THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Reportable
Case no: 445/2020

In the matter between:

COMMISSIONER FOR THE SOUTH AFRICAN
REVENUE SERVICE

APPELLANT
and
TONELERIA NACIONAL RSA (PTY) LTD
RESPONDENT

Neutral citation: Commissioner: SARS v Toneleria Nacional RSA (Pty)
Ltd (Case No 445/2020) [2021] ZASCA 65 (1 June
2021)
Coram:
NAVSA, WALLIS and MBATHA JJA and ROGERS and
POYO-DLWATI AJJA
Heard:
10 MAY 2021
Delivered: This judgment was handed down electronically by circulation
to the parties’ representatives by email, publication on the Supreme Court
of Appeal website and release to SAFLII. The date and time for hand-down
is deemed to be 09h45 on 1 June 2021
Summary: Customs Duty – classification – wooden items for use in wine-
making to impart flavour to the wine – whether coopers' products.

ORDER

On appeal from: Western Cape Division of the High Court, Cape Town
(Binns-Ward J sitting as court of first instance):
The appeal is upheld with costs, such costs to include the costs of
two counsel.
The order of the high court is amended to read:
'The application is dismissed with costs such costs to include the costs of
two counsel.'

JUDGMENT

Wallis JA (Navsa and Mbatha JJA and Rogers and Poyo-Dlwati AJJA
concurring)

[1] Wooden barrels have been used for over four thousand years to store
and convey an enormous variety of goods.1 In recent times other materials,
such as cardboard, plastic and steel, have largely taken their place. They
are now primarily confined to use in the liquor industry, where they both
provide storage during the maturation process and in some, if not all,
instances the wood from which they are manufactured is treated so as to
impart flavour to the wine or other product. One finds them being used for
the maturation and storage of wine, port, sherry, rum, brandy and whisky.2

1 A general history may be found in Wikipedia at https://en.wikipedia.org/wiki/Barrel.
2 Including whiskey emanating from places outside Scotland. Wooden barrels are also used in the
maturation of tabasco sauce, balsamic vinegar and soy sauce, where they are known as kioke and made
of cedar rather than oak. In maturing wine brandy, both oak and chestnut are used. See Canas et al
'Physicochemical and sensory evaluation of wine brandies aged using oak and chestnut wood
simultaneously in wooden barrels and in stainless teel tanks with staves' (2016) 51 International Journal
of Food Science and Technology 2537-2545.

[2] The respondent, Toneleria Nacional RSA (Pty) Ltd (Toneleria), is
the South African subsidiary of a Chilean company, Toneleria Nacional
LTDA (TN), that manufactures, traditional wooden barrels for use in the
wine industry. In addition to conventional barrels, TN also manufactures
what it calls InserStaves, ShortStaves and MiniStaves (the disputed items),
which are planks or slats made of the same treated oak as barrels and cut
to different sizes.3 Toneleria imports these into South Africa and sells them
to wine producers as a cheaper alternative to traditional wooden barrels for
imparting the qualities of wood to the wine. They are attached to a frame
or rack inserted into a maturation tank, usually of stainless steel. According
to Mr Potgieter, the deponent to the founding affidavit, while not used in
making premium wines, they are used in relation to wine that 'can come
relatively near, quality-wise, to the best barrel-matured wines'. The
difference between a traditional barrel and the disputed items appears from
the photographs reproduced below showing TN's products:

3 In addition, it manufactures smaller oak products under the name of Zigzags, Viniblocks, Chips, Rice
and Powder, directed at the same purpose.

[3] The dispute between Toneleria and the appellant, the Commissioner
of the South African Revenue Service (the Commissioner, or SARS, as
appropriate) relates to the classification of the disputed items for customs
purposes in terms of Part 1 of Schedule 1 to the Customs and Excise Act
91 of 1964 (the Act). Toneleria contended that the disputed items should,
like wine barrels, be classified under tariff heading 44.16 as:
‘Casks, barrels, vats, tubs and other coopers’ products and parts thereof, of wood,
including staves.’
This tariff heading attracts no duty. SARS disagreed. On 13 June 2016 it
made a determination, under s 47 of the Act in respect of a single container
load imported from Chile, that the disputed items should be classified
under tariff heading 4409.29.90.4 Toneleria appealed to the Western Cape
Division of the High Court in terms of s 47(9)(e) of the Act. Its appeal was
upheld by Binns-Ward J and a declaratory order granted that the disputed
items, both those in the original container load that precipitated the
determination and those in four subsequent container loads, should be
classified under tariff heading 44.16. The appeal is with his leave.
Classification

4 Other aspects of the determination related to different products and are not in dispute.

[4] The proper approach to questions of classification between different
headings is well-established.5 It follows a three-stage process6:
‘Classification as between headings is a three-stage process: first, interpretation – the
ascertainment of the meaning of the words used in the headings (and relative section
and chapter notes) which may be relevant to the classification of the goods concerned;
second, consideration of the nature and characteristics of those goods; and third, the
selection of the heading most appropriate to such goods.’
In terms of s 47(8)(a)(i) of the Act the interpretation of any tariff heading
or any tariff sub-heading in Part 1 of Schedule 1:
'shall be subject to the International Convention on the Harmonized Commodity
Description and Coding System done in Brussels on 14 June 1983 and to the
Explanatory Notes to the Harmonized System issued by the Customs Co-operation
Council, Brussels (now known as the World Customs Organisation) from time to time
…’
The Explanatory Notes do not have an overriding function, in that the
primary task of the court is to ascertain the meaning of the relevant
headings and section and chapter notes, but they are a helpful guide in
explaining or perhaps supplementing the headings, without overriding or
contradicting them.7

[5] In the present case, there are no relevant section or chapter notes, but
the explanatory note to tariff heading 44.16 reads as follows:
‘44.16 – Casks, barrels, vats, tubs and other coopers’ products and parts thereof, of
wood, including staves.
This heading is restricted to containers which are products of the coopers’ trade, that is
those of which the bodies are composed of staves with grooves into which the heads
and bottoms are fitted the shape being maintained by hoops of wood or metal.

5 Secretary for Customs and Excise v Thomas Barlow and Sons Ltd 1970 (2) SA 660 (A) (Thomas
Barlow).
6 International Business Machines SA (Pty) Ltd v Commissioner for Customs and Excise 1985 (4) SA
852 (A) at 863G-H.
7 Thomas Barlow op cit, fn 5, at 676B-C.

Coopers’ products, include casks of various kinds (tuns, barrels, hogsheads, etc)
whether tight (for wet goods) or slack (for dry goods), as well as vats, tubs, etc.
These goods may be disassembled or partly assembled, and are sometimes lined or
coated inside.
The heading also covers staves and all other wooden products, finished or not,
recognisable as parts of coopers’ products (eg. barrelheads, hoopwood cut to length and
notched at the ends for assembly).
The heading also includes unfinished staves (stavewood), that is, the strips of wood
used for forming the side, heads or bottoms of barrels and other coopers’ products. Such
stavewood may be in the form of:
(1) Strips cleft from sectors of tree trunks along the direction of the medullary rays.
Such cleft staves may also be further flat sawn on one of the principal faces, the other
face being merely trued by axe or knife.
(2) Sawn staves, provided that at least one of the two-principal faces is concave or
convex, such curved surfaces being produced by sawing with a cylindrical saw.
The heading excludes:
(a) Wood which is sawn flat on both principal faces (heading 44.07 or 44.08).
(b) Containers made of staves affixed to the heads and bottoms by nailing (heading
44.15).
(c) Casks, etc, cut to shape for use as furniture (eg, tables and chairs) (Chapter 94).’

[6] Save for the one critically important aspect, there is no particular
difficulty in construing tariff heading 44.16. It falls comfortably into two
parts, namely:
(a) Casks, barrels, vats, tubs and other coopers’ products; and
(b) Parts thereof, of wood, including staves.
Both the founding and replying affidavit advanced an argument that the
disputed items were staves in accordance with the second part of the tariff
heading. The argument was pursued, 'albeit faintly', in the High Court, but
it was rightly rejected and not pursued on appeal. The disputed items were
not produced in order to be incorporated into some other product, but were
products in their own right and imported and marketed as such. They were

not parts of other products. A stave in its ordinary sense relevant to this
tariff heading refers to:8
'Each of the thin narrow usu curved pieces of wood which, when placed together side
by side and hooped, form the side of a barrel or cask.'

[7] That left the first half of the tariff heading. The disputed items were
not casks, barrels, vats or tubs. Were they 'other coopers' products'? This
was the central issue in the case. Toneleria accepted that, as a relatively
new product, they were not traditional coopers' products, but contended
that the trade of a cooper is no longer confined to the traditional role of
manufacturing barrels, casks and other containers and has developed to
include the manufacture of alternative products for use in the wine trade.
These serve the same purpose as a barrel, but at lower cost. This is where
the parties joined issue.

[8] In accordance with the established taxonomy of classification the
first step was to ascertain the meaning of tariff heading 44.16 and in
particular the meaning of the expression 'other coopers' products'. In this
regard the judge said that it was 'the typical use of the goods in question
that fell to be established by evidence on the facts' of 'the range of products
that coopers currently make'. Accordingly, so he held, whether or not a
particular product is characteristically made by coopers is a question of fact
that is amenable to proof by evidence.

[9] In adopting this approach, the judge fell into the error of conflating
the first and second enquiries in the process of classification. The first stage
required a determination of the meaning of 'other coopers' products',

8 Shorter Oxford English Dictionary (6 ed, 2007), Vol 2, p 2994, sv 'staff', meaning 5. The Collins English
Dictionary (6 ed, 2003) defines a stave as 'any one of a number of long strips of wood joined together to
form a barrel, bucket, hull etc.'

without regard to whether the disputed items constituted 'other coopers'
products'. In the process of classification determining the meaning of the
tariff heading is the essential first stage. Only thereafter does one proceed
to the second stage of considering the nature of the products in issue to
determine in the third stage whether they fall within the class of products
identified in the tariff heading. Failing to observe that vital distinction has
the result that the nature of the products is used to colour the meaning of
the tariff heading.

[10] Maintaining a clear distinction between the first and second stages
of the determination process was vitally important in this case, because
'other coopers' products' constitutes a category of material items of a
specific type, in the same way that other items in the tariff heading, such
as casks, barrels, vats and tubs, are material items capable of definition and
description as a class of objects. The point can be illustrated by the homely
example, of whether a domestic kettle is a boiler. As the tariff heading
refers to boilers, one must in the first instance determine what is meant by
a boiler. Having done this, in the second stage the court considers the nature
of the domestic kettle. Finally, in the third stage the domestic kettle's
properties are measured against those of a boiler in the light of the meaning
ascribed to the word 'boiler' in the first stage. If one conflates the first two
by focussing on the fact that both the boiler and the domestic kettle use a
source of heating in order to boil water and produce steam, one is likely to
fall into error.9

[11]  A failure to undertake the analysis in the proper stages leads, as it
did in this case, to the court analysing the nature, purpose and function of

9 The example is a simplification to illustrate the point.

the goods in issue, without having first established what kind of goods were
referred to in the tariff heading. The judgment commenced its
consideration of the question whether the goods were 'other coopers'
products' by citing a submission by counsel that the disputed items bore the
hallmarks of cooperage. It proceeded to describe the process of sourcing
oak to make the products and highlighted that it was the same process as
used for sourcing oak to make barrels. It went on to explain that the wood
used for the disputed items underwent a similar process to the wood used
for making barrels and emphasised the functional equivalence of the
disputed items and traditional barrels. After reference to a dictionary
definition of a cooper, that he recognised did not support Toneleria's case,
the judge asked rhetorically (and went on to answer affirmatively) the
question:
'But is a barrel substitute or alternative that is now commonly produced by coopers,
using many of their traditional skills and methods,10 not also a modern day 'coopers'
product?'

[12] Interpreting the tariff heading and understanding to what it refers
may require that some facts about the object or goods described in the tariff
heading be established by evidence. That was the point made by this court
in Smith Mining.11 The tariff heading under consideration referred to 'works
trucks … of the type used in factories, warehouses, dock areas or airports
for short distance transport of goods'. Of its own knowledge, the court
could not know what vehicles were used for that purpose in factories,
warehouses, dock areas or airports. Accordingly, evidence needed to be led
to show what vehicles were used for those purposes in those work

10 As will become apparent later in this judgment, there was no evidence that the production of the
disputed items involved coopers or the use of any of their traditional skills and methods.
11 Smith Mining Equipment (Pty) Ltd v The Commissioner: South African Revenue Service [2013]
ZASCA 145 para 8.

environments. In this case the relevant material is available from
dictionaries, encyclopaedias, reference books and other publications,
together with the limited evidence led by the parties on this issue.

The meaning of 'cooper' and 'other coopers' products'.
[13] A good starting point is to ascertain the meaning of a 'cooper'. In the
oldest dictionary available to me12 a cooper is defined as:

‘One who makes or repairs barrels, hogsheads, casks etc.’
Jumping forward 80 years the Shorter Oxford English Dictionary13 defines
a cooper as:
‘A skilled worker who makes and repairs wooden vessels formed of staves and hoops,
as casks, tubs, etc.’
The Cambridge English Dictionary provides the following definition:
'a person who makes and repairs barrels (= large wooden containers with a flat top and
curved sides, used for holding beer, wine etc.)
I have consulted a number of other dictionaries both printed and online. All
of them are to the same effect, so citation of further definitions would be
otiose and add nothing to our understanding of what a cooper is.14 Each
definition refers to a person who manufactures various forms of container
and the word 'etc' refers to other unspecified containers. The tariff heading
uses similar language in its reference to 'casks, barrels, vats, tubs and other
coopers' products'. That recognises that casks, barrel, vats and tubs are by
their very nature coopers' products, and the word 'other', like 'etc' in the
dictionaries, points to these being further products of a similar nature made
by coopers.

12 Websters New International Dictionary of the English Language (1927).
13 Vol 1 p 517, sv ‘cooper’.
14 The word 'cooper' appears to have its origin in corresponding Dutch or German words and
means a barrel-maker. The common surname traces its origin to people who were barrel-
makers.

[14] The cooper's craft is as ancient as the use of wooden containers such
as barrels, casks, vats, pails, troughs, churns and similar items.15
Manufacture of these items required special tools and skills in which every
cooper would be trained. All were made using staves fitted and bound
together with hoops and flat ends.16 The ubiquitous use of wooden
containers has now diminished and some more modern tools have been
adapted for use in the craft, but the evidence was that the essential process
remains the same. A brochure from Maison Louis Latour, annexed to an
affidavit on behalf of SARS, dealt with the operation of its cooperage,
which is given over to the production of wine barrels. It said that the
process had changed very little since the Middle Ages.

[15] The description in the brochure was as follows. Most of the steps in
preparing the staves used in manufacturing a barrel, such as shaving,
shortening, shaping and gouging, are now done by machine, but the
essential task of assembling the barrel is done by hand and requires a
skilled cooper. At Maison Louis Latour – a famous wine producer – only
one cooper works on each barrel, although some cooperages use
production-line processes. The production of a barrel involves the cutting
and shaping of the staves so that they fit together. They have to be bent to
form the curved external shape of a barrel, with a bulge in the middle. The
base and head have to be cut to fit the barrel. This is done by cutting
grooves (crozes)17 in the staves into which the head is fastened. The whole
is fastened together and held with hoops, usually of metal. The joins

15 Its antiquity is preserved in the United Kingdom by the Worshipful Company of Coopers which is one
of the oldest Livery Companies of the City of London and received its Royal Charter in 1501. See
https://www.coopers-hall.co.uk/history/the-companys-history accessed 9 May 2021.
See
the
description
of
'cooperage'
in
the
1911
Encyclopaedia
Britannica
at
https://en.wikisource.org/wiki/1911_Encyclop%C3%A6dia_Britannica/Cooperage
accessed
10 May 2021.
17 Technically called crozes, as are the tools used to cut the groove for holding the head and foot of the
barrel.

between the individual staves, and between the staves and the head and
base of the barrel, must be tight and permit of no leakage. All this requires
considerable skill.18 There was no evidence that the manufacture of the
disputed items required the same, or even similar skills.

[16]  Against the background of the dictionary definitions and this
description of the cooper's craft, the expression 'other coopers' products' in
the tariff heading includes a variety of containers not specifically
mentioned under the general reference to 'casks, barrels, vats, tubs'.
Originally a barrel described a wooden container of a specific shape and
capacity manufactured by a cooper. It was broadly cylindrical with a bulge
around the centre section, making it easy to roll and manoeuvre, with a
capacity of approximately 120 litres. There was a range of similarly
constructed containers the largest of which was a 'tun' and then, in
descending order, a pipe or butt (half a tun), a puncheon or tertian (one
third); a hogshead (one quarter), a tierce (one sixth), a barrel (one eighth)
and a rundiet (one fourteenth). With the decline in use of wooden barrels
the expression 'barrel' has become more generic, referring generally to
containers of this broad description, but made in the traditional way. For

18 The following description of the manufacture of barrels for the Bordeaux region of France is to be
found at https://Bordeaux.com.
'COOPERS (OR BARREL MAKERS)
Wooden barrels or casks play an important role in making and aging wine, providing the wine with
aromatic notes of coconut, vanilla, buttered bread and caramel. Coopers are craftsmen who make and
repair barrels. The craft dates back centuries and has changed very little over time. Making barrels still
requires the hands of an expert. … Coopers are craftsmen who make and repair barrels. The craft dates
back centuries and has changed very little over time. Making barrels still requires the hands of an expert.
Because the wood is the key factor in the quality of the barrel, coopers hand-select the best oak, often
from European forests. Once the wood is selected, logs are split and the wood is aged naturally through
exposure to air and water. After aging, lengths of wood (called staves) are carefully shaped then
assembled. At this point, the cooper seals the joints by running a wet cloth over the staves and placing
the barrel over a fire. This stage is called chauffe, meaning “warm-up". The “toast" of the wood can be
light, medium or heavy – a decision made by the winemaker based on the style of wine to be aged and
the aromas sought. Once the warming-up is over, the wood is pliable and can gradually be arched and
tightened to obtain the shape of the barrel. The standard capacity of a Bordeaux barrel is 225 liters.
From beginning to end, the barrel making process requires approximately eight hours of work, almost all
exclusively by hand.'

example, the wine barrels that one encounters on South African wine farms
typically contain between two and three hundred litres.

[17] Apart from the different types of barrels described in para 16, other
containers made in the traditional manner by coopers included butter
churns, firkins and kegs. Some would be closed containers and others open.
The products manufactured by coopers can be described as follows:19
'There were four divisions in the cooper's craft. The "dry" or "slack" cooper made
containers that would be used to ship dry goods such as cereals, nails, tobacco, fruits,
and vegetables. The "dry-tight" cooper made casks designed to keep dry goods in and
moisture out. Gunpowder and flour casks are examples of a dry-tight cooper's work.
The "white" cooper made straight-staved containers like washtubs, buckets, and butter
churns, which would hold water and other liquids but did not allow shipping of the
liquids. Usually there was no bending of wood involved in white cooperage. The "wet"
or "tight" cooper made casks for long-term storage and transportation of liquids that
could even be under pressure, as with beer. The "general" cooper worked on ships, on
the docks, in breweries, wineries and distilleries, and in warehouses, and was
responsible for cargo while in storage or transit.'

[18] I have found only two general references to coopers making products
other than containers. The article cited in the previous paragraph said that
journeymen coopers also traditionally made wooden implements such as
rakes and wooden shovels. The other said that white coopers crafted
utensils, bowls, pails, butter churns, spoons, ladles and other kitchen
implements.20 The latter related to the colonial period in the United States.
Bar these two exceptions, the available material about the trade of a cooper
demonstrated that their function and area of expertise lay in the

19 The description is taken from https://en.wikipedia.org/wiki/Cooper_(profession). See also
https://www.britannica.com/technology/barrel-container
and
https://winehistoryproject.org/croze-
howel-or-chiv/, both accessed on 11 May 2021.
20 The reference is to a culinary education site https://www.ice.edu/blog/what-is-a-cooper accessed 11
May 2021.

manufacture of wooden containers, both closed and open. The technique
characterising a cooper's work in relation to all these items was to
manufacture staves that were fitted (not nailed) together and bound, almost
invariably with hoops of wood or iron.21 In the case of barrels and casks
and other closed containers, they would ordinarily be bent into the barrel
shape with a bulge in the centre and closed at top and bottom.

[19] SARS provided us with the extract on cooperage from The Oxford
Companion to Wine.22 The history it gave was consistent with what is set
out above. Under the heading of 'Cooperage today' it said:
'Cooperages are found wherever there is a wine or spirits business that needs barrels,
notably in America, Scotland, and France, but also in Italy, Spain, Portugal, Ireland,
eastern Europe, Germany, Australia and South Africa. They make new vats and barrels
… and/or repair or maintain older barrels and vats …'
The entry continues and deals with cooperage in the United States, France,
Italy, Spain and Portugal. Although published in 2006, when the European
Union permitted wood products to be inserted in wine for flavouring
purposes where the vintner was not maturing the wine in oak barrels, it
does not refer to such products as being manufactured by coopers.

[20] Against that background, the reference to 'other coopers' products'
in tariff heading 44.16 most obviously refers to containers similar in the
manner of their construction to the casks, barrels, vats and tubs referred to
in the opening words of the heading. These containers are manufactured
using the skill and techniques of a trained cooper. The disputed items do
not fall into this category. This is not an application of the eiusdum generis
rule of interpretation, but flows from an examination, derived from

21 Copper in the case of barrels containing gunpowder.
22 Jancis Robinson (ed) The Oxford Companion to Wine (2006, 3 ed) pp196-197, sv 'cooperage'. The
4th edition published in 2016 is not available to me.

dictionaries and similar published sources, of the work undertaken by
coopers and the nature of the products manufactured by them, using the
skills and techniques in which they have been trained.

[21] The reference to 'other coopers' products' goes further than merely
requiring that the products in question be produced by coopers or in
cooperages. The tariff heading indicates that these are products of a
distinctive nature, recognisable as coopers' products and capable of being
distinguished from other manufactured wooden products. In my view that
means that they must recognisably be products of a type and quality that
would be produced in a cooperage and require the application of the skills,
training, techniques and expertise of a trained cooper. That serves to
distinguish such items from other wooden products and, where the
products are manufactured in a cooperage, determine whether they are in
truth coopers' products and not simply a by-product of the operations of the
cooperage.

[22] This understanding of the expression 'other coopers' products' is
consistent with the explanatory note's statement that the tariff heading is
restricted to 'containers which are products of the coopers' trade, that is,
those of which the bodies are composed of staves with grooves into which
the heads and bottoms are fitted, the shape being maintained by hoops of
wood or metal'. The further provisions of the note demonstrate a familiarity
with the trade of a cooper, distinguishing as it does between tight and slack
barrels and vats and tubs. SARS contended that this was the correct
interpretation of 'other coopers' products'.

[23] In summary, it is strongly arguable that the reference in tariff
heading 44.16 to 'other coopers' products' is confined to wooden containers

and parts thereof. If that is correct it would dispose of the appeal, but it is
unnecessary to decide that finally, as more complete evidence than we
received might show that this interpretation is unduly narrow. It is therefore
preferable to adopt a more limited construction of 'other coopers' products'.
In my view it applies to wooden products, manufactured by coopers and
requiring the use of the traditional skills, techniques and expertise of a
qualified cooper.

[24] I do not think that Toneleria's invocation of the 'always speaking'
approach to the interpretation of statutes is permissible. That approach is
apt when the court is considering whether a statute extends to a situation
not foreseen at the time it was drafted. But the principle has its limits. They
were expressed as follows in Malcolm:23
'There is obvious sense in this approach when a court is confronted with a novel
situation that could not have been in the contemplation of the legislature at the time the
legislation was enacted. Courts can then, in the light of the broad purpose of the
legislation, current social conditions and technological development, determine
whether the new situation can properly, as a matter of interpretation, be encompassed
by the language. But, as Lord Bingham pointed out in Quintavalle,24 by way of
example, they cannot use the principle to extend legislation relating to dogs to cats,
however desirable such an extension may seem. In other words the principle has limits
…'

[25] Applying the principle in the context of the Harmonised System is
particularly inappropriate, because that system is constructed on the basis
that from the outset it includes all products in the course of trade, whether
in existence or still to be invented and manufactured. In other words, there

23 Malcolm v Premier, Western Cape Government [2014] ZASCA 9; 2014 (3) SA 177 (SCA) paras 10
and 11.
24 R (on the application of Quintavalle) v Secretary of State for Health [2003] UKHL 13; [2003] 2 All
ER 113 (HL) paras 8-10.

are no gaps that need filling or updating. Every product is capable of being
classified using the process of classification described above. If a product
is thought to sit uncomfortably within the applicable tariff heading or sub-
heading, that may justify an approach to the Harmonised System
Committee of the World Customs Organisation for a revision of the
relevant tariff heading or sub-heading, but that is not a matter for a national
court.25 The Harmonized System is the product of international agreements
between states, and like any international agreement it should as far as
possible be interpreted uniformly by national courts.26 It should not be
subjected to an approach to interpretation the proper purview of which is
purely domestic legislation.

Toneleria's case and the facts
[26] The broad description of the cooper's trade set out above was not
challenged. Toneleria's contention was that, with the march of progress,
coopers were no longer confined to the traditional role of manufacturing
barrels, casks and other containers, but had developed and now
manufacture alternative products for use in the wine trade, serving the same
purpose as a barrel, but at lower cost. Even if the tariff heading had been
formulated with the traditional concept of what constituted 'coopers'
products' in mind, the Harmonised System was intended to accommodate
both existing and novel products with the aim of accommodating all
products under an appropriate heading, notwithstanding that a particular

25 The following description of the process is taken from the World Customs Organisation (WCO)
website at https://wcoomd.org.
'The maintenance of the HS is a WCO priority. This activity includes measures to secure uniform
interpretation of the HS and its periodic updating in light of developments in technology and changes in
trade patterns. The WCO manages this process through the Harmonized System Committee (representing
the Contracting Parties to the HS Convention), which examines policy matters, takes decisions on
classification questions, settles disputes and prepares amendments to the Explanatory Notes. The HS
Committee also prepares amendments updating the HS every 5 – 6 years.'
26 Commissioner: SARS v Levi Strauss SA (Pty) Ltd [2021] ZASCA 32 para 36.

item was not known to, or in the minds of, those who formulated the
Harmonised System. The disputed items would be accommodated most
appropriately under tariff heading 44.16, together with traditional barrels,
as 'other coopers' products', in accordance with the third step of tariff
determination.

[27]  Toneleria rested its case almost entirely on the fact that the disputed
items were made of the same oak as conventional barrels and underwent a
similar process of curing and toasting, before the oak was cut on a
conventional circular saw into the particular items. It suggested that the
only difference between the disputed items and barrels was that instead of
putting the wine into wood, the wood was being put into the wine. But in
contrast to cutting planks or slats with a conventional saw, the staves
intended for producing barrels must be fitted together on the bases; the
crozes must be cut; the barrel heads installed; and the whole bound together
with hoops.

[28] Toneleria's affidavits concentrated on the now abandoned argument
that the disputed items were staves in terms of the definition, and on trying
to show that the process of production was largely similar to that of
producing barrels. There was no attempt to trace the history of the
development of these alternative products. We do not know when they
started to be made and used in viniculture. An academic article on wine
maturation said that the use of wood shavings in wine production has been
documented in France since the nineteenth century. However, it suggested
that experiments in using pieces of oak instead of barrels commenced in
the early 1960s in new winemaking countries and was regulated in the
United States of America in 1993. Until 2006 their use was barred in the

European Union (EU).27 The International Organisation of Vine and Wine,
an intergovernmental organisation of which South Africa and most, if not
all, major wine-producing nations are members, regulated the use of pieces
of oak wood as an alternative to traditional barrel-aging by resolutions in
2001 and 2005.28 It appears therefore that the use of these alternative
products is a relatively recent phenomenon, although it has become more
widespread since 2006 when the EU sanctioned the use of such material.29
That is not in itself decisive, but it demanded some evidence to show that
this is now part of a cooper's trade so that the products are to be regarded
as coopers' products.

[29] Regrettably, other than the brochure from Maison Louis Latour and
the description of the manufacturing process used by TN, neither party
tendered evidence concerning general practice among coopers or the range
of products that coopers now produce. The judge's researches on the
internet discovered cooperages in France that have added items similar to
the disputed items to their range of barrels.30 That appears also to be the
position with Toneleria's parent company. However, there are cooperages
that exclude this type of product from their cooperage products, and
describe them separately as oak additives.31 There are also manufacturers

27 Maurizio Petrozziello et al Chemistry and Technology of Wine Aging with Oak Chips Section 1
(Introduction)
available
at
https://www.intechopen.com/books/chemistry-and-biochemistry-of-
winemaking-wine-stabilization-and-aging/chemistry-and-technology-of-wine-aging-with-oak-chips,
accessed 10 May 2021.
28 Pilar Rubio-Bretón, Teresa Garde-Cerdán and Juana Martinez 'Use of Oak Fragments during the Aging
of Red Wines' Beverages 2018, 4, 102 available at https://mdpi.com (accessed 16 May 2021). See
Resolutions OENO 9/2001 and OENO 3/2005 of the International Organisation of Vine and Wine.
29 Canas et al, 'Wine Aging Technology: Fundamental Role of Wooden Barrels' (2020) 9 Foods 1160
available at www.mdpi.com/journal/foods. The original Regulation EC 1507/2006 has been replaced by
Regulation 2019/934. Petrozziello et al, op cit, fn 28. See also Perez-Coello and Diaz-Maroto 'Volatile
Compounds and Wine Aging' in M V Morneo-Arribas, M C Polo (eds) Wine Chemistry and Biochemistry
Chapter 8C, pp 295-311 at 296.
30 They refer to their products as staves. See https://www.boutes.com/en/produits/gamme/staves/ and
https://www.boutes.com/en/produits/gamme/staves/. A domestic cooperage's website refers to 'oak
barrels and other cooperage products' which includes 'oak alternatives'. See https://capecooperage.com.
31 See http://www.apjohn.com.au/product-categories/oak-additives/.

who confine their business to such products and neither produce barrels
nor claim to be cooperages.32 One local cooperage apparently
manufactures both wine barrels and wine barrel furniture and novelty
items.33 This inconclusive, and necessarily limited, judicial review goes no
further than indicating that products similar to the disputed items are being
manufactured by some cooperages internationally, but we do not know the
extent to which this is the case.

[30] I turn then to the evidence on behalf of Toneleria. It came from
Mr Potgieter, its general manager. He has a degree in Viticulture and
Oenology, spent seven years as a winemaker and in short order became
first commercial, and then general, manager of Toneleria. His connection
with manufacturing barrels and the disputed items arises from his having
visited the parent company's factory and studied some unidentified
academic material. He is not a cooper nor does he claim any expertise in
regard to the training, techniques and skills of a cooper and his evidence
was not supported by an affidavit from a cooper.

[31] Mr Potgieter explained that the disputed items and the other ancillary
products manufactured by TN are all intended as alternatives or substitutes
for the wooden barrels traditionally used to mature wine. He highlighted
the function of the wood in the barrels to impart taste, aroma, flavour
profile and structure to the wine and the increasing cost of traditional
barrels. This led TN and, he said, its competitors worldwide, although he
did not identify them, to devise products of the same general nature as the
disputed items intended as a relatively cheaper alternative to barrels.

32 See https://oaksolutionsgroup.com/configurations/#tankstaves.
33 See https://sawinebarrels.com. The website describes only the wine barrels as coopered products.

[32] According to Mr Potgieter the use of these alternative products
enables winemakers having 'the necessary knowledge and skill' to make
wines that 'can come relatively near, quality-wise, the best barrel-matured
wines'.34 He explained that the selection of the wood and its drying,
seasoning and toasting were very similar to the treatment undergone by
wood to be used in making barrels. However, the differences between the
two were not explained, so we do to know how and why they diverge. Can
wood that would be unsuitable for the making of barrels be used to make
the disputed items, or are they made out of the offcuts after cutting the
staves and tops for barrels? How similar is the toasting process as between
barrels and the disputed items? The statement that:
‘[o]verall, the toasting process undergone by the staves is very similar to the toasting
processes undergone by barrels.’ (emphasis added)
is unhelpful, without stating the differences between the different
processes. It left too much unexplained.

[33]  Mr Potgieter described TN's business as being 'a manufacturer of
wooden products related to the production and ageing of wine'. He said this
included 'staves, blocks, chips, rice and powder and 'apart from these' it
also manufactures traditional wine barrels. As its name suggests,35 he said
that TN's business 'qualifies as that of cooperage, even if one were to
restrict this term to its traditional sense'. Apparently, almost half its
business is based on barrel sales. There is no reason to doubt that TN's
business is in part the business of a cooperage, but that is not the part with
which this case is concerned. The mere fact that one half of the business is

34 Pilar Rubio-Bretón et al, op cit, fn 28 analysed the differences between different forms of aging of
wine and showed that there were different effects as to the release of chemicals and in regard to the
timing of aging. Canas et al, op cit, fn 29 refer to wine of similar quality being produced by the different
forms of aging. There does not appear to be a clear picture as to the differences between the two different
methods of maturation.
35 Tonelaria translates from Spanish into English as 'cooperage'.

a cooperage has little bearing on whether the other half fits the same
description.

[34] It emerged from Mr Potgieter's description that at the production
stage there is a divergence between the process of making barrels and the
manufacture of the disputed items. He described the cutting of the disputed
items using a circular saw according to the dimensions required by
customers. This is determined by the amount of wood that the winemaker
wants to have contact with the wine. He did not deal with the process of
preparing the staves that go into the manufacture of barrels. The size of
these is presumably not determined by the customer, but by the size of the
barrels produced by TN. The staves have to be cut and shaped in order to
enable the barrel to be constructed. We were not told how the curved shape
is achieved or whether the barrels are crafted individually or by a
production line system. The manufacture of the hoops, the assembling of
the barrels and the barrel heads, the cutting of the crozes and the process
of fitting the whole together, were not explained. Accordingly, it is
impossible for the court to know how significant these divergences are in
the greater scheme of things. All one can say is that, given the nature of a
barrel and the complexity of its construction, it is likely that it involves far
more complex work to produce a barrel than to produce the disputed items.
That is reflected in the cheaper price of the latter.

[35] The final processes in regard to the disputed items are the drilling of
the 'staves' so that they can be attached to and suspended from an
appropriate frame inside a stainless steel vat and packing in specialised
packaging to prevent them from being damaged, or absorbing unwanted
odours, being contaminated or undergoing environmental changes. By
contrast, the finishing of barrels involves the installation of barrel heads;

the cutting of holes for taps or bungs; sanding and hoop installation; and
pressure testing. We were not told anything about the packaging of barrels,
but it will not be the same as the disputed items.

Discussion
[36] The net effect of Mr Potgieter's evidence was that the processes
undertaken in the production of the disputed items and those used in
relation to barrels were directed at achieving similar results insofar as
imparting flavour, sensory profile and the like to wine. The manufacturing
processes were in some respects similar and might at points overlap,
especially in the preliminary stage of selecting and curing the wood, but it
is clear that in many respects they diverge. The disputed items may perform
a similar role to barrels insofar as the maturation of the wine and imparting
flavours to the wine is concerned, but they are fundamentally different in
not fulfilling the storage function that is, at the least, a primary purpose of
a barrel.

[37] Mr Potgieter's conclusion was that there was a 'virtually complete
functional equivalence of oak barrels' and the disputed items. He stressed
the fact that the disputed items and the wood used to make barrels
underwent very similar treatments. This distinguished them from wood
used in carpentry. He said:
‘The staves at the centre of the present dispute are, effectively, barrels in everything
except name. They are made from exactly the same sort of raw material; have
undergone exactly the same sort of production process; and serve precisely the same
function, only at slightly lower cost – indeed the goal behind their use is to simulate as
far as possible, only more cheaply, traditional barrel fermentation. The staves can be
described, in effect, as de-constructed barrels. They allow other vessels (steel tanks) to
achieve barrel-like effects without any need for the vessels to be replaced by actual
barrels, or indeed, for the vessel used to be modified in any way.’

[38] There are two problems with these contentions. The first is that the
disputed products are not performing the same functions as barrels
produced by a cooper. They are performing some of the same functions,
but not all of them. That is a significant difference. The storage function of
the barrel cannot be ignored. The second problem is that the fact that
products may serve a similar purpose or function does not mean that they
should for customs purposes fall in the same classification. Electric light
bulbs and candles serve the same purpose, but are plainly different products
and fall to be classified differently.

[39] Tellingly, Mr Potgieter did not say that the manufacture of the
disputed items is undertaken by a cooper. He did not say that the production
of the disputed items is a result of the exercise of the skill, techniques and
expertise of a cooper. Instead, he spoke of an 'employee' manually grabbing
the 'staves' and placing them in a machine for brushing. That does not seem
to require particular skill or expertise. It might well be the work of a
labourer or machine hand. He said that an 'experienced employee' used a
circular saw to cut the 'staves' according to the requirements of the
customer. The only skill that seems to require is the ability to operate the
circular saw safely and cut the pieces to the correct dimensions. There
appears to be a world of difference between cutting planks or slats using a
circular saw and the complex process of manufacturing a barrel. On the
face of it, the cutting and drilling undertaken in respect of the disputed
items does not display any features that would distinguish it from the type
of work done in a conventional workshop manufacturing wooden products
or preparing wood for use in the manufacture of wooden products. There
is no suggestion that the people who do this work in TN's factory are
trained coopers or need to be trained coopers. (The position in regard to the
barrel-making section is presumably different.)

[40] I accept that there are probably a number of companies around the
world that operate cooperages and, in addition to making barrels,
manufacture other wooden products, including some the same as, or fairly
similar to, the disputed items. This does not mean that the additional
products are coopers' products. It is significant that products of this type
can be produced without the manufacturer engaging in the concurrent
manufacture of barrels or requiring the services of a qualified cooper.

[41] To sum up, the manufacture of the disputed items is not part of the
traditional tasks of a cooper nor does their production require an
application of the skills, training, techniques and expertise of a cooper.
They are directed at serving a similar function in wine-making to a
conventional oak wine barrel, other than the storage of the wine itself.
There is no resemblance between them and barrels used in the storage and
maturation of other liquor products, such as whisky, port, sherry, brandy
or rum, or non-liquor products, such as tabasco, balsamic vinegar or soy
sauce. Those barrels and other containers produced for those purposes are
coopers' products.

[42] At the end of the day Toneleria's argument rested on nothing more
than the functional similarities between the disputed items and traditional
oak barrels arising from the selection of wood, the seasoning and toasting,
and the role they play in the maturation of wine. In my view that was
insufficient to bring the disputed items within the category of 'other
coopers' products' as described in tariff heading 44.16. They are not
products of the same or similar type to those expressly described as
coopers' products, because they are not containers. Nor does their
production require the application of the skills, techniques and expertise of
a trained cooper. The functional similarities on which Toneleria relied

accordingly did not serve to bring the disputed items within the category
of 'other coopers' products'.

[43]  In the result the appeal must succeed. That renders it unnecessary
to enter into the debate whether the high court's order could encompass the
additional containers. The following order will issue:
The appeal is upheld with costs, such costs to include the costs of
two counsel.
The order of the high court is amended to read:
'The application is dismissed with costs such costs to include the costs of
two counsel.'

_________________
M J D WALLIS
JUDGE OF APPEAL

Appearances

For appellant:
J A Meyer SC (with him L G Kilmartin)

Instructed by:
The State Attorney, Cape Town and Bloemfontein.

For respondent:
RF van Rooyen SC (with him CR Cilliers)
Instructed by:
Smith, Tabata Buchanan and Boyes, Cape Town
Honey Inc, Bloemfontein.

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME
COURT OF APPEAL

FROM The Registrar, Supreme Court of Appeal
DATE 1 June 2021
STATUS Immediate

Please note that the media summary is for the benefit of the media and
does not form part of the judgment.

Commissioner: SARS v Toneleria Nacional RSA (Pty) Ltd (444/20) [2021]
ZASCA 65 (1 June 2021)

The SCA today upheld an appeal by the Commissioner: SARS against a
decision by the Western Cape Division of the High Court, upholding an appeal
by Toneleria Nacional RSA (Pty) Ltd against a SARS determination of the
customs classification of certain wooden items imported by Toneleria from
Chile for use in the maturation of wine. The wooden items are oak planks or
slats made of the same oak as wine barrels and subjected to similar
processes of curing and toasting before being cut into shape using a circular
saw. They are used by some winemakers as an alternative to maturing wine
in oak barrels, which are expensive. The planks or slats are suspended in the
wine from a frame and the winemaker. The effect in imparting flavour, aroma
and structure to the wine is similar to the effect of maturation in oak barrels.
The tariff item 44.16 under which Toneleria sought to import the
disputed items applied to 'Casks, barrels, vats, tubs and other coopers’
products and parts thereof, of wood, including staves.’ Although Toneleria
describes these items as staves, they are not staves of the type referred to in
the tariff heading, because they are independent items not intended as parts

of anything else. Nor are they casks, barrels, vats or tbs. Accordingly they
could only qualify for inclusion under tariff heading 44.16 if they were 'other
coopers' products'.
The court considered what a cooper is and held that in its ordinary
meaning it is a person who makes barrels and other similar containers using
traditional methods that have been in use for hundreds of years. The cooper
is a skilled craftsman, using special tools and techniques to produce wine
barrels and similar containers. These have distinctive features, such as the
bulge around the centre of the barrel and the hoops of metal or wood that hold
the barrel staves together. All of these features were missing from the items
imported by Toneleria. Nor was there any evidence to show that they are
generally accepted as 'coopers' products', that is, products created using the
skills and special techniques of a cooper. It is not sufficient that they may
perform some of the functions of a wooden barrel, although not its storage
function. The tariff heading required the product to be products of the skills
and techniques of a cooper. The evidence did not show that the production of
these items required any input from a cooper.
The SCA accordingly held that the imported items were not 'other
coopers' products' and therefore did not qualify for importation under tariff
heading 44.16. The appeal was upheld with costs including the costs of two
counsel.