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Court of Tax Appeals

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Sol Oil, Inc. vs. The Commissioner of Customs

CTA Case No. 4407 June 9, 1994


cr· ·1

REPUBLI C Or THE PHILIPPINES

COURT Or TAX APPEALS

QUEZON CITY

SOL OIL, INC.

Petitioner,

-

versus -

C.T.A. CASE NO. 4407

THE COMMISSIONER OF

CUSTOMS,

Respondent.

X --

D

E

C

I

-

X

s

I

a

N

This

is a petition for review praying,

among

that

this

Court

order

the

respondent

Commissioner o£ Customs to "reconsider his decision

of

October 16, 1989", to

"recompute

petitioner's

export duty £or its various coconut exports in 1985

at the rate o£ 5Y." and to "re£und the amount o£ ONE

MILLION ONE

HUNDRED THREE

THOUSAND TWO HUNDRED

FORTY SEVEN <PESOS>".

The undisputed £acts are as £allows:

Petitioner is a domestic corporation

engaged

in

the manu£acture of crude coconut oil and

copra

pellets

£or

export.

On various

dates

prior

to

October

7, 1985, petitioner e'ntered

into

several

contracts for the export sale o£ crude coconut

oil

to

various

buyers in the

United

States.

These

41


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D E C I 5 I 0 N -

C.T.A. Case No. 4407

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2 -

sales

were evidenced by the correspondent

Reports

on Foreign Sales <RFS> duly approved by the Central

Bank.

Petitioner was issued six <6>

Certi£icates

o£ Export Duty Exemption <three o£ which were dated

October

2,

1985 and the other

three

were

dated

November

19,

1985)

by

the

Philippine

Coconut

Authority

<PCA>

pursuant

to

the

provisions

o£

Presidential Decree No. 1960 and PCA Administrative

Order No. 01 and 01- A series o£ 1985.

For

reasons

known only

to

petitioner,

the

actual shipment o£ the contracted volumes under the

abovementioned export sales contracts were e££ected

only

on October 7 and 28, 1985.

The Collector

o£

Customs

o£

the Port o£ Tacloban

assessed

export

duties on the shipments at the rate o£ 9Y. which was

the prevailing rate at the time the contracts

were

entered

into.

Petitioner

was

then

issued

the

corresponding Orders o£ Payment directing it to pay

customs duties totalling F2,301,021.43.

Instead

of

paying

the

assessed

duties,

petitioner

presented

the Certificates

of

Export

Duty Exemption previously issued to it by the

PCA.

As

a

result,

no payment

was

actually

made

by

petitioner.

416


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D E C I S I 0 N -

C.T.A. Case No. 4407

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3

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Meanwhile,

on

October 7,

1985,

Executive

Order

No.

1055

became

effective,

reducing

the

expor·t

duty

on crude coconut

oil from

9Y. to 5Y..

Subsequently,

in

1985

petitioner

made

other

shipments

of

crude

coconut

oil

for

which

the

corresponding

duties were assessed at the rate

of

5Y. as mandated under E.O. 1055.

On

November

14,

1985,

petitioner

wrote

respondent Commissioner requesting that the

latter

issue

a Tax Credit Certificate or

an

"authority"

directing the Collector of Customs of Tacloban City

to recompute the export duties on the two shipments

of

crude

coconut

oil

made

by

petitioner

on

October

7 and 28, 1985, and to apply the

"excess"

tax

credit

to

the

shipments

made

in

1985.

Petitioner contended that the Collector of

Customs

of

Tacloban City had erroneously

assessed

export

duties on the 1985 shipments at the rate of 9Y.

and

not 5Y. as provided under Executive Order No .

1055.

Petitioner based its letter on a "ruling" issued by

Deputy

Commissioner of Customs Vicenta

A.

Feria,

Jr. on August 15, 1985, to the effect that the rate

of

e x port

duty to be applied to

exportations

of

coconut

oil should be the rate prevailing

at

the

417


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D E C I S I 0 N -

C.T.A. Case No. 4407

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4 -

time

of

shipment pursuant to Section 514

Tariff and Customs Code.

of

the

On

October 16~

1989~ respondent

Commissioner

denied petitioner's "request" for recomputation~ on

the

ground

that, under PCA

Administrative

Order

Nos. 01 and 01-A~ series of 1985 which were

issued

pursuant

to

the

provisions

of

P.D.

1960~

the

computation

of the correct export duty

should

be

based

on

the rate · prevailing on the date

of

the

contract and not on the date of shipment.

On

November

17,

1989~

petitioner

wrote

respondent

Commissioner another letter requesting

the latter to

reconsider

his earlier decision

denying

petitioner's

request

for

recomputation.

Subsequently, on December 1, 1989, without

waiting

for

the

resolution

of its request for reconsideration, petitioner filed the instant petition.

Petitioner contends that the proper rate of export duty to be used shoul~ be that prevailing at the time of shipment on October 7 and 28~ 1985 <i.e., 51. as provided under E.O. 1056> and not that prevailing on the date the export sales contracts were entered into and exe.cuted.

It relies principally on the provisions of Section 514 of the 418 - D E C I S I 0 N - C.T.A. Gase No. 4407 - 5 - Tari££ and Customs Code, Executive Order Nos. 920, 968 and 970, all o£ which provide that the export duty should be based on the "gross FOB value at the time o£ shipment".

In addition, petitioner also relies on the "ruling" issued by Deputy Commissioner Feria dated August 15, 1986, to the e££ect that the correct rate o£ export duty to be appli e d should be that prevailing "at the time o£ shipment, more speci£ica lly at the time o£ completion o£ loading". Petitioner £urther argues that PCA Administrative Orders No. 01 and 01-A, inso£ar as these run counter to the provisions o£ Section 514 o£ the Tari££ and Customs Code and the other laws cited by petitioner, should not be given any £orce and e££ect. On the other hand, respondent Commissioner contends that the applicable law on the matter is Pres i dential Decree No. 1960 as implemented by PCA Administrative Orders No. 01 and 01 - A, series o£ 1985.

The a£oresaid administrative orders provide that the tax e x emption granted under P.D.

1960 should be compute d based on the prevailing export duty rate at the d a te o£ contract and not at the time a £ shipment.

Respondent argues that P.D. 1960 should prevail being a special law and one o£ later 419 - 0 E C I S I 0 N -

- 6 - enactment.

Additionally, respondent Commissioner al s o raises the question of jurisdiction, contending that the instant petition is improper because no protest was filed by petitioner with said respondent.

There being no such protest, there is therefore, no adverse ruling or decision by said respondent which can be the subject of an appeal to this Court.

Finally, respondent Commissioner also points out that petitioner was totally exempted from paying any export duties on the two shipments in question, and that accordingly, there is nothing to be "refunded~ to petitioner.

We rule against petitioner. It is elementary that this Court's appellate jurisdiction is to review the decisions of respondent Commissioner in any matter brought before the latter "upon protest" as well as in cases involving claims for refund. In this regard, it should be noted that petitioner never disputed nor protested the assessment of the Collector of Customs of Taclbban City, assessing the export duties on its coconut oil shipments at the rate of 9/..

There is, s trictly speaking, no protest as requ ' red under Sections 2313 and 2402 of the Tariff 420 - D E G I S I 0 N - G.T.A. Case No. 4407 - 7 - and Customs Code, and there£ore no decision or ruling by respondent Commissioner in a "protest" action which would require the exercise by this Court o£ its appellate jurisdiction. This brings Us to our second point:

may petitioner's so-called "request £or [a] recomputation" be considered a claim £or re£und?

We do not think so.

A claim £or re£und presupposes that the claimant actually paid something to the government in excess o£ what it should have actually paid under the circumstances.

In the instant case, it is not disputed that petitioner never actually paid any export duty on the shipments in question, as it was exempted £rom such payments under the provisions of P.D. 1960. Thus, not having actually paid anything to the government, it cannot now claim any right to be re£unded any "excess payment". The contention that petitioner actually "paid" the assessed e)tport duty by tendering the Certificates o£ Export Duty Exemption issued by the PCA is clearly untenable. Precisely, by virtue a£ the e x emption granted under P.D. 1960, petitioner was absolved £rom any liability to pay export duties on the shipments in question.

The 421 - D E C I S I 0 N -

- 8 - certificates issued by the PCA merely attested to the fact that no export duties were actually due from petitioner despite the assessment issued by the Collector of Customs. Besides, it cannot be gainsaid that said certificates are by no means legal tender in this jurisdiction, and cannot therefore be used in the "payment" of petitioner's obligations <assuming, that is, that petitioner had any such obligations). Lastly, an examination of the certificates in question shows tha·t the same were issued irrespective of the amount of export duties due on the shipments, the only relevant consideration being the volume of goods exported.

Thus, a ·typical certificate contains the following · entries, among others:

Name of Exporter:

SOL OIL, INC.

Commodity: Crude Coconut Oil Quantity:

500 LT

Total CIF Value:

$ 2 52,000.00 Gross FOB Value:

$223,300.00 Quantity Exempted:

Quantity Subject to Tax: None 422 • - D E C I S I 0 N -

- 9 - From the foregoing, it is clear that petitioner was totally exempted from paying the appropriate export duties on the entire quantity of coconut oil it exported, regardless of the amount of duties involved and, more importantly, regardless of the rate used in computing such duties.

Thus, irrespective of the rate used in computing the assessed duties, petitioner was exempted from paying such duties as long as the quantity of goods it exported did not exceed the quantity stated in the certificate. In other words petitioner was exempted from paying the correct or appropriate export duties, no more no less.

Accordingly, even assuming that the Collector of Customs erred in applying the rate of 9% instead of 5% as required under E.O. 1056, this wou1d not have made a difference inasmuch as an adjustment in the amount of export duties due from petitioner would also necessarily result in a corresponding reduction in the limit of the liability covered by the exemption to the correct QL appropriate amount. In any event, there would be no "excess" duties to speak of much less any "excess" payment which would enti t le petitioner t o a refund. 423 - D E C I S I 0 N -

- 10 - In view of the foregoing,_ the Court finds it unnecessary to rule on the issue of the validity of P.D. 1960 and PCA Administrative Orders No. 01 and 01-A in relation to Section 514 of the Tariff and Customs Code and E.O. Nos. 920, 968 and 970.

WHEREFORE, the instant petition is denied for lack of merit.

SO ORDERED.

Quezon City, Metro Manila, 9 June

WE CONCUR:

<inhibits> E HESTO D.:z

AOS A

Pres~di~ Ju(j/d RA~

0. tE Associate ~lud ~ELK.

Associ a GRUBA Judge CERTIFICATION I hereby certify that this decision was reached after due consultation among the members of the Court of Tax Appeals in accordan_ce with Section 13, Article VIII of the Constitution. 42 ~.~Q,~ ERHESTO D. ACOSTA Presiding Judge Court of Tax Appeals

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