Samcor (Manufacturing) (Pty) Ltd v Commissioner for the South African Revenue Service (265/2000) [2002] ZASCA 19; [2002] 3 All SA 260 (A) (27 March 2002)

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[2002] ZASCA 19
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Samcor (Manufacturing) (Pty) Ltd v Commissioner for the South African Revenue Service (265/2000) [2002] ZASCA 19; [2002] 3 All SA 260 (A); 65 SATC 25; 2002 (4) SA 823 (SCA) (27 March 2002)

REPUBLIC OF SOUTH AFRICA
IN THE SUPREME COURT OF
APPEAL
OF SOUTH AFRICA
Reportable
Case number: 265/2000
In
the matter between:
SAMCOR
(MANUFACTURING) (PTY) LTD
Appellant
and
THE
COMMISSIONER FOR THE SOUTH
AFRICAN
REVENUE SERVICE
Respondent
CORAM
:
HOWIE,
MPATI JJA and HEHER AJA
HEARD
:
18
FEBRUARY 2002
DELIVERED
:
27
MARCH 2002
Determination
under s 65 of Customs and Excise Act; Commissioner requested to
amend; whether restatement of the determination a new
determination
and appealable.
___________________________________________________________________
JUDGMENT
__________________________________________________________________
MPATI
JA:
[1]
The
Customs and Excise Act 91 of 1964 (the Act) provides,
inter alia
,
for the levying of customs duty on goods that are imported into the
Republic. The amount of duty to be paid depends mainly upon
the
value of the goods so imported. Section 65 (1) of the Act reads as
follows:
“
Subject to the provisions of this Act, the value for
customs duty purposes of any imported goods shall, at the time of
entry for home
consumption, be the transaction value thereof, within
the meaning of section 66.”
In terms of s 66 (1) the transaction
value of any imported goods “shall be the price actually paid or
payable for the goods when
sold for export to the Republic, adjusted
in terms of section 67 ….”.
[2]
This
appeal concerns adjustments to the “price actually paid or payable”
to an exporter in respect of imported goods as sanctioned
by s 67 of
the Act. Section 67(1)(c) is in the following terms:
“In ascertaining the transaction value of any imported goods in
terms of s 66(1), there shall be added to the price actually paid
or
payable for the goods-
(a) …
(b) …
(c) royalties and licence fees in respect of the imported goods,
including payments for patents, trade marks and copyright and for
the
right to distribute or resell the goods, due by the buyer, directly
or indirectly, as a condition of sale of the goods for export
to the
Republic, to the extent that such royalties and fees are not
included in the price actually paid or payable, but excluding
charges
for the right to reproduce the imported goods in the Republic.”
[3]
The
appellant unsuccessfully applied before Smit J in the Transvaal
Provincial Division for an order declaring the fees and royalties
paid or payable by the appellant to two Japanese motor vehicle
companies in terms of certain agreements not dutiable in terms of
s
67 (1) (c) of the Act, and setting aside a determination said to have
been made by the respondent on 9 September 1997 to the effect
that in
ascertaining the transaction value of the relevant goods the said
fees and royalties were to be added to the price actually
paid or
payable. An application for leave to appeal was dismissed by Smit J
but granted by this Court.
[4]
The
Samcor Group of Companies (Samcor), of which the appellant forms
part, imports, assembles, manufactures, markets, sells and exports
motor vehicles, motor vehicle parts and accessories. The appellant
is the manufacturing arm of Samcor and manufactures Mazda and
Ford
motor vehicles from component parts which it imports from Japan
together with other components parts sourced locally or elsewhere.
[5]
The
history of Samcor is the following: Ford Motor Company of SA Limited
was incorporated on 29 December 1923. On 11 December 1980
it changed
its name to Ford Motor Company of South Africa (Pty) Limited and
operated under that name until 1985. Another motor vehicle
company,
Chrysler (SA) Pty Limited, was incorporated on 16 January 1959 and on
12 November 1976 changed its name to Sigma Motor Corporation
(Proprietary) Limited (Sigma). On 1 September 1984 Sigma changed its
name to Amcor Motor Holdings (Proprietary) Limited. On 7 March
1985
the business operations of Amcor Motor Holdings (Pty) Ltd and Ford
Motor Company of SA (Pty) Ltd were amalgamated and rationalised
under
a holding company, South African Motor Corporation (Pty) Ltd
(Samcor). The manufacturing operations were taken over by Ford
Motor
Company of SA (Pty) Ltd, which thereafter changed its name on a
further three occasions. It is presently registered as Samcor
(Manufacturing) (Pty) Limited. That is the appellant. The marketing
operations of Samcor were taken over by Amcor Motor Holdings
(Pty)
Ltd, which changed its name twice and is presently known as Samcor
(Marketing) (Pty) Ltd.
[6]
During
1977 Sigma took over a franchise agreement which another South
African Company, Illings (Pty) Ltd, had with a Japanese company,
Toyo
Kogyo Co, Ltd, now known as Mazda Motor Corporation (Mazda).
[7]
On
8 May 1979 Sigma concluded three related agreements with a Japanese
motor company, Mitsubishi Motor Corporation (Mitsubishi),
viz a
Manufacturing and Patent Licence and Technical Assistance Agreement,
a Distribution and Supply Agreement and a Trade Mark Licence
Agreement. In terms of the first-mentioned agreement Mitsubishi,
inter alia
, granted Sigma the exclusive licence to assemble
and progressively manufacture in the Republic, for resale in the
Republic and neighbouring
territories under the Distribution and
Supply Agreement, Mitsubishi Motor products, purchased from it in
“Knocked Down” (unassembled)
condition. Sigma was entitled to
manufacture or purchase locally, component parts, referred to as
“omissions”, which it used
with the Knocked Down component parts
to assemble or manufacture a complete motor vehicle. It would also
be furnished with technical
assistance and other benefits in
consideration of which it agreed to pay to Mitsubishi,
“
an amount of money as a fee determined for each and
every MMC [Mitsubishi Motor Corporation] motor product and omission
assembled
and/or manufactured by or for Sigma as follows:”
The agreement then dealt with the
manner of calculation of such fees. The Trade Mark Licence Agreement
is not relevant for present
purposes.
[8]
On
31 October 1979 Sigma entered into three related agreements with two
other Japanese motor companies, Mazda and C.Itoh & Co,
Ltd
(Itoh), viz a Technical Assistance Agreement, a Memorandum Agreement
and a Distributorship Agreement for Mazda CKD Vehicles.
In terms of
the Technical Assistance Agreement Mazda,
inter alia
, granted
Sigma “the exclusive licence to assemble and/or manufacture in
Territory”, being the Republic and certain neighbouring
States,
certain Mazda motor vehicles as “CKD vehicles”. “CKD” stands
for “Completely Knocked Down” and “CKD vehicles”
was defined
as
“
the motor vehicles planned and designed by [Mazda]
and assembled and/or manufactured by [Sigma] in Territory under the
rights and
technical assistance herein granted …”.
The component parts supplied by Mazda
for the assembly or manufacture of CKD vehicles came in the form of a
kit known as a CKD kit,
which did not contain all the component parts
necessary for the assembly or manufacture of a complete vehicle.
Omissions were used
with the component parts in the CKD kit in the
assembly or manufacture of a completely built up vehicle. The
exclusive right to
import Mazda component parts, spare parts and
accessories and for the resale and distribution of the CKD motor
vehicles, spare parts
and accessories was granted to Sigma in terms
of the Distributorship Agreement.
[9]
A Technical Assistance
Agreement also provided for the use, by Sigma, of Mazda’s
intellectual property such as patent, trade mark
and utility model
design rights pertaining to the CKD vehicles. Mazda also undertook
to furnish Sigma with technical assistance
which included the making
available of technical information and other data necessary for the
assembly or manufacture of the CKD
vehicles.
[10]
In terms of article 19 of
the Technical Assistance Agreement Sigma, in consideration of the
licence granted to it by Mazda, would
pay Mazda royalties calculated
as a factor of 1.15% of the FOB (Free on Board) Japan price of “one
set of all component parts necessary
for one unit of completely built
up vehicle corresponding to CKD vehicle except tyres, tubes,
batteries and paint”. It will be
noted that although Mazda did not
supply Sigma with a full set of all the component parts necessary for
one unit of completely built
up vehicle, the royalty was calculated
on the price of a full kit.
[11]
Pursuant to these
agreements Sigma embarked upon the assembly and manufacture of
Mitsubishi and Mazda motor products, marketing and
selling them. The
agreements have been replaced over the years by virtually identical
agreements between the Japanese companies
and, after amalgamation and
restructuring referred to in par 5 above, the relevant Samcor
companies.
[12]
During 1983 the
respondent requested Sigma to furnish him with the amounts of its
annual royalty payments as well as its “free
on board” imports
during the 1982 financial year. On 10 November 1983 the respondent
dispatched a letter to Sigma, the first two
paragraphs of which read
as follows:
“VALUE FOR CUSTOMS PURPOSES OF GOODS SUPPLIED BY MITSUBISHI MOTOR
CORPORATION LTD. JAPAN.
With reference to your letter NR/JM of 3 October 1983 and the
information supplied on form DA 55 you are informed that transactions
between you and the above-named supplier are, from a customs
viewpoint, not regarded as open market transactions. His prices to
you cannot, therefore, be accepted as a basis for the value for
customs purposes and must be uplifted by an average of 1%. This
figure has been arrived at by using Customs Valuation Method 1
provided for in Section 66(1) of the Customs and Excise Act, 1964,
and by adding the royalties provided for in Section 67(1)(c).
In calculating the value for customs purposes uplifts must be applied
to prices after they have been adjusted to a free on board
basis,
i.e. after freight and insurance have been deducted in the case of
CIF invoices. The costs, charges and expenses provided
for in
Section 67 of the Act must be added after the uplift has been
applied.”
A similar letter dated the previous
day was written to Sigma in relation to goods supplied by Toyo Kogyo
Co Ltd (now Mazda).
[13]
It is common cause that
the notifications of 9 and 10 November 1983 to Sigma constituted a
determination, in terms of s 65(4) of
the Act, of the transaction
value of the goods respectively imported from Mitsubishi and Mazda.
For convenience I shall refer to
both determinations as the value
determination of 9 November 1983. Section 65(4)(a), as it read prior
to its substitution by s 59(a)
of Act 53 of 1999, provided that:
“If the transaction value of any imported goods cannot be
ascertained in terms of section 66 or has been incorrectly
ascertained
by the importer, the Commissioner may determine a value,
which shall, subject to a right of appeal to the court, be deemed to
be
the value for customs duty purposes of the goods.”
Such determination may be amended or
withdrawn by the commissioner, who may issue another determination in
its stead in terms of s
65(5) of the Act. A determination by the
commissioner may be appealed against in terms of s 65(6) of the Act,
which reads:
“(a) An appeal against any such determination shall lie to the
division of the High Court of South Africa having jurisdiction
to
hear appeals in the area wherein the determination was made, or the
goods in question were entered for home consumption.
(b) Such appeal shall, subject to section 96(1), be prosecuted
within a period of one year from the date of the determination.”
Sigma did not appeal against the
determination of 9 November 1983.
[14]
In 1983 a local content
programme was in operation, which was one of various incentive
schemes introduced by the Government over the
years in an endeavour
to encourage a South African motor industry, especially the use of
local content in motor vehicles, parts and
accessories and the
concomitant reduction in foreign exchange expenditure. In terms of
the programme motor vehicle manufacturers
were entitled to a rebate
of the excise duty payable on locally manufactured motor vehicles
and component parts. It is alleged
in the founding affidavit that:
“In the circumstances the imposition by the Respondent of the 1%
uplift was of little or no practical significance to Sigma since
it
applied only to occasional imports of specified items from
Mitsubishi. Any appeal against the Respondent’s aforesaid
directives
would therefore have been of purely academic interest.”
The 1% uplift has been imposed in
respect of all subsequent Manufacturing and Patent Licence and
Technical Agreements and Technical
Assistance Agreements between
Samcor on the one hand and Mitsubishi and Mazda respectively on the
other.
[15]
Between June 1989 and May
1991 certain legislative developments took place in the country
pertaining to the calculation of excise
duty payable on imported
motor vehicle parts. It is not necessary to detail them for present
purposes. Suffice it to say that because
of an error he had made in
regard to the calculation of duty after an amendment to legislation
introduced on 30 May 1991, the respondent,
on 12 June 1996 and after
he had been approached by an accounting and auditing firm on behalf
of a number of local motor manufacturers
, gave a ruling in terms of
which manufacturers were allowed to claim back duty which they had
paid as a result of such error retrospectively
from the date of the
amendment. The respondent expressly excluded the fees and royalties
paid to Mitsubishi and Mazda by the appellant
from the benefit of the
ruling.
[16]
On 27 June 1996 the same
auditing firm made representations to the respondent on behalf of the
appellant, requesting the respondent
to make a determination in
respect of the royalty payments to Mazda. On 10 July 1996 similar
representations were made in respect
of the fees payable to
Mitsubishi. It was stated in the representations that the appellant
believed that the royalties and fees
were not dutiable as they did
not relate to any imported goods.
[17]
After further
correspondence between him and the appellant’s representatives, the
respondent eventually replied on 9 September
1997, in the following
terms:
“SAMCOR MANUFACTURING (PTY) LTD : DUTIABILITY OF ROYALTY PAYMENTS
Your representations regarding the abovementioned matter dated 13
June 1997 and 2 September 1997 refer.
After due consideration of the submissions on behalf of Samcor, the
view is held that the provisions of section 67(1)(c) of the Customs
and Excise Act, 1964, are applicable to the royalties and fees
provided for in the relevant agreement and that the said royalties
and fees must be added to the price actually paid or payable in
ascertaining the transaction value of the relevant goods.”
A request for reasons for his view
that the provisions of s 67(1)(c) were applicable to the royalties
and fees in issue in ascertaining
the transaction value of the
imported goods drew no response from the respondent. The appellant,
in line with advices it received
before the respondent’s reply of 9
September 1997, then launched an application to the Transvaal
Provincial Division for rectification
of the clauses in the
agreements which provided for the royalty payments and fees in issue.
However, the appellant withdrew the
application when the respondent
filed opposing papers. The reason for the withdrawal is stated in
the founding affidavit as follows:
“38. In view of the Respondent’s unanticipated action in opposing
the application and the fact that in terms of Section 65(6)
[of the
Act] the appeal against the determination in question had to be
prosecuted within a year from the date of the determination
viz by 8
September 1998, and as the Respondent was well aware, it would be
pointless to pursue the application.”
Consequently the proceedings in the
court
a quo
were instituted, which Martha Woolard, Samcor’s
public officer, described in the founding affidavit as “an appeal
in terms of
sub-section 65(6) read with section 96(1) of the Customs
and Excise Act 91 of 1964 … against the determination by the
Respondent
on 9 September 1997 that fees and royalties paid or
payable to two Japanese companies [Mitsubishi and Mazda] … were
dutiable in
terms of section 67(1)(c) of the said Act”.
[18]
Three defences were
raised by the respondent before the court
a quo
apart from
contesting the merits of the matter. Two of those defences were
repeated in the respondent’s heads of argument in this
Court. They
are (1) that the respondent’s letter of 9 September 1997 did not
constitute a value determination in terms of s 65
of the Act, but was
merely to the effect that the respondent stood by his value
determination of 9 November 1983 and that the contents
of the letter
of 9 September 1997, therefore, are not susceptible of an appeal in
terms of s 65(6) of the Act; and (2) that the
purpose of the appeal
was to enable the appellant to claim a refund of duties paid in
respect of the period ending 31 August 1995;
that such claim had in
any event prescribed and that the relief sought would be purely of
academic interest, were it to be granted.
Smit J found it
unnecessary to deal with these additional defences, having decided
the matter in favour of the respondent on the
merits. In this Court
counsel for the respondent did not persist in the second defence.
[19]
In giving judgment the
court
a quo
said:
“On analysing the clauses of the agreement … it is clear in my
view, that the payment of royalties is inextricably linked to
parts
and components supplied to Samcor. It is also clear that the
legislator, by inserting the words ‘directly or indirectly’
in
section 67(1)(c) of the Act, intended to include not only royalties
for which direct provision is made in an agreement but also
to
include royalties which in an indirect manner fall to be classified
as being due as a condition of sale of the goods for export.”
The court
a quo
accordingly
held that “the wording of the agreement clearly indicates that the
royalties were at least indirectly due as a condition
of sale” of
the goods.
[20]
Counsel for the appellant
attacked the learned judge’s reasoning firstly on the basis that
the words “directly or indirectly”
in s 67(1)(c) of the Act do
not qualify the words “as a condition of sale”, but rather the
words “due by the buyer”. Secondly,
counsel submitted that not
only must the royalties and fees be due directly or indirectly by the
buyer “as a condition of sale”
to qualify to be added to the
price actually paid or payable for the goods, but they must also be
paid or payable “in respect of
the goods”. These are two
distinct and separate requirements, so counsel argued. Counsel for
the respondent conceded, correctly
so in my view, that this is indeed
the position. The appellant’s counsel further argued that for the
royalties and fees in question
to be due by the buyer “as a
condition of sale”, it must appear from the relevant agreement or
agreements or otherwise that the
seller would not sell the imported
goods to the buyer unless the buyer undertook to pay such royalties
and fees. Again counsel for
respondent accepted this as the correct
test.
[21]
In the view I take of the
matter it is not necessary to deal with these pertinent issues raised
by counsel. Suffice it to say that
it does not seem to me, at least
from a reading of the agreements, that the fees and royalties were
paid or payable “in respect
of the goods”. However, I express no
firm view on the point.
[22]
In this Court counsel for
the appellant, in an attempt to counter the submissions on behalf of
the respondent that the respondent’s
letter of 9 September 1997 was
not a determination and thus not susceptible of an appeal in terms of
s 65(6) of the Act, commenced
his argument by saying that the
proceedings before the court
a quo
were not an appeal, but
rather an application for a declarator that the royalties and fees do
not fall within the ambit of s 67(1)(c)
of the Act and therefore do
not fall to be added to the price actually paid for the imported
goods in ascertaining the value of the
goods for customs duty
purposes in terms of s 66(1).
[23]
Although the appellant
sought an order “declaring” the fees and royalties in issue not
to have been dutiable in terms of s 67(1)(c)
of the Act, the notice
of motion commences by giving notice that appellant “intends to
appeal and make application to this Court”
for that order. It is
then alleged in the founding affidavit:
“The present application is an appeal in terms of sub-section 65(6)
read with section 96(1) of the Customs and Excise Act 91 of
1964 …
against the determination by the Respondent on 9 September 1997 that
fees and royalties paid and payable to two Japanese
Companies
[Mitsubishi and Mazda] in terms of various agreements with those
corporations were dutiable in terms of section 67(1)(c)
of the said
Act.”
Section 96(1) provides that no legal
proceedings shall be instituted against, amongst others, the
commissioner “for anything done
in pursuance of” the Act “until
one month after delivery of a notice in writing setting forth clearly
and explicitly the cause
of action” and other information. It is
stated in the founding affidavit that due notice “of the
appellant’s intention of
prosecuting this appeal was given to the
respondent on 7 August 1998 in terms of sub-section 96(1) of the
Act”.
[24]
In spite of these and
other clear
indicia
that what was contemplated in the
proceedings in the court
a quo
was an appeal in terms of s
65(6) of the Act, counsel for the appellant submitted that a
statement in the founding affidavit that
this “is an appeal”
could not turn what is not an appeal into an appeal. In response to
the respondent’s submission that the
peremptory notice required by
s 96(1) was lacking in respect of an application for a declarator,
counsel for the appellant argued
that the declarator was sought on
the basis of a dispute between the commissioner and the importer.
The proceedings were thus not
for anything done in pursuance of the
Act and consequently no notice was required. Further, the question
had to be asked whether
the commissioner would have conducted the
matter differently had such notice been given.
[25]
In my view, and as
counsel for the respondent pointed out, the entire proceedings were
premised on the alleged value determination
of 9 September 1997, and
it is clear that that is the basis upon which the matter was
conducted before the court
a quo
. This is evident from the
judgement of Smit J, which commences with the words:
“This is an appeal in terms of the provisions of section 65(6) of
the Customs and Excise Act 91 of 1964 … by the appellant …
.”
His order reads:
“The appeal is dismissed with
costs.”
[26]
This issue (that the
proceedings before the court
a quo
were no appeal but in fact
an application for a declarator) was not raised before the court
a
quo
, nor in the papers. It was raised for the first time during
argument in this Court. The fact that the order sought in the
notice
of motion includes a declaratory order does not change the
position. What was before the court
a quo
was in substance
an appeal in terms of s 65(6) of the Act.
[27]
As to the question
whether the respondent would have conducted the matter differently
had a notice in terms of s 96(1) of the Act
been given, an analogy
may be drawn, in my view, from a judgment of this Court in
Road
Accident Fund v Mothupi
2000 (4) SA 38
(SCA) at 53 B-C, a case
dealing,
inter alia
, with an amendment which was sought to be
introduced at appeal stage. Nienaber JA said that one of the reasons
why the amendment
should not be granted was that “one cannot be
confident that, if pleaded initially, it (the amendment) would not
have had some
bearing on the course of the trial – in the sense of
relevant matter not being explored in cross-examination nor led in
evidence”.
In the present matter the commissioner’s approach, in
my view, may well have been otherwise if the point had been raised
earlier.
[28]
Were the appellant’s
change of stance to be allowed, i.e. were the proceedings now to be
treated as an application for a declaratory
order, it would involve
unfairness to the respondent (cf
Road Accident Fund v Mothupi
,
supra
, at 54 C-D;
Paddock Motors (Pty) Ltd v Igesund
1976 (3) SA 16
(A) at 230 D-H;
Bank of Lisbon and South Africa
Ltd v The Master and Others
1987 (1) SA 276
(A) at 290 E-H). The
result would be to deprive the respondent of having the defence which
he raised considered, viz that the appellant
could not appeal against
the letter of 9 September 1997. That was a legitimate defence taken
in proceedings no one doubted was an
appeal in terms of s 65(6) of
the Act. I have expressed misgivings above as to the correctness of
the decision of Smit J on the
merits. Consequently the respondent is
entitled, as he would have been in the court
a quo
had the
merits gone against him, to a consideration of that defence. I
proceed to consider it.
[29]
In the letter of 27 June
1996, in which the respondent was requested to make a determination
in respect of the royalties paid and
payable to Mazda, reference was
made to the value determination of 9 November 1983. The respondent
was requested “to amend the
valuation determination”, which he
was empowered to do in terms of s 65(5) of the Act, “with
retrospective effect to the
date of the original ruling”. In the
letter of 10 July 1996 relating to the fees paid and payable to
Mitsubishi, he was requested
to “review the determination” (of a
1% uplift) and to “reverse the ruling with retrospective effect to
12 April 1985”. The
significance of this date is not clear from
the papers. In a letter to Samcor dated 22 March 1994 the respondent
advised that the
value determination of 9 November 1983 was still
applicable. Clearly the requests in the letters of 27 June 1996 and
10 July 1996
“to amend” and “review” the value determination
could only have referred to the value determination of 9 November
1983.
There had been no other determination.
[30]
In my view, the
respondent’s reply of 9 September 1997 did not constitute a new
determination. Nor did the respondent amend or
withdraw the
determinations which he had been asked to amend or review. There is
no indication in the letter of the formality which
one would expect
to attach to an official determination (which is apparent from the
determination made in November 1983) such as
the attaching of a
number to it for use on bills of entry and the specification of a
date from which it is to take effect. The letter
is clearly intended
to convey his refusal to amend or review the determination which he
had already made on 9 November 1983. It
follows that the contents of
his reply of 9 September 1997 were not susceptible of an appeal.
[31]
Counsel for the appellant
contended, however, that since the appellant sought declaratory
orders before the court
a quo
, the issue as to whether or not
the letter of 9 September 1997 constituted a value determination in
terms of s 65 of the Act was
academic, because the granting of the
declaratory orders was not dependent upon it. As has been mentioned
in paragraph 3 above,
in addition to the declaratory orders sought by
the appellant an order setting aside “the respondent’s
determination of 9 September
1997 …” was also sought. In view of
the fact that the letter of 9 September 1997 did not constitute a
value determination, such
an order could not be granted. This means
that the value determination of 9 November 1993 still applies.
Section 65(4)(c) of the
Act provides that any determination made by
the Commissioner “shall be deemed to be correct” and any amount
due in terms of any
such determination “shall remain payable as
long as such determination remains in force”. The declaratory
orders sought by the
appellant would be contrary to the express
provisions of the Act. They could not be granted.
[32]
It was further argued on
behalf of the appellant that the determination of 9 November 1983
pertained not to the appellant, but to
Sigma; that the letter of 22
March 1994 was a confirmation of the earlier determination and thus
not a determination binding it
and that it is accordingly entitled to
its own value determination. Not only were the determinations of
November 1983 addressed
to Sigma, but they were also in respect of
different agreements, so counsel continued. The appellant’s
history is set out in paragraph
5 above. Counsel conceded that what
were Sigma’s undertakings in terms of the original agreements are
now the appellant’s.
As has been already mentioned, the agreements
which were originally between Sigma and the two Japanese companies
have been replaced
over the years by virtually identical agreements.
Sigma’s successors, including the appellant (even if the appellant
is not strictly
a successor in title), have throughout recognized the
value determinations of November 1983. At no stage did the
appellant, or
its predecessors after Sigma, consider that because new
agreements were concluded new determinations should be made, until it
saw
an opportunity of reclaiming duty that it had paid. Even then it
did not demand a new determination, but merely requested that the
determination of 9 November 1983 be amended or reviewed. It clearly
considered itself bound by such determination. In adopting
that view
it was in any event correct in law. Upon a proper construction of s
65 of the Act a value determination by the Commissioner
is not a
directive or ruling which pertains to the person of the importer but
to the importation carried on. This is illustrated
by the
respondent’s requirement in the letter conveying the value
determination of 9 November 1983 that a particular determination
number be inserted on bills of entry “in respect of importations
from this supplier”. It must follow that if the identity of
the
importer changes subsequent to such a determination this alone cannot
render the determination ineffective if precisely the same
importation of the same type of goods from the same foreign exporter
continues to be carried out precisely as before but by someone
else
who has to all intents and purposes taken over the importation
business.
[33]
It follows that the
appellant was bound by the determination of 9 November 1983.
The appeal is accordingly dismissed
with costs.
……………….
L
MPATI
JUDGE
OF APPEAL
Concur:
HOWIE JA)
HEHER JA)