Judgment summary
The Tribunal considered an appeal against a Commissioner of Customs and Border Control decision reclassifying imported medical diagnostic kits and laboratory consumables and adjusting their declared transaction value following a post-clearance audit. The Appellant argued that its original tariff declarations and declared values were correct and that the Respondent had acted unlawfully. The Tribunal found in favour of the Respondent on both the classification and valuation issues and dismissed the appeal.
Background
The Appellant is a Research and Training Centre involved in global health research, training and service, focused on public health (paragraph 1). The Respondent is a principal officer appointed under Section 13 of the Kenya Revenue Authority Act, CAP 469, responsible for tax collection functions under Sections 5(1) and 5(2) of that Act (paragraph 2).
Pursuant to Sections 234, 235 and 236 of the EACCMA, 2004, the Commissioner conducted a customs post-clearance compliance review of the taxpayer's importations (paragraph 3). The review found that certain medical diagnostic kits imported under entry numbers 23NBOIM406146900 and 24NBOIM412848471 had been declared under the wrong 2022 EAC/CET HS code (paragraph 4).
The review also found that goods imported under entry 23NBOIM406146900 had a declared value of USD 24,321.93, while the attendant commercial invoice showed a total value of USD 31,213.23, a variance of USD 6,891.3 which was subjected to tax (paragraph 5). The Commissioner issued a demand notice for Kshs. 6,347,084 on 24th September 2025 (paragraph 6).
The Appellant objected on 24th October 2025 (paragraph 7). The Respondent issued a review decision on 20th November 2025 confirming the demand (paragraph 8). The Appellant, being dissatisfied, filed a notice of appeal on 20th December 2025 (paragraph 9).
Core dispute
The Appellant argued that the Respondent unlawfully misclassified its Aptima Compo 100 and 250 diagnostic test kits, waste bag kits, multi-tube unit kits and specimen collection kits, contrary to the Harmonized System, the EAC Common External Tariff 2022, and the General Rules for Interpretation, and that residual headings were wrongly invoked without exhausting specific headings applicable to diagnostic reagents and laboratory consumables (paragraph 10).
The Appellant further contended that the Respondent unlawfully revalued its imports without properly rejecting the transaction value in accordance with the prescribed valuation hierarchy under Section 122 of the EACCMA and the Fourth Schedule, and without discharging the statutory burden of proving the declared value was false, fictitious or influenced (paragraph 10).
The Respondent maintained that the diagnostic kits, being nucleic acid amplification tests, were correctly reclassified under HS Code 3822.19.00 (diagnostic or laboratory reagents), rather than under Heading 30.01 as declared, given that Legal Note 1(j) to Chapter 30 excludes diagnostic reagents of Heading 38.22 (paragraphs 57, 63, 66-70). It also maintained that the plastic specimen collection kits and waste bag kits were correctly classified under HS Code 3926.90.90 as other articles of plastics (paragraphs 57, 71-72). On valuation, the Respondent argued that the adjustment reflected the true transaction value as shown by the commercial invoice (paragraphs 73-76).
Court findings
The Tribunal applied GIR 1 and GIR 6 of the General Interpretation Rules under the EAC-CET (paragraphs 93-94). It found that Heading 30.01 covers specified human or animal substances prepared for therapeutic or prophylactic uses and does not cover nucleic-acid diagnostic reagents, and that Legal Note 1(j) to Chapter 30 expressly excludes diagnostic reagents of Heading 38.22, which was dispositive (paragraphs 97-98).
The Tribunal found that the Aptima Combo 2 test, based on nucleic acid amplification technology identifying ribosomal RNA, answered the description of prepared diagnostic or laboratory reagents under Heading 38.22, and that the Appellant had not provided technical evidence, tariff rulings, product specifications or expert opinion to displace this classification (paragraphs 100-101). The Tribunal upheld the classification of the Aptima Combo diagnostic kits and multi-tube unit kits under HS Code 3822.19.00 (paragraph 102).
On the specimen collection kits and waste bag kits, the Tribunal found these to be plastic articles not falling within Heading 30.05, and upheld their classification under HS Code 3926.90.90 under Heading 39.26 (paragraphs 103-110).
On valuation, the Tribunal noted that customs valuation is governed by Section 122 of the EACCMA and the Fourth Schedule, with the transaction value as the primary basis, departure from which requires objective and verifiable evidence that the declared price is false, fictitious or influenced (paragraph 111). The Tribunal found that the Respondent's adjustment was based on the Appellant's own commercial invoice, representing the true transaction value, and did not amount to rejection of the transaction value in favour of an alternative method (paragraphs 114-115). The Appellant did not provide any reconciliation, credit note, amended invoice or other explanation for the variance of USD 6,891.30, and had not discharged its burden of proof (paragraphs 116-117).
The Tribunal concluded that the Respondent was justified in reclassifying the Appellant's diagnostic kits and laboratory consumables and lawfully adjusted the declared transaction value (paragraph 119).
Outcome
The Tribunal held that the appeal lacked merit and dismissed it. The review decision dated 20th November 2025 was upheld, and each party was ordered to bear its own costs (paragraphs 120-121).
Major issues / areas of contention
- Whether the Respondent was justified in reclassifying the Appellant's diagnostic kits and laboratory consumables under the EAC/CET 2022.
- Whether the Respondent lawfully adjusted the declared transaction value following the post-clearance audit.
- Whether the General Rules for Interpretation (GIR 1 and GIR 6) and Chapter Notes, rather than the Appellant's declared headings, governed the correct classification of the goods.
- Whether the burden of proof to show the assessment was excessive or incorrect had been discharged by the Appellant.