duty and VAT
have not been paid but because the goods had not been detained
under
the provisions of section 114(l)(iv) of the Customs Act, SARS was
left only with a claim which was unsecured and subject
to the limited
preference afforded by
section 99
of the
Insolvency Act. That
was the
situation which arose in
Secretary
for Customs and Excise v Millman
NO
1975 (3) SA 544
(A) and
section 114(1)(
a
C)
was inserted into the Customs Act some years later.
I
am satisfied that, in the scheme of the Customs Act as a whole and
given the protection afforded by
sections 83
and
95
of the
Insolvency
Act, the
statutory lien created by
section 114(1)(
a
C)
serves
only
to provide SARS
with
additional
security and is not a bar to the relief sought by the liquidators’.
[25]
The court a quo’s interpretation protects the legitimate
property expectations of all creditors to share in the proceeds
of a
speedy realisation of assets. The judge was mindful of the fact that
some ambiguity may arise when the provisions of the 1973
Companies
Act and the
Insolvency Act are
considered together with the Customs
Act. She concluded that to the extent that there was ambiguity, she
should prefer an interpretation
that ‘does not result in
injustice, absurdity, and anomaly or contradiction’. Her
reasoning, as evidenced in the following
paragraphs (45-48) of the
judgment, cannot be faulted:
‘
In
my view, interpreting section 47(1) as an embargo provision is likely
to cause injustice to other creditors of the insolvent
estate of the
company and lead to a potentially absurd result
.
As
companies in liquidation are almost always unable to pay their debts,
there will ordinarily be no prospect that the liquidators
could, out
of the insolvent company's own resources, pay customs duty and VAT
before disposing of the equipment. Ordinarily, the
logical source of
funds with which
to
pay customs duty and VAT would be the proceeds of the sale of the
equipment itself
.
Few
purchasers would be willing first to pay SARS before being able to
take delivery of the equipment which they have bought. Of
course no
purchaser would be prepared to pay SARS if the value of duties and
VAT outstanding exceeded the value of the equipment
itself. In that
event
,
if
the respondents' interpretation of the legislation is correct, the
goods would likely never be realised because there would not
be
enough money to overcome the embargo. That would result in the
equipment ending up in a state warehouse to be sold by SARS in
terms
of section 43 of the Customs Act.
That
is in my view an absurd result, particularly given the purpose of the
insolvency regime which is to realise all the property
of the company
at best value in the interests of all creditors. It
was
precisely these types of difficulties that caused the court in
London
and South African Exploration Co v Official Liquidator of
North-Eastern Biltfontein and The Registrar of Deeds
(1895) 12 SC 225
, to read a provision which apparently created an
embargo on transfer of property before certain payments were made
,
as
applying only to voluntary transfers, not those consequent upon
insolvency.
The
interpretation contended for by the respondents also results in the
anomaly that assets which form part of the insolvent estate
are dealt
with not by the liquidators but by SARS (which need not even prove a
claim) and without any input from or control by
the liquidators or
other creditors. It could not have been the intention of the
legislature that assets of an insolvent estate,
in respect of which
other creditors also have real rights, should be dealt with
completely outside the machinery of insolvency’.
[26]
One final reason for rejecting the Commissioner’s claims is
that the
Insolvency Act makes
specific provision for the preference
that the claims in issue in this case are to enjoy in the event of
insolvency. The relevant
sections are
ss 99(1)(cA)
and (cD) of the
Insolvency Act. The
effect of the argument on behalf of the
Commissioner would be to nullify these provisions in relation to
these claims by giving
the Commissioner a right to payment in
preference to all other creditors. The statutory priority given to
funeral and death bed
expenses; the costs of sequestration and
administration of the estate; the costs of execution; salaries and
wages; payments of
amounts due for workmen’s compensation;
income tax and payments under the Pneumoconiosis Compensation Act 64
of 1962; would
all have to give way to claims under the Customs Act
and the VAT Act. That would be so even though the
Insolvency Act
specifically
confers on such claims a priority over the claims here
in issue. That is not a sensible or realistic interpretation of the
relevant
statutory provisions.
[27]
The court a quo correctly concluded that properly construed, the
Customs and VAT Acts do not preclude the Commissioner from
releasing
the equipment to the liquidators without the liquidators first having
to pay duty and VAT thereon.
[28]
For these reasons the appeal is dismissed with costs, including the
costs of two counsel.
____________________
L
V Theron
Judge
of Appeal
APPEARANCES
For
Appellant:
A Meyer SC with MA Ngqanda
Instructed by:
TKN Inc, Durban
Lovius-Block,
Bloemfontein
For
First to Sixth Respondents:
EA Limberis SC with BM Gilbert
Instructed
by:
Reitz
Attorneys, Houghton Estate
Symington
& De Kok, Bloemfontein
[1]
Section 47(1)
of the Customs Act reads:
‘
Subject
to the provisions of this Act, duty shall be paid for the benefit of
the National Revenue Fund on all imported goods,
all excisable
goods, all surcharge goods, all environmental levy goods, all fuel
levy goods and all Road Accident Fund levy goods
in accordance with
the provisions of Schedule 1 at the time of entry for home
consumption of such goods: Provided that the Commissioner
may
condone any underpayment of such duty where the amount of such
underpayment in the case of-
(a)
goods imported by post is less than fifty cents;
(b)
goods imported in any other manner is less than five rand; or
(c)
excisable goods is less than two rand.’
[2]
Section
47A(1) provides that ‘[s]ubject to the provisions of this Act,
no person shall remove, receive, take, deliver or
deal with or in
any imported or excisable goods or fuel levy goods unless such goods
have been duly entered’.
[3]
Section 93 of
the Customs Act reads, in relevant part:
‘
(1)
The Commissioner may, on good cause shown by the owner thereof,
direct that any ship, vehicle container or other transport
equipment, plant, material or other goods detained or seized or
forfeited under this Act be delivered to such owner, subject
to-
(a)
payment of any duty that may be payable in respect thereof;
(b)
payment of any charges that may have been incurred in connection
with the detention or seizure or forfeiture thereof;
and
(c)
such conditions as the Commissioner may determine . . .
(2)
The Commissioner may, on good cause shown mitigate or remit any
penalty incurred under this Act on such conditions as the
Commissioner may determine.’
[4]
The factors
listed in this section are:
‘
(a)
whether that settlement would be in the interest of good management
of the tax system, overall fairness and the
best use of the
Commissioner's resources;
(b)
the cost of litigation in comparison to the possible benefits with
reference to-
(i)
the prospects of success in a court;
(ii)
the prospects of collection of the amounts due; and
(iii)
the costs associated with collection;
(c)
whether there are any-
(i)
complex factual or quantum issues in contention; or
(ii)
evidentiary difficulties,
which
are sufficient to make the case problematic in outcome or unsuitable
for resolution through the alternative dispute resolution
procedures
or the courts;
(d)
a situation where a participant or a group of participants in a tax
avoidance arrangement has accepted the Commissioner's
position in
the dispute, in which case the settlement may be negotiated in an
appropriate manner required to unwind existing
structures and
arrangements; or
(e)
whether the settlement of the dispute will promote compliance of the
tax laws by the person concerned or a group
of taxpayers or a
section of the public in a cost-effective way.’
[5]
Section
114(1)(a)(i) states that ‘[a]ny amount of any duty, interest,
penalty or forfeiture incurred under this Act and
which is payable
in terms of this Act, shall, when it becomes due or is payable, be a
debt due to the State by the person concerned
and shall be
recoverable by the Commissioner in the manner hereinafter provided’.
[6]
Section
114(1)(
b
)(i)
provides:
‘
The
claims of the State shall have priority over the claims of all
persons upon anything subject to a lien contemplated in paragraph
(a), (aA), (aB) or (aC) and may be enforced in accordance with the
provisions of this section if the debt is not paid upon demand
after
the person by whom the debt is due is in writing advised of such
debt and of the date on which such debt becomes due and
is payable’.
[7]
Roux en
andere v Van Rensburg NO
[1996] ZASCA 54
;
1996
(4) SA 271
(A) at 276E-277C.
[8]
Section 47
provides:
‘
If
a creditor of an insolvent estate who is in possession of any
property belonging to that estate, to which he has a right of
retention or over which he has a landlord's legal hypothec, delivers
that property to the trustee of that estate, at the latter's
request, he shall not thereby lose the security afforded him by his
right of retention or lose his legal hypothec, if, when delivering
the property, he notifies the trustee in writing of his rights and
in due course proves his claim against the estate: Provided,
that a
right to retain any book or document of account which belongs to the
insolvent estate or relates to the insolvent's affairs
shall not
afford any security or preference in connection with any claim
against the estate’.
[9]
Section 83
provides, in relevant part:
‘
(2)
If such property consists of a marketable security, a bill of
exchange or a financial instrument . . ., the creditors may,
after
giving the notice mentioned in subsection (1) and before the second
meeting of creditors, realize the property in the manner
and on the
conditions mentioned in subsection (8).
(3)
If such property does not consist of a marketable security or a bill
of exchange, the trustee may, . . . take over the property
from the
creditor . .
.
and if the trustee does not so take over the property the creditor
may, after the expiration of the said period but before the
said
meeting, realize the property in the manner and on the conditions
mentioned in subsection (8)’.