Samsung Electronics SA (Pty) Ltd v The Commissioner for the South African Revenue Service (764/2021) [2022] ZASCA 126; 85 SATC 24 (28 September 2022)

Samsung Electronics SA (Pty) Ltd v The Commissioner for the South African Revenue Service (764/2021) [2022] ZASCA 126; 85 SATC 24 (28 September 2022)

The court held that the Samsung Galaxy S7 smartphone is correctly classified under tariff heading 8517.12.10 as a 'telephone for cellular networks or for other wireless networks, designed for use when carried in the hand or on the person'. The objective characteristics of the product—its design, portability, SIM card functionality, and ability to make calls over cellular networks—establish its principal function as a telephone for cellular networks. The evolution of technology and the addition of multifunctional capabilities do not alter its essential character for customs classification purposes. The tariff heading is divided into mutually exclusive categories, and the product cannot be...

Citation
[2022] ZASCA 126
Parties
Appellant: Samsung Electronics SA (Pty) Ltd; Respondent: The Commissioner for the South African Revenue Service
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
28 September 2022
Case Number
764/2021
Procedural Posture
Civil Appeal / Appeal From Gauteng Division of the High Court, Pretoria
Outcome
Appeal dismissed with costs, including those of two counsel.
Judges
Ponnan, Plasket, Hughes, Molefe, Siwendu
Legal Topics
Customs and Excise Act, Tariff Classification, Interpretation of Statutes, International Harmonized System
Tax Law Commercial and Corporate Customs and Excise Act Tariff Classification Interpretation of Statutes International Harmonized System

Case Brief

Summary, issues, holding and outcome

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Parties

Samsung Electronics SA (Pty) Ltd

Appellant

The Commissioner for the South African Revenue Service

Respondent

Procedural Posture

Civil Appeal / Appeal From Gauteng Division of the High Court, Pretoria

Legal Issues

  1. 1 Whether the Samsung Galaxy S7 smartphone is correctly classified for customs duty purposes as a 'telephone for cellular networks' or as 'other apparatus for the transmission or reception of voice, images or other data'.
  2. 2 Whether the principal function of the smartphone is that of a telephone for cellular networks under the Customs and Excise Act 91 of 1964.
  3. 3 Whether the Commissioner for SARS correctly withdrew the initial tariff determination and reclassified the product under the appropriate heading.

Ratio Decidendi

The court held that the Samsung Galaxy S7 smartphone is correctly classified under tariff heading 8517.12.10 as a 'telephone for cellular networks or for other wireless networks, designed for use when carried in the hand or on the person'. The objective characteristics of the product—its design, portability, SIM card functionality, and ability to make calls over cellular networks—establish its principal function as a telephone for cellular networks. The evolution of technology and the addition of multifunctional capabilities do not alter its essential character for customs classification purposes. The tariff heading is divided into mutually exclusive categories, and the product cannot be...

Court Disposition

Appeal dismissed with costs, including those of two counsel.

Orders

  • The appeal is dismissed with costs, including those of two counsel.