IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
CASE NO : 27441/2020
In the matter between:
BOTTOM LINE SOLUTIONS (PTY) LTD Applicant
TRADING AS BLS PORTCO SA
and
THE COMMISSIONSER FOR THE SOUTH Respondent
AFRICAN REVENUE SERVICE
DATE OF JUDGMENT : This judgment is issued by the Judge whose name is reflected herein
and is submitted electronically to the parties/their legal representatives by email. The judgment
is further uploaded to the electronic file of this matter on Caselines by the Judge’s secretary .
The date of the judgment is deemed to be 12 May 2025.
JUDGMENT
Khashane Manamela , AJ
(1) REPORTABLE: NO
(2) OF INTEREST TO OTHER JUDGES: NO
(3) REVISED.
12 May 2025
Date K. La M Manamela
2
Introduction
[1] This is a review application by Bottom Line Solutions (Pty) Ltd trading as BLS Portco
SA (‘BLS’) , operating as ‘a clearing agent ’1 in terms of the provisions of the Customs and
Excise Act 91 of 1964 (‘the CEA’) , to set aside a demand by the South African Revenue Service
(‘SARS’) for payment in the amount of R3 688 458.21 in respect of liability for customs duty,
value added tax (‘VAT’), penalties, interest and other charges associated with the deemed
diversion or exportation of goods .2 BLS contends that the demand or assertions of liability on
its part by SARS is unreasonable, irrational and failure by SARS to apply its mind to the
relevant legal provisions, facts and circumstances of the matter , and, thus, ought to be reviewed
and set aside in terms of the common law and the Promotion of Administrative Justice Act 3
of 2000 (‘PAJA’).
[2] The review is opposed by SARS mainly on the ground that BLS is liable in its role as
an agent in terms of section 99(2) of the CEA as the impugned goods are deemed to have been
diverted instead of being exported as declared. SARS, also, advanced grounds of a preliminary
nature, as would appear below.
[3] The application came before me as a specially allocated motion . Mr JM Barnard
appeared for BLS and Mr JA Meyer SC appeared for SARS . This judgment was reserved , but
regrettably it is handed down much later than initially intended .
Relevant aspects of the customs clearing process for goods to be exported after landing in
South Africa
[4] The essence of the dispute between the parties relate to the role played or which ought
to have been playe d by BLS, as a clearing agent, in respect of the customs clearance for the
1 Par [56] below for the meaning of a ‘ licen sed clearing agent ’ and ‘registered agent’.
2 Pars [17]-[18] below for SARS’ letter of demand (‘LOD’).
3
export of the impugned goods. It is therefore important for the process of ‘ customs clearance ’
to be highlighted.
[5] The process was explained by the Supreme Court of Appeal (‘ the SCA’) in
Commissioner of Customs and Exercise v Container Logistics (Pty) Ltd; Commissioner of
Customs and Exercise v Rennies Group Ltd t/a Renfreight3 as follows:
What is known in ordinary language as 'customs clearance', is referred to in the Act
as 'due entry'. Within a prescribed period after goods are imported the importer is
required to make due entry thereof in the prescribed form. This is done by submitting
a bill of entry containing particulars, inter alia , of the goods in question and the
purpose for which they are being entered, to the Controller (an official designated by
the Commissioner for a particular area). At the same time, unless the Controller
allows a deferment, the duties due on the goods must be paid. If the Controller is
satisfied , a release order is issued. Goods entered for home consumption are
presumably released without further ado; what happens to them thereafter does not
concern us. Goods destined for a neighbouring country may be entered either for
removal in bond (s 18) or for storage in a customs and excise warehouse (s 18A)
whence they may later be removed upon due entry for export. In either case, if they
are destined for a place beyond the borders of the common customs area, there is an
immediate liability to pay the dut y but actual payment thereof is conditional upon it
being proved to the satisfaction of the Commissioner that the goods have been duly
taken out of the area. If proof is furnished within the prescribed time, the liability
ceases; if not, the duty is payabl e on demand. Goods removed in bond or for
export from a customs and excise warehouse may not be diverted without the
permission of the Commissioner to any destination other than the one declared on
entry.4
[6] SARS , in papers before the Court, has actually paraphrased the process for a clearing
agent to remov e bonded goods from the warehouse for export.5 The narration appears to be
criticised by BLS on the basis that there is no proof that the process set out was the applicable
process at the relevant time and that the process set out does not appear to correlate with
sections 18 and 18 A of the C EA and the applicable rules . But, I do not consider the criticism
fair and justified , more so , since BLS doesn't state what it considers to have been the correct
3 Commissioner of Customs and Exercise v Container Logistics (Pty) Ltd; Commissioner of Customs and
Exercise v Rennies Group Ltd t/a Renfreight 1999 (3) SA 771 (SCA) (‘ Container Logistics ’) concerning
decisions by the Commissioner under s 99(2) (a) of the C EA render ing the respondents , as clearing agents ,
liable for obligations of their principals for unpaid customs duties and other charges in respect of goods
which landed in Durban and cleared for export to Mozambique.
4 Container Logistics at par [10].
5 Answering Affidavit (‘ AA’) pars 54-56, CaseLines (CL’) C369-C370.
4
process at the time . BLS says it h as been operating since 1999 as a clearing agent and, therefore,
one wouldn’t be unreasonable to expect it to alert the Court of anything which may be amiss
in SARS’ description of the process. More so , since BLS considers the facts and nature of the
dispute in Container Logistics to be similar to those in this matter . But nothing really turns on
this.
Background
[7] It is necessary to briefly set out some facts in the background to the matter or dispute
between the parties. What appears below is common cause between the parties or not
dispositively disputed by the affected party , otherwise the areas of dispute are pointed out.
[8] On 09 October 2015 , BLS prepared and submitted for processing a SAD500 export
declaration form or a ‘bill of entry ’6 through the Johannesburg Customs Office of SARS for
purposes of the release for movement of imported goods compris ing 782 bales of men’s t -shirts
from Durban to the warehouse of an entity called Clearline Clearing and Logistics (‘Clearline ’)
in Johannesburg . The original bill of entry to enter the goods into the bonded warehouse of
Clearline had been done by an entity called SMT Clearing . The documents were f urnished to
BLS through a local entity called Atlantic Impex. The bill of entry was to obtain authori sation
to remove the goods from the bonded warehouse of Clearline to be exported through the
Beitbridge border post to Lusaka, Zambia . According to SARS the clearing instructions were
actually from a certain Mr Martin Ngwenya , acting on behalf of Intanet Investment Limited
(Lusaka ) (‘Intanet’) , although given on a pro -forma Atlantic Impex document . Intanet was the
consignee of the goods .
6 Section 1 of the CEA defines a ‘bill of entry’ as including ‘any SAD form, except as otherwise provided
in any Schedule, rule or the Schedule to the rules’.
5
[9] BLS, still on 9 October 2015 , populat ed some specific documents7 by making entries
on SARS’ Electronic Data Interchange (‘EDI’) system and submitted same to SARS. On 12
October 2015, SARS’ Customs Tactical Intervention Unit (‘TIU’) detained the goods under
section 88(1)(a) of the CEA. On 13 October 2015 , BLS says it received from SARS per the
EDI (or noted same ) the authority to release the goods from the warehouse for export ation .
[10] On 15 October 2015, following an inspection , the TIU noted a discrepancy in the
number of bales declared on the bill of entry in that one additional bale (of 360 pieces of t -
shirts) had not been declared. The TIU addressed a letter on 19 October 2015 to Butbro
Products Trading CC (‘Butbro’) , the exporter8 of the goods, informing it of TIU’s findings . In
response Butbro effected a voucher of correction (SAD504) on 20 October 2015.
[11] On 22 October 2015 , the TIU - determined to deal with the matter under section 91 of
the CEA - issued to Butbro a letter of intent.9 Butbro abided by SARS ’s decision. On 23
October 2015, TIU informed Butbro , among others, that the DA70 notice may be processed
and, on receipt of the deposit amount and once the TIU had issued the ‘Movement under
Detention Notice ’, the goods may be moved to the warehouse of Clearline under detention.
This notice was issued on 28 October 2015 and sent to the MSC Depot in Durban, Butbro and
Clearline .
[12] On 2 November 2015, Butbro passed a SAD504 Voucher of Correction to correct the
ex-warehouse entry by amending the quantity and value of the goods. BLS says the voucher of
correction was processed by SMT and BLS was informed to amend the WE entry, which it di d.
7 FA6, excluding the CN2, namely, The documents included the Customs Declaration Form (CD1), SAD
500 -Customs Declaration Form, SAD 554 – Voucher of Correction: Export, SAD 502 - Customs
Declaration Form (Transit Control), the Customs Road Freight Manifest, SAD 505 - Customs Declaration
Form (Bond Control), and the SAD 507 - Additional Information / Produced Documents.
8 Section 1 of the CEA on the defin ition of a n ‘exporter ’.
9 SARS AA: C -365 par 36 and annexure “AA7”: C -420
6
[13] It is opportune to point out that it is SARS’ case, as would appear below, that c ontrary
to TIU’s knowledge and in direct contravention of the instructions under the TIU
correspondence and the ‘Movement under Detention Notice ’, BLS received the instruction s
from Atlantic Impex to pass an ex -warehouse bill of entry . BLS, according to SARS, knew that
the declaration in the bill of entry was for the outright export of goods originally placed under
the warehousing procedure and that the goods were destined for Zambia. This declaration and
the documents which followed, SARS contends, were not properly completed by BLS.
[14] On 17 February 2016 , SARS requested from BLS the following information regarding
the release of the goods ex -warehouse : the CN2 document , the clearing instructions and the
contact details of the person who issued the instructions to BLS. SARS also engaged with the
legal representatives of Butbro and SMT . BLS argues that t his means SARS was fully aware
of the details of Butbro and SMT , it ought to be pointed out .
[15] On 20 July 2016 , SARS issued a letter of intent to BLS and Clearline in which SARS
stated that the goods were diverted without its permission to a destination not declared on the
entry for removal in bond and that BLS and Clearline have intentionally and/or negligently
failed to export the goods to Lusaka. It is essentially SARS’ case that BLS failed to provide
documents show ing that the goods were transported via road to Zambia or that the documents
submitted by BLS purporting to confirm exportation are false.
[16] On 05 September 201 6, SARS issued a letter of demand to BLS and C learline for
payment in the amount of R3 688 458.21 by no later than 15 September 2016 . An internal
appeal process around March 2017 and request for alternative dispute resolution (‘ ADR ’) in
April 2017 and February 2018 , were to no avail. On 7 March 2018 , BLS gave notice in terms
7
of section 9610 of the C EA of BLS’ intention to institute legal proceedings . This review
application was launched on 30 June 2020.
SARS’ letter of demand
[17] As indicated above, o n 05 September 201 6, SARS directed a letter of demand (‘LOD’)
to BLS and C learline , whilst c opying Int anet.11 The LOD also refer s to oral representations
received from BLS and Clearline .
[18] The material parts of the LOD include the following :
Having considered the aforementioned e -mail letters as well as the oral
representations made to this office by both BLS and Clearline please be advised as
follows:
…
8. In light thereof, the goods were diverted without permission of the
Commissioner to a destination other than the destination declared on the entry
for removal in bond and you may have intentionally and/or negligently failed
to export the goods from South Africa to Lusaka.
…
LEGAL APPLICATION
…
7. Based on the above , the goods are deemed to have been dealt with contrary to
the provisions o f Section 87 of the Act and are therefore liable to forfeiture.
. …
10. In the circumstances, it is considered that Sections 18 A(2), 18A (3) 18A (9),
19(7), 19(8) and 2 0(4)bis read with the relevant Rules th ereto have been
contravened which may constitute offences as described in terms of Section
80(1) (c) and (o) and Section 83 of the Customs & Exercise Act, Act No. 91
of 1964 …
Summary of Liability
In light of the aforementioned and based on the available evidence in our possession ,
you are liable for payment of the following amounts:
Customs Duty R 973 861.20
Value Added Tax * R 469 617.54
Interest On Value Added Tax * R 33 881.47
VAT Penalty in terms of section
39(4) read with section 2 13 of
TAA * R 46 962.00
Section 86(2)(a) deposit R 2 164 136.00
Total R 3 688 458.21
The a forementioned sum of R 3 688 458.21 should reach this office on or before the
2016 -09-15, failing which action will be taken …12
10 Par [ 51] below for a reading of s 96 of the CEA.
11 Founding Affidavit (‘FA’) annexure ‘FA1’, Caselines (‘CL’): C54 -C61.
12 FA1, CL: C54 -C59.
8
[19] BLS’ internal administrative appeal , as indicated above, was unsuccessful and the ADR
process did not consummate to avoid this review application .
Condonation for the late institution of the review proceedings
[20] The review application was brought late. This is common cause. The period of the delay
is approximately sixteen months late, c ounting from 5 February 2019 to 30 June 2020. The
former represents the first day after the lapse of one year after the ADR process and the latter
the date on which BLS issued the review with the registrar of this Court. No doubt the review
was instituted beyond the prescribed 180 days for judicial reviews in terms of PAJA13 and
beyond the one year from the date of which the cause of action arose in terms of section 9614
of the CEA .
[21] BLS seeks condonation of the non -compliance. BLS did request SARS to grant an
extension of the one year period in terms of the CEA .15 BLS blames a change in its legal
representatives over the period of the delay and the failure of the settlement negotiations or
ADR process with SARS . SARS considers t he reasons advanced by BLS for the delay as
irrelevant to the exercise of discretion by this Court in terms of section 96(1)(c)(ii) ; not
sufficiently compelling or exceptional to justify condonation against prejudice on the part of
SARS , and do not amount to good cause under section 96(1)(c)(i) of the CEA . Notably, the
interests of justice dictates that there be finality of dispute s, especially given the considerable
length of the delay , it is also argued on behalf of SARS. SARS urges the Court to decline
condonation .
[22] I have noted the submissions for and against the granting of condonation. I agree with
SARS that finality of disputes is paramount especially in the environment in which SARS
13 Section 7(1), read with s 6(1), of PAJA.
14 Par [ 51] below for a reading of s 96 of the CEA.
15 Section 96(1)(c)(i) of the CEA .
9
operates. But the period of delay i s not unreasonably long and even if it is I do not detect any
irremediable prejudice to SARS. Therefore, I will grant condonation in the interests of justice.
Notice of motion , its subsequent amendment and the objections by SARS
[23] The original notice of motion prefacing B LS’ founding papers stated, in the main, the
relief sought by BLS as being in respect of the SARS’ decision to hold BLS liable for customs
duty and other charges as borne by the LOD dated 5 September 2016 .16
[24] BLS, subsequently, amended the original notice of motion in order to seek relief ,
mainly, as follow s:
1. The decision of the Respondent dated 5 September 2016 in terms of which
customs dut y, VAT, VAT penalties, interest and forfeiture are demanded , is
reviewed and set aside;
2. The decision of the Respondent in response to the Applicant's internal
administrative appeal dated 9 March 2017, is reviewed and set aside;
3. The decision of the Respondent in response to the Applicant ’s application for
alternative dispute resolution dated 5 February 2018, is reviewed and set aside;
4. The decision of the Respondent to terminate settlement negotiations dated 5
December 2018, is reviewed and set aside; and
5. The decision of the Respondent to refuse to set aside the LOD dated 5
December 2018, is reviewed and set aside;
6. Condonation is granted in respect of the requisite periods in the Promotion of
Administrative Justice Act, 3 of 2000 and section 96 of the Customs and
Exercise Act, 91 of 1964, in the event that the Respondent does not agree to
the extension of therefore set periods;
7. The Respondent is ordered to pay the costs hereof and in the event of the
Respondent opposing the application the Respondent be ordered to pay the
costs on the scale of attorney and own client …17
[25] SARS contends that the relief sought (against the decisions set out in prayers 3 to 5 of)
the amended notice of motion is not properly before this Court. SARS argues that the
amend ment to the notice of motion failed to comply with the jurisdictional fact under section
96 of the CEA. The material brought by the amendment w as not included in BLS’ pre -litigation
16 Notice of Motion dated 26 June 2020, C L B1-B2.
17 Amended Notice of Motion dated 19 October 2020, C L C1-C2.
10
written notice .18 The amended notice of motion strayed beyond the ambit of the pre -litigation
notice by BLS , which only sought to review SARS’ decision(s) surrounding the LOD of 5
September 2016. Now the amended notice of motion includes decisions relating to the internal
administrative appeal and the ADR application. BLS was aware of the latter decisions of
September 2016 and April 2017 , respectively, but excluded them from the pre -litigation notice
delivered in February 2018. Section 96 of the CEA is aimed at preventing prejudice on the part
of SARS by giving it ‘notice of judicial proceedings contemplated against SARS to enable
SARS to prepare and plead its defence ’,19 including to investigate claims and assess its options
as to accept ance, reject ion or settle ment of any claim before being embroiled in litigation at the
public expense.20
[26] I do not consider the relief relating to the ADR process, the terminat ion of th e settlement
negotiations and the refusal to set aside the LOD to constitute decisions capable of independent
determination from the main relief in the original notice of motion on the potential liability of
BLS for the customs duty and other charges, referred to above. In my view, the disposal of the
latter is equall y dispositive of the former. Therefore, I don’t consider the inclusion of the
additional relief in the amended notice of motion to be prejudic ial to SARS and would consider
it for purposes of the outcome of this application.
Record of the review proceedings
[27] BLS laments the condition of the record of proceedings sought to be review ed filed by
SARS. According to BLS some documents have not been included , such as the detention
notice ; the actual removal of the goods from the warehouse and export documentation , and
how the Zambia clearance documentation came about. And the documents relating to SARS’
18 Par [1 6] above.
19 Dragon Freight (Pty) Ltd and others v Commissioner for South African Revenue Service and others (South
African Clothing and Textile Workers Union as Intervening Party) [2021] 1 All SA 883 (GP) [56].
20 Mohlomi v Minister of Defence 1997 (1) SA 124 (CC) [9].
11
engage ments with entities and persons , such as Butbro , Atlantic Impex, Clearline and SMT are
not disclosed as part of t he record . Also , the record is silent when it comes to the substantiation
of the allegation of falsity and invalidity of the acquittal documents .21 Consequently, b oth BLS
and this Court are not enabled to fully assess the lawfulness of the decision -making process , it
is argued on behalf of BLS .22
[28] SARS rejects BLS’ criticism . The record , according to SARS, does not have to include
documents not relevant to the decision of 5 September 2016 (i.e. relating to the LOD ), such as
those to do with the relief sought in terms of the amended notice of motion . SARS argues that
the record comprises all documents and information before SARS at the time the decision was
made and the disclosed documents shed light on the decision -making process and factors
considered by the decision -maker.23 SARS , also, considers the alleged failure on its part to
obtain information from the Zimbabwean or Zambian customs authorities as outside of its
statutory obligation s under the CEA .
[29] I agree. The documents disclosed appear to me to be sufficient for the review. This is
so despite my decision above to include the relief sought in terms of the amended notice of
motion. A challenge of this nature is always effective when pursued earlier in terms of the rules
of practice of this Court to compel the desired compliance, rather than belatedly as part of relief
to dispose of a matter. Also, I searched in vain for specific aspects in BLS’ case which it is
contended by BLS will be affected b y the allegedly omitted material.
21 AMI Forwarding (Pty) Ltd v Government of the Republic of South Africa (Department of Customs and
Exercise) 2010 JDR 0505 (SCA) [33].
22 Democratic Alliance v Acting National Director of Public Prosecutions 2012 (3) SA 486 (SCA) [37];
Democratic Alliance v President of the Republic of South Africa 2017 (4) SA 253 (GP) [24]; Helen Suzman
Foundation v Judicial Service Commission 2018 (4) SA 1 (CC) [13]. See also DE van Loggerenberg,
Erasmus: Superior Court Practice (Service 23, Jutastat e -publications May 2024) RS 23, 2024 at D1 Rule
53-3.
23 Helen Suzman Foundation v Judicial Service Commission 2018 (4) SA 1 (CC) [17].
12
BLS’ grounds of review
[30] BLS, essentially, seeks that SARS’ decisions be reviewed and set aside , on the grounds
that: (a) there is no legal and factual basis to hold BLS liable for the amount claimed by SARS;
(b) BLS only acted in its capacity as a clearing agent on instruction of Atlantic Impex in respect
of a limited and defined mandate ; (c) any potential liability ceased in terms of the provisions
of section 99 (2) of the CEA ; (d) SARS is acting unreasonably, irrationally and f ailed to apply
its mind to the relevant legal provisions, facts and circumstances ; (e) this is a common law
review application ;24 (f) the conduct breaches the legality principle and is also review regarding
the questionable validity of the conduct ; (g) the conduct also constitute administrative action
and, thus, also falls within the ambit of a review in terms of PAJA .
[31] SARS criticises the BLS’ grounds of review as only restat ing the ground s of review as
set out in section 6(2) of PAJA and as lacking substantiat ion by way of facts. This is in addition
to lamenting the additional grounds introduced by the amend ed notice of motion , dealt with
above . I agree that some of the grounds do not constitute aspects of the review capable of
particular attention but general standards or yardsticks against which the impugned decisions
are to be judged.
BLS’ case (including submissions)
General
[32] According to BLS it ‘is a well -established clearing agent providing forwarding and
clear ing services to clients both domestically and internationally ’ and has been registered and
licen sed with SARS as a clearing agent since January 1999. It conduct s business from
Morningside, Durban .
24 Container Logistics at par [20]-[21]. See also Pharmaceutical Manufacturers Association of SA and
Another: In Re Ex Parte President of the Republic of South Africa And Others 2000 (2) SA 674 (CC) [33],
[44] and Merafong City v Anglogold Ashanti Ltd 2017 (2) SA 211 (CC) [143] -[144] .
13
[33] To recap : BLS seeks the review and setting aside of the decision taken by SARS to hold
it liable for customs du ty, VAT, V AT penalties, interest and forfeiture in the amount of around
R3 688 458.21 .25 The dispute relates to good s which were exported (according BLS) or were
to be exported , but diverted (according to SARS). The amount demanded by SARS represents
the liability SARS imputes to BLS for its role as a licen sed clearance agent . According to
SARS , BLS is liable for the obligations of its princip al in accordance with the provisions of
section 9926 of the CEA. The material issues in the background are summarised above.27
[34] BLS’ case is that the material goods were exported by road exiting at t he Beitbridge
border into Zimbabwe – in transit - and then arriving in Lusaka, Zambia. In other words, the
goods were imported into South Africa with an intention to export them; were entered into a
bonded warehouse under cover of bill of entry submitted to SARS by SMT, another clearing
agent , and after SARS accepted and processed that entry , BLS was not subsequent ly involved.
BLS emphasises that the bill of entry was submitted to SARS , which in turn - through the EDI
- informed that the goods were released from the warehouse authorising the process to export
the goods . BLS says the latter activity effectively ended its involvement in the transaction and,
thus, SARS’ claim relates to the subsequent events . BLS emphatically contend that it only had
a limited involvement in the transaction which involvement ended with the obtaining of the
authori sation by SARS to remove the goods from the bonded warehouse of Clearline to be
exported. It was not involved in the removal of the goods from the bonded warehouse, the
transportation of the goods to the Beitbridge border, the proces sing of the goods for export at
Beitbridge or the subsequent removal in transit of the goods through Zimbabwe or the import
of the goods into Zambia .
25 SARS letter of demand, dated 5 September 2016, quoted in the material part in par [18] above.
26 Par [ 52] below, for a reading of s 99 of the CEA.
27 Pars [ 7]-[16], above.
14
[35] Also, it is BLS’ case that the evidence available clearly shows that SARS from the
outset knew that BLS had no involvement in the movement of the goods . Also, BLS did not
know about the detention of the goods by SARS and the movement under detention notice
issued by SARS’ TIU although w idely circulated , there was no notice to BLS. SARS was
always in full control of and monitor ed the movement of the goods . And the subsequent
exchanges with representatives of Butbro and SMT excluded BLS, which confirm that SARS
did not consider BLS relevant regarding the shipment . Available evidence suggests that the
goods had been duly exported , it is contended on behalf of BLS .
[36] BLS also points out that its limited mandate terminated long before the alleged
falsification of documents and , thus, th ere is no merit in imput ing liability on BLS for the
obligation of its erstwhile princip al. This is inimical to an agency agreement and the provisions
of the CEA which cannot be properly interpreted to extend the functions and potential liability
of an agent post the termination of i ts mandate. There was full compli ance by BLS with the
obligations imposed by sections 18 and 18 A of the CEA . Besides any potential liability ceased
as provided by section 99 (2)(b)28 of the C EA. BLS had no knowledge of the alleged diversion
of the goods and could not have reasonably taken any more or other steps to prevent the alleged
non-fulfilment. Consequently, SARS material decisions ought to be reviewed and set aside , as
set out above.
SARS’ case (including submissions)
[37] According to SARS the dispute in this matter concerns the removal of goods detained
in terms of section 88(1)(a) of the C EA from a licen sed warehouse without permission from
SARS , the diversion and failure to duly export the goods as declared , as well as the falsification
of customs ’ acquittal documents.
28 Par [ 52] below for a reading of s 99(2)(b) of the CEA .
15
[38] The impugned decisions all flow from the decision made on 5 September 2016 in terms
of the LOD . In this decision, SARS , under section 99(2) of the C EA levied duties, VAT,
penalties, interest and forfeiture amounts against BLS, an authorised clearing agent, for the
removal and diversion of bonded goods for home consumption, without SARS ’s permission.
Section 99(2) of the CEA in effect renders agents liable for the obligations of their foreign
principals.
[39] SARS opposes the review application on various grounds. Some of these have already
been dealt with in the preliminary issues discussed above. Essentially, the only major ground
of opposition still to be assessed is SARS’ contention that BLS is liable and has not placed
evidence before the Court that it satisfies the jurisdictional facts of section 99(2) to escape
liability , as the clearing agent . Obviously, more will be said when determining the issues in the
relief sought by BLS in support of SARS ’ quest for the dismiss al of the review .
[40] The correct approach to section 99(2)(a)(i) -(iii) according to SARS is premised on the
clearance process as set out in Container Logistics , referred to above.29 Counsel for SARS
submitted that the aforesaid process is helpful in determining whether BLS’ liability has ceased
under section 99(2). Essentially, g oods removed in bond or for export from a customs and
excise warehouse may not be diverted without the permission of SARS to any destination other
than the one declared on entry. SARS says in this matter there was a failure to export the goods ,
despite the fact that a bill of entry was passed. BLS is liable under section 18A(3) of the CEA
and has not satisfied the threshold criteria set out in section 99(2)(a) to escape liability as a
clearing agent under the CEA. The onus rests on BLS to pro ve that the goods were exported.
This is made clear by section 102 of the CEA. This onus was not satisfied , it is submitted on
behalf of SARS .
29 Container Logistics at par [10], quoted in par [ 5] above.
16
[41] SARS rejects BLS’ argument that the determination ought to include whether BLS , as
a clearing agent , incurred liability under section 44 of the CEA. SARS objects to the raising of
the argument based on section 44 in the BLS’ reply on the basis of prejudic e to SARS and
seeks that it be ruled pro non scripto .30 SARS says it was deprived of the opportunity to answer
to any factual allegations and ground of review on which an argument of this kind may be
founded.31 I agree. But I also do not think that reliance of section 44 is dispositive of this matter
or having any meaningful bearing on the outcome.
[42] And, regarding BLS disput ing that i t is rational and reasonable to hold it liable under
the circumstances . But SARS contends that BLS’ case does not extend to a c hallenge of validity
of section 99(2) and , thus, the rational ity and reasonable ness of the provision were not raised
for determination by this Court. Otherwise, the issue does not constitute a distinct inquiry , but
is rather integrated in the grounds of review. SARS, nevertheless, pointed out that it is rational
and reasonable for BLS, an agent , to be held liable under section 99(2) on the basis of a
relationship of trust between SARS and licensed clearing agents. To hold otherwise would
require the physical examination of every consignment of goods imported into or exp orted out
of the Republic. This approach would render the effective administration of imports and
exports near impossible and the administration costs prohibitively high . It would also cause
delays which would seriously inhibit the flow of trade. It is thus both rational and reasonable
that section 99(2) imposes liability on a clearing agent for conduct committed by the principle.
[43] SARS refute s the contention by BLS that any liability should cease upon satisfaction
of the requirements under section 99(2) . According to SARS the obligation under section 99 is
30 Swissborough Diamond Mines (Pty) Ltd and Others v Government of the Republic of South Africa and
Others 1999 (2) SA 279 (W) at 323G .
31 Airports Company South Africa Limited v Airport Bookshops (Pty) Ltd t/a Exclusive Books 2016 (1) SA
473 (GJ) at [17] , citing Swissborough Diamond Mines (Pty) Ltd and Others v Government of the Republic
of South Africa and Others 1999 (2) SA 279 (T) 323F.
17
prefaced in section 64B dealing with the licensing of clearing agents . The latter provision
provides for the liability of a licensed clearing agent ‘in respect of any entry made or bill of
entry delivered as contemplated in section 99(2) ’.32 This ought to be considered against the
obligations of a clearing agent for customs duty set out in section 18A of the CEA regarding
goods which are exported from the customs and excise warehouse. In terms of section 18A(3)
liability for customs duty does not cease , where the goods are not out of the common customs
area,33 as envisaged in 18A(2)(a) , and where the goods have been diverted or deemed to have
been diverted , as envisaged in 18A(9). The exporter, a foreign principal, remains liable and
there is a link between the obligations of the exporter and its agent in this regard under section
18A(3).
[44] SARS argues that BLS has not escaped customs duty liability and , thus, falls within the
purview of section 18A(3). SARS further argues that BLS cannot avoid liability without BLS
satisf ying SARS that (i) it was not a party to the non -fulfilment of the material obligation (s) by
its principal or exporter ; (ii) when BLS became aware of the non-fulfilment it notified the
Controller of same as soon as practicable , and (iii) BLS took all reasonable steps to prevent the
non-fulfilment. It is SARS’ case that BLS has not proven t hese cumulative jurisdictional facts
under section 99(2) to avoid liability . The onus is clearly on BLS in this regard . I deal with this
further below .
[45] In conclusion i t is submitted that this Court should dismiss the application , as BLS has
failed to establish review able grounds . SARS seeks a cost order , including the costs of two
32 Section 64B(5) , quoted under par [50] below.
33 Section 1 of the CEA defines the ‘common customs area’ as ‘the combined areas of the Member States of
SACU’ and ‘SACU’ as ‘the Southern African Customs Union between the Republic of Botswana, the
Kingdom of Lesotho, the Republic of Namibia, the Republic of South Africa and the Kingdom of
eSwatini’.
18
counsel , one of whom is a senior counsel on scale C, where so employed , to accompany the
dismissal of the application.
Applicable legal principles
[46] I have already referred to some legal principles applicable to the determination to be
made in this matter. I consider it necessary to reflect in more detail some of the provisions of
the CEA, as reflected below.
[47] Section 18 of the CEA provides for the r emoval of goods in bond as follows :
(1) Notwithstanding anything to the contrary in this Act contained —
(a) except as otherwise prescribed by rule —
(i) the importer or owner of any imported goods landed in the Republic;
(ii) the licensee of any customs and excise manufacturing warehouse in which excisable or
fuel levy goods are manufactured;
(iii) the licensee of any storage warehouse in which excisable or fuel levy goods are stored;
(iv) the licensee or owner of any imported goods stored in a customs and excise storage
warehouse; or
(v) any clearing agent licensed in terms of section 64B appointed by such importer, owner or
licensee,
may enter such goods for removal in bond and may remove such goods or cause such goods
to be removed —
(aa) in the case of goods contemplated in subparagraph (i) , to any place in the Republic
appointed as a place of entry or warehousing under this Act or to any place outside the
Republic: Provided that any goods which are in transit through the Republic as contemplated
in subsection (1A) , may only be so entered and removed or caused to be so removed by such
licensed clearing agent; or
(bb) in the case of goods contemplated in subparagraphs (ii) , (iii) or (iv), to any
warehousing place in the Republic or to any place in any other country in the common customs
area appointed as a warehousing place for rewarehousing at that place in another such
warehouse.
…
(2) In addition to any liability for duty incurred by any person under any provision of this
Act, but subject to the provisions of section 99 (2), the person who enters any goods for
removal in bond or who may remove in bond any goods contemplated in subsection (1) and
who removes or causes such goods to be so removed, shall subject to the provisions
of subsection (3) , be liable for the duty on all goods which are so entered and so removed in
bond.
(3) (a) Subject to subsection (4) , any liability for duty in terms of subsection (2) shall cease
if -
(i) goods destined for a place in the common customs area, have been duly entered at that
place; or
(ii) (aa) goods destined for a place beyond the borders of the common customs area have been
duly taken out of that area; or
(bb) in circumstances and in accordance with procedures which the Commissioner may
determine by rule the goods have been duly accounted for in the country of destination.
(b) Any person who is liable for duty as contemplated in subsection (2) must -
(i) obtain valid proof that liability has ceased as specified in paragraph ( a) (i) or (ii) within the
period and in compliance with such requirements as may be prescribed by rule;
19
(ii) keep such proof and other information and documents relating to such removal as
contemplated in section 101 and the rules made thereunder available for inspection by an
officer; and
(iii) submit such proof and other information and documents to the Commissioner at such time
and in such form and manner as the Commissioner may require; or
(iv) ( aa) notify the Commissioner immediately if liability has not ceased as required in terms
of paragraph ( a) (i) or (ii) or valid proof has not been obtained as contemplated
in subparagraph (i) ; and
(bb) submit payment of duty and value -added tax payable in terms of the Value -Added Tax
Act, 1991 (Act No. 89 of 1991), together with such notification as if the goods were entered
for home consumption on the date of entry for removal in bond.
(c) Subject to subsection (4) , there shall be no liability for duty on any goods where such
liability was discovered as a result of, or following upon any such inspection by an officer or
a request by the Commissioner as contemplated in paragraph ( b) (ii) and (iii), respectively,
where that liability occurred on a date earlier than two years prior to the date on which such
inspection commenced or such request was made.
[48] Section 18 A of the CEA provides as follows :
(1) Notwithstanding any liability for duty incurred thereby by any person in terms of
any other provision of this Act, any person who exports any goods from a customs
and excise warehouse to any place outside the common customs area shall, subject to
the provisions of subsection (2) , be liable for the duty on all goods which he or she
so exports.
(2) (a) Subject to the provisions of subsection (3) , any liability for duty in terms
of subsection (1) shall cease if —
(i) the said goods have been duly taken out of the common customs area; or
(ii) in circumstances and in accordance with procedures which the Commissioner
may determine by rule, the goods have been duly accounted for in the country of
destination.
(b) An exporter who is liable for duty as contemplated in subsection (1) must —
(i) obtain valid proof that liability has ceased as specified in paragraph
(a) (i) or (ii) within the period and in compliance with such requirements as may be
prescribed by rule;
(ii) keep such proof and other information and documents relating to such export as
contemplated in section 101 and the rules made thereunder available for inspection
by an officer; and
(iii) submit such proof and other information and documents to the Commissioner at
such time and in such form and manner as the Commissioner may require; or
(iv) ( aa) notify the Commissioner immediately if liability has not ceased as required
in terms of paragraph ( a) (i) or (ii) or valid proof has not been obtained as
contemplated in subparagraph (i) ; and
(bb) submit payment of duty and value -added tax payable in terms of the Value -
Added Tax Act, 1991 (Act No. 89 of 1991), together with such notification as if the
goods were entered for home consumption on the date of entry for export.
(c) Subject to subsection (3) , there shall be no liability for duty on any goods where
such liability was discovered as a result of, or following upon, any such inspection
by an officer or a request by the Commissioner as contemplated in paragraph
(b) (ii) and (iii), respectively, where that liability occurred on a date earlier than two
years prior to the date on which such inspection commenced or such request was
made.
(3) If—
(a) the liability has not ceased as contemplated in subsection (2) (a); or
20
(b) the goods have been diverted or deemed to have been diverted as contemplated
in subsection (9) ,
such person shall, except if payment has been made as contemplated in subsection
(2) (b) (iv), upon demand pay —
(i) the duty and value -added tax due in terms of the Value -Added Tax Act 1991 (Act
No. 89 of 1991), as if the goods were entered for home consumption on the date of
entry for export;
(ii) any amount that may be due in terms of section 88 (2); and
(iii) any interest due in terms of section 105:
Provided that such payment shall not indemnify a person against any fine or penalty
provided for in this Act.
(4) No goods shall be exported in terms of this section —
(a) until they have been entered for export; and
(b) unless, except as otherwise provided in the rules, they are removed for export by
a licensed remover in bond as contemplated in section 64D.
[49] Section 44 A of the C EA reads as follows:
Joint and several liability for duty or certain amounts. —Subject to the provisions
of sections 36A (2) ( b) (i) and 99 (2) ( b), whenever in terms of this Act liability for
duty or any amount demanded under section 88 (2) ( a) devolves on two or more
persons, each such person shall, unless he proves that his relevant liability has ceased
in terms of this Act, be jointly and severally liable for such duty or amount, any one
paying, the other or others to be absolved pro tanto .
[50] Section 64B of the C EA provides for clearing agent licences and liability of a
licen sed clearing agent as follows in the material part :
(1) No person shall, for the purposes of this Act, for reward make entry or deliver a
bill of entry relating to, any goods on behalf of any principal contemplated in section
99 (2), unless licensed as a clearing agent in terms of subsection (2) .
…
(5) A licensed clearing agent shall be liable in respect of any entry made or bill of
entry delivered as contemplated in section 99 (2).
(6) A licensed clearing agent shall disclose the name and category of the principal
referred to in section 99 (2) on such bill of entry and if such agent does not so disclose
or makes or delivers a bill of entry where the name of another such agent or his own
name is stated as the importer, exporter, remover in bond or other principal, as the
case may be, he shall be liable for the fulfilment of the obligations imposed on such
principal in terms of this Act.
[51] Section 96 of the provides for a n otice of action and period for bringing action , as
follows , in the material part :
21
(1) (a) (i) No process by which any legal proceedings are instituted against … the
Commissioner or an officer for anything done in pursuance of this Act may be served
before the expiry of a period of one month after delivery of a notice in writing setting
forth clearly and explicitly the cause of action, the name and place of abode of the
person who is to institute such proceedings (in this section referred to as the “litigant”)
and the name and address of his or her attorney or agent, if any.
…
(b) Subject to the provisions of section 89, the period of extinctive prescription in
respect of legal proceedings against … the Commissioner or an officer on a cause of
action arising out of the provisions of this Act shall be one year and shall begin to run
on the date when the right of action first arose …
(c) (i) The … Commissioner or an officer may on good cause shown reduce the
period specified in paragraph ( a) or extend the period specified in paragraph ( b) by
agreement with the litigant.
(ii) If … the Commissioner or an officer refuses to reduce or to extend any period as
contemplated in subparagraph (i) , a High Court having jurisdiction may, upon
application of the litigant, reduce or extend any such period where the interest of
justice so requires.
[52] Section 99 of the C EA provides for the liability of an agent for obligation s imposed on
the princip al as follows in the material part:
(1) An agent appointed by any master, container operator or pilot or other carrier,
and any person who represents himself or herself to any officer as the agent of any
master, container operator or pilot or other carrier, and is accepted as such by that
officer, shall be liable for the fulfilment, in respect of the matter in question, of all
obligations, including the payment of duty and charges, imposed on such master,
container operator or pilot or other carrier by this Act and to any penalties or amount s
demanded under section 88 (2) (a) which may be incurred in respect of that matter.
(2) (a) An agent appointed by any … exporter …, remover of goods in bond or other
principal and any person who represents himself to any officer as the agent of any …
exporter, … remover of goods in bond or other principal, and is accepted as such by
that officer, shall be liable for the fulfilment, in respect of the matter in question, of
all obligations, including the payment of duty and charges, imposed on such importer,
exporte r, manufacturer, licensee, remover of goods in bond or other principal by this
Act and to any penalties or amounts demanded under section 88 (2) (a) which may
be incurred in respect of that matter: Provided that, except if such principal has not
been disclosed or the name of another agent or his own name is stated on the bill of
entry as contemplated in section 64B (6) or the principal is a person ou tside the
Republic, such agent or person shall cease to be so liable if he proves that —
(i) he was not a party to the non -fulfilment by any such … exporter, … remover of
goods in bond or other principal, of any such obligation;
(ii) when he became aware of such non -fulfilment, he notified the Controller thereof
as soon as practicable; and
(iii) all reasonable steps were taken by him to prevent such non -fulfilment.
(b) No … exporter, … remover of goods in bond or other principal shall by virtue of
the provisions of paragraph ( a) be relieved from liability for the fulfilment of any
obligation imposed on him by this Act and to any penalty or amounts demanded
under section 88 (2) (a) which may be incurred in respect thereof.
22
(c) For the purposes of the proviso to paragraph ( a) a principal outside the Republic
shall be deemed to include the consignee in a country outside the Republic shown on
a bill of entry for removal in bond of imported goods.
(3) Every shipping and forwarding agent and every agent acting for the master of a
ship or the pilot of an aircraft and any other class of agent which the Commissioner
may by rule specify shall, before transacting any business with the Commissioner,
and a ny class of carrier of goods to which this Act relates which the Commissioner
may by rule specify shall, before conveying any such goods, give such security as the
Commissioner may from time to time require for the due observance of the provisions
of this Act: Provided that the Commissioner may call for special or additional security
in respect of any particular transaction or conveyance of goods from any agent or
carrier.
(4) (a) An agent (including a representative or associate of the principal)
representing or acting for or on behalf of any exporter, manufacturer, supplier,
shipper or other principal outside the Republic who exports goods to the Republic,
shall be liable, in r espect of any goods ordered through him or obtained by an importer
by means of his services, for the fulfilment of all obligations imposed upon such
exporter, manufacturer, supplier, shipper or other principal by this Act, and to any
penalties or am ounts demanded under section 88 (2) (a) which may be incurred by
such exporter, manufacturer, supplier, shipper or other principal under this Act:
Provided that any such agent shall cease to be so liable if he proves that —
(i) he was not a party to the non -fulfilment, by any such exporter, manufacturer,
supplier, shipper or other principal, of any such obligation; and
(ii) when he became aware of such non -fulfilment, he forthwith notified the
Controller thereof; and
(iii) all reasonable steps were taken by him to prevent such non -fulfilment.
(b) Every agent of a class referred to in paragraph ( a) and specified in the rules for
the purposes of this paragraph shall register himself with the Commissioner and
furnish such security as the Commissioner may from time to time require for the due
observance of the provisions of this Act: Provided that the Commissioner may accept
such security from any association of such agents approved by him which undertakes
to give security on behalf of its members.
(c) No agent referred to in paragraph ( b) shall transact any business on behalf of any
such exporter, manufacturer, supplier, shipper or other principal after a date specified
by the Minister by notice in the Gazette unless he has complied with the provisions
of paragraph ( b).
(d) …
(5) Any liability in terms of subsection (1) , (2) or (4) ( a) shall cease after the
expiration of a period of two years from the date on which it was incurred in terms of
any such subsection.
[53] The statutory provisions quoted above are vital for purposes of addressing the issues
requiring determination in this matter, to which I turn, next.
Issue s for determination
[54] Some of the issues have already been discussed above. The following are the issues
remaining f or determination to dispose of this matter : (a) whether the demand by SARS for
23
payment by BLS in the amount of R3 688 458.21 in respect of liability for customs duty, value
added tax (‘VAT’), penalties , interest and other charges associated with the ‘exportation’ of
goods should be set aside; (b) the role played or which ought to have been playe d by BLS, as
a clearing agent, in respect of the customs clearance for the export of the impugned goods ; (c)
were the impugned goods removed in bond or for export from a customs and excise warehouse
and diverted without the permission of SARS to a destination other than the one declared on
entry for removal in bond ; (d) did the involvement of BLS in the transaction end upon recei pt
– through the EDI – of the authority to release the goods from the warehouse for export ation ;
(e) were the CN2, road manifest and the customs clearance documents which reflect Zimbabwe
Revenue Authority date stamp of 10 October 2015 and the Zambian Revenue Authority
Clearance document that BLS forwarded on 15 August 2016 which reflect s the Zambian
Revenue Authority stamp of 15 October 2015 false and/or invalid documents , and (f) is BLS,
as an agent on behalf of Intanet, the principal , liable for all obligations imposed on its principal
in terms of section 99(2) of the C EA.
[55] The issues above are interlinked and in some respect repetitive. They have been only
identified to highlight their existence, but the discussion would – in some respects – feature
blended issues, as borne by the self -explanatory subheadings utilised. Repetitions may be
unavoidable in some respects.
A registered agent and a licenced clearing agent
[56] The CEA and the Customs and Exercise Rules, 1995 (‘the Rules’) do not directly define
the reference ‘clearing agent ’. But from the perspective of SARS ‘[a] ny person (excluding a
registered agent) who lodges a Customs Clearance Declaration (CCD): …[f] or reward on
behalf of another Customs Client type; or … [p] rovides a service that includes the clearance of
goods (e.g. Licensee of a Customs warehouse making CCD on behalf of the importer, exporter
or owner of the goods) must license as a Customs clearing agent in terms of Section 64B of the
24
Act’.34 Section 64B of the CEA , quoted above, provides for clearing agent licences and liability
of a licen sed clearing agent .35 Further, according to SARS there is a further category of
‘registered agent ’, namely a person (individual or juristic persons) located in South Africa to
act on behalf of a foreign principal ’.36 Also , according to SARS a ‘registered agent’ and what
is referred to as a ‘licensed clearing agent’ are not the same.37 But the latter may become the
former . A registered agent accept s nominations by foreign principal s in which the functions
(i.e. importer, exporter or remover of goods in bond) to be fulfilled on behalf of the foreign
principal are indicat ed.38
[57] According to BLS, in the context of this matter , it played the role of a ‘ clearing agent ’
and Atlantic Impex that of a ‘ registered agent ’. BLS says it merely carried out the instruction
of Atlantic Impex. A clearing agent , BLS points out, is an agent in the normal sense of the
word, licen sed in terms of the CEA to fulfil a specific function for its princip al. BLS says that
in the process of customs c learance the specific action would be to obtain approval from SARS
regarding something provided for in the CEA.
[58] I suppose in the above context of the above analogy, Atlantic Impex would also be the
principal and BLS the agent. But, BLS dissects the situation even further. It accords a further
meaning to ‘ clearing agent ’: a special agent engaged by the principal for a specific limited
purpose for completi on and submi ssion of customs clearance document s for approval . BLS,
says the authority of the agent is limited to th e aforesaid function which is performed for a
reward or fee.
34 https://www.sars.gov.za/customs -and-excise/registration -licensing -and-accreditation/clearing -agents/#elementor -
toc__heading -anchor -0> accessed 1 May 2025.
35 Par [55] above for a reading of s 64B of the CEA.
36 https://www.sars.gov.za/customs -and-excise/registration -licensing -and-accreditation/registered -agent/#elementor -
toc__heading -anchor -0> accessed 1 May 2025.
37 Ibid.
38 Ibid.
25
[59] SARS labels the distinction urged upon by BLS to be erroneous for purposes of liability
under sections 18A and 99 of the CEA as these provisions impose liability on a person who is
proven to have remove d goods from a customs warehouse to an area outside the common
customs area and on any agent for obligations imposed on a principal , save where the liability
has cease d or is excluded under the CEA. SARS says neither of these statutory exclusion s
applies to BLS .
[60] I consider it to be common cause that BLS was involved in this matter as a licen sed
clearing agent or clearing agent . So far there is no connotation of liability in the aforesaid label.
Role of a clearing agent in respect of the customs clearance and BLS’ conduct
[61] There is not much by way of divergence on what BLS did in the matter. The areas of
dispute are regarding what BLS ought to have done or not done . BLS prepared the XE entry
online using SARS’ EDI system by populating the material documents (i.e. excluding the CN2
and included the customs declaration )39 submitting them to SARS. BLS says the documents
reflected Intanet as the consignee and, thus, BLS did not act for the exporter, Butbro. This,
BLS argues, constituted compliance with sections 64B(6) and 99(2)(a) , ostensibly regarding
the duty placed on a licensed clearing agent to disclose the name and category of the principal .40
[62] BLS says that it appears that the actual exportation of the goods was done by Intanet,
the consignee according to BLS , but according to SARS the ‘true principal’ of BLS disclosed
in the various bills of entry. SARS points out that BLS was instruct ed by Mr Martin Ngwenya ,
acting on behalf of Intanet . Atlantic Impex , according to SARS, only provide d its document
for communicat ion to BLS without any perceivable interest in the matter . Atlantic Impex could
not be the principal in the matter as it had no customs procedure to instruct BLS on, it is argued
on behalf of SARS . It is further pointed out on behalf of SARS that, an export involves only
39 Footnote 7 above.
40 Pars [ 50] and [ 52] above for a reading of ss 64B(6) and 99(2)(a), respectively.
26
two parties , namely, the exporter and the foreign consignee and, thus, logic ally a clearing agent
can only act on behalf of either of them . Consequently, either the exporter or the foreign
consignee would be the principal of the agent .
[63] But SARS says no proof of export of the goods was provided and, thus, the goods were
deemed to have been diverted in terms of section 18A(9)(b). Also, SARS says b ased on the
facts , BLS would be liable even if its true principal was Atlantic Impex , although Atlantic
Impex was not disclosed in the various bills of entry (as prescribed by sections 64B(6) and
99(2)(a)) .
[64] SARS says i t is common cause that BLS , as the licensed clearing agent , did not
complete the CCD forms correctly and omitted important information that would have enabled
BLS and SARS to track the goods diverted from warehouse detention. Had BLS taken these
reasonable steps in completing the forms, SARS would not be reliant solely on the say -so of
the parties. The lack of oversight facilitated the diversion of goods from detention and,
thereafter, from the common customs area.
[65] The assertions by SARS are denied by BLS. In the main, BLS says what it did was
proper as confirmed by the release granted by SARS in respect of the goods. BLS had no
obligations beyond that as its mandate had terminated. I deal with the latter issue in detail under
the next subheading.
When does the involvement or role of a clearing agent ends (including BLS’ case of limited
mandate )
[66] BLS further argues that any liability should cease upon satisfaction of the requirements
under section 99(2) . Section 99(2)(a) provides that the liability of an agent ceases if the agent
furnishes proof that it was not a party to the non -fulfilment, that it notified the Controller of the
non-fulfilment as soon as practically possible after becoming aware thereof, and that it took all
27
reasonable steps to prevent the non-fulfilment . But the latter does not find application where
the principal is ‘a person outside the Republic ’.41 A consignee outside the Republic shown on
a bill of entry for removal in bond of imported goods is deemed to be ‘a person outside the
Republic’ .42 From what is stated above, it is clear that BLS’ true principal was Intanet . I agree
with SARS that the facts of this matter show that Intanet as the exporter and a foreign principal
remains liable. The refore, BLS, as Intanet’s agent also bears the customs duty liability.
[67] It is BLS’ case that its mandate in the transaction or process was fulfilled and
relationship with the principal terminate d when the clearance and agency fee was paid in the
amount of R650 around 8 December 2015 . BLS, also says that, the quantum of the fee received
confirms the limited nature of its mandate and services it was engaged for . It received no further
or other instruction in respect of th e shipment , including for the transport ation of the goods to
the border and the processing of the goods for export at the border. Therefore, it is erroneous
and both in fact and law for SARS to assume that the provisions of the CEA extends the
agent /princip al relationship .
[68] On the basis of what appears above, I agree with SARS that the customs duty liability
of BLS has not ended.
Where the acquittal documents falsified and/or invalid , and w here the impugned goods
diverted
[69] The validity of the documentation relating to the processing of the goods for export
purposes through the Beitbridge border and importation into Zambia (‘the acquittal
documents ’) is questioned by SARS . But BLS, on the other hand, contends that SARS does
not have powers to deem documentation falsified or fraudulent as it purported to do . At most ,
41 Section 99(2)(a).
42 Section 99(2)(c).
28
SARS may establish such falsification o r fraud in the discharge of its onus to the Court .43 In
any way, any falsification of the documents would have occurred after BLS’ limited mandate
was terminated , BLS concludes. I have already ruled on the issue of limited mandate above.
[70] BLS, further contends that, apart from the discrepancies between the dates of the st amps
of the foreign revenue authorities on the initial acquittal documents , which later were replaced
with documents bearing stamps with different dates , SARS did not provide any evidence
regarding the falsity of the CN2 document or any link to or knowledge of BLS regarding the
alleged falsity. The evidence, BLS contends , show and confirm importation of the goods into
Zambia . This is similar to what occurred in the decision of Container Logistics , it is contended
by BLS .
[71] SARS deemed the goo ds to have been diverted, m eaning that duty, VAT and penalties
became payable in respect to the shipment . The ordinary process to be followed by a clearing
agent when removing bonded goods from the warehouse for export is alluded to above and set
out in the answering affidavit.44 The process involves a declarant complet ing the customs
declaration form on the EDI interface ; submi ssion by the declarant to the customs officer at the
border , hard copies of some forms, and generation by the customs officer of a status release
form for th e release of the consignments.
[72] SARS says that it is importan t that a declarant, such as BLS, complete the material
forms accurately and fully on the EDI interface to enable all parties involved in the movement
of bonded goods to track the goods in consignment and to receive update notifications through
the EDI interface of the authorisations granted for the movement of the goods or their further
detention. It is said that the EDI interface functions in tandem with the SARS Entry/Exit system
43 AMI Forwarding (Pty) Ltd v Government of the Republic of South Africa (Department of Customs and
Exercise) 2010 JDR 0505 (SCA) [33].
44 AA par 54 – 56, CL C-369-370.
29
(‘SSM ’) utilised at the border post. The latter system allows the declarant and SARS alike to
track in real time the exit of the goods from the country.
[73] Where goods are diverted SARS may invoke the remedies under sections 44, 87 and
99(2) of the CEA to hold liable any entity which acted in a manner which remove d the goods
from the control of Customs or SARS .45
[74] It is common cause that the initial acquittal documents submitted to SARS indicated
the goods as having crossed Beitbridge border post into Zimbabwe on 10 October 2015 . The
documents were corrected by subsequent identical acquittal document s saved for the dates
reflected there on which indicate d the goods having left South Africa on 6 November 2015 ;
entered Zimbabwe on 7 November 2015 and Zambia on 15 November 2015. SARS says despite
the two versions in terms of the documents its SMM system and EDI interface still reflect that
the goods are ‘unacquitted ’ and yet to arrive at the border to exit South Africa. This is also
borne by other records such as security registers at the Beitbridge border on the truck or vehicle
indicated as having ferried the goods across.
[75] BLS declares having no knowledge of the alleged diversion of the goods and could not
have reasonably taken anymore or other steps to prevent the alleged non -fulfilment. Section
18A(3) provides that where the goods have been diverted or deemed to have been diverted as
contemplated under subsection (9), liability for customs duty does not cease .
[76] I do not think that there is any credible basis on which BLS can assert that the two sets
of acquittal documents are valid. The reason for replacement of the earlier set was due to the
fact that they couldn’t be relied upon and, thus, were invalid. The se cond set can also not be
valid against the unrefuted evidence as borne by SMM system and EDI interface that the goods
45 Capri Oro (Pty) Ltd and Others v Commissioner of Customs and Excise and Others [2002] 1 All SA 571
(A) [20] citing with approval, Secretary for Customs and Excise and Another v Tiffany’s Jewellers Pty
(Ltd) 1975(3) SA 578(A) on the implications of s 87 of the CEA.
30
are ‘unacquitted ’ and yet to arrive at the border to exit South Africa. All these lead me to accept
SARS contention that the impugned goods have been diverted .
Liability of BLS as an agent for obligations imposed on its principal
[77] I have found above that SARS was correct in deeming the goods to have been diverted.
But, BLS may avoid customs duty liability in terms of section 99(2) of the CEA by establishing
the cumulative jurisdictional facts under section 99(2) . SARS contends that BLS has not
satisfied all the criteria under the provision .46
[78] Section 64D of the CEA proscribes the remov al of goods for export under section 18A
by an unlicen sed remover.47 SARS says BLS failed to comp lete the necessary information on
the EDI interface and, thus, facilitated the removal and diversion of the goods declared for
export and its plea of ignorance is contrived to escape liability under section 99(2). But, BLS
has failed to establish meritorious reliance on section 99(2) to escape liability . Therefore , the
current review before this Court is also without merit .
[79] Based on the facts set out above , SARS submits that the liability for payment of the
duty and other charges on the part of Intanet , as the principal disclosed in the various bills of
entry , did not cease by virtue of the provisions of section 18A(1) and 18A(3)(b)) , and as Intanet
is a foreign principal (as provided for in section 99(2)(a) read with (c)) , BLS remained liable
for payment of the duty and other charges demanded by SARS in terms of section 64B(6) and
section 99(2)(a).
[80] I agree that BLS has not met the onus under section 99(2) that it notified SARS on
becoming aware of the diversion of goods or that it took all reasonable steps to prevent the
46 Container Logistics [15]-[17].
47 See also s 18A(4)(b) of the CEA.
31
non-fulfilment of the customs obligations. In fact, it is a finding of the Court that the improper
preparation of the material documents by BLS facilitate d the current turn of events.
Conclusion and co sts
[81] Based on what appears above, I could not find anything to suggest that SARS made an
error of law, acted with bias, took the impugned decision s for an ulterior motive or purpose, or
that relevant considerations were ignored and irrelevant considerations were taken into
account. The demand by SARS or assertions that BLS is l iable is devoid of unreasonable ness
and irrational ity.
[82] Against the backdrop of this outcome, I do not consider it warranted to directly address
the other so -called decisions to do with the ADR process, the terminat ion of th e settlement
negotiations and the refusal to set aside the LOD . I consider the finding made to be dispositive
of these ‘decisions’ .
[83] It has been submitted on behalf of BLS that the w ell-established Biowatch48 principle
ought to be applied in the event the outcome is against BLS. On the other hand SARS has
persisted in its case for a cost order against BLS in the event of such outcome. I do not consider
application of the Biowatch principle justified by the facts of this matter and the issues
determined.
[84] Therefore, I will dismiss the application and hold BLS liable for payment of costs of
the application , including the costs of two counsel , one of whom a senior counsel on scale C,
where so employed . I consider the aforesaid scale of counsel appropriate and justified .
Order
[85] In the p remises, I make the order, that:
48 Biowatch Trust v Registrar Genetic Resources and Others 2009 (6) SA 232 (CC) .
32
a) the application is dismissed, and
b) the applicant shall pay costs of the application , including the costs of two
counsel , one of whom a senior counsel on scale C, where so employed .
___________________________
Khashane La M. Manamela
Acting Judge of the High Court
Date of Hearing : 12 Novem ber 2024
Date of Judgment : 12 May 2025
Appearances :
For the Applicant : Mr JM Barnard
Instructed by : VFV A ttorneys , Pretoria
For the Respondent : Mr J A Meyer SC (with previous h eads of argument by
Mr S Budlender S C and Ms S Kazee )
Instructed by : Klagsbrun Edelstein Bosman Du Plessis Inc, Pretoria