CTA Case No. 2573

DECISION -

CTA CASE NO.

Chevron Genoa 1473

Zuiko M

aru

Shosei Maru

Stolt B

oel

Vessel

Visayan

Shosei Maru

~do-

San Carlos

Ferngate

Visayan

-do-

Yoshu Maru

Shosei Maru

Shizuura Maru

Visayan

Yuyo Maru

2573 8-21-71 1520 8-28-71 2120 12-12-70 946 5-30-73 Aviation 1,028 Gasoline m/t Lubricating 594,956 oil * m/t .

-do- 2,355.71 m/t Lubricating 5,135 oil m/t 8-13-71 8-24-71 11-23-70 5-22-73

3. The Collector of Customs of Manila levied and collected in advance on said shipments the following amounts aggregating P30,958.30 as checking charges pursuant to Customs Memorandum Order No. 55-69, dated October 3, 1969, which petitioner paid under protest under the following official receipts and were ligui- | dated under the following voucher numbers and dates;

Reg.

No.

839 795 “1006 1054 1275 1399 1548 1937 52 128 1715 421

Amount of

Checking

Charges

P1,930.00 975.74 937.51 2,802.37 287.09 76.94 1,847.51 939.04 122.14 264.86 1,520.36 1,140.88 2,990.57

Official Receipt

Number

15766 14381 19048 19874 25045 25046 26374 29451 37088 41845 44312 33120 51092

Date

5-13-70 5- 4-70 6- 4-70 6-10-70 7-24-70 -do=- | 8- 6-70 8~28-70 ll- 6-70 12-24-70 1-21-71 10- 2-70 3-12-71

Voucher

Number Date

15766 5-13-70 14381 5- 4-70 19048 6- 4-70 19874 6-10-70 - 25045 7-24-70 25046 -do-~_

26374 B= 6-70

29451 8-28-70 37088 11- 6-70 41845 12-24-70 44312 1-21-71 33120 10- 2-70 51092 3-12-71

DECISION =

Lucky No. 1 762 2,474.83 57012 5- 5-71 57012 S- 5-71 Shosei Maru 883 767.10 58955 5-24-71 58955 5-24-71 Yuyo Maru 1134 3,301.79 63081 6-30-71 "63081 6-30-71 Stolt Sidra 1358 269.10 66822 8- 3-71 66822 8- 2-71 Bonneville 1492 108.17 68154 8-16-71 68154 8-16-71 Chevron Genoa 1473 925.20 68819 8-20-71 68819 8-20-71 zuiko Maru 1520 535.46 69372 8-27-71 69372 8-27-71 Shosei Maru 2120 2,120.14 40197 12-10-70 40197 12-10-70 Stolt Boel 946 4,621.50 141415 6- 1-73 141415 6- 1-73 Total P30 ,.958.30

4. Petitioner filed with the Collector of Customs of Manila twenty-one (21) separate protests against the imposition and collection of said checking charges, which protests were docketed under the protest case numbers listed below and subsequently denied by the q Collector of Customs of Manila in a decision rendered on August 27, 1973 and received by petitioner on October 8, 1973:

Vessel Registry No. Manila Protest No.

Visayan 839 6036

Shosei Maru _ 795 6037

~do~ _ 1006 6085,

San Carlos 1054 6094

Ferngate 1275 7025 ‘

Visayan 1399 7039

~do- 1548 "7062 224 ' - 5 -

Yoshu Maru

1937 7082

Shosei Maru

52 8004

Shizuura Maru

128 8029 Vi sayan 1715 808 2

Yuyo Maru

421 810 6 Lucky. No. 1 762 8160

Shosei Maru

883 8178

Yuyo Maru

1134 8208 Stolt Si dra 1358 8242

Bonneville

1492 8245

Chevron Genoa

1473 8246 zuiko Maru 1520 8247

Shosei Maru

2120 8316

Stolt Boel

946 8861 5.

On October 23 , 1973, petitioner a ppealed to respondent the decision of t he Collector of Customs of Manila in said protest cases, which appeal was docketed as Customs Case No.

73-~ 38 .

6.

On November 21, 1973, r espondent rendered his decision in Customs Case No . 73-138 affirming lu !£!£ the decision of t he Collector of Customs of Manila i n said protest cases, copy of which deci s ion was r eceived by petitioner on November 28, 1973 and is hereto attached as Annex "A" and made an i ntegral par hereof .

Hence the present r ecourse.

Petitioner assails the right of the Bureau of 225

- 6 Customs to impose and ~oll ect the checking charges aforesaid .

Argument advanced 's tha such charges • are improper .

easons : (1) ,t~o statutory author i t y · for the collection of checking charges at the Port of Manila; and (2) No check ing services were r endered .

.

to author ize t he i mposi t ion and collection of checking char ges.

1 .

Petitioneris position of no statutory autho- r ity for the collecti on of checking charges at t he Port of Manila calls t o mind Caltex (Philippines) .Inc. vs. Acting Commissioner of Customs, CTA Case Nc o 2564 , March 31, 1975, certiorar i denied in L- 41595, Februar y 6, 1976 , the factual setting of which i s on all fours with the case at bar, including the parties involved and i ssues litigated , · and where this Court di ~po sed of the same ~ontent i on in clear and unequivocal terms, in th~ following wise:

The collection of checking charges on lubr icat ing oil from petitioner was made pursuant to Cus t oms Memorandum Order No. 55-69 dated October 3, .1969 , which states: "( 6) At the Cash Division, the Billi ng Cierk· t ogether wit h t he Liquidator assigned thereat from

the Management Overseer Group and

the r epresentative of the arrastre contract ors wi ll compute t he amount of checking charges and prepare the arrastre bills.

The special permit s hal l be validated upon paymen in advance of the corresponding check- . ing charges as comput ed , in cash or i n certnied check by the owner , 226

DECISION -

CTA CASE NO . 2573 - 7 - i mporter, consignee and/ or broker of t he cargo subj ect to refund if it is l ater ver ified t hat no ac tual c heck ing services has been rendered. All payments in advance shall be received by t he teller des i gnated for s uch purpose by the Chief , Cash Division , and Offfcial Receipts shall be i s sued for such payment to be credited to the Portworks Fund .

A copy of the Official Re- ce i pt and a copy of the Arrastre Bill shall be forwarded by the Cash Division to the Int ernal Audit Service after payment.

HENCEFORTH

NO PAYMENT TO THE ARRAGTRE CONTRACTORS

OF CHECKING CHARGES FOR CHECKING SER-

VICES AT THE BAY SHALL BE ALLOWED OR

AUTHORIZED."

(Exh . "4" pp. 33- ~5 , CTA rec.)

The collection of checking charges as embodied in the aforesaid Customs Memorandum Order No. 55-69 i s authorized by Section 3302 of the Tar iff and Customs Code , which pro- . vides as follows :

"Sec . 3302 .

Other charges,- .

When any article is sold or any services rendered by the Bureau of Customs in any matter for which a charge may be collected legally , no fee therefor having been fixed by l aw, s uch charge shall be on such amoun t as may from time to time be fixed by r egulation or order of the Commissioner and approved by the department head: and the payment of such charge may be made by affixing and cancelling t he documentary customs stamp." (Under lining ·supplied.) .

It i s apparent from the above quoted pro~ visi ons of t he l aw that respondent can fix by regulation or order the amount of c hecking c harges when the amount is not fixed by law. The cont ention of petitioner to t he effect that there exis ts no statutory authority as a basis for the collection and imposition of checking charges on its lubricating oil is wit hout merit.

227

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- .s - We fi nd no cogent and valid reason to modify , much l ess depart from the conclusion r eached in Caltex (Philippines) _I nc., as expres sed in the above quoted opinion of the Cou~t ~he~e , and the same should ~esolve the i dentical p~oblem now brought before us in this appeal.

2.

Petitioner further contends that the amount of P30,958 . 30 paid as checking charges should be re funded to .it in accordance with paragraph 6 of Customs Administrative Order No . 55-~9, for t he reason that there were no actual checking services rend e ~ed by the Bureau of Customs , or its ar~astre contractor, on the lubricating oil shipments consigned to i t .

We find peti tioner ' s contention well taken. In order to have a more effective means of ' .

collect1ng lawful revenues , dues, f ees , charges, fines and penalties accruing under the Tariff and Customs Code, the Bureau of Customs promulgated Customs Memorandum Order No. 55-69 dated October 3, 1969 providing for the collection of checking charges in advance; and the summary report of the arrastre checker is proof of actual checking services rendered . (Special and affirmative de fenses of r espondent in his answer to petitioner's petition f or review.) paragraph 8 of said memorandum order : 228 To quote f I .

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DECISION

CTA CASE NO . 2573 . - 9 - '8) After the ships i de d ischarge at the bay i s completed , the Customs I nspector on board and the arrastre checker who shall be a qual i fied surveyor in cases of bulk cargoes shall sign on t he f ace of Special Permit i ndicating time of completion of shipside discharge.

The Arrastre Checker

shall also submit to the Customs Inspector on board a _eummary" report of actual ser - . vi ce rendered to be attested by the inspector .in five (5) copies, the original to be sub- mitted t o t~e Cash Divi s ion by the Contrac tor •~ Head Checker, one copy to be reta ined by t he Customs I nspector , one copy for the broker/ consignee and one copy f or the Arrastre Contractor.

The summary_££port duly accomp- lished shall be proof t hat checkin services was rende~ . x x x 1n1ng suppl~ed . )

If the summary r epor t of the arrastre checker is 0h ~ evidence tha t checking services had been rendered, why i s it that in denying the prot ests of petitioner aga i nst the imposition and col l ection of checking charges on i ts l ubricating oil sh i pments , the Collector of Cus t oms of Manila based its decision dated August 27, ' 1973 on t he presumption of law that "offic i al duty has been regularly performed" under Section 5, Rule· 131 of

the Rules of Court and ~

on the summary reports of his ar r astre c hecker as provided for in Customs Memorandum Order No . 55-69?

Then, when the protest cases were appealed to r espondent Commissioner of Custo~s, the decision of t he l atter dated November 21, 1973, affirm- ing in !2!2 t he dec ision of t he Collector of Cutoms, merely noted tha t Customs Memorandum No. 55-69 • provi8es that t he s ummary report of t he Arrastre Checker s shall 229 '

- 10 be proof of actual check i ng services rendered"J and "With the summary r eport of the Arrastre Checkers, he presumption of l aw is that checking services have been rendered in the i nstant cases , since the presumption of law is to the effect that official duty has been regularly performed".

(pp. 6-7., CTA r ecords.) . Nothing - absolute- ly nothing - is said in the dec isions Of t he Collect or of Customs and Commissioner of Cus toms of the summary reports duly accomplished by their arrastre contractor that checking servi ces were rendered, when these reports ar e supposed to be official records of the Bureau of Customs and under the customs memorandum, proof of actual checking services rendered.

It i s to be fairly and justly presumed that the Commissioner of Customs, which possesses a power so comparatively broad and searching as to fix by regulation or order checking charges for services rendered has so shaped the customs memorandum order as, without ambi- guity or doubt, to bring within it everything it was meant to be.

Hence , where his memorandum order requires that the summary report' of t he arrastre checker is proof of actual checking services render ed , the right of the Bur eau of Customs to collect chec king charges should not be planted upon the presumption, standing alone , that official duty has been regularly performed. Accordingly, 230

DECISION -

CTA CASE NO ~ 2573

- .11 - as contended by pet itioner , the presumption that checking services have been rendered should arise upon the existence of "s ummary reports duly accomp- lished" , and not based on another presumpti on that such summary reports exi s t because official duty has been performed.

An assessment, wh i ch in this case is the l iabilit y of petitioner to checking charges, must be based on actual fac ts .

The presumption of correct- ness of assessment being a mere presumption cannot be made t o r est on another presumption .

(Collector of

Internal Revenue vs . Benipayo, L-~3 656 , January 31, 1962, 4 SCRA 182 , 185o ) .

At any rate, in accor dance with Section 2, Rule 7 of the Rules _of the Court of Tax Appeals, 'which pro- vides that the Commissioner of Customs shall certify and forward to this Court with in ten (10) _days after fili ng his answer , respondent, upon moti on of petitioner , was directed to f orward and certify , as part of the Customs records bearing on this case , the summary re- ports of the arrastre checkerse Dur ing the hear ing of this case on July 11 , 1983 , however , r espondent ' ~ counsel orall y manifested before this Court tha t due to the lapse of almost t en (10) _years , t he summary reports of the arrastre checkers on the·impor tat i ons in question could no longer be l ocated despite diligent efforts. 231

DECISION -

CTA CASE NO . 2573 - 12 - Nevertheless , if in t he dec isions of the Collector of Customs of Manila and r espondent Commissioner of Customs in the subject protest cases , which were pro- mulgated on August 27 , 1973 and November 21, 197 3, respectively, the summary reports of the arrastre checkers were never cited or menti oned as evidence that checking serv ices were rendered pursuant to Memor andum Orde r No. 55-691 the Cus toms r ecords s ub- mitted to t his Cour t on February 11, 1974 do not i n- elude or contain the summary r epor ts of checking ser- vices performed on the oil shipments of petnioner; and the personnel of t he Bureau of Customs could not locate them, the only i mplication 5 that such summary reports do not exist.

Undoubtedly , it seems clear that no checking services were actually rendered by the Bureau of Customs or its arrastre contractor on the lubricating oil shipments i nvolved in this case. As observed by this Court in Caltex (Philippines) .Inc. vs. Acting Commissioner of Customs, CTA Case No. 2564, March 31, 1975 , certiorar · denied in L-.1595, February 6, 1976, which as stated earlier , is on all fours wit h the instant case by r eason of the exact i dentity of the f acts , par t i es and law i nvolved, as well as the i ssue l itigated: After t he vessel had arr i ved, three cargo inspectors headed by Mr . Conrado Mendoza of the E. R. Sanderson and Company hired by the herein petitioner boarded 232 '

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DECISION -

CTA CASE

O. 2573 - 13 - t he vessel for t he purpose of check ing the quantity of the cargo and to deter- mine if the l ubricating oil was con- taminated with f or e ign elements while on boar d the vessel .

Inspec tor s of R.S.

Del Pan Industries hired by Far Eas t Molasses also boarded t he vessel for the same purpose but with a view t o pro- tect the vessel's owner should a claim be fil ed by a consignee.

The said sur- veyors watched the opening of t he tank hatches by the vessel's crew, a f ter which the surveyors measured the lubrica ting oil before the s ame was pumped to the lighters and barges, and again it was measured when already at t he l ighters and b Q~ ges .

During

all the t ime that pe titioner 's surveycrs were performing the job measuring the said lubricating oil, none of the personnel of the Bureau of Cus toms present at the aforesaid ves~el ever participated. In the light of the above , and t he uncontroverted testimony of petitioner's witness, Mr . Conr ado Mendoza , who surveyed the cargo invol ved herein , that: Q.

A.

Q.

A.

Mr . Mendoza, i n performing the sur- veying funct ions in connection with · the shipments involved in this case, would you know if there were any representative fr om t he Bureau of Customs or Arrastre which conducted the same?

In ever y vessel , t hey have customs i nspector on board and customs guard . There are case s wher e checkers are boarding vessels also - wh ich are ar rastre checkers.

Now, on t hose cases where there were r epresentatives f r om the arrastre operator, what did these r epr esent- atives perform in connection wi t h these shi pme n t~?

I don 't exactly know t he scope of their work .

What I know is , sometimes 233

DECISION

CTA CASE O. 2573 - 14 - they come t o us and get quantities we computed, sometimes t he measure- ment.

After that they j ust leave for somewhere .

X

X

X

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Q.

When you s aid th e ~ came to you and got figures you computed , what figures were you referring to?

A.

Fi gures on the quantities of the product.

We compute the quantities , l ater or after these figures have been alr eady prepared they came t o us and ask how much.

But if you mean actual gauging perfor med by them together with us, I cannot remember whether they did the ac tu a l~ug ing. (TSN, July 1 , 1982 , pp. 6 & 7) We are convinced that no actual checking s ervices were rendered by the Bureau of Customs personnel or its arras tre contractor on t he oil shipments of petit'oner . In line wi th the dec ' sion of the Supreme Court in t he case of Caltex Philippines , Inc., et al., vs. Delgado Bros., Inc., 96 Phil . 308, and t he decision of th i s Courl in Caltex (Phil ippines) .Inc . vs . Acting Cqm- missioner of Customs , supra , we find petitioner 110t liabl e for the checking charges i n question as no checking ser vices were performed by t he Bureau of Customs or by the arrastre contractor . Accordingly , the checking charges paid by petitioner are r efund- abl e .

WHEREFORE , the decis i on appealed from i s hereby , rever sed .

Respondent Acting Commissioner of Cus toms 234

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- 15 - is ordered to grant pe titioner a t ax refund or credit in the amount of P30,958 . 30

WE CONCUR:

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