[2024] KETAT 739 (KLR)

Decase Chemicals Limited v Customs and Border Control Department (Tax Appeal E166 of 2023) [2024] KETAT 739 (KLR) (Commercial and Tax) (24 May 2024) (Judgment)

Neutral citation: [2024] KETAT 739 (KLR)

Republic of Kenya

In the Tax Appeal Tribunal

Commercial and Tax

Tax Appeal E166 of 2023

RM Mutuma, Chair, EN Njeru, M Makau, B Gitari & AM Diriye, Members

May 24, 2024

Between

Decase Chemicals Limited

Appellant

and

Customs And Border Control Department

Respondent

Judgment

Background 1. The Appellant is a limited liability company registered in Kenya involved in the business of importation, sale and re-sale of general chemicals and other specialty chemicals used in the manufacture and production of many industrial products.

2. The Respondent is a principal officer appointed under Section 13 of the Kenya Revenue Authority Act and the Kenya Revenue Authority is responsible for the administration and enforcement of various revenue laws including Income Tax Act and VAT Act.

3. The Appellant imported two products, namely Silicon UF5866 and UF 5875 entry No. 22EMKIM401613476 and declared them under HS Code 3910. 00. 00

4. The Respondent in a Tariff ruling dated 23rd January 2023 classified the two products under HS Code 3402. 90. 00.

5. The Appellant lodged an application for review of the tariff ruling on 9th February 2023 to which the Respondent issued a review decision on 2nd March, 2023 upholding its earlier tariff ruling classification.

6. Aggrieved by the Respondent’s review decision, the Appellant lodged the Appeal herein on 26th April, 2023.

The Appeal 7. The Appeal as contained in the Memorandum of Appeal dated 26th April 2023 and filed on an even date is premised on the following grounds of appeal, that:a.The products; Silicon UF5866 and UF5875 are non-ionic raw materials used in the production of Polyurethane foam which falls under HS Code 3402. 42. b.That Silicon UF5866 and UF5875 are Organic surface-active agents which when mixed with water at a concentration of 0. 5 % at 20 °C and left to stand for one hour at the same temperature give a transparent or translucent liquid or stable emulsion without separation of insoluble matter and also reduce the surface tension of water to 4. 5 x 10-2 N/m (45 dyne/cm) or less.c.That the two CAS numbers of UF-5866 and UF-5875 evidenced on the MSDS are not due to a combination of two different surfactants.d.That the second structure is the unreacted raw material present in the product. The structure of UF-5866/5875 belongs to polyether-modified polydimethylsiloxane, and its synthesis process is a hydrosilylation reaction of low hydrogen silicone oil and allyl polyether. Because allyl polyether is excessive during the reaction, there will be some unreacted allyl polyether left in the product.

THe Appellant's Case 8. Appellant set out its case on its;a.Statement of Facts dated and filed on 26th April 2023 and the documents attached thereto;b.Written submissions dated and filed 21st February 2024;c.Witness statement of Nazir Sevany dated and signed on 20th November 2023; and,d.Witness statement of Patrick Mwangi dated and signed 22nd November 2023.

9. The Appellant submitted two issues for determination as follows;a.Whether there is a valid Appeal before the Tribunalb.Whether the Respondent erred in classifying SILICON UF5866 and UF5875 in HS Code 3402. 90. 00 instead of 3402. 42. 00.

a. Whether there is a valid Appeal before the Tribunal 10. The Appellant submitted that the Respondent through tariff rulings on 23rd January 2023 classified the two products SILICON UF5866 and UF5875 under HS code 3402. 90. 00.

11. The Appellant dissatisfied with these decisions lodged an appeal for review on 9th February 2023 with the Respondent. The Appellant took note of the exclusion in the Chapter 39 Note 2 (f) thereby directing that the applicable Heading is HS Code 3402. 042. 00 but took challenge with the classification by the Respondent of Silicon of UF5866 and UF5875 under 3402. 90. 00 instead of 3402. 042. 00.

12. The Appellant averred that the Respondent replied conforming its classification under 3402. 90. 00. The Appellant stated that it continued engaging the Respondent through a mail dated 10th March 2023 and a consultative meeting held on 22nd March 2023 which did not bear fruit leading to the Respondent issuing its final decision on 28th March 2023 where it upheld its earlier classification ruling.

13. The Appellant relied on the Judgment espoused in the case of Commissioner of Customs and Border Patrol vs. Lachlan Kenya Limited (Income Tax Appeal E054 of 2021) [2022] KEHC 12109 (KLR), Hon. Mabeya J. sitting on Appeal, upheld this Honourable Tribunal’s Judgment and stated as follows:“18. The foregoing provisions are clear on the required timelines. An appeal to the Tribunal ought to be lodged within 45 days after the Commissioner had rendered his decision on [a] any matter in dispute.”

14. The Appellant stated that this Appeal is compliant with Sections 229 and 230 of EACCMA. The Appellant further stated that it requested in writing for a review of the Respondent’s decision of 23rd January 2023 within 17 days.

15. The Appellant averred that a final decision by the Respondent was made on 28th March 2023. It subsequently filed this Appeal on 26th April 2023 and served it upon the Respondent on the same date. The Appellant stated that the Appeal to this Honourable Tribunal was filed in under 30 days.

16. The Appellant stated that it is imperative to note that the Respondent in its Statement of Facts at paragraph 23 asked the Tribunal to uphold its review decisions dated 28th March 2023 and therefore, the decision was the final decision, meaning that the Appeal to the Tribunal was filed 29 days after the Respondent’s final decision which is well within the period prescribed under Section 230 of the EACCMA.

b.Whether the Respondent erred in classifying SILICON UF5866 and UF5875 in HS Code 3402. 90. 00 instead of 3402. 42. 00 17. The Appellant averred that there is no dispute that the applicable Heading under the EAC CET 2022, is HS Code 3402 which reads as follows:3402 - Organic surface-active agents (other than soap); surface-active preparations, washing preparations including auxiliary washing preparations) and cleaning preparations, whether or not containing soap, other than those of heading 34. 01. - Anionic organic surface-active agents, whether or not put up for retail sale:3402. 31 - Linear alkylbenzene sulphonic acids and their salts3402. 39 - Other- Other organic surface-active agents, whether or not put up for retail sale:3402. 41 - Cationic3402. 42 - Non-ionic3402. 49 - Other3402. 50 - Preparations put up for retail sale3402. 90 - Other

18. It was the Appellant’s submission that from the foregoing there are single dash sub-headings and double dash sub-headings. Therefore, in order to correctly classify Silicon UF5866 and UF5875, General Rules for Interpretation 6 (GIR 6) must be considered.

19. The Appellant submitted that GIR 6 provides:“For legal purposes, the classification of goods in the subheadings of a heading shall be determined according to those subheadings and any related Subheading Notes and, mutatis mutandis, to the above Rules, on the understanding that only subheadings at the same level are comparable. For the purposes of this Rule the relative Section and Chapter Notes also apply, unless the context otherwise requires.”

20. The Appellant submitted that the above rule provides that the classification of goods in the Subheading is to be determined according to the terms of those Subheadings and any related Subheading Notes, as well as according to the terms of Rules 1 to 5 with appropriate changes.

21. The Appellant further submitted that the Chapter Note 3 and Part (I) of Heading 3402 does not conflict but rather complement each other and that Part (I) states as follows:“(1)Organic Surface-active Agents (other Than Soap)The organic surface-active agents of this heading are chemical compounds, not chemically defined, which contain one or more hydrophobic functional groups in such a proportion that, when mixed with water at a concentration of 0. 5% at 20 °C and left to stand for one hour at the same temperate, they give a transparent or translucent liquid or stable emulsion without separation of insoluble matter (see Note 3(a) to this Chapter). For the purpose of this heading, an emulsion should not be considered as having a stable character if, after being left to stand for one hour at 20 °C, (1) solid particles are visible to the naked eye, (2) it has separated into visually distinguishable phases or (3) it has separated into a transparent part and a translucent part, visible to the naked eye.Organic surface-active agents are capable of adsorption at an interface; in this state they display a number of physio-chemical properties, particularly surface activity le.g., reduction of surface tension, foaming, emulsifying, wetting), which is why they are usually known as "surfactants"However, products which are not capable of reducing the surface tension of distilled water to 4. 5 × 10-2 N/m (45 dyne/ cm) or less at a concentration of 0. 5% at 20 °C are not regarded as surface-active agents and are therefore excluded from this heading.”

22. The Appellant contended that there is no conflict with the Chapter Note and Subheading note. Silicon UF5866 and UF5875 meet the conditions of a surface-active agent based on the tests both by the Appellant and the Respondent.

23. The Appellant submitted that the terms of the Subheadings under 3402 provide that Silicon UF5866 and UF5875 could be classified under:- Anionic organic surface-active agents, whether or not put up for retail sale:- Other organic surface-active agents, whether or not put up for retail sale:3402. 50 - Preparations put up for retail sale3402. 90 - Other

24. The Appellant submitted that Silicon UF5866 and UF5875 do not contain any anionic properties. As a result, applying GIR 1, the terms of the subheading most applicable is other organic surface-active agents and that this becomes all the more applicable because when considering the double dash headings under “Other organic surface-active agents, whether or not put up for retail sale”. They are as follows:3402. 42 - - Non-ionic3402. 49 - - Other

25. The Appellant submitted that the Explanatory Notes further state:“Organic surface-active agents may be:(1)Aionic,(2)Cationic,(3)Non - ionic, in which case they do not produce ions in an aqueous solution. Their solubility in water is due to the presence in the molecules of functional groups which have a strong affinity for water. Examples are: products of the condensation of fatty alcohols, fatty acids or alkylphenols with ethylene oxide; ethoxylates of fatty acid amides.(4)Ampholyic.”

26. The Appellant stated that from the testing and analysis by the both the Respondent and the Appellant that there is presence of non-ionic surface-active agents in Silicon UF5866 and UF5875. The Appellant further stated that from the foregoing, it is clear that applying GIR 1 and GIR 6, the appropriate heading, using the terms of the Heading and subheading is 3402. 42.

i.The Respondent ignored the World Customs Organization Classification Opinion 27. The Appellant stated that Section 122 (6) of the EACCMA requires that the Respondent should take into consideration the WCO’s decisions, rulings, classification opinions and guidelines when considering the correct HS Code applicable.

28. The Appellant claimed that the Respondent did not apply the terms of the Subheadings but rather went straight to the Explanatory Notes with respect to Surface-active preparations. No reasons were given by the Respondent why there was preference to the Explanatory Notes for surface-active preparations, yet Explanatory Notes are not legally binding and only there to guide. In particular, the Explanatory Notes do not have exclusions either to dictate that they could not be classified as organic surface-active agents.

29. The Appellant submitted that the World Customs Organization in its classification opinions with respect to HS Code 3402. 42 includes:“1. Polyols, having the character of non-ionic surfactants, used as surfactants and also for the manufacture of polyurethane foams.Application of GIRs 1 and 6Adoption: 19612. Polyols, having the character of non-ionic surfactants, obtained by the sequential addition of propylene and ethylene oxides to ethylenediamine, and used as surfactants and also for the manufacture of polyurethane foams.Application of GIRs 1 and 6Adoption: 1961”

30. The Appellant asserted that the above classification has been there since 1961 and has not changed. From the testimony of its witness Nazir Sevany AWI, SILICON UF5866 and UF5875 have not changed for over 30 years in composition and that it is also not disputed that SILICON UF5866 and UF5875, have the character of non-ionic surfactants and are used in the manufacture of polyurethane foams. Therefore, the correct categorization due to the Harmonized System is HS Code 3402. 42.

ii.The Respondent ignored GIR 2 (b) and (3) when there were potentially 2 subheadings applicable. 31. The Appellant stated that the Respondent placed reliance on the following Explanatory Note with respect to surface active preparation:“Other mixtures based on surface active agent of Part (1) above e.g., surface-active preparations containing a proportion of soap, such as alkylbenzene sulphonate with sodium stearate).”

32. The Appellant argued that the Explanatory Note is clear that the product is a mixture that must be based on an organic surface-active agent. So, the product must contain an organic surface-active agent and that this Explanatory Note contains no exclusion of any headings or subheadings. As such Silicon UF5866 and UF5875 could be classified under the following subheadings:“- Other organic surface-active agents, whether or not put up for retail sale:3402. 90 – Other”

33. The Appellant submitted that GIR 2(b) provides:“Any reference in a heading to a material or substance shall be taken to include a reference to mixtures or combination of that material or substance with other materials or substances. Any reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partly of such material or substance. The classification of good consisting of more than one material or substance shall be according to the principles of Rule 3. ”

34. The Appellant maintained that applying GIR 2 (b), the classification Silicon UF5866 and UF5875 would clearly be in HS Code 3402. 42“- Other organic surface-active agents, whether or not put up for retails sale.”

35. The Appellant averred that it requested for extension of time to provide all the documents, but the objection was invalidated by the Respondent. The documents included the following: Manufacturer’s findings after various tests on the products. And Material Safety Data Sheets.

36. The Appellant stated that its objection was invalidated citing reasons that the two products are surface-active preparations containing non-ionic surface-active agents and organic silicones dispersed in an aqueous medium, classified in 2022 EAC/CET Code 3402. 90. 00.

37. The Appellant claimed that it submitted a letter of Appeal as required under Section 33 (1) of the Tax Procedures Act 2015 and that it was received by Respondent correspondence on 10th February 2023. It was the Appellant’s further submission that it provided documents and additional information in soft copy on email dated 23rd February 2023 which was acknowledged on the 1st of March 2023.

38. The Appellant’s first witness testified that the Appellant also imports the two products into Tanzania and Uganda where the HS Code 3901 is being used and there should be consistency in the customs tariff within the region of East Africa.

39. The Appellant’s second witness testified that in order to get a clarity on the tariff classification they requested OSiC, the manufacturer of the products, did a surface tension test where both Silicon UF5866 or UF5875 were mixed with water at a concentration 0. 5% at 20° and left to stand for one hour at the same temperature. The results showed that there formed a transparent or translucent liquid or stable emulsion without separation of insoluble matter and also reduced the surface tension of water to 4. 5 * 102N/m (45 dyne/cm) or less.

40. The Appellant claimed that based on those results, Silicon UF5866 and UF5875 fall under Chapter 34 owing to Chapter Note 3.

41. The Appellant stated that the chemical reaction giving rise to SILICON UF5866 and UF5875 was shared by OSiC and that there is evidence that there is a hydrosilation reaction of low hydrogen silicone oil (methyl siloxane (MDD’yM)) and allyl polyether (polyalkene glycol).

42. The Appellant’s second witness one Dr. Patrick Mwangi AW2, a retired Senior Lecturer in Chemistry who specializes in polymers testified that although he did not conduct the testing himself, he relied on the reports produced by OSiC, the manufacturer of Silicon UF5866 and UF5875 as these were undisputed.

43. The witness stated that he identified that Silicon UF5866 and UF5875 are synthesized from Dimethyl siloxane and polyakene glycol and that since he reviewed the data sheet for the products provided by OSiC and as per the chemical equation provided by OSiC, there is a reaction between the dimethylsiloxane and polyalkene glyco. This is a standard reaction for producing the polyalkene oxide-methysiloxane polymer.

44. The Appellant relied on the following case laws;i.Commissioner of Customs and Border Control v Kenya Breweries Limited (Tax Appeal E157 of 2021) [2022] KEHC 14570 (KLR)ii.TAT Appeal No. 569 of 2021 Powerex Lubricants Limited - vs- Commissioner of Customs & Border Controliii.Puratos Canada Inc. -vs- Canada (Customs & Revenue), 2004 CANLII5/069 |CA CITT].iv.TAT Appeal NO. 282 of 2020 Kenya Breweries Limited -vs- Commissioner of Customs & Border

The Appellant’s Prayers 45. The Appellant prayed that this Tribunal grants the following orders, that;a.The Appeal herein be allowed.b.The decision dated 28th March 2023 be set aside.c.The Appellant be at liberty to import SILICON UF5866 and UF5875 under HS code 3402. 42. 00.

The Respondent’s Case 46. The Respondent has set out its case on its;a.Statement of Facts dated 23rd May 2023 and filed on 24th May 2023 together with documents attached thereto;b.Witness statement of Bernard Oyucho dated 17st November 2023 and filed on 20th November 2023; and,c.Written Submissions dated and filed 29th February 2024.

47. The Respondent submitted two issues for determination as follows;a.Whether there is a proper Appeal:b.Whether the Respondent’s tariff rulings dated 2nd March 22 classifying the subject is on proper law:

a.Whether there is a Proper Appeal 48. The Respondent submitted that the law governing disputes of this nature is laid down under Section 229 (1) EACCMA which states:-“A person directly affected by the decision or omission of the commissioner or other officers of 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. Section 229 (4) Commissioner shall within a period not exceeding thirty days of receipt of the application under subsection (2) and any further information the Commissioner may require from the person lodging the Application, communicate his or her decision in writing to the person lodging the application stating reasons for the decision. Section 230(1) states a person dissatisfied with the decision of the commissioner under section 229 may appeal to a tax appeals tribunal Filed on: - No Paid- - BY: Kenya Revenue Authority - Reference: E3CQAKC3 - KSH. 0. 00 established in accordance with section 231. Section 230(2) provides a person intending to lodge an appeal under this section shall lodge the appeal within forty-five days after being served with the decision, and shall serve a copy of the appeal on the Commissioner.”

49. The Respondent asserted that the Appellant’s Appeal ought to have been lodged before the Tribunal against the review decision issued on 2nd March 2023, since that is what formed the substantive decision on the issue in dispute.

50. It was the Respondent’s submissions that further meetings and correspondence do not restart the timelines clock envisaged under the provisions of Section 229 and 230 of EACCMA as this can be done as the Appeal goes on before the Tribunal.

51. The Respondent claimed that Appellant’s interpretation of the above provisions is misguided and the Appeal against the decision of 28th March 2023 is improper.

b.Whether the Respondent's tariff ruling dated 2nd March 2023 classifying the subject goods is proper in law. 52. The Respondent stated that it is settled law that tax statutes must be interpreted strictly. The Respondent asserted that in applying the EAC-CET, it is governed by the General Interpretation Rules (GIR) as cited within the EAC-CET. The GIR is to be applied sequentially from the first Rule.

53. The Respondent averred that according to GIR 1, classification shall be determined according to the terms of the Headings and any relative Section or Chapter Notes and, provided the Headings or Notes do not require otherwise. The Rule 1 of GIR provides that:“The titles of Sections, Chapters and sub-Chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes and, provided such headings or Notes do not otherwise require, according to the following provisions”

54. The Respondent maintained that an understanding of Rule 1 of the GIR would render that if a product is classifiable under a heading, sections and chapter notes then Rule 1 would suffice. If the product is not easily classifiable within the ambit of Rule 1, therefore then the subsequent Rules 2 to 6 are used.

55. The Respondent averred that the goods imported by the Appellant were easily classifiable under Rule 1 and there was then no need to implore any of the other rules.

56. The Respondent stated that much as the Appellant declaration the items were classifiable under 3910. 00, however it conducted a lab analysis that reclassified the products under 3402. 90. 00.

57. The Respondent submitted an analysis of Chapter 3402 of CET on Organic surface-active agents (other than soap); surface-active preparations, washing preparations (including auxiliary washing preparations) and cleaning preparations, whether or not containing soap, other than those of Heading 34. 01.

58. The Respondent stated that the point of departure between the parties is which specific subheading do the subject goods fall under. The Appellant argued for 3402. 42 while the Respondent takes the 3402. 90 position.

59. The Respondent further stated that the items classifiable under this heading must meet the criteria for Chapter 34 Note 3, which the Respondent shall restate as follows:“For the purposes of heading 34. 02, ‘organic surface-active agents’ are products which when mixed with water at a concentration of 0. 5% at 20°C and left to stand for one hour at the same temperature:(a)give a transparent or translucent liquid or stable emulsion without separation of insoluble matter; and,(b)reduce the surface tension of water to 4. 5 x10-2 N/m (45 dyne/cm) or les.”

60. The Respondent averred that Silicon UF 5875 is specified to be a chemical preparation containing polyalkkyleneox-modified polysiloxane intended for use in the production of polyurethane form.

61. The Respondent submitted that Heading 34. 02 covers the classification of organic surface-active agents (other than soap); surface active preparations, washing preparations including auxiliary washing preparations) and cleaning preparations, whether or not containing soap, other than those of Heading 34. 01 17. It includes classification of silicones that comply with conditions of Note 3 to Chapter 34 as per the exclusion notes of Heading 39. 10 18.

62. The Respondent asserted that Part 1 of Heading 34. 02 defines the organic surface-active agents of this heading as chemical compounds, not chemically defined which contain one or more hydrophilic or hydrophobic functional groups in such proportion that when mixed with water at a concentration of 0. 5% at 20 degrees Celsius and left to stand for one hour at the same temperature, they give a transparent or translucent liquid or stable emulsion without separation of insoluble matter.

63. The Respondent stated that Heading 34. 02, surface-active preparations include:i.Intermixtures of the surface-active agents of part i) above (eg sulphrocinoleates mixed with sulphonated alkylnaphthalenes or sulphated fatty alcohols).ii.Solutions or dispersions of the surface agents of part (i) above in an organic solvent (eg a solution of a sulphated fatty alcohol in cyclohexanol or in tetrahydronaphthalene).iii.Other mixtures based on a surface-active agent of part (1) above (eg surfaceactive preparations containing a proportion of soap, such as alklybenzenesulphonate with sodium stearate).iv.Solutions or dispersions of soap in an organic solvent such as cyclohexanol. solutions of soap in water, which may have a small quantity (generally not exceeding 5% of alcohol or glyrecol added, are liquid soaps of heading 3401.

64. The Respondent argued that based on the above information, Silicon UF5866 and UF5875 are considered to be a surface-active preparation containing non-ionic surface-active agents and organic silicones dispersed in aqueous medium intended for use in the production of polyurethane foams, classified in Code 3402. 90. 00 as guided by GIR 1 & 6.

65. The Respondent in its statement dated 17th November 2023 stated that laboratory tests were conducted on both SILICON UF5866 and UF5875 which identified that the product contained non-ionic surface-active ingredients and a polymeric organic compound with typical siloxane functional groups capable of reducing the surface tension of water (at 20 °C) to less than 4. 5 x 10-2N/m as specified under the Explanatory Note 3 to Chapter 34 and intended for industrial application in the manufacture of polyurethane foams.

66. The Respondent in its witness statement averred that Heading 3402 was the applicable heading and that based on the Technical Data Sheet; the Appellant’s chemical analysis report, since there was presence of non-ionic surface-active ingredients and a polymeric organic compound with typical siloxane functional groups, it relied on Explanatory Notes to Heading 3402, in particular Part Il in respect to surface-active preparation.

67. The Respondent through its witness during cross examination asserted that SILICON UF5866 and UF5875 was not mixed with any other product after they were formed.

68. The Respondent stated that its witness indicated that what was tested was only the SILICON UF5866 and UF5875 and that it was these products that met the requirements of Chapter 34 Note 3.

69. The Respondent relied on the following case laws;i.Cape Brandy Syndicate vs. Inland Revenue Commissioners (1920) 1 KB 64. ii.Keroche Breweries Limited versus the Commissioner of Customs and Border Control where the Tribunal quoted the Canadian case of In Puratos Canada Inc.- Vs-Canada (Customs and Revenue) 2004 Canlii 57069 (Ca C Itt).

The Respondent’s Prayers 70. The Respondent prayed that this Tribunal:a.Upholds the Respondent's review decisions as proper and in conformity with the provisions of the law.b.Dismisses this Appeal with costs to the Respondentc.Finds this Appeal devoid of merit

Issues for Determination 71. The Tribunal having considered the Memorandum of Appeal, the parties’ Statements of Facts and written submissions and the documents attached thereto concludes that there are two issues that call for its determination as follows:a.Whether there is a valid Appeal before the Tribunal.b.Whether the Respondent erred in classifying SILICON UF5866 and UF5875 in HS code 3402. 90. 00 instead of 3402. 42. 00.

Analysis and Findings 72. The Tribunal having identified the issues for determination proceeds to analyze it as indicated hereunder; -

a.Whether there is a valid Appeal before the Tribunal. 73. The dispute herein arose after the Respondent’s demanded for additional taxes following its tariff ruling on two chemical products: Silicon UF5866 and UF 5875 which were imported by the Appellant.

74. The Tribunal notes that the Appellant first objected to the Respondent’s tariff classification of its products and requested for review in a letter dated 9th February 2023 to which the Respondent issued a review decision dated 2nd March 2023.

75. The Tribunal also notes that the Appellant was not satisfied with the Respondent’s review decision and made further engagements through emails and meetings. This did not yield any fruits for the Appellant and only lead to the Respondent in a letter dated 28th March 2023 reiterating its earlier position of upholding the tariff classification.

76. The Tribunal notes that the law governing this dispute is to be found in Section 230 (2) of the EACCMA which states:“A person intending to lodge an appeal under this section shall lodge the Appeal within forty-five days after been served with the decision and shall serve a copy of the appeal on the Commissioner”.

77. The crux of the matter is whether the Respondent’s letter dated 2nd March 2023 or the one dated 28th March 2023 was the review decision issued by the Respondent on which this Appeal is mounted.

78. The Appellant’s position was that it should be allowed to Appeal against the Respondent’s letter dated 28th March 2023 as this was the last communication it received from the Appellant on tariff ruling. If this were to be allowed, the Appellant is well within the 45 days’ period within which it is allowed to lodge an Appeal as per Section 230 (2) of the EACCMA.

79. On the other hand, the Respondent was of the view that it issued its review decision on the two products on 2nd March 2023 and this is what the Appellant was supposed to Appeal against. The Respondent’s insisted that the letter dated 28th March 2023 was just a reiteration of its earlier review decision contained in its earlier letter. If the Tribunal were to go with this, the Appeal would be beyond the 45 days period within which an Appellant is allowed to lodge an Appeal as per Sections 230 (2) of the EACCMA.

80. It is the Tribunal’s view that the Respondent rightly issued its review decision on 2nd March 2023 against which the Appellant was supposed to lodge its Appeal within 45 days. However, the Appellant lodged its Appeal on 26th April 2023, which is 55 days after the Respondent’s review decision issued on 2nd March 2023.

81. The Tribunal is of the view that further meetings and correspondence between the two parties do not restart the timelines clock envisaged under the provisions of Sections 229 and 230 of EACCMA.

82. Further, it is the Tribunal’s view that the Appellant’s engagement with the Respondent through its letter dated 10th March 2023 was a form of ADR, something it could pursue even after lodging its Appeal before the Tribunal within the statutorily allowed timelines.

83. It is the Tribunal’s conclusion that the Appellant’s instant Appeal lodged with the Tribunal on 26th April 2023 is time barred as this has been done outside the 45 days allowed by law as contemplated under Section 230 (2) of the EACCMA.

84. In view of the foregoing, the Tribunal finds that the Appellant’s Appeal herein is invalid and not properly before the Tribunal.

85. Having held that there is no valid Appeal before the Tribunal for its jurisdiction to be invoked, the Tribunal shall not delve into the other issue as it has been rendered moot.

Final Decision 86. The upshot of the foregoing is that the Appeal is incompetent and the Tribunal accordingly proceeds to make the following Orders:i.The Appeal be and is hereby struck out.ii.Each party to bear its own costs.

87. It’s so ordered.

DATED AND DELIVERED AT NAIROBI THIS 24THDAY OF MAY, 2024. ROBERT M. MUTUMA - CHAIRPERSONELISHAH N. NJERU - MEMBERMUTISO MAKAU -MEMBERBERNADETTE M. GITARI -MEMBERMOHAMED A. DIRIYE - MEMBER