Court of Tax Appeals
0Sol Oil, Inc. vs. The Commissioner of Customs
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.
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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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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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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