CAPE TOWN - A Cape Town-based export company and its director have been found guilty of misdeclaring a consignment of scrap metal in order to avoid paying recently introduced export duties.
The SA Revenue Service (Sars) said the company, Scrapmania, and its director, Joseph Daniel Hurling, pleaded guilty to a charge of making a false declaration to customs and both were fined R500 000, with Hurling fined an additional R100 000 in the Durban Regional Court.
In September 2021 Mirage Shipping processed an export declaration for 10 containers of “polymers and ethylene” on behalf of Scrapmania.
The shipment made its way from Cape Town to Durban harbour, where it was detained for inspection on arrival after it was flagged on the customs system.
“On October 12, 2021, it was inspected and found to contain scrap metal, which requires an International Trade Administration Commission (ITAC) permit and is liable for export duties.
“A criminal case was then registered with the SAPS for contravention of the Customs and Excise Act and the ITAC Act,” the Sars said.
The scrap metal industry is a multibillion-rand industry and contributes an estimated R15 billion annually to South Africa’s gross domestic product.
The Sars said that in 2017, a scrap metal company lost a case in the Constitutional Court challenging the State’s scrap metal export provisions, known as the price preference system, as well as ITAC's decision to refuse to issue export permits to the company, in accordance with the price preference system.
This followed almost four years of litigation over the lawfulness of the price preference system.
Sars commissioner Edward Kieswetter said: “Sars is committed to trade facilitation and growing our country’s economy. It will continue to make it easy and seamless for traders to comply with their legal obligation by providing them with clarity and certainty.
“Equally, Sars is building its capability to make it hard and costly for those of the traders who chose to be non-compliant. This is a warning that we will leave no stone unturned in ensuring that those who are involved in these types of behaviour that border on criminality are dealt with harshly. Our fiscus is short- changed by this intentional and criminal misdeclaration.”
Cape Times