SARS did well to seize 19 containers of cheap Chinese clothing “unrealistically” under SCA rules

The SA apparel industry has complained for years that it is being unfairly undercut by cheap imports.

The Supreme Court of Appeal of Bloemfontein has accepted the appeal of the Revenue Agency SA (SARS) justifying his decision to seize 19 containers of cheap clothes from China.

“There was no credible explanation for the incredibly low prices charged by the suppliers of the goods,” the court ruled on Tuesday. “The goods and containers into which they were imported were subject to confiscation.”

The ruling means that SARS had the right to first seize and then hold the containers. Also overturns a previous High Court ruling ordering the release of containers.

“Unrealistic and unattainable.”

The Revenue Agency confiscated the assets in 2020 on the grounds that they were clearly under-invoiced.

He said the Gauteng-based clearing agent Dragon Freight and six other importers had not been able to explain how they had managed to source the goods at such low prices.

READ | SARS returns to court in battle over seizure of cheap Chinese clothing imports

But the tax collection agency’s seizure order was canceled in December 2020, when Judge Selby Baqwa of the North Gauteng High Court in Pretoria ordered the containers to be released.

Baqwa argued that SARS should have accepted the initial responses provided by the importers. The subsequent research she conducted and the follow-up questions she asked were “procedurally unfair” or “irrelevant”.

But the SCA found Baqwa’s decision flawed.

“The High Court made a mistake by ignoring not only the evidence demonstrating the falsity of the agreements, but also the reasons for the contested decision, despite the fact that it cited these reasons verbatim in its ruling.”

In her case, SARS had relied on evidence provided by fabric expert Dr. Jaywant Irkhede, who noted that importers claimed they were able to source clothes for only $ 0.21 or around R3 per garment.

While importers disputed Irkhede’s calculations, the court found that his evidence “made it clear that the prices declared by the importers were unrealistic and unattainable.”

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