~ -- - U.PUBL, et al. vs. The Commissiqner of Customs

DECISION

- 2 - had imported mac h inery and parts which arr ived on December 23 and December 31, 1978 at the Port of Bislig under the correspon~ing i mport entries Nos . 5-9 , 11, 15-22 , 24-28 , 87, 101-102, fil ed in Januar y , 1979; 3) the Collector ' .

of Customs a ssessed and collected the tax of 25% of the full rates due on the importati on per the diminishing schedule in \he resolution amounting to Pl53 , 110 . 00 and anothe r 5% tax on the exe~pt portion in the sum of ~131,843.00 pursuant td Presidential Decree No. 1395 as implemented by Finance Department Order No. 13- 78 , wh ich petri tioner paid under protest as formalized in Bislig Protes t No. 5-79 by way of claiming a refund of t axes er rone ously collected on the subject import.a t.ion ; 5) .the protest was di s missed by the Collector. o f Customs a nd on appeal sustained by the re s pondent. Commi s sioner of Customs on January 24 , 1980 .

Hence this petition.

In the light. of the circumstance s br iefl¥ summarized above the case presents no dispute as to the r e latively simple material facts bu~ the parties are tLying to get the better of each o ther over by a quibble a s to the date of the accrua l of the tax or the time ly avail- ment of the benefits o f e xemption. By in la.rge , petitioner con tends that the asse ss- ment a nd i mposition o f 25% tax was at c omple t e variance ~ with t he NEDA resolut.ion considering that. the i mport- ation arr i ved at the Por t o ~ Bislig in 1978 and there- fore entitled to a 10 0% tax exemption. It. averp· that 271

- 3 - "to constitute importation i t . is necessary that. the me rchandise a~rived wi thin the jurisdictional waters of the Philippines with i nten t t o unload. "

(Mariano

Martin v. Insular Collecto~ of Customs, Tariff Decision circular 502 1 cited in Tej am I Commen t:.a.r ies on the rrar iff and Customs Code , 1978 ed., p . 13) ~ \.

Respondent maintains that the impor.t:.ations i n que s tion were subject:. t:.o 25% tax pursuant to t he same NEDA Resolution No. 21 on t he ground that the date the I mport Entries wer e fi l ed and accepted was in 1979 the date the importations were deemed "ente r ed " as. provided for under Section s 205 and 206 of the Tariff and Customs Code, as amended, in part. r ead: "Sec . 205.

Effect:. i v.e Date of Rates of. Import. Duty. - Impor t .ed articles shall be subjec t:. to t he rate or rates of import duty existing at the time of entry or withdrawal from the warehouse in the Philippines for consumption .

XXX

XXX

XXX

"Sec. 206.

Entry or Withdr awal fr-om the Warehouse for Consumption. - . I mported ar ticles shall be deemed ' entered' in the Philippines for cons umption whe n the s peci- fied entry f orm is properly filed and ac.c.epted, toge the r with any related doc u- ments required by the provisions of t his Cads and/or iegulations to be fil ed with s uch form at the t ime of entry at the polf t or ·sta tion by the customs offic ial designated tc:.o rec.eive such e n tt.r y papers and any duties, taxes , fee.s and/or ot.her lawful charges required to be paid at the time of 'making such entry or secured to be paid with Customs official designated to receive s uch monies ,' provided that the articles has previously arrived

- 4 - within the limits of the port of ent~y.

XXX

XXX

XXX

11

We

f~nd nothing cr~ptic in the language of the said provisions as to pose any ambigu i t:.y in t:.lJe ir- application.

The first stamps a definite resolve as to what the imported article shall be subject:. which is the rate ~r rates of import duty existing at the time of entry or withdrawC!l from the warehouse for consumption.

The secon·d explicitly reckons- as to when the merchandise ·shall be deemed 11 entered 11 with such requisitions, viz.:

1) .Previous arrival within the limits of the port of entry ; 2) .forms and documents filed and accepted by the Customs' authorities; and .

3) .duties, taxes and other lawful charges paid or se- cured to be paid.

Suffice it therefore, the fact of arrival alone of the merchandise is l ess significant than it is made to seem.

Any such posture would have s tretched too faJ: the effective ran]e of ex.pedienc:y and gravely impairs the ~nd for which the stat.ute was in tended.

Relevan 1!:. is the rule that 11 the mere posses- sion of merchandise on board vessel in Philippiae waters is not sufficient in itself to amount. to the importation of the same (U.S. v . Chu Loy, 37 Phil. ~10) ~ and the use of the term 11 import" should rather be restricted t~ goods as are actually released from cus- toms custody into the commer<;:e of the country (May co.

v. U.S. , 12 CCA 1 T. D. 4 0 2 7 0) •.

27J

~ I .

- 5, - It is not short of authori ty nor logic that the imported article must have to be " e ntered" as legally contempla\ed in Sections 205 and 206 of the . Tariff and Customs Code, supra, for the ascertainment of the corresponding. imposition or the exemption therefrom. And for more reasons, with the shipme nt on a tax free basis of "ma6hinery, equipment and spare parts shipped with such machinery and equipment" tolled under. suc:h conditions:

1) .are not: ma nufac:tur e d domestically in reasonable quantity and quality at reasonable prices~ 2) .are directly and actually needed and will be used exclusive ly by the registered ente rprise~ 3) are covered by shipping documents in the name of the re- gistered enterprise~ and 4) .have the prior approval of the Board be fore importation thereof (Sees. 7(d) and 8, R.A. No. 5186) •.

No les s unex pect.:.ed therefore is that such importations are not impervious to the constr aints requiring validating acts to firm up the eligibility for the entrY. thereof.

In short, the mere breaking of the carrying vessel within the jurisdictional. water s brooks no ins t ant tax burden in terms of appli- cable specific rates of import liabilities upon which tacked the pe~centage of diminishing exemption until such time of the satisfaction of the legil proscriptions fotz. valid ent..ry.

It may be necessary to repeat what so plainly apply to such cas~s, that. - .

- 6 - "It:. should likewise be underst.ood that sh i pments of machinery and s pare parts thereof and raw materials authori zed to be imported under the grant thq.t are e ntered or withdrawn from ·warehouse for consumption in accordance with Section 206 of the Ta riff and Customs Code after 12:00 o'clock midnight of De cembe r 31, 19&1 s hould be subjected to the payment of ninety (90%} per cent:. of the full rate s of duties a nd int.er.nal revenue taxes in addition to the special import taxes and other charges due the~eon even if such shipments are covered by authority to release in the form letter addressed to that Office which indicates that only 50% of the customs dut.i e s and internal revenue taxes in a.dd i t .ion to the special import taxes thereon may be collecte d."

(Let.t.er of the Secr.·etary of Finance to t.he Commissione r of Cust.oms dated November 9, 1961} •.

The record makes it c l ear that insofar as the same i s brought to bear upon the circumstances of the peti- tioner in the case a t bar, the import entries of the subject importation were fil e d and acce pted by the Cus- toms authorities and the taxes paid on l y in January 1979 or beyond the period prescribed for the enjoyme nt of ful l tax e xemption privilege.

Pursuant therefore to the statute above quoted the articles in question were deeme d "entered" in 1979 ·and accordingly entitled to /a. partial exemption of 75% of the full rates of dut.y and internal revenue tax under the diminishing, schedule o f the resolution. · The failure of petitioner to haue its goods "entered" before 1979 bars its claim for t he full enjoyment of the tax privilege. Th~ respondent 's reasons for t he levy of the 25% of the rightful dues seem a little more than a statement of the obuious.

- 7 - We uphold.

Then again a nd quite evident, the tax prescribed under PreSidential Decree No. 1395 for "All importations which are at present totally or partially exempt from Customs duties and internal revenue tax under the pro- vision of any general or special law shall be subject to 5% customs duty and 5% internal revenue tax. xxx (Sec. l) ". as implemented by Finance Department. Order No. 13-78, providing, insofar as pertinent, that "The customs duty and internal revenue tax imposed under the decree shall be applied to the importations entered or withdrawn for consumption on or after April 21, 1978 whether the y enjoy total or partial exemption and shall be paid before release of the shipment from Customs' custody (Sec. 7) ". likewise bears directly on pet.i tioner 's importation.

No reason is apparent and none is vouch- safed why the payment as decreed cannot be enforced. This Court will not deem itself authorized to depart from the plain meaning of the statute so explicit in terms and so searching in extent.

So it appears and we so hold that the petition iS/ Without merit: and the same i s dismi s sed and the re- fund of the amount s ought denied, with costs.

27G

Associate Judge

WE CONCUR: ©

AMANTE LLER 1

Presidi Judge

CONSTANTE *C. ROAQUIN

/Associate Judge

a

P

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