E'3so Sti\NDAF.D Fehrl'Il 1 Ze:H & I.\··, et al.

DECISION -

CTA c: .. S!~ ~10. 19 7 4 - ') ·- '-• 1.

Petitioner is a corporation organized and existing under the laHs of tbe Ph.ilip;?ir es, wi.th principal office at Manila Banking Corporation Building, Ayala Avenue: Makati, Rizal.

Respondent

is the duly appointed Comm i ssioner of Internal Revenue vested wich aLthority to act as such for the Reputlic of the Philippines.

2.

Petitio~er is a manufacturer of fertilizer and agricultur~l chemicals.

! n connection with this business, petitioner imported during the latter part· of 1966 and the early part of 1967 several bags of urea, coated and pelleted.

The details of these importations are as follows:

Date of Arrival

Oct. 27 1 1966 Nov. 20 1 1966 Jar ·• 10, 1967 Feb. 51 1967

No" of Bags of

Name of Vessel

Urea , coated ;.21l~Ue.:..<Jj. s ~.fY~S?. • .0D:d .E!~l) e !~~d. _ S.S. "Toyo £.1aru'l 40,000 No. 1 , Reg. No.

1880 s.s. "Eastern Visay21s," H.eg.

No. 1845

C'

('1 •"' .. ;..') . n;;,;qbic Bay" He'J. No. 54 c ~ p.C>. "Shi.nk. f.1a.r u" l~f..~g ~ J.\]O" 204 301000 40p000 On the above importations of urea, coated and pclleted, the Collector of Custons of the Port of

Import Entry

No.

101808-1966 100188-1966 OJY)0-1.967 12090-1967

DECISION -

CTA CASE NO. 1974 - 3 - Manila, for and in behalf of respondent Commissioner of Internal Revenue, assessed and collected from petitioner the 7% advance sales tax computed on the basis of the 10% ad valorem duty provided fo r in paragraph 29.26B of the Tar iff and Customs Code . Parenthetically, paragr aph 29.268 of the then in force Tariff and Customs Code imposed on urea an ad valo~ duty of 10 % if the nitrogen content of the importation is more than 45 %. However, if its nitrogen content is 45% or less, the duty is only 5% under tariff paragraph 31.028.

The Bureau of

Customs appraiser classified the above importations under tariff paragraph 29.268 and imposed the higher tariff duty of 10 %.

4.

The payments of the above advance sales tax which are evidenced by the fol lowing official receipts: Official Receipt No.

54871 56023 61531 65231

Date Issued

Amount

Dec. 2 , 1966 De c. 9, 1966 Jan. 16, 1967 Feb. 13, 1967 -- 1?86,122.00 68,900.00 51,660.00 66,624.00 were made by petitioner in view of its immediate need for the shipments .

However, petitioner lodged corres- pending protests against the additional 5% ad yalo£~ duty and the corresponding advance sales tax pend ing the results of the che mical a nalysis then being ..

DECISION -

CTA CASE NO. 1974 - 4 - conducted by the National I nst itute of Science and Technology (NIST) _tu determine the true nitrogen content of the urea of each of the four shipments . 5.

In view of the findings of the National Institute of Science and Technology (NIST) _that neither of the urea of each of the four shipments contains more than 45% of nitrogen, pe titioner main- tains that it is subject only to 5% ad valorem duty on its above importations, inste ad of 10% imposed and collecte d by the Bureau of Customs . Petitioner , therefore,c l aims that it has overpaid the corresponding a dvance s ales tax thereof in the total amount of ~12,333.00 .

6.

On August 22, 1 968 , pe t itioner f ile d separa t e c laims for refund of the e xcess advance sales t ax paid on the importation s cover ed by Official Receipts Nos . 54871 , 56023 and 61531.

On September 6, 1968, petitioner f iled anoth e r claim for refund of the excess advanc e s ales tax p i d on the importation covered by Offic i al Rece i p t No . 65231 . Af ter no seasonable action was t aken by r espon- dent on its cla ims fo r ref und , peti tione r f iled this petition for r e view with this Court for the purpose o f interrupting the r unning o f the p r escriptive

DECISION -

CTA CASE NO. 1974 - 5 - period for instituting judicial action for the recovery of the aforesaid overpayments of adva nce sales tax.

The parties are not in controversy on the computation of the advance sales tax payable by, or the amount refundable to , petitioner as the case may be.

Is petitioner Esse Standard Fertilizer & Agri- cultural Chemical Co., Inc . (Philippines) _entitled to the refund of the sum of Pl2,333.00 as overpaid advance sales tax on the imported urea involved in this case?

The resolution of this iss ue depends upon the question whether said imported urea contains more than 45 % or less nitrogen. An analysis of the nitrogen content of said imported urea by t he National Institute of Science and Technology upon request by the Bureau of Customs shows the following :

( pp • 55 , 57 , 58 , 6 0 & 6 8 , B I R records.)

No . of Bags of Date of Arriva l & Urea Coated & Import Entry No.

Pelleted

Feb. 5, 1967 40,000 1 2090 Jan. 10, 1967 30,000 03300 Nov. 20, 1966 50 , 000 100188 Oct. 27, 1966 40,000

1018 08

247 Nitrog e n

Content

42.48 % 44 . 8% 45% 45%

Analysis

Number

2- 6. 7-o. 0 3- 3 1-67-003-143 .

.

.

1-6 7-00 3-7.0 1-6 7-00 3-7.1 ..

DECISION -

CTA CAS£ . NO. 1974 - .6 - It appearing from the aforesaid a na l ysis r epor ts that error was committed by the customs appraiser i n imposing 10% ad valorem duty on the said imported ur ea instead of only 5%, resulting i n excess advance sales tax payments, to wi t:

O.R . NO.

65231 54871 56023 61531

Date Issued

2-13-66 12- 2-66 1- 9-66 1-16-6 7

T 0 T A L

Amount Paid

p 66 , 624.00 86,122 . 00 68 , 900. 00 51,600 .0 0

Excess

fl 3 , 006 . 00 3 , 886.00 3 , 109 . 00 2 , 332.00 petitioner ESso Standard Fertilizer & Agricultural Chemical Co. , Inc .

(Philipp ines) _should have paid only fl260 , 973.00 instead of P273,306.0 0 advanc e sales tax on its ur e a importations.

The records show that the aforesaid payments as we ll as the discrepancy reports duly approved ·by t he Bureau of Cu s toms have been verified by the office of respondent.

(p. 67, BIR records.)

In the a bsence of contrary fin d ing and analysis a s to the nitrogen content of the urea involve d in this case, we s e e no valid re a son for us not to gr a nt a tax credit in f avor of petitioner the to t al amount of Pl2 , 333 . 00 as exces s p ayme nt of advance s ale s t ax on its import- ations of urea involved in this case .

Paragraph

3l.02B of the then in force Tarif f a nd Customs Code

DECISION -

CTA CASE NO . 1974 - 7 - imposed on urea an ad valo~ duty of 5% if the nitr ogen conte nt of the importation is 45% or l ess . The law is clear and specific .

Our plain duty therefore is t o apply the law as it is written .

WHEREFORE, r espondent Commissione r of Internal Revenue is hereby ordered to grant a tax credit in favor o f petitione r Esso Standard Fertilizer & Agri- cultural Chemical Co. , Inc. (Philippine s ) _the amount of Pl2 , 333 . 00.

Without pronouncement as to costs .

Associate Judge