The applicant is a haulage company. At the time of the hearing it operated a foreign currency account with Renaissance Merchant Bank Limited. In April 2007, the applicant applied, through its bank, to the Reserve Bank of Zimbabwe to use its foreign currency to procure a motor vehicle, a Mercedes Benz ML320.

The application was granted and the foreign currency was released by Renaissance Merchant Bank Limited with the approval of the Reserve Bank of Zimbabwe.

Thereafter, the applicant procured its vehicle and imported it into the country. The respondent refused to accept import duty in local currency. It seized the motor vehicle pending payment of duty in foreign currency.

Aggrieved by this decision, the applicant filed this application.

On the merits, the applicant contended that the funds used to purchase the vehicle were obtained through an authorized dealer. It was therefore exempt from paying duty in foreign currency as prescribed in section 3(a) of the Customs and Excise (Designation of Luxury Items) Notice, 2007, (S.I.80A of 2007).

The respondent's demand for payment of duty in foreign currency is premised on section 3(a) of S.I.80A of 2007. The respondent contended that the funds used by the applicant to purchase the vehicle belonged to the company. The applicant did not, therefore, “obtain” the funds as it already had ownership of the funds. The funds were already to the credit of the applicant. Therefore the applicant did not apply to the bank to obtain money but sought authorization to utilise the money already to its credit. Section 3(a) of S.I.80A of 2007 provides that -

“3. The following persons shall be liable to pay duty and value added tax on luxury items in terms of s2 -

(a) Every resident of Zimbabwe who imports luxury items that were purchased using funds obtained otherwise than through an authorized dealer;”

The issue before me is, therefore, whether or not the funds in the applicant's foreign currency account that were used to purchase the vehicle were funds “obtained” through an authorized dealer.

The applicant referred me to the case of Murowa Diamonds (Private) Limited v Zimbabwe Revenue Authority & Anor HH88-07. The above issue is identical to the issue that the court in that case had to determine. In that case, Murowa Diamonds (Private) Limited imported two motor vehicles using funds in its foreign currency account. It applied to the Reserve Bank of Zimbabwe, through its bank, to utilize the funds. The respondent refused to release the two vehicles on the basis that the vehicles were luxury items and demanded import duty and value added tax in foreign currency in terms of of section 3(a) of S.I.80A of 2007. MAKARAU JP ruled that the word “obtain” in section 3(a) of S.I.80A of 2007 should be accorded its ordinary meaning. She therefore dismissed the submissions by the respondent that the applicant already had the foreign currency at its disposal and only sought authority from the Reserve Bank to use the funds.

The respondent appealed against MAKARAU JP's judgment...,. The appeal was decided on 28 September 2009 in favour of Murowa Diamonds (Pvt) Ltd in Zimbabwe Revenue Authority & Anor v Murowa Diamonds (Private) Limited SC41-09. GARWE JA observed that funds in a foreign currency account do not belong to the account holder.

Counsel for the respondent, however, argued that the case was distinguishable from the present application in that in the present application the applicant had not yet paid any duty to the respondent. In Zimbabwe Revenue Authority & Anor v Murowa Diamonds (Private) Limited SC41-09, Murowa Diamonds (Pvt) Ltd had already paid duty in Zimbabwean dollars. All that was left in that case was for the Zimbabwe Revenue Authority to release the vehicle in issue to Murowa Diamonds (Pvt) Ltd. He submitted that in the present application the applicant would be required to pay duty in United States dollars as opposed to Zimbabwean dollars.

He conceded that although the country now operates on a multi-currency regime the Zimbabwe dollar is still legal tender. He however argued that it did not make economic sense for the applicant to pay duty in Zimbabwean dollars considering that the economy is currently using United States dollars. He further referred me to section 19 of the Finance Act, 2009 (No.2 of 2009 (S.I.5 of 2009) arguing that the Act provides for collection of duty in United States dollars.

Counsel for the applicant contended that the applicant had tendered payment in local currency at the relevant time – which tender the respondent refused to accept at its own peril. He further contended that the Finance Act, 2009 (No.2 of 2009 (S.I.5 of 2009) referred to by counsel for the respondent relates to taxable income from trade or investment and not from duty payable.

Section 19 of the Finance Act, 2009 (No.2 of 2009 (S.I.5 of 2009) is a transitional provision. It provides that for all accounting and taxation purposes taxable income from trade or investment which was received or accrued, in whole or in part, in Zimbabwean currency in the previous financial year whose balance is denominated in Zimbabwe currency shall be expressed in United States dollars at a rate of exchange to be approved by the Commissioner-General. As rightly submitted by the applicant the provision relates to “taxable income from trade or investment.” Duty on imported items does not, in my view, constitute income from trade or investment. The provision relied upon by the respondent in support of the calculation of duty in United States dollars therefore does not apply to the applicant

It is not in issue that the applicant tendered payment of duty in Zimbabwean dollars – which tender was refused by the respondent. It is also not in issue that the Zimbabwean dollar is still legal tender.

It therefore appears to me that the respondent cannot, under the circumstances, demand payment of duty in United States dollars merely because it is expedient to do so under the current economic environment. The loss, it seems, lies where it falls.

In the result, I make the following order -

1. The first respondent be and is hereby ordered to release the Mercedes Benz ML320; Chassis Number WDC1631542A086385; Engine Number 112943034067 upon payment by the applicant of duty assessed by the respondent in Zimbabwean dollars.

2. The first respondent shall bear the costs of this application.

The plaintiff filed a delictual claim against the defendant, seeking damages in the sum of US$709,948.

It was specifically alleged in the plaintiff's declaration that the defendant wrongfully and unlawfully sought to levy import duty on certain resin imported by the plaintiff for its manufacturing processes using an incorrect tariff, causing the plaintiff to litigate on the matter. By the time the litigation was resolved, in favour of the plaintiff, the imported resin, which remained uncleared for customs purposes, had become moribund and useless to the importer, thereby causing the total loss that was claimed in the summons under various heads…,.

The claim was defended primarily on the basis, that, in seeking to levy duty on a higher tariff than previously levied, the defendant was not acting with malice and that its actions were not wrongful and unlawful to ground an action in delict. Further, it was denied that the containers of the imported resin were presented to the defendant for the purposes of customs clearance.

The facts giving rise to the suit between the parties are largely common cause.

The plaintiff is an established public company, specializing in the production and manufacture of timber and timber products. It is listed on the local bourse. As part of its manufacturing processes, it uses a certain resin (hereinafter referred to as “the chemical”), that is imported into the country and import duty paid.

Over a period of about ten years, the plaintiff imported this resin at a steady 5% duty payable to the defendant.

In or about February 2005, the plaintiff received four containers of the imported chemical. When it presented the chemicals to the defendant for clearance, duty was levied not on the usual and expected 5% but at 25%.

The plaintiff approached this court for adjudication on the correct level of duty payable and its contentions were upheld. The defendant immediately noted an appeal against the decision of this court. In the meanwhile, the parties reached an agreement that the four containers be released upon the plaintiff paying a deposit against the required duty.

Again, in the meanwhile, in May 2005, the plaintiff imported into the country ten other containers of the chemical while the legal wrangle was still on. There is a dispute as to whether these ten containers were presented for customs clearance or not….,.

On 7 April 2006, the Supreme Court handed down its judgment, upholding the High Court judgment and vindicating the plaintiff's stance.

In June 2006, the ten containers of the chemical were cleared by the defendant at 5% duty. It was then discovered that the chemical had become moribund and valueless to the importer.

On 27 September 2006, the plaintiff issued summons against the defendant as detailed above.

In the summons, the plaintiff claimed the sum of US$285,123=76 as the replacement value of the chemical that went moribund; US$20,016=44 as the value of orders that were lost as a result of the plaintiff's failure to use the moribund chemical; and the sum of US$404,807=80 as damages for lost business.

At the trial of the matter, three issues had to be resolved by evidence. These were;

(i) Firstly, whether the order issued by this court also covered the ten containers, the subject of this dispute; and

(ii) Secondly, whether the ten containers were presented to the defendant for duty purposes;

(iii) Thirdly, in issue was the quantum of damages that the plaintiff would be entitled to in the event that the defendant was found liable.

In support of its case, the plaintiff led evidence, firstly, from one Joseph Chikwana. He was the plaintiff's Purchasing Manager at the time the dispute arose.

His testimony was largely to reiterate the facts that are common cause in this dispute concerning the first four containers of the chemical. Regarding the ten containers forming the subject of this suit, he testified as follows:

These were imported about six months after the first four and in respect of which the parties were before this court, locked in litigation over the correct tariff to be used for calculating duty. The ten containers came through Beira, and, when they arrived in Mutare, the plaintiff sought to have them cleared. The plaintiff did not submit any documents to the defendant as there was a pending case between the parties. The containers were placed in a bonded warehouse.

When the customs clearance agent came back with the news of the stalemate between the parties, the witness personally visited the defendant's office and was attended to by a Mr Chamboko and a lady officer who was assisting Mr Chamboko. The discussions referred to the pending case and the parties felt that they could not move from that position due to the pending litigation. The defendant demanded duty at the higher rate which the plaintiff was not in a position to pay at the time.

The witness was involved in the formulation of the claims that the plaintiff finally brought against the defendant.

He explained that the claim for $22 billion was the fees that the plaintiff paid to the agent to have the containers released.

During the period of the dispute, the plaintiff had pending orders from its overseas customers. Because of the time it took to resolve the issue, the plaintiff was unable to meet the orders, resulting in the orders being cancelled. The value of the lost orders was captured in a spread sheet that the plaintiff's Finance Department generated. The spread sheet was adduced into evidence. The value of the lost orders was in the sum of US$74,134=97.

Using a profit margin of 27%, the plaintiff claimed damages in the sum of US$20,016=44 under this head.

The chemicals expired whilst they were in the containers and awaiting clearance. The value of replacing the chemical was in the sum of US$285,123=76.

During the time that the parties were locked in the dispute, the plaintiff could not produce most of its products and thus lost business due to the unavailability of its products. It calculated this loss at US$404,807=80. Another spread sheet was adduced into evidence, through the witness, showing the plaintiff's calculation of the lost business.

The plaintiff tried to mitigate its damages by borrowing glue from other timber processing companies.

When the judgment of the High Court became available, in November 2005, the witness took the judgment to the defendant, seeking release of the ten containers. He was informed that the defendant would appeal against the judgment - which they did.

Pending determination of the appeal, the plaintiff again approached the defendant for the release of the containers. The approach was not successful leading the plaintiff to approach this court on a certificate of urgency. No judgment was handed down in the matter which was heard on 8 December 2005.

In my view, the witness is an articulate and confident man who fared well under cross examination. He was forthright in his answers to questions put to him under cross-examination and readily admitted to some of the shortcomings in the assumptions that had been used in calculating the damages claimed by the plaintiff. While I found the witness unnecessarily verbose in his responses, I have no reason to disbelieve his evidence.

The second witness to testify on the plaintiff's behalf was one Prince Nyemba. At the time, he was the plaintiff's Finance Director. He joined the plaintiff's employment in August 2006 and was not yet with the plaintiff in May 2005 when the events forming the subject of this trial were unfolding. The plaintiff naturally keeps records of its transactions and the witness had access to these.

The witness then testified as to what the plaintiff's records revealed its loss to be as a result of the delay in having the glue released to it by the defendant.

Under cross-examination, the witness admitted that the claims by the plaintiff had been calculated without taking into account certain exigencies and variables such as changing exchange rates and fluctuating costs of production.

Due to the fact that the witness was not an employee of the plaintiff at the relevant time, and also due to the concessions that he made under cross examination, that the plaintiff's claim was aggressively if not inaccurately calculated, I shall place marginal probative value on his testimony and will only rely on it where it is corroborated by other reliable evidence.

After the testimony of this witness, the plaintiff closed its case.

The defendant opened its case by calling one Clements Kwenda. He is employed by the defendant as a team Leader at Forbes Border Post, having joined the then Department of Customs and Excise in 1990.

The witness detailed the procedures that an importer of goods into the country has to observe before his or her goods can be cleared. Regarding the claim before the court, he testified as follows:

The plaintiff imported two separate lots of chemicals. Firstly, it imported four containers of the chemicals. An entry for the four was submitted to the defendant. A dispute arose as the defendant called for duty at a rate higher than the plaintiff was offering. The matter was then referred to the courts. At a later stage, and while the matter was pending before the court, the plaintiff paid a deposit for the release of the four containers.

As at 25 February 2005, the plaintiff was aware that it could have the ten containers released upon payment of a deposit.

In respect of the ten containers, Bills of Entry for the ten were submitted to the defendant on 29 June 2006. The containers were all cleared on the same date. Prior to this, he was unaware of any letter that the plaintiff had written to the defendant seeking the release of the ten containers. He was aware that a letter had been addressed to the defendant's Harare office though he had not seen it.

Under cross-examination, the witness could not dispute, that, for the previous eleven years the plaintiff had imported the chemical at 5% duty. In his opinion, the officer who inspected the goods and asked for duty at a higher rate was simply doing his work and did not err. He did not agree that the departure from the classification that had been used for the past eleven years had been done with an improper motive.

The witness gave his evidence well. I find that most of his testimony was on facts that are common cause. He was clear as to what transpired between the parties although his attempt to draw a distinction between the Harare and the Mutare offices of the defendant was without basis. On the main, I will rely on the testimony of this witness.

The defendant called the testimony of one Clifford Mubaiwa Chamboko next. He is the man in charge of the defendant's offices in Mutare.

On 17 February 2005, a meeting was held in his office pertaining to the clearance of the four containers. The plaintiff's first witness and the clearing agent were in attendance. The tariff dispute between the parties was discussed.

At no stage did the defendant refuse to accept the entry relating to the ten containers. There was no meeting between the parties regarding the ten containers.

Under cross-examination, the witness maintained that the defendant was justified in re-classifying the imported chemicals. He pointed out that the classification of imports is a complex matter and that for that matter, errors would occur.

The witness gave his evidence in a very measured way; so measured was he, that, at times, he appeared slow. Despite this, I have no reason to disbelieve his evidence as, in my view, there are few material disputes of facts in this matter.

After the testimony of this witness, the defendant closed its case.

At the pre–trial conference of the matter, eight issues were identified for trial as follows:

1. Whether the declarator issued by the Honourable Justice Hungwe, under case no HC838/05, covered the four containers or the ten containers, which are the subject matter of this dispute;

2. Whether the containers were declared for duty purposes;

3. What is the procedure to be followed by an importer of goods in circumstances where there is a dispute in relation to a consignment that has been declared for duty purposes;

4. Whether, in the absence of compliance with such procedure, any liability attaches to the defendant;

5. Whether the defendant is liable to the plaintiff in respect of contents (that) became moribund as well as the customs clearance, storage charges and demurrage charges associated with the containers;

6. Whether the defendant is liable to the plaintiff for special damages in respect of cancelled orders and lost business;

7. In respect of all damages, the quantum of damages that may be awarded to the plaintiff, if any; and

8. What order is to be made as regards costs.

In my view, the issue that falls for determination in this trial, in the main, is whether or not the defendant's conduct was culpable under the lex Aquilia. If so, what damages did the plaintiff suffer?

I narrow down the issues in this manner as, in my view, resolution of issues one to four, as settled at the pre-trial conference, will not resolve the dispute between the parties.

Having listened to the evidence of the parties, it appears clear to me that while the declarator by HUNGWE J specifically dealt with the four containers in respect of which a dispute had been formally declared, his ruling, and that of the Supreme Court on the matter would bind the parties in the importation of similar chemicals and would thus have a direct bearing on the importation of the ten containers.

I also note that while the ten containers may not have been formally presented to the defendant for clearance, the parties were locked in a dispute over the four containers in respect of the duty payable, and, on a practical note, the defendant was most unlikely to accept duty at the lower tariff pending determination of the litigation that was then unfolding between the parties.

The parties are all familiar with the procedures that have to be observed in relation to the importation of products and an answer to this question will, in my view, not bring us nearer to the resolution of the matter than we were when we started off.

I further form the view that the plaintiff has not approached this court because the defendant allegedly did not clear the ten containers of the chemical. The dispute between the parties relates to the defendant's insistence on the incorrect rate of duty after the High Court ruling, and, the issue that arises, in my view, is whether such insistence, including the unsuccessful approach to the Supreme Court on the issue is culpable and renders the defendant liable to the plaintiff in delict.

I now return to the issues as I see them.

In my view, the plaintiff's claim could have been pleaded with greater clarity to reveal the plaintiff's cause of action against the defendant. I must confess, that, I am at a loss as to the cause of action that the plaintiff is raising against the defendant. I had hoped that the cause of action would become clear with the leading of evidence and the final submissions by counsel in the matter.

Unfortunately, it has not, as I shall show below.

The plaintiff has pleaded, in its declaration, that the defendant acted wrongfully against the plaintiff, leading to the plaintiff incurring certain losses.

Reading through the plaintiff's declaration, I discern three possible actions by the defendant that the plaintiff appears to be terming “wrongful”:

(i) Firstly, the plaintiff alleges, in paragraph 4 of the declaration, that the defendant acted wrongfully and unlawfully when it demanded duty for the first four containers at 25%.

(ii) Secondly, it is alleged, in paragraph 6, that the defendant acted wrongfully and unlawfully and with malice when it noted an appeal against the decision of this court.

(iii) Finally, the plaintiff alleges, in paragraph 7, that the defendant acted wrongfully by refusing to clear the ten containers on duty other than the erroneously calculated 25%.

As pleaded above, the plaintiff alleges wrongful action leading to an economic loss without grounding its claim in the lex Aquilia that requires a mental element in the form of negligence or dolus before liability can be founded.

It is my understanding of our law of delict that actions under the lex Aquilia are meant to compensate the plaintiff for the damages occasioned to him or her by the wrongful act attributable to the defendant's fault. Thus, for a successful prosecution of a claim under the action, a plaintiff must prove a wrongful act by the defendant, patrimonial or economic loss, and fault on the part of the defendant.

It is common cause that the plaintiff has not pleaded that the defendant acted negligently in the circumstances of this matter. No particulars of the negligence are pleaded. The plaintiff has not specifically pleaded that the defendant acted intentionally and that it intended to cause loss to the plaintiff by its actions.

It is trite, in my view, that in an action founded on the lex Aquilia, the mental element status of the defendant must be specifically pleaded so that the defendant knows the case that it has to meet. Lack of such particularity, in my view, is fatal to the plaintiff's claim as it does not disclose the plaintiff's cause of action.

On this basis alone, I would absolve the defendant from the instance.

However, I am somewhat handicapped by two events that did not occur in this matter:

(i) Firstly, the defendant did not except to the plaintiff's pleadings for the cause of action to be crystallized before the defendant pleaded thereto.

(ii) Secondly, the matter proceeded through a pre-trial conference where the parties appeared to have been agreed that what was being pleaded was the lex Aquilia and the real issue for determination was whether the defendant was liable to the plaintiff for the pure economic loss that resulted from the defendant's actions.

It is true, in practice, that evidence led at the trial to prove culpa under the lex Aquilia invariably proves the wrongfulness of the conduct: see Van Der Eeecken v Salvation Army Property Co and Another 2008 (4) SA 28 (T)…,.

However, the correct legal position, in my view, is that culpa, in the form of negligence or dolus, like wrongfulness, is an essential requirement for liability under the Aquilian action. While culpable conduct causing harm is not actionable unless it is also wrongful, conduct that is not negligently or intentionally caused but that results in harm is equally not actionable unless there was a duty to prevent the occurrence of harm to the plaintiff. Where the defendant owes the plaintiff no legal duty, there is no wrongfulness. This means that despite the existence of blameworthy conduct on his or her part, the defendant enjoys immunity against liability for damages resulting from such conduct.

I will therefore proceed to examine the evidence that was led at the trial to assess whether the evidence establishes both the culpa and the wrongfulness.

As indicated above, the plaintiff did not plead negligence. Similarly, the tenor of the evidence led at the trial was not suggestive of any negligent conduct on the part of the defendant.

The essence of Joseph Chikwana's evidence was to the effect that the defendant simply refused to release all the containers of chemicals on duty other than at the wrongly calculated 25%. He did not proceed to suggest that such conduct by the defendant in this regard was negligent in any respect.

In his evidence in chief, the plaintiff's main witness did not at all testify as to the defendant's state of mind in refusing to release the containers of the chemicals at 5% duty. It was only in answer to a question put to him in cross-examination that the witness was drawn into testifying that the actions by the defendant were malicious and deliberate although the plaintiff had no complaints to make against the employees of the defendant.

One clearly discerns a contradiction in the evidence so elicited from the witness.

It is common cause that the defendant acts though the agency of its employees. and, if the plaintiff had no complaints about the manner in which the defendant's employees had handled the matters, it is difficult to envisage in what way the defendant acted maliciously and intentionally against the plaintiff.

On the basis of the above, I would find that the plaintiff did not lead any evidence to show that the defendant's conduct, even if found wrongful, was accompanied by such a mental element as to find liability under the lex Aquilia.

In his written submissions, the plaintiff's counsel makes a sweeping statement to the effect that the conduct by the defendant was in breach of a clear statutory provision and that such breach was without just cause. Counsel proceeds to submit, that, at the very least, this constituted gross negligence.

With respect, I find myself unable to agree.

Firstly, I am not convinced that setting the tariff using an incorrect classification was breach of the duty imposed upon the defendant by statute. Secondly, I am not persuaded that making an error in calculating duty is per se gross negligence.

In any event, as discussed above, the plaintiff did not plead negligence and did not lead any evidence to reveal any negligent behaviour on the part of the defendant. It is therefore idle of counsel to make such a submission in the circumstances.

Again, on the basis that the plaintiff failed to lead any evidence upon which I can find that the defendant behaved towards the plaintiff with the requisite mental element to found liability under the lex Aquilia, I would absolve the defendant from the instance on this basis alone.

It appears to me that the plaintiff may have proceeded under the incorrect belief that wrongfulness is similar to and the same as culpa and that pleading wrongfulness on its own suffices to satisfy the requirements of the Aquilian action.

It is not.

The two are separate requirements that have to be satisfied in each suit although the evidence led to prove one may be used to prove the other. I can do no better than associate myself with the observations of SCOTT JA in Gouda Boerdery Bk v Transnet Ltd 2005 (5) SA 490 (SCA) when he had the following to say…,:

“It is now well established that wrongfulness is a requirement for liability under the modern Aquilian action.

Negligent conduct giving rise to loss, unless also wrongful, is therefore not actionable.

But, the issue of wrongfulness is more often than not uncontentious as the plaintiff's action will be founded upon conduct which, if held to be culpable, would be prima facie wrongful.

Typically, this is so where the negligent conduct takes the form of a positive act which causes physical harm. Where the element of wrongfulness gains importance is in relation to liability for omissions and pure economic loss. The inquiry as to wrongfulness will then involve a determination of the existence or otherwise of a legal duty owed by the defendant to the plaintiff to act without negligence: in other words to avoid negligently causing the plaintiff harm. This will be a matter for judicial judgment involving criteria of reasonableness, policy, and, where appropriate, constitutional norms.

If a legal duty is found to have existed, the next inquiry will be whether the defendant was negligent.

The test to be applied will be that formulated in Kruger v Coetzee, involving as it does;

(a) First, a determination of the issue of foreseeability; and

(b) Second, a comparison between what steps a reasonable person would have taken and what steps, if any, the defendant actually took.

While conceptually the inquiry as to wrongfulness might be anterior to the enquiry as to negligence, it is equally so that without negligence the issue of wrongfulness does not arise; for conduct will not be wrongful if there is no negligence.

Depending on the circumstances, therefore, it may be convenient to assume the existence of a legal duty and consider first the issue of negligence. It may also be convenient, for that matter, when the issue of wrongfulness is considered first, to assume for that purpose the existence of negligence.

The courts have, in the past, sometimes determined the issue of foreseeability as part of the inquiry into wrongfulness, and, after finding that there was a legal duty to act reasonably, proceeded to determine the second leg of the negligence inquiry, the first (being foreseeability) having already been decided.

If this approach is adopted, it is important not to overlook the distinction between negligence and wrongfulness.”…,.

Assuming that I have erred in finding that the plaintiff fatally failed to plead and prove culpability on the part of the defendant, I now turn to consider whether the conduct by the defendant was wrongful.

In my view, the issue of wrongfulness in this matter takes centre stage as the loss that the plaintiff seeks to be redressed is pure economic loss. There is thus no physical damage to the property of the defendant giving rise to the loss, which, historically, would have led to the conclusion that the action of the defendant was prima facie wrongful if it was culpably caused: see Gouda Boerdery Bk v Transnet Ltd 2005 (5) SA 490 (SCA).

The inquiry as to wrongfulness in situations where the plaintiff has suffered pure economic loss as occurred in this matter involves a determination of the existence or otherwise of a legal duty owed by the defendant to the plaintiff to act without culpa.

It has been held in a number of authorities, that, the inquiry into whether or not the defendant owed the plaintiff a legal duty will be a matter for judicial judgment involving criteria of reasonableness, policy, and, where appropriate, constitutional norms.

This has been a part of our law since the courts in this jurisdiction accepted that the Aquilian action was wide enough to apply to claims for pure economic loss.

Thus, in Zimbabwe Banking Corporation v Pyramid Motor Corp 1985 (4) SA 553 (ZSC)…, GUBBAY JA…, had this to say:

“There is no general principle of delictual liability for economic loss negligently caused. It must have been caused wrongfully as well as culpably. There must have been an infringement of a legally protected right, the determination of which requires the exercise of a judicial value judgment embracing all relevant facts, including matters of policy: see Administateur, Natal v Trust Bank van Afrika Bpk 1979 (3) SA 824 (A) at 833D-H. For whereas physical injury to person or corporeal property is prima facie unlawful, causing economic loss is not.”

In casu, it is my view that the plaintiff approached this matter without realizing that its claim called for more than evidence of what transpired between the parties.

Having approached the court for an order redressing pure economic losses, it fell upon the plaintiff to persuade the court to make a value judgment to the effect that the defendant owed the plaintiff a duty not to cause it loss through the incorrect calculation of duty.

This is a novel duty to which the Aquilian action has not yet been extended by our courts.

As such, great care had to be taken in leading evidence that would persuade the court to hold that the extension of the action to cover such incidences is proper and is in accordance with policy.

No evidence was led before me as to what a reasonable collector of revenue would have done in the circumstances and whether to hold the defendant liable in the circumstances of the matter will be promotive of any social or economic norm that is consistent with current policies on revenue collection.

Speaking for myself, I am reluctant to extend the action to hold liable a public body, like the defendant, for an error that occurs during the discharge of its statutory functions.

I am also reluctant to hold liable a defendant for pursuing a constitutional right in unsuccessfully noting an appeal to the Supreme Court as to do so might be to stifle, and, in some cases, completely negate such right.

But, these are just my views arrived at without the aid of argument from counsel.

In reaching this conclusion, I have been influenced by the remarks by GUBBAY JA…, in Zimbabwe Banking Corporation v Pyramid Motor Corp 1985 (4) SA 553 (ZSC)…, when he had this to say:

“Mr Chaskalson is, of course, correct in cautioning that, in determining whether any norm of behaviour causing economic loss should be characterised as wrongful, the adoption of a conservative approach is required: see the Lillicrap case supra at 500D-E and the authorities there-cited.

Certainly, there is need for 'care and circumspection' in the ascertainment of whether a particular type of action is one which will be confined within reasonable and manageable bounds and is not fraught with what aptly has been described as 'overwhelming potential liability'.

Each case must be assessed pragmatically on its own facts and merits, with primary weight being laid upon the policy of the law.

The Court must ask itself whether, paying due and proper regard to the notion of justice and the interests of the litigants balanced against the community as a whole, it is socially desirable to impose liability in the particular circumstances: see Tobacco Finance (Pvt) Ltd v Zimnat Insurance Co Ltd 1982 (3) SA 55 (ZH) at 61F-H.”

On the basis of the above, I would hold that the conduct complained of was not wrongful in the circumstances even if it was committed with the requisite culpability, which I have already found above not to have been proved.

In view of the finding that I make on the liability of the defendant, I do not think it is necessary that I make a finding on the quantum of damages sought by the plaintiff in this matter. However, in keeping with the practice of this court, I shall proceed to do so for the benefit of the Supreme Court in the event that my decision is appealed against.

It has been my finding above that the evidence of the plaintiff's two witnesses, in respect of the alleged loss, was inconclusive in that, under cross-examination, the witnesses admitted that the claims by the plaintiff had been calculated without taking into account certain exigencies and variables such as changing exchange rates and fluctuating costs of production. As such, it is my view that the amounts claimed by the plaintiff in its declaration are somewhat exaggerated and are not a correct reflection of the loss actually suffered by the plaintiff.

In the result, I make the following order:

1. The defendant is absolved from the instance.

2. The plaintiff shall meet the costs of the defendant.

The dispute between the parties arose as a result of the introduction, by S.I.80A on 5 April 2007, of legislation requiring importers, like the applicant, to pay duty in foreign currency for specified goods. Prior to that date, the duty and value added tax was payable in Zimbabwe dollars, after the conversion of the value of the imported goods from their foreign currency value to Zimbabwean dollars.

The need for conversion from Zimbabwean dollars back to foreign currency did not arise until after the introduction of S.I.80A of 2007.

After 5 April 2007, the value of imported goods is first converted to Zimbabwean dollars from their value in foreign currency. In the case of luxury items, the payable duty and value added tax in Zimbabwe dollars will then be converted for payment of duty and value added tax in foreign currency.

The Zimbabwe Revenue Authority is no longer using conversion rates for new imports but it is still doing so for the removal of goods from bonded warehouses, if they were put therein before the use of multi-currencies started.

Both parties agreed, in their respective heads of argument, that the issue of the conversion rate to be used is still relevant. The dispute between them has therefore not been resolved.

There are, in my view, two groups of goods to be considered. Those warehoused before the introduction of duty in foreign currency, and those warehoused thereafter.

Goods warehoused prior to 5 April 2007

In respect of the goods warehoused before the payment of duty in foreign currency was introduced, the case can be determined by establishing whether or not payment of duty in foreign currency was introduced with retrospective effect. If they were not, the entry which will factor in the foreign currency payment is that for the removal of the goods from the bonded warehouse. Statutory Instrument 80A of 2007, in section 1(1) provides as follows:

“(1) This Notice may be cited as the Customs and Excise (Designation of Luxury Items) Notice, 2007.

(2) This Notice shall come into force on 5 April 2007.”

The intention of the legislature was to bring the payment of duty in foreign currency into effect from 5 April 2007. This means, any duty which was charged on entry, at the port of entry, before 5 April 2007, was charged in Zimbabwean dollars and created a debt by the importer (“the applicant) to the respondent in Zimbabwean dollars.

The Zimbabwean dollars is, therefore, the currency of account, which can now only be paid in foreign currency as converted on the date of removal from the bonded warehouse. This means the entry which will factor in foreign currency is the entry for consumption.

Any other interpretation would bring retrospective operation to S.I.80A of 2007, when it specifically provides that it came into effect on 5 April 2007.

Goods warehoused after 5 April 2007

The position in respect of goods imported after 5 April 2007 will depend on what the law provides as regards the calculation of duty at the port of entry.

Counsel for the applicant submitted that the respondent calculates duty and value added tax in Zimbabwean dollars at the port of entry, and only converts it into foreign currency on entry for consumption, that is, at the time the goods are removed from the bonded warehouse.

He submitted that the currency of account is therefore in Zimbabwean dollars and that of payment is in foreign currency.

Counsel for the respondent submitted that duty is calculated into foreign currency at the port of entry.

He therefore submitted that the issue of conversion into foreign currency on the date of entry for consumption does not arise as the conversion is done at the port of entry when the goods are imported into the country.

The dispute between the parties would have been easily resolved if the applicant had attached bills of entry which confirm their contention. That would have proved, or disproved, the respondent's contention, that, the currency of account and the currency of payment were both in foreign currency at the time the goods were entered for importation.

This demonstrates the importance of attaching documents to affidavits, in terms of Rule 227(4)(b) of the High Court Rules 1971, to verify averments in affidavits.

The court must now interpret the law to determine the legal position as to when the conversion into foreign currency (“United States dollars”) must be done.

That will resolve the issue whether or not the issue of conversion arises at the time of entry for consumption.

Counsel for both parties' are agreed on the following provisions of the law on the importation of goods and the payment of the duty and value added tax.

1. That in terms of section 38(1) of the Customs and Excise Act [Chapter 23:02] goods may not be imported without entry being made and the duty (which includes value added tax) being paid or secured.

2. That in terms of section 39(1) of the Customs and Excise Act [Chapter 23:02], entry must be made at the port of entry, that is, at the border post through which the goods are imported.

3. That in terms of section 40(1)(c) of the Customs and Excise Act [Chapter 23:02], duty must be paid at the port of entry, or be secured, if the importer is taking the goods into a bonded warehouse, licenced in terms of section 68 of the Customs and Excise Act [Chapter 23:02].

4. That in terms of section 69 of the Customs and Excise Act [Chapter 23:02], a security bond must be given to secure the payment of duty for the goods placed in a bonded warehouse.

5. That in terms of section 70(1) of the Customs and Excise Act [Chapter 23:02], goods are stored in a bonded warehouse without the payment of duty, but if they are lost, or damaged, on the way to the warehouse, duty immediately becomes due for the value by which the value of the goods to be warehoused are diminished.

I agree with counsel for the parties on their interpretation of the abovementioned sections.

The parties are in dispute on the interpretation of section 115 of the Customs and Excise Act [Chapter 23:02] as it was after its amendment by section 13 of the Finance Act No.8 of 2007, and before it was repealed and substituted by section 37 of the Finance Act No.3 of 2009.

The amendments to section 115 of the Customs and Excise Act [Chapter 23:02], by section 13 of the Finance Act No.8 of 2007, came into effect on 6 September 2007. It was repealed by section 37 of the Finance Act No.3 of 2009 which came into effect on 30 January 2009.

This means the current provisions of section 115 of the Customs and Excise Act [Chapter 23:02] do not apply to the dispute between the parties because the dispute predates it.

The applicable law is, therefore, section 115 of the Customs and Excise Act [Chapter 23:02] as it was after it was repealed and substituted by section 13 of the Finance Act No.8 of 2007, which came into effect on 6 September 2007.

The then section 115 of the Customs and Excise Act [Chapter 23:02] provided as follows:

“(1) When the value or cost of any imported goods, or any element that is required to be included in such value or cost, is expressed in the currency of a foreign country, it shall be converted to the currency of Zimbabwe at the selling price for that foreign currency as designated by the Commissioner, in consultation with the Reserve Bank of Zimbabwe, applicable as a customs rate at the time the goods concerned were entered in terms of this Act; provided that where one or more special rates, in addition to the general rate at which the Zimbabwe dollar may be exchanged for the United Dollar as specified in Exchange Control (“Exchange Rate”) Direction 2002 (S.I.223 of 2002) or in any other statutory instrument amending or replacing that Direction, the Minister may, by instruction to the Commissioner, published in the Gazette, determine that a special rate shall apply in respect of certain goods specified in the instruction.

(2) ...,.

(3) In calculating the duty payable on any luxury items, the value for duty payable shall be calculated in the same way as for goods that are not luxury items except that the Zimbabwe dollar duty and import, or valued added tax, thus arrived at shall be converted, at the general rate referred to in the proviso to subs (1), into United States dollars; provided that where any amount of duty and import, or value-added tax, thus payable may require payment to be made in coins, the Commissioner is authorised to increase, or reduce, the amount to the nearest figure, to enable payment to be made in notes only.”

The issue between the parties can be resolved by the interpretation of section 115(3) of the Customs and Excise Act [Chapter 23:02].

Counsel for the applicant's heads of argument..., submitted that:

“Section 115(1) provides that where the value or cost of any good is expressed in foreign currency, it is to be converted into Zimbabwean currency, at the applicable customs rate, at the time when the goods were entered in terms of the Act. It is submitted that, here, the concept of entered must apply to the first time on entry.”

I agree with his interpretation of section 115(1) of the Customs and Excise Act [Chapter 23:02] but would add that that subsection refers to goods in general without distinguishing between ordinary and luxury goods. It must be, therefore, read to mean that, in general, the value of goods expressed in foreign currency must be converted into Zimbabwean currency at the port of entry.

The distinction between ordinary and luxury goods is made in subsection (3) of section 115 of the Customs and Excise Act [Chapter 23:02]. In..., his heads of argument, counsel for the applicant briefly dealt with the other subsections of section 115 of the Customs and Excise Act [Chapter 23:02] as follows:

“Other subsections of section 115 deal with the payment of certain duties in foreign currency. These are the crux of this matter.”

He is correct in saying that these are the crux of this case. In fact, subsection (3) of section 115 of the Customs and Excise Act [Chapter 23:02] is the crux of this case.

In..., the applicant's heads of argument, counsel for the applicant commented on it as follows:

“Subsection (3) of the Act requires that the VDP on luxury items be calculated in the same way as goods that are not luxury items, except that the Zimbabwean dollar duty and value added tax so calculated is to be converted at the general rate referred to in subs (1). The question is; when is that conversion to be done?”

A careful reading of subsections (1) and (3) of section 115 of the Customs and Excise Act [Chapter 23:02] provides that the calculation of duty shall be done at the time of entry for importation at the port of entry. Subsection (3) of section 115 of the Customs and Excise Act [Chapter 23:02] then provides that the duty for luxury items shall –

“be calculated in the same way as for goods that are not luxury items, except that the Zimbabwean dollar duty and import, or value added tax, thus arrived at shall be converted, at the general rate referred to in the proviso to subsection (1), into United States dollars.”

This must mean the conversion from Zimbabwean dollars to United States dollars, for luxury items, must be done at the port of entry, to complete the calculation of duty, just as the calculation of duty for non-luxury goods is completed at the port of entry.

In terms of section 38(1) of the Customs and Excise Act [Chapter 23:02], duty is calculated at the port of entry.

This means, for an importer who does not have a bonded warehouse, or intent to take the goods to a bonded warehouse, duty is paid at the port of entry.

Duty must, therefore, be calculated into foreign currency at the port of entry.

Counsel for the respondent submitted, in paragraph 18,19 and 21.1 of his heads of argument that:

“18. It is respectfully submitted that by virtue of the above provisions, the applicable exchange rate is the one prevailing at the 'time the goods were entered in terms of this Act', to wit, at the time of importation, and the same rate applies in reverse, i.e. for the determination of duty payable.

19. It is inconceivable that the intention of the legislature was to have multiple exchange rates in one transaction, that is to say, in one bill of entry. What is clear from an examination of all the provisions is that the value for duty purposes is determined using the exchange rate applicable upon importation, and, likewise, the duty payable is determined at the same rate.

21. It is submitted that duty is determined at the time of importation and is fixed for luxury items, in foreign currency, and is due in the same currency. The question of conversion does not, therefore, arise.”

He relied on what the respondent had said..., in its opposing affidavit, which reads as follows –

“All the information on the bill of entry for consumption will be the same as on the bill of entry for warehousing, save only for the rate of duty, if same would have changed, as the law provides that the rate of duty prevailing at the time of removal from the warehouse will apply. Before the introduction of duty in foreign currency for motor vehicles, such duty as had been calculated on the defined value in the bill of entry for importation would be payable in local currency.  However, after the introduction of duty in hard currency, the duty in local currency will be converted back to foreign currency using the same rate that was used to calculate the defined value of the vehicle at the time of importation.”

An examination of subsection (1) and (3) of section 115 of the Customs and Excise Act [Chapter 23:02] reveals a continuous process by which duty and value-added tax should be calculated for luxury items.

Subsection (1) of section 115 of the Customs and Excise Act [Chapter 23:02] provides that the customs exchange rate applicable at the time of entry shall be used to convert the foreign currency value of the imported goods into Zimbabwean currency.

Subsection (3) of section 115 of the Customs and Excise Act [Chapter 23:02] then provides that “the calculation of duty and value-added tax for luxury items shall be the same as non-luxury items, except that the Zimbabwean dollar duty and import, or value added tax, thus arrived at shall be converted, at the general rate referred to in the proviso to subs (1), into United States dollars..,.”

This means, the procedure for calculating duty for both luxury, and non-luxury, items, starts from the conversion of their foreign currency value to Zimbabwean dollars, at the rate prescribed by subsection (1) of section 115 of the Customs and Excise Act [Chapter 23:02].

In the case of non-luxury goods, the process ends with the calculation of duty and import, or value-added tax, in Zimbabwe dollars.

In the case of luxury items, the process proceeds to the conversion of the resultant Zimbabwean dollar duty and import, or value-added tax, into foreign currency, at the general rate referred to in the proviso to subsection (1) of section 115 of the Customs and Excise Act [Chapter 23:02]. This means, the calculation of duty for luxury items, at the port of entry, would not be complete until the Zimbabwe dollar duty has been converted into foreign currency.

It was further submitted that as shown by Annexures BB1, BB2, and D, the applicant owned the vehicle at the time of his arrival. The vehicle, it was argued, had been bought through the use of personal funds, as per arrangements between the applicant and Dr. E.Nhodza. Payment for the vehicle was routed through an authorised dealer, namely Standard Chartered Bank Zimbabwe Limited, as required by the Exchange Control Regulations.

It was, therefore, argued that the first respondent's attempt to retrospectively alter the position which freed the vehicle from all and any encumbrances was without basis and should, therefore, be rejected.

The first respondent submitted that the applicant did not own the vehicle at the time of his arrival or return to Zimbabwe on 8 August 2008. The first respondent based his argument on the fact that payment..., was effected on 15 and 18 August 2008. This submission by the first respondent is also linked to the submission that the funds for the purchase of the vehicle did not belong to the applicant. It was argued that the funds belonged to Dr.E.Nhodza.

Ownership, as indicated in Mazarura v Director of Customs and Excise SC98-02, and Mahammed v Director of Customs and Excise 1998 (1) ZLR 60 (H), can be acquired in various forms.

Annexure D conveys to me that there was indeed a binding arrangement between the applicant and the vehicle supplier (ADC (Export) Services Limited). That arrangement existed at the time the vehicle was imported and, indeed, it finally arrived under the applicant's name. I do not, therefore, see value in the argument that the vehicle was paid for after its arrival.

The importation of the vehicle by the applicant brought in a number of players such as Dr.E.Nhodza, authorised dealer (Standard Chartered Bank), the supplier of the vehicle (ADC (Export) Services Limited), shipper (Safmarine), and the first respondent itself. Documentation from all these players led to the final registration of the vehicle in the applicant's name on 5 December 2008.

The second respondent (the judgement creditor) had obtained judgement against Mbada Mine; and the Sheriff, having attached certain movables at Mbada Mine, had advertised them for sale. The property attached comprises mining equipment, vehicles and office furniture. The claimants in the court a quo had filed separate interpleader applications which were consolidated and heard together, as the facts, the legal issues and the judgement creditor were the same.

Both claimants averred that the items attached had been imported by Mbada Mine but actually belonged to them. Ownership in this equipment was reserved in their favour until it was fully paid for. According to the claimants, Mbada Mine still owes ZAR42 million and ZAR48 million to the claimants respectively. Therefore, the equipment was not executable, as per the agreements between the claimants and Mbada Mine, until the purchase prices had been fully paid.

The judgment creditor averred that Mbada Mine had imported, and was the owner, of the equipment in question. The agreements relied upon by the claimants were a façade since the claimants had neither imported the equipment nor did it belong to them.

Decision of the High Court and Grounds of Appeal

The High Court considered the relevant legislation and accepted that goods may be imported by persons other than their owner. Also relevant was the definition of the word “holder” in the Mines and Minerals Act, in terms of which a holder of a registered mining location can import goods belonging to another and can benefit from the suspension of duty on goods imported for his mining operations. Any person who is not a holder, as defined, or imports goods for resale, is not entitled to suspension of duty under the governing Customs Regulations.

The court a quo found that the documents available showed that Mbada Mine, being a holder, had imported the disputed equipment into the country. The claimants had not shown that they were the owners of that equipment. They had not produced the relevant importation documents issued by the customs authorities. They had only produced transportation documents and invoices which did not assist their claims. The documents relating to suspension of duty showed the claimants as suppliers rather than owners of the equipment in question. Moreover, there was nothing to show that the claimants had imported the equipment temporarily in the absence of temporary import permits or proof of duty paid on the equipment. Additionally, one document issued by the customs authorities showed that some of the goods had been imported permanently by Mbada Mine. The equipment could only have been so imported if Mbada Mine had assumed permanent ownership. The claimants could not be owners of goods imported permanently by Mbada Mine.

On the basis of these findings, the court a quo held that the probabilities favoured the judgment creditor's assertion that the equipment belonged to Mbada Mine and that the agreements of sale relied upon were mere shams. The evidence suggested that there was collusion between Mbada Mine and the claimants in order to frustrate the execution process. The claimants had failed to persuade the court that they were the owners of the equipment in dispute. In the event, the court dismissed the claimants' claims with costs and declared the claimed property specially executable.

The grounds of appeal herein relate, in essence, to the ownership of the assets in question.

The appellants assert that the question of ownership is governed by the agreements of sale and that ownership in the assets has not transferred from the appellants to Mbada Mine but remains vested in them pending full payment of the relevant purchase prices. They also assert that the importation process could not impact on the question of ownership or proprietary rights in the assets. The appellants could be the beneficial owners of equipment imported permanently by Mbada Mine….,.

It is not in dispute that Mbada Mine had imported the assets that were attached by the Sheriff. The point of contention is whether, in so importing, Mbada Mine had assumed the right of ownership in the assets. It is also not in dispute that initially, at some point, the appellants owned the assets in question….,.

The appellants argue that the fact that Mbada Mine was the one which imported the assets into the country did not mean that Mbada Mine was the owner of the assets. They argue, further, that the court a quo's reliance on importation documents was a misdirection since importation does not prove ownership. To buttress this submission, the appellants rely upon the definition of “importer” in the Customs and Excise Act. Having regard to this definition, the appellants argue that the mere fact that Mbada Mine had imported the assets did not prove that ownership vested in it. This is so because the definition of importer includes an owner or other person….,. They maintain that Mbada Mine was involved in the importation of the equipment only as the holder of a registered mining location.

Essentially, the crux of the appellants' argument is that one can be a holder and an importer but not necessarily the owner of the assets imported….,.

It is also the second respondent's submission that the letter from the Zimbabwe Revenue Authority (ZIMRA) to Mbada Mine, concerning the suspension of duty on the importation of the assets, implied that it was Mbada Mine that was the owner of the assets. This was because there was a clause in the letter stipulating that the assets were not to be sold.

The question that this Court has to decide is whether the appellants have successfully discharged the onus of proving that they are the owners of the assets concerned. To answer this question, it is necessary to determine whether the reliance by the court below on importation documents to prove ownership was competent and whether the agreements showing the appellants' ownership of the assets were genuine.

Whether Importer must be the Owner

I take the view that the court a quo's reliance on importation documents to determine the issue of ownership was flawed and incorrect. This is so because the Customs and Excise Act [Chapter 23:02] makes it clear that a person, who is not the owner, can be an importer of goods. Section 2 of the Customs and Excise Act [Chapter 23:02] states that an importer:

“includes any owner of or other person possessed of or beneficially interested in any goods at any time before entry of the same has been made and the requirements of this Act fulfilled.”…,.

The above provision is clear and unambiguous.

An importer can either be the owner or anyone else who is possessed of or beneficially interested in the goods to be imported. It does not limit the definition of an importer to the owner alone.

Mbada Mine possessed an interest in the assets as they were to be used at its mine. It was not disputed that it was Mbada Mine that had imported the assets. However, by holding that Mbada Mine was also their owner, simply by virtue of having imported the assets, the court a quo undoubtedly misdirected itself. It is abundantly clear under the Customs and Excise Act that even a non-owner may import goods.

In relation to suspension of duty on the importation of mining equipment, the Customs and Excise (Suspension) Regulations 2003 (S.I.257 of 2003) as amended, provide, in section 9K(2), that:

“Suspension of duty shall be granted to a holder in respect of specified goods which, during the specified period, are imported by that holder for use solely and exclusively for mining development operations.”

A “holder” of a mining location, in the context of the above Regulations, is defined, in section 5(1) of the Mines and Minerals Act [Chapter 21:05] as:

“The person in whose name such location is registered with the Mining Commissioner or with the Board or with the Secretary…,.”

The above provisions make it clear that suspension of duty on imported mining equipment is provided for persons who are holders of registered mining locations in terms of the Mines and Minerals Act. There is nothing in the definition of an “importer” or “holder”, or in the provision which allows for suspension of duty, to indicate that the person importing the equipment has to be the owner of that equipment. For an importer to be entitled to suspension of duty, he has to be a holder of a registered mining location, and must show that the equipment will be used solely and exclusively for mining development operations.

Having regard to the foregoing, I take the view that the court a quo's reliance on importation documents to prove ownership of the assets in question was misguided and incorrect. The relevant statutory provisions are clear in that they do not speak of an owner of goods but rather of an importer and a holder - neither of which necessarily has to be the owner. To this end, the question of who imported the assets becomes of no consequence to the determination of ownership.

The evidence of the former employee of Mbaba Mine is only helpful to the extent that it proves what is already common cause, to wit, that Mbada Mine was the importer of the equipment. He could not positively state whether Mbada Mine had purchased the equipment before it was imported or paid for it at any time thereafter.

It was the second respondent's argument that Mbada Mines had made itself out to be the owner by importing the assets on a permanent basis and that the letter from the Zimbabwe Revenue Authority (ZIMRA) directing that the assets were not to be sold implied that ZIMRA was under the impression that the assets belonged to Mbada Mine. The second respondent contends that this impression could only be drawn from a representation by Mbada Mine that the assets belonged to it and no one else.

While it may be a fact that Mbada Mine imported the assets on a permanent basis, that fact does not automatically mean that it did so on the premise that it was the owner of those assets. Nothing was advanced to substantiate the argument that permanent importation is only available to the owner and not an importer who does not own the assets. Indeed, nothing to buttress such argument was placed either before the court a quo or before this Court.

In the event, the argument cannot succeed.

Section 119 of the Customs and Excise Act [Chapter 23:02] reads:

“119 Appeals against valuation of goods

[1] Any person who is aggrieved by any determination of the Commissioner in terms of this Part may, subject to section one hundred and ninety-six and after payment of the amount of any duty or tax demanded by the Commissioner in respect of the goods concerned, appeal to the High Court against such determination. [emphasis by respondent's counsel]

[2] If, on an appeal in terms of this section, the High Court determines that a lesser amount was payable by way of duty or tax than the amount actually paid by the appellant in terms of subsection [1], the Commissioner shall refund the amount overpaid in accordance with section one hundred and twenty-five.”

As to whether by 3 September 2011 the applicant had fully paid for the motor vehicle, I come to the conclusion that the correct position is that he had fully paid for it by 29 August 2011 as reflected by the FNB invoice. He therefore owned the vehicle from 29 August 2011…,.

This is an appeal against part of the judgment of the High Court which decided against the appellant on several issues on which the parties had failed to reach agreement in an urgent chamber application....,.

BACKGROUND

During the period extending from January 2009 to July 2013 the appellant imported and declared goods which were then classified as base stations. On 3 December 2013, the second respondent wrote a letter to the appellant informing it that the respondents had carried out a post-clearance audit of the “base station importations” by the appellant during the stated period. The audit had revealed anomalies which the second respondent attributed to mis-classification of single components or parts of base stations as complete base stations by the appellant. The second respondent stated, in the same letter, that the appellant ought to have been, and was aware, that all importations of base stations were to be moved into bond and warehoused and the final consumption entries of the base stations would be done inland. The conclusion was, therefore, that the first respondent had been prejudiced in the sum of $15,884,943=45 in customs duty and value added tax. The appellant was, as a consequence, requested, in the said letter, to pay the tax as well as a 300 percent penalty on the tax due bringing the amount due to $63,539,773=84.

On 9 December 2013, the respondents placed a garnishee order against the appellant's CBZ bank account for the amount of $63,539,773=84. A similar process was done on the appellant's Steward Bank account in the sum of $62,909,433=11. Both garnishee orders were placed in terms of the Income Tax Act [Chapter 23:06].

In response, the appellant filed an urgent chamber application with the High Court of Zimbabwe on 10 December 2013. It sought an interim order in the following terms:

“TERMS OF INTERIM RELIEF GRANTED

PENDING THE FINAL DETERMINATION OF THIS MATTER IT IS ORDERED THAT:

1. The garnishee orders placed by the respondents on 9 December 2013 on the applicant's accounts with Steward Bank Limited in the amount of US$62,909,433=11 and CBZ Bank Limited in the amount of US$63,539,733=84 be and are hereby set aside.

2. The respondents be and are hereby interdicted from placing any garnishee orders on applicant's accounts with any other person or bank on the same, similar or related grounds as in this case.”

The final order it sought was couched:

“TERMS OF THE FINAL ORDER SOUGHT

IT IS ORDERED THAT:

1. The respondents' claim against the applicant for payment of duty and Value Added Tax amounting to US$15,884,943=46 in respect of the importation of base station components by the applicant during the period January 2009 to June 2013 be and is hereby set aside and dismissed.

2. The penalty of 300 percent amounting to US$47,654,830=38 imposed on the applicant by the respondents be and is hereby set aside and dismissed.”

The appellant sought this interim order on three bases.

(a) The first was that the garnishee orders were un-procedural as they were made in terms of section 58 of the Income Tax Act despite the fact that the tax claimed was due under the Customs and Excise Act [Chapter 23:02]. It argued that such a procedure for customs duty is provided in terms of section 201A of the Customs and Excise Act. It contended that, assuming that the procedure for appointing a representative taxpayer does apply to disputed tax liabilities, the appellant had a right to object to an assessment in terms of section 62 of the Income Tax Act. The appellant contended that Part IIIA of the Revenue Authority Act [Chapter 23:11], which provides for the procedure for the recovery of outstanding taxes, safeguards the appellant's rights to object to assessments and to be heard in the determination of any tax claims. The same applies to section 201A of the Customs and Excise Act [Chapter 23:02] it argued.

(b) The second basis was that there was no anomaly in the clearance of the appellant's base station components. It made reference to a letter from the Department of Customs and Excise which was written in 1998 in response to a letter from the appellant seeking guidance on classification of base station components. In the letter, dated 5 October 1998, the Department of Customs and Excise responded and stated:

“I confirm that the goods on the lists that you have submitted can be imported by your company duty free under tariff 8525.2020 as components that make up a base station. The Collectors of Customs and Excise at Beitbridge, Harare, Bulawayo and Plumtree have been advised and the list circulated to them.”

The same position was restated by the second respondent in a subsequent letter on 24 February 2010. In this letter, the second respondent took the position that components of a base station can be cleared under tariff 85176100 in the quantities specified therein. The appellant argued that the duty to classify lay with the respondents and their duty assessments constituted pactum de non petendo as between them and the appellant.

(c) The third issue was that the 300 percent penalty was irregular and excessive and could only have been levied in terms of section 200 of the Customs and Excise Act against a party who admits to an alleged fiscal offence or if the respondents had gone to court to obtain an order to that effect.

The respondents opposed the application.

Regarding the irregularity of the use of the garnishee notice with references to the Income Tax Act, the respondents attributed this to an error on the part of the first respondent's officers mainly due, allegedly, to the fact that the forms for customs and excise are “virtually identical” to those for the Income Tax Act. It was averred that the garnishee notices had since been withdrawn and that it was intended to issue the correct documents in terms of the Customs and Excise Act.

The respondents denied issuing an advance tax ruling as contemplated by the law. They contended that the appellant could not rely on administrative correspondence between it and managers of the first respondent. They therefore denied that the requirements of estoppel were established. They also challenged the argument that the respondents were functus officio in light of section 87 of the Customs and Excise Act which provides:

“87 Classification of goods for customs purposes

(1) For the purpose of determining the customs duty payable in respect of any goods that are imported, the Commissioner or an officer shall classify such goods into the appropriate tariff headings, subheadings or codes in accordance with any rules set out in the customs tariff, paying due regard to -

(a) The explanatory notes to the Harmonised Commodity Description and Coding System, issued from time to time by the World Customs Organisation in Brussels; and

(b) Decisions of the Harmonised Commodity Description and Coding System Committee.

(2) The Commissioner shall vary or set aside a classification of goods made in terms of subsection (1) if he is satisfied, whether on appeal by the importer of the goods or otherwise, that the classification was incorrect.

(3) Any classification of goods made in terms of this section shall be binding on the importer of the goods, subject to an appeal —

(a) To the Commissioner, where the classification was made by an officer; or

(b) To the Fiscal Appeal Court in terms of the Fiscal Appeal Court Act [Chapter 23:05], where the classification was made, varied or confirmed by the Commissioner.

(4) The Commissioner shall ensure that at least one copy of —

(a) The publications referred to in paragraph (a) of subsection (1); and

(b) Any decision referred to in paragraph (b) of subsection (1) on which he has relied for the purpose of classifying any goods;

is kept available for public inspection during normal business hours in his offices and at such other offices of the Department as he considers appropriate.

(5) If the classification of goods for the purposes of this Act is an issue in any proceedings before any court, a document purporting to be a copy of a publication or decision referred to in subsection (1), and purporting to be certified as correct by the Commissioner, shall be admissible in the proceedings as prima facie proof of its contents upon its production by any person.”...,.

In respect of the penalty, the respondents justified it on the basis that the appellant's agents had allegedly displayed flagrant disregard for the Customs and Excise Act. Additionally, the respondents argued that the appellant had alternative remedies, including an appeal to the Fiscal Appeals Court. The appellant could also lodge security under the Customs and Excise Act as well as payment of the capital and interest claimed pending the determination of the penalty. The respondents also argued that the correct forum for the ventilation of the dispute was the Fiscal Appeal Court and not the High Court.

The court a quo narrowed down five issues that it had to determine in respect of the urgent chamber application before it. These were:

(a) Whether the importation of the base stations by the applicant, during the period January 2009 to July 2013, was conducted within the law.

(b) Whether the respondents were prevented from reviewing the classification for customs duty purposes of base station components imported by the applicant during the relevant period, by the doctrines of estoppel, waiver or functus officio.

(c) Whether the second respondent was entitled, at law, to impose and collect a fine without the agreement of the appellant or a fine of the magnitude imposed on the appellant.

(d) Whether it was competent for the second respondent to collect the fine imposed on the applicant through the garnishee procedure provided for under section 201A of the Customs and Excise Act.

(e) Whether the launching of an appeal or other challenge to the classification of goods for customs purposes, under section 87 of the Customs and Excise Act, precludes the respondents from collecting customs duty under challenge under section 201A of the Customs and Excise Act pending the determination of the appeal or other challenge.

The court a quo found, in respect of the first issue, that the importations were not done lawfully but through false declarations. It found, further, that the appellant's agents had made such declarations and that their transgressions lay squarely on the appellant as the principal.

In respect of the second issue, the court a quo found that the doctrine of estoppel did not preclude the respondents from acting as they did especially in light of section 87(2) of the Customs and Excise Act. The court equally found the doctrine of waiver not applicable as it found that an error in classification did not amount to waiver of the duty payable.

Regarding the fourth issue, the court a quo found that the respondents could not levy a fine without the appellant admitting to the fiscal offence or where the court so orders.

The fifth issue was also resolved in favour of the appellant on the basis that section 201A of the Customs and Excise Act relates to the placing of a garnishee for duty only and not for a fine.

The court made the following order therefore:

1. The declarations made by the applicant amounted to a contravention of the law.

2. The respondents were entitled to re-classify goods arising from the post-clearance audit.

3. The respondents could not waive a duty to correctly classify the goods.

4. The noting of the appeal to the Fiscal Appeal Court did not suspend the decision of the second respondent.

5. The second respondent could not impose a penalty without the consent of the applicant.

6. The second respondent could not collect the penalty by way of garnishee.

7. None of the parties completely succeeded in the arguments advanced. It is ordered that each party shall bear their costs.

THIS APPEAL

The appellant filed an appeal against part of the judgment of the court a quo. The part to which this appeal relates was stated in the Notice of Appeal as:

“The part of the judgment appealed against is the part whereby the court a quo held that:

1. The declarations made by the applicant in the court a quo amounted to a contravention of the law.

2. The first and second respondents were entitled to reclassify goods imported by applicant in the court a quo in its post clearance audit.

3. The noting of an appeal by applicant in the court a quo against a decision made by second respondent under the Customs and Excise Act did not suspend the decision of the second Respondent.

4. Each party shall bear its own costs.”

GROUNDS OF APPEAL

The appellant attacked this part of the judgment by raising the following grounds of appeal:

“1. The court a quo erred in fact and at law in finding that appellant made false declarations in the absence of a finding by second respondent that appellant had made false declarations, or an allegation by second respondent that appellant had made false declarations or sufficient proof that appellant had made false declarations.

2. The court a quo erred both in fact and at law in finding that second respondent was not estopped from changing the classification for duty purposes of the base station components imported by appellant from a duty free tariff that had been applied by second respondent for more than 15 years to a tariff that attracted duty.

3. The court a quo erred at law in finding that section 14 of the Fiscal Appeal Court Act [Chapter 23:05] does not suspend the decision appealed against when it in fact does, unless second respondent orders otherwise, which he did not do in the present case.

4. In any event, the court a quo erred in finding that section 14 of the Fiscal Appeal Court Act applies to the present case when in fact the section only applies to Stamp Duties and Sales Tax, and does not apply to appeals relating to Customs and Excise which are governed by Part IV of the same Act, which part gives appellant an option to either pay the duty, or to furnish security acceptable to second respondent as was done by appellant in this matter.

5. In the circumstances, the court a quo erred at law in not allowing the appellant's claim for costs of suit.”

At the commencement of the hearing of this appeal, the appellant abandoned the third and fourth grounds of appeal. Counsel for the appellant argued the appeal on the basis of the first, second and fifth grounds of appeal.

APPELLANT'S SUBMISSIONS BEFORE THIS COURT

Counsel for the appellant urged this Court to find that the starting point is to define a base station. He pointed to the definition of 'base station' in section 87 of the Customs and Excise Act [Chapter 23:02] which incorporates the Harmonised Commodity Description and Coding System issued from time to time by the World Customs Organisation in Brussels as well as decisions of the Harmonised Commodity Description and Coding System Committee. He argued that a letter by the Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) listed what constitutes a base station. He contended that this is consistent with the letter written by the Department of Customs and Excise on 5 October 1998 to the effect that the specified components of a base station be imported by the appellant duty free.

A letter dated 24 February 2010 was referred to, where the respondents wrote to the appellant and indicated that components of base stations could be cleared under Tariff 85176100. The rider was that the importations of listed components would have to correspond with the number of base stations to be installed.

Counsel for the appellant made reference to the letter dated 3 December 2013 and highlighted that the allegation therein was that of the appellant having made a misclassification as opposed to making a false declaration. He argued that issues of false declarations were not part of the respondents' case against the appellant as stated in their letter and that that issue was therefore not properly before the court a quo.

Counsel for the apellant further argued that the classification done by the respondents was correct as it is consistent with Rule 2(a) of the Explanatory Notes to the Harmonised Commodity Description and Coding System.

Counsel for the appellant further argued that as a bonded warehouse facility is intended for goods that are classified under a dutiable tariff it followed logically, therefore, that goods that are classified under a duty-free tariff did not need to be put in a bonded warehouse.

He submitted that the base stations in issue were imported as un-assembled or dis-assembled components because of the impossibility of importing an assembled base station. He argued that the rule applicable in terms of section 87 of the Customs and Excise Act is Rule 2(a) of Statutory Instrument 245/2002, S.I.245 of 2002. Counsel for the appellant argued that the second respondent did not carry out a reconciliation of the unassembled components imported by the appellant to establish whether they were in excess of the requirements for a base station. He further argued that the court a quo's finding that the appellant made false declarations was wrong as the issue was not before the court a quo and the finding was, in any event, incorrect.

It was also argued, on behalf of the appellant, that the court a quo erred both in fact and at law in not finding that the second respondent was estopped from changing classification of the imported base station components.

He submitted that the classifications during the period extending from October 1998 to 24 February 2010 had been done by the second respondent's predecessor under the letter of 5 October 1998 and the second respondent under his letter dated 24 February 2010, respectively. Both letters classified the components of a base station which are un-assembled or dis-assembled under the tariff heading “Base Stations.”

Both letters, it was argued, were authored by officers who had ostensible authority to write them on behalf of the second respondent and that the respondents ought therefore to be estopped from varying or setting aside the given classifications with retrospective effect. The second respondent thus became functus officio when the classification decisions were made.

In motivating the fifth ground of appeal, relating to costs, the argument was that as a result of the foregoing, the court a quo ought to have granted the appellant's application with costs.

RESPONDENTS' ARGUMENTS

Counsel for the respondents submitted that the appellant purported to import base stations but it did not. It imported various components and items of telecommunications equipment under the guise of importing base stations thereby benefitting from improper classification. He contended that this resulted in the number of base stations allegedly imported by the appellant to exceed 491142 base stations compared to the number given by by the Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) that the appellant has set up 2440 base stations.

He argued that these so-called components were not imported in compliance with Rule 3(b) of the Classification Rules which states that composite goods made up of different components shall be classified as if they consist of a component which gives them their essential character. As a result, for the various components imported in “complete knock down form” to be deemed as a base station, all parts should be imported at the same time to constitute the essential character of a base station. He argued, therefore, that the components in this case were not imported or cleared at the same time meaning they did not constitute the essential character of a base station. Therefore, the respondents were correct in levying tax on each individual component.

He submitted, additionally, that base station batteries are excluded from the tariff heading 8517 in terms of the Explanatory Notes, 5^th Edition, 2012, Volume 5. The point he sought to make was that not all components are duty free. He further stated that the appellant's clearing agents therefore violated the law in the manner in which they imported the base stations for the appellant. He submitted that the agents admitted to the same and were suspended from operating, and, further, that the appellant itself admitted to these anomalies arising from the conduct of these agents and paid the assessed duty and penalty. The classification from 2009 to 2013 was carried out by various clearing agents, some lodging correct declarations and others mis-classifying the components. He argued that the finding of the court a quo that the importation had been irregular, unlawful and illegal was a factual finding which this Appellate Court cannot set aside in the absence of a finding that there has been a grave misdirection on the part of the court a quo. He argued that the appeal must fail on this point.

On the question of estoppel, counsel for the respondents submitted that the court a quo was correct in finding that the respondents are entitled to carry out post clearance audits in terms of the law. He submitted that in terms of section 87(2) of the Customs and Excise Act, the second respondent can set aside or vary his or her own classifications. He argued that estoppel does not arise in matters relating to statutory obligations or rights. Furthermore, that such power was also reposed in the second respondent in terms of section 223A(4) of the Customs and Excise Act. Counsel for the respondents argued that in casu there was no dispute that the post-clearance audit took place within the prescribed time limits. He also submitted that the respondents are entitled to take remedial action where anomalies arise after an audit. He argued, therefore, that estoppel has no application in the circumstances.

Counsel for the respondents argued that reliance on the letters referred to was misplaced as the letters did not constitute a “revenue advance tax ruling”, no formalities or procedure having been followed by the appellant to acquire such an advance tax ruling.

He also submitted that the requirement for the bonded warehouse was to ease the appellant's plight of having to source the components from different suppliers across the world and hence being unable to present the components for classification, as per Rule 2(a), at the time of importation. He underscored that it was a suggestion made for the convenience of the appellant. He argued that Rule 2(a) deals with the classification of incomplete or unfinished articles presented unassembled or disassembled and that base station components imported separately are liable for duty in accordance with the tariffs that apply to such separate components.

He contended that the appellant cannot benefit from the zero duty applicable to a base station importation. He argued that the simple issue for determination was whether the cleared components made up a complete base station, and, if not, they could not be classified as base stations. He reiterated that the respondents' position is that the Commodity Code 8517.6100 does not include un-assembled or dis-assembled parts or components. On these bases, he prayed for the dismissal of the appeal with costs as the decision of the court a quo was correct.

ISSUES

Three issues arise for determination before this Court. These are:

1. Whether the issue regarding false declarations was an issue that was properly before the court a quo and on which it was required to make a determination.

2. Whether the classification was done in terms of the law.

3. Whether the order of costs made by the court a quo ought to be interfered with.

2. Whether the classification was done in terms of the law

As argument progressed before us it became very clear, from both counsel's submissions, that the dispute between the parties was not about the description of the imported goods but their classification. Classification is generally dealt with by section 87 of the Customs and Excise Act [Chapter 23:02]. For ease of reference the relevant portion of the section is quoted..., below:

“87 Classification of goods for customs purposes

(1) For the purpose of determining the customs duty payable in respect of any goods that are imported, the Commissioner or an officer shall classify such goods into the appropriate tariff headings, sub-headings or codes in accordance with any rules set out in the customs tariff, paying due regard to —

(a) The explanatory notes to the Harmonised Commodity Description and Coding System issued from time to time by the World Customs Organisation in Brussels; and

(b) Decisions of the Harmonised Commodity Description and Coding System Committee.

(2) The Commissioner shall vary or set aside a classification of goods made in terms of subsection (1) if he is satisfied, whether on appeal by the importer of the goods or otherwise, that the classification was incorrect.”

From the foregoing, it is clear that the duty and obligation to classify goods for customs purposes lies with the “Commissioner or an officer”. The Customs and Excise Act defines 'Commissioner' as:

“'Commissioner' means —

(a) The Commissioner in charge of the department of the Zimbabwe Revenue Authority which is declared, in terms of the Revenue Authority Act [Chapter 23:11], to be responsible for assessing, collecting and enforcing the payment of duties in terms of this Act; or

(b) The Commissioner-General of the Zimbabwe Revenue Authority, in relation to any function which he has been authorised under the Revenue Authority Act [Chapter 23:11] to exercise;”

It defines an 'officer' thus:

“'Officer'—

(a) Means an officer of the department of the Zimbabwe Revenue Authority which is declared in terms of the Revenue Authority Act [Chapter 23:11] to be responsible for assessing, collecting and enforcing the payment of duties in terms of this Act;

(b) Includes a person exercising the powers or performing the duties of an officer conferred or imposed upon him in terms of subsection (4) of section three;”

Whatever else these two terms may mean definitely excludes the taxpayer. It is not the duty of a taxpayer to classify his, her or its own imports for the purposes of customs duty assessments.

In casu, the respondents classified the components of base stations as base stations. Technically, the matter could be disposed of at this juncture because the letter which led to all this litigation was premised on the contention that the appellant mis-classified its own imports. There was not and cannot be such an obligation on a taxpayer and thus on the appellant. It thus cannot be alleged to have classified its own goods for custom purposes. The legal syllogism upon which the respondents' case rested fell.

It was also counsel for the appellant's unchallenged submission that the exercise of that duty by the respondents is reflected, and, therefore, confirmed by the Bills of Entry that were processed by the second respondent and his officers. In addition, the fact that the respondents have the duty to re-classify in terms of section 87(2), pre-supposes, as also specifically stated in section 87(1) Customs and Excise Act, that they are the ones who would have made the classification in the first place.

In the letter of 3 December 2013, and in the proceedings in the court a quo, the respondents contended that for the appellant to import the components as base stations, the components had to be moved in bond. They have since changed their position and now state that that earlier position had been suggested for the ease or convenience of the appellant and not as a strict rule of law. In other words, there was no requirement at law that the imported components be moved into bond. Counsel for the respondent's earlier submission that all the components had to be imported at once for the components to be taxed as a base station and not disparately at different times was thus effectively retracted.

Even if it existed, such a requirement would be impracticable. This is so given the appellant's unchallenged submission that the components are imported from different countries and through different modes of transport, and, therefore, entering the country at different ports of entry. The said submission is thus not supported by the reality of the situation on the ground. It is not tenable. In any event, there does not appear to be any wrongdoing on the part of the appellant. Even if it had certain components in excess of the base stations that it has already set up, that would not detract from the impracticability of the alleged requirement for all components to be imported and brought into the country at the same time.

The letter of 24 February 2010 states in part:

“Reference is made to your letter dated 18 February 2010 and several subsequent meetings held in connection with the abovementioned subject.

Please be advised that the components and quantities listed below constitute a base station and can be cleared under tariff 8517.6100.

ONE BASE STATION CONSISTS OF THE FOLLOWING COMPONENTS:

Description Quantity

1.1 Container 1

1.2 Air conditioning 2

1.3 Power equipment (rectifiers) 1

1.4 Batteries 48

1.5 Battery rack 2

1.5 Cellular radio equipment (cabinet) (sic) 1

1.6 Transmission radio equipment (indoor) 4

1.7 Connectors 48

2.0 GSM antennae 6

3.0 WCDMA (3G) antennae 6

4.0 Microwave antennae and outdoor unit 3

5.0 Waveguides cables 150m

6.0 Feeder cables (mtrs)/ connectors (unit) 600m

7.0 Tower 1

8.0 Cables trays – metres 16

9.0 Cable clamps (mtrs)/ installation equipment 1

(unit)/accessories unit

This means that the listed components constitute one base station and it is important that your importations correspond with the number of base stations to be installed.”

The appellant has not stopped operating. Thus, even if there were to be extra components of base stations in addition to the set-up or operative or active base stations, there is no indication that there is a bar to how many base stations it is to import and set up or install. Those extra components may be for more base stations to be set up in the future when all necessary components have been gathered or when it finds it necessary or economic to set them up.

The respondents' contention is not convincing. There appears to be no law that that the appellant has broken.

The submission was made by counsel for the appellant that the respondents appear to be disowning the letters that emanated from their offices and have been referred to earlier in this judgment, by stating that they were not advance tax rulings nor tariff rulings. This, as well as counsel for the appellant's further submission that the letters have never been said to have been issued in error nor have the respondents stated what other purpose the letters sought to achieve, remained unchallenged.

That the classifications done from October 1998 to 24 February 2010 were done by the second respondent's predecessor under the letter of 5 October 1998 and the second respondent under his letter dated 24 February 2010, respectively, also stands unchallenged. It is clear that in terms of section 87 of the Customs and Excise Act [Chapter 23:02], these decisions by the second respondent and his officers lawfully stand as such and do not need to be related to or compared with an advance tax ruling.

Another submission by counsel for the appellant that also remained unchallenged was that in order to discharge his duties of classification as required by section 87 of the Customs and Excise Act, the second respondent did not need the powers under section 34D of the Revenue Act [Chapter 23:11] that relate to the making of an advance tax ruling. A classification done under section 87 has no connection to an advance tax ruling under section 34D and must therefore not be confused with the same.

It follows that the letters under discussion were therefore competent as they were written by agents of the second respondent. The case of Gwafa v Small Enterprises Development Corporation & Anor 1999 (2) ZLR 261 (SC)..., that was referred to by the appellant's counsel sheds some light on this aspect.

The reasoning in Gwafa v Small Enterprises Development Corporation & Anor 1999 (2) ZLR 261 (SC) being that:

“The principles on which a seller can be bound by the ostensible authority of his agent have been set out in a number of cases which have come before this Court. In Stewart Zagreb Properties (Pvt) Ltd 1971 1 RLR 180 (RA) at 184C-F; 1971 (2) SA 346 (RA) at 349 F-H, BEADLE CJ said:

'The principles on which a seller or a principal can be bound by the ostensible authority of an agent have been set out recently by this Court in the case of Reed NO v Sager's Motors (Pvt) Ltd 1970 (1) SA 521 (RA). The headnote to that case, which accurately sets out the judgment, is as follows:

'If a principal employs a servant or agent in a certain capacity, and it is generally recognized that servants or agents employed in this capacity have authority to do certain acts, then any of those acts performed by such servant or agent will bind the principal because they are within the scope of his 'apparent' authority. The principal is bound even though he never expressly or impliedly authorized the servant or agent to do these acts, nor had he by any special act (other than the act of appointing him in his capacity) held the servant out as having this authority. The agent's authority flows from the fact that persons employed in the particular capacity in which he is employed normally have authority to do what he did. Whether an act is or is not within the scope of the apparent authority of an agent is essentially a question of fact.'”

On the reasoning in Gwafa v Small Enterprises Development Corporation & Anor 1999 (2) ZLR 261 (SC), the authors of the letters related to had the ostensible authority to write them on behalf of the second respondent.

The letters did not require that the components be presented together at the same time nor did they require that the components be moved in bond to earn their classification. As observed earlier, it would be impossible for these components to be presented at the same time or to be presented after being assembled as they are manufactured by different suppliers from different countries at different times and moved from different ports of entry into the country.

The impracticability of the respondents' stance lends credence to the contention by the appellants that the respondents can only be taken to have misunderstood their schedules thereby creating the misconception that the appellant imported 491142 base stations whereas the schedules in fact show the various components and not complete base stations.

A reconciliation by the respondents of the base station components that were imported by the appellant would have revealed the correct number of base stations imported as the base stations that have been installed by the appellant are in situ. This was not done hence the misconception that the number was 491142 base stations which arose from counting base station components as base stations.

For the appellant to succeed in proving estoppel, it has to prove, and the authority for this proposition is the case of Andrew Phillips (Pvt) Ltd v GDR Pneumatics (Pvt) Ltd 1986 (2) ZLR 65 (SC) 67, that the respondents or their officers made a representation in word or deed which might have reasonably misled the appellant; that the appellant was misled and that the representation induced the appellant to act as it did.

In casu, the two letters, the conduct of the second respondent and his officers, in classifying the base station components as 'base stations' and the passage of time before the respondents sought to set aside the classification, all tend to buttress the appellant's case. The appellant cannot, in the circumstances, be faulted for believing that the base station components that it imported were correctly classified as base stations and were therefore duty-free. This was an administrative decision by the respondents which decision is neither ultra-vires nor unlawful. The submission that in these circumstances there is no barrier to the application of the doctrine of estoppel thus finds favour with this Court.

The fact that the respondents had been making the same classification in the same way for fifteen years and now sought to reverse the classification at this stage was not satisfactorily explained away by the respondents.

The respondents sought to take refuge in section 87 of the Customs and Excise Act [Chapter 23:02] which states that the Commissioner shall vary or set aside a classification of goods made in terms of subsection (1) if he is satisfied that the classification was incorrect.

It also appears that section 87(2) does not avail any rescue to the respondents' conduct and that it would only do so on clear proof that the classification was incorrect. This, the respondents have not shown to be the case.

It is for these reasons that the respondents ought to be estopped from varying or setting aside the classification of the components as 'base stations' with retrospective effect.

Section 87 of the of the Customs and Excise Act requires the second respondent to classify goods in accordance with any rules set out in the customs tariff, paying due regard to the Explanatory Notes to the Harmonised Commodity Description and Coding System issued from time to time by the World Customs Organisation in Brussels and to decisions of the Harmonised Commodity Description and Coding System Committee. It was the unchallenged contention of the appellant that regard being had to these, it is clear that base stations under Commodity Code 8517.6100 include un-assembled or dis-assembled parts or components of base stations.

The conclusion must therefore be made that the classification was done in terms of the law.

The third and fourth grounds of appeal having been abandoned, the appeal must succeed, as it does, on the first and second grounds of appeal only….,.

DISPOSITION

Accordingly, it is ordered as follows:

1. That the appeal succeeds in respect of the first and second grounds of appeal.

2....,.

3. The judgement of the court a quo is set aside and is substituted with the following order:

(a) The importation of base stations by the appellant was done according to law.

(b) The respondents are estopped from re-classifying, for duty purposes, the base station components imported by the appellant and classified by the second respondent under a duty-free tariff.

4. The respondents shall pay the costs of this appeal.

Following an urgent chamber application lodged with this court an order by consent was granted as between the applicant, first, second, third and fourth respondents on 13 November 2013. Five issues were reserved for argument and these are:

“(a) Whether the importation of the base stations by the applicant during the period January 2009 to July 2013 was conducted within the law.

(b) Whether, in the circumstances of this case, the 1^st and 2^nd respondents are prevented from reviewing the classification for customs duty purposes of base station components imported by the applicant between January 2009 and July 2013 by the doctrines of estoppel, waiver, or functus officio.

(c) Whether, at law, the 2^nd respondent is entitled to impose and collect, without the agreement of the applicant, a fine at all, or of the magnitude imposed on the applicant, namely, US$47,654,830=38.

(d) Whether it is competent for the 2^nd respondent to collect the fine imposed on the applicant through the garnishee procedure provided for under section 201A of the Customs and Excise Act [Chapter 23:02].

(e) Whether the launching of an appeal or other challenge to the classification of goods for customs purposes under section 87 of the Customs and Excise Act precludes the 1^st and 2^nd respondents from collecting the customs duty under challenge under section 201A of the Act pending the determination of an appeal or other challenge.”

The facts of the matter are as follows.

The first and second respondents placed garnishee orders on the applicant's bank accounts with the third respondent. On 3 December 2013, the applicant was served with a letter to which was attached bills of entry relating to base station components imported between January 2009 and June 2013. Related to the schedule was a revised tariff calculating the duty now payable. A penalty of 300% was also imposed. It was stated that the applicant owes customs duty and value added tax in the sum of US$15,884,943=46. It was contended that the applicant paid duty on its imports as base stations as opposed to base station components. Thus, a penalty of US$47,654,830=38 was imposed, bringing the total amount claimed to US$63,539,773=84. No reason was given for the penalty that was imposed.

As regards the garnishee order made under section 58 of the Income and Tax Act [Chapter 23; 06] it is contended that the provision relates to tax obligations under that Act. It is also contended that the procedure relating to the appointment of representative tax payers does not apply to disputed tax liabilities. Even if the Income Tax Act is applicable the applicant would be entitled to object in terms of section 62 and the time within which to object had not lapsed. Part 111A of the Revenue Authority Act [Chapter 23:11] does not empower the Commissioner General to arbitrarily take the applicant's money.

The applicant refers to annexures 'F' and 'G' in relation to what constitutes a base station. Annexure 'F' is a letter written on behalf of the Director of Customs and Excise on 5 October 1998 and addressed to the applicant's Manager, General Services. The enumerated goods are classified for duty free purposes under tariff 8525.2020. Annexure 'G' is another letter written on behalf of the second respondent and addressed to the applicant's Chief Logistics Manager on 24 February 2010.

It is further contended that it is impractical to have a base station assembled in bond in order to qualify for duty free status. The duty of an importer is to declare imports and not the assessment of goods for duty purposes. Thus, the respondents are bound by the assessments they made.

Regarding the penalty, the applicant contends that there is no law that it violated. Section 200 of the Customs and Excise Act relates to penalties where a party admits violating the Act. In such a case, the respondents are not permitted to impose a penalty through an agent under section 201A of the Customs and Excise Act. In addition, a penalty of 300% is manifestly excessive.

In opposing the application, the first and second respondents contend that the dispute between the parties is over classification of goods for customs purposes. It is acknowledged that the applicant has always imported base stations constituted as components. The law allows importation of assembled base stations.

For classification of goods for customs purposes, the Customs and Excise Tariff Notice, Statutory Instrument 245/2002 (S.I.245 of 2002) incorporates General Rules for Interpretation of Harmonised System for the Classification of Goods which is a global standard. In that respect, rule of classification 3(b) provides that composite goods made up of different components shall be classified as if they consisted of a component which gives them their essential character. All completely knocked down components shall be imported at the same time to constitute the essential character of a base station.

For an importer to rely on a tariff ruling on imports, the ruling must be issued according to law in order to constitute a Revenue Advance Tax Ruling (which includes a Tariff Ruling). The ruling must be issued by the second respondent and not an administrative head or manager at station level.

Some specific agents of the applicant imported base stations without placing them in bond to enable reconciliations. They also imported other telecommunications equipment under the guise of base stations. When this was brought to the applicant's attention the proper amounts of duty were paid.

Following such a development, the first respondent, as it is entitled to do, conducted a post-clearance audit relating to base stations. In the process, significant anomalies were noted. There was an erroneous declaration of base stations. The applicant was advised of the outcome of the audit and asked to pay in terms of the Special Warrant Customs Duty. The applicant asked for more time to consider the issue. The respondents conceded that the wrong garnishee form was used. Instead of the one used for Customs and Excise they used the one for Income Tax. The erroneous garnishee was subsequently withdrawn.

Lawfulness of the Imports

Counsel for the applicant submitted that illegality does not arise by virtue of the letter dated 3 December 2013. This is because the letter made reference to an administrative arrangement. An allegation of illegality pre-supposes that the applicant acted on its own. Bills of Entry were reviewed by the respondents. The duty to classify is not that of the importer. He further submitted that if there is any mis-classification, it is the fault of the respondents.

Counsel for the respondents submitted that the applicant can only succeed in the relief sought if the facts do not support the respondents' actions. He further submitted that ordinarily courts should not interfere with the powers bestowed on administrative authorities.

According to the Customs and Excise (Tariff) Notice, Statutory Instrument 245/2002 (S.I.245 of 2002) General Rules for the Interpretation of the Harmonised System Classification of Goods in the nomenclature shall be governed by the following principles:

“Rule 2

(a)…,.

(b) Any reference in a heading to a material or substance shall be taken to include a reference to mixtures or combinations of that material or substance with other materials or substances. Any reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partly of such material or substance. The classification of goods consisting of more than one material or substance shall be according to the principles of Rule 3.

Rule 3

When, by application of Rule 2(b), or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows:

(a)…,.

(b) Mixtures, composite goods consisting of different materials or made of different components, and goods put up in sets for retail sale, which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable.

(c)…,.”

The respondents' contention is that following a post clearance audit regarding imports made by the applicant between January 2009 and June 2013 certain anomalies were detected. These included the importation of certain telecommunication equipment other than equipment that constituted a base station. In other instances, the applicant is said to have imported individual components that could have constituted a base station had they been imported at the same time and moved into a bonded warehouse. In fact, the respondents' contention is that the equipment was imported under the guise of a base station. This resulted in the declared base stations by the applicants amounting to 491142. In contrast, the Postal and Regulatory Authority noted that the applicant had 2440 base stations.

The applicant acted through agents. It is the duty of an importer to make an entry of the importation of goods in a Bill of Entry. In this respect see sections 39 and 40 of the Customs and Excise Act [Chapter 23: 02]. It is also clear that a principal is liable for the transgressions of an agent. In this respect see section 218(3) of the Customs and Excise Act.

It is only when the individual components of telecommunication equipment constituted a base station that they could not attract duty. I cannot see, for example, how cables could be billed as base station.

Therefore, in light of the audit conducted in respect of the importations done by the applicant, the false declarations amount to a contravention of the Customs and Excise Act [Chapter 23: 02]. It matters not that these declarations were made by the applicant's agents.

Estoppel

Counsel for the applicant submitted that the acts of functionaries are deemed to be those of the principal. This acts to protect the rights of others who rely on the acts of administrative authorities as in the present case. Thus, it is inappropriate for the respondents to turn around and claim duty for goods that previously did not attract duty. A re-classification can only be done on appeal. He referred to section 87(2) of the Customs and Excise Act [Chapter 23: 02].

Counsel for the respondents submitted that the dispute must be analysed in the context of the provisions of the Customs and Excise Act. Thus, the statute in question bestows certain powers on the respondents which cannot be overridden by common law principles. For example, there is provision for payment of duty pending the resolution of a dispute.

The defence of estoppel was explained by McNALLY JA in Mashave v Standard Bank of S.A. Ltd 1998 (1) ZLR 436 (SC)…, as follows:

“The Roman-Dutch law protects the right of an owner to vindicate his property, and, as a matter of policy, favours him as against an innocent purchaser. See for instance Chetty v Naidoo 1974 (3) SA 13 (A) at 20A-C.

The innocent purchaser's only defence is estoppel.

Estoppel depends upon an allegation that a representation was made by the owner/claimant. In Aris Enterprises (Finance) (Pty) Ltd v Protea Assurance Co Ltd 1981 (3) SA 274 (A), Corbett JA (as he then was) said at 291:

'The essence of the doctrine of estoppel by representation is that a person is precluded, i.e estopped, from denying the truth of a representation previously made by him to another person if the latter, believing in the truth of the representation, acted thereon to his prejudice (see Joubert, The Law of South Africa, vol 9 para 367 and the authorities there cited). The representation may be made in words, i.e expressly, or it may be made by conduct, including silence or inaction, i.e tacitly (Ibid para 371); and, in general, it must relate to an existing fact (Ibid para 372).'”

See also Grosvenor Motors (Potchefstroom) Ltd v Douglas 1956 (3) SA 420 (A)…,.; Johaadien v Stanley Porter (Paarl) (Pty) Ltd 1970 (1) SA 394 (A); Oakland F Nominees (Pty) Ltd v Gelria Mining & Invstm Co Ltd 1976 (1) SA 441 (A); Jones & Ors v Trust Bank of Africa Ltd & Ors 1993 (4) SA 415 (C)…,.; Basson t/a Repcomm Community Repeater Svcs v Postmaster General 1994 (3) SA 224 (SE)…,.; RABIE, The Law of Estoppel in South Africa…,.; MILLER, The Acquisition and Protection of Ownership…,.; VISSER and G POTGIETER, Estoppel: Cases and Materials….,.; SILBERBERG & SCHOEMAN's The Law of Property 3ed…,.; GIBSON's SA Mercantile & Company Law 6ed…,.

Section 87(2) of the Customs and Excise Act [Chapter 23:02] provides that-

“The Commissioner shall vary or set aside a classification of goods made in terms of subsection (1) if he is satisfied, whether on appeal by the importer of the goods or otherwise, that the classification was incorrect.”

The provision empowers the Commissioner to vary an erroneous classification of goods. Such variation is not limited to an appeal as contended by counsel for the applicant. I am fortified in this view by the wording - “whether on appeal by the importer of the goods or otherwise…,.”

The ordinary dictionary meaning of 'otherwise' is - “in another or different way; in other or different respects: or apart from that.”

Therefore, I construe that provision to mean that the Commissioner-General may vary or set aside a classification of goods, if he is satisfied, whether on appeal by the importer of goods or in any other circumstances, that the classification was incorrect.

It would be absurd to restrict the Commissioner General's intervention to an appeal when there is provision for a post-clearance audit as provided in section 223A of the Customs and Excise Act. In this respect, section 223(4) of the Customs and Excise Act [Chapter 23:02] provides that:

“The Commissioner, after releasing the goods subject to entry and in order to satisfy himself or herself as to the accuracy of the particulars contained in the declaration, may undertake a post-clearance audit in relation to those goods, that is to say, he or she or any officer or person authorised by him or her in writing may -

(a)…,.

(b)…,.

(c)….,.

(d)…,.”

Waiver

Counsel for the applicant submitted that by virtue of classifying some components for base stations as duty free, the respondents waived an intention not to impose duty on the class of goods so specified.

This is sufficient to invoke estoppel. He further submitted that the applicant published its financial statements over the years based on this information and it had impact on the public. Therefore, the respondents must be estopped from re-classifying the components.

It is also contended that the classifications made in the letters dated 5 October 1998 and 24 February 2010 were made by agents of the Commissioner General and not officers in terms of section 87 of the Customs And Excise Act. In that context, it is tantamount to a classification made by the Commissioner-General himself. Consequently, the Commissioner General would be precluded from reclassifying goods that were classified by his agents.

As previously noted, of the letters in contention, the one dated 5 October 1998 was signed by T. Chimunhu on behalf of the Director of Customs and Excise. That of 24 February 2010 was signed by M. Madongorere on behalf of the Commissioner General.

Counsel for the respondents countered this argument by submitting that the respondents have an unfettered right to conduct post-clearance audit within six years.

Just as the argument on estoppel, I find merit in the argument advanced by the respondents. The people who signed the letters referred to are officers of the first respondent as defined in the Customs and Excise Act. It is those officers who made the classifications of the imports in terms of section 87(1) of the Act. It is clear that the classification was not made by the second respondent. In that event the applicant's recourse was either to appeal to the second respondent (if the classification was made by an officer) or to appeal to the Fiscal Appeal Court (if the classification was made or varied by the second respondent). See section 87(3) of the Customs and Excise Act [Chapter 23:02].

The duty to classify goods rests with the first respondent's officers or the second respondent. In the event of error in the classification of such goods, such classification can be varied by the Commissioner General who is the second respondent. Therefore, an erroneous classification of goods cannot be viewed as waiver of duty payable on the class of goods affected by such erroneous classification. The respondents would be failing in their statutory obligations were they to turn a blind eye to the need to rectify any anomaly exposed by a post-clearance audit.

A party relying on waiver has the onus to show that the other party had full knowledge of its rights and abandoned such rights expressly or impliedly. See Barclays Bank of Zimbabwe v Binga Products 1984 (2) ZLR 26 (SC). The classification of goods in their correct tariff cannot be viewed as a right. It is a duty and where it is not done correctly, it must be rectified….,.

Since no draft order was prepared, the issues raised by the parties are disposed of as follows:

1. The declarations made by the applicant amounted to a contravention of the law.

2. The respondents were entitled to re-classify goods arising from the post-clearance audit.

3. The respondents could not waive a duty to correctly classify the goods.

This is an appeal against the judgment of the Fiscal Appeal Court setting aside the classification and revaluation by the appellant's Commissioner of Customs and Excise of a 2006 white box van Iveco 40C14 motor vehicle.

The respondent imported the motor vehicle in question through the Plumtree Border Post on 23 August 2013. Its clearing agent declared the motor vehicle as a “2006 IVECO DAILY BOX VAN MODIFIED AS AN AMBULANCE”. That much is not in dispute. What is in dispute is the proper classification of the motor vehicle in question for the purposes of calculating customs duty payable to the fiscus.

The customs officer initially classified the motor vehicle as a minibus falling under Customs Tariff heading 87.02 and revalued it upwards in terms of section 111 of the Customs and Excise Act [Chapter 23:02]. Dissatisfied with that assessment and revaluation, the respondent appealed to the Regional Manager who held that the customs officer's classification was wrong. He accordingly re-classified it as a goods carrying motor vehicle under tariff heading 87.04 of the Customs and Excise (Tariff) Notice 2012 Statutory Instrument 112 of 2012. The respondent again disputed that classification and revaluation on the basis that what it had imported was an ambulance passenger carrying motor vehicle which should have been classified under tariff heading 87.03 of the above Statutory Instrument, S.I.112 of 2012. It then appealed to the Commissioner without success.

Aggrieved by the dismissal of its appeal by the Commissioner, the respondent successfully appealed to the Fiscal Appeal Court, which, on 10 November 2015, issued the following order:

“I am satisfied that the Commissioner wrongly classified the motor vehicle under heading 87.04. He should have classified it under heading 87.03. Accordingly, it is ordered that:

(a) The appeal is allowed.

(b) The classification imposed by the Commissioner of Customs and Excise is set aside.

(c) The matter is remitted back (sic) to the Commissioner for the reclassification of the motor vehicle in accordance with the terms of this judgment.

(d) Each party shall bear its own costs.”

The crisp issue for determination is whether the court a quo correctly found that the motor vehicle in issue is an ambulance which is a passenger carrying motor vehicle falling under tariff heading 87.03 and not a goods carrying motor vehicle falling under tariff heading 87.04.

The classification of goods for purposes of duty is governed by section 87 of the Customs and Excise Act [Chapter 23:02] which provides as follows:

“87 Classification of goods for customs purposes

(1) For the purpose of determining the customs duty payable in respect of any goods that are imported, the Commissioner or an officer shall classify such goods into the appropriate tariff headings, sub-headings or codes in accordance with any rules set out in the customs tariff, paying due regard to —

(a) The explanatory notes to the Harmonised Commodity Description and Coding System, issued from time to time by the World Customs Organisation in Brussels; and

(b) Decisions of the Harmonised Commodity Description and Coding System Committee.

[Subsection amended by Act 29 of 1998 and by Act 17 of 1999]

(2) The Commissioner shall vary or set aside a classification of goods made in terms of subsection (1) if he is satisfied, whether on appeal by the importer of the goods or otherwise, that the classification was incorrect.

(3) Any classification of goods made in terms of this section shall be binding on the importer of the goods, subject to an appeal —

(a) To the Commissioner, where the classification was made by an officer; or

(b) To the Fiscal Appeal Court in terms of the Fiscal Appeal Court Act [Chapter 23:05], where the classification was made, varied or confirmed by the Commissioner.”

It is clear that the Commissioner and his subordinates are strictly bound by the provisions of section 87 of the Customs and Excise Act and the relevant rules. For that reason, they have no discretion outside the section as read with the prescribed rules. It therefore follows that the Commissioner's classification of goods must fall squarely within the dictates of section 87 of the Customs and Excise Act and the rules; doing otherwise would be illegal.

Heading 87.03 provides for the description of motor vehicles falling under that heading as follows:

“87.03 – Motor cars and other motor vehicles principally designed for the transport of persons (other than those of heading 87.02) including station wagons and racing cars…,.”

The heading also includes:

“(1) Motor cars (e.g. limousines, taxis, sports cars and racing cars).

(2) Specialised transport vehicles such as ambulances, prison vans and hearses.

…,.

(6)…,.”

The classification of certain motor vehicles in this heading is determined by certain features which indicate that the vehicles are principally designed for the transport of persons rather than the transport of goods (heading 87.04). These features are especially helpful in determining the classification of motor vehicles which generally have a gross vehicle weight rating of less than 5 tonnes and which have a single enclosed interior space comprising an area for the driver and passengers and another area that may be used for the transport of both persons and goods. Included in this category of motor vehicles are those commonly known as “multiple purpose” vehicles (e.g. van-type vehicles, sport utility vehicles, certain pick-up vehicles). The following features are indicative of the design characteristics generally applicable to the vehicles which fall in this heading:

(a) Presence of windows along the two side panels;

(b) Presence of sliding, swing-out or lift-up door; or

(c) Doors with windows on the side panel or in the rear;

(d) Absence of a permanent panel or barrier between the area for the driver and front passengers and the rear area that may be used for the transport of both persons and goods.

(e) Presence of comfort features and interior finish and fittings throughout the vehicle interior that are associated with the passenger areas of vehicles (e.g., floor carpeting, ventilation, interior lighting, ash trays).

It was the respondent's case that it imported the vehicle in question as a decommissioned ambulance, intact, as it was principally designed to convey the sick to and from hospital. It was also used to ferry disabled persons and critically ill patients on life support. In proof whereof the respondent relied on the commercial invoice filed of record.

At page 50 of the record of proceedings, the importer of the motor vehicle, Jetset Freight Services P/L, gave a vivid description of the motor vehicle in graphic terms depicting it as an ambulance as follows:

“2006 IVECO DAILY 40V14 BOX VAN MODIFIED INTO AN AMBULANCE

Vehicle is now fitted with a compressor to purify oxygen and fitted with pipes to distribute oxygen through to the patients on board. It has two outlets (valves) which pass through to the oxygen masks and to the patients.

(i) Vehicle has 6 seats for patients and the driver's seat is the seventh. It also has 2 pillars for holding a stretcher when transporting bed-ridden patients.

(ii) Vehicle has drawers which serve as vomit bags, glove (sic) bags, and disinfectant bags.

(iii) Vehicle has a rack above the driver's head which holds the stretcher.

(iv) Vehicle is also fitted with machine to lift wheel chairs and stretchers for the bed ridden.

(v) Vehicle is fitted with glass windows on the sides and on the rear.

(vi) The weight of the vehicle is given as 4,800kgs.”

The above description, coupled with pictures of the disputed motor vehicle, chief among them is annexure 'F' at page 37 of the record of proceedings depicting the interior of the motor vehicle adorned with the convenient features and passenger seats installed for the comfort of passengers.

Undoubtedly, the description given by the importer, and backed up by pictures of the motor vehicle, fits that of an ambulance and the prescribed description of motor vehicles falling under heading 87.03.

On the evidence placed before the court a quo, it is not in dispute that the motor vehicle in question was manufactured as a box van but was later modified into an ambulance. At the time of assessment it had been modified into an ambulance and it still bore the modified principal design that made it fit the description of an ambulance.

The appellant's contention is that the respondent did not import an ambulance because its principal design, at the time of manufacture, was not that of an ambulance but a box van suitable for the carriage of goods falling under tariff code 87.04. In developing its argument, the appellant forcefully submitted, in its heads of argument, that;

“Having found that the motor vehicle was manufactured as a box van, the inescapable conclusion was that it was principally designed for the carriage of goods. The subsequent modification did not matter in the principle design of the motor vehicle.”

The appellant agued, further, that because heading 87.04 provides that it applies to all types of vans, the 2006 white box van Iveco 40C14 motor vehicle must be classified under tariff code 87.04.

On the other hand, the respondent's contention is that it imported an ambulance because at the time of presentation and assessment by the customs officials it had been modified into an ambulance and it still bore the features of an ambulance which is a passenger-carrying motor vehicle falling under tariff code 87.03.

The question to be answered is; what did the respondent import on the 23^rd of August 2013?

It is common cause that the respondent imported a motor vehicle manufactured as a box van suitable for the conveyance of goods that had been subsequently converted into an ambulance for the conveyance of sick people and the disabled. The respondent bought the motor vehicle long after it had ceased to be a box van and was now an ambulance.

In the absence of fraud, common sense dictates that the respondent could not possibly have imported a box van because, as at 23 August 2013, the motor vehicle had ceased to be a box van and was now an ambulance. A perusal of the record of proceedings shows that apart from mere speculation and conjecture, the appellant came nowhere near establishing that the respondent had fraudulently converted a box van into an ambulance for purposes of avoiding duty. For the stronger reason, the appellant was unable to rebut the respondent's assertion that the motor vehicle had been used as an ambulance in its country of origin and was imported as such, bearing the features of an ambulance such as oxygen and stretcher handling facilities.

The appellant's interpretation of the law and classification of the motor vehicle in question is problematic in that it fails to recognise fundamental change. One cannot continue to call a hen an egg simply because at one time it was an egg; nor can a man be called a baby simply because he was born as a baby. Likewise the Commissioner cannot continue to call a motor vehicle a box van after it has been converted into an ambulance.

The contra fiscum rule prescribes that the meaning that benefits the individual against the State Treasury should be adopted. See Sekrtaris Van Binnelandse Inkomste v Raubenheiner 1969 (4) SA 314 (A). Likewise, in the case of S v Galguits Garage (Pty) Ltd 1969 (2) 459 (A), the court held that in cases of doubt, the most favourable interpretation to the tax payer should be adopted.

The mere fact that the Customs Officer, the Regional Manager, the Commissioner and the respondent could not agree as to which category the imported vehicle fell casts doubt on the customs officials' classification of the motor vehicle. The court a quo was therefore undoubtedly correct in interpreting the law in favour of the respondent.

In conclusion, I am constrained to remark that in cases of doubt the main function of customs officials is not to make extra money for the State but to facilitate trade, hence doubts must be resolved in favour of the taxpayer.

For the foregoing reasons, the learned judge in the court a quo's finding that the motor vehicle presented at the Plumtree border post, on 23 August 2013, by the respondent, is an ambulance falling under tariff code 87.03 is beyond reproach. That being the case, the appeal can only fail.

It is accordingly ordered that the appeal be and is hereby dismissed with costs.