https://new.kenyalaw.org/akn/ke/judgment/ketat/2026/250

 REPUBLIC OF KENYA IN THE TRIBUNAL OF KENYA AT NAIROBI COUNTY COURT NAME: TAX APPEALS TRIBUNAL CASE NUMBER: TATC/E801/2025 GREENHILLS INVESTMENTS LIMITED 1st Appellant - Versus - Kenya Revenue Authority 1st Respondent JUDGMENT # BACKGROUND 1. The Appellant is a private limited company incorporated in Kenya. 2. The Respondent is a principal officer appointed under Section 13 of the Kenya Revenue Authority Act, CAP 469 of Kenya’s Laws. Under Section 5 (1) of the Act, the Kenya Revenue Authority is an agency of the Government for the collection and receipt of all tax revenue. Further, under Section 5(2) of the Act with respect to the performance of its functions under subsection (1), the Authority is mandated to administer and enforce all provisions of the written laws as set out in Part 1 and 2 of the First Schedule to the Act for the purposes of assessing, collecting and accounting for all revenues in accordance with those laws. 3. The Appellant imported a mobile device described as "Famoco Scanner with docking station" on 1st April, 2025 and made a self-declaration vide import entry number 25NBOIM403677739. As per the self-declaration, the device was described as "SCANNER FAMOCO FX205" was declared under 2022 EAC/CET Code 84.71.60.00. 1. Upon verification, the Respondent proposed a different HS code 8517.13.00, that provides for Telephone sets, including telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network), other than transmission or reception apparatus of heading 84.43, 85.25, 85.27 or 85.28. The Appellant disputed the HS Code and therefore, the case was escalated to Tariff HQ for arbitration and further review. 2. The classification decision was communicated to the Appellant vide Tariff Classification decision under ref. number: KRA/C&BC/BIA/THQ/11o9/04/2025, dated 29th April 2025. 3. Dissatisfied with the decision, the Appellant lodged an application for review vide appeal letter ref. 522250172/3 dated 12th May, 2025 and received by the Respondent on 15th May, 2025. 4. Upon review of the application, the Respondent issued a Review decision upholding the earlier classification that classified Famoco Scanner with docking station under 2022 CET HS Code 8517.13.00 vide a letter dated, 13th June, 2025. 5. Aggrieved by the decision, the Appellant filed its Notice of appeal dated and filed on 25th July 2025. # THE APPEAL 1. The Appellant lodged its Memorandum of appeal dated 25th July 2025 and filed on the even date wherein the it raised the following grounds of appeal: 1. That the Respondent erred in law and in fact by assessing customs duties amounting to Kshs 784,723 on the basis that the Appellant misclassified Famoco Scanner with Docking station under Harmonized System Codes ("HS code") 8517.13.00 which attract customs duties at 25 % instead of HS code 8471.60.00 which attracts customs duties at 0 %. * 1. That the Respondent failed to take into account material support evidence, including product FX205 product sheet, Tech Sheet FX, technical specifications and the Explanatory Notes to Chapter 84 of the Harmonized Commodity Description and Coding system which demonstrate that the Scanner Famoco FX205 meets the criteria for classification under HS Code 84.71. # THE APPELLANT’S CASE 1. The Appellant’s case is premised on its Statement of facts dated 25th July 2025 and filed on even date and written submissions dated 17th February 2026 and filed on the even date. 2. In further support of its case the Appellant filed the following documents: 3. Review decision dated 13th June 2025; 4. A letter to the chief manager of tariffs; 5. Letter dated 14 th April 2025 requesting for release of goods under bank guarantee; 6. A letter dated 15th April 2025 from M Oriental bank Limited; 7. Letter dated 12th May 2025 being a letter of appeal; and 8. Catalogue from Famco. 9. The Appellant averred that on 13th June 2025, the Respondent issued a tariff review decision to the Appellant. The decision reclassified the Famoco Scanner with Docking Station ("the product" or "Scanner Famoco FX205") from HS Code 8471.60.00 to HS Code 8517.13.00. 10. The Appellant averred that the tariff review decision resulted in a tax liability of 25% of duties, comprising short levied duties, penalties and interest on the imported product. It stated that the issue on tariff classification of Scanner Famoco FX205 was first addressed by the Appellant vide a letter to the Respondent on 10th April 2025. 11. The Appellant stated that it submitted a letter to the Respondent on 10th April 2025 wherein it requested the Respondent to review and reconsider the tariff classification of Scanner FamocoFX205 under 85.17, which applies to mobile devices and submitted that the classification by the Respondent does not align with the intended functionality and usage of these devices as per the manufacturer's specifications and their actual deployment. 12. The Appellant stated that the application for review was for the Respondent to reconsider classifying the Scanner Famoco FX205 under tariff 84.71. It asserted that detailed technical specifications of the device, highlighting their core functionalities, their intended use and deployment within Village Market Mall's loyalty program were provided. 1. The Appellant requested the Respondent to review the tariff classification of Famoco Scanner with Docking station and facilitate for the consignment to be released in light of the information that was provided. 2. The Appellant stated that due to the ongoing dispute on tariff classification of ScannerFamocoFX205, the Appellant decided to have the consignment released under a bank guarantee considering that it would take time for the Respondent to issue a ruling. 3. Subsequently, the Respondent issued a tariff ruling on 29 th April 2025 wherein the product was classified under HS Code 8517.13.00 on the basis of a WCO opinion, which according to the Appellant, was not attached to the tariff ruling letter for reference by the Appellant. 4. The Appellant asserted that the Respondent's decision classifies the imported product under HS Code 8517.13.00 which attracts import duty at the rate of 25% as per EAC Legal Notice No. EAC/147/2024. The Appellant had classified the product under HS code 8471.60.00 which attracts import duty at the rate of 0% under the EAC Common External Tariff ("CET"). 5. According to the Appellant, from the description of the HS Codes, it was evident that classification under Chapter 84.71 and 85.17 covers Automatic data processing machines and other apparatus for transmission or reception of voices, images or other data respectively. Therefore, it stated that Chapter 84 is more into data processing machines whereas Chapter 85 refers to apparatus used for transmission of data. 6. The Appellant argued that the most important element in determining the correct HS Code for classifying Scanner Famoco FX205 should be determined based on the usage of the product. 7. The Appellant asserted that on 28th April 2025, it made oral submissions and provided a product catalogue to the Respondent during a meeting at the Respondent's Tariff Headquarter offices based at Sameer Park. 8. The Appellant averred that the Respondent's tariff review decision relied on an opinion from the World Customs Organization (WCO) regarding the classification of radio frequency identification (RFID)/barcode reader with a mobile operating system capable of scanning radiofrequency identification and barcodes, and consisting of two main parts: a main console and a grip. 1. The Appellant averred that the Respondent classified the product under HS Code 8517.13.00 based on the device's specifications, physical appearance, and cellular connectivity capabilities, as reflected in tariff ruling letter dated 29th April 2025. 2. That for the purpose of heading 85.17, under WCO Compendium of Classification Opinions, defines the term "smartphones" to mean telephones for cellular networks equipped with a mobile operating system designed to perform the functions of an automatic data processing machine such as downloading and running multiple applications simultaneously, including third-party applications, and whether or not integrating other features such digital cameras and navigational aid system. 3. According to the Appellant, the Explanatory Notes (EN) to HS code, further provides that telephone for cellular network or for other wireless networks, "covers telephone for use on any wireless network. Such telephones receive and emit radio waves which are received and retransmitted, e.g.., by base stations or satellites." 4. The Appellant asserted that Heading 85.17 covers the classification of apparatus for the transmission or reception of speech or other sounds, images or other data between two points by variation of an electric current or optical wave flowing in a wired network or by electro-magnetic waves in a wireless network. 5. That the Scanner Famoco FX205 features an 8MP rear camera used to capture images of barcodes and QR codes, which are processed by software to extract encoded data. 6. That the Scanner Famoco FX205 uses NFC for short-range communication and 4G/Bluetooth for data transmission but is not designed to receive and retransmit radio waves as defined under Explanatory Notes to HS Code 8517.13.00. 7. The Appellant argued that the Respondent based its tariff review decision on an WCO opinion that classifies radio frequency identification (RFID)/barcode reader with a mobile operating system. 8. The Appellant asserted that for the purposes of heading 84.71, the expression "automatic data processing machines" means machines capable of: 9. *"Storing the processing program or programs and at least the data immediately necessary for the execution of the program:* 10. *Being freely programmed in accordance with the requirements of the user;* 11. *Performing arithmetical computations specified by the user; and* 12. *Executing, without human intervention, a processing program which requires them to modify their execution, by logical decision during the processing run."* 13. The Appellant maintained that the Famoco Scanner FX205 operates using a pre-installed program, which stores both the program and the data necessary for its execution. That the device is configured to perform functions such as capturing transaction data and awarding customer loyalty points based on pre- set rules. 14. The Appellant contended that according to the product specifications, the device is capable of being programmed in accordance with user requirements, including syncing with a loyalty program, and that it performs basic arithmetic computations, such as converting transaction amounts into reward points, and executes these functions automatically without human intervention once configured. 15. The Appellant maintained that the product satisfied the conditions outlined in the Explanatory Notes to heading 84.71 for a unit to be regarded as part of an automatic data processing system, namely: 16. "It is of a kind solely or principally used in an automatic data processing system; 17. It is connectable to the central processing unit either directly or through one or more other units; and 18. It is able to accept or deliver data in a form (codes or signals) which can be used by the system." 19. According to the Appellant, these operational features are consistent with the conditions set out under the Explanatory Notes to HS Code 84.71 for classification as an automatic data processing machine in accordance with GIR 1 & 6. 1. That the product features support the Appellant's position that the reclassification of the imported goods was not justified under the applicable tariff codes and classification criteria. 2. The Appellant submitted that the Respondent erred by reclassifying the Scanner Famoco FX205 from HS Code 8471.60.00 which attracts custom duties at 0% to HS Code 8517.13.00 which attracts a duty rate of 25% duty pursuant to EAC Legal Notice No. EAC/147/2024. # Appellant’s prayers 1. The Appellant prayed as follows: 2. That the Tariff Review Decision dated 13th June 2025 be annulled and set aside in its entirety; 3. The Appeal be allowed with costs to the Appellant; and 4. Any other remedies that the Honourable Tribunal deems just and reasonable. # THE RESPONDENT’S CASE 1. The Respondent’s case was premised on its: 2. Statement of facts dated 25 th November 2025 and filed on 26th November 2025; 3. Written submissions dated 22nd April 2026 and filed on even date. 4. Witness statement of Thadeus Ogoti dated 18th March 2026 which was admitted as evidence in chief on 1st April 2026. 5. The Respondent stated that the Appellant disputed the HS Code provided for by the Respondent and therefore, the case was escalated to Tariff HQ for arbitration and further review. The Respondent stated that at the Tariff HQ the Appellant presented the physical mobile device together with its manuals and specifications. 6. That upon review of the nature of the device, its uses and the technical specifications provided, the device, Famoco Scanner with docking station was clearly identified to be a mobile device for scanning designed for business applications with the following specifications: * Dimensions 148X74X16mm/5.8X2.9Xo.6 * An 8-MP rear camera, * 5-inch touch screen panel, * A charging dock, * Type-C USB -charger cable with a wall plug features. * Subscriber Identification Module slot for Sim Card * functionalities, (Dual/Micro Sim) * Cellular network and Wireless connectivity, * Runs on android operating system. * Global Positioning Systems (GPS) * Power on/off, Volume +/- buttons * Voice/ Audio etc 1. According to the Respondent, these features enable the device communicate the data captured through the scanning of the Quick Response (QR) code pre-installed in the client gadget and transmits the same to the backend central location for storage. 2. That based on the verification findings, physical examination of the device presented, and the technical information provided together with the intended use to collect and transmit data through a cellular or wired network, the device was therefore considered to be a mobile device for scanning designed for business applications with features similar to that of a smartphone Classified in 2022 EAC/CET Code 8517.13.0o by application of GIRS 1 &6. 3. The Respondent stated that it is duly and legally mandated to collect all customs revenue as provided for under Section 5(2) of EACCMA. Therefore, by assessing and collecting customs revenue arising from the misclassification of Famoco Scanner with docking station under HS Code 8471.60.00 the Respondent was enforcing the mandate given by the law. 4. According to the Respondent, the Appellant had erroneously misclassified Famoco Scanner with docking station under 8471.60.00 which provides for the classification of "Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, not elsewhere specified or included. 1. That however, upon applying the General Rules for Interpretation of the Harmonized Systems, the Respondent noted that imported device could not be classified under this heading as it did not meet the threshold set out in Note A of Heading 84.71. 2. The Respondent averred that the automatic data processing machines of this heading must be capable of fulfilling simultaneously the conditions laid down in Note 5 (A) to this Chapter. The Device must capable of: * Storing the processing program or programs and at least the data immediately necessary for the execution of the program; * Being freely programmed in accordance with the requirements of the user; * Performing arithmetical computations specified by the user; and * Executing, without human intervention, a processing program which requires them to modify their execution, by logical decision during the processing run. 1. That Explanatory Note 5 to Chapter 85 provides that "For the purposes of heading 85.17, the term "smartphones" means telephones for cellular networks, equipped with a mobile operating system designed to perform the functions of an automatic data processing machine such as downloading and running multiple applications simultaneously, including third party applications, and whether or not integrating other features such as digital cameras and navigational aid systems. 2. That from this definition, it was clear that smartphones include not only phones but other devices capable of performing functions of an automatic data processing machine and remain classified under smartphones. 3. The Respondent asserted that in arriving at the correct classification, which is a key mandate of the Respondent to ensure proper trade statistics are maintained, considered all material information presented, physical examination of the device presented and the oral submissions. The Respondent stated that this is evidenced by the fact that the Respondent even offered the Appellant an opportunity for a physical engagement that was held on 28th April, 2025 to present its case before the review decision was issued. 1. The Respondent asserted that by classifying the device under 2022 EAC/CET HS code 8517.13.00 did not in any way imply that the device was to be used as a mobile phone for communication. That it was guided by the legal notes under Note5 to Chapter 85, which provide that smartphones are to be taken to include apparatus with similar features like those of smartphones including those used as automatic data processing machines which does NOT meet the conditions set out under General Note A under Heading 84.71 and the Chapter Notes to Chapter 84 Note 5(A) to (E). 2. The Respondent maintained that the imported device Famoco Scanner with docking station does not meet the set criteria hence correctly classified under HS Code 8517.13.00 as guided by GIR 1 &6. 3. According to the Respondent, the WCO opinion on the classification of a similar product was part of the Respondent finding in support of the classification decision under page 2 paragraph 4. 4. The Respondent noted that the WCO in classifying radio frequency identification (RFID)/barcode reader with a mobile operating system capable of scanning radio-frequency identification and barcodes, and consisting of two main parts: a main console and a grip. That its characteristics include, among others, the following: dimensions: 164.2x 80.0 x 24.3 mm, touch panel display: 5.2" (132.08 mm), audio :1 speaker, 2 microphones, keypad; 4 front keys, 1 power key, 2 scan keys, 1 multifunctional key. 5. The Respondent contended that the main console had the specifications and physical appearance of a typical smartphone, equipped with a connector to support connection with the grip, and cellular connection capabilities. It further stated that it was also equipped with a camera to scan and pre-installed application for scanning and that the apparatus run applications, and communicates with the server after scanning the barcode (Heading 8517.13/2). 6. The Respondent maintained that the Famoco Scanner with docking station imported by the Appellant performs typical functions like the above gadget i.e. of scanning and communicating scanned data in a backend and with typical features like those of smartphone. That the radio frequency identification was only one of the means of scanning among others like use of camera as is the case for Famoco Scanner with docking station, therefore, the devices need not to be identical but similar. 7. That the apparatus of 85.17 have been recognised to have the capabilities of an automatic data processing machine. That these devices or apparatus equally have pre-installed programmes including smartphones and the existence of a preinstalled programme does not exclude them from heading 85.17. 1. The Respondent stated that its decision was in conformity with the laws and the same should be upheld. 2. The Respondent submitted that it correctly classified the Appellant’s goods and that the Appellant did not discharge its burden of proof. 3. The Respondent relied on the following caselaw to submit that the Tribunal has found in favour of the Respondent’s classification and ruled that the burden is on the taxpayer to prove that the Respondent’s classification was incorrect: # Master Power Systems Limited v Commissioner Customs and Border Control (Tax Appeal E631 of 2023) [2024] KETAT 1017 (KLR) (12 July 2024) (Judgment); 1. **Prima Rosa Flowers Limited v Commissioner Of Domestic Taxes [2019] eKLR;** 2. **Ushindi Exporters Limited v Commissioner of Investigation and Enforcement (Tax Appeals Tribunal No 7 of 2015**); and 3. **Commissioner of Domestic Taxes v Metoxide Limited [2021]** 4. The Respondent also relied on the case of **Republic v Commissioner General & Another Ex-Parte Awal Ltd [2008] eKLR** wherein the court held that the Respondent had the statutory duty to impose duty according to the tariff classification provided by law under the Customs and Excise Act and under the Harmonised Commodity Description and Coding System provided by the World Custom Organization explanatory notes in which Kenya is a signatory. # Respondent’s Prayers 1. Based on the foregoing, the Respondent prayed: 2. The Review decision be upheld; 3. The Appeal be dismissed with costs to the Respondent. # ISSUE FOR DETERMINATION 1. The Tribunal has considered the parties’ pleadings and submissions, and has identified the following issue for determination: **Whether the Respondent** # erred in classifying the Appellant’s imports under HS Code 8517.13.00 **instead of HS Code 8471.60.00.** **ANALYSIS AND FINDINGS** 1. Having identified the issues for determination, the Tribunal proceeds to analyse the same as hereunder: - # Whether the Respondent erred in classifying the Appellant’s imports under HS Code 8517.13.00 instead of HS Code 8471.60.00 1. While the Appellant maintained that it correctly classified the imports under HS Code 8471.60.00, the Respondent was of the view that the Appellant’s imports were supposed to be classified under HS Code 8517.13.00. 2. Classification of commodities is governed by EAC Customs Union Common External Tariff. The Tribunal is guided by the General Interpretation Rules for the Classification of Goods (GIRs) which sets out principles of classification of goods in the Nomenclature. In particular, GIR 1 provides inter alia: *1. 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…* 1. It is noted that classification of goods in the subheadings of a heading is determined according to the terms of those subheadings and any related Subheading Notes *mutatis mutandis.* In this regard, GIR 6 provides that: *For legal purposes, the classification of goods in the subheadings of a* *heading shall be determined according to the terms of 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.* 1. The Canadian Court in **Puratos Canada Inc v Canada (Customs and Revenue) (2004) CA CITT** observed as follows regarding classification of goods: *“The General Rules for the Interpretation of the Harmonized System referred to in section JO of the Customs Tariff originated in the International Convention on the Harmonized Commodity Description and Coding Systems. They are structured in cascading form so that if the classification of the goods cannot be determined in accordance with Rule 1, then regard must be had to Rule 2 and so on.... The above legislation requires the Tribunal to follow several steps before arriving at the proper classification of goods on an appeal: first to examine the schedule to see if the goods fit prima facie within the language of a Tariff Heading; second, to see if there is anything in the Chapter or Section notes that precludes the goods from classification in the Heading; and third, to examine the Classification Opinions and the Explanatory Notes to confirm classification of the goods in the Heading.”* 1. The Respondent’s preferred Hs Code 8517.13.00 provide as follows: *85.17 Telephone sets, including smartphones and other telephones, including telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network), other than transmission or reception apparatus of heading 84.43, 85.25, 85.27 or 85.28.* *--Smartphones* 1. Heading 85.17 deals with telephone sets, including smartphones and other telephones. The Hs Code 85.17.13.00 that the Respondent preferred provides for smartphones. 2. Note 5 of the Chapter notes provides the following clarity: *5.- For the purposes of heading 85.17, the term “smartphones” means telephones for cellular networks, equipped with a mobile operating system designed to perform the functions of an automatic data processing machine such as downloading and running multiple applications simultaneously, including third-party applications, and whether or not integrating other features such as digital cameras and navigational aid systems.* 1. The contention here is that the product under this subheading is equipped with a mobile operating system designed to perform the functions of an automatic data processing machine such as downloading and running multiple applications simultaneously. The import has other features such as digital cameras and navigational aid systems which are necessary but not mandatory. 2. The Appellant declared its product under HS Code 8471.60.00 which provides as follows: *84.71 Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, not elsewhere specified or included.* *- Input or output units, whether or not containing storage units in the same housing.* 1. Heading 84.71 deals with automatic data processing machines and part thereof. 2. Note 6(A) of chapter 84 provides as follows: *6.- (A) For the purposes of heading 84.71, the expression “automatic data processing machines” means machines capable of:* 1. *Storing the processing program or programs and at least the data immediately necessary for the execution of the program;* 2. *Being freely programmed in accordance with the requirements of the user;* 3. *Performing arithmetical computations specified by the user; and* 4. *Executing, without human intervention, a processing program which requires them to modify their execution, by logical decision during the processing run.* 5. The Tribunal notes that headings 84.71 and 85.17 may overlap in respect of modern multifunctional electronic devices. However, the distinction lies in the principal function of the apparatus as discerned from its objective characteristics, technical architecture and operational capabilities. Heading 85.17 principally covers apparatus whose primary function is the transmission or reception of voice, images or other data over wired or wireless networks. On the other hand, the heading 84.71 covers automatic data processing machines and units thereof whose essential character lies in the data processing functions as contemplated under Note 5 (A) of the Chapter 84, even where such machines possess communication capabilities ancillary to their principal data processing function. 1. The Tribunal further notes that Note 5(E) to Chapter 84 excludes from heading 84.71 machines incorporating or working in conjunction with an automatic data processing machine where they perform a specific function other than data processing. The critical inquiry therefore is whether the imported apparatus principally performs a communication/transmission function falling under heading 85.17 or whether its communication features are merely subsidiary to its primary role as an automatic data processing unit used for specialized business process operations. 2. The Appellant stated that the product is classifiable under HS Code 84.71.60.00 as it features an 8MP rear camera used to capture images of barcodes and QR codes, which are processed by software to extract encoded data; that the product uses NFC for short-range communication and 4G/Bluetooth for data transmission but is not designed to receive and retransmit radio waves as defined under Explanatory Notes to HS Code 8517.13.00; that the product operates using a pre-installed program, which stores both the program and the data necessary for its execution. It stated that the device is configured to perform functions such as capturing transaction data and awarding customer loyalty points based on pre-set rules among other reasons. 3. Having considered the terms of the competing headings, the relevant Chapter Notes and the objective characteristics of the imported device pursuant to the GIR 1, the Tribunal finds that the apparatus possesses features potentially bringing it within both heading 84.71 and heading 85.17. The Tribunal therefore proceeds, for completeness, to consider GIR 3 (a), which provides that where goods are prima facie classifiable under two headings, the heading providing the most specific description is to be preferred over the heading providing a more general description. 4. The Tribunal has examined the technical documentation catalogue specifications and operational features of the imported apparatus. The evidence demonstrates that the device is specifically configured for specialization enterprise and business-processing applications including customer enrolment, barcode and QR-code scanning, attendance tracking, remote management and structured data capture. While the apparatus incorporates cellular, Bluetooth and BFC connectivity, the Tribunal finds that such communication capabilities are auxiliary to the device’s primary operational role within an integrated business- processing environment. It is the Tribunal’s considered view that the objective characteristics therefore align more closely with a specified automatic data processing unit than with apparatus principally designed for the telecommunication purposes under heading 85.17. 5. The Tribunal further notes from the product catalogue and technical specifications that the apparatus is capable of storing processing programs, executing pre-configured applications, processing captured transactional data and interacting with backend systems without continuous human intervention. The device is also configured in accordance with user requirements for the deployment in specialized enterprise environments. The characteristics satisfy the requirements as contemplated under Note 5 (A) to Chapter 84 relating to the automatic data processing machines. 6. The Tribunal has also considered the Respondent’s Review Decision wherein the Respondent acknowledged that the imported apparatus is “a mobile device for scanning designed for business applications with typical features similar to that of a smartphone”. In the Tribunal’s view the Respondent’s own characterization supports the conclusion that the apparatus is specialized multifunctional business processing device rather than a conventional telecommunication apparatus principally intended for communication purposes under heading 85.17. 7. The Tribunal finds that the mere presence of the smart-phone like features, including a mobile operating system, camera, SIM-card capability and wireless connectivity, does not by itself determine classification under the heading 85.17. Modern automatic data processing devices frequently incorporate such functionalities. The decisive factor remains the principal function and objective character of the apparatus as imported. In the present case, the evidence before the Tribunal demonstrates that the communication functionalities are subordinate to the device’s specialized data- processing and enterprise functions. 8. The Tribunal has also considered the WCO classification opinion relied upon by the Respondent concerning the RFID/barcode reader with the smartphone-like characteristics. While the cited opinion is persuasive and relevant, the Tribunal notes that the classification disputes must ultimately be determined based on the precise objective characteristics, principal function and operational rile of the imported goods under consideration. In the instant case, the evidence placed before the Tribunal demonstrates that the imported apparatus operates principally as a specialized enterprise data- processing device integrated into a structured loyalty and transactional management system, with communication capabilities serving an ancillary operational role. 9. In view of the foregoing analysis, and upon the consideration of the relevant GIRs, Chapter Notes, technical specifications, operational characteristics and intended functional architecture of the imported apparatus, the Tribunal is persuaded that the imported device is more appropriately classifiable under HS Code 8471.60.00 as an automatic data processing unit. In the circumstances the Tribunal therefore finds and holds that the Respondent erred in classifying the Appellant’s imports under HS Code 8517.13.00 instead of HS Code 8471.60.00. # FINAL DECISION 1. The upshot of the foregoing is that the Tribunal finds the Appeal is meritorious and the Tribunal accordingly proceeds to issue the following orders: 2. The Appeal be and is hereby allowed; 3. The Review Decision dated 13 th June 2025 be and is hereby set aside; 4. No orders as to costs. 5. It is so ordered. # DATED AND DELIVERED AT NAIROBI THIS 29TH DAY OF MAY 2026 SIGNED BY/FOR: **★ TH E JUDICIAR Y O F KENY A ★** **HON. ROBERT MUGAMBI MUTUMA (CHAIRPERSON) HON. EUNICE NJERI NGANGA HON. BONIFACE KIBIY TERER DOMINIC KIPKEMOI RONO HON. BILLY GRAHAM OKUMU MIJUNGU** Tax Appeals Tribunal Tribunal Date: 2026-05-29 14:50:06