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[2011] ZAGPPHC 100
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Minister of Trade and Industry, National Government and Others v Eastern Eagle Home Textile (SA) CC (A677/08) [2011] ZAGPPHC 100 (25 May 2011)
NOT
REPORTABLE
IN
THE HIGH NORTH GAUTENG HIGH COURT,
PRETORIA
(REPUBLIC OF SOUTH AFRICA)
CASE:
A677/08
DATE:25/05/2011
MINISTER
OF TRADE AND INDUSTRY,
NATIONAL
GOVERNMENT
..................................................................................
First
Appellant
THE
COMMISSIONER FOR THE SOUTH AFRICAN
REVENUE
SERVICE
......................................................................................
Second
Appellant
THE
CONTROLLER OF CUSTOM AND
EXCISE
............................................
Third
Appellant
And
EASTERN
EAGLE HOME TEXTILE (SA)
CC
.......................................................
Respondent
JUDGMENT
Fabricius
J:
1.
This appeal involves a number of questions relating to the second
respondent's decision on 28 July 2006 to seize a certain container
in
terms of the provisions of section 88(1 )(c) of the Customs and
Excise Act 91 of 1964 ("the Customs Act") and his
reasons
for doing so.
2.
Pursuant to such seizure the present respondent launched an
application in the court a quo to have such decision reviewed in
terms of various sections of the Administrative Justice Act 3 of 2000
("PAJA").
3.
The application succeeded; substantially on the basis that the
relevant export declaration relied upon by the third appellant
was
inadmissible evidence. Accordingly the decision to seize the relevant
container FSCU616654 was set aside, and the second appellant
was
ordered to reconsider such seizure after conducting a full and proper
hearing of all relevant facts, and having due regard
to the
principles of natural justice.
4.
That decision resulted in the appeal before us.
5.
It is true that the function of a review court is not to usurp the
function of the administrative agency, save in certain circumscribed
circumstances. If a decision by an organ of state is rational and
lawful within the confines of PAJA, a court will not interfere.
See:
Bato Star Fishing v Minister of Environmental Affairs
[2004] ZACC 15
;
2004 (4) SA 490
CC at paragraphs 42 and 48.
6.
The appellants case is that the evidence before him showed that the
respondent had under-declared the values of the goods imported
by it,
and that because respondent did not rebut such, the appellant was
justified and duty bound to seize the goods in terms of
Section
88(1)(c) of the Customs Act.
I
must mention that Sections 39(1 )(a), (b) and (c), 40(1 )(c) and (e),
47, 87(1)., 88, 102(4) and 107(2)(a) are also relevant.
7.
Before I turn to the process that was followed by the Commissioner,
it is convenient to mention what his powers are in terms
of the
Customs Act, and especially Section 88(1). An officer seizing goods
in terms of Section 88(1 )(c) is required to hold a
suspicion on
reasonable grounds that:
(a)
the goods were imported:
(b)
they had been imported without compliance with the provisions of the
Act, and
(c)
they were liable to forfeiture.
Such
an administrative act must be exercised in conformity with the
requirements of PAJA.
See:
Commissioner SARS v Trend Finance
2007 (6) SA 117
SCA at paragraph
25, and Commissioner SARS v Saleem
[2008] ZASCA 19
;
2008 (3) SA 655
SCA.
8.
The relevant facts can now be summarized:
8.1
On 24 May 2006 the container was stopped and inspected;
8.2
On inspection of the goods the following observations made by the
investigating officer, Mr McCourt, caused him to be suspicious:
8.2.1The
packaging of the goods reflected telephone and fax numbers in China
and Namibia;
8.2.2
Although the goods were of high quality, the invoice prices thereof
were ridiculously low;
8.3
As a result of the aforesaid the goods were detained in terms of the
provisions of section 88(1 )(a) of the Customs Act, in
order to
determine whether they were liable to forfeiture;
8.4
In order to enable him to do his investigation, Mr McCourt prepared a
so-called "shopping list" in terms of which
certain
identified and specified information and documentation were requested
from the respondent's clearing agent;
8.5
The response which came in terms of the letter annexed to the
founding papers as "A9" and "M4", did not
address
the essence of the request i.e. to furnish documentation that would
prove that the goods were imported in full compliance
with the
provisions of the Customs Act and, in particular, that the declared
values were correct;
8.6
In an attempt to resolve the shortcomings in the respondent's reply
and to finalise that investigation, Mr McCourt requested
a meeting at
the Commissioner's offices in Durban;
8.7
In terms of an e-mail dated 30 May 2006, Mr McCourt informed the
Respondent that the scheduled meeting could be obviated if
SARS was
furnished with the outstanding documentation prior thereto. One of
the documents called for was the export bill of entry;
8.8
In terms of an-email dated 1 June 2006, Respondent was advised that
the documentation was still being awaited;
8.9
In terms of an email dated 5 June 2006 Mr McCourt:
8.9.1
expressed his loss to understand why the applicant couid not furnish
the Commissioner with the requested documentation as
the obtaining
thereof was normally a mere formality;
8.9.2
again pointed out that the goods would not be released unless the
bill of export was made available.
8.10
Under cover of a letter dated 5 June 2006 the Commissioner was
furnished with a letter from the applicant's Chinese supplier,
explaining that they did not have the requested document;
8.11
As it became evident that the applicant had no intention of
furnishing the Commissioner with the requested documentation, and
the
export bill of entry in particular, Mr McCourt approached the
shipping line and managed to obtain a copy from them;
8.12
Consequent upon obtaining the export bill of entry, Mr McCourt, per
email dated 6 June 2006, advised the Respondent of the
said fact as
well as of the fact that the values reflected in the export bill of
entry were drastically lower that the values reflected
in the invoice
lodged with the Commissioner upon entry of the goods. Based on the
aforesaid evidence the applicant was called upon
to explain the
discrepancies in the values and again advised that the goods would
not be released unless an acceptable explanation
was given;
8.13
Under cover of the letter of dated 12 June 2006 (annexure "A24",
p97) the Commissioner was furnished with a letter
from the
respondent, stating that it could not give an explanation as to why
the values were different.
8.14
Mr McCourt met with representatives of the applicant on two
occasions, to wit on 28 and 29 June 2006;
8.15
At the aforesaid meetings the applicant's representatives were:
8.15.1
advised that the goods would not be released unless proof of proper
compliance with the Customs Act was furnished;
8.15.2
advised that in particular, such proof would have to include an
acceptable explanation for the discrepancy between the values
in the
export bill of entry and the documentation lodged with SARS;
8.16
On 12 July 2006 respondent addressed an email to Mr Beyers Theron,
the head of customs operations unit, informing him of the
history of
the matter, and requesting him to intervene;
8.17
Mr Beyers Theron responded in terms of an email dated 25 July 2006.
In his reply he pointed out that the Applicant had been
requested to
furnish the Commissioner with specific documents,
that
undertakings that the requested documentation and information would
be furnished were given, but that the same had yet not
been
furnished, and also urged that the requested documents be provided as
soon as possible:
8.18
Respondent in turn responded in terms of an email dated 27 July 2006.
In this response none of the allegations made by Theron
were
disputed, or even challenged, and it simply raised the "defence"
that the requested documentation was not normally
requested and that
the co-operation that had been rendered to date "was done purely
to assist Durban with the ongoing investigations";
8.19
In terms of a letter dated 28 July 2006 the goods were seized in
terms of the provisions of section 88(1 )(c) of the Customs
Act. The
seizure notice also contained the reasons for the Commissioners
decision to seize the goods;
8.20
The Commissioner was subsequently advised that the reasons set out in
paragraphs 1, 2, 3, 6 and 7 of the seizure notice were
unsustainable.
Acting on the said advice the Commissioner:
8.20.1
abandoned his reliance thereon;
8.20.2
limited his decisions to the grounds as set out in paragraph 4 read
with paragraph 5 of the seizure notice.
9.
The commissioner was of the view, confirmed by the evidence of Mr.
Desai, that having regard to the quality of the goods, the
values
reflected in the relevant invoice were extremely low.
10.
As far as the Chinese Export Bill of Entry is concerned, there can be
no doubt that it related to the container and goods in
question, for
the following reasons:
10.1
According to the export bill of entry it related to container with
number FSCU6166554;
10.2
According to the bill of entry the goods were imported in container
with number FSCU6166554;
10.3
According to the two letters from Dong Ying the goods were imported
in container with number FSCU6166554;
10.4
In the founding affidavit respondent, in dealing with the reasons
given by the Commissioner for his decision to seize the goods,
explained that the export bill of entry was in any event provided by
the shipping company, The said statement by necessary implication
accepted that the document obtained from the shipping line pertained
to the consignment in issue;
10.5
In all of the correspondence addressed to the Commissioner the issue
relating to the export bill of entry was treated on the
basis that it
pertained to the container and the goods in issue;
10.6
It should be evident from the evidence above that:
10.6.1
The origin of the export bill of entry was not an issue;
10.6.2
the export bill of entry had to be lodged with the Chinese customs
authorities for purposes of exporting the container;
10.6.3
it related to the goods exported/imported in container number
FSCU6166554
These
facts were at all times prior to the seizure decision accepted by the
Respondent and thus common cause between the parties.
11.The
court a quo therefore erred in this regard in finding that such
export bill was inadmissible evidence.
12.
The explanations offered by the respondent did not properly address
the evidence on the value of the goods obtained by the Commissioner,
and were insufficient to rebut the presumption created by Sections
102(4) and (5) of the Customs Act.
13.
Accordingly the court a quo erred in not dismissing the respondent's
application.
14.
The following order is therefore made:
14.1The
appeal succeeds with costs.
14.2
The order of the court a quo is set aside and substituted with the
following order: "The application is dismissed with
costs
including costs of 2 counsel."
Date:
25 May 2011
H
FABRICIUS J
I
agree:
MSIMEKI
J
I
agree.
MATOJA
Judges
of the High Court North Gauteng Division