https://new.kenyalaw.org/akn/ke/judgment/ketat/2026/277

**REPUBLIC OF KENYA** **IN THE TAX APPEALS TRIBUNAL AT NAIROBI** **TAX APPEAL NO. E1474 of 2025** **UNIVERSITY OF WASHINGTON GLOBAL ASSISTANCE PROGRAM..............APPELLANT** VS **COMMISSIONER OF CUSTOMS AND BORDER CONTROL…………….....RESPONDENT** **JUDGMENT** BACKGROUND 1. The Appellant is a Research and Training Centre involved in global health research, training, and service, focuses on public health. 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. Pursuant to the provisions of Sections 234,235 and 236 of the EACCMA, 2004, the Commissioner conducted a customs post-clearance compliance review on the taxpayer’s importations. 4. The review established that some of the medical diagnostic kits imported by the taxpayer vide entry numbers 23NBOIM406146900 and 24NBOIM412848471 have been declared with the wrong 2022 EAC/CET HS code. 5. The review also established that goods imported vide customs entry number 23NBOIM406146900 had a declared value of USD 24,321.93, but the attendant commercial invoice had a total value of USD 31,213.23. The variance of USD 6,891.3 was thus subjected to tax. 6. Based on the foregoing, the Commissioner issued the Taxpayer with a demand notice of Kshs. 6,347,084 on 24th September 2025. 7. On 24th October 2025, the Appellant objected to the Commissioner’s demand notice. 8. On 20th November 2025, the Respondent issued the Review decision confirming the Commissioner’s tax decision. 9. The Appellant being dissatisfied with the Respondent's review decision lodged notice of appeal filed on 20th December 2025. **THE APPEAL** 1. The Appellant lodged a memorandum of appeal dated 20th December 2025 and filed on the even date raising the following grounds of appeal: 2. That the Respondent erred in law by misclassifying medical diagnostic reagents and laboratory consumables contrary to the Harmonized System, the EAC Common External Tariff 2022, and the General Rules for Interpretation. 3. That the Respondent unlawfully invoked residual tariff headings without first exhausting specific and descriptive headings applicable to diagnostic reagents and medical laboratory consumables. 4. That the Respondent failed to apply the Harmonized System Explanatory Notes which are authoritative and legally binding interpretive aids. 5. That the Respondent erred in law by revaluing the Applicant’s imports without rejecting the transaction value in accordance with the prescribed valuation methods. 6. That the Respondent failed to discharge the statutory burden of proving that the declared transaction value was false, fictitious, or influenced. 7. That the Respondent relied on undisclosed internal comparison tables and alleged positive variance without furnishing objective market data from comparable imports. 8. That the Respondent’s decision violated the principles of legality, certainty, procedural fairness, and administrative justice. **THE APPELLANT’S CASE** 1. In support of the appeal, the Appellant relied on its statement of facts dated 20th December 2025 and filed on the even date and written submissions dated and filed on 3rd January 2026. 2. The Appellant averred that in the course of its operations, it imported medical diagnostic kits and laboratory consumables for nucleic acid detection through import entries 23NBOIM406146900 and 24NBOIM412848471. 3. The Appellant stated that, at the time of importation, it declared the goods under tariff headings applicable to medical diagnostic reagents and consumables and supported the declarations with invoices, airway bills, and proof of payment which were verified and accepted by the Respondent. 4. The Appellant further stated that following a post clearance audit, the Respondent reclassified the imports under different tariff headings and adjusted the declared transaction value, culminating in a demand for additional taxes amounting to Kshs. 6,347,084. **Appellant’s Submissions** 1. The Appellant filed written submissions dated 3rd January 2026 wherein it submitted that through the impugned decisions, the Respondent retrospectively reclassified the Applicant’s imported medical diagnostic kits and laboratory consumables and adjusted the declared transaction value, long after the goods had been duly verified, accepted, and released for home consumption. 2. The Appellant submitted that in the ordinary course of its business, it imported specialized medical diagnostic kits and laboratory consumables for use in clinical and public health laboratories namely; Aptima Compo 100 and 250 diagnostic test kits, waste bag kits, multi-tube unit kits, and specimen collection kits, all of which are specifically designed, manufactured, and supplied for the in-vitro diagnosis of Chlamydia trachomatis and Neisseria gonorrhoeae through nucleic acid amplification technology. 3. The Appellant submitted that subsequently, and long after the clearance process had been concluded, the Respondent initiated a post-clearance audit. 4. The Appellant contended that, following that audit, the Respondent purported to reclassify the Appellant’s medical diagnostic kits and laboratory consumables under residual and general tariff headings, and to adjust the declared transaction value by reference to undisclosed internal benchmarks. 5. The Appellant submitted that these actions culminated in the issuance of a Notice of Demand dated 24th September 2025 demanding additional taxes amounting to Kshs. 6,347,084, together with a review decision issued under reference P051387163 affirming the demand. 6. The Appellant submitted that the following issues arise for determination: 7. **Whether the Respondent lawfully reclassified the Applicant’s imported diagnostic kits and laboratory consumables.** 8. The Appellant submitted that Tariff classification in Kenya is governed by the Harmonized Commodity Description and Coding System as domesticated through the East African Community Common External Tariff, 2022, and must be undertaken strictly in accordance with the General Rules for the Interpretation of the Harmonized System. 9. The Appellant submitted that although the Harmonized System Explanatory Notes are not enacted as statute, they are internationally recognised as authoritative interpretive aids and form an integral part of the classification methodology. Kenyan courts and the Tax Appeals Tribunal have consistently relied on the Explanatory Notes to elucidate the scope and content of tariff headings. 10. The jurisprudential position is settled that tax statutes, including customs legislation, must be construed strictly, objectively, and in accordance with the language of the law. Tax liability cannot be imposed by implication, administrative discretion, or revenue expediency. 11. The Appellant submitted that in **Kenya Revenue Authority & 2 others v Doshi Iron Mongers Limited (Civil Appeal No. 66 of 2021; [2024] KECA 640 (KLR)**), the Court of Appeal reaffirmed that administrative action by revenue authorities must be exercised within the confines of the law and in conformity with constitutional standards of legality, reasonableness, and fair administrative action. The Court emphasised that revenue collection powers cannot be exercised arbitrarily or in a manner that undermines legal certainty and procedural fairness. 12. It submitted that in **Commissioner of Domestic Taxes v Total Kenya Limited ([2018] eKLR)**, the Court of Appeal held that tax obligations must arise from clear and express statutory provisions and not from implication, administrative convenience, or subjective interpretation by the taxing authority. 13. The Appellant argued that the Aptima Compo 100 and 250 diagnostic test kits, together with the waste bag kits, multi-tube unit kits, and specimen collection kits, are designed, manufactured, and used exclusively for the medical laboratory diagnosis of Chlamydia trachomatis and Neisseria gonorrhoeae through nucleic acid amplification techniques. 14. The Appellant submitted that the imported goods have no alternative commercial, industrial, or general laboratory application outside a controlled clinical diagnostic setting. 15. The Appellant submitted that the goods are therefore not general laboratory reagents, plastic articles, or multipurpose apparatus. Their essential character is medical, diagnostic, and consumable in nature. 16. In accordance with the General Rules for Interpretation, tariff classification must be determined by the objective characteristics, composition, and intended use of the goods at the time of importation, and not by post-clearance revenue considerations. 17. It submitted that the High Court in **Republic v Commissioner of Customs Services ex parte Unilever Kenya Limited ([2012] eKLR)** held that tariff classification must be based on the nature, composition, and use of goods as imported, and that customs authorities are not permitted to resort to speculative reasoning or residual tariff headings where the Harmonized System provides a specific and appropriate classification. 18. The Appellant stated that, notwithstanding this settled legal framework, the Respondent reclassified the Applicant’s diagnostic kits under HS Code 3822.19.00 and the specimen collection kits under HS Codes 3926 and 9027. These headings are residual or general in nature and, under established principles of tariff classification, may only be invoked where no specific heading adequately describes the goods. 19. The Appellant submitted that General Rule 3(a) of the Harmonized System expressly provides that where goods are prima facie classifiable under two or more headings, the heading which provides the most specific description shall be preferred over headings providing a more general description. That this principle has been consistently upheld by the Tax Appeals Tribunal. 20. In **Abbott Laboratories Limited v Commissioner of Customs and Border Control (Tax Appeals Tribunal)**, the Appellant submitted that the Tribunal held that residual tariff headings are a measure of last resort and cannot be applied where the Harmonized System, read together with the Explanatory Notes, provides a clear, specific, and descriptive heading for the goods in question. 21. According to the Appellant, in the present case, the Respondent failed to demonstrate, either in the Notice of Demand or in the review decision, why tariff headings under Chapter 30 or Chapter 90 were inapplicable. 22. The Appellant submitted that no technical analysis, expert evidence, or reference to the relevant Explanatory Notes was provided to justify the exclusion of those Chapters. Instead, the Respondent bypassed them altogether, in direct violation of the General Rules for Interpretation and the established methodology of tariff classification. 23. The Harmonized System Explanatory Notes to Chapter 30 expressly recognise diagnostic reagents and products designed for use in medical diagnosis, while the Explanatory Notes to Chapter 90 clarify that clinical diagnostic apparatus, together with their parts and accessories, fall within that Chapter where they are specifically designed for medical use. 24. The Applicant’s original declarations under HS Code 3001.90.00 and HS Code 3005.90.90 were therefore consistent with the Harmonized System, the EAC Common External Tariff 2022, and internationally accepted customs standards. 25. The Appellant submitted that, in the premises, the Respondent’s reclassification was not merely erroneous but unlawful; it was unsupported by technical or scientific evidence, contrary to the General Rules for Interpretation, and inconsistent with binding judicial authority and settled Tribunal jurisprudence. 26. **Whether the Respondent lawfully adjusted the declared transaction value following the post-clearance audit.** 27. The Appellant submitted that Customs valuation in Kenya is governed by a strict and mandatory statutory hierarchy anchored in section 122 of the East African Community Customs Management Act, 2004 (EACCMA) and the Fourth Schedule thereto, which domesticate the WTO Agreement on Customs Valuation. That under this framework, the transaction value, being the price actually paid or payable for the goods when sold for export to Kenya, is the primary and preferred method of valuation. 28. It contended that departure from the transaction value is not a matter of administrative choice or convenience. Section 122 of the EACCMA permits rejection of the transaction value only where the customs authority establishes, on the basis of objective and verifiable evidence, that the declared price is false, fictitious, influenced, or otherwise unacceptable within the meaning of the Act and the Fourth Schedule. That absent such proof, the law does not permit recourse to alternative valuation methods. 29. The Appellant stated that the Court of Appeal authoritatively pronounced itself on this question in **Commissioner of Customs Services v SDV Transami (Kenya) Limited [2012] eKLR.** The Court held that the burden of proof rests squarely upon the Commissioner to demonstrate that the declared transaction value is unacceptable and that such burden must be discharged through cogent, objective, and verifiable evidence. 30. **Whether the Notice of Demand dated 24th September 2025 and the review decision are lawful and enforceable.** 31. The Appellant submitted that, post-clearance audits are recognised tools of customs administration under the East African Community Customs Management Act, 2004 (EACCMA), particularly sections 235 and 236. 32. However, the statutory power to conduct a post-clearance audit is not unfettered. It must be exercised strictly within the confines of the law and cannot be deployed as a mechanism to retrospectively rewrite lawful import declarations in the absence of objective evidence of misdeclaration, misclassification, or undervaluation. 33. It submitted that, a post-clearance audit does not confer upon the Respondent a carte blanche to reopen concluded transactions merely because a different interpretation is later preferred. Its purpose is corrective and compliance-oriented, not punitive. 34. Accordingly, it must be exercised in a manner that is lawful, reasonable, proportionate, and procedurally fair, and in fidelity to the substantive provisions governing tariff classification and customs valuation. 35. The Appellant relied in **Kenya Revenue Authority v Export Trading Company Limited [2020] eKLR** where the Court held that statutory powers conferred upon revenue authorities must be exercised within the bounds of legality, reasonableness, and procedural fairness, and that administrative action in the taxation sphere must adhere strictly to both the enabling statute and constitutional requirements. That the Supreme Court further emphasised that where administrative decisions affect property rights and commercial certainty, the decision-maker bears a heightened obligation to act transparently, rationally, and in strict conformity with the law. 36. The Appellant submitted that in the present case, the impugned Notice of Demand dated 24th September 2025 and the subsequent review decision issued under reference P051387163 were founded on an unlawful reclassification of the Appellant’s imports and an unlawful adjustment of the declared transaction value. 37. It submitted that the Respondent neither established any factual misrepresentation on the part of the Applicant nor furnished objective, verifiable evidence to justify departing from the tariff classification and transaction value that had already been verified and accepted at the time of importation. 38. The Appellant argued that, equally significant is the Respondent’s failure to accord the Applicant a procedurally fair review. It contended that the review decision merely reiterated the conclusions of the post-clearance audit without meaningfully engaging with the Applicant’s substantive objections, technical explanations, or documentary evidence. That it did not address the applicable Harmonized System Explanatory Notes, the General Rules for Interpretation, or the statutory valuation hierarchy. It submitted that such a perfunctory reaffirmation does not meet the threshold of a lawful and reasoned review contemplated under the EACCMA. 39. The Appellant submitted that Article 47 of the Constitution guarantees every person the right to administrative action that is lawful, reasonable, and procedurally fair, and further requires that written reasons be provided where a decision adversely affects rights or legitimate expectations. 40. It submitted that the impugned Notice of Demand and review decision fall far short of this constitutional standard. They lack a lawful foundation, are unsupported by objective evidence, and undermine the Appellant’s legitimate expectation that import declarations duly verified and accepted would not be disturbed arbitrarily or capriciously. 41. The Respondent further submitted that the combined effect of these defects is that the Notice of Demand dated 24th September 2025 and the review decision issued under reference P051387163 are tainted with illegality, irrationality, and procedural impropriety. In law, such decisions are null and void *ab initio* and are incapable of sustaining enforcement action. **Appellant’s prayers** 1. The Appellant prayed for the following orders: 2. That this Honourable Tribunal be pleased to allow the Appeal and set aside the Respondent’s review decision issued under reference P051387163, together with the Notice of Demand dated 24th September 2025 issued under reference KRA/CBC/RMD/PCA/638/09/2025. 3. That this Honourable Tribunal be pleased to declare that the Respondent unlawfully misclassified the Applicant’s imported Aptima Compo 100 and 250 test diagnostic kits, waste bag kits, multi tube unit kits, and specimen collection kits. 4. That this Honourable Tribunal be pleased to declare that the correct tariff classification of the Applicant’s imported goods is as declared by the Applicant at the time of importation, namely HS Code 3001.90.00 and HS Code 3005.90.90, in accordance with the Harmonized System, the Explanatory Notes, and the EAC Common External Tariff 2022. 5. That this Honourable Tribunal be pleased to find and hold that the Respondent unlawfully adjusted the transaction value of the Applicant’s imports in the absence of proof that the declared value was false, fictitious, or influenced. 6. That this Honourable Tribunal be pleased to order the Respondent to withdraw, vacate, and cancel all additional tax assessments, demands, penalties, and interest arising from the impugned post clearance audit. 7. That this Honourable Tribunal be pleased to award the costs of the Appeal to the Applicant. 8. That this Honourable Tribunal be pleased to grant such other or further relief as it may deem just and expedient in the circumstances. **THE RESPONDENT’S CASE** 1. In opposition to the Appeal, the Respondent relied on its statement of facts dated 28th January 2026 and filed on 6th February 2026 together with the documents attached thereto and written submissions dated 26th May 2026 and filed on 15th June 2026. 2. The Respondent averred that pursuant to the provisions of Sections 234, 235 and 236 of the EACCMA, 2004, it conducted a customs post clearance compliance review on the taxpayer's importations. 3. The Respondent stated that the review established that some of the medical diagnostic kits imported by the taxpayer *vide* entry numbers 23NBOIM406146900 and 24NBOIM412848471 had been declared with the wrong 2022 EAC/CET HS code. 4. The Respondent stated that the impugned kits included: 5. Aptima Combo 2 essay -Declared under 3001.90.00 instead of 3822.19.00; 6. Multi-tube unit kits for Chlamydia trachomatis/Neisseria gonorrhoea nucleic acid detection. Declared under 3005.90.90 instead of the correct 3822.19.00; 7. Plastic specimen collection kits declared under 3005.90.90 instead of 3926.90.90; 8. Plastic waste bag kits declared under 3005.90.90 instead of 3926.90.90. 9. The Respondent further stated that the review also established that goods imported vide customs entry number 23NBOIM406146900 had a declared value of USD 24,321.93, but the attendant commercial invoice had a total value of USD 31,213.23. The variance of USD 6,891.3 was thus subjected to tax. 10. In response to the first ground of appeal that the Respondent lawfully reclassified the Applicant's imported diagnostic kits and laboratory consumables, the Respondent averred that merchandise imported into the East African Community (EAC) is classified under the East African Community Common External Tariff Schedule (EAC/CET). Tariff classification in the EAC/CET schedule is governed by the principles outlined in the General Interpretation Rules for the classification of goods (GIRS). 11. GIR 1 requires that classification be determined first according to the terms of the headings of the tariff schedule and any relative section or chapter notes, and unless otherwise required according to the remaining GIRs taken in their appropriate order. 12. GIR 6 provides that for legal purposes, the classification of goods in the subheadings of 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 this Rule, the relative Section and Chapter Notes also apply, unless the context otherwise requires. 13. The Respondent stated that, the World Customs Organization (WCO) harmonized commodity description and coding system Explanatory Notes (ENs) constitute the official interpretation of the harmonized system at the international level. While not legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the EAC-CET and are generally indicative of the proper interpretation. 14. Heading 30.01 caters for the classification of glands and other organs for organo- therapeutic uses, dried, whether or not powdered; extracts of glands or other organs or of their secretions for organo-therapeutic uses; heparin and its salts; other human or animal substances prepared for therapeutic or prophylactic uses, not elsewhere specified or included. Legal Note 1(j) to Chapter 30 states that the Chapter does not cover diagnostic reagents of heading 38.22. 15. Heading 30.02 covers human blood; animal blood prepared for therapeutic, prophylactic, or diagnostic uses; antisera and other blood fractions and immunological products, whether or not modified or obtained by means of biotechnological processes; vaccines, toxins, cultures of micro-organisms (excluding yeasts) and similar products; cell cultures, whether or not modified. 16. In response to the second ground that the Respondent lawfully invoked tariff headings without first exhausting specific and descriptive headings applicable to diagnostic reagents and medical laboratory consumables, the Respondent averred that it analysed the classification of the Appellant’s imported diagnostic reagents and medical laboratory consumables, evaluating whether they were accurately classified under the applicable tariff headings. 17. The Respondent averred that the Appellant asserted that diagnostic reagents designed for disease diagnosis are classified under Heading 30.02, provided they are based on antisera or similar substances. 18. However, the Respondent contended that the Aptima Combo 2 test is based on nucleic acid amplification tests (NAAT) and not on antisera. While antisera-based tests detect antibodies or antigens, the Aptima Combo 2 test identifies the genetic material (ribosomal RNA) of infectious organisms, which excludes it from Heading 30.02. 19. In contrast, heading 38.22 pertains to diagnostic or laboratory reagents, whether or not on a backing, prepared diagnostic or laboratory reagents, excluding those of Heading 30.06, including certified reference materials. 20. In response to the third ground of appeal that the Respondent failed to apply the Harmonised System Explanatory Notes, which are authoritative and legally binding interpretive aids, the Respondent stated that the Explanatory Notes to Heading 38.22 clarify that diagnostic reagents are utilized in assessing physical, biophysical, or biochemical processes in both humans and animals, relying on measurable or observable alterations in the biological or chemical components of the reagent. 21. The Respondent submitted that the Aptima Combo 2 diagnostic kits are categorized under Heading 38.22 and specifically Subheading 3822.19.00 of the EAC/CET 2022, adhering to the application of GIRs 1 and 6. 22. Conversely, it submitted that heading 30.05, which pertains to wadding, gauze, bandages, and similar items intended for medical, surgical, dental, or veterinary use, does not facilitate the classification of plastic specimen collection kits and waste bags. 23. Heading 39.26, which addresses other plastic articles not classified elsewhere, appropriately includes the Applicant’s plastic specimen collection kits and waste bags, specifically under Subheading 3926.90.90 of the EAC/CET 2022, in alignment with GIRs 1 and 6. 24. In response to the fourth ground that the Respondent unlawfully adjusted the declared transaction value following the post-clearance audit, the Respondent argued that following the post-clearance audit, the Respondent evaluated the declared value of goods imported under customs entry number 23NBOIM406146900. The declared value stood at USD 24,321.93, whereas the relevant commercial invoices showed a total value of USD 31,213.23, resulting in a difference of USD 6,891.30. As a result, the Commissioner adjusted the declared value to account for this difference for taxation purposes. 25. According to Section 122(1) of the East African Community Customs Management Act, 2004 (EACCMA), when imported goods are subject to ad valorem import duty, the value of such goods shall be determined in line with the Fourth Schedule and import duty shall be assessed on that value. 26. The Fourth Schedule details the application of Methods 1 to 6 for valuing imported goods and indicates that the customs value shall be the transaction value, the price actually paid or payable for the goods when sold for export to a Partner State, subject to adjustments under Paragraph 9. 27. The Respondent’s adjustment of the declared transaction value was carried out in accordance with these legal provisions, accurately reflecting the correct value of the imported goods as indicated in the submitted invoices. 28. In response to the fifth ground of Appeal that the Notice of Demand dated 24th September 2025 and the review decision issued under reference P051387163 are lawful and enforceable, the respondent stated that on 24th September 2025, the Respondent issued a Notice of Demand and subsequently rendered a review decision under reference P051387163, following a post-clearance compliance review conducted in accordance with Sections 234, 235, and 236 of the East African Community Customs Management Act (EACCMA), 2004, which pertained to the Applicant's importations from 2020 to 2023. 29. According to the Respondent the review determined that the Appellant imported diagnostic kits, including the Kit Aptima Compo 100-Test and 250-Test, waste bag kits, pins, and a multi- tube unit kit assembly (entry 23NBOIM406146900), utilized for the detection of Chlamydia trachomatis and Neisseria gonorrhoea as well as for laboratory analysis. 30. The Respondent stated that the Appellant had classified the diagnostic kits and multi-tube unit kit assembly under tariff headings 3001.90.00 and 3005.90.90, respectively, while the Respondent identified the appropriate classifications as 3822.19.00 and 9027.90.00. 31. It further stated that specimen collection kits imported under entry 24NBOIM4128484710, consisting of polypropylene containers and HDPE caps, were initially classified under tariff 3005.90.90, but the review concluded that they should be classified under 3926.90.90 as “other articles of plastics” in accordance with the relevant headings. 32. The Respondent averred that the review also highlighted discrepancies between the declared values and invoice values, with a total declared value of USD 24,321.93 compared to invoice values amounting to USD 31,213.23, resulting in a variance of USD 6,891.30. 33. As a result, the Respondent argued that the Appellant was obligated to pay the resulting duty liability, and the Respondent prepared e-slips for payment, indicating that penalties of five percent (5%) of the demanded amount, along with an additional two percent (2%) per month for each month in default, would be applicable under Section 135(2) of the EACCMA, 2004. **Respondents Submissions** 1. The Respondent filed its written submissions dated 26th May 2026 and filed on 15th June 2026. 2. In its submissions, the Respondent rehashed its statement of facts and submitted that it is trite law that in tax appeals, the burden of proof lies with the Appellant. That the Appellant failed to meet this burden. 3. The Respondent submitted that this position has been upheld in **Tumaini Distributors Company Limited v Commissioner of Domestic Taxes (Tax Appeal 141 of 2017) [2019] KETAT 10 (KLR),** where the Tribunal, drawing on **PZ Cussons East Africa Limited v Kenya Revenue Authority [2013] eKLR**, emphasized that the responsibility lies with the taxpayer to demonstrate that an assessment is either excessive or incorrect. 4. The Respondent further submitted that the Appellant has not presented any expert evidence, WCO ruling, tariff opinion, or other relevant materials that would demonstrate the Respondent's classification under Heading 3822.19.00 is incorrect. As a result, the Appellant has not satisfied the burden of proof necessary to show that the Commissioner's decision was erroneous. 5. The Respondent contended that the Appellant has not provided an explanation for the discrepancy between the declared customs value of USD 24,321.93 and the invoice value of USD 31,213.23. 6. The Respondent submitted that in the lack of evidence that disputes the Respondent's findings, the valuation adjustment is justified. **Respondent’s Prayers** 1. The Respondent respectfully prayed that this honourable Tribunal be pleased to: 2. Dismiss the Appeal with costs; 3. Affirm the Respondent's post-clearance audit findings, including tariff reclassification and valuation adjustments; and 4. Issue any further orders that the Tribunal may consider just and appropriate under the circumstances. **ISSUES FOR DETERMINATION** 1. The Tribunal identified the following issue for determination: 2. **Whether the Respondent was justified in reclassifying the Appellant’s diagnostic kits and laboratory consumables.** 3. **Whether the Respondent lawfully adjusted the declared transaction value** **ANALYSIS AND FINDINGS** 1. **Whether the Respondent was justified in reclassifying the Appellant’s diagnostic kits and laboratory consumables.** 2. The Appellant contended that the Respondent unlawfully reclassified its specialised medical diagnostic kits and laboratory consumables after clearance. It maintained that the Aptima Compo 100 test and 250 test diagnostic kits, multi-tube unit kits, specimen collection kits and waste bag kits were designed exclusively for in-vitro diagnosis and medical laboratory use. It argued that the goods ought to retain their declared classifications under HS Codes 3001.90.00 and 3005.90.90, and that the Respondent improperly resorted to residual headings without applying the relevant Chapter Notes, the General Rules for the Interpretation of the Harmonized System, and the WCO Explanatory Notes. 3. Conversely, the Respondent contended that the Appellant’s declared tariff headings were incorrect under the EAC/CET 2022. It argued that Chapter 30 expressly excludes diagnostic reagents of Heading 38.22 and that the Aptima Combo 2 assay and multi-tube unit kits, being nucleic-acid-based diagnostic reagents or laboratory components, were not classifiable under Heading 30.01 or 30.05. The Respondent further maintained that the specimen collection kits and waste bag kits were plastic articles properly classifiable under Heading 39.26. It asserted that its reclassification was undertaken in accordance with GIR 1 and GIR 6, the applicable Chapter Notes, and the objective characteristics and intended use of the imported goods. 4. The Tribunal has considered the parties’ respective positions. The dispute concerns the tariff classification of the Appellant’s imported goods. The General Interpretation Rules (GIR) as cited in the EAC-CET provide for principles that govern classification of goods in the nomenclature. GRI 1 provides *as inter alia*: *‘‘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. GIR 6 is also instructive. It 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. **Classification of Aptima compo 100 test and 250 test diagnostic kits and multitube unit kits.** 2. The Appellant declared the Aptima Compo 100 test and 250 test diagnostic kits and the multi-tube unit kits under HS Code 3001.90.00 3. Heading 30.01 that the Appellant preferred covers the following: *“Glands and other organs for organo-therapeutic uses, dried, whether or not powdered; extracts of glands or other organs or of their secretions for organo-therapeutic uses; heparin and its salts; other human or animal substances prepared for therapeutic or prophylactic uses, not elsewhere specified or included.”* 1. The Tribunal observes that Heading 30.01 covers specified human or animal substances prepared for therapeutic or prophylactic uses. On its plain wording, it does not cover nucleic-acid diagnostic reagents. The Appellant's statement of facts confirms that it imported medical diagnostic kits and laboratory consumables for nucleic acid detection. This is not a substance prepared for therapeutic or prophylactic use but a diagnostic reagent designed for laboratory testing. 2. Critically, Legal Note 1(j) to Chapter 30 expressly states that Chapter 30 does not cover diagnostic reagents of Heading 38.22. This exclusion is dispositive of the matter regarding classification under Chapter 30. The Tribunal finds that the Appellant's reliance on Heading 30.01 is misplaced, as the goods in question are expressly excluded from Chapter 30 by the relevant Chapter Note. 3. The Respondent classified the diagnostic test kits under Heading 38.22, which covers: *“Diagnostic or laboratory reagents on a backing, prepared diagnostic or laboratory reagents whether or not on a backing, whether or not put up in the form of kits, other than those of heading 30.06; certified reference materials.”* 1. The Respondent explained that the Aptima Combo 2 test is based on nucleic acid amplification tests (NAAT) and identifies the genetic material (ribosomal RNA) of infectious organisms. The Appellant’s own case confirms that the imported kits were used for nucleic-acid detection. The goods therefore answer the description of prepared diagnostic or laboratory reagents under Heading 38.22. 2. The Tribunal further observes that the Appellant did not provide technical evidence, a tariff ruling, product specifications, expert opinion or other material to demonstrate that the goods were substances of the kind contemplated under Heading 30.01, rather than diagnostic reagents of Heading 38.22. Applying GIRs 1 and 6, the Tribunal finds that the Respondent’s classification of the Aptima Combo diagnostic kits under HS Code 3822.19.00 was proper. 3. Applying GIR 1 and GIR 6, the Tribunal finds no basis to disturb the Respondent's classification of the Aptima Combo 2 diagnostic test kits and multi-tube unit kits under HS Code 3822.19.00. The classification is supported by the terms of Heading 38.22, the relevant Explanatory Notes, and the objective characteristics of the goods as established by the evidence on record. 4. **Classification of specimen collection kits and waste bag kits** 5. The Appellant classified specimen collection kits and waste bag kits under Heading 30.05. This heading coves: *“Wadding, gauze, bandages and similar articles (for example, dressings, adhesive plasters, poultices), impregnated or coated with pharmaceutical substances or put up in forms or packings for retail sale for medical, surgical, dental or veterinary purposes.”* 1. The evidence before the Tribunal describes the specimen collection kits and waste bag kits as plastic articles. The Appellant did not provide product specifications, laboratory manuals, a binding tariff ruling, expert evidence, or WCO material demonstrating that these goods are wadding, gauze, bandages or analogous articles within Heading 30.05. 2. The Respondent classified these goods under Heading 39.26, which covers other plastic articles not elsewhere classified. Specifically, Subheading 3926.90.90 covers other articles of plastics not more specifically provided for elsewhere in chapter 39. 3. The Tribunal finds this classification appropriate. The goods are essentially plastic articles used for specimen collection and waste disposal in a laboratory setting. They do not possess the characteristics of goods classified under Heading 30.05, and their medical or diagnostic use does not, by itself, bring them within Heading 30.05. In the absence of a more specific applicable heading, Heading 39.26 properly applies. 4. The Tribunal notes the Appellant's argument that the goods are designed exclusively for medical diagnostic use. However, tariff classification is determined by the objective characteristics, composition, and intended use of the goods at the time of importation. Even if designed for medical use, the goods remain plastic articles appropriately classified under Heading 39.26 where the Harmonized System does not provide a more specific heading for such articles. 5. The Tribunal is guided by the principle established in **Republic v Commissioner of Customs Services ex parte Unilever Kenya Limited ([2012] eKLR)** that tariff classification must be based on the nature, composition, and use of goods as imported, and that customs authorities are not permitted to resort to speculative reasoning or residual tariff headings where the Harmonized System provides a specific and appropriate classification. 6. In this case, the Respondent has demonstrated through reference to the relevant Headings, Legal Notes, and Explanatory Notes that the classifications adopted are appropriate and specific to the goods in question. 7. Accordingly, the Tribunal finds that the Respondent correctly classified the plastic specimen collection kits and waste bag kits under HS Code 3926.90.90 in accordance with GIRs 1 and 6. **b) Whether the Respondent lawfully adjusted the declared transaction value** 1. Customs valuation is governed by section 122 of EACCMA and the Fourth Schedule thereto. Under paragraph 2 of the Fourth Schedule, the primary basis of valuation is the transaction value, namely, the price actually paid or payable for the goods when sold for export to a Partner State, subject to the prescribed adjustments under Paragraph 9 of the Fourth Schedule. Departure from the transaction value is permitted only where the customs authority establishes, on the basis of objective and verifiable evidence, that the declared price is false, fictitious, or influenced. 2. The Court of Appeal in **Commissioner of Customs Services v SDV Transami (Kenya) Limited [2012] eKLR** held that the burden of proof rests squarely upon the Commissioner to demonstrate that the declared transaction value is unacceptable and that such burden must be discharged through cogent, objective, and verifiable evidence. 3. In the present case, according to the Respondent, the post-clearance audit revealed a discrepancy between the declared value of USD 24,321.93 and the commercial invoice value of USD 31,213.23 for entry 23NBOIM406146900, resulting in a variance of USD 6,891.30. 4. The Appellant contended that the Respondent unlawfully adjusted the declared transaction value. However, the Tribunal notes that the adjustment was based on the commercial invoice value, which represents the actual price paid or payable for the goods. The Respondent did not reject the transaction value in favor of an alternative valuation method; rather, the Respondent adjusted the value to reflect the true transaction value as evidenced by the commercial invoice. 5. Unlike a case where the Commissioner rejects an otherwise supported transaction value and substitutes it with an internal/external benchmark, this was a reconciliation of the declared value against the Appellant’s own commercial invoice. The invoice value is material evidence of the price actually paid or payable, which is the transaction value contemplated under paragraph 2 of the Fourth Schedule to EACCMA. 6. The Appellant did not offer a reconciliation, credit note, split shipment documentation, amended invoice, proof of a discount, or any other explanation for the variance. It merely asserted that the declared value had earlier been accepted at clearance. The burden of proof in tax appeals lies with the taxpayer to demonstrate that an assessment is excessive or incorrect. The Appellant has not discharged this burden with respect to the valuation adjustment. 7. Earlier acceptance of a declaration does not preclude a lawful post-clearance verification under sections 234 to 236 of EACCMA. In the absence of evidence explaining the discrepancy, the Tribunal finds that the Appellant has not shown that the adjustment of USD 6,891.30 was erroneous. 8. Consequently, the Tribunal finds that the Respondent's adjustment of the declared transaction value was lawful and in accordance with Section 122 of the EACCMA and the Fourth Schedule. The adjustment was based on objective documentary evidence, namely the commercial invoice, and did not amount to a rejection of the transaction value in favour of an alternative method. 9. Consequently, the tribunal finds and holds that the Respondentwas justified in reclassifying the Appellants diagnostic kits and laboratory consumables and lawfully adjusted the declared transaction value. **FINAL DETERMINATION** 1. The upshot to the foregoing is that the Tribunal finds and holds that the Appeal lacks merit and makes the following orders: - 1. The appeal be and is hereby dismissed; 2. The review decision dated 20th November 2025 be and is hereby upheld; 3. Each party to bear its own cost. 2. It is so ordered. **DATED AND DELIVERED AT NAIROBI THIS 14TH DAY OF AUGUST 2026.** **……………………………..….** **ROBERT M. MUTUMA** **CHAIRMAN** **……………………………… ……..….……..……………..** **JIMMY M. MALLA DR. TIMOTHY B. VIKIRU MEMBER MEMBER** **……………………………..….** **GLORIA A. OGAGA** **MEMBER**