IN THE SUPREME COURT OF APPEAL OF SOUTH AFRICA

Case no 368/2001

REPORTABLE

In the matter between

Lewis Stores (Pty) Ltd                                                                                  Appellant
and
The Minister of Finance                                                                    First Respondent
The Commissioner of the South African Revenue Service          Second Respondent

Before:
Howie, Schutz, Streicher, Brand JJA and Lewis AJA
Heard:
2 September 2002
Delivered: 6 September 2002

Customs duty – classification – whether pots and pans plated with gold

_______________________________________________________________
JUDGMENT
_______________________________________________________________
SCHUTZ JA
[1] The issue in this case is whether certain imported pots and pans are plated
with gold.
[2] The appellant is the importer, Lewis Stores (Pty) Ltd (hereinafter ‘the
importer’).  The first respondent is the Minister of Finance.  He abides the result.
The second respondent is the Commissioner for the South African Revenue
Service.  He is responsible for the levying and collection of customs duty.  I shall
refer to him as ‘Customs’.
[3] Before setting out the statutory provisions relevant to this case I would adopt
a passage from the judgment of Trollip JA in Secretary for Customs and Excise v
Thomas Barlow & Sons Ltd 1970 (2) SA 660 (A) at 675D-F explaining the
structure of that part of the Customs and Excise Act 91 of 1964 (the Act) with
which we are concerned.  Trollip JA stated:
‘The duty which is payable is set out in Schedule 1 of the Act.  This Schedule is a
massive part of the statute in which all goods generally handled in international
trade are systematically grouped in sections, chapters and sub-chapters, which are
given titles indicating as concisely as possible the broad class of goods each
covers.  Within each chapter and sub-chapter the specific type of goods within the
particular class is itemised by description of the goods printed in bold type.  That
description is defined in the Schedule as a “heading”.  Under the heading appear
sub-headings of the species of the goods in respect of which the duty payable is

expressed.  The Schedule itself and each section and chapter are headed by
“notes”, that is, rules for interpreting their provisions.’  (Emphasis supplied.)

[4] The sub-headings relevant to this case appear in Chapter 73 of Part 1 of
Schedule 1 to the Act in the following context:
’73.23 Table, Kitchen or Other Household Articles and Parts Thereof, of Iron and
Steel;  Iron or Steel Wool;  Pot Scourers and Scouring or Polishing Pads,
Gloves and the Like, of Iron or Steel:

………..
7323.10
Iron or steel wool ……..

………..
7323.93
Of stainless steel:
.20
Hollowware for kitchen or table use (excluding those plated with
precious metal)

30 %
.90
Other

20 %
……………’  (Emphasis supplied.)

[5] The item 73.23 above is a heading and the succeeding item 7323.93 is a sub-
heading.  The later sub-sub-headings 7323.93.20 and 7323.93.90 are the ones
relevant to this case.  The parties are agreed that the pots and pans have to be
classified under the one or other of these sub-sub-headings.  This is so because they
are hollowware made of stainless steel, the only question being whether they are
plated with a precious metal – in this case gold.  The percentages 30 % and 20 %
reflect the different rates of duty applicable to the two items.  Customs contends for
the higher rate (item 20) and the importer for the lower (item 90).
[6] The first ‘note’ that is of importance is contained in Schedule 1 of the Act
under the heading ‘General Notes’.  It is numbered A.1 and reads in its setting:
‘A General Rule for the interpretation of this Schedule

Classification of goods in this Schedule shall be governed by the following
principles:
1.
The titles of Section, Chapters and sub-Chapters are provided for ease of
reference only;  for legal purposes, classification shall be determined
according to the terms of the headings and any relative Section or Chapter
Notes and, provided such headings or Notes do not otherwise require,
according to the following provisions:  ………’

In the Thomas Barlow case (above) Trollip JA commented upon these words
(at 675H-676A):
‘That, I think, renders the relevant headings and section and chapter notes not only
the first but the paramount consideration in determining which classification, as
between headings, should apply in any particular case.’

[7] Rule 6 under the ‘General Notes’ deals with sub-headings in these terms:
‘For legal purposes, the classification of goods in the subheadings of a heading
shall be determined according to the terms of those subheadings and any related
subheading notes and, mutatis matandis, to the above rules, on the understanding
that only subheadings at the same level are comparable.  For the purposes of this
Rule the relative section and chapter notes also apply, unless the context otherwise
applies.’

[8] Also relevant to the interpretation of the sub-headings are the ‘explanatory
notes’ published by the World Customs Council, Brussels (formerly the Customs
Co-operation Council, Brussels).  Section 47 (8) (a) of the Act provides that the
interpretation of a heading or subheading ‘shall be subject to’ these notes.  In
International Business Machines SA (Pty) Ltd v Commissioner for Customs and
Excise 1985 (4) SA 852 (A) Nicholas AJA held (at 864A-C) that these notes are not
to be regarded as peremptory injunctions, as all that s47 (8) requires is that an

interpretation should conform to, and not be contrary to, the Brussels notes.  One of
these notes which is relevant to this case reads:
‘These articles (falling under heading 73.23) may be cast, or iron or steel sheet,
plate, hoop, strip, wire, wire grill, wire cloth, etc., and may be manufactured by
any process (moulding, forging, punching, stamping, etc.).  They may be fitted
with lids, handles or other parts or accessories of other materials provided that
they retain the character of iron or steel articles.’  (Emphasis supplied.)

[9] In the International Business Machines case (above) Nicholas AJA further
stated (at 863G-H):
‘Classification as between headings is a three-stage process:  first, interpretation –
the ascertainment of the meaning of the words used in the headings (and relevant
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 which is most appropriate to such goods.’

[10]   Taking interpretation first, the expression hollowware for kitchen or table
use, made of stainless steel, is clear.  The expression ‘plated with gold’ has been
the subject of argument. By whatever process it is achieved, the notion of gold
plating is plain enough.  But must the whole be plated and if not the whole, where
must the plating be?  These questions, should they arise, are not answered by the
exclusionary words used in 7323.93.20, ‘those plated with precious metal’, because
they tell of plating, but not of its location or extent.  However, I would think that if
one says that a thing is plated the ordinary meaning conveyed is that it is all plated.
The SOED gives as the first two meanings of the verb ‘to plate’ the following:  ‘1.
To cover, or overlay with plates of metal, for ornament, protection, or strength;  to
cover (ships, locomotives, etc.) with armour-plates.  2.  To cover articles made of

the baser metals with a coating of gold or silver;  also iron with tin’ (emphasis
supplied).  This second meaning is the one that must govern in this case.  The
provision in the Brussels notes concerning lids, handles, other parts and
accessories, is of assistance.  But before proceeding it is necessary to describe the
goods.  Such a description is relevant also to the second and third enquiries, as it is
the essence of the second and necessary for an approach to the third.
[11] The goods imported consist, first, of a 12 piece set consisting of a frying pan
and 11 pots, and, secondly, of a 12 litre stock pot, having the same construction and
design as the pots in a set.  The pots and their lids and the pans are made of
stainless steel.  It is to be emphasised that the hollowware in the narrow sense, that
is the pot or pan without a lid or handle, is made of stainless steel and bears no gold
plating.  The handles and lid knobs are made of bakelite and they are partly gold
plated, but overall the aureate sheen is dim.  The plating is very thin, but that is of
no matter as it is there.  The mass of the gold is some 0,0008 % of the total mass of
the pot and lid but, again, it is there.  The plating is said to cover roughly 10 % of
the external surface area of the pot and lid and roughly 5 % of the total surface area
internal and external (although to my unskilled eye the percentages are even less).
Although the pot sets are advertised in print and by television as a ‘Gourmet Gold
Cookware Set’, the packaging emphasises their stainless steel nature and expounds
the benefits of the same.  So much for the second stage of the classification, the
consideration of the nature and characteristics of the goods.

[12] I come to the third stage, the selection of the most appropriate heading.  If I
had first had sight of one of the products with an eye unbedevilled by learned
argument, I do not think that it would have occurred to me to call it gold-plated.  I
think I would have called it a stainless steel pot and might have added that the
handles and the knob on the lid were decorated with gold plate.  And if I had
bought one as a gold-plated pot without first having seen it I would have been
offended to have received a steel pot with some golden trimmings but no gold
plating.  It would, in my opinion, be more appropriate to call the pot a steel pot,
albeit with trimmings, than to call it a pot plated with gold.
[13] Mr Puckrin, for Customs, has also placed emphasis on the note quoted in
para [8] above.  He contends that the pot itself (the hollowware) is the essential
article, and that it is not plated with gold at all.  Ergo.  I agree with Mr Puckrin’s
argument that if only the handles and the knob are plated, they are, in terms of the
note, to be regarded as mere ancillaries that cannot enoble the character of the
entire article.
[14] The importer relies on some American decisions, to the effect that it is
sufficient if the plating is not an ‘insignificant or negligible part’.  See, for instance,
Saji & Kariya Co et al v United States (No 1907). 9 Ct Cust Appls 78 (1919).  The
legislation there considered is not identical to that before us and in any event we are
not bound by these decisions.  When I look at the products before us, the plated
area is indeed negligible and, as I have said, it would not have occurred to me to
call them gold-plated.  But the case against the importer is even stronger.  Given

the ordinary meaning of the word ‘plated’, the matter is to be approached the other
way round.  Unless the unplated area is insignificant a product could not properly
be said to be plated.
[15] Accordingly, I am of the view that the correct tariff description is contained
in 7323.93.20, so that the higher duty of 30 % is attracted.
[16] Very correctly, both counsel agreed to play the ball instead of the man.  By
this I mean that they agreed that if a decision on the tariff classification went
against the importer that would dispose of the appeal.  This had the effect of
rendering unnecessary of decision some very complicated arguments which were
addressed to us and which I need not describe.  At the root of them was the
operation of s47(11), as it was in 1998.  For the importer it was argued before us
that there had been no determination at all by Customs in respect of the goods still
in contention.  However, much as the parties may have been at odds below,
everybody, including the judge, was of the view that an appeal against a
determination was being argued.  I say this merely to warn that in the future
Conradie J should not be seen as having decided any more than what he did decide
– namely what the correct tariff classification was.  In my opinion he was correct
on that score, and, that being so, his order was the correct one and does not need to
be disturbed or altered in any way.
[17] The appeal is dismissed with costs, including the costs of two counsel.

____________
W P SCHUTZ
JUDGE OF APPEAL

CONCUR

HOWIE JA
STREICHER JA
BRAND JA
LEWIS AJA