https://new.kenyalaw.org/akn/ke/judgment/ketat/2026/219

 REPUBLIC OF KENYA IN THE TRIBUNAL OF KENYA AT NAIROBI COUNTY COURT NAME: TAX APPEALS TRIBUNAL CASE NUMBER: TATC/E1382/2025 SANPAC AFRICA LIMITED VS KENYA REVENUE AUTHORITY JUDGMENT # BACKGROUND 1. The Appellant is a private limited liability company duly incorporated in Kenya pursuant to the provisions of the Companies Act. It is a regional supplier of superior innovative packaging solutions, geo-textiles & synthetics, nets and floriculture products. 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 assorted in-mould printed plastic labels (Dairy land classic strawberry ripple 500ml & 1L plastic labels, Dairyland classic vanilla strawberry 500 ml & 1L plastic labels, Dairyland deluxe vanilla choc flakes 500ml & 1L plastic labels, Dairyland real fruit blueberry swirl 500ml & 1L plastic labels, Dairyland real fruit peach Melba 500ml & 1L plastic labels, Dairyland classic vanilla 500ml & 1L plastic labels, Dairyland Deluxe Salted Caramel 500ml & 1L plastic labels, Dairyland Deluxe Salted Caramel with nuts 500ml & 1L plastic labels, onja margarine 250g & 500g plastic labels, Dairyland classic chocolate ripple 500ml & 1L plastic labels, Dairyland Deluxe Biscotti 500ml & 1L plastic labels, Dairyland Deluxe cookies & cream 500ml & 1L plastic labels, Dairyland Deluxe kulfi 1L plastic labels, Dairyland Real Fruit 500ml & 1L plastic labels, Dairyland Real Fruit Pina Colada 500ml & 1L) under Import Entry Number 25EMKIM400877147. 1. The Appellant declared the plastic articles under the 2022 EAC/CET HS Code 3920.20.90. However, processing of the entry was halted at the station pending verification of the declared HS code. The Samples were subsequently drawn from the consignments of the imported goods and sent to the Valuation and Tariff Section to give an opinion on the applicable tariff. 2. On the 8th September, 2025, the Respondent issued tariff Rulings, references KRA/CBC/BIA/THQ/0275-0278/08/2025-2026 and KRA/CBC/BIA/THQ/O280-0290/08/2025-2026 which classified the articles under 2022 EAC/CET HS Code 4911.10.00. 3. On 1 st October 2025, the Appellant applied for review against the tariff rulings contending that the in-mould printed plastic labels should be classified under the 2022 EAC/CET HS Code 3920.20.90. 4. The Respondent considered the Appellant's application for review and concluded that the plastic articles presented for tariff classification are considered to be plastic film printed with characters and graphics which provide useful information about the product hence classified in the 2022 EAC/CET Code 4911.10.00 in accordance with the General Interpretative Rules 1 and 6. The Respondent then issued a review decision vide letters dated 30th October, 2025. 5. The Appellant being dissatisfied with the Review Decision instituted the Appeal herein vide a Notice of Appeal dated 28th November, 2025. # THE APPEAL 1. The Appellant lodged the Memorandum of appeal dated 11 th December 2025 and filed on even date wherein it raised the following grounds of appeal: 1. That the Respondent erred and misdirected itself in rejecting the Appellant's application dated 1st October 2025 seeking a review of the Respondent's tariff classification. * 1. That the Respondent erred and misdirected itself in misinterpreting the provisions of the East African Community Common External Tariff as to the nature of the Appellant's imports, which are printed plastic labels used for information purposes. 2. That the Respondent erred in concluding that the imported plastic labels were meant for promotion and advertisement thereby arriving at the incorrect conclusion that they ought to be classified under HS Code 4911.10.00. 3. That the Respondent erred in law and in fact in failing to find that the Appellant's products were correctly classified under HS Code 3920.20.90 which is described as "other plates, sheets, film, foil and strip, of plastics, noncellular and not reinforced, laminated, supported or similarly combined with other materials - of polymers of propylene." 4. That the Respondent is in breach of the Appellant's legitimate expectation, having previously found that the Appellant's classification of the same item under Tariff No. 3920.20.90 was correct, but subsequently changing its position and reclassifying the imports to Tariff No. 4911.10.00, without any explanation as to the reason behind the change in position. 5. That the Respondent erred in law and in fact in requiring the Appellant to pay an amount of Kshs 1,356.272 in order to have its goods cleared, pending the determination of the dispute as to the correct tariff classification. 6. That the Respondent's Review Decision is unreasonable and unjust as it is based on a misapprehension and disregard of the Appellant's explanations and the documentation provided. # THE APPELLANT’S CASE 1. The Appellant lodged its statement of facts dated 11th December 2025 and filed on the even date. The Appellant also relied on witness statement of Rajiv Raja dated 10th March 2026 and filed on 19th March 2026, which was adopted by the Tribunal as evidence in chief during the hearing on 1st April 2026. In further support of the appeal, the Appellant filed written submissions dated 22nd April 2026 1. The Appellant’s case was that it imported into Kenya a consignment containing various printed plastic labels for Dairyland ice cream (a variety of flavours) and Onja Margarine, under entry number 25EMKIM400877147. The Company duly paid import duty. import VAT, IDF, RDL and MSS Levy that was payable on the consignment, amounting to Kshs 5,788.589. 2. The Respondent flagged the consignment and conducted a verification exercise, culminating in a verification report dated 29th August 2025. In the report, the Respondent proposed that the goods be classified under Tariff No. 4911.10.00 of the East African Community Customs External Tariff ("EAC CET"). The tariff attracts import duty at the rate of 35%. 3. This proposed classification was at variance with the Appellant's declaration under Tariff No. 3920.20.90 on the basis that the imported plastic labels are intended solely for labelling product packages and contain only mandatory product information, not advertising or promotional content. 4. It stated that by a letter dated 1 st September 2025, the Appellant undertook to settle the duties relating to the subject consignment once a final tariff determination had been made, while also requesting release of the goods. It averred that the Respondent declined this request and directed the Appellant to pay the disputed duties under protest, pending further discussion. 5. On 3rd September 2025, the Appellant proceeded to make a payment of Kshs 1,356,272 under protest, in order to secure release of the goods. Shortly thereafter, the Respondent issued several letters dated 8th September 2025 for each of the plastic labels imported under Entry no. 25EMKIM400877147, affirming its findings as noted in its verification report dated 29th August 2025. 6. The Appellant pointed out that the tariff rulings are identical, save for the names of the items. in the said rulings. The Respondent described the articles as pre-printed and illustrated product labels of plastics for cocoa products (for Dairyland) and vegetable oil (for Onja Margarine). 7. According to the Appellant, the Respondent noted that Heading 49.11 covers the classification of other printed matter, including printed pictures and photographs including screens made by printing a film of plastics with letters or symbols to be cut out for use in design work. The Respondent concluded that the plastic labels were to be classified under EAC/CET Code 4911.10.00 as plastic films printed with characters and graphics providing useful information about the product. The Appellant then filed an objection dated 1st October 2025 challenging the classification. 1. On 30th October 2025, the Respondent issued review decisions confirming the assessment hence this appeal. # Whether the Respondent erred in concluding that the imported plastic labels were meant for promotion and advertisement thereby arriving at an incorrect conclusion that they ought to be classified under HS Code 4911.10.00 1. The Appellant stated that tariff No. 4911.10.00 covers printed material for commercial promotion or advertisement, including trade catalogues. promotional posters, leaflets. flyers and display cards with advertising content. It stated that the essential character of items covered under this Tariff is the intention to promote and advertise. 2. The Appellant stated that the goods imported by the Appellant are not designed or intended for advertising or promotional purposes but they constitute plastic labels used exclusively for packaging and product identification. It maintained that their essential character is the labelling of product packages, not advertising as alleged by the Respondent. 3. Further, the Appellant contended that the pictorial representations of the labels inspected by the Respondent clearly demonstrate that the label are used to identify the product rather than to promote or advertise it. It added that this position is reinforced by the Respondent's own tariff ruling dated 8th September 2025, where the Respondent noted that the labels provide the following printed information about the product: * Product Names: Dairyland/Onja Margarine * Volume:500ml and 1 Litre * Ingredients * Nutrition Values * Manufacturers Details 1. According to the Appellant, all of the above information is typical of product identification and packaging not promotional advertising. In addition, it stated that the requirement to include such information on pre-packaged goods is not optional but rather, a requirement of the law specifically, Rule 7 of the Weights and Measures (Sale and Labelling of Goods) Rules. 1. The Appellant contended that the information appearing on the imported labels is a statutory requirement for purposes of consumer protection, traceability, compliance and most importantly, identifying the product and not a means of advertising. 2. The Appellant averred that the labels form an integral component of the plastic packaging materials it manufactures. It stated that this is because, # under Rule 7 of the Weights and Measures (Sale and Labelling of Goods) **Rules**, the Appellant's clients are required to securely affix labels containing the prescribed information on the packaging materials, and the Appellant cannot supply those materials without the necessary identifying labels. 1. Therefore, the Appellant asserted that the classification of the labels under Tariff No. 4911.10.00 is misplaced and ought to be vacated. # Whether the Respondent erred in failing to find that the Appellant's products were correctly classified under HS Code 3920.20.90 1. The Appellant's position was that it correctly classified the goods under Tariff No. 3920.20.90. It stated that in applying the General Interpretation for the Classification of Goods (GIR), in particular GIR 1 and 6, the first port of call is the Chapter description. 2. It cited Chapter Note 10 under Chapter 39 which provides that: *"ln headings 39.20 and 39.21, the expression plates, sheets, film, foil and strip' applies only to plates, sheets, film, foil and strip (other than those of Chapter 54) and to blocks of regular geometric shape, whether or not printed or otherwise surface-worked, uncut or cut into rectangles (including squares) but not further worked (even if when so cut they become articles ready for use)."* 1. The Appellant pointed out that tariff No. 3920.20.90 is described as follows: *"Other plates, sheets, film, foil and strip, of plastics, noncellular and not reinforced. laminated, supported or similarly combined with other materials.* *-Of polymers of propylene* *-Other"* 1. According to the Appellant, the Company's imports consist of plastic sheets/films printed and cut, made of polymers of propylene (specifically Bi- axially Oriented Polypropylene). Their sole purpose is for use in labelling product packages, as they contain product information. It maintained that they therefore, fall squarely within Tariff No. 3920.20.90. 2. The Appellant stated that Note 2 to Section VIl of the Harmonized System further reinforces this position. It provides that goods of headings 39.18 and 39.14 are excluded from Chapter 49 even if printed with motifs, characters, or pictorial representations that are not merely incidental to the primary use of the goods. The implication is that plastics and articles thereof remain classified under Chapter 39, even when printed, unless the printing itself gives the product the essential character of printed matter. 1. The Appellant argued that the fact that the Appellant's film is pre-printed for in-mould labelling applications does not alter its essential character as plastic film designed for integration into packaging. It averred that the printing is incidental to the label's primary function, namely to form part of the plastic packaging material in compliance with statutory labelling requirements. 2. The Appellant stated that its labels form an integral component of the plastic packaging materials it manufactures because, under the applicable law, the Appellant's clients are required to securely affix labels containing the prescribed information on their packaging materials, and the Appellant cannot supply those materials without the necessary identifying labels. 3. According to the Appellant, the labels in question are in-mould labels, semi-finished products used in the in-mould labelling of ice cream and margarine containers. They are pre-printed and illustrated specifically for these products and are made from BOPP Film (Biaxially Oriented Polypropylene Film), designed for in-mould labelling applications. The Appellant stated that the process operates as follows: * A robot or feeder picks the label and places it into the mould cavity. * The label is secured in place using vacuum, electrostatic charge, or mechanical clamps. * Molten plastic is injected or blown into the mould, encapsulating the label. * The moulded part cools and is ejected with the label fused to its surface. * The robot (where automated) picks the finished part and places it into the collection bin. 1. The Appellant relied on the reasoning of the United States Court of International Trade in **Amcor Flexibles Kreuzlingen AG v United States (Slip Op. 22- 15, 2022** wherein the Court was asked to determine whether "Formpack," a printed aluminium foil used in pharmaceutical packaging should be treated as "printed matter" under Heading 4911. The Appellant pointed out that the Court rejected this approach, holding that the printing did not transform the foil into "printed matter" because the essential nature of the product remained packaging material. 1. According to the Appellant, the in-mould labels retain their essential nature as polypropylene packaging film, notwithstanding the printing. 2. Based on the foregoing, the Appellant stated that the clear distinction between items under Chapter 49 and those that fall under Chapter 39 lies in their purpose. The Appellant pointed out that items under Chapter 49 are intended for advertising and promotional use, whereas items under Chapter 39 are distinguished by their physical composition as plastics. The Appellant contended that its imports are not intended for advertising but for the labelling of packages, and thus properly fall under Chapter 39, specifically Tariff No. 3920.20.90. 3. The Appellant proposed that in the alternative, and without prejudice to the foregoing, should the Tribunal find that the labels are not properly classifiable under Chapter 39, then the appropriate classification would be under HS Code 4911.99.90 as "other printed matter." It stated that this is because the labels are used for product identification within the packaging process not for advertising or trade promotion, and therefore do not fall under HS Code 4911.10.00. 4. The Appellant relied on the classification opinion adopted by the World Customs Organization at its 42nd Session of the HS Committee (Doc 42.024, Annex H/22), where the committee considered printed aluminium labels with paper backing. In this opinion, the Committee examined a product consisting of a thin sheet of aluminium printed with product information and backed with a layer of paper for stiffness and ease of handling. The product was not designed for promotional distribution but was instead intended to be affixed to manufactured goods (such as appliances or machinery) to indicate serial numbers, compliance markings or instructions. The Appellant pointed out that in its ruling, the WCO held as follows: *"The labels, although printed were used not for advertising but as product identifiers and thus could not be classified under subheading 49111.10. They fall under subheading 4911.99 (now49111.90 under HS 2017/20222) as other printed matter"* *"The Committee concluded that the product was not classifiable under subheading 4911.10 as trade advertising material, rather it was to be classified under subheading 4911.99 (Now 4911.90) as other printed matter based on its purpose and function"* 1. Therefore, the Appellant argued that the Respondent, in reclassifying the labels, disregarded the clear provisions of the EAC/CET as well as the documents adduced by the Appellant in support of its position. # Whether the Respondent is in breach of the Appellant's legitimate expectation, having Previously found that the Appellant's classification of the same item under Tariff No. 3920.20.90 was correct, but subsequently changing its position and Reclassifying the imports to Tariff No.4911.10.00, without any explanation as to the reason behind the change in position 1. The Appellant argued that the doctrine of legitimate expectation protects taxpayers such as the Appellant against abrupt and unexplained changes in administrative interpretation where a clear and unambiguous representation has been made by a public authority. 2. It stated that on 11th September 2023, the Appellant made an application for an advance tariff classification for the plastic labels, providing samples for the Respondent's evaluation. By a letter dated 9th October 2023, the Respondent issued an advance ruling, indicating that the correct classification was under Tariff No. 4911.10.00. 3. The Appellant averred that it subsequently challenged the Respondent's position and provided further clarification as to the nature of the product. The Appellant suggested two options for classification, based on the use of the plastic labels in packaging material: Tariff No. 3920.20.90 or Tariff No. 4911.99.90. 4. It pointed out that on 3rd January 2024, the Respondent issued a reviewed tariff classification relating to the products stating that upon further review, the Respondent had confirmed that the correct classification was indeed Tariff No. 3920.20.90. The Appellant noted that the Respondent reasoned as follows: *"Based on the above information, the printed Dairyland vanilla flavour ice cream 500ml label is considered to be a white BOPP film with printed information of the product that is merely incidental to its primary use classified in 2022EAC/CET Code 3920.20.90 as guided by GIR 1 & 6."* 1. According to the Appellant, in issuing the reviewed tariff classification on 3rd January 2024, the Respondent created a legitimate expectation that the Appellant's imports would henceforth be classified under Tariff No. 3920.20.90. 2. It contended that the Respondent's subsequent action of recommending a different tariff classification for the same goods without notice, justification, or any change in the nature of the goods constitutes a unilateral, unwarranted departure from its prior representation and is therefore a breach of that legitimate expectation. 3. The Appellant cited the Court of Appeal in ***Kenya Revenue Authority & 2 others v Darasa Investments Limited [2018] eKLR*** wherein the Court explained the principle of legitimate expectation as follows: *"Legitimate expectation refers to the principle of good administration or administrative fairness that, if a public authority leads a person or body to expect that the public authority will, in the future, continue to act in a way either in which it has regularly (or even always) acted in the past or on the basis of a past promise or statement which represents how it proposes to act, then, prima facie, the public authority should not, without an overriding reason in the public interest, resile from that representation and unilaterally cancel the expectation of the person or body that the state of affairs will continue.’’* 1. The Appellant contended that the Respondent expressly considered the very same items-white BOPP film with printed product information in 2024 and concluded that they were properly classified under Tariff No. 3920.20.90. The Appellant was aggrieved that the subsequent decision to reclassify them under Tariff No. 4911.10.00 was unilateral, without notice, and without explanation as to why the earlier classification was abandoned. 2. It stated that the goods remain identical to those previously classified under Tariff No. 3920.20.90. it averred that the Respondent's abrupt departure from its earlier ruling not only undermines predictability and certainty in tax administration but also unlawfully frustrates the Appellant's legitimate expectation that similar goods will be subjected to the same treatment. 3. It was of the view that the Respondent's Review Decisions are erroneous and ought to be set aside in their entirety. 4. The Appellant submitted that the Respondent’s Classification of the Appellant’s imported Products under HS Code 4911.10.00 was incorrect; and that the Respondent violated the Appellant’s Legitimate Expectation. 5. The Appellant relied on the following case laws: # Napply Ever After Limited v Commissioner of Customs & Border Control (Tax Appeal E535 of 2025) [2026] KETAT 73 (KLR); 1. **Attorney General v Okoiti & 3 others (Civil Appeal E416 of 2021) [2025] KECA 309 (KLR);** 2. **Amcor Flexibles Kreuzlingen AG v United States (Slip Op. 22-15, 2022);** 3. **Kenya Revenue Authority & 2 others v Darasa Investments Limited [2018] eKLR;** 4. **Republic v Kenya Revenue Authority Ex Parte M-Kopa Kenya Limited [2018] eKLR;** 5. **Keroche Industries Limited v Kenya Revenue Authority & 5 Others [2007] KLR 240;** 6. **Ecobank Kenya Limited v Commissioner of Domestic Taxes ( Commercial Civil Case No. 8 of 2010)** **Appellant’s prayers** 1. The Appellant prayed as follows: 2. That the appeal be allowed; 3. That the Respondent's Review Decisions dated 30 th October 2025 be hereby set aside; 4. That an order be issued that the Appellant's imports are correctly classified under HS Code 3920.20.90; 1. That in the alternative and without prejudice to (iii) above, an order be issued that the Appellant's imports are correctly classified under HS Code 4911.99.90; 2. That the Respondent be ordered to refund the amount of Kshs 1,356.272 paid under protest on 3 September 2025; 3. The costs of the Appeal be awarded to the Appellant; and 4. Any other or further remedies the Tribunal deems just and reasonable. # THE RESPONDENT’S CASE 1. The Respondent filed statement of facts dated 14 th January 2026 and written submissions dated and filed 27th April 2026 The Respondent also relied on witness statement of Timothy Kowino dated 11th March 2026 adopted as evidence in Chief by the Tribunal during hearing on 1st April 2026. 2. It stated that for purposes of verification of the applicable HS Code the East African Community Common External Tariff (CET) 2022 version was applicable. 3. It stated that the Appellant imported assorted in-mould printed plastic labels under Import Entry Number 25EMKIM400877147. It averred that the articles are used in an in-mould labelling whereby a pre-printed decorative films are placed into a mould before the plastic container is shaped into that mould. 4. The Respondent averred that the labels have excellent heat resistance, dimensional stability and compatibility with polypropylene containers. It stated that the label becomes an integral part of the final product majorly used for the product container labelling and identification. It contended that the labels provide the following printed information about the product; product name, volume, ingredients, nutritional values and manufacturer details. 5. According to the Respondent, the imported assorted in-mould printed plastic labels are classifiable under 2022 EAC/CET HS Code 4911.10.00 which provides for Other printed matter, including printed pictures and photographs for trade advertising material, commercial catalogues and the like as guided by GIR 1 & 6. 6. Respondent contended that the heading 49.11 includes screens made by printing a film of plastics with letters or symbols to be cut out for use in design work. It relied on Legal Note 2 to Section VII of the 2022 EAC/CET which provides that except for the goods of heading 39.18 or 39.19, plastics, rubber, and articles thereof, printed with motifs, characters or pictorial representations, which are not merely subsidiary to the primary use of the goods, fall in Chapter 49. 1. The Respondent pointed out that GIR 1 provides that classification shall be determined according to the terms of the headings and any relative Section or Chapter notes. It relied on that GIR 6 which 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. It noted that for the purposes of this rule the relative section and chapter notes also apply unless the context otherwise requires. 2. The Respondent noted that the Harmonized Commodity Description and Coding system explanatory notes as well as the additional notes constitute the official interpretation of the Common External Tariff and provide the scope of each heading under the EAC CET. 3. It was the Respondent’s view that it did not err or misdirect itself in interpreting the provisions of the East African Community Common External Tariff as to the nature of the Appellant's imports. It asserted that the imported goods were printed plastic labels whose essential character and primary function was to convey information and promotional content. It relied on the General Rules for the Interpretation of the Harmonized System and the Explanatory Notes to HS heading 49.11, to assert that the classification was correct. 4. The Respondent stated that it did not err in concluding that the imported plastic labels were meant for promotion and advertisement, as the labels were printed articles whose principal function was to convey information and promote the branded products. It stated that the General Rules for the Interpretation of the Harmonized System, Legal Note 2 to Section VII, and the Explanatory Notes to HS heading 49.11, the goods were correct classified as printed matter under HS Code 4911.10.00 and not as plastic articles of Chapter 39. 5. It maintained that it did not err in law or in fact in failing to find that the products were correctly classified under HS Code 3920.20.90, as the said heading applies to plastic plates, sheets, film, foil and strip in their unprinted form. It stated that the imported goods were printed plastic labels, whose essential character and principal function was to convey information and/or serve promotional purposes. It averred that upon printing, the goods ceased to fall within Chapter 39 by operation of the General Rules for the Interpretation of the Harmonized System, the relevant Section and Chapter Notes, and the Explanatory Notes, and were therefore correctly excluded from HS Code 3920.20.90 and classified under HS Code 4911.10.00. 1. The Respondent contended that it did not breach the Appellant's legitimate expectation as any prior classification under HS Code 3920.20.90 was based on the information and documentation available at the time. It noted that subsequent review of the imported goods, taking into account their printed nature and principal function to convey information and for promotional purposes, necessitated reclassification under HS Code 4911.10.00. 2. The Respondent emphasised that it did not err in requiring the Appellant to pay the sum of Kshs 1,356,272 for the clearance of the Appellant's goods pending determination of the correct tariff classification as this was standard procedure under Customs Laws to secure revenue. 3. The Respondent maintained that the Review Decision was proper in law having taken considerations of the Appellant's position, the documentation provided and the applicable law. The Appellant argued that the classification reflected the essential character and principal function of the imported goods in line with the General Rules for the Interpretation of the Harmonized System, the Explanatory Notes, and the East African Community Common External Tariff. 4. It argued that the decision to classify the Appellant's imported in mould printed plastic labels under HS Code 4911.10.00 was proper in law. 5. The Respondent relied on Section 235 and 236 of the EACCMA to state that it is empowered to conduct an audit within 5 years of importation and to call for documents to ascertain whether the proper taxes were paid. 6. The Respondent further stated that short levied taxes demanded from the Appellant under Section 135 of EACCMA, 2004 were proper in law. It therefore maintained that the Respondent's Review Decision dated 30th October, 2025 is proper in law and the same should be affirmed. 7. The Respondent submitted that it did not err in classifying the Appellant’s plastic labels under the HS Code 4911.10.00; and that the Respondent’s decision to demand for the short levied taxes was proper in law. 1. It cited the following case laws: # Republic v Commissioner General & Another Ex-Parte Awal Ltd [2008] eKLR; 1. **Beta Healthcare International Ltd V Commissioner of Customs Services [2010] eKLR;** 2. **Pharmaceutical Manufacturing (K) Co Ltd & 3 others v Commissioner General of Kenya Revenue Authority & 2 others [2017] eKLR; and** 3. **SDV Transami Kenya Limited V Commissioner of Customs Services [2012] KEHC 3488 (KLR).** **Respondent’s prayers** 1. The Respondent prayed 2. That the Review Decision dated 30th October, 2025 classifying the printed plastic labels under 2022 EAC/CET HS Code 4911.10.00 is proper therefore, ought to be upheld; and 3. That the appeal be dismissed. # ISSUES FOR DETERMINATION 1. The Tribunal having carefully evaluated the parties’ pleadings it is of the respectful view that the issues that call for its determination is as hereunder; # Whether the Respondent erred in reclassifying the Appellant’s imports under the HS Code 4911.10.00. 1. **Whether the Respondent was justified in demanding for short levied taxes.** **ANALYSIS AND FINDINGS** 1. Having identified the issues for determination, the Tribunal proceeds to analyse the same as hereunder; # Whether the Respondent erred in reclassifying the Appellant’s imports under the HS Code 4911.10.00. 1. The Appellant’s case is that it correctly classified the imports under HS Code 3920.20.90. On the other hand, the Respondent’s case is that it correctly reclassified the imports under HS Code 4911.10.00. 2. The classification of commodities in EAC 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. 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 also vital to note 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 Respondent’s preferred HS Code 4911.10.00 provides as follows: *49.11 Other printed matter, including printed pictures and photographs.* *4911.10.00 - Trade advertising material, commercial catalogues and the like* 1. The Respondent argued that the import in issue were articles used in an in- mould labelling whereby pre- printed decorative films are placed into a mould before the plastic container is shaped into that mould. It averred that the labels have excellent heat resistance, dimensional stability and compatibility with polypropylene containers. It asserted that the label becomes an integral part of the final product majorly used for the product container labelling and identification. It also pointed out that the labels provide the following printed information about the product; product name, volume, ingredients, nutritional values and manufacturer details. 1. On the other hand, the Appellant heading of choice, HS Code 3920.20.90 provides as follows: *39.20 Other plates, sheets, film, foil and strip, of plastics, noncellular and not reinforced, laminated, supported or similarly combined with other materials.* *3920.20.90 --- Other* 1. Both parties agree that the articles that the Appellant imported are key to the container onto which they are affixed. Whereas the Appellant argued that the articles used to identify the product and are also used for proposes complying with statutory provisions and in particular Rule 7 of the Weights and Measures (Sale and Labelling of Goods) Rules Legal Notice 24 of 1999, the Respondent argued that the imported plastic labels were meant for promotion and advertisement, as the labels were printed articles whose principal function was to convey information and promote the branded products. 2. In fact, the Respondent also agreed with the Appellant that the imported items are key as they identify the product. In particular, the Respondent stated as follows at paragraph 18 of the statement of facts: *18. The Respondent avers that the labels have excellent heat resistance, dimensional stability and compatibility with polypropylene containers.* ***The label becomes an integral part of the final product majorly used for the product container labelling and identification.*** 1. The Tribunal has carefully considered Note 2 of **Section VII of the EAC/CET which provides as follows:** *Except for the goods of heading 39.18 or 39.19, plastics, rubber, and articles thereof, printed with motifs, characters or pictorial representations, which are not merely subsidiary to the primary use of the goods, fall in Chapter 49.* 1. The evidence before the Tribunal demonstrates that the Imported articles consists of pre-printed in-mould labels manufactured from biaxially oriented polypropylene (BOPP) film. The labels contain product names, ingredients, nutritional information, volume declarations, manufacturer details and pictorial representations. The Tribunal is satisfied that the printed content is not merely incidental to the goods rather the printing constitutes the very reason which the label are manufactured and used, namely to communicate product specific information to consumers and to identify the packaged goods. 1. While the Appellant argued that the labels form part of the packaging material, the Tribunal notes that the dispute is not whether the articles are made of plastic but whether their essential character is derived from the plastic substrate or from the printed material appearing thereon. The Tribunal finds that the labels derive their commercial Identity and intended use from the information and graphics printed on them. In the absence of such printing, the articles would not perform their intended functions as product labels. 2. The Tribunal nevertheless finds that the Respondent erred in classifying the goods under HS Code 4911.10.00, as this subheading is reserved for trade advertising material, commercial catalogues and similar promotional articles. The evidence presented before the Tribunal does not demonstrate that the imported labels are designed principally to advertise or promote products in the manner contemplated under this subheading. 3. The Tribunal finds that the information appearing on the labels including product description, ingredients, nutritional values, manufacturer details and volume declarations, is simply intended to identify the product and facilitate compliance with applicable statutory consumer information requirements, such information cannot, without more, be equated to trade advertising material. 4. The Tribunal is persuaded that the labels are intended for product identification and packaging purposes rather than advertising. Although the label may contain attractive graphics and branding elements those features are ancillary to their primary functions as product labels affixed permanently to the finished container through the in-mould labeling. 5. Having found the goods are properly classified within Chapter 49 by virtue of Note 2 of Section VII. The articles are also used to ensure compliance with Rule 7 of the Weights and Measures (Sale and Labelling of Goods) Rules Legal Notice 24 of 1999. The said Rules are made pursuant to Weights and Measures Act, Cap. 513. but do not constitute trade advertising material under HS Code 4911.10.00, the Tribunal therefore finds that the more appropriate classification is HS Code 4911.99.90 which covers other printed matter not elsewhere specified. 6. Accordingly, the Tribunal finds and holds that the Respondent erred in reclassifying the imported in-mould printed plastic labels under HS Code 4911.10.11. # Whether the Respondent was justified in demanding for short levied taxes 1. Following the reclassification, the Respondent demanded the Appellant pay Kshs 1,356,272 as short levy. Considering that HS Code 4911.10.00 provides the rate of 35%, HS Code 4911.99.90 provides for the rate of 25%. As such, the Respondent should not have demanded payment of short levy. 2. Having found that the goods are properly classified under HS Code 4911.99.90 the Tribunal finds that the demand founded on the Respondents classification cannot stand. Any duties paid as a consequence of the impugned classification ought to be adjusted in accordance with the correct tariff treatment. 3. Based on the foregoing, the Respondent was not justified in demanding short levied taxes. # FINAL DECISION 1. In the circumstances, the Tribunal finds and holds that the appeal is meritorious and makes the following orders: - 2. The Appeal be and is hereby allowed; 3. The Review Decision dated 30th October 2025 be and is hereby set aside; and 4. The Respondent shall refund the Appellant of Kshs. 1,356,272 paid pursuant to the impugned classification within 90 days of this Judgement. 5. No orders as to costs. 6. It is so ordered. # DATED AND DELIVERED AT NAIROBI THIS 7TH DAY OF JULY, 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 HON. BILLY GRAHAM OKUMU MIJUNGU** Tax Appeals Tribunal Tribunal Date: 2026-07-07 13:35:10