[2025] KETAT 77 (KLR)

Export Trading Company Limited v Commissioner Customs and Border Control (Tax Appeal E616 of 2024) [2025] KETAT 77 (KLR) (31 January 2025) (Judgment)

Neutral citation: [2025] KETAT 77 (KLR)

Republic of Kenya

In the Tax Appeal Tribunal

Tax Appeal E616 of 2024

CA Muga, Chair, BK Terer, EN Njeru, E Ng'ang'a & SS Ololchike, Members

January 31, 2025

Between

Export Trading Company Limited

Appellant

and

Commissioner Customs and Border Control

Respondent

Judgment

Background 1. The Appellant is a private limited liability company incorporated in Kenya whose principal activity is importation of fertilizer into the country.

2. The Respondent is a principal officer appointed under Section 13 of the Kenya Revenue Authority Act, CAP 469 of Kenya’s Laws (hereinafter “the Act”). 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 Appellant lodged entry number 24MBAIM4012531 and declared the products Falcon Gold Max 10-10-10 +TE, Falcon Gold N- Max 14-6-5 + TE, Falcon Gold K-Max 4-16-27 +TE and Falcon Gold P-Max 7-21-7 + TE under the 2022 East African Community Common External Tariff (hereinafter “EACCET”) HS code 3105. 20. 00 which provides for other mineral and chemical fertilisers. The Respondent noted that there was possible misclassification of the products and carried out a verification on the tariff classification of the products.

4. Consequently, The Respondent issued a tariff ruling dated 9th April 2024 classifying the products under HS code 3824. 99. 90 by applying General Interpretation Rules (hereinafter “GIR”) for the classification of goods 1 and 6. The Appellant applied to the Respondent on 16th April 2024 seeking for a review of the tariff classification indicating that Heading 3105 is the most appropriate heading.

5. The Respondent vide a decision dated 13th May 2024 upheld the classification of the four products under HS Code 3824. 99. 90 by application of GIR 1, 3 (c) and 6. The Appellant being aggrieved by the decision, lodged the Appeal herein vide a Notice of Appeal dated 27th May 2024 and filed 7th June 2024.

The Appeal 6. The Appellant filed the memorandum of appeal dated and filed on 27th May 2024 and filed 7th June 2024 wherein the Appellant raised the following grounds of appeal:a.That the Respondent regarded the NPK composition of between 25% and 47% as inferior to the 2. 47 grams per litre of the Trace elements (micro elements) and used that logic to elevate the trace elements to be conferring essential character to the mixture hence excluding the NPK fertilizer from chapter 31 through misinterpretation of the General Note to the Explanatory Notes (hereinafter “EN”) to chapter 31. b.That the Respondent violated the sequential order of application of the GIRs of the Harmonized System by elevating rule 3(c) where 3(b) suffices classification.c.That among the duties of the Respondent is to facilitate trade and collect taxes maintaining balance over the two. In this case the Respondent seem to have been obsessed with collecting taxes at the expense of trade facilitation and that explains why it is ready to disregard the law so as to collect more taxes.

Appellant’s Case 7. The Appellant relied on its statement of facts filed on 7th June 2024. The Appellant did not file any submission and the Appeal proceeded based on its pleadings.

8. The Appellant stated that its sister company M/S Export Trading Company Inputs Kenya Limited is a registered business entity and a regular importer of fertilizer and has been in business for a long time. It imported a consignment of 2x40 containers of 40. 47 metric tons NPK Fertilizer in liquid form around 19th February, 2024 from Jordan and entered the goods vide Import Entry number 24MBAIM401012531 of 20th February, 2024.

9. The Appellant classified these goods under heading 3105 tariff code 3105. 20. 00 under the guidance of the provisions of the EACCET, and the GIR of the Harmonized System. The Appellant stated that it registered the entry and paid all taxes due.

10. According to the Appellant, when the Appellant’s entry reached the releasing point at Regional Logistics Centre Cargo Freight Station where the goods were to be delivered, the officer said that there was an alert in the integrated customs management system on the classification, that NPK Fertilizer is classifiable under tariff line 3824. 99. 90 and not 3105. 20. 00 as declared. When the Appellant asked for tariff justification of the classification, the officer could not give and instead referred the entry to customs valuation and tariff office in Mombasa on the 22nd February, 2024 for advice.

11. When the Appellant followed on the entry at the valuation and tariff office the following day, the Appellant was told to avail the certificate of analysis which according to the Appellant, was provided. The Appellant alleged that after presenting the analysis certificate the officer said the correct heading was as suggested by NTC but when asked for a justification the Appellant was told to go and have samples drawn from the consignment which the Appellant did on the 5th of March 2024.

12. The Appellant was then informed that the matter had been referred to Tariff Headquarters in Nairobi for the determination of the tariff classification dispute for the test results would be sent there as well.

13. The Appellant stated that it kept on following the matter and that it was not until 9th April 2024 when the Appellant was served with tariff rulings numbers KRA/C&BC/BIA/THO/230/04/2024, KRA/C&BC/BIA/THO/231/04/2024, RA/C&BC/BIA/THO/232/04/2024, KRA/C&BC/BIA/THO/233/04/2024 all dated 9th April, 2024. The Appellant stated that the reasons given by the Tariff Headquarters as justification were clear misinterpretation of the law.

14. The Appellant requested to release the goods under bank guarantee which was granted so the bank guarantee was executed. The Appellant added that then it executed the bank guarantee and requested for the release of the goods but it was told to have the guarantee executed in the ICMS system. The Appellant alleged that it tried this option unsuccessfully therefore, the Appellant sought help from the officer who had issued the directive but the officer said that the Appellant could contact ICMS helpdesk for help.

15. The Appellant alleged that it did so and was directed to accept the amendment done on the entry then choose mode of payment. The Appellant alleged that when it did so it generated an e-slip for VAT. The Appellant then requested for the cancellation of the e-slip but the Respondent’s officials said it was not possible and that the Appellant had to pay the extra taxes and cancel the bond guarantee.

16. The Appellant stated that it paid all extra taxes of Kshs 1,293,407. 00 as demanded by the Customs officers so as to have the goods released in order to avoid further demurrage charges accruing. It stated that it incurred demurrage charges amounting to US$ 10,470. 00 owing to this ruling arising from misinterpretation by those in charge of tariff classification.

17. The Appellant wrote to the Respondent requesting for a review of the tariff rulings through its letter dated the 17th April 2024. According to the Appellant, the head of tariff headquarters in Nairobi called for a meeting which the Appellant attended and deliberated on the issue but from the look of things it seemed impossible to overrule himself hence he stood by defending the earlier stand though he had problems justifying his classification.

18. The Appellant averred that the Respondents response through letters ref. KRA/C&BC/BIA/THQ/APPEAL/45/05/2024, KRA/C&BC/BIA/THO/APPEAL/46/05/2024, KRA/C&BC/BIA/THA/APPEAL/47/05/2024, KRA/C&BC/BIA/THQJAPPEAL/48/05/2024 all dated the 13th May 2024 denied the Appellant’s review application and upheld the ruling giving reasons not supported by the correct interpretation of the law hence this Appeal.

19. The Appellant noted that the EACCET Nomenclature version 2022, the terms of heading 3105, the GIR of the Harmonized System second part of Rule 1, and even note 6 to the chapter notes to chapter 31 all point to heading 3105 as the most appropriate heading for the classification of NPK Fertilizer as compared to any other heading in the Nomenclature.

20. The Appellant asserted that even KRA's own tariff rulings posted on their website in March 2018 on the same product NPKFERTILIZER found that tariff 3105. 20. 00 is the most appropriate.

21. The Appellant acknowledged that the Respondent has a duty to collect taxes on behalf of the government but must not forget that it also has a duty to facilitate legitimate trade and an overtaxed business cannot be said to be facilitated. It added that the tariff classification determines the rate of taxes payable for imported goods hence the trend of overtaxing goods through vague tariff rulings should be opposed by all Kenyans as it contributes directly to the high cost of living.

22. The Appellant in its Memorandum of Appeal stated facts that ought to have been stated under the statement of facts. The Appellant stated as follows:The Chemical Composition of the Four Varieties of Liquid Npk Fertilizer:i.Falcon Gold NPK 14-6-5+TE is composed of Nitrogen (N) 149%, Phosphorus Pentaoxide (P205)696, Potassium Oxide (K20) 596, Traco Elements (TE) of Boron (B) 250ppm, Copper EDTA (Cu) 500ppm, Iron EDTA (Fe) 700ppm, Manganese EDTA (Mn) 500ppm, Molybdenum (Mo) 20ppm and Zinc EDTA(Zn) 500ppm. This variety has NPK composition of 25% and total Trace Elements 2470ppm. (The total trace elements concentration is equivalent to 2. 47 grams per litre).ii.Falcon Gold NPK 7-21-7+TE is composed of Nitrogen (N) 7%, Phosphorus Pentaoxide (P205)219%, Potassium Oxide (K20) 7%, Trace Elements (TE) of Boron (B) 250ppm, Copper EDTA(Cu) 500ppm, Iron EDTA (Fe) 700ppm, Manganese EDTA (Mn) 500ppm, Molybdenum (Mo) 20ppm and Zinc EDTA(Zn) 500ppm. This variety has NPK composition of 35% and total Trace Elements 2470ppm. (The total trace elements concentration is equivalent to 2. 47 grams per litre).iii.Falcon Gold NPK4-16-27+TE is composed of Nitrogen (N) 4%, Phosphorus Pentaoxide (P205) 16%, Potassium Oxide (K20) 27, Trace Elements (TE) of Boron (B) 250ppm, Copper EDTA (Cu) 500ppm, Iron EDTA (Fe) 700ppm, Manganese EDTA (Mn) 500ppm, Molybdenum (Mo) 20ppm and Zinc EDTA(Zn) 500ppm. This variety has NPK composition of 47% and total Trace Elements of 2470ppm. (The total trace elements concentration is equivalent to 2. 47 grams per litre).iv.Falcon Gold NPK 10-10-10+TE is composed of Nitrogen (N) 10%, Phosphorus Pentaoxide (P205) 10%, Potassium Oxide (K20) 10, Trace Elements (TE) of Boron (B) 250ppm, Copper EDTA (Cu) 500ppm, Iron EDTA(Fe) 700ppm, Manganese EDTA (Mn) 500ppm, Molybdenum (Mo) 20ppm and Zinc EDTA(Zn) 500ppm. This variety has NPK composition of 30% and total Trace Elements of 2470ppm. (Total trace elements concentration is equivalent to 2. 47 grams per litre).

23. Based on the foregoing, the Appellant maintained that this fertilizer is composed of a mixture of chemicals and which can be grouped into two categories, the major elements macro elements of NPK and the trace elements of micro elements of Boron, Copper EDTA, Iron EDTA, Manganese EDTA, Molybdenum and Zinc EDTA. In all the varieties the NPK content is between 25% and 47% while in all the varieties the total trace element content is a constant 2470ppm which is equivalent to 2. 47 grams per litre. Therefore, the Appellant stated that the Macro elements of NPK gives this product its essential character.

24. The Appellant cited Rule 3(b) of the GIR The Harmonized System which states: "Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable". Therefore, this product is to be classified as if it consisted wholly of NPK according to the rule.

25. The Appellant averred that under the guidance of the provisions of the second part of Rule 1 of the GIR of the Harmonized System (GIR of HS) which states in part: ‘‘for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter Notes, provided such headings or Notes do not otherwise require, according to the provisions of Rules 2,3,4 and 5. "

26. The Appellant added that Note(v) to the Explanatory note of Rule 1 of the GIR of HS makes it clear that the terms of the headings and any relative section or chapter Notes are the first to be considered in determining tariff classification.

27. According to the Appellant, the terms of heading 3105 states in part, "Mineral or chemical fertilizers containing two or three of the fertilizing elements nitrogen, phosphorus and potassium." NPK is a chemical fertilizer containing three of the fertilizing elements nitrogen, phosphorus and potassium, while the text to tariff line 3105. 20. 00 reads, "Mineral or chemical fertilizers containing three of the fertilizing elements nitrogen, phosphorus and potassium". The product is specified in heading 3105.

28. The Appellant stated that Note 6 of the chapter notes to chapter 31 states, "For the purpose of heading 31. 05, the term “other fertilisers" applies only to products of a kind used as fertilisers and containing, as an essential constituent, at least one of the fertilizing elements nitrogen, phosphorus or potassium" NPK is normally used as fertilizer and the NPK in question has all the three fertilizing elements as essential constituents.

29. The Appellant cited the terms of heading 3824 which reads in part,"...chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included." The Appellant argued that the proviso "not elsewhere specified or included" in heading 3824 disqualifies NPK fertilizer from the heading as the heading requires that for any product to fall under 3824 it shouldn't be specified or included anywhere in the nomenclature. The Appellant averred that NPK is specified in heading 3105, hence cannot qualify to be classified under the heading.

30. Therefore, the Appellant maintained that the most appropriate HS Code for NPK fertilizer is 3105. 20. 00 according to the Harmonized Commodity Description and Coding System.

Appellant’s Prayers 31. The Appellant prayed that the Tribunal be pleased to compel the Respondent to do the following:a.Review tariff rulings reference numbers: KRA/C&BC/BIA/THQ/230/04/2024, KRA/C&BC/BIA/THQ/231/04/2024, KRA/C&BC/BIA/THQ/232/04/2024 and KRA/C&BC/BIA/THQ/233/04/2024 dated the 9th April 2024. b.Interpret the law on tariff classification of NPK Fertilizer correctly and apply it across board.c.Have the rulings revoked as they are unjustifiable if the correct interpretation of the laid down rules on tariff classification as set by WCO are applied.d.Refund all extra taxes collected on the basis of this unjustifiable ruling and all extra cost incurred such as the demurrage charges which wouldn't have accrued had it not being for the rulings.

Respondent’s Case 32. In response to the appeal, the Respondent relied on its statement of facts dated and filed on 6th July, 2024. The Respondent also filed its written submissions dated 7th October 2024 on 8th October 2024. However, the Tribunal expunged Respondent’s submissions since the Respondent failed to comply with directions of 12th September 2024 wherein the Tribunal directed that the submissions be filed and served on or before 26th September 2024.

33. The Respondent pleaded that the appellant lodged entry number 24MBAIM4012531 and declared the products Falcon Gold Max 10-10-10 +TE, Falcon Gold N- Max 14-6-5 + TE, Falcon Gold K-Max 4-16-27 +TE and Falcon Gold P-Max 7-21-7 + TE under 2022 EACCET HS code 3105. 20. 00 which provides for other mineral and chemical fertilisers.

34. The Respondent argued that the products are described as liquid fertiliser containing macro and micro nutrients; Nitrogen, Potassium, Phosphorous and micronutrients; iron, manganese, Zinc, Copper. The product is said to be soluble and a scientifically balanced liquid fertiliser which promotes optimal plant health.

35. The Respondent noted that there was possible misclassification of the products and carried out a verification on the tariff classification of the products. It stated that upon examination of the products it noted that the products were identified as an agricultural nutritional formulation containing macronutrients and micronutrients. The Respondent thus issued a tariff ruling dated 9th April 2024 classifying the products under HS code 3824. 99. 90 by applying GIR for the classification of goods 1 and 6.

36. According to the Respondent, the Appellant applied to the Respondent on 17th April 2024 seeking review of the tariff classification indicating that Heading 3105 is the most appropriate heading to apply.

37. On 13th May, 2024, the Respondent after considering the Appellant's application and the submissions upheld the classification of the four products Falcon Gold Max 10-10-10 +TE, Falcon Gold N- Max 14-6-5 + TE, Falcon Gold K-Max 4-16-27 +TE and Falcon Gold P-Max 7-21-7 + TE in HS Code 3824. 99. 90 by application of GIR 1, 3 (c) and 6. Therefore, the Appellant lodged this Appeal.

38. The Respondent pleaded that it considered the provisions of the Custom Tax Nomenclature classification and the GIR and applied it correctly when classifying the Appellant's goods. It stated that Chapter 31 covers classification of chemical fertilizers as specified in the limited lists in heading 31. 02 - mineral or chemical fertilizers; nitrogenous, 31. 03 - mineral or chemical fertilizers; phosphatic, 31. 04 - mineral or chemical fertilizers; potassic, and 31. 05 – Mineral or chemical fertilisers containing two or three of the fertilising elements nitrogen, phosphorus and potassium; other fertilisers.

39. Further, the Respondent stated that the general notes to chapter 31 excludes micronutrient preparations which are applied to seeds, to foliage or to soil to assist in seed germination and plant growth. It added that they may contain small amounts of the fertilising elements nitrogen, phosphorus and potassium, but not as essential constituents.

40. The Respondent argued that Heading 38. 24 covers the classification of prepared binders for foundry moulds or cores; chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included.

41. According to the Respondent, the products contain the following ingredients:a.Falcon Gold Max 10-10-10 +TE; Nitrogen 10% as (N), Phosphorous pentoxide 10% as (P205), Potassium Oxide 10% as (K20) and micronutrients; Boron 250ppm as (B), Copper 500ppm as (Cu), iron 700ppm (Fe), manganese 500ppm as (Mn), molybdenum 20ppm (Mo) and Zinc 500ppm (Zn).b.Falcon Gold N- Max 14-6-5 + TE: Nitrogen 14% as (N), Phosphorous pentoxide 6% as (P205), Potassium Oxide 5% as (K20) and micronutrients; Boron 250ppm as (B); Copper 500ppm as (Cu), iron 700ppm (Fe),manganese 500ppm as (Mn), molybdenum 20ppm as (Mo) and Zinc EDTA 500ppm as (Zn).c.Falcon Gold K-Max 4-16-27 +TE; Nitrogen 7% as (N), Phosphorous pentoxide 21% as (P205), Potassium Oxide 7% as (K20) and micronutrients; Boron 250ppm as (B). Copper 500ppm as (Cu), iron 700ppm (Fe), manganese 500ppm as (Mn), molybdenum 20ppm as (Mo) and Zinc EDTA 500ppm as (Zn).d.Falcon Gold P-Max 7-21-7 + TE; Nitrogen 4% as (N), Phosphorous pentoxide 16% as (P205), Potassium Oxide 27% as (K20) and micronutrients; Boron 250ppm as (B), Copper 500ppm as (Cu), iron 700ppm (Fe), manganese 500ppm as (Mn), molybdenum 20ppm as (Mo) and Zinc EDTA 500ppm as (Zn).

42. The Respondent argued that both macronutrients and micronutrients are essential in the overall growth and development of the plant cycle; macronutrients are essential for plant growth and overall state of the plant while micronutrients help plants by providing minerals and vitamins crucial for disease prevention, healthy development and well-being of the plant.

43. The Respondent pleaded that pursuant to the terms of heading 38. 24, the heading provides for, in pertinent part, the classification of chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products). The Respondent further stated that ultimately considering the composition of the products also includes micronutrients and therefore tariff classıfication can not only be limited to the macronutrients - Nitrogen, Phosphorous and Potassium.

44. According to the Respondent, the Appellant's products, Falcon Gold Max 10-10-10 +TE, Falcon Gold N- Max 14-6-5+ TE, Falcon Gold K-Max 4-16-27 +TE and Falcon Gold P-Max 7-21-7 + TE contains mixture of micronutrients and macronutrients and thus cannot be classified within the scope of chapter 31. Both macronutrients and micronutrients are important for plant's overall growth. The Respondent thus pleaded that the appropriate code for the Appellant's product is HS Code 3824. 99. 90.

45. The Respondent alleged that it applied the Rule 1, 3(c) and 6 of General Interpretation Rules in a sequential manner.

46. Further, the Respondent relied upon section 229 of the East African Community Customs Management Act, 2004 (hereinafter “EACCMA”) which provides for application for review by any person affected by the decision or omission of the Respondent on matters relating to Customs and provides the legal timelines to be observed. The Respondent maintained that its decision was made within the law.

Respondent’s prayers 47. The Respondent urged this Tribunal to uphold its review decision dated 13th May 2024 and that the appeal be dismissed with costs to the Respondent.

Issues For Determination 48. The Tribunal having considered the parties’ pleadings, puts forth the following issue for determination:Whether the Respondent erred in classifying the Appellant’s consignment under HS code 3824. 99. 90 instead of HS code 3105. 20. 00.

Analysis and Findings 49. The Tribunal wishes to analyze the issue as hereunder:Whether the Respondent erred in classifying the Appellant’s consignment under HS code 3824. 99. 90 instead of HS code 3105. 20. 00.

50. It was the Respondent’s case that the Appellant ought to have declared the consignment under HS code 3824. 99. 90. Heading 3824 provides as follows:Prepared binders for foundry moulds or cores; chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included.’’

51. The Tribunal notes that tariff code 3824. 99. 90 provides for ‘Other.’

52. The Appellant declared its consignment under Heading 31. 05 which provides as follows:Mineral or chemical fertilisers containing two or three of the fertilising elements nitrogen, phosphorus and potassium; other fertilisers; goods of this Chapter in tablets or similar forms or in packages of a gross weight not exceeding 10 kg .’’

53. Further, the tariff code 3105. 20. 00 provides as follows:Mineral or chemical fertilisers containing the three fertilising elements nitrogen, phosphorus and potassium.’’

54. The Appellant stated that the consignment that it imported contained the following elements:a.Falcon Gold NPK 14-6-5+TE is composed of Nitrogen (N) 14%, Phosphorus Pentaoxide (P205)6%, Potassium Oxide (K20) 5%, Traco Elements (TE) of Boron (B) 250ppm, Copper EDTA (Cu) 500ppm, Iron EDTA (Fe) 700ppm, Manganese EDTA (Mn) 500ppm, Molybdenum (Mo) 20ppm and Zinc EDTA(Zn) 500ppm. This variety has NPK composition of 25% and total Trace Elements 2470ppm. (The total trace elements concentration is equivalent to 2. 47 grams per litre).b.Falcon Gold NPK 7-21-7+TE is composed of Nitrogen (N) 7%, Phosphorus Pentaoxide (P205)21%, Potassium Oxide (K20) 7%, Trace Elements (TE) of Boron (B) 250ppm, Copper EDTA(Cu) 500ppm, Iron EDTA (Fe) 700ppm, Manganese EDTA (Mn) 500ppm, Molybdenum (Mo) 20ppm and Zinc EDTA(Zn) 500ppm. This variety has NPK composition of 35% and total Trace Elements 2470ppm. (The total trace elements concentration is equivalent to 2. 47 grams per litre).c.Falcon Gold NPK4-16-27+TE is composed of Nitrogen (N) 4%, Phosphorus Pentaoxide (P205) 16%, Potassium Oxide (K20) 27%, Trace Elements (TE) of Boron (B) 250ppm, Copper EDTA (Cu) 500ppm, Iron EDTA (Fe) 700ppm, Manganese EDTA (Mn) 500ppm, Molybdenum (Mo) 20ppm and Zinc EDTA(Zn) 500ppm.This variety has NPK composition of 47% and total Trace Elements of 2470ppm. (The total trace elements concentration is equivalent to 2. 47 grams per litre).d.Falcon Gold NPK 10-10-10+TE is composed of Nitrogen (N) 10%, Phosphorus Pentaoxide (P205) 10%, Potassium Oxide (K20) 10%, Trace Elements (TE) of Boron (B) 250ppm, Copper EDTA (Cu) 500ppm, Iron EDTA(Fe) 700ppm, Manganese EDTA (Mn) 500ppm, Molybdenum (Mo) 20ppm and Zinc EDTA(Zn) 500ppm. This variety has NPK composition of 30% and total Trace Elements of 2470ppm. (Total trace elements concentration is equivalent to 2. 47 grams per litre).

55. The GIR for the classification of goods provides that classification of goods in the Nomenclature shall be governed by a number of principles. In this regard, GIR 1 provides as follows as follows: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.’’

56. The Tribunal having examined the heading 31. 05 vis a vis the consignment that the Appellant imported, noted that the consignment contained fertilising elements nitrogen, phosphorus and potassium as provided under heading 31. 05.

57. The Tribunal examined tariff code 3105. 20. 00 vis a vis the consignment that the Appellant imported, and noted that the consignment contained fertilising elements nitrogen, phosphorus and potassium. The consignment that the Appellant imported had other elements including Boron (B), Copper EDTA (Cu), Iron (Fe), Manganese EDTA (Mn) among other elements. HS Code 3105 refers to ‘other fertilisers.’ In this regard, note 6 to chapter 31 provides as follows:For the purposes of heading 3105, the term “other fertilisers” applies only to products of a kind used as fertilisers and containing, as an essential constituent, at least one of the fertilising elements nitrogen, phosphorus or potassium.’’The Respondent did not dispute that these other elements are also fertilizers.

58. GIR 2(b) is applicable to this case. It provides as follows:Any reference in a heading to a material or substance shall be taken to include a reference to mixtures or combinations 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 goods consisting of more than one material or substance shall be according to the principles of Rule 3. ’’

59. The consignment that the Appellant imported contained a mixture or combination of that material or substance with other materials or substances. Therefore, pursuant to GIR 2(b), the Appellant’s imports could still be classified under tariff code 3105. 20. 00 because the code does not imply that the fertilising elements nitrogen, phosphorus or potassium must be in pure form.

60. The Tribunal notes that heading 3105 refers to ‘other fertilisers’ whilst Note 6 to chapter 31 defines ‘other fertilizers.’ The Respondent did not dispute that these ‘other elements’ that the Appellant imported are also fertilizers or that they did not contain fertilising elements nitrogen, phosphorus or potassium.

61. The Tribunal also reviewed the provisions of GIR 3 in relation to the issue at hand. GIR 3 provides as follows: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. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods.b.Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to 3 (a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable.c.When goods cannot be classified by reference to 3 (a) or 3 (b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration.’’

62. The Tribunal notes that GIR 3(a) provides that the heading which provides the most specific description shall be preferred to headings providing a more general description. The Tribunal established that heading 31. 05 provides a more specific description as it expressly mentions the elements unlike heading 38. 24 which provides for general description of chemical products. Secondly, chapter 31 deals with fertilizers and the Respondent admitted that chapter 31 covers classification of chemical fertilizers and that the Appellant imported fertilizes. The point of departure between the parties is that the Respondent stated that whereas HS Code 3105. 20. 00 provides for three elements that is fertilising elements nitrogen, phosphorus and potassium, the Appellant’s imports included other elements.

63. The Tribunal noted that it is true that tariff code 3105. 20. 00 expressly provides for three elements that is fertilising elements nitrogen, phosphorus and potassium yet the Appellant’s imports included other elements. However, heading 31. 05 also refers to ‘other fertilisers’ while Note 6 to chapter 31 defines those other fertilisers. Consequently, the Tribunal’s view is that the presence of Trace Elements (TE) of Boron (B), Copper EDTA (Cu), Iron EDTA (Fe), Manganese EDTA (Mn), Molybdenum (Mo) and Zinc EDTA (Zn) does not oust the Appellant’s consignment from heading 31. 05. Secondly, the consignment that the Appellant imported contained a mixture or combination of that material or substance with other materials or substances apart from fertilising elements nitrogen, phosphorus and potassium and applying GIR 2(b) still places the consignment under HS Code 3105. 20. 00 instead of HS code 3824. 99. 90.

64. The Tribunal’s view is that the consignment that the Appellant imported clearly indicates nitrogen, phosphorus and potassium in their respective percentages and the Respondent did not controvert this information. The Tribunal is satisfied that the Appellant’s import was well declared under tariff code 3105. 20. 00 because this is the code that provides the most specific description.

65. Consequently, the Tribunal finds and holds that the Respondent erred in classifying the Appellant’s consignment under HS code 3824. 99. 90 instead of HS code 3105. 20. 00.

Final Decision 66. The upshot to the foregoing is that the Tribunal finds and holds that the Appeal is meritorious and makes the following Orders:a.The Appeal be and is hereby allowed.b.The Respondent’s review decision dated 13th May 2024 be and is hereby set aside.c.The Appellant’s consignment namely: Falcon Gold Max 10-10-10 +TE, Falcon Gold N- Max 14-6-5 + TE, Falcon Gold K-Max 4-16-27 +TE and Falcon Gold P-Max 7-21-7 + TE be are hereby classified under tariff code 3105. 20. 00. d.The Appellant be and is hereby entitled to a refund of any duties paid in protest pursuant to Section 144(3) of EACCMA.e.Each party to bear its own cost.

67. It is so Ordered.

DATED AND DELIVERED AT NAIROBI ON THIS 31ST DAY OF JANUARY 2025. …………………………………CHRISTINE A. MUGA - CHAIRPERSON…………………………BONIFACE K. TERER - MEMBER…………………………EUNICE N. NG’ANG’A- MEMBER…………………………OLOLCHIKE S. SPENCER - MEMBER