37A. Special provisions in respect of marked goods and certain goods that are free of duty

 

(1)    

 

(a)     Notwithstanding anything to the contrary in this Act contained, where –

(i)      any goods are classified under and specified in any heading or subheading of Chapter 27 of Part 1 of Schedule No. 1;

(ii)     such goods are also classified under and specified in any item of Part 2 and Part 5 of Schedule No. 1;

(iii)    such heading or subheading has been expressly quoted in any such item; and

(iv)    a free rate of duty is prescribed in respect of each such heading or subheading and such item,

such goods shall, as may be prescribed by rule, on importation into or manufacture in the Republic or on being marked, be accounted for in any customs and excise warehouse licensed in terms of this Act.

(b)     For the purposes of this section the Commissioner may, on such conditions as he may impose in each case in order to ensure the proper control over the storage, marking and removal of the goods contemplated in paragraph (a), approve any such warehouse and any licensee or class of licensee of such warehouse;

(c)     Unless so approved by the Commissioner, no person shall deal with any such goods in any manner contemplated in paragraph (b).

 

(2)    

 

(a)     If any goods are described in any heading or subheading or item referred to in subsection (1)(a) as marked, the unmarked goods concerned shall be marked by the approved licensee in the approved warehouse by the addition of such marker, in such proportion which is equal to or exceeds, and in accordance with such procedure and control measures, as may in each case be prescribed by rule.

(b)     Any goods contemplated in subsection (1) shall each be stored separately from all other goods and shall be subject mutatis mutandis to the provisions of this Act relating to dutiable goods stored in and removed from a customs and excise warehouse, as may be prescribed by rule.

(c)    

(i)      Subject to the provisions of subparagraph (iii), any reference to “marked goods” or “marker” in this or any other section or any heading or subheading of Chapter 27 of Part 1 or in any item of Part 2 or Part 5 of Schedule No. 1 or in any note to such Chapter or Part or in any rule, shall be deemed to be a reference to unmarked goods referred to in subparagraph (ii) which have been marked and the marker which is required to be added as contemplated in paragraph (a);

(ii)     Any reference to “unmarked goods” in this or any other section or in any heading or subheading of Chapter 27 of Part 1 or in any item of Part 2 or Part 5 of Schedule No. 1 or in any note to such Chapter or Part or in any rule, shall be deemed to be a reference to goods which, except for the reference to marked, are of the same description as marked goods and are specified as unmarked goods of such description in any such heading, subheading or item;

(iii)    Whenever it is necessary for the purpose of establishing any contravention of any provision of this section, any goods shall be deemed to contain marked goods when such goods contain a proportion of the marker equal to or exceeding that as may be prescribed by rule.

(d)     Such addition of a marker shall be deemed not to constitute mixing or blending for the purposes of –

(i)      section 37; or

 

(ii)     the classification of any goods under any heading, subheading or item of Schedule No. 1, except as provided in this section.

(e)     The application of the free rate of duty specified in any heading or subheading of Chapter 27 of Part 1 or in any item of Part 2 and Part 5 of Schedule No. 1 in respect of any goods described as marked goods, shall be subject to the provisions of this section.

 

(3)    

 

(a)     Any person who sells or disposes of in any manner, whether or not for any consideration, any marked goods at any one time in excess of the quantity prescribed by rule, shall issue an invoice to the purchaser, or to any other person to whom the goods are so disposed of, containing such particulars as may be prescribed by rule.

(b)     Any person who so sells or disposes of marked goods shall keep a copy of such invoice and any person to whom such invoice is issued shall keep such invoice for such period as may be prescribed by rule.

(c)     Any person referred to in paragraph (a) and any other person who is at any time in possession of or has under his control any marked goods in excess of the quantity prescribed by rule, shall complete and keep such books, accounts and other documents in such form, reflecting such particulars and for such period and shall comply with any such other requirements, as may be prescribed by rule.

(d)     The provisions of paragraph (a) shall not apply to stock loan transactions between approved licensees of customs and excise warehouses.

 

(4)    

 

(a)     No person shall –

(i)      mix any marked goods in any proportion with distillate fuel or petrol;

(ii)     mix any marked goods in any proportion with any lubricity agent for use as fuel in any engine;

(iii)    mix any marked goods in any proportion with any lubricity agent, or be in possession of any marked goods mixed in any proportion with any lubricity agent, or be in possession of marked goods for mixing with any lubricity agent in any circumstances or for any purpose, otherwise than in accordance with this section and the rules;

(iv)    use any marked goods, whether or not mixed with any other goods in any proportion, as fuel in any engine;

(v)     sell or dispose of in any manner whether or not for any consideration or acquire any marked goods or any marked goods mixed with any lubricity agent, for use as fuel in any engine;

(vi)    be in possession of or sell any marked goods mixed in any proportion with distillate fuel or petrol;

[Subparagraph (vi) substituted by section 122 of Act 60 of 2001]

(vii)   be in possession of any marked goods or marked goods mixed in any proportion with any lubricity agent for use as fuel in any engine;

(viii)  remove or neutralise or attempt to remove or neutralise any marker in any marked goods;

(ix)    add any substance to any marked goods which can prevent or impede the detection of the marker;

(x)     be in possession of any marked goods or sell or dispose of in any manner whether or not for any consideration or acquire any marked goods in which is present any substance which or the colour of which can prevent or impede the detection of the marker;

(xi)    mix any unmarked goods with any marked goods; or

(xii)   unless approved by, and subject to such conditions as may be imposed by, the Commissioner, import any goods containing the marker.

(b)     Any person who so mixes or uses or sells or disposes or acquires or possesses any marked goods or so adds any substance to any marked goods or so removes or neutralises or attempts to remove or to neutralise any marker or any person to whom any invoice referred to in subsection (3)(a) has been issued in respect of the marked goods concerned, shall, in addition to any other liability incurred in terms of this Act, be liable, as the Commissioner may determine, for the payment of an amount not exceeding the duty that may be leviable on any distillate fuel, petrol, lubricity agent or unmarked goods in accordance with the provisions of Schedule No. 1, whichever yields the greatest amount of duty, in respect of all marked goods which –

(i)      are in the possession or under the control of such person or on any premises in the possession or under the control of such person; and

(ii)     were previously sold or disposed of or purchased or were in the possession or under the control of such person or on any premises in the possession or under the control of such person at any time, unless it is shown within 30 days from the date of any demand for payment of any amount in terms of this section that the goods concerned have not been dealt with contrary to the provisions of paragraph (a).

(c)    

(i)      If different rates of duty on such distillate fuel, petrol, lubricity agents or unmarked goods were in force during any period in respect of which the duties are calculated for the purposes of the payment referred to in paragraph (b), the highest rate in force at the relevant time shall be applied for the purposes of calculating the duty payable as provided in paragraph (b).

(ii)     For the purposes of calculating the duty payable on any marked goods mixed with distillate fuel, petrol, unmarked goods or lubricity agent in any tank, including the fuel tank of any engine, such duty shall be calculated, on the total quantity of such mixed goods, in accordance with the provisions of paragraph (b).

(d)     Notwithstanding anything to the contrary in this Act contained, any person who, contrary to subsection (3) and the rules, fails to –

(i)      keep any invoice issued or a copy thereof;

(ii)     issue any invoice;

(iii)    complete and keep the books, accounts and documents; or

(iv)    forthwith furnish any officer at such officer’s request with such invoice or copy thereof and the books, accounts and documents, required to be completed and kept,

shall, in addition to any other liability incurred in terms of this Act, in respect of the goods to which such failure relates, be liable, as the Commissioner may determine, for the payment of an amount not exceeding the duty that may be leviable on any distillate fuel, petrol, lubricity agents or unmarked goods in accordance with the provisions of Schedule No. 1, whichever yields the greatest amount of duty, unless it is shown within 30 days of the date of any demand for payment of such amount in terms of this section that the goods concerned have not been dealt with contrary to the provisions of this section.

(e)     Any amount of which any person is liable in terms of this section shall be payable upon demand by the Commissioner.

(f)     Payment of any amount in respect of the marked goods referred to in paragraph (b)(i) shall not absolve the person concerned from compliance with the provisions of paragraph (a).

 

(5)    

 

(a)     For the purposes of this section an officer may –

(i)      take samples of any goods in any tank or other container or in any fuel tank of any engine;

(ii)     analyse such samples or send them for analysis to any person designated under paragraph (c)(ii);

(iii)    stop and detain any vehicle or mobile apparatus with or without the assistance of any traffic officer or member of the South African Police Service or the South African National Defence Force;

(iv)    detain any ship with or without the assistance of any member of the South African Police Service or the South African National Defence Force.

(b)     The provisions of section 106 (2) shall mutatis mutandis apply to any sample taken under this subsection.

(c)     The Commissioner may –

(i)      by rule prescribe the form for reporting on any vehicle or mobile apparatus stopped or premises visited, or any person concerned with such vehicle, mobile apparatus or premises; or on any procedure or method for the taking or analysis of any sample by an officer; or on the results of such analysis and any other particulars as may be required on such form;

(ii)     designate any person to analyse any such sample;

(iii)    by rule prescribe the form for reporting on the analysis of such sample by such designated person, the results of such analysis and any other particulars as may be required on such form;

(iv)    by rule prescribe the method for sealing any tank or container.

(d)     Any person who is any way concerned with any marked goods or any vehicle or mobile apparatus or any premises where any tank or other container is situated, shall furnish an officer on demand with any particulars which he is able to provide for the purposes of the completion of the report referred to in paragraph (c).

 

(6)    

(a)     Whenever an officer has detained any ship, vehicle, mobile, apparatus, engine, tank or other container or goods in terms of this Act for the purposes of investigating any matter to which this section relates, he shall not, if any goods are tested for the presence of a marker, take any action to enforce any other provision of this Act, unless he is in possession of a report by the person designated under subsection (5)(c)(ii) or by any person in the employ of and authorised by such designated person, on the prescribed form, which contains particulars indicating that the goods concerned have been dealt with contrary to the provisions of this section.

(b)     Any person who is any way concerned with such goods as contemplated in subsection (4)(b) shall be liable in respect thereof for payment of an amount calculated on the same basis as provided in that subsection.

(c)     Any goods otherwise found by an officer to have been dealt with contrary to the provisions of this section and any goods which have been used in so dealing with those goods shall be liable to forfeiture in accordance with this Act

(d)     The owner or whoever has possession or control of any goods, ship, vehicle, mobile apparatus, engine, tank or other container, shall be liable for any reasonable costs and expenses, including the costs of analysing any sample, incurred by, and charges due to, the Commissioner in the handling of and dealing with any such goods, ship, vehicle, mobile apparatus, engine, tank or other container for the purposes of this section.

 

(7)    

 

(a)     Notwithstanding the provisions of subsection (4) and anything to the contrary in any other provision of this Act, whenever any marked goods have become mixed with or contaminated by unmarked goods or any other goods, by an act or omission which by the exercise of reasonable care could not have been avoided, such mixing or contamination shall, in the event that the proportion of the marker present in such mixed or contaminated goods is less than the proportion prescribed by rule in terms of subsection (2)(a), but is equal to or exceeds the proportion prescribed by rule in terms of subsection (2)(c)(iii), be reported immediately to the Commissioner, unless such mixing or contamination occurs within a licensed customs and excise warehouse, and the licensee complies with the provisions of subparagraphs (i) and (ii) of paragraph (b), and a report of each such event is prepared and kept available for inspection by an officer.

(b)     Such goods shall, subject to the approval of the Commissioner and to such conditions as the Commissioner may in each case impose –

(i)      be mixed or blended with other goods by the licensee of a customs and excise warehouse until the proportion of the marker is less than the proportion prescribed by rule in terms of subsection (2)(c)(iii), in which case the total quantity of such mixed or blended goods shall be liable to the duty applicable to such goods in terms of Schedule No. 1 on removal from such warehouse; or

(ii)     be delivered to any person who is registered as required by the rules, for mixing or blending with other goods where such mixed or blended goods are not capable of use as fuel in any engine.

(c)     If the Commissioner for any reason finds that such mixed or contaminated marked goods cannot be dealt with as contemplated in paragraph (b) within any reasonable period determined by the Commissioner, such goods shall on expiry of such period be regarded as having been abandoned to the Commissioner and may thereafter be disposed of in such manner as the Commissioner considers reasonable in the circumstances.

(d)     The licensee of the customs and excise warehouse, the purchaser or any other person to whom the marked goods were disposed of or whoever had control thereof when such mixing or contamination occurred shall be liable for any reasonable costs and expenses incurred by and charges due to the Commissioner in respect of any handling of and dealing with such goods in accordance with the provisions of paragraph (b) or (c).

(e)    Any person who deals with such mixed or contaminated goods contrary to the provisions of paragraph (b), shall, in addition to any other liability incurred in terms of this Act, be liable in respect of the total quantity of such goods for payment of an amount calculated on the same basis as provided in subsection (4)(b).

 

(8)    

 

(a)     Where any goods may be disposed of in terms of section 90, the Commissioner may, notwithstanding the provisions of that section, but subject to such conditions as the Commissioner may in each case impose, which may include conditions requiring payment of any amount determined by the Commissioner –

(i)      dispose of such goods for mixing or blending with other goods as contemplated in subsection (7)(b);

(ii)     dispose of such goods in any other manner which the Commissioner considers reasonable in the circumstances; or

(iii)    order the destruction of such goods.

(b)     The person from whom the goods were seized shall be liable for any reasonable costs and expenses incurred by and charges due to the Commissioner in respect of the handling of and dealing with such good as contemplated in paragraph (a).

 

(9)    

 

(a)     No person may acquire or sell or dispose of in any manner, whether or not for any consideration, or be in possession of or have under his control or use –

(i)      any goods, other than marked goods, for which provision is made free of duty in Schedule No. 1 as contemplated in subsection (1)(a); or

(ii)     any marked goods mixed with any lubricity agent,

except in accordance with the provisions of this section and the rules.

(b)     In addition to the provisions of this subsection and any rule made thereunder, except as otherwise provided in any rule, any marked goods mixed or intended to be mixed with any lubricity agent shall be subject to the provisions of this section and the rules relating to marked goods.

(c)     Where any person is required by any rule made under paragraph (d) to register with the Commissioner, the Commissioner may –

(i)      require before registration that such person furnishes security in such form, nature or amount as the Commissioner may determine;

(ii)     at any time require that such security be altered or renewed in such manner as the Commissioner may determine;

(iii)    determine the particulars to be furnished on application for registration and the requirements to be complied with before such application is considered;

(iv)    register such person subject to such conditions as the Commissioner may in each case impose;

(v)     refuse to register any person or class of persons and cancel the registration of any person who has dealt with any goods contrary to the provisions of this section or the rules or any other provision of this Act and refuse re-registration of such person.

(d)     The Commissioner may for the purposes of this section, by rule, prescribe the following:

(i)      The persons who are required to register and the goods and activities in respect of which they are required to register;

(ii)     quantities which shall be subject to any such rule;

(iii)    the conditions on which and the purposes for which any marked goods may be mixed with any lubricity agent;

(iv)    the conditions on which and the purposes for which any person may sell or dispose of in any manner, whether or not for any consideration, or be in possession of or use, any goods contemplated in this section;

(v)     any invoice to be issued, the particulars on such invoice, the person who shall keep such invoice or copy thereof, the persons who are required to complete and keep books, accounts and other documents, the form in which they shall be kept, the particulars to be reflected therein and the period for which they are required to be kept;

(vi)    restrictions in respect of the removal and export of any goods to which this section applies;

(vii)   all matters which are required or permitted in terms of this section to be prescribed by rule;

(viii)  any other matter which the Commissioner may consider necessary and useful to regulate the lawful and prevent the unlawful distribution and consumption of any goods to which this section applies.

(e)    

(i)      No goods referred to in paragraph (a)(i) shall be used for any other purpose than that for which they are removed from a customs and excise warehouse and in accordance with the conditions imposed by the Commissioner and those prescribed in the rules, except with the prior permission of the Commissioner and on payment of the duties leviable in terms of Schedule No. 1 in respect of unmarked goods: Provided that if the Commissioner so permits, the goods may be mixed or blended with other goods in which case the provisions of subsection (7) shall mutatis mutandis apply to such goods.

(ii)     If any goods referred to in paragraph (a)(i) are dealt with contrary to the provisions of this section and the rules, any person who had possession or control of such goods at the time they were so dealt with, shall, in addition to any other liability incurred in terms of this Act, be liable in respect of such goods for payment of an amount calculated on the same basis as provided in subsection (4)(b).

 

(10)   No person shall be entitled to any compensation for any loss or damage arising out of any bona fide action of an officer or any person who assists him under the provisions of this section.

 

(11)   The provisions of section 44A shall mutatis mutandis apply in respect of the liability incurred by any person in terms of this section.