ACO Drainage Limited v Commissioner Customs & Border Control [2025] KETAT 47 (KLR)

ACO Drainage Limited v Commissioner Customs & Border Control (Tax Appeal E866 of 2024) [2025] KETAT 47 (KLR) (31 January 2025) (Judgment)

Neutral citation: [2025] KETAT 47 (KLR)

Republic of Kenya

In the Tax Appeal Tribunal

Tax Appeal E866 of 2024

RO Oluoch, Chair, AK Kiprotich & G Ogaga, Members

January 31, 2025

Between

ACO Drainage Limited

Appellant

and

Commissioner Customs & Border Control

Respondent

Judgment

Background 1. The Appellant is a private limited liability company duly incorporated and registered in Kenya and part of the ACO Group whose principal business activity is in manufacture and distribution of customized drainage applications.

2. The Respondent is a principal officer appointed under Section 13 of the Kenya Revenue Authority Act, and the Authority is charged with the responsibility of among others, assessment, collection, receipting and accounting for all tax revenues as an agency of the Government of Kenya, and the administration and enforcement of the statutes set out under the Schedule to the Act.

3. The Appellant imported a waste water treatment plant and declared the same under HS Code 8421. 21. 00 on 23rd August 2023. During verification, the Respondent classified the item under HS Code 8421. 29. 00.

4. The Appellant contested the Respondent's tariff classification in a letter dated 4th September 2023. Through a Tariff Ruling dated 25th September 2023, the Respondent reaffirmed its position of HS Code 8421. 29. 00.

5. The Appellant applied to make payment under protest through a letter dated 4th September, 2023.

6. The Appellant objected the decision of 25th September 2023 via a letter dated 27th September 2023.

7. The parties held a consultative meeting on 3rd October 2023 in a bid to resolve the issue and through a letter dated the same day, the Respondent reaffirmed its decision of 25th September 2023. Thereafter the Appellant lodged an appeal to the Respondent in a letter dated 25th October 2023.

8. The Respondent issued demand notice dated 23rd February 2024 which it summoned the Appellant for offence compounding within 14 days. The Appellant replied vide a letter dated 1st March 2024.

9. The Appellant made an application to file an appeal out of time with the Tribunal on 3rd May 2024. The Tribunal delivered its Ruling on 12th July 2024 allowing the Appellant extension of time to appeal out of time.

10. Aggrieved by the Respondent’s decision, the Appellant filed a Notice of Appeal dated 5th April, 2024.

The Appeal 11. Based on the Memorandum of Appeal dated 25th July, 2025 and filed on 30th July, 2024, the Appellant premised its Appeal on the following grounds.a.That the Respondent failed to take into account all information and explanations provided before issuing its objection decision.b.That the Appellant had legitimate expectation in relying on the Respondent’s earlier tariff rulings dated 22nd December 2020 and 16th December 2021. c.That the Respondent wrongfully interpreted and applied the description under Tariff Code 8421. 29. 00 in classifying and assessing the Appellant’s imported product.d.That the Respondent’s demand of additional taxes and fines is excessive and punitive, beyond the ability of the Appellant to pay and contrary to generally accepted cannons of taxation.

Appellant’s Case 12. The Appellant’s case is premised on the hereunder filed documents and proceedings before the Tribunal:i.The Appellant’s Statement of Facts dated 25th July 2024 and filed on 30th July, 2024 together with the documents attached thereto.ii.The Appellant’s witness statements of Stefano Pisanu and Miguel Rovira both dated 2nd October, 2024 that were admitted in evidence on oath on 12th November 2024.

13. The Appellant stated that it imported a waste water treatment plant called Rox-Ecological Total Oxidation Sewage Treatment Plant under B/L MEDUXXXX7073 and Entry Numbers 23EMXXXX08598 and 23EMXXXX805350 where it classified the item under tariff classification 8421. 21. 00.

14. That the Respondent challenged the declared tariff classification of 8421. 21. 00 and assessed the item under HS Code 8421. 29. 00.

15. That the Appellant expressed its dissatisfaction with the Respondent's tariff classification in a letter dated 4th September 2023 referenced as MLI-23-00468. That the letter also communicated the Appellant's wish to pay any extra taxes arising under protest but with a request for a technical tariff ruling.

16. The Appellant submitted that the Respondent undertook a physical verification of the imported item under Entry Numbers 23EMXXXX08598 and 23EMXXXX805350 and challenged the tariff classification of 8421. 21. 00 declared by the Appellant in a tariff ruling dated 25th September 2023.

17. That it responded to the Respondent's ruling in a letter dated 27th September 2023 in line with Section 229 of the East African Community Customs Management Act (EACCMA), where the Appellant shared the product manual for the item labeled as EN12566-3 and requested for a meeting to explain and demonstrate the functionality of the imported plant.

18. That the Respondent granted the Appellant's request for a consultative meeting which was held on 3rd October 2023. It averred that the Respondent confirmed the occurrence of the meeting in its reviewed tariff ruling dated 3rd October 2023 which upheld the tariff classification 8421. 29. 00.

19. The Appellant submitted that it erroneously lodged an appeal to the Respondent for the reviewed tariff ruling in a letter dated 25th October 2023.

20. That thereafter, the Respondent issued a demand notice dated 23rd February 2024 which summoned the Appellant for offence compounding within 14 days in relation to fines due from extra taxes paid on the Entry Number 23EMXXXX08598. That the Appellant responded to the demand notice in a letter dated 1st March 2024 with a request for extension of the notice for 45 days to allow consultations on the same.

21. That the Appellant proceeded to properly file an application to be allowed to lodge an appeal out of time in relation to the decision as provided for under Section 12 of the Tax Appeals Tribunal Act, 2013 on 3rd May 2024. That a ruling in favour of the Appellant was delivered by the Tribunal on 12th July 2024 allowing the appeal to be filed within 15 days.

22. The Appellant further expounded on its grounds of Appeal as hereunder;a.Failure to consider all relevant information and explanations pertaining to the imported product

23. The Appellant stated that the Respondent's decision determined the assessed tariff classification of 8421. 29. 00 based on an item specification picked from a product manual (EN12566-3) that the Appellant presented in its application for Commissioner's review. That the Appellant observed that the product manual is a two-page document with at least 10 sections. That the Respondent only reproduced and relied on the information under one section headed 'Total oxidation-ROX'.

24. The Appellant averred that it clearly concurred with the Respondent in classifying the item under Chapter Heading 8421. That the point of divergence is in the classification which ties to the usage of the item imported by the Appellant. That the Appellant contends that the imported item is strictly meant for filtering or purifying water as already suggested by its name 'Waste water treatment plant'. That the subheading under HS Code 8421. 21. 00 was specifically for 'filtering or purifying machinery and apparatus for water'. That the subheading under HS Code 8421. 29. 00 distantly and generally covers 'Other filtering or purifying machinery for other liquids apart from water and beverages'.

25. The Appellant averred that the product manual relied on by the Respondent in its tariff ruling severally confirms that the imported item is specifically meant for filtering and purifying water in the following cited sections:i.Introduction; Ideal purification system for treating wastewater that can be assimilated to domestic wastewater from small and medium-sized communities.ii.Technical data disclaimer; ACO Remosa will not be responsible for the equipment chosen when the characteristics of the water to be treated and the particularities of the installation are unknown.iii.Total oxidation; The installation of a roughing system is recommended to separate the coarse solids carried by the water by means of a manual (in some cases) or automatic grate before the water enters the treatment plant.iv.Calculation basis; The equipment is designed to treat wastewater with the following composition: BOD5: 400ppm COD: 450ppm, SS: 450ppm.

26. To support its argument, the Appellant cited the contents of the product manual with the manufacturer's letter dated 3rd April 2024 that it averred most importantly offers the following clarification:-“ROX system is a sewage wastewater treatment plant, the word “sewage" is mainly used referring to water containing human urine or solid wastes. With the ROX we treat this water to reduce its human waste content, so in a way we are purifying water. That's why the code “84212100” is more accurate than the code “84212900” as the first refers to "for filtering or purifying water" and the last referees to liquids that are not water, beverages or oil or petrol for combustion engines”

27. It was the Appellant’s observation that if all these relevant information and explanations were considered by the Respondent then it would have arrived at the correct HS Code 8421. 21. 00.

b. Appellant's legitimate expectation 28. The Appellant stated that the Respondent had previously issued tariff rulings prior to the reviewed one dated 3rd October 2023 to the Appellant on the similar item. That the first tariff ruling was dated on 22nd December 2020 and concurred with the Appellant's preferred HS Code 8421. 21. 00. That the second tariff ruling on a similar item was dated 16th December 2021. It averred that even though the HS Code in the ruling (8479. 89. 00) differed with the Appellant's preferred HS Code, it was amiable since it related to a part of the plant and also had the same tax rate as HS code 8421. 21. 00.

29. It submitted that the tariff ruling dated 3rd October 2023 was a complete paradigm shift from the earlier tariff rulings. That if the Respondent's tariff ruling of 3rd October 2023 is allowed it will greatly contravene the tax canon of certainty.

30. The Appellant stated that Adam Smith, the father of modem political economy, laid down the principles or canons of taxation in his famous book "Wealth of Nations". That these principles were still considered to be the starting point of sound public finance. That the tax canon of certainty implies that any tax legislation should be clear and predictable. That such certainty creates legitimate expectation which enhances investor confidence and enables taxpayers to prepare credible financial plans and budgets.

31. The Appellant stated that the Tribunal had also asserted the position of the principle of legitimate expectation in interpreting tax laws in the TAT Appeal No. 165 of 2017 (H.P.Gauff Ingenieure GmbH Co KG).

32. The Appellant added that the Tribunal had previously expressed concern when the Respondent does not discredit facts presented by the Appellant when defending a tariff ruling. That in the instant case the tariff ruling had neither pointed out reasons for divergence from previous tariff rulings nor disputed the facts in the product manual or manufacturer's letter. To support its case the Appellant relied on the case of Appeal No.766 Of 2022-Melvin Mash Int.Ltd-Vs-Commissioner of Customs & Border Control.

33. The Appellant contended that it legitimately expected the Respondent to prefer HS Code 8421. 21. 00 over HS Code 8421. 29. 00 since no grounds had been presented to discredit the earlier rulings or even the supporting evidence adduced by the Appellant

b. Misinterpretation of difference between Tariff code 8421. 21. 00 and 8421. 29. 00 34. The Appellant submitted that the Respondent's demand notice clearly misinterpreted the description of Tariff Code 8421. 29. 00 in comparison HS Code 8421. 21. 00 contrary to the Guidelines in the General Interpretation Rules for the Classification of Goods under Annex 1 to the Protocol on the Establishment of The East African Community Customs Union.

35. That furthermore, reliance on explanation notes of the Harmonized System Code which is controlled by the World Custom Organization is allowed since Kenya is a member.

36. That according to the Harmonized Commodity Description and Coding System (EACCET 2022) tariff code 8421. 29. 00 is described as follows:“Filtering or purifying machinery and apparatus for liquids”

37. The Appellant stated that it objects to the Respondent's tariff ruling and insisted that the assessed products fall under tariff code 8421. 21. 00 for the following reasons:-i.The product consists of a pre-treatment part and biological aeration. The product is used to treat water to reduce its human waste content as per the manufacturer’s product description.ii.The product is not intended for 'purifying liquids that are not water, beverages, oil or petrol for combustion engines' as wrongly stated in the tariff ruling. It is rather intended for purifying water to reduce the human waste content.iii.The literal and natural meaning of the words used in the heading clearly cover water purification i.e. for filtering or purifying water. The literal and natural method of interpretation must be the starting point because the words are not ambiguous.iv.The Appellant's products should be classified under the tariff description appropriate to the goods to which they are most akin-the items under tariff code 8421. 21. 00 are closely related to the Appellant's imported product and should be grouped together.v.Placing the Appellant products under tariff 8421. 29. 00 is too generic and this is against well-known rules of construction of statutes.vi.The tariff description under code 8421. 21. 00 is clear and unambiguous on the fact that the imported product relates to water purification through the reduction of human waste content. The literal and grammatical meaning of a statute or Act using linguistic canons of constructions is always preferred where the meaning of an enactment is clear and unambiguous. The Act is to be read as a whole without attributing to any particular provisions or words a tortured or strained construction or interpretation. The starting point is the statute itself which is read by construing the words used or gathering the meaning from the words used before venturing onto other aids of construction.

38. To further support its case, the Appellant further relied on the following cases;a.The case of Republic v Kenya Revenue Authority Exparte Shake Distributors Ltd [2012] eKLRb.The case of Keroche Industries Limited V Kenya Revenue Authority & 5 Others [2007] Eklr.

Appellants Prayers 39. The Appellant prayed that the Tribunal considers the merits of the case and finds;a.The Appellant's application for Commissioner's review be upheld.b.The Respondent's demand notice be vacated.

Respondent’s Case 40. In its opposition to the Appeal, the Respondent relied on the following documents;a.Statement of Facts dated and filed on 4th September 2024 together with the documents attached thereto.b.The Respondent’s witness statement of Sosten Kiprop dated 26th September, 2024 that was admitted in evidence under oath on 12th November 2024. c.The Respondent’s written submissions dated and filed on 25th November 2024.

41. The Respondent stated that the Appellant lodged Entry Number 23EMXXXX08598 on 23rd August, 2023 and declared the plant as ROX waste water treatment plant under the 20022EAC/CET Code 8421. 21. 00 that provides for centrifuges, including centrifugal dryers; filtering or purifying machinery and apparatus for liquids or gases.

42. That the Respondent stopped further processing of the import to confirm the declared HS Code. That upon verification, a different HS code 8421. 29. 00 that provides for other centrifuges, including centrifugal dryers; filtering or purifying machinery and apparatus for liquids or gases was advised.

43. It averred that the Appellant disputed the HS Code 8421. 29. 00 and the case was escalated to Tariff headquarters for determination.

44. That based on the verification report and technical information availed, the Appellant's product described as Waste Water Treatment Plant branded as ROX Total Oxidation Sewage Treatment Plant was classified in 2022 EAC/CET HS Code 8421. 29. 00.

45. That the Respondent’s classification decision was communicated to the Appellant vide a letter dated 25th September 2023.

46. That the Appellant objected the decision via an appeal dated 27th September 2023. That the Appellant was requesting for the review of the Respondent's decision dated 25th September 2023.

47. The Respondent contended that upon review of additional information and submissions provided by the Appellant and the consultative engagement, the item was described as a waste water treatment plant branded as ROX Total Oxidation Sewage Treatment Plant which was confirmed to be an effluent treatment plant intended to treat waste water consisting of three main processes namely;i.Roughing to separate coarse solids carried by water by means of a manual or by an automatic grate before the water enters the treatment plantii.Biological oxidation that decomposes organic matter with the supply of air that allows oxygenation of the aerobic biomass and keeps it in suspensioniii.Decanting where water from the reactor is calmed by a stiller to allow separation of the sludge from the clear effluent which is moved to the surface for evacuation, part of the sludge is recirculated into the reactor to maintain the biomass concertation in the reactor.

48. It contended that from the information provided, it was clear that the plant as presented was an effluent/sewage treatment plant intend to reduce the toxicity of the effluents to aquatic life and downstream uses especially when discharged in the streams.

49. That subsequently, the Respondent issued a response on 3rd October 2023 upholding the decision issued vide letter dated 25th September 2023.

50. The Respondent asserted that in determining the proper classification of the item imported, the Respondent heavily relied on all material information presented by the Appellant which included; the description in the self-declaration entry form, verification account, the technical manual provided and the oral submissions during the consultative meeting held on 3rd October, 2023.

51. The Respondent averred that the Appellant's claim was not only inaccurate but also misleading.

52. The Respondent stated that as a principle, classification is done on goods as presented at the time of importation. That being cognizant of the fact that products will keep changing due to technological advancement among other factors, rulings are issued to specific goods on specific entries and therefore cannot be applied universally. That this informs why the Respondent has to conduct a physical verification to ascertain exact particulars of the imported product(s) and the applicable Tariff code.

53. The Respondent further stated that every decision and Ruling issued provides a disclaimer that the current ruling as issued supersedes any other contradictory ruling previously issued and therefore the Appellant cannot seek to rely on previously issued Rulings that were based on specific goods and entries not relating to the imported item and entry in question.

54. The Respondent submitted that the classification of goods is guided by the General Interpretation Rules (GIR) of tariff classification in the 2022 EAC/CET to which the Respondent relied to classify the product in Hs Code 8421. 29. 00 as presented. That the application of the rules and the classification was based on facts as determined.

55. The Respondent averred that Chapter 84 of the Harmonized Commodity Description and Coding System (HS) covers the classification of nuclear reactors, boilers, machinery and mechanical appliances.

56. That further, Heading 84. 21 of this Chapter covers the classification of centrifuges, including centrifugal dryers; filtering or purifying machinery and apparatus for liquids or gases.

57. That this Heading covers the classification of filtering or purifying machinery and apparatus for liquids which is split into the following categories at subheading level:a.Subheading 8421. 21. 00 covers the classification of filtering or purifying machinery and apparatus for filtering or purifying water.b.Subheading 8421. 22. 00 covers the classification of filtering or purifying machinery and apparatus for filtering or purifying beverages other than water.c.Subheading 8421. 23. 00 covers the classification of filtering or purifying machinery and apparatus for oil or petrol-filters for internal combustion engines.d.Subheading 8421. 29. 00 covers the classification of other filtering or purifying machinery and apparatus

58. The Respondent acknowledged that it together with the Appellant agreed on the main Heading, but they differ at the subheading level.

59. The Respondent stated that the item as presented was not for purifying water but to treat effluents/sewage water.

60. The Respondent averred that the item was not used to purify water but to reduce its toxicity levels and make the final discharge less harmful to life aquatic or otherwise.

61. That as per the Appellant's manual, it clearly and expressly provides that ".....ROX system is a sewage wastewater treatment plant......to reduce human waste content....”

62. The Respondent averred that the reduction of human waste content in sewerage does not meet the terms of the Code relied upon by the Appellant which provides for filtering or purifying machinery and apparatus for filtering or purifying water.

63. The Respondent asserted that the water referenced under Heading 8421. 21. 00 pertains to drinking water, not sewage water, and therefore does not meet the terms under the HS Code proposed by the Appellant, but rather the one under which the Respondent classified the item.

64. The Respondent maintained that the Appellant's product, Waste Water Treatment Plant (ROX-Ecological Total Oxidation Sewage Treatment Plant), was to be classified in 2022 EAC/CET Code 8421. 29. 00 that provides for filtering or purifying of other liquids.

Respondents Prayers 65. The Respondent prayed that the Tribunal considers the case and finds:a.That the Respondent's decision dated 3rd October 2023 was properly issued and be upheld.b.That the Appeal herein be dismissed with cost to the Respondent.

Issue for Determination 66. After a consideration of the pleadings, submissions and witness statements of both parties, the Tribunal frames the only issue for determination in this dispute to be; Whether the Respondent erred in reclassifying the ROX- Ecological Total Oxidation Sewage Treatment Plant imported by the Appellant’s from HS Code 8421. 21. 00 to HS Code 8421. 29. 00.

Analysis and Determination 67. Having ascertained the issue that falls for its determination, the Tribunal shall proceed to analyze the same as hereunder.

68. The genesis of the dispute was the Respondent’s decision reclassify the Appellant’s imported ROX waste treatment plant under HS Code 8421. 29. 00 as opposed to HS Code 8421. 21. 00 which the Appellant had used to declare the item.

69. The Appellant submitted that the Respondent in the review decision determined the assessed tariff classification 8421. 29. 00 based on an item specification picked from a product manual (EN12566-3) that the Appellant presented in its application for Commissioner's review. That the Appellant observed that the product manual is a two-page document with at least 10 sections. That the Respondent only reproduced and relied on the information under one Section headed 'Total oxidation-ROX'.

70. The Appellant averred that it clearly concurred with the Respondent in classifying the item under Chapter Heading 8421. That the point of divergence is in the classification which ties to the usage of the item imported by the Appellant. The Appellant contended that the imported item is strictly meant for filtering or purifying water as already suggested by its name 'Waste water treatment plant'. That the subheading under HS Code 8421. 21. 00 was specifically for 'filtering or purifying machinery and apparatus for water'. That the subheading under HS Code 8421. 29. 00 distantly and generally covers 'Other filtering or purifying machinery for other liquids apart from Water and Beverages'.

71. The Appellant averred that the product manual relied on by the Respondent in its tariff ruling severally confirms that the imported item is specifically meant for filtering and purifying water in the following cited sections:i.Introduction; Ideal purification system for treating wastewater that can be assimilated to domestic wastewater from small and medium-sized communities.ii.Technical data disclaimer; ACO Remosa will not be responsible for the equipment chosen when the characteristics of the water to be treated and the particularities of the installation are unknown.iii.Total oxidation; The installation of a roughing system is recommended to separate the coarse solids carried by the water by means of a manual (in some cases) or automatic grate before the water enters the treatment plant.iv.Calculation basis; The equipment is designed to treat wastewater with the following composition: BOD5: 400ppm COD: 450ppm, SS: 450ppm.

72. The Respondent on its part contended that upon review of additional information and submissions provided by the Appellant and the consultative engagement, the item was described as a waste water treatment plant branded as ROX Total Oxidation Sewage Treatment Plant which was confirmed to be an effluent treatment plant intended to treat waste water consisting of three main processes namely;a.Roughing to separate coarse solids carried by water by means of a manual or by an automatic grate before the water enters the treatment plant.b.Biological oxidation that decomposes organic matter with the supply of air that allows oxygenation of the aerobic biomass and keeps it in suspension.c.Decanting where water from the reactor is calmed by a stiller to allow separation of the sludge from the clear effluent which is moved to the surface for evacuation, part of the sludge is recirculated into the reactor to maintain the biomass concertation in the reactor.

73. It contended that from the information provided, it was clear that the plant as presented was an effluent/sewage treatment plant intended to reduce the toxicity of the effluents to aquatic life and downstream uses especially when discharged in the streams.

74. Heading 8421 covers; “Centrifuges, including centrifugal dryers; filtering or purifying machinery and apparatus, for liquids or gases.”

75. The description under HS Code 8421. 21. 00 preferred by the Appellant which attracts duty at 0% states; “For filtering or purifying water”

76. On the other hand the description under HS Code 8421. 29. 00 preferred by the Respondent which attracts duty at 10% states;“-- Other- Filtering or purifying machinery and apparatus for gases”

77. In determining the applicable HS Code the Tribunal is guided by the General Rules of Interpretation of the Harmonized Code reproduced partly hereunder:“General Interpretation Rules for the Classification of GoodsClassification of goods in the Nomenclature shall be governed by the following principles :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, according to the following provisions :”

78. The Tribunal having perused the documents presented notes that according to the manufacturers description provided it described the product as follows;“…ACO Remosa wastewater treatment plant consists of a mechanical pre-treatment part and biological aeration, ROX (compact biological reactor by sludge activated), SBREM (Sequential batch reactor-SBR) and NECOR (moving bed biofilm reactor-MBR). The inlet absorbs hydraulic peaks at wastewater treatment plant,The Pre-treated water is then pumped at uniform flow rate from the buffer area into the biological part, which consist of an activation tank which is aerated by micro-bubble aeration and built-inn final sedimentation tankROX system is a sewerage wastewater treatment plant, the word “sewage” is mainly used referring to water containing human urine or solid wastes.With the ROX we treat this water to reduce its human waste content, so in a way we are purifying water.…”

79. The Respondent does not dispute the product description but it contends that the reduction of human waste content in sewerage does not meet the terms of the Code relied upon by the Appellant which provides for filtering or purifying machinery and apparatus for filtering or purifying water.

80. The Tribunal notes that from the EAC/CET the description under HS Code 8421. 21. 00 is specific to filtering or purifying water.

81. However according to the Respondent, the item was not used to purify water but to reduce its toxicity levels and make the final discharge less harmful to life aquatic or otherwise.

82. It is however the view of the Tribunal that in the description provided in EAC/CET it does not matter whether it is to ‘purify’ or ‘filter’. Either fits to the description under HS Code 8421. 21. 00. This was emphasized in Cape Brandy Syndicate V Inland Revenue Commissioners (1920) 1KB as applied in TM Bell V Commissioner of Income Tax (1960) EALR 224 where Roland J stated:“…. In a taxing Act, one has to look at what is clearly said. There is no room for intendment as to a tax, nothing is to be read in, nothing is to be implied. One has look into the language used…”

83. It was the view of the Tribunal that the Respondent ought to have simply looked at the purpose or use of the product before arriving at its decision. In this case the product description clearly states the purpose to be for purifying to reduce human waste content in water.

84. The Tribunal further refers to the holding of the Canadian Court in Puratos Canada Inc V Canada (Customs And Revenue) where the court stated inter alia that:-“the General Rules for Interpretation of the Harmonized System referred to in section 10 of the Customs Tariff originated in the International Convention on the Harmonized Commodity Description and Coding System. 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 Options and the Explanatory Notes to confirm classification of the goods in the heading.”

85. In the instant case, after considering the Chapter Notes, Explanatory Notes and product description and intended use, the Tribunal determines that the classification of the product imported by the Appellant is determinable using GIR 1. In this regard, the Tribunal finds that the ROX- Ecological Total Oxidation Sewage Treatment Plant imported by the Appellant answered the description of a plant for filtering or purifying water and is described most specifically in tariff number 8421. 21. 00.

86. The upshot of the foregoing is that the Tribunal determines that the Respondent erred in reclassifying the ROX- Ecological Total Oxidation Sewage Treatment Plant imported by the Appellant’s from HS Code 8421. 21. 00 to HS Code 8421. 29. 00.

Final Decision 87. Going by the foregoing analysis, the Tribunal determines that the Appeal has merit and therefore succeeds. The Orders that commend themselves are as follows:a.The Appeal be and is hereby allowed.b.The Respondent’s review decision dated October 3, 2023 be and is hereby set aside.c.The Respondent’s Tariff Ruling dated September 25, 2023 be and is hereby set aside.d.Each party to bear its own costs.

88. It is so ordered.

DATED AND DELIVERED AT NAIROBI THIS 31ST DAY OF JANUARY, 2025DR RODNEY O. OLUOCH - CHAIRPERSONABRAHAM K. KIPROTICH - MEMBERGLORIA A. OGAGA - MEMBER