Court of Tax Appeals
0CTA Case No. 4638
11A.
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REPUBLIC OF THE PlllLIPPIHRS
COURT OF TAX APPEALS
QURZOH CITY
PILIPINAS NISSAN INC.,
Petitio n e r~
··· ve r sus -
COMMISSIONER OF CUSTOMS,
F< f.~s pond e n t.
>!
·-
... ~
···-
D
E
C
I
This is
an appeal
C.T.A. CASE NO. 4638
I
0
N
from
the
assessment
and
collection of
duties
and
taxes
on
petitioner's
importation
of
one
( 1 )
unit
Nissan
Model
045
Passenger Car.
It appears that said subject motor vehic l e was
shipped to petitioner to be used for display at the
first motor
show
held
at
the
Philippine
Trade
Training Center
on May
20 to
29 ~
1991
\..,i th
an
invoice value
of Y3~450~000.00 Japanese Yen.
The
shipment \..,as
covered Jay "Clean Report of Findings"
of the
Societe Genera le
de Survei llance S.A .
~ the
entity contracted
by the
Philippine Government to
conduct inspection
of articles
imported into
the
Philippines prior
to shipment~
and to
report the
actual price/Home
Consumption Value
in accordance
with the criteria set
forth
in
Paragraph
1
of
128
DECISION
2 Section 201 of the Tariff and Customs Code~ whic h was $20~014.00.
Release of the vehicle without payment of duties and taxes was approved by the Department of Finance~ subject to the filing of a re-export bond in the amount equivalent to 150% of the taxes and duties due (Annexes C & C - 1~ Petition for Revie~&J) .
For purposes of the amount of re- export bond~ the Bureau of Customs computed the duties and taxes due (Annex D~ Petition for Review). The Bureau of Customs released the vehicle upon filing of Entry No. 20771-90 and Ordinary Re- export Bond No. C(a) 080120 issued by the Domestic Insurance Company dated tl .. ~r.:~ . b. ......... .:t .. ~!I . .•... ... +9.9.Q in the amount of P2~139~093.00 (Annexes
E &
F~ Petition for Review).
The Asian Investment and Finance Corporation~ having indicated an i nteres t in purchasing the motor vehicle~ secured the approval/clearance of the Board of Investments (AnneN G~ Petition fot- Review) • Petitioner filed a request for payment of the duties and taxes on the motor vehicle (Annexes H~ H - 1~ and I ) .
The District Collector of Customs accepted the recommendation for adoption (Annexes J and J - 1).
129
Respondent cancelled the Re-export band = and allowed the payment of duties and tares based an the invoice value, setting aside the contentian that this is nat a local purchase and (1) applied the exchange. rate atthe time. of payment and (2) imposed the. additional 9%. ad valorem import. levy. (Annex L, Fetition for Review).
To avoid delay and further deterioration of the motor vehicle, petitioner paid the duties and taxes amounting to F1,601,426.900 oan July 15, 1991 (Annex M, Fetition for Review), while the liability of petitioner as determined by the Bureau of: Customs is F1,426,962.990 (Annex D), computed as follows: | One (1) Unit Nissan Infinity Q45 CRU (Under Re-export Bond) JY2,450,9000.00 Value cotinine (G66B8 Exchange Rate (JY-$) US$22,004.60 $25,464.69 trmminuete4& Freight $24,289.15 vm tioneeee O/C $25,442.2 Exchange Rate (%~F) DV Duty DY Miscellaneous Landed Cost AVT Base 160% Tan Rate AVT Landed Cost VAT Base _ VAT Rate “$1, 130 Duty AVT 'VAT IPF - 4 - Summar-y P289~025 954~554 182~233 ....................................... :?. .. ~.Q P1~426~062 .• , The issues to be decided by the cour-t ar-e as follm•1s:
1.
What is the exchange r-ate that should be applied to the imputation? 2.
Is the 9/.
additional ad v alor-em duty imposable on the impor-tation? The vehicle as impm-ted be,gan and ter-minated in Mar-ch 1990.
The exchange r-ate which should be applied ar-e those cut-r-ent at the time of impor-tation.
The exchange r-ate of the Japanese Yen a s indicated in the Invoice (Annexes A ) of JY3~450~000 should be conver-ted to U.S. dollar-s at the cur-r-ent r-ate at the time of impor-ta t ion~ or- at US$0.00668 to JY1.00~ ·as v.Jas done in the computation of duties and ta:-:es (Anne:-:
D) •
Similar-ly~ the US dollar- value sho~ld have been conver-ted to Philippine peso at the cur-r-ent r-ate of impor-tation, or- P2.72 to US$1.00 (Annex D). In this instant cas e ~ the exchange r-ates that should be applied ar-e the cur-r-ent e xchange r-ates~ at the time the impor-tation was deemed t e r-minated 131
- 5 - or upon filing of the entr y (Anne :{ E) a nd the acceptance of the Re- export Bond (Anne }:
F) and Releas e of the motor vehicle on March 1 5~ 1990.
The 9% additional ad valorem duty cannot be impos ed as it is impos able only unde r Executive Order No.
443 dated January 3~ 1991 which took effec t on Januar y 21~ 1991.
The impo r tation of the motor vehicle began and was terminated upon the fil i ng of the entry and acceptance of the re- e xport bond and release of the motor vehicle on March 15~ 1990.
Since these eve nts occurred pr i or to the effectivi ty of Executive Or der No. 443 on January 3' 1991 ~ the additional 9% ad valorem duty impose d thereunder cannot be made to apply to this importation. (Hydro Resources Contractors Cor p. vs. C.T.A., 192 SCRA 604, 611). The dete rmination by respondent that thi s is a local purchase is without fac tual or l e gal basis. Respondent Commissioner of Customs ~ in his undated 1st Indorsement (Anne x "L") s et aside as without merit petitioner counsel's contention that this i s not a local purchas e as "the Committee considered and took legal notice of the BOI approval/clearance issued 22 March 1991, of the contemplated sale of subj e ct article to Asian Inves tme nt and Finance Co rp . " 132
- 6 - This statement~ by itself, is a contradiction in terms.
l.tJhi 1 e it states that it is a "contemplated sa le"~ it ruled, as 1-'Jithout merit~ the contention that this is not a case of local purchase.
As contended in the letter of petitioner ' s counsel dated July 3~ 1991 (Anne :-:
II I II )
~ the provisions of Section 101 of the National Internal Revenue Code (NIRC) merely creates a fiction of law for f i>:ing ta:-:
1 i abi 1 i ty.
What is contemplated therein is a case of ta:-:-free importation of goods "~"here such goods are subsequently sold~ transferred or exchanged in the Philippines to non- e:·:empt persons or entities >:xx. 11 In this instant case~ it is the importer itself which had requested for the payment of the duties, ta:·:es and other charges assessed at the time of importation~ payment of which was secured by the filing and acceptance by the Bureau of Customs of a re-expot-t bond.
There had been no subsequent sa 1 e ~ transfer or e:-:change at the time the duties~ t.:n.:es and other charges w~re assessed and paid.
Title and possess ion of the motor vehicle are with the importer at that time and the dut ies~ taxes and other charges were subsequently paid by the petitioner-importer itself.
The 133
- 7 - authority secured by the Asian Investments and Finance Corporation from BOI was in contemp l ation of the sale made after the duties~ ta xes and other charges had been settled in full by the importer~ the petitioner herein. The conclusion of the respondent Commissioner of Customs that at the time the duties~ taxes and other charges were assessed~ this was a case of local purchase is~ therefore~ without factual nor legal basis.
WHEREFORE, respondent Commissioner of Customs having assessed the sum of P1,426,062.00, after petitioner has paid the sum of P1,601,426.00, petitioner is legally entitled to the refund of the sum of P175,364.00.
Without pronouncement as to costs.
SO ORDERED.
Quezon City~ Metro Manila~ March 17~ 1992.
I CONCUR:
Q_~Q..~ ERNESTO D. ACOSTA Presiding Judge 134 co {)1t t/"--- TANT£ C. ROAQUIN ssociate Judge •' - 8 - CERTIFICATIOM I hereby certify that this decision was reached after due consultation between the members of the Court of Tax Appeals in accordance with Section 13~ Article VIII of the Constitution. 135 ~~ Q, (4.JJ.- ERNESTO D. ACOSTA Presiding Judge Court of Ta x Appeals