REPUBLIC OF KENYA IN THE TAX APPEALS TRIBUNAL AT NAIROBI

REPUBLIC OF KENYA

IN THE TAX APPEALS TRIBUNAL AT NAIROBI TAX APPEAL NO. E219 OF 2023

 

AUTOMATIC (K) LTD……………………………………………………………………………….. APPELLANT

~VERSUS~– COMMISSIONER OF CUSTOMS AND

BORDER CONTROL……………………………………………………………………………… RESPONDENT

 

 BACKGROUND

JUDGMENT

 

1. The Appellant is a limited liability company duly incorporated under the Companies Act of the laws of Kenya and is in the business of importation of
2. The Respondent is a principal officer appointed under Section 13 of the Kenya Revenue Authority Act, and under Section 5 of the East Africa Customs Management Act, 2004, and is responsible for management and control of
3. The dispute subject of the Appeal herein emanated from the review decision by the Respondent against the Appellant dated 27th March 2023 regarding tariff classification of copper
4. The Appellant imported copper busbars in 4-meter length under the declared tariff classification under H.S Code 7407.10.00 (of refined copper & copper alloys) under the EACCMA CET 2022 Version from brass copper & Alloy (India) Ltd, import entry number The Appellant declared the imports under HS Code 7407.10.00 of EAC/CET which refers to

descriptions of copper bars, rods, and profiles.

 

5. The Respondent upon inspection on 8th March 2023 reclassified the said copper busbars under Heading 85.36, subheading 8536.90.00 of EAC/CET which covers the classification of electrical apparatus for switching or protecting electrical circuits, or for making connection to or in electrical
6. The Appellant appealed against the reclassification decision on 31st March 2023, and the Respondent issued its review decision on 4th April 2023 upholding its classification of the copper busbars under Tariff Code 90.00.
7. The Appellant dissatisfied with the Respondent‟s review decision instituted its Appeal herein on 15th May 2023 vide its Notice of Appeal dated 10th May

 

THE APPEAL

8. The Appellant filed the Memorandum of Appeal dated 10th May 2023 on 15th May 2023 and set out the following grounds of appeal;
   85. That the Respondent erred in law and fact by falsely invoking the provisions of Heading 85.36, specifically under sub-heading 8536.90.00 under EAC/CET ,2022 to reach the erroneous and illegal finding that the said tariff applied to the Appellant‟s products, copper
   86. That the Respondent erred in law and fact in classifying copper busbars as falling within the classification prescribed under Heading 36 of the EAC / CET 2022, which heading provides as follows; “ Electrical apparatus for switching or protecting electrical circuits , or for making connections to or in electrical circuits (for example; switches, relays, fuses, surge suppressors, plugs, sockets, lamp holders and other connectors, junction boxes), for a voltage not exceeding 1,000 volts; connectors for optical fibres, optical fibre bundles or cables “ , disregarding the fact that copper busbars imported by the Appellant , are in 4 metre with no attachments and or cut into smaller pieces and

 

certainly did not fall within any of the categories specified under the said heading .

• That the Respondent misdirected himself in law by disregarding the express provisions as to classifications and description of the Appellant‟s products prescribed under the EAC/CET HS code 10.00 (of refined copper and of copper alloys) which refers top descriptions of copper bars, rods and profiles, which the Appellant correctly declared in its Import Declaration Form and other supporting documents .

8536. That the Respondent fundamentally misapprehended the provisions of the Tariffs Classification General Rules of Interpretation ( GIOR ) , particularly GIR1 & 6 which starts that , “ the classification is determined principally by the terms of the headings and the relative section or chapter notes and that 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 , respectively in finding a nexus between the copper busbars and other apparatus classified under sub-heading 90.00 of EAC/CET ,2022.”
8537. That the Respondent erred in both law and fact by failing to apply the relevant provision to the interpretation of the tariff and on relying upon an erroneous legal provision, in the circumstances without
8538. That the Respondent erred in law and in fact by failing to fully address his min d to the provisions of EAC/CET , 2022 , GIRs , particularly GIR 1 & 6 , the legal submissions by the Appellant ,s clearing agents that the declared tariff code 10.00 tallied with the Appellant‟s products .

• That the Respondent misdirected himself in law by introducing the electrical apparatus to the copper busbars as criteria for considering the classification, when such criteria is secondary to the tariff classification, General Rules of Interpretation (GIR), particularly GIR 1 & 6 as the

 

Appellant‟s products matches the description Copper bars, rods and profiles.

• That the Respondent erred in law in failing to appreciate the provisions of the General Interpretation Rules, the Section Notes as well as the Chapter Notes that emphasizes on the intention of the product rather than on the form of the product as the basis for classifying

7407. That the Respondent erred in law by failing to consider the Tribunal‟s ruling dated 29th July 2016, where the Honorable Tribunal in determining the classification of copper busbars placed the product under Tariff HS Code 10.00.

9. By reason of the grounds aforesaid, the Appellant prayed that the Respondent‟s review decision dated 4th April 2023 upholding the tariff ruling dated 27th March 2023 be set aside, and the its appeal herein be allowed with

 

THE APPELLANT‟S CASE

10. The Appellant has grounded its case on its;
11. Statement of Facts dated 10th May 2023 and filed on 13th May 2023;
12. Written submissions dated 13th December 2023 and filed on 4th March 2024;
13. Supplementary submissions dated 1st March 2024 and filed on 4th March 2024; and
14. Witness Statement by Bhaskar Patel dated 12th February 2024 and filed on the same date that was admitted in evidence under oath on the 20th February,
15. The Appellant stated that it imported copper busbars in 4 meter length under the declared tariff classification under HS Code 7407.10.00 (of refined copper and copper alloys) under the EAC/CET, 2022, from Brass Copper & Alloy (India) Ltd, import entry number

 

12. The Appellant also stated that the said declared tariff classification corresponds with the description of the goods as per the Import Declaration Form (IDF), the MTD Bill of lading, Kenya Bureau of Standards certificate of conformity issued on 6th February 2023 and the marine cargo policy with Tausi Assurance Ltd, that is 285 pieces of copper busbar in 4-meter length 100 % pure copper (with round edge) 30 x 5 mm; 4867.98:1.
13. The Appellant posited that the said product as declared falls within the provisions of the sub-heading tariff code 7407.10.00 (of refined copper & copper alloys) under the EAC/CET, 2022, which refers to descriptions of copper bars, rods, and
14. It further stated that upon inspection on 8th March 2023, the Respondent reclassified the said copper busbars under Heading 85.36, specifically under sub-heading 90.00 of the EAC/CET, 2022.
15. It was further stated by the Appellant that in a letter dated 27th March 2023, the Respondent rendered its Tariff Ruling thus;

“The item is specified to be a copper busbar in 4-meter length made of 100% pure copper (with round edge).

A busbar is a metallic strip or bar, typically housed inside a switchgear, panel boards, and busway enclosures for local high current power distribution. They are also used to connect high voltage equipment at electrical switchyards, and low voltage equipment in battery banks. They are generally uninsulated, and have sufficient stiffness to be supported in air by insulated pillars ….

…heading 85.36 covers the classification of electric al apparatus for switching or protecting electrical circuits, or for making connections to or in electrical circuits (for example, switches, relays, fuses, surge suppressors, plugs, sockets, lamp holders and other connectors for optical fiber bundles or cables….

 

Based on this information, the copper busbar in 4-meter length is considered to be classified in 2022 EAC / CET code 8536.90.00 that provides for other apparatus as guided by GIR 1 & 6.

The declared 2022 EAC/CET tariff code 7407.10.00 is therefore at variance with this Tariff Ruling.”

16. The Appellant averred that being dissatisfied with the said Tariff ruling by the Respondent, it appealed against the same through its Clearing Agent Rapid Kate Services Ltd by filing a notice of objection on 31st March 2023, and contemporaneously applied for the release of the goods under the security of a bank guarantee, which were finally released on 26th April
17. Aggrieved by the classification decision of the Respondent dated 27th March 2023 the Appellant appealed to the Tribunal against the whole decision on 15th May
18. The Appellant‟s witness one Bhaskar Patel in his witness statement and testimony during the hearing testified that the company had been in the business for over three decades and have on multiple occasions imported the same type of copper busbars from India and other parts of the world, and the said product has always been classified under Tariff Code 10.00.
19. The witness in cross examination confirmed that the Appellant imported the copper busbars which is used for power distribution. The witness further on reexamination confirmed that the product is cut into smaller pieces and modified for it to be used the electrical The witness also confirmed that the busbar product is not an apparatus on its own, and that it depends on other components for it to be used as an electrical apparatus.
20. The witness testified that he believed the Respondent overlooked the provisions of GIR 1 & 6 since the headings and subheadings applicable to copper busbars is Tariff Code 7407.10.00, and further there was no ambiguity in application of this tariff code since the description of the product corresponds with the headings

 

21. The witness further stated that the Respondent applied the definition of a busbar as a metallic trip or bar which definition tallies with the impugned product copper busbar, and that the said definition does not unequivocally distinguish a copper busbar from a copper
22. The Appellant‟s witness also testified that the Respondent further applied a tariff code basing on the use of the products which is electrical apparatus under Heading 8536, which is a secondary classification and, in his view, offends the GIR which must be applied in sequence. He stated that the Appellant‟s goods (copper busbar) fit prima facie within the language of the tariff heading 7407 (copper bars, rods, and profiles) and is not precluded by anything in the Chapter 74 or Section notes from the classification
23. The Witness further stated that the product in its imported state/raw form is not necessarily used as an electrical apparatus as it has other multiple home and industrial uses. That for it to be used as an electrical apparatus for switching and protecting circuits, it needs to undergo further modification and
24. The witness testified that the Respondent did not have to reclassify the product under a different heading based on its use whereas there is a clear-cut classification of the product under a heading and subheading that tallies with its description which is the case for most
25. In its submissions, the Appellant stated that the Respondent erred both in law and fact in classifying its copper busbars under Tariff Code 90.00.
26. The Appellant submitted that 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 require, according to the following provisions (that is GIR 2 TO 6)”

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.”

27. The Appellant submitted that from the above rules, for purposes of reference one must consider the title of the Sections, Chapters and sub-chapters. However, for purposes of determining classification one is required to consider, first, the terms of the relevant heading before considering the relative chapter or chapter notes. Where the above does not suffice, then the explanatory notes thereto will be relied upon. It is only after exhausting the provisions of GIR 1 that the subsequent Rules to GIRs, i.e. 2 to 6, can be considered in The purpose of the Chapter notes, Section notes and Explanatory notes is to provide guidance in the process of classification, the Appellant further submitted.
28. The Appellant cited the case of Puratos Canada Inc. vs. Canada Customs & Revenue (2004) Can LII 57069 (CA CITT), where it was held;

“The General Rules of 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 a 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 appeal . First , to examine the schedule to see if the goods fit prima facie within the language of the 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 of the opinions and the explanatory notes to confirm classification of the goods in the heading .”

29. The Appellant further submitted that as the Respondent defined what a copper busbar is i.e. “That a busbar is an apparatus with a defined function made metallic (copper) strip or bar, typically housed inside switchgear, panel boards and busway enclosures for local high current power distribution”, and further discussed the provisions of Heading 8536, the said references are irrelevant since they made the classification to depart from the provisions of the GRI 1
30. It was therefore a submission of the Appellant that Heading 8536 is certainly not applicable to the Appellant‟s product since there is Heading 7407 which is prima facie applicable to the fitting language of the product description. There being nothing in Chapter 74 or Section notes thereto that precludes the products from classification in the heading, and the explanatory notes confirms the
31. The Appellant submitted that the declared Tariff 7407 is the most suitable tariff classification for copper busbar as the product falls squarely within the language of the Heading 7407 and also subheadings and Chapter Notes under Chapter 74, to wit, the description is copper busbar which is refined copper per the explanatory notes. In addition, the Heading 7407 which covers copper bars, rods and profiles, should not be implied to leave out copper busbars since the words bar and busbar are used interchangeably and recognized
32. It was a further submission of the Appellant that the Respondent erred in law and fact in classifying the copper busbar under Tariff Code 8536.90.00 since the said classification is not in conformity with GIR 1 and the principles laid down in in the Puratos Canada Inc case (supra). It submitted that to arrive at this decision, the Respondent‟s decision was influenced by the ultimate use of the copper busbar and not its imported

 

33. The Appellant cited the case of TAT No. 569 of 2021 Powerex Lubricants Ltd Commissioner of Customs and border Control, where the Tribunal adopted the guidelines laid down in the Puratos Canada Inc. case.
34. The Appellant further submitted that it imported copper busbar in 4-meter length, 100 % pure copper and declared Heading 7407.10.00 as the busbars cannot be used as power conductors straight from importation, as the same need to be further modified, assembled and reassembled and or refined together with other parts and or materials for them to be finally used as electrical apparatus. The Respondent „s reclassification under Tariff 8536 therefore offends the Rules of Interpretation, it
35. The Appellant also submitted that its Tariff review decision, the Respondent indicated that the classification was based on the material information The said presentation by the Appellant included the IDF, MTD Bill of Lading, KBS Certificate of Conformity, and marine cargo insurance policy issued by Tausi Insurance Co. It stated that there is no other material information from the Respondent that has been submitted to the Tribunal to determine the basis for the reclassification thereof, and the basis for the Respondent‟s review decision is at fault and ought to be set aside.
36. The Appellant further submitted that the products herein is classifiable under HS Code 7407.10.00 and cited the case of TAT 282 of 2020 Kenya Breweries Ltd Commissioner of Customs & Border Control, where it was held by the Tribunal while setting aside the Respondent‟s decision;

“The Tribunal having considered the arguments by both parties and various materials placed before it , is of the view that the GIR 1 is the foremost rule of classification . For legal purposes classification is determined by the terms of the headings, section or chapter notes where relevant, and if necessary and allowable, the other GIRs. See the Puratos Canada Inc. case (supra).”

37. It submitted that the Tribunal faulted the Commissioner‟s approach since the words in the Section and Chapter titles are to be used as a guide to where the

 

appropriate Tariff code of the product to be classified is likely to be found. That a product may therefore be included in or excluded from a Section or Chapter even though the titles might lead one to believe otherwise.

38. It further submitted that in the instant Appeal, the task is straightforward as it only requires a juxtaposition of Heading 7407 to 8536. It stated that the copper busbar in its imported state is more likely to be found under Heading Tariff code 7407 which covers; copperbars, rods and profiles, instead of 8536, which covers, electrical apparatus for switching or protecting electrical circuits, or for making connections to or in electrical circuits (for example, switches, relays, fuses, surge suppressors, plugs, sockets, lamp holders, and other connectors, junction boxes), for a voltage not exceeding 1,000 volts; connectors for optical fibre bundles or
39. The Appellant further submitted that applying the principle abovementioned, copper busbar prima facie fitted within the language of Tariff Heading 7407 and subsequently under the subheadings
40. Being a copper bar, hence the primary and or foremost rule of classification, GIR 1, would place it at that heading. Also, from the reading of the Chapter and or Section notes, there is nothing that precludes the copper busbar from classification in the heading and subheadings Lastly, the examination of the classification opinions and explanatory notes to confirm classification will only place the products in Heading 7407.
41. For the foregoing reasons, the authorities cited, the Appellant submitted that its tariff classification of 9285 pieces of copper busbar in 4-meter length made of 100% pure copper (with round edge) under HS code 7407.10.00 9 of refined copper & copper alloys) under EAC/CET, 2022, is merited in
42. The Appellant by reason of the foregoing prayed that the Tribunal upholds that the classification of its products under HS Code 10.00, sets aside the Respondent‟s review decision dated 4th April 2023, and allow its Appeal herein with costs.

 

THE RESPONDENT‟S CASE

43. The Respondent‟s case is set out in its Statement of Facts dated 14th June 2023 and filed on the same date, the witness statement by Sosten Kiprop dated 2nd February 2024 and filed on the same date, that was admitted in evidence under oath on the 20th February, 2024 and the written submissions dated 5th March 2024 and filed on the same
44. The Respondent stated that on the 8th March 2023 the Appellant imported copper busbars vide entry number 23MBAIM401252635 and that the consignment was referred to Tariff Section for tariff
45. The Respondent averred that it issued a tariff classification ruling dated 27th March 2023 classifying the product under Tariff HS Code 90.00 of EAC/CET, which was communicated to the Appellant vide email dated 28th March 2023.
46. The Respondent further stated that the Appellant appealed against the decision vide a letter dated 31st March 2023, and was issued with a review decision vide a letter dated 4th April 2023 upholding the classification of the copper busbars under 2022 EAC/CET Tariff Code 8536.90.00.
47. The Appellant dissatisfied with the review decision instituted the appeal
48. The Respondent averred that the Appellant herein imported copper busbars in 4-meter length made of 100 % pure copper with round edges vide entry number 23MBAIM401252635 on 8th March
49. It averred that a busbar is a metallic strip or bar, typically housed inside switchgear, panel boards and busway enclosures for local high current power distribution and are also used to connect high voltage equipment at electrical switchyards, and low voltage equipment in battery banks. It also averred that the busbars are generally uninsulated and have sufficient stiffness to be supported in air by insulated Thee features allow sufficient cooling of

 

the conductors and the ability to tap in at various points without creating a new joint.

50. The Respondent further averred that the copper busbars in 4-meter length is classifiable under HS code 8536.90.00 of the EAC/CET, 2022 version, which provides for other apparatus as guided by GIR1 to
51. The Respondent also stated that HS Code 85.36 of the EAC/CET 2022 version provides;

“Electrical apparatus for switching or protecting electrical circuits, or for making connections to or in electrical circuits (for example, switches, relays, fuses, surge suppressors, plugs, sockets, lamp holders and other connectors, junction boxes), for a voltage not exceeding 1,000 volts; connectors for optical fibres, optical fibre bundles or cables.”

The HS Code 8536.90 .00 – other apparatus – kg – 10 % .

52. The Respondent averred that GIR 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter
53. The Respondent also stated that GIR 6 states;

“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.”

54. The Respondent further stated that the contention by the Appellant is that the copper busbar is classifiable under HS Code 7407.10.00 of EAC/CET version 2022, which provides;

“Copper bars, rods and profiles;

7407.10.00 – of refined copper                   – kg            – 0 %

– of copper alloys”

 

55. The Respondent averred that the Harmonized Commodity Description and Coding system explanatory notes as well as the additional notes constitute the official interpretation of the Common External Tariff and provide the scope of each heading under the EAC/CET.
56. It stated that the decision to classify the Appellant‟s copper busbars under HS Code 90.00 was proper in law.
57. It also stated that Section 235 and 236 of EACCMA, 2004 empowers the Respondent to conduct an audit within 5 years of importation and to call for documents to ascertain whether the proper taxes were paid, and any short- levied taxes demanded from the Appellant under Section 135 of EACCMA, 2004 are proper in
58. The Respondent therefore averred that its tariff classification dated 27th March 2023 and 4th April 2023 is proper in law and the same ought to be
59. The Respondent‟s witness one Sosten Kiprop in his testimony testified that the Appellant imported copper busbars in 4-meter length made of 100% pure copper with round edges on 8th March 2023, and stated that the busbars is classifiable under HS code 90.00 of the EAC/CET 2022.
60. The Respondent‟s witness on cross examination testified that there is no difference between a copper busbar and a copper bar, and confirmed that copper products are also classifiable under chapter 74 of the EAC/CET. The witness also stated that the cooper bars are more likely to be found under subheading 10.00 of refined copper and not 8536.90.00 of other apparatus.
61. The witness further testified that Heading 85.36 describes electrical apparatus and based on GIR 1, the term copper busbar is not found under the heading, however based on its use it may be classifiable under the He confirmed that without reference to its usage, copper busbar is not classifiable under Heading 85.36.

 

62. The Respondent‟s witness further on cross-examination testified that the subject copper busbars are not apparatus on their own, and it depends on other components for it to be used as an electrical
63. The witness further testified that the product was contemplated to be a finished product and that it falls under Heading 36 as it is used to make connections.
64. He further testified that the products voltage capacity was not tested and that if the product exceeds 1.000 volts it would not fall under 85.36, and further indicated that the purity levels allowed for refined copper tally with the products 100 % purity, and purity levels of 99.85 % and 100 % fall under Chapter 74 EAC/CET, and confirmed that the product‟s copper purity and its nature were not disputed , and what was in contention was the use of the
65. The witness also stated that an apparatus is a functional item, and went on to state that the Appellant‟s product is a part or component of a functional product, and that he looked at it as an apparatus due to its intended
66. The Respondent submitted that since during the hearing the Appellant‟s Director confirmed that the copper busbars are for electricity transmission from the KPLC line to the switchboard thus the same are classifiable under HS code

85.36 and not HS code 74.07.

67. The Respondent further submitted that the Appellant mis declared the imported copper busbars under HS code 10.00 instead of 8536.90.00.
68. The Respondent cited the authorities in the cases of;
69. Republic vs. Commissioner General & Anor exparte Awal Ltd (2008)
70. Beta Healthcare International Ltd Commissioner of Customs Services (2010) eKLR.
71. Pharmaceutical Manufacturing (K) Ltd & 3 others (2017) eKLR.
72. The Respondent therefore submitted that the decision to demand for the short- levied taxes was proper in law as the Appellant mis declared the imported

 

copper busbars under HS code 8536.90.00 instead of HS code 7407 .10.00 which attracts import duty at the rate of 10 %.

70. By reason of the foregoing the Respondent prayed that its tariff classification dated 27th March 2023 and the review decision dated 4th April 2023 be upheld and the Appellant‟s Appeal be dismissed with

 

ISSUES FOR DETERMINATION

71. The Tribunal having considered the pleadings, witness testimony and the submissions made is of the considered view that the Appeal herein distils into one issue which commend for determination as follows;

Whether the Respondent‟s decision to reclassify the Appellant‟s imported cooper busbars under HS Code 8536.90.00, instead of HS Code 7407.10.00 was proper in law.

 

ANALYSIS AND DETERMINATION

72. The dispute subject of the Appeal herein arose from the tariff decision of the Respondent herein dated 27th March 2023 as upheld in its review decision dated 4th April 2023 to reclassify the Appellant‟s imported copper busbar in 4- meter length of 100 % refined copper from HS code 7407,10.00 to Hs code 90.00.
73. In classifying the said item under Tariff Code 8536.90.00, the Respondent stated that;

“…heading 85.36 covers the classification of electrical apparatus for switching or protecting electrical circuits (e.g. Switches, relays, fuses, surge suppressors, plugs, sockets, lamp-holders and other connectors, junction boxes), for a voltage not exceeding 1000 volts; connectors for optical fibres, optical fibre bundles or cables.

 

Based on this information, the copper busbar in 4-meter length is considered to be classified in EAC/CET Code 8536.90.00 that provides for other apparatus as guided by GIR 1 & 6.”

74. The Respondent therefore declared that the Appellant‟s declared HS code 10.00 was at variance with its tariff ruling.
75. The Respondent in its submissions described the Appellant‟s items as, “electrical apparatus for connecting electricity” , but also stated that the same are cut and modified to make the required
76. The Respondent‟s witness also testified that the reasoning behind classifying the imported copper busbars under HS code 85.36 as being that the copper busbars are electrical apparatus for connecting electricity, which is “other apparatus” covered under HS code 90.00.
77. The Respondent also submitted that HS code 07 covers copper bars but the Appellant imported copper busbars which are electrical apparatus covered under HS code 85.36.
78. On the other hand, the Appellant submitted that when a product falls or fits within a heading then the product will be classified under the respective sub- headings thereunder and if a product fails to fit within the particular Tariff Heading, then such a product cannot be considered under the respective sub- headings
79. The Appellant also submitted that Heading 85.36 is not suitable for classifying its product since Heading 7407 prima facie applies to the fitting language of the product description. It averred that there is nothing in Chapter 74 or Section notes thereto that precludes the products from classification in the heading, and the explanatory notes confirms the
80. The Appellant further submitted that its imported copper busbars is described as 100 % refined copper per the explanatory notes and falls within the language of Chapter

 

In addition, the Appellant averred that the Heading 7407 which covers copper bars, rods and profiles cannot be implied to omit copper busbars since the words bar and busbar are interchangeably used to describe the said product and worldwide recognized.

81. The Appellant therefore submitted that the Respondent erred in law and in fact in classifying copper busbar under 90.00 since the said classification is not in conformity with GIR 1 and the principles laid down in the Puratos Canada Inc. case (supra).

It stated that rather, the Respondent arrived at its classification decision influenced by the ultimate use of the copper busbar and not its imported state.

82. In considering the issues in the classification dispute herein, the Tribunal is aptly guided by the authority in the case of TAT 569 of 2021 Powerex Lubricants Ltd Commissioner of Customs & Border Control, where the Tribunal applied the guidelines set out in the Puratos Canada Inc. case (supra) , thus ;

“In the Tribunal‟s view, the Respondent „s decision appears to have been influenced by the classification of “ viscosity improvers “ under Heading

38.11 . However , the Tribunal took into account the Appellant‟s contention that Esprene SPO VO141 is in “ crystalline granule “ in its imported state , and not a prepared viscosity improver and had to be blended with specific base oil in order to be converted into viscosity improver in a state to be used in lubricating oils . The Respondent‟s classification appears to put it in “ liquid form “…from the information provided , it is the Tribunal „s considered opinion that the Appellant‟s product Esprene SPO VO141 , is a raw material used together with other substances and compounds in the production of viscosity improvers for use in oils . Since the product cannot be used as viscosity improver in its imported form , it would follow that Esprene SPO VO141 ought to be classified under Heading 39.01 as opposed to Heading 38.11.”

 

83. In the instant Appeal, the Appellant imported copper busbars in 4-meter length, 100 % refined copper, and declared the same under HS code 10.00. Neither the state of the imported product, nor its ultimate use is in dispute. However, both parties agreed that imported product could not be used straight from importation for its intended purpose, and has to be cut into pieces and modified, assembled and reassembled or refined further, or combined with other materials and implements, for them to be used in electrical panels as electrical apparatus.
84. Similarly, ala Puratos Canada, the Respondent‟s classification appears to put the Appellant‟s products in the class of electrical apparatus, rather than products to be used in the constitution or making of electrical This as its witness testified is by considering the ultimate use of the product.
85. Thus, based on the foregoing, it is the Tribunal‟s considered view that the Appellant‟s product is pure 100% copper material (busbars or bars), which as it were fits the description of a raw material, to be used by modifying and combining with other materials make or constitute the ultimate electrical panels to be used in electrical apparatus. Since the product cannot be used in its original imported form, the Tribunal also finds that the same properly fits under Chapter 74 of copper and articles thereof, and Heading 7407 covering copper bars, rods and profiles, as opposed to Heading 36 covering electrical apparatus.
86. In view of the foregoing reasons, the Tribunal finds and holds that the Respondent erred in reclassifying the Appellant „s imported copper busbars under HS code 90.00 instead of the declared HS code 7407.10.00.
87. The upshot of the foregoing is that the Appellant‟s Appeal is found to have merit and hereby

 

FINAL DECISION

88. The Appeal having succeeded, the Tribunal makes the following Orders:-

 

1. The Appeal be and is hereby
2. The Respondent‟s review decision dated 4th April 2023 be and is hereby set
3. Each party to bear its own
4. It is so

 

DATED and DELIVERED at NAIROBI this 24th day of May, 2024

 

 

 

ROBERT M. MUTUMA CHAIRPERSON

 

 

ELISHAH N. NJERU                                               MUTISO MAKAU MEMBER                                                            MEMBER

 

 

 

 

BERNADETTE M. GITARI                                  MOHAMED A. DIRIYE MEMBER                                                        MEMBER

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