Commissioner of Customs v. Court of Tax Appeals

Under Section 2901 of the Tariff and Customs Code, as amended by Presidential Decree No. 34, berthing charges may be imposed only upon vessels mooring or berthing at national ports; vessels berthing at municipal or privately owned ports are not subject to such charges, the insertion of the word "national" before "port" being a clear legislative intent to restrict the scope of the provision from its original broader formulation.

The Bureau of Customs, through the Commissioner of Customs as petitioner, sought review of a Court of Tax Appeals decision ordering the refund of berthing fees collected from vessels represented by private respondent Litonjua Shipping Company, with Granexport Corporation as sub-agent. The berthing facilities at the port of Kiwalan, Iligan City, were constructed, improved, operated, and maintained solely by and at the expense of Iligan Bay Express Corporation, a private corporation, and not by the national government or any of its agencies. Ports in the Philippines are classified into national ports and municipal ports under Executive Order No. 72, Series of 1936, which also provides that the improvement and maintenance of national ports shall be financed by the government and placed under the supervision and control of the Collector of Customs. Section 2901 of the Tariff and Customs Code, originally referring to berthing at "any port in the Philippines," was amended by Presidential Decree No. 34 (promulgated October 27, 1972, effective thirty days thereafter) to refer instead to "any national port in the Philippines."

The berthing facilities at Kiwalan, Iligan City, were constructed, improved, and are operated and maintained solely by and at the expense of Iligan Bay Express Corporation, a private corporation. Seven vessels engaged in foreign trade — the MS "Chozan Maru," MS "Samuel S," MS "Ero," MS "Messinia," MS "Pavel Rybin," MS "Caledonia," and MS "Leonidas" — were represented in the Philippines by private respondent Litonjua Shipping Company, with Granexport Corporation as its sub-agent.

On various dates between 1973 and 1975, these vessels used the berthing facilities of Iligan Bay Express Corporation at Kiwalan and were assessed berthing fees by the Collector of Customs. The fees, totaling ₱40,551.00, were paid by private respondent under protest on dates ranging from April 17, 1973 to June 7, 1975, covering individual assessments of ₱2,551.00, ₱8,000.00, ₱5,000.00, ₱5,000.00, ₱4,000.00, ₱7,000.00, and ₱9,000.00 for the respective vessels and berthing periods.

Private respondent filed cases before the Bureau of Customs for refund of the berthing fees paid under protest. The Collector of Customs of Iligan City denied the protests, prompting an appeal to the Commissioner of Customs, who affirmed the Collector's decision. Private respondent then elevated the matter to the Court of Tax Appeals, which consolidated the protests and, on July 28, 1978, reversed the decisions of the Commissioner of Customs and ordered a refund of ₱40,551.00. The Commissioner of Customs filed the present petition for review.

• Authority to Collect Berthing Fees Regardless of Port Ownership: Petitioner contended that the government has the authority to impose and collect berthing fees whether a vessel berths at a private pier or at a national port, maintaining that the nature of ownership of the pier is not a condition for collection.
• Kiwalan as a National Port: Petitioner insisted that Kiwalan is a national port since it is within the jurisdiction of the collection district and territorial limits of the national port of Iligan City, citing Customs Administrative Order No. 1-76 dated February 23, 1976, and arguing that Kiwalan cannot claim to be an independent port within a national port without infringing on the territorial jurisdiction of the Port of Iligan.
• Amendment as Mere Surplusage: Petitioner contended that the insertion of the word "national" before "port" in Section 2901 by Presidential Decree No. 34 was a mere surplusage that "merely affirms what customs authorities had been observing long before the law was amended."
• Reliance on Prior Jurisprudence: Petitioner maintained that regardless of whether Kiwalan is a national port, berthing charges may still be collected, citing Luzon Stevedoring Corporation vs. Court of Tax Appeals and Commissioner of Customs (18 SCRA 436 [1966]).

• Limitation to National Ports: Private respondent argued that the right of the government to impose berthing fees is limited to national ports only, the amendment by Presidential Decree No. 34 having inserted the word "national" before "port" in Section 2901 of the Tariff and Customs Code.
• Kiwalan Not a National Port: Private respondent maintained that the port of Kiwalan is not listed as a national port under Executive Order No. 72, Series of 1936, or Customs Memorandum Circular No. 33-73, and was constructed, operated, and maintained solely by Iligan Bay Express Corporation, a private entity, not by the national government.

• Liability for Berthing Charges: Whether a vessel engaged in foreign trade, which berths at a privately owned wharf or pier, is liable for the payment of berthing charges under Section 2901 of the Tariff and Customs Code, as amended by Presidential Decree No. 34.
• Classification of the Port of Kiwalan: Whether the port of Kiwalan is a national port for purposes of the Tariff and Customs Code.
• Continuing Applicability of Prior Jurisprudence: Whether the doctrine in Luzon Stevedoring Corporation vs. Court of Tax Appeals remains applicable after the amendment of Section 2901 by Presidential Decree No. 34.

• Liability for Berthing Charges: No. Only vessels berthing at national ports are liable for berthing fees under Section 2901 as amended by Presidential Decree No. 34; vessels berthing at municipal or privately owned ports are not subject to such charges.
• Classification of the Port of Kiwalan: No. The port of Kiwalan is not a national port, it not being included in the list of national ports under Executive Order No. 72 or Customs Memorandum Circular No. 33-73, and being constructed, operated, and maintained solely by a private corporation.
• Continuing Applicability of Prior Jurisprudence: No. The ruling in Luzon Stevedoring Corporation vs. Court of Tax Appeals is no longer applicable, having been decided before the Tariff and Customs Code was amended by Presidential Decree No. 34, which inserted the word "national" before "port."

• Liability for Berthing Charges: The insertion of the word "national" before "port" in Section 2901 by Presidential Decree No. 34 was a clear indication of legislative intent to change the meaning of the provision from its original broader formulation. A change in phraseology by amendment of a provision of law indicates a legislative intent to change the meaning from that it originally had. It was the Court's duty to give meaning to the amendment, not to treat it as surplusage. Under the amended provision, only vessels berthing at national ports are liable for berthing fees. There are fundamental differences between national and municipal ports: the maintenance of municipal ports is borne by the municipality or private entities, whereas national ports are maintained by the national government; municipal ports are created by executive order while national ports are usually created by legislation; and berthing fees are not collected from vessels at municipal ports while they are collected at national ports. The berthing fees at national ports are applied by the national government for maintenance and repair, and since the national government does not maintain municipal ports, it cannot collect fees thereat. The subject vessels berthed at the port of Kiwalan, constructed, operated, and maintained by Iligan Bay Express Corporation, a private entity, and were therefore not subject to berthing charges.

• Classification of the Port of Kiwalan: The governing law classifying ports into national and municipal is Executive Order No. 72, Series of 1936. A perusal of said executive order discloses the absence of the port of Kiwalan in the list of national ports. Paragraph 1 of Executive Order No. 72 provides that the improvement and maintenance of national ports shall be financed by the Commonwealth Government and placed under the direct supervision and control of the Insular Collector of Customs. It is undisputed that the port of Kiwalan was constructed, improved, operated, and maintained solely by and at the expense of Iligan Bay Express Corporation, not by the national government. Petitioner's claim that Kiwalan is a national port because it is within the jurisdiction of the collection district of Iligan City was rejected: Customs Administrative Order No. 1-76 was issued merely for administrative purposes redefining jurisdictional limits based on the approved staffing pattern and has nothing to do with the collection of berthing fees. The Bureau of Customs' own Customs Memorandum Circular No. 33-73 does not accord national port status to Kiwalan, nor does the appended list include it. Applying the maxim expressio unius est exclusio alterius, the express mention of certain national ports excludes all others, and the port of Kiwalan, not being included, cannot be considered a national port. To hold otherwise would be to legislate and arrogate powers not conferred by the Constitution.

• Continuing Applicability of Prior Jurisprudence: The ruling in Luzon Stevedoring Corporation vs. Court of Tax Appeals was decided under the old Section 2901, which referred to berthing at "any port in the Philippines" without distinction as to ownership or classification. That ruling held that the government's right to collect berthing charges was not conditioned on the pier being publicly owned, because the statute employed the word "pier" without more. However, that ruling is no longer effective because it was decided before the Tariff and Customs Code was amended by Presidential Decree No. 34, which took effect thirty days from October 27, 1972. The amendment inserted the word "national" before "port," fundamentally changing the legal basis for collecting berthing charges and limiting it to national ports only.

• Expressio unius est exclusio alterius — The express mention of one person, thing, act, or consequence excludes all others. Where a statute, by its terms, is expressly limited to certain matters, it may not, by interpretation or construction, be extended to others. The rule proceeds from the premise that the legislature would not have made specified enumerations in a statute had the intention been not to restrict its meaning and confine its terms to those expressly mentioned. Applied in this case to hold that because the port of Kiwalan was not included in the enumerated list of national ports under Executive Order No. 72 and Customs Memorandum Circular No. 33-73, it cannot be considered a national port.

• Legislative intent in amendments — A change in phraseology by amendment of a provision of law indicates a legislative intent to change the meaning of the provision from that it originally had. Applied to the insertion of the word "national" before "port" in Section 2901 of the Tariff and Customs Code by Presidential Decree No. 34, which was held to be a clear indication of legislative intent to restrict berthing charges to national ports, not mere surplusage.

• Classification of ports — Ports in the Philippines are classified into national ports and municipal ports. The key differences are: (1) the maintenance of municipal ports is borne by the municipality, whereas that of national ports is shouldered by the national government; (2) municipal ports are created by executive order, while national ports are usually created by legislation; (3) berthing fees are not collected by the government from vessels berthing at municipal ports, while such fees are collected from vessels moored at national ports. Berthing fees at national ports are applied for the maintenance and repair of said ports; the national government does not maintain municipal ports, which are solely maintained by municipalities or private entities which constructed them.

• "The port of Kiwalan not being included in the list of national ports appended to Customs Memorandum Circular No. 33-73 nor in Executive Order No. 72, it follows inevitably as a matter of law and legal principle that this Court may not properly consider said port as a national port. To do otherwise would be to legislate on our part and to arrogate unto ourselves powers not conferred on us by the Constitution." — This passage articulates the ratio decidendi on the classification of the port of Kiwalan, applying the maxim expressio unius est exclusio alterius and emphasizing the separation of powers constraint on judicial expansion of statutory enumerations.

• "The insertion of the word 'national' before the word 'port' is a clear indication of the legislative intent to change the meaning of Section 2901 from what is originally meant, and not a mere surplusage as contended by petitioner, in the sense that the change 'merely affirms what customs authorities had been observing long before the law was amended.' — This passage states the Court's reasoning for treating the amendment by Presidential Decree No. 34 as substantive rather than declaratory, establishing the principle that changes in statutory phraseology signal legislative intent to alter meaning.

• "It is, therefore, our considered opinion that under Section 2901 of the Tariff and Customs Code, as amended by Presidential Decree No. 34, only vessels berthing at national ports are liable for berthing fees." — This is the Court's definitive formulation of the controlling rule, directly resolving the sole issue in the case.

• Luzon Stevedoring Corporation vs. Court of Tax Appeals and Commissioner of Customs, 18 SCRA 436 (1966) — Distinguished and held no longer applicable. This case was decided under the old Section 2901 of the Tariff and Customs Code, which did not distinguish between public and private piers or between national and municipal ports. The ruling was superseded by the amendment introduced by Presidential Decree No. 34, which inserted the word "national" before "port," thereby limiting the collection of berthing charges to national ports only.

• Section 2901, Tariff and Customs Code, as amended by Presidential Decree No. 34 — Defines berthing charge as the amount assessed against a vessel for mooring or berthing at a pier, wharf, bulkhead-wharf, river or channel marginal wharf at any national port in the Philippines. The insertion of the word "national" by PD No. 34 was held to be a clear legislative intent to restrict the collection of berthing charges to national ports only, rendering vessels berthing at municipal or privately owned ports not subject to such charges.

• Executive Order No. 72, Series of 1936 — The governing law classifying ports into national ports and municipal ports. Provides that the improvement and maintenance of national ports shall be financed by the government and placed under the direct supervision and control of the Insular Collector of Customs. The port of Kiwalan was not included in the list of national ports appended thereto.

• Customs Memorandum Circular No. 33-73, dated March 29, 1973 — Contains a list of national ports and indicates the specific law creating each national port. The port of Kiwalan was not included in the appended list, nor was any law cited creating or converting Kiwalan into a national port.

• Customs Memorandum Circular No. 47-73 — Held by the Bureau of Customs itself that Banago Wharf in Bacolod City, not being listed as a national port, should be considered a municipal port pursuant to Executive Order No. 72, and that berthing charges may not be collected from vessels docking thereat. This circular was cited as persuasive authority supporting the same conclusion as to Kiwalan.

• Customs Administrative Order No. 1-76, dated February 23, 1976 — Issued merely for administrative purposes redefining the jurisdictional limits of each Customs Collection District based on the approved staffing pattern. Held to have nothing to do with the collection of berthing fees, and petitioner's reliance thereon to claim Kiwalan as a national port was rejected.

Feliciano, Bidin, Romero, and Vitug, JJ., concurred.