https://new.kenyalaw.org/akn/ke/judgment/ketat/2026/289

**REPUBLIC OF KENYA** **IN THE TAX APPEALS TRIBUNAL AT NAIROBI** **TAX APPEAL NO E130 OF 2026** **FARMERS CHOICE LTD ............................................................................. APPELLANT** **VERSUS** **COMMISSIONER OF CUSTOMS & BORDER CONTROL ……………........ RESPONDENT** **JUDGMENT** **BACKGROUND** 1. The Appellant is a limited company duly incorporated in Kenya. Its principal activity is the production of a wide variety of fresh meat and meat products including but not limited to sausages, Ham and Vienna. 2. The Respondent is a principal officer appointed under Section 13 of the Kenya Revenue Authority (KRA) Act Cap 469 Laws of Kenya. Under Section 5(1), the Respondent is an agency of the Government for the collection and receipt of all tax revenue. Further under Section 5(2) with respect to performance of its functions under subsection (1), the Respondent is mandated to administer and enforce all the provisions of the written law as set out in Part 1 & 2 of the First Schedule of the Act for the purposes of assessing, collecting and accounting for all revenue in accordance with those laws. 3. The Appellant imported two consignments on 15th October 2024 under Entry Nos. 24EMKIM401024686 and 24EMKIM401028296 and classified them under HS Code 2106.90.90 4. The Respondent requested destination verification of the consignment on 17th October 2024 after which it issued a Tariff ruling on 19th February 2024 on the product classifying the Appellant’s goods under HS Code 2106.90.20. 5. The Appellant appealed against the Respondent’s tariff ruling on 19th March 2025 and requested a review of the decision. The Respondent then issued its reviewed decision on 10th April 2025 upholding its earlier decision of classifying the items under HS Code 2106.90.20. There followed a series of meetings and correspondences of demands by the Respondent. 6. Dissatisfied with the Respondent’s decision, the Appellant filed its Notice of Appeal dated 16th January 2026 on even date. **THE APPEAL** 1. The Appeal is premised on the following grounds of appeal as stated in the Appellant’s Memorandum of Appeal dated 2nd February 2026 and filed on 4th February 2026. 1. That the Respondent erred in fact and law by failing to communicate its review decision pursuant to the provisions of EACCMA Section 229(4). 2. That the Respondent erred in fact and in law by failing to appreciate the clearly strict wording of Section 229(5). 3. That the Respondent erred in fact and law by violating the doctrine of legitimate expectation by failing to review the application to the demand, Ref No. KRA/C&BC/ICDN/ENF/DEMANO/055/2025 dated 5th June 2025 yet reviewed a similar application of the same goods applied the same day to demand Ref KRA/C&BC/ICDN/ENF/DEMAND/054/2025 dated 5th June 2025, with the same product. * 1. That the Respondent erred in fact and in law by applying an erroneous Tax rate of 2% instead of 1.5% on the Railway Development Levy, accordingly confirming an erroneous demand letter. 2. That the Respondent erred in fact and in law by applying an erroneous import duty rate of 25% instead of 10% to goods of Tariff No.2106.90.20 as directed under EAC Legal Notice No EAC/154/2024 dated 30th June 2024, page 87, item No. 98. Kenya granted a remission of duty to apply a duty rate of 10% for the manufacturer of goods and beverages, leading to an erroneous demand letter and figures. 3. That the Respondent erred in fact and in law by failing to appreciate that, when calculating VAT, import duty is an element that adds up to the final VAT figure. Accordingly, charging import duty of 25% was a gross violation of the Appellant rights and erroneously VAT figure. 4. That the Respondent erred in fact and in law by erroneously finding that the imported goods of Tariff No. 2106.90.20 are not listed in the First Schedule of VAT Act 2013 version 2025, while indeed they are clearly listed. Tariff No. 2106.90.20 is listed immediately after section 39(3) item No. 3 in the First Schedule of the VAT Act 2013, version updated 2025. 5. That the Respondent erred in fact and in law by failing to appreciate that Tariff No.2106.90.20 is listed under column 1 of the Tariff Number, while the corresponding column 2 of the description and what was declared is the description as correctly inserted in the column in the Act that deleted it. 6. That the Respondent erred in fact and in law by erroneously finding that the imported goods’ tariff number was deleted, while clearly what was deleted was the erroneous Tariff description, to correct the ambiguity. 7. That the Respondent erred in fact and in law by failing to find that some goods were reclassified three times with the three different Tariff ruling issued by the Respondent at different time but same goods, thus enforcing in bad faith. 8. That the Respondent erred in fact and in law by holding that the Appellant committed an offence under EACCMA Section 203 by declaring the goods using the Tariff ruling issued by the Respondent, which had not been replaced, varied, or altered in any aspect, and the goods remain the same in every aspect. 9. That the Respondent erred in fact and in law by enforcing EACCMA Section 135 before Section 134 effectively took effect, hence enforcing in bad faith and in abuse of authority. 10. That the Respondent erred in fact and in law by purporting to enforce the demand letters by holding arbitrary three consignments in bad faith, illegally, unreasonably, and in a blatant abuse of authority accordingly causing huge loss. **THE APPELLANT’S CASE** 1. The Appellant’s case is premised on its: - 1. Statement of Facts dated 2nd February 2026 together with the documentation attached thereto. 2. Witness Statement of Daniel Maingi Mugwe dated 25th May, 2026 and filed on 26th May,2026. 3. Written submissions dated 16th June 2026 and filed on the same date. 2. The Appellant stated that it has been importing the goods in question, PRO FIT 1:50 and that the Respondent issued three tariff rulings at different times, 28th June 2006,1st August 2013 and 19th February 2025.It stated that all the rulings had the same laboratory test results narration, the same parameters used, same properties of the goods, and were similar in all aspects. However, each tariff ruling was issued with different tariff codes, HS Code 3824.90.90, 2106.90.99, and 2106.90.20, respectively. 3. The Appellant averred that it imported two consignments used in the manufacture of a variety of sausages on 15th October 2024 with Entry numbers 24EMKIM401024686 and 24EMKIM401028296, both dated 15th October 2024, and declared under Tariff No. 2106.90.90, ‘others’. However, on 16th October 2024, the Respondent reclassified the consignment to Tariff code 2106.90.20, which attracts a VAT rate of 16%. 4. The Appellant stated that it applied for a review of the Respondent’s decision through an objection notice dated 19th March 2025 after which the Respondent responded to the Appellant’s application for further review on 10th April, 2025 where it upheld its tariff ruling and informed the Appellant that this was the last communication on the classification of the Appellant’s product. 5. The Appellant further stated that it made a decision not to appeal against the confirmed Tariff review decision but agreed, in protest, to comply with the reclassified HS Code 2106.90.20. 6. The Appellant asserted that earlier, on 30th June, 2024 the East African Community published EAC Legal Notice No. EAC /154/2024 where Kenya granted a remission of duty to apply a duty rate of 10% for the manufacture of goods and beverages for goods of Tariff No.2106.90.20. However, the Respondent charged a duty rate of 25% thus violating the EAC Legal Notice No EAC/154/2024 thereby also violating the Appellant’s rights. 7. The Appellant asserted that the Kenya Gazette Supplement No. 67 of 15th May 2014 amended the Value Added Tax through Amendment No. 7 by deleting the tariff description as it was erroneous. It stated that the National Council of Law Reporting published an updated VAT Act on 29th May 2014, showing correctly what was deleted under Kenya Gazette No.7 of 2014. 8. The Appellant asserted that the VAT Act 2013 published an updated version in 2025, while the First Schedule was aligned under column 1 of the Tariff number, and the corresponding column 2 removed the ambiguity on what was deleted, with the description correctly inserted in the column. This had the effect that Tariff Code No. 2106.90.20 was not taxable. 9. The Appellant averred that the Respondent purported to enforce EACCMA Section 135 in a retroactive manner without considering that EACCMA Section 134 addresses the effect of alteration in the classification of goods such that tariff Ruling KRA/C&CB/BIA/THU/1944/02/2024 could only take effect after 19th February 2025 and not before the alteration of the previous Tariff classification ruling. 10. The Appellant averred that the Respondent issued two demand letters on 9th May 2025 demanding tax of Kshs 2,371,579.00 and Kshs 1,068,514.00 for tariff rulings KRA/C&BC/ICDN/ENF/DEMAND/054/2025 and KRA / C&BC /ICDN / ENF/ DEMAND /055/2025 respectively. 11. The Appellant, on 5th June 2025, lodged two applications for review with the Respondent under EACCMA 2004 Section 229, where each review application had four grounds of objection. It stated that it received a response on 9th June 2025 for Ref. No. KRA /C&BC/ ICDN/ENF /DEMAND/054/2025 and a demand for Ref. KRA/C&BC/ ICDN /ENF/ DEMAND/055/2025. 12. The Appellant stated that it sought an explanation on 8th July 2025 for the demand Ref. KRA/ICDN/FARMER CHOICE /09/07/2025.It further requested a meeting to explain how the inward processing procedure operated on the subject goods. 13. The Appellant stated that it yet again lodged an application for review on 9th July 2025 for Tariff Ruling KRA/C&BC/ICDW/ENT/DEMAND/055/2025 14. The Appellant stated that it informed the Respondent on 11th July 2025 that after the lapse of 30 days provided under EACCMA 229(4) the demand Ref KRA/ICDN/ENF /DEMAND/055/2025 was declared allowed by operation of the law. It stated that it was subsequently denied access through the ICMS systems. It then sought for a meeting to resolve the issue. 15. It argued that on 31st July 2025 it received a letter titled “Demand for Taxes: Withdrawal for Demand Ref KRA/C&BC/ICDN/DEMAND/054/2025 advising it that the demand had been withdrawn and the matter closed. 16. The Appellant stated that it received yet another letter where the Respondent sought to enforce the demand note KRA/C&BC/ICDN/ENF /DEMAD/055/2025 dated 9th May, 2025 and unfairly and arbitrarily withheld three more of the Appellant’s consignments, thereby causing delays and huge losses through demurrage, storage, and other charges. The Appellant asserted that the Respondent’s actions to detain the Appellant’s consignment was against Fair Administrative Act, 2015, which stipulates that every person has the right to administrative action that is expeditious, efficient, lawful, reasonable, and procedurally fair. 17. The Appellant averred that due to the accruing demurrage to the shipping line, it executed a Bank Guarantee on 7th November 2025 for Kshs 1,068,514.00 to cover the amount demanded under demand No Ref: KRA /C&BC/ICDN/ENF /DEMAND/055 /2025 dated 9th May, 2025 and applied for review on 19th June 2025.It averred that the Respondent requested for a meeting on 12th November 2025 which meeting took place on 22nd November. It stated that the meeting unanimously concluded that indeed the Respondent had violated Section 229(5) of the EACCMA by failing to communicate the Review Decision to the review application dated 5th June 2025. 18. The Appellant further averred that the Respondent issued the Review Decision on 17th December 2025 after one hundred and thirty-six (136) days. It stated that the Respondent admitted that its demand notice Ref KRA/C&BC/ICDN/ENF/DEMAND /055/2025 dated 5th June, 2025, stating that it had erroneously applied the wrong tax rate, and further admitting that there was not any found offence. However, it issued a revised demand for Kshs 1,042452.00 19. The Appellant submitted that as per Section 229(4) of the EACCMA, the Respondent was required to communicate its Review Decision within thirty (30) days of receiving the Appellant’s review application unless it requested further information within those statutory periods. It submitted that it lodged its review application on 5th June 2025 and the Respondent communicated the impugned decision on 17th December 2025.Therefore, the Review Decision was issued outside the mandatory 30 -day period and the legal consequence as prescribed by Section 229(5) of the EACCMA implies that the review application was deemed allowed by operation of the law. 20. The Appellant relied on Section 57 of the Interpretation and General Provisions Act and the Procedures Act which provide that, in computing a prescribed period, the first and last days are excluded, and by the Appellant’s calculations, the Respondent issued the Review Decision after one hundred and ninety-five (195) days .The Appellant submitted that it wrote to the Respondent on 11th July 2025 notifying the Respondent that the Review Decision had been deemed allowed, consistent with the guidance in Tax Appeal No 147 of 2021. 21. The Appellant submitted that the Respondent’s demand notice dated 9th May, KRA/CBC/ICDN/DEMAND/055/2025 which had been deemed allowed under Section 229(5) was vacated by operation of the law and the Respondent could not lawfully revive, amend, enforce, or replace that demand through the later letters of July and December 2025. 22. The Appellant submitted that the Respondent unfairly locked the ICMS system, withheld consignments, required security, and compelled compliance with a demand that had already been vacated by operation of law. 23. The Appellant submitted that the Respondent’s actions offended the Appellant’s legitimate expectation as Demand 054 and 055 arose from the same product, imports, and review process, yet the Respondent reviewed and withdrew demand 054 while continuing to enforce demand 055 without a timely review decision. 24. The Appellant applied for a review of the Respondent’s decision vide its letter dated 2nd September 2025.The Respondent reviewed the Appellant’s application and vide a letter dated 5th September, 2025 upheld the Tariff Ruling and issued a Review Decision. 25. The Appellant submitted that the revised demand was also substantially erroneous as EAC Legal Notice No. EAC/154/2024 granted Kenya remission for goods under tariff No. 2106.90.20 to apply duty at 10% for goods used in the manufacture of goods and beverages. It argued that the Respondent nevertheless applied import duty at 25%, charged Railway Development Levy at 2% instead of 1.5% and applied VAT at 16% despite the Appellant’s position that goods under tariff No. 2106.90.20 are listed in the First Schedule to the VAT Act, 2013, as amended. 26. The Appellant submitted that the effect of the Respondent’s action resulted in an inflated and unlawful demand. It stated that according to its computation of import duty of 10% the correct duty would have been Kshs 521,226.00 whereas the Respondent applied 25% and charged Kshs 1,303,065.00 resulting in an overcharge of Kshs 781,839.00 27. It was the Appellant’s submission that if VAT were applicable, which it denied, the VAT should have been Kshs 917,357.00 and not Kshs 1,042.452.00 because the Respondent used the erroneous 25% duty component in its computation. It accordingly stated that the revised demand ought to be set aside both because it followed an application already deemed allowed and because its tax computations were legally and arithmetically defective. 28. It was the Appellant’s submission that the review application against demand 055 was lodged on 5th June 2025 and that no review decision was communicated within the mandatory 30-day period, contrary to Section 229(5) of EACCMA; therefore, deemed allowed by operation of the law. It argued, therefore, that the Respondent had no lawful basis to continue enforcement, issue the revised demand of 16th December 2025 or communicate the review decision of 17th December 2025. 29. It was the Appellant’s contention that the Respondent took 125 days equivalent to 4 months, from 16th October 2024 to 19th February 2025 to issue the Tariff classification Ruling, then took 20 days to issue the Tariff classification review decision dated 10th April , 2025.The Appellant submitted that these delays forced it to make a painful commercial decision not to appeal against the confirmed Tariff classification review decision but agreed in protest to comply with the reclassified tariff No 2106.90.20. 30. The Appellant submitted that it was highly hypocritical and dishonest for the Respondent to speak on both sides of the mouth. It stated that in the Respondent’s written submissions at page 6 paragraph 7, the Respondent had contended that the Appellant did not and is not disputing the Tariff Code 2106.90.20 but on the other side of the mouth state that the correspondence between the Appellant and the Respondent was on the subsequent demand note. 31. The Appellant contended that first, it agreed to comply with the tariff Ruling issued by the Respondent but in protest; secondly, the demand note that the Respondent issued was grossly erroneous and irredeemable, with clear illegality on the face of it. It therefore applied for review as provided under Section 229 of EACCMA. 32. The Appellant contended further that the Respondent was intentionally misleading the Tribunal by failing to appreciate that the judgment contained in the case of TAT No. E805 of 2024 was in reference to a decision contained in TAT No. E166 of 2025 of the same matter, where **Decase Chemicals Limited** filed the appeal to the Tribunal after 55 days, and that paragraph 83 of the judgment read, “it is the Tribunal’s conclusion that the Appellant’s instant appeal lodged with the Tribunal on 25th April 2023 is time barred as this has been done outside the 45 days allowed by the law as contemplated under section 230 (2) of the EACCMA. In view of the foregoing, the Tribunal finds the Appellant’s appeal herein is invalid and not properly before the Tribunal. Paragraph 85. Having held that there is no valid appeal before the Tribunals for its jurisdiction to be invoked, the Tribunal shall not delve into the other issues as it has been rendered moot.” 33. It was the Appellant’s contention that the application of Section 229(5) of EACCMA implies that there was no decision by the Respondent as the Appellant’s application was deemed allowed by operation of the law, thus rendering the Respondent’s decision dated 17th December 2025 moot. It was the Appellant’s further contention that the Respondent’s review decision dated 17th December 2025 and its submission dated 7th May, 2026 address different matters from the impugned review decision, and not matters before this Tribunal. 34. The Appellant submitted that the Respondent’s submission before this Tribunal does not relate to the Appellant’s appeal before the Tribunal or the impugned review decision by the Respondent. It is therefore a misapprehension and misrepresentation of the material fact. 35. The Appellant submitted that the 30-day period prescribed under Section 229((9) is not discretionary. It is a statutory limit imposed on the Respondent’s power to determine an application for review, and failure to communicate a review decision within the prescribed period is not only a mere procedural irregularity, but it triggers the consequence expressly provided by statute. 36. It was the Appellant’s submission that the Respondent was required to act expeditiously, efficiently, lawfully, reasonably, and procedurally fairly, to give clear reasons and to administer the customs review process consistently. It argued that having allowed the statutory period to lapse, the Respondent could not fairly continue to lock the Appellant’s system, detain consignments, demand security, or compel compliance with Demand 055 as though the review application had not been deemed allowed. 37. The Appellant submitted that it had a legitimate expectation, as it had acted on the Respondent’s own processes, prior tariff rulings, and statutory review frameworks. It therefore argued that the Respondent’s withdrawal of Demand 054, while continuing to enforce Demand 055 arising from the same product and factual matrix, was inconsistent and unfair, stating that such conduct offended the principles of good administration. 38. The Appellant relied on the case of **Commissioner of Income Tax v Westmont Power) (K) Limited, Nairobi High Court Income Tax Appeal No. 626 of 2002,** while citing the case of **Inland Revenue v Scottigh Central Electrically Company (1931) 15 TC** where it was stated: - *“Even though taxation is acceptable and even essential in democratic societies, taxation laws that have the effect of depriving citizens of their properties by imposing pecuniary burdens resulting also in period consequences, must be interpreted with great caution .In this respect , it is paramount that the provisions must be express and clear so as to leave no room for ambiguity…any ambiguity in such law must be resolved in favour of the taxpayer and not the revenue authority. Therefore, it is settled law that the legislation that imposes tax must be unambiguous. I add that the rules of taxation should be published and only then can a citizen be liable”* 1. The Appellant therefore submitted that the revenue authority cannot authoritatively state what was clearly deleted in VAT Act 2013 Schedule 1 of the VAT exemption list. It further submitted that what was clearly deleted was the tariff description to correct the ambiguity, and to date the tariff No. 2106.90.20 exists as listed in the exemption list. 2. The Appellant submitted that it notified the Respondent on 11th June, 2025 that its review application was deemed allowed by operation of the law. To buttress its argument, it relied on the case of **Wananchi Group (K) Ltd vs Commissioner of Customs and Border Control** which stated: *“For the Appellant to successfully argue this point, it should have taken the earlier opportunity to write to the Respondent at the expiring of thirty (30) days, informing the respondent that its review application was allowed pursuant to section 229(5) of EACCMA”.* 1. The Appellant submitted that the application for review dated 5th June 2025 was received on the same date, and that the Respondent, in continuing to send demand letters on the same without any review, was a clear violation of Section 229(4) of the EACCMA. Further that the Respondent did not request any additional information as all available information was submitted and provided with the lodged review application letter dated 5th June 2025. 2. The Appellant submitted that the Respondent’s actions prejudiced it as it was forced to indefinitely suspend a multibillion-shilling modern pig rearing project in Naivasha because its future commercial decisions were impacted by the Respondent’s actions. **The Appellant’s Prayers** 1. The Appellant prayed that: - 1. The appeal be allowed and the review decision be dismissed with costs to the Appellant. 2. Order the Respondent to refund the overcharged import duty. 3. Order the Respondent to discharge the bank guarantee issued for the demanded amount. 4. Order the Respondent to compensate for the losses due to its illegal enforcement measures. **THE RESPONDENT’S CASE** 1. The Respondent’s case is premised on its: 1. Statement of Facts dated 7th May 2026 and filed on 25th May 2026 together with the documentation attached thereto. 2. Written submissions dated 7th May 2026 and filed on 26th May 2026. 2. The Respondent stated that the Appellant imported two consignments vide import entry No. 24EMKIM401024686, which was declared under the IM494 regime (inward processing) and No.24EMK1M401028296, which was declared under the IM400(duty paid). The consignments were for a product called PRO FIT 1:50 which the Respondent reclassified to HS Code 2106.90.20 as opposed to the Appellants’ self-declared HS Code 2106.90.90. 3. The Respondent averred that on 5th June 2025, the Appellant applied for a review of both demands, which were referenced KRA/C&BC/ICDN/ENF /DEMAND/054/2025 and KRA/C&BC/ICDN/ENF/DEMAND/055/2025. On 31st July, 2025, the Respondent withdrew demand KRA/C&BC /ICDN/ENF/DEMAND/054/2025, however, demand KRA /C&BC/ICDN/ENF/DEMAND /055/2025 was still due and payable. 4. The Respondent asserted that, due to the fact that the extra taxes remained unpaid, it detained the Appellant’s consignment under Entry 25EMK1M400 920811 on 1st September 2025.It stated that this was as provided under Section 130 of EACCMA 2004. 5. The Respondent averred that the Appellant requested to execute a bank guarantee, which was accepted as the Appellant followed up the arbitration of the case. It stated that it gave the Appellant 7 days to make payments, failure to which enforcement action would be undertaken. 6. The Respondent stated that on 25th November, 2025, it held a meeting with the Appellant where the issues in contention were three: * + 1. Unfair and unreasonable treatment and misrepresentation of facts by the Respondent, that is, VAT at 16% attracting on consignments for PRO FIT 1:50, REGAL HAM FLAVOUR and PHOSPHAT MIX SPICES under EACCET Tariff 2106.90.99 2. The Tariff number 2106.90.20 currently under First Schedule of Exempted goods. 3. Erroneous tax figures on RDL and IDF as extra taxes. The miscellaneous levies RDL was calculated at 2% instead of 1.5%. 7. The Respondent asserted that it reviewed the issues and revised the demand for KRA/C&BC/ICDN/ENF/DEMAND/055/2025 to Kshs 1,042,452.00 on 17th December, 2025. 8. The Respondent stated that it detained another of the Appellant’s consignments on 18th February, 2026 pursuant to Section 130 of EACCMA to compel the Appellant to make payment of the outstanding taxes, as there existed an outstanding E-slip. 9. In response to the Appellant’s grounds of Appeal, the Respondent averred that it issued and communicated its decision on 19th February, 2025 which the Appellant applied for review of after which the Respondent upheld its decision on 10th April, 2025.It averred that the substantive matter of the applicable tariff code was dispensed with vide appeal tariff ruling, which the Appellant did not and is not disputing, the tariff code 2106.90.20. 10. The Respondent contended that correspondences between the Appellant and Respondent was on the subsequent demand notice. It averred that a demand notice is not an appealable decision since there exists an appealable decision, which is the tariff ruling. As such it stated that the Appellant had erred in fact and law by applying Section 229(5) of the EACCMA. 11. The Respondent averred that in the case of **Decase Chemicals Ltd vs Commissioner of Customs & Border Control, TAT Appeal No. E805 of 2024,** the Tribunal held that: *“Flowing from the above captioned letter, the Appellant appears to having been seeking a review of the notice of enforcement for outstanding taxes, in our view the said letter of 8th July 2024 does not constitute an appealable decision, since there exists an appealable decision issued in this dispute on 2nd March 2023”.* 1. The Respondent reiterated that Entry No. 24EMKIM401024686 was declared under IM494(Inward Processing) while 24EMKIM401028296 was declared under IM400(Duty Paid). It stated that its communication dated 31st July 2025 vacated demand KRA/C&BC/ICDN/ENF/DEMAND/054/2025 because the entry was declared under the Inward Processing regime and, though attracting VAT under Code 2106.90.20, VAT was not payable as it was processed under the Inward Processing regime. 2. It however stated that demand KRA/C&BC/ICDN/DEMAND/055/2025 was not vacated because the entry was declared under the duty paid regime and VAT was payable under tariff code 2106.90.20. It therefore asserted that the doctrine of legitimate expectation did not arise, given that proper explanation had been given for the circumstances under which the demand KRA/ C&BC/ ICDN/ ENF/ DEMAND/054/2025 had been withdrawn. It averred that it acknowledged and responded to this position to the Appellant vide the letter dated 17th December 2025 and the revised demand note issued. 3. The Respondent pointed out that this treatment applied to goods imported under the Tax remission scheme, while the matter at hand was in relation to import Entry No. 24EMKIM402028296 which was declared under the duty paid regime; therefore, the requisite taxes applied. It stated that the extra taxes demanded on the revised demand note dated 16th December 2025 was only on the VAT payable, and the same was done on the generated E-slip 1020260000064841. 4. The Respondent averred that Tariff Code 2106.90.20 was deleted from the Exemption Schedule of the VAT Act by Act No. 7 of 2014 52(a)(i), therefore, products classifiable under tariff code 2106.90.20 were vatable. The Respondent averred further that classification is based on the sample and material information presented at the time of importation and customs verification. It stated that for the consignment in question, the samples were drawn and subjected to lab analysis. 5. It was the Respondent’s assertion that the tariff ruling and appeal tariff ruling were subsequently issued classifying the product under tariff code 2106.90.20. It pointed out that the Appellant never objected not is it objecting to the facts of the tariff ruling. It therefore argued that the Appellant’s assertion that the ruling was done in bad faith is null and void. 6. The Respondent stated that under the provisions of Sections 204 of EACCMA 2004, a person who, in relation to customs, makes an entry which is false or incorrect in any particular way commits an offence. It stated further that the Appellant, through its clearing agent, made a declaration with TI 2106.90.90 which was found to be incorrect after samples were drawn and tested. It asserted that this therefore falls under the category of making an incorrect declaration in so far as the tariff is concerned. 7. The Respondent averred that Section 134 of EACCMA 2004 does not apply in this case as the new tariff attracts VAT, which meant there was a short levy of taxes since the initial declaration under tariff 2106.90.90 did not attract any duty. It averred further that under the provisions of Section 130 of EACCMA 2004, the consignments were rightfully detained as lien for the outstanding taxes until the demanded taxes were fully settled. It argued that the Appellant wrote requesting for the release of the consignments each time they were detained and that the Respondent would allow conditional release in good faith. However, the Appellant did not meet the conditions set by the Respondent for the release on every occasion. 8. The Respondent averred that the Appellant does not approach the court with clean hands, given that it never kept the timelines agreed in the meeting and did not respond on time. In in some instances, it never responded at all to the demands which it purported to rely upon in this case. 9. In its Written submissions, the Respondent submitted on one issue: **Whether the Respondent’s decision to demand short-levied taxes was proper in law.** 1. The Respondent submitted that the classification of goods in Kenya is governed by the East African Community External Tariff (EACCET) which modified and adopted the World Custom Organization Harmonized Commodity Description Coding System and its principles of the General Interpretation Rules (GIRs) of classification of goods. 2. The Respondent relied on the case of **Republic vs Commissioner General & Another ex parte Awal ltd (2008) eKLR** where the court noted the application of the Harmonized Commodity Description Coding Systems as follows: *“It is also imperative to note that the rules of interpretation of tariff classification are also provided for in the World Customs organization Explanatory notes of Harmonized Commodity Description and coding system (HS Code). They are the generalized rules of interpretation of harmonized systems in classification of goods in nomenclature issued by the world customs organization to which Kenya is a signatory. The HS Code assists the customs department in the interpretation of the tariff classification. I will apply the interpretation provided for under the Customs and Excise Act plus the rules of HS Code to determine this dispute”* 1. The Respondent further relied on the High Court case in **Beta Healthcare International Ltd v Commissioner of Customs Services (2010) eKLR** which stated: *“Kenya is a signatory to the International Convention on the Harmonized Commodity Description and Coding System. Kenya became a contracting party to the convention on 29th January 1988.The entry into force of the convention came into effect in Kenya on 1st January 1989.”* 1. It was the Respondents’ submission that the EACCET is derived from and informed by the International Convention on Harmonized Commodity Description and Coding System to which Kenya and all member states of East African Community are signatories. It averred that it issued and communicated its decision on 19th February, 2025 and the said decision was appealed by the Appellant, and the initial Respondent’s decision was upheld on 10th April 2025. 2. The Respondent averred that the substantive matter of the applicable tariff code was dispensed with vide an appeal tariff which the Appellant did not and is not disputing; the tariff code is 2106.90.20. Further, that the correspondences between the Appellant and Respondent were on the subsequent demand notice. 3. It was the Respondent’s averment that a demand notice is not an appealable decision, since there exists an appealable decision, which is the tariff ruling.” 4. The Respondent rehashed its argument as stated in its Statement of Facts and, in buttressing its argument further, relied on the following cases: * **Republic vs Commissioner of Domestic Taxes, Ex-parte Sony Holdings Limited (2019) eKLR** * **Pharmaceutical Manufacturing (K) Co Ltd & 3 others vs Commissioner General of Kenya Revenue Authority & 2 others (2017) eKLR.** **The Respondent’s Prayers** 1. The Respondent prayed that the Tribunal; 1. Upholds the Respondent’s objection Decision dated 15th December 2025, as proper and in conformity with the provisions of the Law. 2. That the appeal be dismissed with costs to the Respondent. **ISSUES FOR DETERMINATION** 1. The Tribunal has considered the parties pleadings and is of the view that the appeal distils into two issues for determination: 1. **Whether the Appeal is valid** 2. **Whether the demanded tax is due and payable.** **ANALYSIS AND FINDINGS** 1. Having established the two issues for determination, the Tribunal will proceed to analyse them as hereunder. **a) Whether the Appeal is valid.** 1. The dispute arose after the Appellant’s two consignments of PRO FIT 1:50 were reclassified by the Respondent from HS Code 2106.90.90 to 2106.90.20 through a Tariff Ruling Ref KRA/CBC/BIA /THO/GEN/944/02/2025 dated 19th February 2025. 2. The Appellant sought for a review of the tariff ruling on 19th March 2025, which the Respondent issued a Review Decision on 10th April 2025, upholding the previous tariff ruling. 3. The Respondent proceeded to issue two demands on 9th May 2025, KRA/C&BC/ICDN/ENF/DEMAND/054/2025 for Kshs 2,371,579.00 and KRA/C&BC/ICDN/ENF/DEMAND/055/2025 for Kshs 1,068,514.00 1. Section 230 of the East African Community Customs Management Act (EACCMA) 2004 prescribes the procedure for appeal for one who is dissatisfied with the decision of the Commissioner. It provides as follows: *“230(1) A person dissatisfied with the decision of the Commissioner under Section 229 may appeal to a tax appeal tribunal established in accordance with Section 231* *(2) 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 service a copy of the appeal to the Commissioner.”* 1. The Tribunal notes that the Appellant chose to engage the Respondent through correspondences and meetings during which time one of the demands was resolved in the Appellant’s favour. These series of meetings and correspondence continued and culminated to the Respondent’s letter of 17th December 2025 which was revising demand Ref. KRA/C&BC/ICDN/ENF/DEMAND/055/2025. 2. It is the Tribunal’s view that the Appellant ought to have appealed to the Tribunal within the statutory timelines after the Respondent’s letter of 10th April 2025, which upheld the Tariff Ruling dated 19th February 2025. 3. The Appellant, at Paragraph 61 of its Written Submission, states in part, *“the Appellant made a painful commercial decision not to Appeal against the confirmed Tariff Classification review decision but agreed in protest to comply with the reclassified tariff No 2106.90.20”* 4. The Tribunal observes that the Appellant chose not to appeal the Respondent’s tariff ruling reclassifying its product PRO FIT 1:50 from 2106.90.90 to 2106.90.20 and instead chose to engage the Respondent on the demand without considering the procedural timelines for instituting an appeal. 5. The Tribunal further notes that the Appellant had stated that it chose to pay in protest; however, the Tribunal has not sighted the protest note. It is worth noting that a taxpayer may opt to pay tax in protest and still pursue an appeal to the Tribunal within the statutory timelines which in this case the Appellant failed to adhere to. The Tribunal notes that the time between the Respondent’s tariff review decision on 10th April 2025 and the time of lodgement of the Appellant’s Notice of Appeal on 16th January 2026 is way outside the statutory timelines as prescribed under Section 230 of the EACCMA, thus rendering this appeal incompetent. 6. In view of the foregoing, the Tribunal finds that the appeal is not valid and thus incompetent. 7. Having established that the appeal is invalid, the Tribunal will not delve into the second issue as the same has been rendered moot. **FINAL DECISION** 1. The upshot of the foregoing is that the appeal is bereft of merit and the Tribunal proceeds to make the following orders: 1. The Appeal be and is hereby struck out. 2. The Respondent’s review decision dated 10th April 2025 is hereby upheld. 3. Each party to bear its own costs. 1. It is so ordered. **DATED and DELIVERED at NAIROBI this ………7th..……. Day of ……August...…… 2026** **................................................................** **DR. RODNEY ODHIAMBO OLUOCH** **CHAIRMAN** **……………………………. ……..............……………..** **ABDULLAHI M. DIRIYE DR. ERICK K’OMOLO** **MEMBER MEMBER**