Tax Appeals Tribunal Kenya Decision Customs Valuation Transaction Value>Customs Valuation

Upon arrival of the first shipment (“the consignment”) at the Inland Container Depot (“1CD”) in Nairobi on or about 4^thAugust, 2020, the Appellant was informed, through its clearing agent DHL Global Forwarding, that the Respondent had referred the consignment for valuation on suspicion of undervaluation. Upon valuation, the Respondent ruled that the declared FOB value of USD 650 per metric tonne was relatively low compared to the values declared for identical goods imported previously.

 

JUDGMENT

BACKGROUND

1. The Appellant is a limited liability company duly incorporated in Kenya and whose principal activity is the importation, blending and retailing of a wide range of lubricants and greases for the automotive and industrial sector. In the normal course of its business, the Appellant, from time to time, imports Base Oils and Additives so as to formulate lubricants.
2. The Respondent is a principal officer appointed pursuant to Section 5 (1) of the East Africa Community Customs Management Act 2004 as read together with Section 13 of the Kenya Revenue Authority Act, Cap 469 of the Laws of Kenya and is charged with the responsibility of ensuring proper administration of customs and the collection of any custom duties due on behalf of the Government of Kenya.
3. On or about July 2020, the Appellant imported 44,000 litres of Base Oil SN 500 from Royal Petro Oil Refinery LLP, one of its regular suppliers based in India. The consignment was separated into two shipments of 22,000 litres, whose Free On-Board value (“FOB value”) for each of the shipments was declared at USD 650 per metric tonne by the Appellant.

 Upon arrival of the first shipment (“the consignment”) at the Inland Container Depot (“1CD”) in Nairobi on or about 4^thAugust, 2020, the Appellant was informed, through its clearing agent DHL Global Forwarding, that the Respondent had referred the consignment for valuation on suspicion of undervaluation. Upon valuation, the Respondent ruled that the declared FOB value of USD 650 per metric tonne was relatively low compared to the values declared for identical goods imported previously.

4. Consequently, the Respondent uplifted the FOB value of the consignment to USD 850 per metric tonne from the declared USD 650 per metric tonne citing the application of paragraph 3 Part 1 of the 4^thSchedule to the East African Customs Management Act, 2004 (EACCMA, 2004).
5. Following the uplift, the Respondent assessed and computed the additional duty payable by the Appellant, at Kshs. 166,692/-, and demanded payment of the same on 17^thAugust, 2020 via email.
6. The Appellant wrote to the Respondent vide an email of 18^thAugust, 2020 protesting the additional taxes and detailing the facts leading to the declaration of the FOB value of the consignment at USD 650 per metric tonne. Principal to these was the transaction value of the consignment.
7. With no response forthcoming, the Appellant wrote to the Respondent vide a letter dated 27^thAugust, 2020 communicating its intention to pay the additional duty “under protest” to secure the release of the consignment. The Appellant termed the move as a well informed decision in the interest of its business to cut down the increasing demurrage charges and stall further incidental costs to its business. The Appellant reiterated that it would make an application for review of the decision to impose the additional duty.
8. The Appellant made an application for review as per the provisions of Section 229 of EACCMA vide a letter dated 17^thSeptember, 2020 faulting the value uplifts and the ensuing additional tax liability. Further, the Appellant sought a refund of the additional taxes paid.
9. The Appellant wrote to the Respondent severally seeking a review decision for its application for review.
10. The Respondent vide a letter dated 4^thDecember 2020 informed the Appellant that the value uplifts were in accordance with the provisions of Section 122 of the EACCMA, 2004. The Respondent added that the Appellant had not appealed to the value uplifts as per the provisions of Section 229 of EACCMA, 2004 but rather consented to an undervaluation offence, which was compounded and extra taxes and fines paid. Consequently, the Appellant’s request for a refund was declined.
11. Aggrieved by the decision, the Appellant appealed to by lodging its Notice of Appeal dated 28^thDecember, 2020 on 29^th December, 2020.

THE APPEAL

13. The Appellant outlined its grounds of appeal in the Memorandum of Appeal dated 11^thJanuary, 2021 and filed on even date as follows;-
14. That the Commissioner erred in law and in fact by purportedly subjecting Entry Number 224468 to the provisions of Paragraph 3 part 1 of the Fourth Schedule of the East African Community Customs Management Act, 2004.
15. That the Commissioner erred in law and in fact in failing to explain to the Appellant in writing, pursuant to Section 122(2) of the East African Community Customs Management Act, 2004 of how the Customs value of the Appellant’s goods was determined.
16. That the Commissioner erred in law and in fact in failing to consider the Free On Board value of Entry Number 224468 as provided for

 

in the importation documents, as the transaction value and the basis for levying duty.

1. That the Commissioner erred in fact for failing to consider the international retailing market price of the commodity contained in Entry Number 224468 which is independently verifiable in several Base Oil spot prices platforms.
2. That the Commissioner erred in fact in declaring that the Appellant did not appeal the value uplift as provided for under Section 229 of the EACCMA.
3. That the Commissioner erred in law and in fact by purporting to issue the Decision outside the provisions of Section 229 (4) of the East African Community Customs Management Act, 2004 (““EACCMA”’).
4. The Appellant prayed that the Tribunal;
5. Allows the Appeal;
6. Sets aside or vacates the review decision dated 4^thDecember, 2020;

• Orders a refund of the excess tax and fine paid amounting to Kshs.166, 692/-; and

1. Awards costs of and incidental to this appeal to the Appellant
2. In response to the Appeal thereto, the Respondent filed its Statement of Facts on 30^thJuly, 2021 upon seeking leave to file its response out of time which was allowed.
3. The Respondent argued that the value uplifts were in line with the provisions of Section 122 of the EACCMA, 2004 as read together with the provisions of Paragraph 3(1)(a) of the Fourth Schedule of EACCA which provides for determination of customs value of identical goods.
4. Further, the Respondent stated that by seeking to compound the offence under Section 203, the Appellant negated the need for the issuance of a review decision in line with Section 229 of EACCMA.

THE APPELIANT’S CASE

18. The Appellant set out its case in support ofthe grounds in the Memorandum of Appeal and Statement of Facts dated 11^thJanuary, 2020 and the Written Submissions dated 15^th September, 2020.
19. The Appellant averred that the FOB value of USD 650 per metric tonne as declared was informed by the Commercial Invoice, the Certificate of Conformity, the Bill of Lading and the detailed packing list, as is custom.
20. The Appellant averred that the retailing price of oil and crude material in the international market between January 2020 and April 2020 had been on a downward trajectory and thus the assessment of the FOB value ofthe consignment at USD 850 per metric tonne was illogical. Further, the Appellant added that the commodity as quoted in the international commodity marketplace in independently verifiable Base Oil spot prices platforms such as Argus, was not retailing at the price as uplifted by the Respondent. To assert this position, the Appellant annexed a graphical extract from Trading Economics highlighting the fluctuations of crude prices during the said period.
21. The Appellant averred that it had on 19^thAugust, 2020 forwarded to the Respondent, the spot base oil prices from the Independent Commodity Intelligence Services which clearly indicated that the commodity was retailing between USD 525 per metric tonne and USD 650 per metric tonne. Other documents in support of the FOB value declared included;

• The Commercial Invoice No. EXP/07720-21 dated July 14, 2020 confirming the true FOB value of the shipment;
• The Certificate of Conformity from the Kenya Bureau of Standards dated July 09, 2020;
• The Consignment’s Bill of Lading;
• The detailed packing list dated July 12, 2020; and
• The letter from Royal Petro Oil Refinery LLP confirming the information in the commercial invoice and the IDF Form as accurate.

22. The Appellant averred that it shipped a consignment of an identical product Group 1 Base Oil SN 500 from the same supplier – Royal Petro Oil Refinery LLP in January 2020, which was priced at USD 750 per metric tonne, with the entry duly approved by the Respondent without any dispute.
23. The Appellant submitted that the failure to put into consideration such material facts and the changing retail prices of crude oil and related products constituted an irrationality that should not be condoned by the Tribunal.
24. In highlighting the effect of the failure to take into account relevant considerations, the Appellant relied on the decision in Republic v Public Procurement Administrative Review Board & 2 others Ex parte Pelt Security Services Limited (2018) eKLRwhere it was observed that;

“Reaching at a decision on the basis of irrelevant considerations, or by disregarding relevant considerations, is one of the manifestations of irrationality… it is a reviewable error either to take into account of irrelevant considerations or to ignore relevant ones, provided that if the matter has been considered or the irrelevant one is ignored, a different decision or rule might (but not necessarily) have been made. Many errors of law and fact involve ignoring relevant matters or taking into account of irrelevant ones, ignoring relevant considerations or taking into account of irrelevant ones may make a decision or rule unreasonable ”.

25. The Appellant submitted that contrary to the provision of section 122(2) of the EACCMA, 2004, the Respondent did not in any way or at all offer any explanation to the Appellant of how the customs value of the goods was determined despite the numerous follow-up communications.
26. The Appellant cited the case of Kanoni Trading Company -vs- Uganda Revenue Authority, Tax Appeals Tribunal Application Number 11 of 2003, where the Court held that the Respondent had no reason to doubt the transaction value method.
27. The Appellant added that the information required was provided and should have been accepted as providing a basis for valuation of the its goods by the Respondent without relying on other methods of valuation. Accordingly, the Appellant termed the assessment by the Respondent as unjust, speculative, presumptuous and offensive to the provisions of the law.
28. Further, the Appellant submitted that Section 122 (1) of the EACCMA, 2004 provides that where imported goods are liable to import duty ad valorem, the value of such goods shall be determined in accordance with the Fourth Schedule and import duty shall be paid on that value.
29. Moreover, Paragraph 2(1) ofthe Fourth Schedule, provides that the customs value of imported goods shall be the transaction value which is the price actually paid or payable for the goods when sold for export to the Partner State adjusted in accordance with the provisions of Paragraph 9, provided that the following conditions are met, i.e:
30. There are no restrictions as to the disposition or use ofthe goods by the buyer other than restrictions which:
31. are imposed or required by law or by the public authorities in the Partner State;
32. limit the geographical area in which the goods may be resold; or

Hi. do not substantially affect the value of the goods.

1. The sale or price is not subject to some condition or consideration for which a value cannot be determined with respect to the goods being valued;
2. no part of the proceeds of any subsequent resale, disposal or use of the goods by the buyer will accrue directly or indirectly to the seller, unless an appropriate adjustment can be made in accordance with the provisions of paragraph 9; and
3. the buyer and seller are not related.
4. Further, the Appellant submitted that Paragraph 3 of the Fourth Schedule provides for the use of the Transaction Value of Identical goods method where the Customs value of the imported goods cannot be determined under the provisions of Paragraph 2 above. However, it was the Appellant’s submission that the Customs value was determinable and there is sufficient documentation and information to support the value submitted and thus paragraph 3 cannot apply.
5. The Appellant submitted that the Interpretative Notes of the EACCMA, 2004 at Part II, paragraph 1 provides that the methods of valuation are set out in a sequential order of application and the primary method of customs valuation is defined in Paragraph 2 as the Transaction Value Method. The Appellant relied on the case of Testimonv Motors Ltd Vs. The Commissioner of Customs, Uganda Revenue Authority Civil Suit No. 212 of 2012, where Christopher Madrama Izama J. directed that:

“By the Commissioner Customs, Uganda Revenue Authority suspending the operation of the transaction value method provided

 

for by section 122 and the fourth schedule of the East African Community Customs Management Act, 2004 is unlawful to the extent that it excludes the application of the transaction value method for assessment of customs duty…

The Plaintiffs vehicle, the subject matter of the suit, be reassessed for customs duty and if the reassessment shows that the Plaintiff overpaid customs duty, then the balance over and above the assessed customs duty paid by the Plaintiff shall be refunded. ”

32. The Appellant averred that the inconvenience resulting from the lack of response from the Respondent and the escalating storage costs prompted it to make the informed decision to pay the additional taxes and fines to the Respondent, albeit under protest.
33. The Appellant stated that it was categorical in its letter that it would be exercising its right under the law in objecting to the assessment despite making the payment of the additional taxes assessed.
34. The Appellant averred that in order to prevent its business from grinding to a halt on account of the Respondent’s refusal, neglect or indecision to release its consignment, the Appellant informed the Respondent that it only made business sense to pay the additional taxes ‘Under Protest’.
35. The Appellant contended that the Respondent’s action in uplifting the Customs Value of its imported goods without basis or justifiable reason is arbitrary, capricious, unreasonable, unfair and contrary to the administration of justice and legitimate expectations of a taxpayer. The Appellant placed reliance on the case of Republic-vs- Kenya Revenue Authority (exparte J.Mohamed) Civil Application 312 of 2011, where the court stated that:

“whereas this Court is not entitled to question the merits of the decision of taxing authority, that authority must exercise its powers fairly and there ought to be a basis for the exercise of such powers. A taxing authority is not entitled to pluck a figure from the air and impose it upon a taxpayer without some rational basis for arriving at that figure and not another figure. Such action would be arbitrary, capricious and in bad faith, it would be an unreasonable exercise of power and discretion and that would justify the Court in intervening. ”

36. The Appellant submitted that the Respondent in undertaking its duties should take cognizance of Article 47 of the Constitution which provides for fair administrative action as was upheld in the case of Republic-vs- Kenya Revenue Authority Ex parte Lab International Kenya Ltd. Mombasa High Court Misc. Civil Application No. 82 of 2010.
37. The Appellant refuted that it consented to an undervaluation offence as well as the assertion that it never appealed the decision by stating that indeed it protested against the decision on 18^thAugust, 2020 prior to its letter dated 27^th August 2020.
38. The Appellant averred that it got to know that the Appellant’s agent (DHL global forwarding Kenya Limited) admitted to being guilty of an offence of undervaluation from the Respondent’s Statement of Facts. It was the Appellant’s contention that its Agent did not inform it about the alleged offence of undervaluation nor did the Respondent. The Appellant argued that the only received communication from its Agent was on the payment of the additional taxes as proposed by the Respondent.
39. The Appellant submitted that upon the payment of the additional taxes under protest, it lodged another application for review to the Respondent dated 17^thSeptember, 2020 in which it sought refund of the additional taxes paid.
40. The Appellant submitted that having lodged a second application for review and by virtue of Section 229 (4),it anticipated that communication on the decision by the Respondent in this regard would be received within 30days from 18^thSeptember 2020 being the date the said application was received.
41. It was the Appellant’s case that the Respondent did not communicate its decision to the application for review within the stipulated timeline and that it took its reminder vide the letter dated 30^thNovember 2020 for the Respondent to render its communication on 4^th December 2020, which communication was received by the Appellant on 7^th December 2020.
42. As a result, the Appellant maintained that the Respondent did not respond to the Application for Review within the timeframe required under Section

229 (4) of the EACCMA, 2004 despite being at all times furnished with documentation in support of the FOB value of USD 650 per metric tonne declared.

43. The Appellant concluded that the Respondent erred in law and in fact by purporting to issue the decision out of time, whose implication is that the application was deemed allowed by operation of law.
44. The Appellant thus prayed that the appeal be allowed and the prayers as prayed in the Memorandum of Appeal be granted.

THE RESPONDENT’S CASE

45. The Respondent set out its case in response to the Appeal in the Statement of Facts filed on 30^thJuly, 2021 and the Written Submissions elated 15^th September, 2021 and filed on even date.
46. The Respondent averred that the dispute arose from the Appellant’s import processed at the Inland Container Depot in Nairobi whereby it suspected

undervaluation and thus earmarked the same for review under the Fourth Schedule of EACCMA.

47. The Respondent averred that a comparative analysis of the Appellant’s declared FOB value and the declared FOB value of identical consignments brought in by another importer revealed that the Appellant’s consignment 2020icdll4468 was undervalued.
48. The Respondent submitted that the Appellant had declared an FOB value of USD 650 Per Metric ton for the item Base Oil SN500 while another importer was declaring an identical item at an FOB value of USD 850 Per Metric ton, which was indicative of an undervaluation.
49. The Respondent averred that it communicated its findings to the Appellant on 17^thAugust 2020 via email, indicating the additional taxes payable.
50. The Respondent submitted that it based its determination on the provisions of Paragraph 3(1)(a) of the Fourth Schedule of EACCA which provides for determination of customs value of identical goods as follows;

Where the customs value of the imported goods cannot be determined under the provisions of paragraph 2, the customs value shall be the transaction value of identical goods sold for export to the Partner State and exported at or about the same time as the goods being valued:

51. The Respondent averred that the Appellant’s clearing agent, DHL Global Forwarding Kenya Ltd accepted the findings and applied for compounding of the offence of under-declaration and paid the amount of Kshs. 166,692 together with a fine of Kshs. 100,000.
52. The Respondent submitted that by seeking to compound the offence under Section 203, the Appellant negated the need for a review decision in line with Section 229 of EACCMA.

 

53. The Respondent added that the Appellant’s representative, DHL Global Forwarding Kenya Ltd, made an application dated 1^stSeptember 2020 under Section 203 (e) admitting to be knowingly concerned in fraudulent evasion of payment of duty whereupon the Appellant then paid the requisite amount demanded, albeit “under protest” and sent a letter confirming this position on 5^th September 2020.
54. The Respondent submitted that once the Appellant had consented to paying the uplifted amount under Section 203, it was no longer necessary for them to make an application under Section 229 of EACCMA.
55. The Respondent further added that if the Appellant was aggrieved by the decision of 17^thAugust, 2020, it had the option of making an application for review under Section 229 at that point. Instead, it opted to make an admission of the offence under Section 203 of EACCMA followed by the payment of the additional taxes demanded.
56. Based on the foregoing, the Respondent maintained that it was not bound to make a decision in line with Section 229 (4) over a matter which, for all intents and purposes, had already been settled. The Respondent averred that it was the Appellant who had the duty of appealing to the Tribunal as provided for under Section 230(1) of EACCMA, 2004.
57. The Respondent thus prayed that the Tribunal upholds the decision to uplift the value of imports pursuant to Paragraph 3 of the First Schedule of EACCMA and dismiss the Appeal with costs.

ISSUES FOR DETERMINATION

58. The Tribunal having considered the pleadings, documentations and rival arguments from the parties is of the view that the appeal distils into the following issues for determination;-
59. Whether the Respondent erred in uplifting the value of the Appellant’s imports.
60. Whether by paying the additional taxes and fines charged therein, the Appellant consented to the taxes and negated the need for the Respondent to issue a decision in line with Section 229 of EACCMA.

ANALYSIS AND FINDINGS

59. The Tribunal wishes to analyse the issues as herein-under;-
60. Whetherthe Respondent erred in uplifting the value of the Appellant’s imports.
61. Section 122(1) of EACCMA stipulates that customs valuation for imported goods liable to ad valoremduty shall be determined in accordance with the Fourth Schedule.
62. Paragraph 2 of Part 1 of the Fourth Schedule specifies that the customs value of imported goods shall be the transaction value, which is the price actually paid or payable for the goods when sold for export to the Partner State. Paragraph 2 provides that the customs value shall be the transaction value provided the following conditions are met, i.e.:

• that there are generally no restrictions on the disposition or use of the goods by the buyer,
• that the sale price or price is not subject to conditions or consideration for which a value cannot be determined,
• that no part of the proceeds of any subsequent resale, disposal or use of the goods by the buyer will accrue directly or indirectly to the seller and the buyer, and
• that buyer and seller are not related, or where the buyer and seller are related that the transaction value is acceptable for customs purposes under the provisions of subparagraph (2).

62. Part 1 of the Fourth Schedule of EACCMA lists the various methods of valuation whereas the Interpretative Notes (Part II of the Schedule), stipulate that the methods of valuation are to be applied in a sequential order and that the primary method of customs valuation is the Transaction Value Method.
63. The Respondent argued that the Appellant had under-valued its goods and that the customs value could not be determined using the Transaction Value Method, hence the application of the identical and similar goods method for valuation.
64. Whereas Section 122(4) of EACCMA gives the Respondent the right to satisfy themselves as to the truth or accuracy of any statement, document or declaration; the same should be done in accordance with the applicable principles and legal provisions.
65. On the subject, Text 1.2 of Article 17 of the WTO Customs Valuation Agreement recommends that certain procedures should be observed as follows;

“Decision regarding cases where Customs Administrations have reasons to doubt the truth or accuracy of the declared value” – not only reaffirms that the transaction value is the primary basis of valuation, but recommends that, as a first step, Customs should ask the importer to provide further explanation that the declared value represents the total amount actually paid or payable for the imported goods, if reasonable doubt still exists after receiving additional information (or in absence of a response), Customs may decide that the value cannot be determined according to the transaction value method. However, before a final decision is taken,

Customs must communicate its reasoning to the importer, who, in turn, must be given reasonable time to respond, in addition, the reasoning of the final decision must be communicated to the importer in writing. ”

66. The Tribunal notes that when a declaration has been presented and where the customs administration has reason to doubt the truth or accuracy of the particulars of or documents produced in support of the declaration, the customs administration may ask the importer to provide further explanation, including documents or other evidence, that the declared value represents the total amount actually paid or payable for the imported goods (Transaction Value).
67. In Testimony Motors Limited-Vs-The Commissioner of Customs (Uganda Revenue Authority (2012) HC Civil Suit 212,the court stated that;-

“… Section i22(i) is couched in mandatory terms, it provides that the value of such goods shall be determined in accordance with the

Fourth Schedule and import duty shall be paid on that value. It does not give any discretionary powers on the Commissioner to rely on alternative methods without following the procedure or directives laid out in the Fourth Schedule, in other words, it is the price paid for the goods by the buyer or importer which forms the basis for assessing the customs duty payable _on the goods. ”

68. Based on the foregoing, the transactional value method is the primary method of valuation, while other methods can only be used if the said method is insufficient.
69. Despite the fact that the Respondent argued that its decision to depart from the Transaction Value Method was because it had reasonable cause to doubt the values declared by the Appellant, the Tribunal observes that the Appellant adduced sufficient evidence to justify the declared value.
70. To be more specific, the Appellant adduced evidence in the form of Commercial Invoice, the Certificate of Conformity, the Bill of Lading and the detailed packing list to prove the value of the goods and justify the declared values. The Appellant went into lengths to explain the volatility of the crude oil and related products market, including an independently verifiable graphical extract highlighting the variations of crude prices over time and a confirmation from the supplier confirming the value of the goods, which were ignored by the Respondent in totality.
71. The Respondent did not give any plausible reasons before this Tribunal for deviating from the Transaction Value Method and neither did it cast any doubt as to the credibility of the documents beyond asserting that other importers were declaring a different higher value.
72. Therefore, it is the Tribunal’s view that the Respondent erred in law in departing from Transaction Value Method in valuing the Appellant’s imports in the face of sufficient evidence to demonstrate the accuracy of value of the goods as declared by the Appellant and the duty payable.
73. Whether by paying the additional taxes and fines charged therein, the

Appellant consented to the taxes and negated the need for the Respondent to issue a decision in line with Section229ofEACCMA.

73. The Appellant, being aggrieved by the Respondent’s decision had the option to make an application for review under Section 229 at that point or consent to the additional taxes.
74. The Appellant averred that it protested the Respondent’s decision to uplift the valuation by an email dated 18^thAugust, 2020. Eliciting no response from the Respondent even as its shipment continued to accrue storage and demurrage costs each day, the Appellant made the business decision to pay the additional taxes and fines accruing offence from the “undervaluation”

 

by a letter dated 27^th August 2020. The Appellant indicated clearly that the payment was made under protest for the sole reason of securing release of its shipment to arrest further accumulation of storage and demurrage costs.

75. The Appellant thereafter went ahead and put in a formal application for review dated 17^thSeptember 2020 protesting the same and seeking a refund of the additional taxes paid under protest on 27^th August 2020.
76. The Tribunal is of the view that an effective admission to any offence must be unequivocal but not conditional for it to stand. In this case, the consent to the additional taxes and fines thereon was purely informed by the interests of the Appellant’s business and thus did not constitute a conscious admission of guilt.
77. The evidence before the Tribunal leads to the finding that the consent to the additional taxes and the fines thereon and the subsequent settlement of the same was to secure the release of the goods to arrest additional costs.
78. From the correspondence adduced before the Tribunal, the Appellant was firm that the payment of the fines and the assessment was as a result of the heavy additional charges and costs incurred, as well as the fears of its business grinding to a halt.
79. Moreover, the Appellant was keen to lodge an application for review on 17^thSeptember, 2020 which was within stipulated time under S.229 of EACCMA.
80. By the Respondent’s own admission, both the payment for the additional taxes and the fines under s. 203 was paid under protest. It is therefore the Tribunal’s view that the Respondent upon receipt of the application for review, should have issued a decision within the 30 days’ timeline stipulated under 229of EACCMA.
81. The Respondent’s argument that the Appellant consented to the additional taxes negated them from issuing a response cannot stand as the same was clearly made “under-protest” and subject to an impending application for review.
82. Having stated the above and out of an abundance of caution, the Tribunal highlights the provisions of Section 229 (6) of EACCMA and implore taxpayers/importers to rely on the same provisions when seeking to secure the release of goods for legitimate business reasons such as the avoidance of unreasonable storage charges and other business interests as those proffered by the Appellant. The same can be done without necessarily consenting or admitting to any offences pending the determination of their application for review. The said provision states;

“During the pendency of an application lodged under this Section, the Commissioner may at the request of the person lodging the application release any goods in respect of which the application has been lodged to that person upon payment of sufficient duty as determined by the Commissioner or provision of sufficient security for the duty and for any penalty that maybe payable as determined by the Commissioner. ”

83. In the foregoing spirit, the Respondent should equally endeavour to process such requests at the earliest instance not to hurt the business interests of the taxpayers, which may subsequently be counterproductive in the quest for revenue collection by the Government.

FINAL DECISION

84. The upshot of the foregoing is that the Tribunal makes the following orders;-
85. Appeal be and is hereby allowed.
86. The Respondent erred in unjustifiably deviating from the Transaction Value Method in determining the customs value of the Appellant’s imports.

• The Respondent to refund the additional and fines amounting to Kshs. 166,696/- paid by the Appellant within sixty (60) days of the date hereof.

1. Each party to bear its costs.
2. It is so ordered.

DATED and DELIVERED at NAIROBI on this 28^th day of January, 2022.

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