Ttepublic 0, et al. vs. The Commi Ssioner of Customs

DECISION -

CTA CASE NO, 337 - 3 - '

1980 .

On appeal, under Consolidate Customs Case os.

80- 0.5 ; 80- 1.0 ; and 31- 6.0 , r espondent Commissioner of Cus t oms sustained the Collec t or ' s. i n a deci s i on r ender ed on Oc tober 14 , 980 .

Hence this peti t ion for review.

Peti tioner wraps up i t s position this wi s e : "The Collector of Customs i mposed and coll ected t he 5\ customs duty (per PD 1 395) .on t he exempt portion of the subject i mportati on based on the tot al l anded cost plus mar up ther eof and no on t he home consumption value of t he s ub- . j ect i mpor t ation as de t ermined under Section 201 of t he Tarif f and Customs Code in r elation to PD 1395 as i mple- mented by Depar tment Order No. 13-7.8 . The Coll ect or of Customs reli ed on t he pr ovisions of Section. 3 of Department Order No. 13-78 and of Section 193 of the Nationa I nter nal .

.

Revenue Code which provisions of l aw have no applicat i on • to the case at bar because what is involved here is ot the 5i i nt ernal r evenue tax but t he 5\ cus toms ·duties per PD 1395. "

The r espondent aver s , "The contention of appellan (herein peti t i oner ) tha the comput ation of the 5% tax . .

should be based mer ely on t he home consumption value as determined under Section 201 of the Tariff and Cust oms Code is evoid of any l egal basis in t he ligh of all th ore uo e revi sions of aw imp ementing regulat i ns and PD 1 395 .

When we speak of internal revenue t a advance 247

DECISIO

CTA CASE

O. 3371 - 4 - sales t ax i n these cases , specifical ly) '· the afore-cited provision of th revenue code and Reven e Regulatio s o .

S- 78 should apply which i nvariabl y i nclude the mark-up . And as ordained under PD 1395, the 5% tax should be levied , .

assessed and collected in accordance with the pertinent provisions of such code , which is what t he Collector correctly did . "

And , as earlie r ma i ntained by the Collecto of Cus toms , "Section 201 of the Tariff and Customs Code of 1978 invoked by protestant (herein petitioner ) ~ a s positively no applicable basis to the case at bar cons idering that said Secti on 201 r el ates to the computation of ' duti able value ' f or purposes of i mposing ' c.ustoms duty' .and not 'tax ' .because in a r iving at the ' t.axable value • as i n t his instant protests t he pertinent provisions of Nationa I n ternal Revenue Code of 1977 is the l aw applicable . n More- over , "The question or issue of t he assessment and payment of 'customs duty' i s settled i nasmuch as protestant (her e in pe titioner ) .is r equired by l aw to pay i n f ull said customs duty on the entr ies nder protest. ha is lef t a t i s sue then i s the assessment and payment of five (5%) .t ax which is to be imposed on the exempt portion , in addition to the tax due on the t axable portion.

The argument then that t his Of fice erred i computing the f ive (5%) .Per cent tax based on the t otal l anded cost and no o the home c'onsumpticn f valu s erroneo , i being devoid of any l egal author i t y 248

- .s - ....

s ince Section 201 of the Tariff and Customs Code is not applicable."

Given the quirky particulars of the circumst ances obtaining the parties seem to have s ubst antially differed and diverged mos t sharply on the material fact ual i ssue. But the only point urged upon ou consideration of why t he deci sion appeal ed from s hould be reversed i s the alleged i ncorrectly based imposition and col l ection of customs duties by virtue of Presidential Decree 395 o the exempt portion of the subject impor t ations which con- sequence proved onerous to the petitioner by such ove r - · payment of ~18 4 , 94 1. 9 2 outlined as follows : "'

Bislig

Bislig

Bislig

Bislig

Bis ig Bisl ig

Bislig

Bislig

Bislig

Bislig

Bislig

Bislig

Protes t No.

Protes t o .

Protest No .

Protest o .

r otest o .

Protes t No.

Protest No .

Protest

o.

Protest No.

Protest No.

Protest No.

Protest No.

T 0 TAL

15-79 16- 7.9 17-7.9 18- 7.9 19-7.9 22-79 23-7.9 1-8.0 5-80 10-8.0 11- 8..0 3-8.0 • • • = p 498 . 00 3u835. 0 5,392 . 09 3, 177 . 00 4"6,419.00 46 ,542 . 37 8 , 954 . 58 6,386 . 37 55, 951.04 420. 68 92 . 19 1,682. 56 11184, 941 . 92 (sic) Respondent must ave lost the fores t f or the trees so to speak by assuming a question relative to an incorrec tness of t he computation of t he internal revenue tax based on t he t otal l anded cost plus mark up "since Section 201 of the Ta iff nd Customs Code i s not applicable. ' ;···.

249

DECI SI ON -

CTA CASE NO.

371 - 6 - .

. Putting aside the apparent uibble, it is hardly necessary to observe tha t he terms of PD 1395, supra, as i mplemented , the addi tional 5% customs duty is direct y t acked on the home consumpti on value while the 5' i nt ernal • r evenu~ tax i s essentially addressed t o the tota l anded cost of t he i mported articles.

Section 201 of t he Tariff and Customs Code determines the first and Section 193 b) of the National Internal Revenue Code , the l atter, quoted respecti vely as follows:

..

"Section 201.

Basis of Dutiable Value. -The dutiable value of an i mported article subjec t o an ad valorem rat e of duty shall be based o t he home consumption value or price (excl uding i nterna exc i se t axes) of same , l ike or similar ar tie es , x including t he value of all contai ners, co- . verings and/or packings of any kind and all other costs , charges and ex.penses i ncident to placing t he article in a condition r eady f or shipmen to the Philippines, plus ten (10%) per cen of s uch home consumption value or price: " • "Secti on 193 e {b) Sales t ax on imported artic l es .

x x

the percentage t axes x -x shall be pa id in a ance by the i mporter , x x x base on the home consumption val ue or price (excluding i nternal r evenue exci se taxes) thereof , plus ten (10% ) per cent of such home consumption value 0 price; i ncluding postage, commission , customs duty and all simi lar charges, x . "

We f ind no threa~ of ambiguity from the language of the s a i d provi sions insofar as the s ame i s brought t bear upon the circumstances of t he petitioner i n t he case at bar .

The t er ms are amply suffici en to dispel any pall ce tainty cast o er the pet i t ione g c a i o The particul ar i mpos i tion of either a duty or tax appears 250

DECISION -

CTA CASE NO . 3371 - 7 - c~llirig ly explicit and severely const rained . The require- ments f or effective i mplementation t her eof are o clear impor t and one may not be nard put t o r e s t a choice of the basis f or t he l ev ies. As had happened , t he respondent no only fai led to infuse val id cogni zance , but would have t he f ocus i ng question expedientl y t reated as neither here nor there , 11 For, · nstead of basing the 5% c ustoms duty on t he home consumption value of the subjec i mportation as deter - mined under Section 201 of the Tariff and Cust oms Code the Collector of Customs i mposed the 5% customs duty on t he bas is of the t otal l anded cost plus mark up of t he impo t ed arti c l es. "

We think the r espondent ha s f umbl ed i nto a rever sible error .

Under the circumst ances , we are pe r suaded to extend t he • r elief sought by the pe t i tioner r elati ve to i ts claim for r efund of the amou.nt r epresenti ng over payments ·of the 5% customs duties on the exempt por tion o subj ect i mport- ations conditioned ·however upon a r e iquidation of t he corresponding i mpor t ~ntr i e s covered by the protests .

WHEREFORE , as above qualif i ed , the r e spondent is hereby direct ed t o rant the r efund withou pronouncement as to cos ts .

251

I

•

DECISION -

CTA C SE NO . 3371 - 8 -

WE CONCUR:

~~~ Presidi 9 J udge 252