Liberty Aviation Corporation, et al. vs. The Acting Commissioner of Customs, et al.

DECISION

another si:-:

(6) months) the subject. aircra ·ft was never re-exported nor the cor r esponding duties, taxes and oU1er c h <?.rges l e gal. 1 y d ur:> t.h ~::-~r-- eDn paid notwithstanding the sale thereof 'few $1,1.07, '75 7.00 to the National. Sugar- Trading Corpor a tion ( NAFllJTRA) on October 1980 by the petitiDner. Ccmsequen tl y on November .l3 ' .1981 the Co 11 ector of l"lani 1 a In t e n1 a t. :i on a l Airport demanded the payment from petiti o ne r the amount of F'3~560~9 5 4.00 or the face value of the re-p:-:pnr-t bond for- the no~-complianc:e of the ter--ms and condition tl--lE?I"' !~ D·f and bn-:> ac: h o f f.·. h e a f f .i. l i. .:\ t ing provision o'f Section 105~ ibid.

The r-e spo ndent Commissioner o'f Customs gave f i nality tn the demand on June 3~ 1982.

Hence this instant petition. Petitioner seeks the discharge of the Re- E:-: port Bond ear-lier posted ·f'or- the r-e 1 ease of the aircraft co ·1 r:l it ion a 11 y entered t.a :-:

free under Section 105(i) of the Tariff and Customs Code, which was ~;old on October, .1980 to a ta:{ e>:empt governmental entity.

It avr.:'!r·s "Thu~;, there was in fact no taxes and duties due from the purchaser or 29 importation by NASUTRA fram BAC (Beech Aircraft Corporation). In accordance therewith, the Ministry of Finance issued its Firet Indarsement an 18 May 1981 authorizing the Commissioner of Customs to release the aircraft ‘covered hy Feech Aircraft Corporation Invoice No. A&89R27-1 dated January 12, 1981 « « « withaukt the prepayment of duties, taxes, fees and other charges required by Section 22 of Fresidential Decree No. 1177 wom MTN, Hence , “Under such circumstance, there are no taxes and duties accruing upon the aircraft which need he paid by petitioner before it is entitled to a discharge of its band."

Respondent’ s unvarying assertion is “that the sale between Liverty Aviation Corperation and NASUTRA took place in OQetober, 1980, without the knowledge and consent of the Bureau and the subject plane was turned over and delivered to NASUTRA on November 20, 19680, On the other = hand, the exemption certificate cited therein was issued to NASUTRA by «he Ministry only on May 18, 1981. Tt must be emphasized that said exemption dated May 18, 1981 of that Office, specifically refers to ‘shipment of othe National Sugar . Trading 30 - 5 ....

The Beechcraft plane cove red by t hi s case~ however~ n:>fers to ' .impor·· t ;::d :ion of L.:i. tJerty Aviation "~td.c h waS' conditiona ll y re 1 eased punsuan t t o the p r o v i s j CHlS of S ec: tion 105(i) of the Tar .lff and Ctistorns Coci e '.

This being the case~ it.

can safely be con c luded that the e>:emption certi fi t: ate does not re ·fer to the p 1 ane under consideration.

Nowher·e in the recor·ds wi 11 show that tl ~ e Min is try inten d s thi s e:·:empt ion to be applied to the Beechcraft plane i mported by Liberty Aviation Cor·por ,:!\ tion." A c: c:: ordingly~ "that s ,:!\le to ta :·:-e:·:empt entity will not <"\bsolve Liberty Aviation Cor-poration of its l iab.i 1 i ty ·for· violation of the terms and conditions of the bon d~ as we ll as the provision of Section 105 of the Tariff and Customs Code.

As the principal imp o rter~ it is hi s prime obligation to fulfill fait h fully the ter-ms and ccmdi tion s of the bond~ that is~ to re- e:·:port the plane or pay the duties and t axes due thereon prior to the sale and any breach thereof will result on the duty of thi s Bureau to collect the face value the bond and/or pros~cute the impor-ter for v io 1 ""tion o f :Jec tion 105 in re 1 a ticm 31 to Section 32602 of the Tariff and Customs Cede, as y amended.

Stripped to its essence the case presents a disquieting quibkele on the particular "shipment" contemplated and referred to in the certificate of tax exemption issued by the Ministry of Finance an May 18, 1981, which reads:

The shipment of the National Sugar Trading Corporation an affiliate af the Philippine Sugar Commission under PD 11732 consrsting of one (I) E98SO Standard Beecher -ft King Arr Foe BO and other optiona.: equipment and avionieas, covered by Beecheratt Corporation Invortce Nea. AL28923-1 dated January £3, {F8f, may he released NEthHoOUt the prepayment otf duties, taxes and ather charges required by Section 23 of Presidential Decree No, Li77 pursuant to the Joint Circular Issued by the Budget Commission and the Ministry of Finance dated Nay P, 1978 x oON Ne Far from a comedy of errors, the aforesaid tax exemption grant cannat be naively viewed as of such broad scope and spectrum with open-ended feature as would sire an impertatioan which petitioner may proffer to attach. The certificate of xemption is not mere legal legerdemain but finds confinement to "shipment of the National yi f Sugar Trading Corporation. Settled as the rule 32 - 7 -· that exemption from a common burden cannot be permitted to e :-:ist upon in fer·enc e o r· vague implications because the law "doer; not l ook with favor on tax exemptions and that h ~ who would seek to be thus privill:c>ge d must justify it by words "too plain to be mistaken and tno ca t egorical to be misinter·pn;:;>ted."

The of the questioned aircraft cannot simply be piggy- backed to the privilege made available to N~SUTRA.

"To require less would sanction an e x p~di ~ nt ~ rr ange men t unsusta .i.nable by opera tir:m or applicable settlecf pr·.inc.i.pl es. The s e prosc ripti ons of securing the integrity o f the lawful dues are no mere ingenuous sophistries conjur~d out of some quirky insights bu t ar·e ti.ngE~d with stn:mq i~ssw?.s of public poli cy to preven t ·f r·a ud u pc>n the t-evenues lest the cornerstone of e ffectiv e c ollection be p 1 aced in the qui cksand o ·f se 1 f - .i.n 1·. p r··est" Corporation Ltd. vs.

CoJtJt issioner of Custo•s. CTA Case No. 3099, July 31, 1981). We then? ·fore find _i llog ic t he spr ou ting impression precipi.tately broached b y t he petitioner that the tax exemption authorized the Nati onal 33

- n -- Sug~r Cor·· pol'- ~ tion be t~c:ked t.o the pr·eviously .i. mpcwted ~ircra ·ft. sold on November· 20, 1980.

The in tend men t in the ta:·:

pr.i. vi 1. ege is of deliber~te c hoi ce ~nd the ~vailment thereof cannot easily titillate to as si mpl e as "What 's in a n~me?

That which we ca ll a rose in any other name would smell as sweet "~ so to s peak.

We are less impressed by what petiticmer- alle:~ged than what it failed compliance.

Su ·f"fic~:-: it to statE?~ in~ 2nd Indor-sement to the Commissir.:mer- of Customs dated March 9, 1982 ~ the Ministry of Finance concurTed "with the stand taken by that Bureau on the recommendation of the Collector of Customs o"f the M~nila International Airpor-t to ho 1 d the re 1 ease o"f a 11 shipmen t.s of Liberty Aviation Corporation in view of its fa ilure to pay its obligation arising "from the importation o·f one ( .1.)

Beech cr·~ ft plane" and nrdered, "That o"f"fic:e is hereby directe d to enforce the immediate collection of the duti es and ta xes due on the said plane and the corresponding penalties attached thereto in view of the patent vinlation of the T~r- i.f"f Coclr::~."

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- 9 ··- So it ~ppears and We so hold that there is no error in the res pondent's demand f or·· peti ticmer to pay the tota 1 a mount of F'3 ~ 360,955 .00 representing the face value o f the Re-Export Bond No. 80/12024.

WHEREFORE, peti~ion is hereby d i smissed at petitioner's cost~.

WE CONCUR:

. --ROAQUIN 35

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C E R T I F

I

C A T I 0 N

I hereby cr:rti fy that t hi s decision was reached after due consult2tion among t he members of the Court of Ta x Appeals in Acc ordance with Section 13, Article VIII of the Const itution . AMf\NT FILLER Pr·e s.i. d ~ng Judqe Court of Tax Appea ls 36