Bericap East Africa Limited v Kenya Revenue Authority (Tribunal Case E097 of 2026) [2026] KETAT 241 (KLR) (20 July 2026) (Judgment)

 REPUBLIC OF KENYA IN THE TRIBUNAL OF KENYA AT NAIROBI COUNTY COURT NAME: TAX APPEALS TRIBUNAL CASE NUMBER: TATC/E097/2026 BERICAP EAST AFRICA LIMITED VS KENYA REVENUE AUTHORITY JUDGMENT # BACKGROUND 1. The Appellant is a limited liability company incorporated in Kenya whose principal activity is that of manufacturing and trading in plastic closures. 2. The Respondent is a principal officer appointed under Section 13 of the Kenya Revenue Authority Act, CAP 469 of Kenya’s Laws. Under Section 5 (1) of the Act, the Kenya Revenue Authority is an agency of the Government for the collection and receipt of all tax revenue. Further, under Section 5(2) of the Act with respect to the performance of its functions under subsection (1), the Authority is mandated to administer and enforce all provisions of the written laws as set out in Part 1 and 2 of the First Schedule to the Act for the purposes of assessing, collecting and accounting for all revenues in accordance with those laws. 3. The Respondent conducted a desk audit for the period 2024 to 2025 which revealed that the Appellant had been classifying the item interchangeably between HS Code 4823.90.90 and HS Code 3921.19.10. 4. The Appellant was initially issued with a tariff ruling referenced KRA/CBC/BIA/THQ/61o/10/2024 dated 31st October 2024 whereby the imported item Induction Liner R-Wise-900F was classified under HS Code 3923.50.90. 1. The Respondent issued a demand letter dated 14th October 2025 seeking to recover Kshs 3,709,485.00 after retrospective application of the tariff ruling which classified the item under HS Code 3923.50.90. 2. The Appellant objected to the reclassification in its appeal to the demand notice vide a letter dated 13th November 2025. 3. The Respondent issued a Review decision dated 9th December 2025. 4. Being dissatisfied with the Review decision, filed this Appeal vide Notice of Appeal dated and filed 13th January 2026. # THE APPEAL 1. The Appellant lodged the Memorandum of Appeal dated 27th January 2026 and filed on even date raising the following ground of appeal: 1. That the Respondent erred in law and in fact in reclassification of Induction Liner R-WSE-900F from Tariff No. 3921.19.10 to 3923.50.90. resulting in a demand for short levied duties of Kshs 3,709,485.00 # THE APPELLANT’S CASE 1. In support of its Appeal, the Appellant relied on: 2. Statement of facts dated 27th January 2026 and filed on the even date. 3. Witness statement of Nil Seda Karaduman dated 21st April 2026 and admitted as evidence in chief on 30th April 2026 4. Written submissions dated on 20th May 2026. 5. Supplementary submissions dated and filed on 18th June 2026 6. According to the Appellant, the Respondent conducted a customs post clearance audit ("PCA") on the importation by the Appellant of induction liners R- WSE-900F, (herein referred to as Induction Liner R-WSE-900F) and issued an assessment dated 14th October 2025 (the Assessment") of Kshs 3,709,485.00 as additional import taxes upon reclassification of the said induction liner R- WSE - 900F from tariff No. 3921.19.10 to 3923.50.90. 7. The Appellant objected to the Assessment through an objection in support of its classification under Heading 39.21. It stated that it outlined the functionality of the Induction Liner as a plate, sheet, film, foil and strip, of plastics clearly illustrating the form in which it was imported clearly showing that at the time of importation when taxes are applied, the Induction Liner clearly and literally falls under a plate, sheet, film, foil and strip of plastics. An actual photo of the Induction Liner R-WSE-900F imported by the Appellant together with the manufacturer's Technical Data Sheet of the machine that affixes the subject Induction Liner through pressure, which also indicates the model number and machine description. 1. The Appellant argued that Induction liners are multi-layered seals used in packaging to ensure an airtight and tamper-proof opening, on a plastic container with the main purpose being that of maintaining the integrity of the product inside the container such as preventing oxidation. It noted that an induction liner is either sealed to the container's opening or affixed to a closure (whether plastic or aluminium) using an induction sealing machine through affixing the induction liner to the closure through pressure. It added that Induction liners are typically made of materials like aluminium foil, paper pulp and polymer. More specifically, it stated that the Induction liner R-WSE-900F is a pre-cut liner that is white in colour and is made of polyester film and EPE Foam as detailed in the manufacturer's Technical Data Sheet. 2. According to the Appellant, an Induction Liner R-WWSE-900F is mainly used in sealing containers containing oil -based products such as oil lubricants and other viscous liquid products. It asserted that the Induction Liner R-WSE-900F is affixed to the plastic closure through the pressure process by a specialized machine and there is no heat process undertaken in affixing the induction liner to the plastic closure. 3. The Appellant stated that it delivers the plastic closure with the Induction Liner R-WSE-900F affixed to it, to the manufacturer of the liquid-based product to seal the plastic container, once the product is filled in the plastic container. 4. The Appellant objected to the Respondent's demand for additional taxes on 13th November 2025 and the Respondent issued a review decision dated 9th December 2025. The Respondent's objection decision maintained the assessment arrived at during the PCA which reclassified Induction Liner R-WSE-900F to HS Code 39.23.50.90 as stoppers, lids, caps and other closures (other). The Appellant being dissatisfied filed this appeal. 5. In support of the ground of the appeal, the Appellant cited the General Interpretative Rules (GIRs) for the Classification of Goods of the East Africa Community Customs Management Act 2004 (EACCMA) and CET, 2022 that govern the process of classification of goods for customs purposes. It averred that GIR 1 provides that for legal purposes, classification shall be determined according to terms of the headings and any relative Section or Chapter Notes. 1. The Appellant stated that in its classification, it referred to Chapter 39 which provides for classification of plastics and articles thereof. It argued that the Induction Liners are made of plastic, therefore, classifiable under Chapter 39 since the Commissioner classified the Induction Liners under Chapter 39 of the EACCMA CET. 2. Further, the Appellant classified the Induction Liner R-VWSE-900F under Heading 39.21 which provides for classification for "Other Plates, Sheets, Film, Foil and Strip, of Plastics", particularly, Tariff Number 3921.19.10 which provides for classification of *"Other Plates, sheets, film, foil and strip, of plastics - Cellular - Of Other Plastics (unprinted)'*. However, the Commissioner classified the Induction Liners Heading 39.23 which provides for classification for *"Articles for the conveyance or packing of goods, of plastics; stoppers, lids, caps and other closures, of plastics."*, particularly, Tariff Number 3923.50.90 which provides for classification of *"Articles for the conveyance or packing of goods, of plastics; stoppers, lids, caps and other closures, of plastics - Stoppers, Lids, Caps and Other Closures - Inserts -Other"*. 3. It cited GIR 1 which provides that *‘‘...for legal purposes, classification shall be determined according to the terms of the heading and any relative Section or Chapter Notes ...".* 4. It averred that Tariff Number 3921.19.10 perfectly captures the classification of the Induction Liners based on the nature of the items as being an article of plastic (polymer) in sheet form that is unprinted (plain white) in contrast to the Respondent's reclassification of the Induction Liners under Tariff Number 3923.50.90 which provides for classification of articles that are plastic in nature for conveyance or packing of goods i.e. stoppers, lids, caps or closures. 5. It relied on GIR 1 to assert that the Induction Liners are appropriately classified under Tariff Number 3921.19.10 and that the Respondent's reclassification of the Induction Liner R-WSE-900F under Tariff Number 3923.50.90 which classifies the induction Liners as *"stoppers, lids, caps or closures",* whether primary or secondary is erroneous and that the short-levied duties assessed by the Respondent are not due and payable. 6. As to the nature and characteristics of the Induction Liners, the Appellant argued that the Induction Liner R-WSE-900F is a liner or seal in nature with an upper foamed grip which provides convenient opening with spiral peeling and the remained circle ring on bottle neck after removing foil and top grip layer provides efficient reseal performance. It stated that the item is affixed to the plastic closure through high-pressure application and this process does not alter its physical or chemical characteristics. It averred that the induction liner itself cannot seal a container as a closure; rather, it complements the closure system by ensuring product quality and preventing leakage. 1. The Appellant asserted that Induction Liner R-WSE-900F cannot be applied directly to a plastic container, therefore, it is erroneous for them to be classified under Tariff Number 3923.50.90. 2. It stated that the Induction Liner R-WSE-900F is affixed through pressure to the plastic closure and the plastic closure with the affixed Induction Liner R- WSE-900F delivered to the manufacturer. It contended that just like any other liner, once Induction Liner R-WSE-900F has been torn or peeled off by a user, the seal is NOT reusable and no longer serves its primary function of ensuring product quality. The Appellant further asserted that items classifiable under Tariff Number 3923.50.90 are reusable more than once. 3. According to the Appellant, it manufactures plastic closures classifiable under Tariff Number 3923.50.90 and averred that plastic closures have two main components made of plastic, specifically, the shell and tamper evident band (TE Band). The shell is the main body of the closure which includes a top base wall and a downwardly extending skirt whereas TE Band is a security feature which can be described as a thin, breakable, frangible bridges or webs of rings connected to the bottom of the extending skirt portion of the shell which breaks away from the shell upon first opening providing visual evidence that the container has been opened. The Appellant added that upon breaking away from the shell, the TE Band settles at the bottom of the neck of the container (mostly bottles) as proof of tampering of the container. However, it noted that the shell and TE Band are still useable since the two components continue performing their primary function of preventing leakage of the liquid or powder content from inside the container, whether plastic or not. 4. In view of the foregoing, the Appellant asserted that Induction Liner R- WSE-900F cannot be classified under Tariff Number 3923.50.90 since it does not perform the function of a closure which is in addition to maintaining the integrity of the liquid product inside the container but also preventing leakage of the liquid content inside the container. The Appellant asserted that an Induction Liner R-VWSE-900F can only serve its function once. 1. The Appellant averred that Induction Liner R-WSE-900F are not functionally useful without plastic closures. It stated that the induction liners including Induction Liner R-WSE-900F are not finished plastic closures, stoppers or lids that can be applied directly to a plastic container and cannot fully function independently without the plastic closures by ensuring that there is no contamination or leakage. It averred that Induction Liner R-WSE-900F serves as intermediate packaging component used in-tandem with a plastic closure contamination of the content of the container. 2. According to the Appellant, while an induction liner including induction Liner R-WSE-900F is essential to the performance of the overall closure system preventing contamination or leakage of the content of the container, it cannot substitute the plastic closures or caps. It noted that without an induction liner such as Induction Liner R-WSE-900F, the plastic closure would still fully function as can be demonstrated in plastic closures utilized for water and carbonated drinks such as soda. 3. The Appellant stated that Induction Liner R-WSE-900F is a specialized protective liner used in conjunction with plastic closures for sealing containers that hold edible oils, lubricants and other such products. It is affixed to the underside of the closure and forms part of a composite sealing system. It noted that at the time of importation, Induction Liner R-WSE-900F cannot perform the function of a closure on its own when placed on a plastic container. It only becomes functional when combined with a plastic closure or cap and applied using specialized sealing equipment which utilizes pressure as a force in the sealing process. It emphasised that Induction Liner R-WSE-900F cannot be classified under H.S Code 3923.50.90. 4. It contended that Tarriff 3923.50.90 classifies finished products. It pointed out that Heading 3921 cover *"plates, sheets, film, foil and strip of plastics, whether or not printed or embossed, not otherwise worked."* The Induction Liner R-WSE-900F fits this description as an induction liner. In contrast, Tarriff Number 3923.50.90 pertains to finished plastic articles such as caps, lids, and stoppers i.e. items that are ready for immediate use in packaging. In Appellant’s view, Induction Liner R-WSE-900F cannot function independently as a closure and requires further assembly by being affixed onto a plastic closure through pressure, therefore, classification under Tariff Number 3923.50.90 is misguided since it contains finished articles designed for direct use in packaging. 5. While the Respondent in the Objection Decision averred that Induction Liner R-WSE-900F was classifiable as a 'secondary closure" and specifically, that ‘functionally, the induction liner acts as a secondary closure preventing leakage and tamper proofing in packaging systems," the Appellant stated this aspect was not mentioned or considered in the Assessment. 6. The Appellant maintained that the Respondent erred in law and in fact by disregarding the GIR of the Harmonized Commodity Description and Coding System of the EAC CET in classification of Induction Liner R-WSE-900F under Heading 39.23. 7. The Appellant further stated that in principles of law, there are the three (3) rules of statutory interpretation which guide interpretation of laws. The "literal meaning" refers to the Literal Rule of Statutory Interpretation, a principle where judges interpret laws by giving words their plain, ordinary; and grammatical sense as written, assuming the law maker intended exactly what its words convey. 8. The Appellant urged the Tribunal to consider the literal meaning of a closure and note that the Induction Liner R-WSE-900F in its nature is a liner and is even stated and classified as such by its manufacturer, therefore, does not qualify as a closure. Further, the Appellant urged the Tribunal to take cognisance of the Respondent's intent to get creative through referring to Induction Liner RWSE900F as a secondary closure. 9. It stated that Heading 39.23 and specifically, H.S. Code 3923.50.90 of the EACCMA CET which the Respondent seeks to reclassify Induction Liner R- WSE900F under does not mention or consider "secondary closure". The term secondary closure" is not defined in the law as a closure was meant to be literally defined as such. The Appellant contends that Induction Liner R-WSE900F is an induction liner in nature and not a closure and that the Respondent is intent on being creative by creating the term "secondary closure" to cause injustice to the Appellant. 10. The Appellant contended that the Induction Liners were appropriately classified as other plates under Heading 39.21 on the grounds set out hereinabove. 11. The Appellant submitted that Induction Liner R-WSE-900F is classifiable under tariff code 3921.19.10 as a plastic closure instead of tariff code 3923.50.90. 12. On the law on statutory interpretation the Appellant relied on the dictum of Lord Simmons in **Russel vs Scott** wherein the learned Judge held that, *“My* *Lords, there is a maxim of income tax law which, though it may sometimes be overstressed yet ought not to be forgotten. It is that the subject is not to be taxed unless the words of the taxing statute unambiguously impose the tax upon him.”* 1. It also relied on the case of **Cape Brandy Syndicate v Inland Revenue Commissioners (1921) 1 KB 64** where the Court held as follows: *“...in a taxing Act, one has to look merely at what is clearly said. There is no room for intendment as to a tax. There is no equity about tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied (emphasis added). One can only look fairly at the language used...”* 1. It also cited the Supreme Court of Kenya in ***Petition No. 12 (E014) of 2022: Barclays Bank of Kenya Limited (now Absa Bank Kenya PLC) v Commissioner for Domestic Taxes (Large Taxpayers Office)*** where the Apex Court stated that Article 210(1) 0f the Constitution provides that *“no tax or licensing fee may be imposed, waived or varied except as provided by legislation.”* 2. The Appellant also cited the House of Lords in **Adamson v Attorney General (1933) AC 257** where it was held that it is well settled that in cases where a section imposes a tax on a subject, it is incumbent on the Crown to establish that its claim comes within the very words used, and if there is any doubt or ambiguity this defect, if it be in view of the Crown a defect, can only be remedied by legislation**.** 1. It also relied on the case of **Jafferali Mohamedali Alibhai v the Commissioner of Income Tax [1961] EA 61**, to submit that the subject is not to be taxed unless the words of the taxing Statute unambiguously impose the tax upon him. 1. The Appellant in its Supplementary Submissions identified the issue for determination as whether there had been an issue of reclassification and, more particularly, whether the Induction Liner R-WSE-900F ought to be classified under tariff code 3921.19.10 as a plastic closure or whether it ought to be reclassified under tariff code 3923.50.90 as proposed by the Respondent, thereby resulting in the levying of additional taxes. The Appellant further indicated that it had procedurally appealed to the Tribunal pursuant to Section 230 of the East African Community Customs Management Act (EACCMA) after being dissatisfied with the Respondent's Review Decision dated 9th December 2025 issued under Section 229 of the EACCMA. 1. The Appellant in its Supplementary Submissions noted that whereas it had identified the issue for determination as one concerning the proper tariff classification of the subject induction liner, the Respondent had identified the issue for determination as whether it had acted within its statutory mandate by demanding duties amounting to Kshs. 3,709,485. 2. The Appellant in its Supplementary Submissions contended that the Notice of Demand dated 14th October 2025 constituted and formed a new cause of action capable of being subjected to a fresh objection process. In support of that position, the Appellant referred to the authority of Commissioner of Customs and Border Control v Rex International Limited, Nairobi High Court Commercial and Tax Appeal No. E027 of 2024, which had been relied upon by the Respondent, and noted that the Respondent asserted that it had acted within its mandate on the basis of the findings made in that decision. 3. The Appellant in its Supplementary Submissions observed that, at paragraph 43 of Commissioner of Customs and Border Control v Rex International Limited, Nairobi High Court Commercial and Tax Appeal No. E027 of 2024, the High Court held that where a taxpayer had failed to apply for review of a tariff ruling or seek extension of time within the prescribed period, the taxpayer became bound by that tariff ruling and that a subsequent demand for taxes merely represented taxes that had crystallized and did not amount to a new cause of action capable of objection. 4. The Appellant in its Supplementary Submissions maintained that Commissioner of Customs and Border Control v Rex International Limited, Nairobi High Court Commercial and Tax Appeal No. E027 of 2024 was neither applicable nor relevant to the present appeal because it was not apparent that the facts in that precedent were identical to those prevailing in the instant dispute before the Tribunal. 5. The Appellant in its Supplementary Submissions stated that it only became aware of the alleged relationship between the Tariff Ruling dated 31st October 2024 and the Notice of Demand dated 14th October 2025 upon being served with the Respondent's Statement of Facts dated 23rd March 2026 on 24th March 2026. 6. The Appellant in its Supplementary Submissions pointed out that paragraph 9 of the Respondent's Statement of Facts expressly stated that, there having been no appeal against the Tariff Ruling dated 31st October 2024, the Respondent issued the Demand Notice for Kshs. 3,709,485 following the retrospective application of the Tariff Ruling classifying the item under HS Code 3923.50.90. 1. The Appellant in its Supplementary Submissions contended that the Respondent's Statement of Facts referred to a desk audit conducted for the period 2024 to 2025 whereas the impugned Notice of Demand expressly referred to the period from April 2020 to date, thereby demonstrating inconsistency in the Respondent's position. 2. The Appellant in its Supplementary Submissions observed that paragraph 8 of the Respondent's Statement of Facts expressly stated that the Respondent conducted a desk audit for the period 2024 to 2025 which revealed that the Appellant had been classifying the subject item interchangeably between HS Code 4823.90.90 and HS Code 3921.19.10. 3. The Appellant in its Supplementary Submissions maintained that the Respondent did not notify it, in the Tariff Ruling dated 31st October 2024, of its right to appeal against that ruling within the prescribed timelines under Section 229 of the East African Community Customs Management Act (EACCMA). 4. The Appellant in its Supplementary Submissions highlighted that notwithstanding the foregoing, the Respondent issued the Appellant with the Notice of Demand dated 14th October 2025 demanding Kshs. 3,709,485. 5. The Appellant in its Supplementary Submissions observed that the Notice of Demand consisted of three parts, namely a Summary of Post Clearance Audit Findings – Tariff Classification, a Summary of Short Levied Duty Liability, and an Appeal of Tax Decision. 6. The Appellant in its Supplementary Submissions noted that the Notice of Demand stated that the Respondent had undertaken a Customs post-clearance compliance review pursuant to Sections 234, 235 and 236 of the East African Community Customs Management Act (EACCMA) for the period from April 2020 to October 2025. 7. The Appellant in its Supplementary Submissions reiterated that whereas the Notice of Demand referred to the period from April 2020 to date, paragraph 8 of the Respondent's Statement of Facts referred to a desk audit for the period 2024 to 2025, which demonstrated inconsistency in the Respondent's pleadings. 8. The Appellant in its Supplementary Submissions brought to the Tribunal's attention that the Respondent, through the Notice of Demand, informed the Appellant that the goods declared under tariff sub-heading 3921.19.10 were classifiable under tariff code 3923.50.90 and, on account of the alleged misclassification, assessed and demanded additional Import Duty and VAT amounting to Kshs. 3,709,485.00. # Appellant’s prayers 1. The Appellant prayed for the following reliefs: a The appeal be allowed; 2. The Respondent's confirmed assessment be annulled; and 3. The costs of this appeal be awarded to the Appellant. # THE RESPONDENT’S CASE 1. In response to the appeal, the Respondent filed its Statement of Facts dated 23rd March 2026 and filed on 24 th March 2026 together with written submissions dated 20th May 2026 and filed on 25th May 2026. 2. The Respondent’s case was that the product in issue is "Induction Liner R- wSE-900F", a plastic (polyolefin polymer) liner of approximately 1.157 millimetres thickness, used in container sealing systems. The liner is applied through a heat induction process and is used to prevent leakage, contamination, and tampering of packaged goods. 3. The Respondent pointed out that the dispute concerns the proper tariff classification of the Induction Liner. The Respondent classified the product under HS Code 3923.50.90, whereas the Appellant contends that it should be classified under HS Codes 3921.19.10. 4. The Respondent correctly stated that goods imported into the East African Community (EAC) are classified under the East African Community Common External Tariff Schedule (EAC/CET) and that Tariff classification in the EAC/CET schedule is governed by the principles set forth in the General Interpretation Rules for the classification of goods (GIRS). 5. The Respondent stated that the GIRs are applied sequentially, with each rule being considered in turn, and subsequent rules are applied only where classification cannot be determined under the preceding rule. It noted that under GIR 1, classification is determined according to the terms of the headings and any relevant section or chapter notes. 6. It noted that where goods are prima facie classifiable under two or more headings, GIR 3(a) provides that: *“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) The heading which provides the most specific description shall be preferred to headings providing a more general description.”* 1. It stated that once the appropriate heading has been determined, classification at the subheading level is undertaken in accordance with GIR 6. 2. The Respondent was of the view that it was not in contention that the Induction Liners are made of plastic therefore classifiable under Chapter 39 of the EAC/CET. 3. It pointed out that Heading 39.23 covers *"Articles for the conveyance or packing of goods, of plastics; stoppers, lids, caps and other closures, of plastics."* 4. The Respondent pointed out that under the Explanatory Notes to heading 39.23, this heading covers all articles of plastics commonly used for the packing or conveyance of all kinds of products. The articles covered include: 5. Containers such as boxes, cases, crates, sacks and bags (including cones and refuse sacks), casks, cans, carboys, bottles and flasks. The heading also covers: 1. Cups without handles having the character of containers used for the packing or conveyance of certain foodstuffs, whether or not they have a secondary use as tableware or toilet articles; 2. Bottle preforms of plastics being intermediate products having tubular shape, with one closed end and one open end threaded to secure a screw type closure, the portion below the threaded end being intended to be expanded to a desired size and shape. 6. Spools, cops, bobbins and similar supports, including video or audio cassettes without magnetic tape. 7. Stoppers, lids, caps and other closures. 8. According to the Respondent, the product in issue, by its design and use, functions as a sealing mechanism within a container closure system. It prevents leakage, preserves product integrity, and provides tamper evidence, all of which are core functions of a closure. 9. The Respondent noted that while Appellant's contention that the product cannot function independently, it pointed out that the function does not remove it from classification as a closure. It stated that many closures operate as part of integrated systems, and classification is determined by function and use, not independence. 1. Further, the Respondent argued that Appellant's reliance on heading 39.21 is misplaced. In noted that the heading covers plastic materials in primary or semi-finished forms such as plates, sheets and films. In contrast, the product in issue is a specifically manufactured article with a defined sealing function in packaging systems. 2. The Respondent also argued that the Appellant's reliance on heading 39.21 is also erroneous as the heading covers plastic materials in primary or semi- finished forms such as plates, sheets and films. In contrast, the Respondent contended that the product in issue is a specifically manufactured article with a defined sealing function in packaging systems. 3. According to the Respondent, the contention that the product is not a finished article is equally without merit. The Respondent averred that the induction liner is a complete and specifically manufactured product at the time of importation, and does not undergo further manufacturing, but merely application in use. 4. The Respondent contended that having established that the appropriate heading is 39.23, classification at the subheading level is determined in accordance with GIR 6, which requires that classification be based on the terms of the subheadings at the same level. 5. The Respondent pointed out that subheading 3923.50.90 provides for *"stoppers, lids, caps and other closures,"* which directly captures articles whose function is to seal containers used in the packing of goods. 6. The Respondent averred that the induction liner, by virtue of its sealing function, falls within the scope of *"other closures"* under subheading 3923.50.90. 7. The Respondent contended that at the tariff line level, the applicable classification is 3923.50.90, which covers other closures not more specifically provided for. 8. The Respondent averred that all its actions were taken in accordance with the provisions of the law. It maintained that the additional assessments issued were properly founded in fact and law, and that the Objection decision was fair, reasonable, and made in accordance with statutory provisions. 9. In summary, it submitted that the correct tariff code was 3923.50.90 therefore, the Appellant was liable to pay Kshs 3,709,485 as assessed. 10. The Respondent submitted that the Appellant has not provided any evidence to disprove the Respondent’s demand for short levied taxes. It relied on the decision in ***HCCTA No. E027 of 2024 Commissioner of Customs and Border Control v Rex International Limited*** where the Court held as follows: - *“The Respondent, having failed to exercise the right to apply for a review of the tariff ruling … within the prescribed period above, nor to apply for an extension of time, was bound by the classification determined in the said tariff ruling. The letter of demand … for taxes was merely due to the fact that the taxes had crystallized, occasioned by the Respondent’s failure to challenge the said tariff ruling. It did not form a new cause of action that could be subject to a new objection process. I find merit in the Appellant’s argument that the Tribunal erred in reclassifying the disputed products despite the absence of an objection to the tariff ruling, as required under Section 229 of the EACCMA 2024. Consequently, I agree with the Appellant that the Tribunal lacked the jurisdiction to revisit and reclassify the products, as the tariff ruling had attained finality under the law”* # Respondent’s prayers 1. The Respondent urged the Tribunal to uphold the Respondent’s Review Decision as proper and in conformity with the provisions of the Law; and dismiss the appeal with costs to the Respondent. # ISSUES FOR DETERMINATION 1. The Tribunal having carefully considered the parties’ pleadings, documentation and submissions adduced before it notes that two issues call for its determination; # Whether the Appeal is competent * 1. **Whether the Respondent was justified in classifying the imports under HS Code 3923.50.90 instead of HS Code 3921.19.10.** **ANALYSIS AND FINDINGS** 1. The Tribunal having established two issues for determination will proceed to analyse the same as follows; # Whether the Appeal is competent 1. The evidence before the Tribunal demonstrates that the Respondent issued a Tariff Ruling dated 31st October 2024 classifying the Appellant's imported product under HS Code 3923.50.90. The Tariff Ruling expressly communicated the Respondent's classification decision and indicated that the declared tariff classification was incorrect. 2. The subsequent demand notice dated 14th October 2025 merely quantified the short-levied duties arising from the implementation of that earlier Tariff Ruling. It did not introduce a fresh classification decision nor did it amount to a second tariff ruling. The legal consequence is that the operative decision capable of review was the Tariff Ruling of 31st October 2024, while the Demand Notice merely enforced that decision after the tax liability had crystallized. 3. The Tribunal notes that the Appellant did not lodge an application for review against the Tariff Ruling within the thirty days as prescribed under Section 229(1) of the East African Community Customs Management Act, 2004 (EACCMA), which provides that any person directly affected by a decision of the Commissioner shall lodge an application for review within thirty days from the date of that decision. 4. Equally, there is no evidence that the Appellant invoked Section 229(3) of the EACCMA by seeking an extension of time from the Commissioner to lodge an application for review out of time. The failure to invoke either statutory avenue rendered the Tariff Ruling final and binding upon the Appellant. 5. The Respondent averments in its statement of facts stated as follows at paragraphs 6 and 9 which constituted a preliminary objection; *‘‘The Appellant was initially issued with a tariff ruling referenced: KRA/CBC/BIA/THQ/610/10/2024 dated 31st October 2024 whereby the imported item Induction Liner R-Wise-900F was classified under HS Code 3923.50.90. The consignment under Entry 24MBAIM405583640 was released upon execution of a bank guarantee.* *There being no Appeal to the tariff ruling dated 31st October 2024, the Respondent then issued a demand of Kshs 3,709,485 after retrospective application of the tariff ruling which classified the item under HS Code 3923.50.90.’’* 1. Further the tariff ruling dated 31st October 2024 stated in part *“In this regard, the declared HS Code 3921.19.10 is at variance with this tariff ruling. This tariff classification is based on the material information* *submitted and does not absolve the importer from any liability that may arise at the time of importation, Customs verification and clearance of goods.* *Kindly note that this ruling shall be upheld in case of any other contradictory tariff ruling issued prior to this.”* 1. The Appeal is founded upon a demand notice where the underlying Tariff Ruling was never challenged within the statutory timelines. Accordingly, it satisfies the threshold for a preliminary objection as laid down in **Mukisa** # Biscuits Manufacturing Co. Ltd v West End Distributor Ltd [1969] E.A 696 wherein Law JA discussed what constitutes a pure point of law in matters of preliminary objections as follows: *“a preliminary objection consists of a point of law which has been pleaded or which arises by clear implication out of pleadings and which if argued as a preliminary point may dispose of the suit. Examples are an objection to the jurisdiction of the court or a plea of limitation or a submission that the parties are bound by the contract giving rise to the suit to refer the dispute to arbitration….a preliminary objection is in the nature of what used to be a demurrer. It raises a pure point of law which is argued on the assumption that all the facts pleaded by the other side are correct. It cannot be raised if any fact has to be ascertained or if what is sought is the exercise of judicial discretion.” (Emphasis is ours).* 1. Consequently, the Respondent raised a preliminary objection in its pleadings which the Tribunal must examine its merits. 2. It is the Tribunal considered view that that once the statutory period for challenging the Tariff Ruling expired without any application for review or extension of time, the Respondent was legally entitled to enforce that ruling through the issuance of a demand for the taxes found to be short-levied. Consequently, the demand notice did not revive or create a new right of objection under Section 229 of the EACCMA because the legal dispute concerning tariff classification had already been conclusively determined by the unchallenged Tariff Ruling. 3. This position is firmly supported by the High Court in **Commissioner of Customs and Border Control v Rex International Limited, Nairobi High Court Commercial and Tax Appeal No. E027 of 2024**, where the Court held that a taxpayer who fails to seek review of a tariff ruling within the prescribed period, or fails to seek extension of time, becomes bound by that tariff ruling. 1. The Court further held that subsequent demand for taxes merely represents taxes that have crystallized by operation of the unchallenged tariff ruling and does not constitute a new cause of action capable of being subjected to a fresh objection process. Consequently, the Tribunal lacks jurisdiction to revisit or reclassify goods where the tariff ruling has attained finality. 2. The Tribunal further finds that the Appellant's objection dated 13th November 2025 was directed against the demand notice rather than the Tariff Ruling. Such an objection was legally ineffective because the demand notice merely implemented an earlier decision that had already become final. In law, the Appellant could not circumvent the mandatory statutory review process by challenging the enforcement mechanism instead of the substantive tariff determination from which the demand emanated. 3. The Tribunal also notes that the Appellant itself appreciated the procedural difficulty arising from its failure to challenge the Tariff Ruling. The record shows that the Appellant filed supplementary submissions seeking to address the Respondent's jurisdictional objection after the issue had been raised. Those submissions attempted to distinguish **Commissioner of Customs and Border** **Control v Rex International Limited, Nairobi High Court Commercial and Tax Appeal No. E027 of 2024** by contending that the demand notice constituted a new cause of action and by asserting that it only became aware of the connection between the Tariff Ruling and the demand notice upon receipt of the Respondent's Statement of Facts. However, those submissions did not alter the undisputed fact that no application for review had ever been lodged against the Tariff Ruling within the statutory period, nor was any extension of time sought under Section 229(3) of the EACCMA. Consequently, the procedural defect remained incurable. 1. It is not disputed that the Respondent issued a tariff ruling dated on 31st October 2024 whereby the imported item Induction Liner R-Wise-900F under Entry 24MBAIM405583640 was classified under HS Code 3923.50.90. It is also not disputed that the Appellant did not object to this tariff ruling. Instead, the Appellant vide a letter dated 13th November 2025, objected against a demand notice dated 14th October 2025. The question then, is whether the appeal is competent, if so, whether the Tribunal has jurisdiction to entertain it. 2. Section 229 (1) of the EACCMA provides for application for review to the Commissioner. In particular it provides as follows: *“A person directly affected by the decision or Application omission of the Commissioner or any other officer on matters relating to Customs shall* *within* ***thirty days of the date of the decision or omission*** *lodge an application for review of that decision or omission.” (Emphasis is ours).* 1. The negative decision was issued vide a tariff ruling dated 31 st October 2024. The Appellant did not file for review of this decision within thirty days as required under Section 229 (1) of the EACCMA. There was nothing on record to indicate that the Appellant sought and obtained leave from the Respondent to object out of time as required under Section 229(3) of the EACCMA. 2. The Tribunal further notes that the Appellant failed to exhaust the dispute resolution mechanism expressly established under Section 229 of the EACCMA. The doctrine of exhaustion requires a litigant to pursue all internal statutory remedies before invoking the jurisdiction of a court or tribunal. In **Ripple** **Pharmaceuticals Limited v Commissioner, Customs and Border Control [2025] KEHC 806 (KLR)**, the High Court affirmed that failure to comply with **Section 229 of the EACCMA** renders an appeal before the Tribunal invalid. 1. Similarly, in **Njeri v Commissioner of Domestic Taxes [2025] KEHC 749 (KLR)**, the Court held that failure to exhaust the review mechanism under Section 229 of the EACCMA deprives the Tribunal of jurisdiction. The Court reiterated the principles enunciated in **Mereka v Samora M. Sikalieh – Chairman, Karen Langata District Association (KLDA) [2023] KEHC 19953 (KLR)** that courts and tribunals should decline jurisdiction where the statutory dispute resolution process has not been exhausted. 1. The Tribunal equally adopts the long-standing principle established by the Court of Appeal in **Speaker of the National Assembly v Karume (1992) KLR** **21**, that where legislation provides a clear procedure for redress, that procedure must be strictly followed before a party can invoke judicial intervention. Section 229 of the EACCMA provides such a mandatory statutory procedure, and the Appellant was bound to comply with it before approaching the Tribunal. Having failed to do so, the Appellant cannot invoke the Tribunal's appellate jurisdiction. 1. The inevitable consequence is that the Tribunal lacks jurisdiction to entertain the appeal. Since jurisdiction is everything and cannot be conferred by acquiescence or consent of the parties, the Tribunal cannot proceed to determine the merits of the tariff classification dispute. 2. Accordingly, the Tribunal finds that the Appellant's right to challenge the tariff classification lapsed upon its failure to seek review of the Tariff Ruling dated 31st October 2024 or obtain leave to object out of time. 3. Consequently, in the absence of a valid application for review under Section 229 of the EACCMA, the Tribunal finds and holds that the Appeal is incompetent and is ripe for striking out. 4. Having established the foregoing, the second issue for determination is hereby rendered moot. # FINAL DECISION 1. The upshot to the foregoing is that the Appeal is incompetent and the Tribunal proceeds to make the following orders: - 2. The Appeal be and is hereby struck out. 3. Each party to bear its own cost. 4. It is so ordered. # DATED AND DELIVERED AT NAIROBI THIS 20TH DAY OF JULY, 2026 SIGNED BY/FOR: **★ TH E JUDICIAR Y O F KENY A ★** **HON. EUNICE NJERI NGANGA HON. SANKALE SPENCER OLOLCHIKE** **HON. BERNADETTE MUTHIRA GITARI** **HON. BILLY GRAHAM OKUMU MIJUNGU** Tax Appeals Tribunal Tribunal Date: 2026-07-20 15:00:43