Civil Reference No. 7 of 2004
The appellant, Shana General Store Limited, is a Tanzanian company engaged in retail and wholesale trade. Between January and December 2012 it imported edible oil and soap from Pwani Oil Products Kenya Limited, a Kenyan supplier that was a beneficiary of the duty remission scheme under Article 25(1) of the Protocol on the Establishment of the East African Customs Union (as per Legal Notice No. EAC/45/2011). Under Article 25(3) of the Protocol, finished goods produced under the duty remission scheme are meant for export outside the EAC and attract full duties if sold within the EAC Customs Union (EACCU). The respondent, the Commissioner General of Tanzania Revenue Authority (TRA), treated the imported goods as falling within the scheme and assessed import duty of TZS 855,697,789.00, later reduced on review to TZS 457,855,601.25. The appellant contested the assessment, relying on a certificate of origin issued by the Kenya Revenue Authority certifying the goods as Kenyan-origin, arguing this entitled the goods to preferential tariff treatment under section 111 of the East African Community Customs Management Act, 2004 (EACCMA) and the EAC Rules of Origin, 2009. The Tax Revenue Appeals Board and, on appeal, the Tax Revenue Appeals Tribunal both rejected this argument, holding that the certificate of origin did not prove the goods were manufactured from Kenyan-origin materials and that, since the supplier was listed as a beneficiary of the duty remission scheme, the goods could not be sold duty-free within the EAC. The appellant then appealed to the Court of Appeal.
Whether a certificate of origin issued under section 111(2) of the EACCMA and rule 12(1) of the EAC Rules of Origin, 2009 constitutes conclusive evidence of the originality of goods for purposes of preferential tariff treatment, particularly where the supplier is a beneficiary of the duty remission scheme under Article 25 of the Protocol; and whether the Tribunal erred in upholding the respondent's imposition of duty despite the certificate of origin and in not requiring a verification procedure under rule 12(3) of the Rules of Origin.
The appellant argued that the certificate of origin issued by the Kenya Revenue Authority, a competent authority, raised a rebuttable presumption—amounting to near-conclusive proof—that the goods originated from Kenya, which could only be displaced through the formal verification procedure under rule 12(3) (originally cited as 12(2)) of the Rules of Origin. It contended that upon production of the certificate, the evidential burden shifted to the respondent, relying on Insignia Limited vs. Commissioner General (TRA), where evidential burden-shifting was recognized once a taxpayer made out a prima facie case. The appellant also argued that the Legal Notice listing the supplier as a duty-remission beneficiary was insufficient to invalidate the certificate of origin, and that the respondent's unilateral disregard of the certificate breached EAC harmonization principles. The respondent countered that the Rules of Origin and the duty remission scheme served different purposes and were mutually exclusive; that Article 25 of the Protocol specifically prohibits duty-free sale within the EAC of goods produced under the remission scheme; that the certificate of origin, while relevant to establishing geographic origin, was not conclusive proof that goods were not manufactured from materials benefiting from duty remission; and that Insignia was distinguishable and inapplicable to the present tax dispute.
The Court of Appeal dismissed the appeal with costs, upholding the Tribunal's decision. It held that under section 111(2) of the EACCMA, read with rule 12(2) of the EAC Rules of Origin, 2009, a certificate of origin—while a relevant document—is not conclusive proof of a good's originality for preferential tariff treatment; Customs are empowered to require additional documents to establish origin. Since the burden of proof in tax matters rests on the taxpayer under section 18(2)(b) of the Tax Revenue Appeals Act, and since the supplier was confirmed as a beneficiary of the duty remission scheme under the Legal Notice, the respondent was justified in requiring further proof that the goods were not manufactured using materials that had benefited from duty remission—proof the appellant failed to provide. The Court found the appellant's reliance on the verification procedure under rule 12(3) misplaced, because the dispute was not about the authenticity of the certificate but about whether, notwithstanding the certificate, the goods fell within the duty remission prohibition under Article 25(3) of the Protocol. The Tribunal was therefore correct that the certificate alone did not suffice to establish preferential tariff eligibility, and the respondent's imposition of duty was lawful and within the parameters of section 111(2) of the EACCMA.
The judgment clarifies that a certificate of origin under the EAC Customs regime, though relevant evidence, is not conclusive proof of the originality of goods for preferential tariff treatment purposes, especially where the supplier benefits from the duty remission scheme under Article 25 of the Protocol. It confirms that the Rules of Origin and the duty remission scheme serve distinct purposes and are not mutually displacing, meaning compliance with origin certification does not automatically exempt goods from remission-scheme duty obligations. The decision reaffirms the principle that the burden of proof in tax disputes lies on the taxpayer, and that Customs authorities may lawfully demand supplementary documentation beyond a certificate of origin to verify the true sourcing of materials used in manufacture. It also underscores the applicability of the plain meaning rule in interpreting tax statutes, limiting resort to certificate-based presumptions where statutory language expressly allows additional proof requirements.
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