Rabai Power Limited v Commissioner of Customs and Border Control [2025] KETAT 204 (KLR)

Rabai Power Limited v Commissioner of Customs and Border Control (Tax Appeal E861 of 2024) [2025] KETAT 204 (KLR) (4 April 2025) (Judgment)

Neutral citation: [2025] KETAT 204 (KLR)

Republic of Kenya

In the Tax Appeal Tribunal

Tax Appeal E861 of 2024

CA Muga, Chair, BK Terer, EN Njeru, E Ng'ang'a & SS Ololchike, Members

April 4, 2025

Between

Rabai Power Limited

Appellant

and

Commissioner Of Customs And Border Control

Respondent

Judgment

Background 1. The Appellant is a company registered within the Republic of Kenya and is engaged in the power and electricity sector.

2. The Respondent is a principal officer appointed under Section 13 of the Kenya Revenue Authority Act, CAP 469 of Kenya’s Laws (hereinafter “the Act”). Under Section 5 (1) of the Act, the Kenya Revenue Authority is an agency of the Government for the collection and receipt of all tax revenue. Further, under Section 5(2) of the Act with respect to the performance of its functions under subsection (1), the Authority is mandated to administer and enforce all provisions of the written laws as set out in Part 1 and 2 of the First Schedule to the Act for the purposes of assessing, collecting and accounting for all revenues in accordance with those laws.

3. The Appellant imported a product it described as Filter Inserts on diverse dates between the years 2022 to 2024. The Respondent noted that the item was specified as an oil filter ideal for filtration of SAE 30 and 40 lubricating oil on 4 stroke trunk diesel engines. The Appellant declared the goods under tariff code 4812. 00. 00. The Respondent then carried out a desk audit of the Appellant's customs operations and established instances of tariff misclassification and its view was that the appropriate classification for the Appellant's goods was HS Code 8421. 23. 00.

4. The Respondent issued a notice for demand of short levied duties on 26th April, 2024 informing the Appellant of the misdeclaration of the tariff code and assessed short levied taxes of Kshs 2,622,554. 00.

5. The Appellant lodged an objection to the demand vide a letter dated 24th May 2024. The Respondent considered the Appellant's response and issued a review decision dated 21st June 2024 confirming taxes due of Kshs. 2,622,554. 00. The Appellant being dissatisfied with the decision, lodged this appeal vide notice of appeal filed on 19th July 2024.

The Appeal 6. The Appellant lodged its Memorandum of Appeal dated and filed on 2nd August 2024, raising the following grounds of appeal:a.That the Respondent erred in law and fact by failing to appreciate that the filter inserts were correctly classifiable under HS Code 4805. 40. 00. b.The Respondent erred in law and fact by disregarding the Appellant's position that the filter insert is a part of a larger filter housing system, affirming its classification under Heading 4805 rather than Heading 8421. c.The Respondent erred in law and fact by failing to appreciate the exclusion clause of the explanatory note to Heading 4812, which excludes other paper products listed under Headings 4803, 4805, or 4823, and the fact that the material component of the filter insert is paper pulp.d.Without prejudice to the aforementioned grounds, the HS Code 8421. 99. 00 is the most suitable alternative to the Respondent's inaccurate classification of the filter inserts if Heading 4805 is not applied.

Appellant’s Case 7. The Appellant filed its Statement of Facts dated 2nd August on the even date. The Appellant also relied on testimony of Mr. Mrinzi Raphael Bosso whose witness statement dated and filed on 31st December, 2024, was adopted by the Tribunal as evidence in chief during the hearing on 29th January, 2025. The Appellant also filed written submissions dated 12th February 2025 on even date.

8. The Appellant stated that it has a thermal power plant that uses heavy fuel oil to generate electricity. The plant has an installed capacity of 90 megawatts, which contributes considerably to the national grid and enhances the stability of power supply in Kenya. It asserted that this plays an important role in meeting the country's industrial, commercial, and residential energy needs by providing a reliable source of electricity.

9. The Appellant stated that it imported filter inserts which are specifically designed for optimal performance, featuring fine filtration, high dirt holding capacity, and minimal operational expenses. It stated that the filter inserts are able to address all four contamination types - particles, water, varnish, and acidity - in a single process, showcasing their versatility and effectiveness.

10. The Appellant averred that filter inserts are used in oil filters ideal for filtration of mineral and synthetic based oils, including hydraulic oils, gear oils, lube oils, engine lube oils, turbine lube oils, honing oils and rolling oils. Filter inserts are integral components of filtration systems and cannot independently execute solid waste filtration.

11. The Appellant stated that following its importation of the filter inserts, it received a demand notice reference KRACBCIRMD/PCA/318/204 dated 26th April 2024 from the post clearance audit (PCA) section of the Respondent stating that the Appellant had mis-declared filter inserts on importation leading to a short levying of taxes amounting to Ksh 2,622,554. 00 .The Appellant noted that the Respondent's tax demand was based on its unfounded re-classification of the its importation, the filter insert, under tariff line 8421. 23. 00. It noted that Heading 84. 21 of the East African Community (EAC) Common External Tariff (“hereinafter “EACCET”) covers centrifuges, including centrifugal dryers; filtering or purifying machinery and apparatus, for liquids or gases.

12. The Appellant stated that it applied to the Respondent for review on 24th May 2024 and with its application, it filed an illustration of the procedure of replacement of filter inserts. According to the Appellant, the illustration plainly showcased that the filter inserts are part of a larger filter housing system, thus affirming its classification as a part rather than a stand-alone filter. The Respondent issued a review decision on 21st June 2024 holding that these products are oil filters and should be classified under tariff code 8421. 23. 00. The Appellant then filed this appeal and expounded on its grounds of appeal as hereinunder:

a. Whether the Respondent erred by failing to appreciate that the filter inserts were correctly classifiable under HS Code 4805. 40. 00. 13. The Appellant asserted that the Respondent erred in law and fact by failing to appreciate that the filter inserts were correctly classifiable under HS Code 4805. 40. 00. It averred that the foremost rule of classification and for legal purposes, classification is determined by the term of headings, section, or chapter notes where relevant and if necessary and allowable. The Appellant cited the Canadian case of Puratos Canada Inc. v Canada (Customs and Revenue) 2004 CANLII 57069 (CA CITT) where it was held that the Commissioner rightly placed more emphasis on the Chapter Title and related Chapter Notes and Explanatory Notes in classification.

14. It stated that the Respondent's position is that the filter inserts should be classified under centrifuges, including centrifugal dryers; filtering or purifying machinery and apparatus, for liquids or gases and more particularly under Oil or petrol-filters for internal combustion engines, and therefore subject to import duty at 25%. However, the Appellant asserted that the filter inserts are classifiable under Other uncoated paper and paperboard, in rolls or sheets, not further worked or processed than as specified in Note 3 to this Chapter and more specifically, to be filter paper and paperboard which classification is subject to 0% import duty.

15. In support of its case, the Appellant relied on the explanatory note to heading 84. 21 which states that: “Filter blocks of paper pulp and other filtering elements are excluded from Chapter 84. ” It added that the exclusion clause states as follows:“It should be noted, however, that filter blocks of paper pulp fall in heading 48. 12 and that many other filtering elements (ceramics, textiles, felts, etc.) are classified according to their constituent material."

16. The Appellant averred that the explanatory note to heading 4805. 40 allows filter paper and paperboard for the manufacture of tea bags, of coffee filters, of filters for motor vehicles, as well as analytical filter paper, thus aligning with the composition of the Appellant's filter inserts. Consequently, the Appellant maintained that the correct classification applicable to the Appellant's filter inserts is under the heading 4805. 40 whose explanatory notes provide for "Filter paper and paperboard", accurately capturing the items' nature and purpose.

17. Therefore, the Appellant asserted that the Respondent's classification of the filter inserts under tariff code 8421. 23. 00 was an error in law and fact. Moreover, the Appellant asserted that the correct classification of the filter inserts ought to be under tariff code 4805. 40. 00.

b. Whether the Respondent erred by disregarding the Appellant's position that the filter insert is a part of a larger filter housing system. 18. The Appellant also raised the issue that the Respondent erred in law and fact by disregarding its position that the filter insert is a part of a larger filter housing system, affirming its classification under Heading 4805 rather than Heading 8421. In relation to this issue, the Appellant asserted that the procedure for replacement of filter inserts clearly shows that the items are part of a larger filter housing system, thus affirming the items are not stand-alone filters. It therefore maintained that it is erroneous for the Respondent to cherry pick the items' features and subsequently misclassify the filter inserts as independent parts rather than parts of a larger filter housing system.

19. The Appellant argued that it provided an illustration laying out the process for the replacement of the filter inserts in its application for review dated 24th May 2024 but the Respondent completely ignored this supporting evidence when issuing its review decision.

20. It reiterated that it was able to demonstrate that the filter insert is a part of the filter housing system thereby disproving the Respondent's erroneous argument that the items are classifiable under Heading 84. 21. The Appellant averred that it was guided in by GIR Rules 1 and 6 to assert with specificity that the filter inserts are a part of a larger filtering system. The Appellant averred that the GIR 1 is applicable in the present case in classifying the filter inserts correctly under Heading 48. 05 as the filter insert is a filter made of paper which is correctly captured by the said heading.

21. It maintained that its position is reinforced and buttressed with reference to the exclusion note to heading 84. 21. Filter inserts are excluded from heading 84. 21 since the heading encompasses a range of industrial and laboratory equipment designed for separation and purification tasks. It includes centrifuges, which utilize centrifugal force to separate substances of varying densities, such as separating solids from liquids or distinguishing between different liquids.

22. According to the Appellant, centrifugal dryers, a specialized type of centrifuge, are used to extract moisture from materials, facilitating drying processes. Additionally, the category covers filtering and purifying machinery and apparatus, which are engineered to eliminate impurities or contaminants from liquids or gases, including various filters and purifiers employed across.

23. The Appellant asserted that the explanatory notes to Heading 84. 21 on classification of parts provides for the exclusion of parts of filtering elements as far as their constituent material is as follows:‘‘It should be noted, however, that filter blocks of paper pulp fall in heading 48. 12 and that many other filtering elements (ceramics, textiles, felts, etc.) are classified according to their constituent material.’’

24. The Appellant averred that whereas it pointed out the notes to Heading 84. 21, the Respondent ignored them.

c. Whether the Respondent ignored the exclusion clause of the explanatory note to Heading 4812. 25. The Appellant also averred that the Respondent erred in law and fact by failing to appreciate the exclusion clause of the explanatory note to Heading 4812, which excludes other paper products listed under Headings 4803, 4805, or 4823, and the fact that the material component of the filter insert is paper pulp. The Appellant emphasised that the Respondent failed to appreciate the material component of the filter insert is paper pulp and that the Heading 4812 excludes other paper products used for filtering liquids under Headings 4805 or 4823 or 4803.

26. It was in view of the foregoing that the Appellant asserted that the classification of paper filter inserts such as the one imported by the Appellant are classifiable under Heading 4805. The Appellant added that explanatory notes to subheading 4805. 40 define the filter paper and paperboard as follows:“Subheading 4805. 40”“Filter paper and paper board are porous products, devoid of wood fibres obtained by a mechanical or semi-chemical process, unsized and designed to remove solid particles from liquids or gases. They are obtained from rag or chemical pulp or a mixture thereof and may also contain synthetic or glass fibres. The pore size is determined by the size of the particles to be removed. These products include filter paper and paperboard for the manufacture of tea bags, of coffee filters, of filters for motor vehicles, as well as analytical filter paper and paperboard which should be neither acidic nor alkaline and should have a very low ash content.”

27. The Appellant maintained that Heading 4805 covers the classification of "other uncoated paper and paperboard, in rolls or sheets, not further worked on or processed as specified in Note 3 to the Chapter". It relied on Note 3 to the Chapter which provides as follows:“Subject to the provisions of Note 7, headings 48. 01 to 48. 05 include paper and paperboard which have been subjected to calendring, super-calendering, glazing or similar finishing, false watermarking or surface sizing, and also paper, paperboard, cellulose wadding and webs of cellulose fibres, coloured or marbled throughout the mass by any method. Except where heading 48. 03 otherwise requires, these headings do not apply to paper, paperboard, cellulose wadding or webs of cellulose fibers which have been otherwise processed.”

28. It also relied on Note 7 to the Chapter which provides as follows:“Except where the terms of the headings otherwise require, paper, paperboard, cellulose wadding and webs of cellulose fibres answering to a description in two or more of the headings 48. 01 to 48. 11 are to be classified under that one of such headings which occurs last in numerical order in the Nomenclature.”

29. The Appellant asserted that classification of the filter inserts under the heading 48. 05 is amply supported by the wording of the chapter heading, subheading and explanatory notes which align with the GIR guidance. Thus, the Appellant asserted that the specific pore sizes and shape of the filter inserts are as a result of the paper and paperboard being subjected to finishing methods. It contended that these methods are provided for in Note 3 to Chapter 48 that is calendering, super-calendering, glazing or similar finishing, false watermarking or surface sizing, and also paper, paperboard, cellulose wadding and webs of cellulose fibres, coloured or marbled throughout the mass by any method. Therefore, the Appellant prayed that the Tribunal vacates the Respondent's erroneous tax demand of Kshs 2,622,554. 00.

d. Whether HS Code 8421. 99. 00 is the most suitable alternative. 30. The Appellant also argued that HS Code 8421. 99. 00 is the most suitable alternative to the Respondent's inaccurate classification of the filter inserts if Heading 4805 is not applied.

31. The Appellant maintained that the filter inserts are a part of the larger filter housing system, thus disproving the Respondent's classification as a stand-alone filter in its incorrect application of the HS Code 8421. 23. 00. Further, the Appellant stated that HS Code 8421. 99. 00 specifically relates to parts of filters and purifiers but does not cover filter blocks of paper pulp that in Heading 4812 and that many other filtering elements are classified according to their constituent material.

32. The Appellant asserted that where neither HS Code 4805. 40. 00 nor HS Code 8421. 23. 00 can be ascertained as the proper classification of the filter inserts, HS Code 8421. 99. 00 may apply. The Appellant submitted that HS Code 8421. 99. 00 may apply as the most reasonable classification of the filter inserts, which would be categorized as parts, based on GIR 1.

33. Based on the above, the Appellant reiterated on a without prejudice basis, that the most suitable classification for the filter inserts is under HS Code 8421. 99. 00 if HS Code 4805. 40. 00 is not applied.

34. The Appellant in its written submissions wherein it submitted that the Respondent erred in law and fact by classifying the filter inserts under EACCET HS Code 8421. 23. 00 rather than EACCET HS Code 4805. 40. 00.

35. The Appellant relied on the case of Puratos Canada Inc. v Canada (Customs and Revenue), 2004 Can LIl 57069 (CA CITT) to elaborate on how classification ought to be carried out. Further, the Appellant submitted that if heading 4805 is not applicable, the only other alternative HS Code for consideration in this case is HS 8421. 99. 00.

36. Consequently, the Appellant prayed for the following reliefs:a.That the Respondent's review decision dated 21st June 2024 and tax demand of Ksh 2,622,554 be set aside;b.That the Appeal be allowed with costs to the Appellant; andc.That the Tribunal be pleased to issue any other remedies that the Tribunal deems just and reasonable.

Respondent’s Case 37. The Respondent filed its Statement of facts dated 4th September 2024 on even date. The Respondent also filed written submissions dated 8th January 2025.

38. In response to the Appeal, the Respondent pleaded that it considered the literature from the manufacturer, C.C Jensen's, which indicates that the inserts are already treated and cut into shape. It averred that the goods in dispute are described as “filter insert" ready for use as presented and are ideal for filtration of SAE 30 & 40 lubricating oil.

39. It noted that the terms of heading 48. 05 covers the classification of Other uncoated paper and paperboard, in rolls of sheets, not further worked or processed than as specified in note 3 to chapter 48.

40. The Respondent averred that the goods in dispute are article of paper not covered by the terms of the heading nor in the specified subheadings. It stated that the Taxpayer did not declare the goods under HS Code 4805. 40. 00 as stated in the statement of facts. The declared HS Code was 4812. 00. 00.

41. The Respondent pleaded that a thorough review of the Appellant's documents revealed that the CJC® Filter inserts are used for maintenance of almost all oil types; Hydraulic oils, gear oils, lube oils, mineral/synthetic oils, engine lube oils for 2&4-stroke engines, diesel fuel (MGo, MDO, LSFO), gas oils, quench oils, heat transfer oils, honing oils, rolling oils, transformer oils, gas engine oils, phosphate esters (HFD), tap changer oils, insulating oils, refrigerator compressor lube oils, bearing lube oils, turbine oils, EAL, glycol-based fluid (PAG), water glycol-based fluids (PEG), water-based fire resistant fluids (HFA, HFB), water-based machine tooling fluids among others. Accordingly, the Respondent concluded that the goods appropriately fell under the terms of Heading 84. 21 cited as follows "Centrifuges, including centrifugal dryers; filtering or purifying machinery and apparatus, for liquids or gases."

42. It relied on the Explanatory Notes to Heading 84. 21 part (II) under Section A which directs that the heading includes the following:‘‘Oil filters for internal combustion engines, machine-tools, etc. which are of two main types:(i).Those containing a filtering element, usually of superimposed layers of felt, metallic gauze, steel wool, etc.'’

43. Therefore, the Respondent pleaded that filter inserts are included under the terms of heading 84. 21 in particular tariff HS code 8421. 23. 00.

44. The Respondent stated that the Explanatory Notes to Heading 48. 12 excludes, other paper products used for filtering liquids, e.g., filter paper (Heading 48. 05 or 48. 23), cellulose wadding (Heading 48. 03 or 48. 23).

45. According to the Respondent, the item in question is not a filter paper but oil filter inserts correctly classified under HS code 8421. 23. 00. The Respondent noted that the explanatory notes referred to by the Appellant do not apply to the article in dispute. It also added that tariff code 8421. 23. 00 which covers oil or petrol filters for internal combustion engines is most appropriate as it covers the centrifuges, including centrifugal dryers; filtering or purifying machinery and apparatus, for liquids or gases.

46. The Respondent noted that the Appellant has indicated different HS codes for the filter inserts at different instances:i.HS code 4812. 00. 00 upon importation;ii.HS code 4805. 40. 00 during objection stage; andiii.HS code 8421. 99. 00 in the Appeal documents.

47. The Respondent asserted that the three HS codes that the Appellant sought to rely on fall short as they do not apply taking into account the nature of the Appellant's imported goods. The Respondent pleaded that it considered the provisions of the Harmonised System classification and the General Interpretation Rules and applied it correctly when classifying the Appellant's goods.

48. According to the Respondent, Section 235 and 236 of the East African Community Customs Management Act, 2004 (hereinafter “EACCMA”) grants the Respondent powers to call for documents and conduct a Post Clearance Audit (PCA) on the import and export operations of a taxpayer within a period of five years from the date of importation or exportation.

49. The Respondent also cited Section 135 and 249(1) of EACCMA to assert that it empowers it to recover any such amount short levied or erroneously refunded with interest at a rate of two percent per month for the period the taxes remain unpaid. It also cited Section 229 of EACCMA which provides for application for review by any person affected by the decision or omission of the Respondent on matters relating to Customs and provides the legal timelines to be observed.

50. In its written submissions, the Respondent submitted that it applied the General Interpretation Rules (GIR) as cited in the EACCET when classifying the Appellant’s goods. It submitted that it applied GIR 1 because the Heading covers ‘‘…filtering or purifying machinery and apparatus for liquids or gases."

51. The Respondent submitted that its decision of 21st June 2024 is proper. It submitted that whereas the Appellant sought to classify the filter insert under HS code 4805. 40. 00 considering it is made of paper pulp, and in light of the exclusion notes that preclude alternative HS codes, the Respondent submitted that it reviewed the product manufacturer's website, C.C Jensen and noted that the inserts are already treated and cut into shape. The Respondent also noted that the terms of heading 48. 05 require that they are not worked and presented in rolls or sheets therefore, it submitted that the articles that the Appellant imported fall outside the scope of this heading.

52. Whereas the Appellant asserted that the alternative HS code for the filter inserts is HS Code 8421. 99. 00 indicating that it relates to parts and filters and purifiers but does not cover filter blocks of paper pulp than in Heading 4812 and many other filtering elements are classified according to their material. On the other hand, the Respondent submitted that the Appellant did not raise this ground at objection review stage and that the Respondent was not granted an opportunity to determine the ground at that stage. Consequently, the Respondent submitted that the assertion ought not to be considered on appeal as it has not gone through the process of objection.

53. It submitted that where an importer of goods misclassifies goods, the Commissioner is empowered to correctly classify the goods. To support this position, the Respondent cited the case of Harshavadan P.Shah T/a Vipees Through the Republic & another v Kenya Revenue Authority [2012] eKLR.

54. Based on the foregoing, the Respondent prayed as follows:a.The Tribunal be pleased to uphold the Respondent's findings as proper and in conformity with the law;b.The decision of the Respondent issued on 21st June, 2024 be upheld; andc.This Appeal be dismissed with costs to the Respondent.

Issues For Determination 55. The Tribunal having carefully evaluated parties’ pleadings is of the view that the issue that calls for its determination is as hereunder:Whether the Respondent erred in reclassification of Appellant’s imported product.

Analysis And Findings 56. The Tribunal having established the issue for determination will proceed to analyze it as follows:Whether the Respondent erred in reclassification of Appellant’s imported product.

57. This dispute began when the Appellant imported what it described as “filter insert replacement” which it classified under HS Code 4812. 00. 00 attracting import duty of 0%. Upon a PCA by the Respondent, a desk audit revealed that the imported products had been misclassified wherein the Respondent reclassified the products under HS Code 8421. 23. 00 which attracts an import duty of 25% resulting in short levied duties of Ksh 2,622,554. 00 for imports made for the 2022 to 2024 review period.

58. The view of the Tribunal is that the parties in this dispute perceived the imported product or item differently leading to the divergent tariff classification codes. However, the Appellant has demonstrated to the Tribunal by the testimony of its witness as well as the diagram/illustration on the use of the imported item, which the Appellant adduced as documentary evidence, that indeed the item was described as a filter insert.

59. The Tribunal notes that the Appellant did not specify the code under which it imported the filter inserts and, in its pleadings, it flip flopped between HS code 4805. 40. 00 and HS code 8421. 99. 00. The Respondent on the other hand reported that the Appellant had declared the filter insert under HS code 4812. 00. 00 but was of the view that the Appellant’s filter inserts ought to have been declared under HS Code 8421. 23. 00.

60. The Tribunal in making its determination will rely on EACCET 2022 in view of the Appellant having imported the filter inserts between the years 2022 to 2024. The GIR as cited in the EACCET provide for principles that govern classification of goods in the nomenclature. GIR 1 provides as follows:‘‘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…’’

61. On the other hand, GIR 6 provides as follows:‘‘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.’’

62. HS code 4812. 00. 00 under which the Appellant is said to have declared its Filter Inserts provides as follows:‘‘Filter blocks, slabs and plates, of paper pulp.’’

63. The Appellant proposed that the filter inserts ought to be classified under HS code 4805. 40. 00 which provides as follows:‘‘Other uncoated paper and paperboard, in rolls or sheets, not further worked or processed than as specified in Note 3 to this Chapter.‘Filter paper and paperboard’ ’’

64. On the other hand, the view of the Respondent was that the applicable code was HS Code is 8421. 23. 00 which provides as follows:‘‘Centrifuges, including centrifugal dryers; filtering or purifying machinery and apparatus, for liquids or gases. ‘-Oil or petrol-filters for internal combustion engines’’

65. The Tribunal notes that the Appellant, without prejudice, suggested that the correct alternative HS code was 8421. 99. 00 which provides as follows:“‘—Other ’ “

66. The Tribunal examined Heading 4805 which pursuant to GIR 1, the heading provides; ‘uncoated paper and paperboard, in rolls or sheets, not further worked or processed than as specified in Note 3 to the Chapter.’

67. Note 3 to Chapter 48 provides as follows:“Subject to the provisions of Note 7, headings 48. 01 to 48. 05 include paper and paperboard which have been subjected to calendering, super-calendering, glazing or similar finishing, false water-marking or surface sizing, and also paper, paperboard, cellulose wadding and webs of cellulose fibres, coloured or marbled throughout the mass by any method. Except where heading 48. 03 otherwise requires, these headings do not apply to paper, paperboard, cellulose wadding or webs of cellulose fibres which have been otherwise processed.”

68. The Tribunal reviewed the Appellant’s attached diagrams and observed that the filter insert replacement is in a cylindrical shape with folded lines and not in the form of a roll or a sheet and that therefore tariff code 4805. 40. 00 does not apply. The further view of the Tribunal is that the Appellant did not demonstrate that the shaping or serrating of its filter inserts did not constitute further processing which is excluded under Heading 4805. The Tribunal having determined that the filter inserts are cylindrical shaped, finds that the initial declaration by the Appellant under Heading 4812 which covers “filter blocks, slabs and plates of paper pulps” does not fit the description of the filter inserts.

69. The Tribunal having found that the filter inserts are not classifiable under Heading 4802 and 4805 will proceed to explore the applicability of Heading 8421 as adopted by the Respondent and suggested by the Appellant as an alternative classification.

70. The Tribunal examined HS code 8421. 23. 00 as adopted by the Respondent. The cited tariff code provides for, ‘filtering or purifying machinery and apparatus.’ The Appellant imported an apparatus that is used for filtering. However, the Respondent arrived at this tariff code on the basis that a filter insert is a complete item. This view adopted by the Respondent was inaccurate because a filter insert is not a complete item on its own as it has to be inserted into a filtering system for it to work. The finding of the Tribunal is therefore that the filter inserts fall under heading 8421 and more specifically, the applicable tariff code is 8421. 99. 00 “Other” which attracts an import duty rate of 10%.

71. Accordingly, it is the finding of the Tribunal that the Respondent erred in reclassifying the Appellant’s imported product.

Final Decision 72. Based on the foregoing analysis and findings, the Tribunal makes the following Orders:a.The tariff code applicable to the imported filter insert is 8421. 99. 00. b.The Respondent’s review decision dated 21st June 2024 be and is hereby set aside.c.The Respondent to recompute the short-levied import duty in line with the tariff code 8421. 99. 00 within 30 days of delivery of this Judgement.d.Each party to bear its own cost.

73. It is so Ordered.

DATED AND DELIVERED AT NAIROBI ON THIS 4TH DAY OF APRIL 2025. CHRISTINE A. MUGA - CHAIRPERSONBONIFACE K. TERER - MEMBERELISHAH N. NJERU - MEMBEREUNICE N. NG’ANG’A - MEMBEROLOLCHIKE S. SPENCER - MEMBER