I ' REPL.JRY.1R of 'I I!:·: Plituppinlts Court 0f Tax Appeals Ol ' Y.7.0N C:Itv Olympia J:Usiness I·Fi.·-'\Chines Co., Inc. vs. Comiv\Issioner of Cu::, et al.

DECISION -

CTA. CASE NO. 2756 - 2 - the spare parts were all declared and classifie d by petitioner under Tariff Heading No . 34.55 of the Tariff and Customs Code, as ame nded , with 10% ad valorem duty. based on this classification, petitioner paid on the said shipment t he amounts of f>l7 , 146.88 and Pl 5 , 504 . 00 as customs duty and advance sales tax , respectively . However, befo re the tinal liquidation ot the importation, the Burea u ot Customs picked out repres entative items of the imported spare parts and revised the clas sifica- tion of t he aforesaid s pare parts by placing the subject r eprese ntative items under different taritf headings and .subj ected t he same to higher rates ot duty as tallows : Rubber foot 40 . 148

Electric Motor

85 . 01C

Springs

73 . 35 Bolts , Nuts , Washers , Ri vets , Screws and studs 73 . 32

Spool

73 . 408 Connecting Wi r e, Taut Wire, Te nsion

VJire and Pull

1dire

Pins

Condenser

Switches

Rubber Rings

85 . 238 73 . 34 85 . 18 85 .19 40 ol48

Rate of Duty

50}6 so% 30% sa;s 100}6 10% 50}~ 50}6 As a result of the above reclassification, peti- tioner was assessed by the Collector of Customs tor

Dl:CISI ON -

CTA. CASE NO. 2756 - 3 - the Port of Manila and made liaole for the payment o± the amounts of F6,693.00 and f-586.00, as additional customs duty and advance sales t a x, re specti vely, which peti tioner suosequently paid on March 12, 1973 as aforesaid under Of ficial Receipt No . 0816785. Petitioner suosequently and formally protested on March 20, 1973, docketed as Mani la Customs Protest Case No . 8727 , the additional assessment made and claimed tor the refunds ot the said additional customs duty and advance sales taxes it had pa id f rom t he Collector ot - Customs.

Thi s protest was denied in a dec i sion by the Col l ector of Customs, which was subsequently atfirmed by the Commissioner of Cus toms, on appeal in the latter's decision dated ~e p tember 9 , 1975.

From this decision of the Commi ssioner of Customs, aforesaid petitioner ap- pealed to this Court.

The issue in the instant case is whether or not the reclassification o± the various spare parts made by the Col lector of Cus toms and attirmed oy respondent Commissioner ot Customs is in accordance with law . Petitioner contends that the imported spare parts were properly classified oy it under Tariff Heading No . 84 . 55, Chapter 84, Schedule XVI ot the Taritf and Cus- toms Code ot the Philippines , as amended . It asserts that the parts in question were imported and sold tor use solely or principally tor typewriters classified under Tariff Heading No. 84 . 51, and calculating or .. .

DECI~ION -

l.TA . CA::il:. NO . 2756 - 4 - or adding machines classified unde r Taritf Heading No. 84 . 52.

Petitioner claims that Tariff Heading No. 84 . 55, taken in re lation to Taritf Heading Nos . 84 . 51 and 84 . 52, squarely applies in this case . ~aid Tariff Heading No . 84 . 55 provides as tollows: 84 . 55 Pa rts and accessories (other than covers , carrying cases and the like) suitable tor use solely_gr P£inci£~1lY ~ith machine~_ot_E_t_ind tall- i.iliL::Yl..:t.hin he ading __ ~.Q..!. 84 . 51, 84 . 52, 84 . 53 or 84 . 54 ..•• ad val. 10% The relative Taritf Heading Nos . 84.51 and 84 . 52 re- ferred to in Taritf Heading No . 84 . 55, provide also as tollows:

84.51 Typewriters , other than type- writers incorporating calcu- lating mechanisms, cheque- writing machines • . • • • • ad val. lQ% 84 . 52 Calculating machines ; account- ing machines, cash registers, postage- franking machines, ticket- issuing machines and similar machines , incorpora - ting a calculating device •• ad yal. 20% Based upon its claim that the spare parts were used solely fo r its Olympia typewriters , calculating and adding machines , petitioner concl udes that the Burea u ot Customs had theretore erroneously reclassified the imported parts in controversy under the aforementioned various taritf headings , other than Taritf Headi ng No. 84 . 55 which reters t o parts and accessories ot ot fi oe machines such as typewriters, adding machines and cal- culating machines .

Moreover, the application of said ( ,... G ' .

,:.._, Lt' . .....................

· · · ·- · ·- · ·" ···--~------r--- ·

DECISION -

CIA .

CA~t NO . 2756 - 5 - Taritf He ading No. 84 .55 to the imported spare parts can De sustained, according to petitioner, oy the Expla natory Not es of the 1950 text ot the ~r us s els Nomenclature upon which the Taritf and Customs Code is oased, and particularly under Rule 3, para graph (a), ot ~ ecti on 203, which provi des as tallows: Rule 3 .

When articles are prima tacie, classifiable under two or more headings or suoheadings, or imported in sets consisting of several articles, classification shall be et± ected as tal l ows:

(a) The he a di.!J.9_Qr s ubhea di!lSL~hi c h £ rov_i .Qg.§._:the m os.:t~.£i t i.£_Qg.§...~J:Jptio.n 2,ha LLJ2.~_pre tgrred_,:t.Q_.£!2.Y other he a di.!l9 .QI_su~bgading_hrov ~.Q1.ng_£_ill.QJ:g_qen eJ:Ql .Qg.§.£~1£ t io n.

(Underl i ning ours.)

On the other hand, res pondent Commissioner o± Customs insists that the reclassificati on ma de ot the imported articles are correct.

We do not agree with re spondent.

The representa- tive imported articles or items - 10 items al l in all, were all reclassified, at different Tariff Headings with the exception of condensers, and at rates higher than 10% .

~ut all these spare parts, consisting ot ( 1) ruober toots; ( 2) electric motors; ( 3) springs;

(4) bolts, nuts, wa shers, rivets , screws and studs; (5) spools; (6) connecting wires, taut wires , tension wires and pull wire s ; (7) pins; (8) condensers ; ( 9 ) switches; and (10) ruooer r i ngs , were all imported oy petitioner , without any contradiction on the part of respondent, as parts only ot Olympia otfice machines, ') r·· r"""j ,:.., ,_) ' '.

.. . .............. ··- ·- -·----~ --- - --~~~~_.... ............ ..._ .. .._ ..

DECI ::,ION - CIA. CASE NO. 2756 - 6 - such as calculators, adding machi nes and portable , standard and electric typewriters .

(Exhs . A to A- 28;

A-29 to A-49; t.s . n., pp . 8- 9; 10-12; 12-22 ; 22-23, October 19, 1976 . )

These spare parts were all manu- factured in \Jest Germany and imported to maintain and are suitably used onl y t or Olympia busine ss machines. (Jgid., t. s .n., pp. 22- 24; ibid., p . 4.) With r espect to these representative spare parts chosen oy the Collector of Cus t oms, as oasis f or its reclassification, it i s very important to take note of the foll owing uncontradicted declarations o± petitioner's witness Roberto Camadini, Na t1onal Technical Lonsultant of peti tioner during the hea r i ng of the case in this Court.

with r e t er ence to the ru~L.!.Oot~ {Exh. lj-1), it wa s aeclarea uy ~a m aa1n1 that t h e ~e ~ p are part~ were to oe used ror . Olympia uu s 1n e~ s mac hl nes- typewriters , calculators and adding ma chines - ana intenaea to reduce tn~ noi~e ana protect the moveme nt or the machines parts and cannot ue us ed tor any othe r machines . lt.s.n., pp.

8-9, Oct. 19 . 1976; see also t . s .n., p . 14, Jan. 12, 1977.) As to the electri c motors (Exh. lj-L), the~e ~pare parts were aes1gnea t o ari ve Olympia electric typewriters, electric adding machines or c a lcul a tor~ and the~e cannot oe used as spare parts tor other orana ot machines . (Ibia., pp. 16-17; 28-29.)

Anent the importee srr~D~2 (Exh. B-3), these parts ' ) t.' 8 .

' .

,...., '- ~1 \.

.. . _ , .. _ ...... _. .... ......... ............... ~ ................... ---- ---" --~-.-----·! DEi..... l ::ilON "'- CTA. CASE NO. 2756 - 7 - were particularly designed to produce t ens ion and used as a ma.in drum spring of 01 ympia typewriters . (]bid.,

p. 30; t . s.n . , p . 18, Jan . 12, 1977.) 2£££WS and 21~ d s, the se spa re pa rts were designed to hold together a machine a nd enable s ome parts to func- tion on a s pecific design and we re made i n sizes and in t hickness , and used and f itt ed in a particular pla ce in the Olympi a brand typewriters, adding machines and cal- culators .

(Q2.Ci1 . , p . 31 ) The gumQer screws (Exh . 4), were made to hold t he carriage at the end motion of these mach i nes.

(t. s . n . , p . 20 , Ja n . 12, 1977.) The n~ts were intended to fasten a certain attachment to the Olympia typewrite rs and other Ol ympia brand machines. (joid., pp . 22- 23 . )

As to t he 22QOls, these spare parts are descrioed as round meta l parts tor pulling up the riobons . The spring mechanism ot the spool has s pecific ±unctions intended tor the Olympia el ectric typewriters and cannot be used in other brands ot typewriters . (t . s . n. , pp .

32 - 33; Oct . 19, 1976 . )

With res pect to t he tensi on and pull wires (Exhs . B- 6; B- 7), these parts constituted a linkage between the typewriter :bar and the intermediate bar tor Olympia typewriters.

(t . s . n. , p . 23, J a n . 12 , 1977 . )

These

cannot be used i n any other machines of other brands , and with respect to t he connecting , taut , and pull wires, . . .. . .... .. .... ... . .

"· ·----~-.... ~~----.._ ___ __......_. __

DECISION -

CTA. CASE ~0. 2756 - 8 - these parts were made gene ra lly as a linka ge between one moving part to another ot Olympia business machines . (QQ. Ci t ., pp. 33-34.)

As to t he £.i.D§. , these were ·specit ically used in Olympi a electri c typewriters to hold the staff segment thereof, or the pins were us ed to hold i n place the capi t al and sma l l le t t ers assemDly o± the said t ypewr i - ters .

(p . 370 , Customs Rec . )

1dith respec t to .f_Qndensers (capacitors) l Exh. B-,§/, these s pa re pa r ts were designed tor Olympia elec t r ic machines~ such as typewriters and calc ul ators and used t o give the motor the right starting t ur n and ca nnot be used tor machines o± any othe r brands . (t . s . n. , pp . 37- 38 , Oct.

1 ~ , 1976 . )

It provides the impulses f or the drum cycle (t . s . n. , p . 26 , Jan . 12 , 1977 ) and des i gned to ±it the power o± the motor ot the Dusi ness ma chine s . (Ibid ., p . 27 . )

Coming to the switches (Exh . b- 9 ) , t hese are pl as- ti c switche s t or the red and Dlue r iDDen mec ha ni sm of the said typewriters .

( Ibid ., p . 28 . )

These ar e the imp r ession control or the ot f and on switches f or Olympi a electric typewriters , adding machines and calc ulators and which cannot De us ed tor any othe r bus i ness ma chine s ot other Dr ands .

(Ibid . , p . 39 ; t . s . n., p . 28 , Ja n. 12 , 1977 . )

Lastly, with r espec t to the ruDDer r i nas , these were designe d a s a bumper to reduce noise, leve l t he ~2 c 0

DECI::>ION -

CIA. CASE NO. 2756 - 9 - moving parts and to enaole the operator to atfix top cover s or parts ot typewriters a nd calcul9tors . (Ibid . , pp . 41- 42.)

Considering the aforesaid declared f acts relative to the spare parts in question, and which were used by respondent to reclassity the same under other headings at higher ~Q valQ£~~ duties , we are of the opinion t hat the application by petitioner of Taritf Heading No . 84 . 55 , in relation to Taritt Heading Nos . 84 . 51 and 84 . 52 should be upheld .

Taritf Heading Nos . 84 . 55 and 84 . 52 ot t he Tariff and Customs Code are quoted her eunder tor emphasis and analysis .

84.55 Parts and acces sories (other than covers , carryi ng cases and the like ) suitable tor use solely or principally with machines ot a kind tail- ing within heading No . 84 . 51 , . 84. 52 , 84 . 53 or 84 . 54 •..

• ad val .

10~ 84 . 51 Typewriters , other than type- writers incorporati ng calcu- lating mecha nism, cheque - writing machine s . .

. • .. ad val . 29% 84 . 52 Calc ulating machines; account- ing machines , cash r egisters , postage-franking machines , ticket- issuing machines and similar machines , incorpora ting a calculating device .

. ad y~l· 2~6 We take caretul note that t he aoove quoted Tariff Hea d- ings Nos . 84 . 55 , 84 . 51 and 84 . 52 are under ~chedule XVI and under which Machine r y and Mechanical Applia nces; Eletrical Equipment and Parts Thereof are cl assified .

2Gl

·-· --- -----····---- -·-· - ---· ·--~--·-~• , ,. .mr Hrxcum=-oa:=:c • •=• •= ••=•=•==='="'F~;o<;l;R > :::l;"Q;'==

DECISION -

CIA. CA::>c NO. 2756 - 10 - In the Explanatory Notes to the 1950 text ot the brussels Nomenclature, u ~ on whi ch our tariff and customs laws are based (Montano Tejam, Preface to t he 1st and 3rd Ed, pp. VII-IX, ~o m.!:!}g nt.£r:ie.,Lof_! he_Bev _i_~e d_Iariff _,2[)d Customs ~ode_gt_~h~_E h ilip.Q in es , Vol . I , 1973 Ed . ) , it provides that Schedule XVI , " x x x covers all mechanical or elec- trical machineries , apparatus and appliances and parts ther eof, x x x. "

(Ibid., Vol . II , p . 1360) The classifications ot the articles in question are determined principally according to the "terms of the taritf headings" and their r elative schedule and chapter notes .

(::>ec . 203 , Tariff and Customs Code , as amended . )

And als o, pursuant to the same Explanatory Notes to the ~ russ e ls Nomenclature , re garding Tariff Hea di ng No. 84 . 55 , it stated that "subject to the general provi sion regarding t he classification of parts (see General Explanatory Note to ~chedule xVI)~ this heading covers parts and accessories suitable tor use solely or .Qri.Q.£ipal l y with machine s ot he adi ng_§~51 , 8 4 . d~ ' 84.53 or 84 . 54" (Montano Te jam , g.Q • .£.Lt. Vol . III , pp . 1603- 1604; Underlini ng ::>uppliedJ The Expla natory Notes , therefore , were in substantially the same wordings as what the law now provides , that is the provision in Taritf Heading No. 84 . 55 .

A much more deeper insight into the provision of Taritf Heading No . 84 . 55 will show that this heading covers "parts," without any limita t i on as to their component materials, or limitation that these

DECISION -

CTA. CJ\Sc i\lO. 2756 - 11 - cannot be used tor any purpose , except only that these are used as spare parts ot the machines or articles to which they are de s i gned or dedicated, hence, cla s s ifiable properly as parts of articles or ·machines . (.§QQ Norma n G.

Jensen, v . u.s. , 24 CCR 160; CD 1225, Vol . 4, Gus - toms Law Digest , Par. 8 . 6, p . 444.) As a matter of legal principle , "parts " to be dutiable , must be speci- fically described and clearly identitied with such arti- cle or machine and that it was manufactured and dedicated solely tor use on a particular article or machine ; such to be useful fo r no other purpose and that such parts must be essential to that article .

(Davies Turner & Co .

v. u.s . 13 CCR 190 , CD 893 , 4 Customs Law Digest 445; U.s . v. oell & Howel l Co., 19 CCPA 151, TD 45263 , Aff ' g Abs 14388 , 4 Customs Law Digest 527 ; u.s. v . Kriss Kross Corp ., 24 CCPA 133 , TD 48607, rev 'g Abs 32310 , 4 Customs Law Digest 528 .)

The imported parts a nd/or accessories in question, on the strength ot the overwhelming evidence of ·petitioner, were specifically descrioed and were designed especially or particularly tor use in replacing wornout parts tor the Olympia brand machines - typewriters, addi ng and cal- culating machines .

The said spare parts are components ultimately to be a ssembled to the completed ma chines of petitioner and this contributes greatly to t he perf ormance of said machines; and t here is no evidence which will show that these spare parts can be used in ma chines of other

DECISI<DN -

CTA. CASE NO. 2756 - 12 - brands; and these spare parts were oeing sQ1d for use as parts ot such Olympia ousiness machines. Accordingly, aforesaid spare parts, having been previously specifical- ly described as spare parts ot the Olympia business machines- typewriters, calculating and accounting machines named therein (u.s. v. American ~ead Co. , 9 Cu App. 279 TD 37873, Aff'g Abs 42259) are classifiable under Taritf Heading No. 84 . 55 as parts of typewriters, calculating and account- in~ machines reterred in Taritf Heading Nos . 84.51 and 84.52 rather than those taritf headings which respondent Commissioner of Customs and the Collector ot Customs have classified the same .

By the clear terms or provision of Taritf Heading No . 84.55, the parts in question were manufactured and actually and practically intended as parts and accessories of the worn out Olympia busines s machines - typewriters, adding machines and calculating machines . That being so, there is no way by which the said parts and accessories can be classified therefore under different heading clas- sifications (TH Nos . 40.148; 85.01; 73 . 32; 73.35; 73.408; 85 . 238; 73.34; 85.18; 85.19 and 40.148, all ot the Tariff and Customs Code, as amended) and under ditferent and/or higher tariff duties.

It was error tor respondent Commissioner of Customs to classity the ruober toots and ruooer rings under Taritf Heading No. 40.14B with an ad valorem duty ot 50% because under the terms ot that heading, it classifies there under only

DtCI0ION -

CTA . Ci-\SE NO. 2756 - 13 - articles of ,1!nh2_rd_gne.Q_y_vlcanized rut1ber such a;; rubber was hers are classifiable .

Here, the rubber toots and r ubber rings i n question were essentially ot very special kind of rubber tit fo~ and int e nd~d s pecially to reduce the noise ot Olympia business machines. Moreover, under legal note 3( c) of Chapter 40 , which covers "Rubber, Synthetic Rubber , factice and articles thereot , under which Tariff Heading 40 .148 partic ularly fall , it pro- vides , with legJl authority , that "mechanical or elec- .!.±:.leal ap p l_i_a nc es_£.Qc:l~ts (includinq electrical goods of all kind) , .QLhardf..!Jg_Q rubber , talling within Schedule XVI (coveri ng ma chinery and mechanical appliances; elec- t rica l equipment; parts there of) 11 are not covered. ( ~nde rl iniD 9 ours .)

Consequently, petitioner had pro- perly classified the rubbe r foots a nd rubber rings under Tariff Heaa.l 11Y 1 ... o. 84. 55 .

As to the ~.L~ctrlL- lllOtOr;:, , whlcn r~ ;:,p 011u ~ nt naa r·cclassified under Tariff Heading No. 85 . 01C at an ad Y£1Q£Qill duty of sa~ , which covers electrical goods such as generators, motors and transformer s , and others , t hi s recl as sifi cati on is er roneo us f or t he r easons that

(1) t he ele ctric moto rs were i mport2d as s pa re parts whi ch were commercia lly and pr acti cal ly fit f or petiti on- e r 's Olympia business machi nes ; a nd (2 ) t he Expla natory Notes to the 1950 t e xt of the Bru s sels Nomencla t ure (Montano Tejam , fomment aries on the Revis ed Tariff and ~-~-~ .

.!.'::.~~ C o9.~ , as amended·, Vol . III , 1973 Ed ., p . 1649)

DEC ISION -

CTA. CASE NO .

2 7~6 - 14 - ~: rovides th at;

11 The present Char t er (Chapter 85 - Electrica l f;lachinery and Equip;·1cnt, Parts Ther eof) covers all ele ctrical ma chinery and equipment other tha n (a ) ID££hiD.£1:Y_ anQ_ _ £pparatu2__ o f~ind C..QVei.:ed__Qy C h o I..!:.S.L 8 4 , .!::! hi c b_.I.S.!D~AJJ2. __ <;:.l..Q2._~ i fie d there eve n i f ele.£.!:I.: ic--r~ ee \Jene:r:al E~planato ry Note on tha t Chapter . '1Lita llcs Uurs..!./ In other words , even if the article in ~ u est ion is an electric motor , inasmuch a s the elect ric motors were in- tende d to be pa rt of , and suitably and actually, solely and r rincipally used in ma chineri es covered by Chapter 84 (Boilers , Machinery and Mechanica l Appliances; Parts Thereof), under which Taritf Heading No. 84 . 55 falls, the electri c motors are suoject to 10% taritf duty , as of parts andjor ac cessories/typewriters , adding and calcu- lating machines .

With regard to the springs, respondent reclassified these under Taritf Heading No . 73 . 35 , covering spring and leave s ot springs , made of iron and steel, with an ad valorem duty ot 3~6 .

This is not correct.

Under the

~xplanatory Note of the 1950 text ot the brussels Nome n- clature (Montano Tejam, Ibid. , Vol . II , pp . 1226-1227), it provides that Taritf Heading No . 73.35 excludes "c) Springs , assemoled with other articles to form x x x, identitiable garts of machinery ( ~ ch e dule XVI) x x x."

This means that the springs in question , which were par- ticularly designed to produce t ension and used as spring ot the main drum ot Olympia typewriters, should not therefore be classitied under Tariff Heading No. 73.35.

DECISION -

CTA. CASt NO . 2756 - 15 - This more than ever strengthens the view that parts and accessories used solely and principally destined tor typewriters, adding machines and calculating ma chines, and used tor no other purpose , shduld oe classified under Tariff Heading No . 84.55 at l~lo ad yal9rem duty. The bolts, ~, W2Shers , rivets, screws and studs were wrongly reclassified under Tariff Heading No . 73.32 with a taritf duty of 5~~ by res pondent . For the same reason, as heretofore adverted to, with respect to the articles above stated , these are parts suitable tor and used solely in machines, such as the Olympia typewriters, adding and calculating machines, oecause they were mainly de signed to hold together the said Olympia business machines' parts together, and he nce, should be properly classitied under Taritf Heading No. 84.55. Whil e these articles may literally tall under the articles mentioned or listed under this heading, such as the nuts , rivets and washers, yet, in the legal notes under ~che dule XV covering ~ase Metal and Articles of ~ase Meta ls, where Taritf Heading No . 73. 32 talls, and considering that the legal notes under ~chedule XV is a part ot the law itself, legal notes l(t) of said ~chedule XV declares that arti- cles talling within ~chedule XVI (kachinery , Mechanical Appliances, El ectrical Equipments and Parts Thereof) are not covered by said ~chedule xV .

Accordingly , the parts and accessor · ~s used solely and principally on mechanical appliances and electrical equipments , such as the oolts , ,, ,~ ~~

~GI

-------------,.-:;~---

DECI~ION -

CTA.

CA~E NO . 2756 - 16 - nuts, wa shers, rivets, s crews and studs in q ues~ion are not, there tore , included in said Taritf Heading 73 . 32 , cut properly classitied under Tariff Heading No . 84.55. Regarding the .§..QQOls , whi ch' were special parts used i n Olympia typewriters , it was mistakenly classi- fied under Taritf Heading No. 73 . 408 as other articles ot iron or s teel with an ad yalorem duty of 7Cf}6 .

We

believe that since these spools were intended for use specially on Olympia cusines s machines , and to no othe r, it was properly classitied by petitioner under Tariff Heading No. 84.55 .

Anent the t e nsion , conn ectin~ , tau! and QQll wires , these wires provide the linkage cetween parts ot the Olympia cusiness machines such as the typewriters and intermediate oar of the Olympia typewriters . He nce, for respondent to classity these parts under Tariff Heading No . 85 . 23b, with tariff duty ot SO% £Q valorem , it was error since the articles classitiacle under Tariff Head- ing No . 85.23b pertains to insulated electric wire , caole, bars strip and the like .

In these particular imported wires of petitioner , these are without any in- sulations, unlike the electric wire properly classifiable under Tariff Heading No. 85 . 238 .

Accordingly, reclassi- fication of these articles under Taritf Heading No . 85 . 23b was incorrect and considering t hat these parts were used particularly tor the Olympia typewriters, adding and calculating machines, they should be classitied properly

DECISION -

CTA. CASE NO . 2756 - 17 - under Tariff Heading No . 84 . 55 and subject to Ol}lY 10% ~.Q val or em duty.

Coming now to the 2ins, which r espondent reclassi- fi ed under Tari t f Heading I~o . 73 . 34 , subject to 100% , we find such reclas s i fi cation to be erroneous .

Taritf

Heading No. 73. 34 hereunder clearly classifies ordinary articles s uch as ordinary pins , safety pins, hair pins , curl i ng pi ns , pointed sha nks tor brochures, oadges , hat- pins and others .

(Expla natory Note to the 1950 text of the l:irussels Nomenclature , cited i n Monta no Tejam , ioi.Q, vol . II , 1973 Ed., p . 1225-1226 . ) Clearly the imported pins in question were not essent ially of the character as t hose stated i n the Expla natory Notes to t he brussels Nomenclature with respec t to the classification ot arti- cles under Taritf Hea ding No .• 73 . 34 . be cause ot the pins' distinct characteri stics ot holding in place the ca pital and small lette rs a ssemoly ot the Olympia elec- tric typewriters , it should be appropriately classitied under Taritf Heading No . 84 . 55 , rather than under 73. 34 which classities ordi nary pins .

As to the condensers or ££Qacito~~ ~ these articles were i ncorrectly classified by r esponde nt as falling under Taritf Heading No . 85 .18 .

While condensers or capacitors ma y literally oe classi t iable under Taritf Heading No . 85.18 , yet , where the condensers which were imported oy petitioner were commercially or particularly desi gned and used to give the motor ot the petitioner's

DECISION -

CTA. CASE i~O . 2756 - 18 - business machines the right starting turn and made to tit the power of the same Olympia electric machines - typewriters, adding machines a nd calculating machines - and the same cannot be used in other machines of dif- ferent brands , ostensibly these parts or accessories should oe classified properly and suoject to 10}6 ad valo- ~ duty under Taritf Heading No . 84 . 55 . Finally , the switches imported oy petitioner were incorrectly clas sitied by r espondent under Taritf Heading No . 85 . 19 with an ad valorem duty ot 50/6 since this pro- vision substantially pertain to electrical switches and its connections .

The articles whi ch are s ubject to duty under Taritf Hea ding No . 85 .19 are those designed to make or break electrical circuits .

In the case at oar , the plastic switches which petitioner imported are ot a type and design i ntended to turn the ribbo n me chanism or to change to red or clue type of the Olympia ousiness machines .

These are the switches tha t controls the color ot the ricbon as de sired oy the ope r ator .

Since Tariff

Heading No . 85 . 19 does not apply becau~e of the nature of the imported switches in question and that, turthermore , the switches having bee n desi gned only tor Olympia type- writing ma chines, not to ma ke or creak electrical circuits, and these cannot t urthermore be used tor machines of any other orand, these switches should oe classified properly under Taritf Heading No . 84 . 55 .

Considering the above a nalysis , the imported "pa rts" () r" l r..;

~el \_..

Dl::CI~ION -

CTA.

CA~t: NO. 2756 - 19 - in question cannot De classitied under the headings here- tofore used DY respondent, as there was no showing in the evidence or the records of this case that the imported parts can De used appropriately, practically or commer- cially , and/or tit tor use in machines ot other brands, or other than as parts ot petitioner's ousiness machines. It is our opinion that petitioner is not liable tor addi- tional customs duty on its importations and the same having been paid , respondent is, theretore , legally oound to retund the said sum ot f6,6 9 3 ~00 as overpaid customs duty .

It is noted , however, that no claim tor refund ot the sum ot ~ 5 8 6 . 00 as advance sales tax paid was tiled oy petiti oner with the Commiss i oner ot Internal Revenue and that the latter was not made a party to this case. Under the doctrine laid down in our decision in the case ot Wise and Compa ny, Inc . vs . Rolando G. Geotina , Commis- sioner ot Customs , CTA Case No. 2717 dated DecemDer 29 , 1977 , we held therein , as we similarly hereto hold , that tor tailure of pet i t io ner to file a written claim tor retund ot said advance sales tax with the Commissioner o± Internal Revenue and tor not making the latter a party to this case, thi s Court is wi thout jurisdiction over the said refund ot t he advance sales tax . 1!JHEREJ:-ORE , the decision of the Commissioner of Customs appea led ±rom is hereby modified .

Respondent

DECI~ION -

CIA. CASE NO . 2756 - 20 - .Commissioner of Customs is here oy ordered t o retund to petitionnr Olympia business Machi nes Co. (Phi l . ) , Inc . the sum ot I=>6 , 693 o00 a s overpaid customs duty. No pronouncement as t o costs.

SO OHDC:RED.

Quezon City , Me tro Ma ni l a , August 25, 1980

WE COI\CUR :

~~-t;_i~~ AMANTE f /L~ER Pr esiding J udge / /?,•

CO~

R;;AQUIN ( Ass ociate Judge