CTA Case No. 4171 (Decision)

HEP UBLIC OF TilE P HILIPPINES COURT OF TAX APPEALS QU E ZON CITY PROCTER AND GAMDLE PHILIPPINES, MANUFACTURING COMPANY, p 0 t i t i 0 1'1 CH1 ~ -VIH'!l ll 11- C.T.A. CASE NO. 4171 ALEXANDER PnDILLA� COMMISSIONI::: FI OF CUSTOMS, Hespond e nt. H - - - - - -� - - - - � ��� ' �� -� - H X:> E C s 0N This case comes on a si mple i ss ue of whethel'"' thv ~ublish ed home c on sumpt ion value prevails over the eonsul a l�~ ot"' commer~ e:i.a l invoice value as basis for determining the d Jtiab le value of impo~ted commo' dititHi s ubject to BHl ad VI.AlcJrtim t"' a te of duty. 1he material facts ~ re found acc ord ingly. , Sometime on Fe bt"' �Jat~ y 3, 1986 , the s. s. "Southern Pt"'incess", Regi s tt"'Y No. 42 - 86 at~t.. ived at the Pot"'t of Batangas from Ul san, South Kot"' ea and discharged a shipment of 987, 688 me tt... ic tons of Dodecylbenzene with a total C & F value of ... � 691; 381. 60. The valu~ indicated in the Commercial Invoice is t630.00/MT. 317

DECISION CTA CASE NO . 4171 - 2- Unde r� Ent~--~ y No. 0 096-86 , peti ti onet~ de c lat~ ed f7(jQ.OO/I'Ifr , the publi s h e d home consumption value �, <HCIJ> for Dode~ylben ze n e, pe r Revision Ot~d e t~ No. ' 10, � dated D c tobet~ 1, 198 ~) and Revision Dt' det' No. 1, ;',1: dated January 2, 1986, in anticipation of an .':'��1 increase a ppt'aisal in accot' dance with Section 1408 "~-~1� af the Tariff and Cu st oms Code a nd avoid the :{ 'l impo~ition of surcha~ge. Petitioner paid the amount of P1,501,500.00 and P3, 156,127.00 a~ customs dUty and internal revenue t�A>Hu, respectiv e ly. It did file a protest however with a claim for refund of P145,282.00 representing an alle~ed e xcess duty resulting from a higher a ppt~aisal, waiving the intet' nal t' evenue ta~ porti o n. The . Collectot' o f of Batangas di~~issed the protest and denied th e t'e fund and on appeal by the pet it ionet' , the t' e s pond en t Commissioner of Customs affit' med the Collectot"''s decision on May 27, 1987. Follows the instant petition. The recorda show th a t the petitioner entered a thipment of Dodecylbenzene at an HCV of $700.00/MT (published value> vis a vis $630.00/trn ( co mme t~c i a 1 invoice) t o avo i d " t"' ltn n i n g t he t~ i s k of being

�. DECISION CTA CASE NO. 4171 - 3- �i mpos ed a heav y Sllt'c lt d!;IE' ot~ se izu t~ e undet~ Sect ion 250:.3 o 't' t; he Tat~iff' ancl C u s l:o ms Code." Afte r~ having effected sans the anticipated penalties, petitioi1e1�~ in a volte -f ace assailed its own de cla ~~ ed v al u ;:d;i nn by invol<ing the commet~cial i n v o i c e v a l u e i n s t e ad , t h at t h e f i t~ s t and f o t' e mo s t co nsid t?ration in ascet' t a in i ng the HCV of an imported pl'~ odu ct bei ng the co 111 rn e t~c i a l invoice va l1..1e. "The duti a bl e value of an impot~ted a!"'ticle 9tjb.ject to an ad valo!"~ern !"~ate of duty shall be i i ! based on the home cot�1sumption valu e ol"~ price" which ' I ,;shall be the valu e or pl'~ice declat~ed in the I com more i a l, trade or sales invoice." l! <Soc. 20 1, Tat~iff and Customs Code . > And here's l I the rub! petitione r would want to a vail of a refund l on a di ffe rent strok e. Re s pond en t ' s u n vat' y i n g a s s e t~ t i on i s t hat t h e published HCV of $700.00/MT constituted in the r � v i s i on o rd e t' s and so dec 1 at' e d by the pet i t i one t' itself for the enh'Y of the impot~ ted met' chandise the t'eSI..llt of a cat'e ful and thot'ough ~ompilation ~nd comparison df invoices for articles .of the same nat Ut'e and kind e xpol"'t ed at a par<ticular time and place as hewed close to the �tat�.1tory mandate that "the cort'ect d uti ab 1 e value 319

DE'CISION CTA CASE NO. 4171 - 4- o f the s h a 11 be asce t'taine d ft'om the r e ports of t he f<e v e11Ue nttache Ot' Com me t 'C i a 1 Attac h a ){ ){ and from s u c h other information that may be a v a i 1 a b 1 e t o t h e B LW e au o f C u s t o ms 11 and f r' o m "the dat e gather' ecl, t h e Commissioner' of Cltstoms shall asc ertain and establish the home consumption valUes of the articles eHport ed to the Philippines I and shall publish s uc h lists of value s from time to tirnw." 201' ib i d.) And such appr' aisal thereon based the pt' esumption that official : duty ham been re gularly p erfor med and mu s t prevail over the commercial invoi ~e value or pric e . On the same fricusing question, I f 11 c u s t o ms aut h o t' i t i e s wet' e bd~rid by the invoice v a lue, it is evident that they would be, to a considera ble extent, a t the mercy of f oi"'Q i gn mt? rchant s and i mpot' t er' s. " <Coca-Cola E><port Corporation v. Co�� i ssi oner of Cust oats, et al. 56 SCRA 13. > The pt' on ounce ment offer's no 1 on g er' an occasion to fut'ther' speculate upon which value to base � the assessement. We t h e t' e f o t' e h e s i t at e t o fa�hion an issue into a satisfactorily settled legal situation. Mo r e o v a r, t h i s r' e c u r~ r' i n g s e e mi n g 1 y t t~ o Lt b 1 i n g legal question on the valuation of i mpor~t ed 3 2,;0

'I' Ht:C ISlOt ~ 1 0 CASE NO. 4171 r' :'d.l.':IIP in ' tc>n ~� Ot' "-1'\ i n ten or and c it' cums t' ances he t ~e in petiti o n e t' l e nding .' Th a la w do es n ut pt' ovide that it i s ..' un l y a f ter~ t he "e s tabli s hed" Ot' ,. "inf ol" ma tion" v a H .Ie i s " publi s hed" tha t I 'l such home c onsll.lllpt i on value ma y be the 'l basi s of assessment of the customs duty �~ and t a x e s � 0 n t h e con b' at' y , i t i s .�,,' expli c itly pt' ovided that upon t'e asonable I doubt a s to the acc uracy of the de c lared �l v a 1 u e o f the at' t i c 1 e i n t h e c on s ul a l'' o t' comme rc i a l invoi c e, the Commi ss ioner~ of ',\ Custo ms may dete ~ min e its home c osumption .'4., val�Je fro111 oth~t' a vailable and mot'e ,,I reliable sources . wh ic h "est a bli s h e d" ot' ... " info r mat i on " v a 1 iJ e i s not a pt' e r�� e qui s i t e > beforl? it may , be the ba s i s of the �j imposition of custom s duty a n cl taxes. ' �.: Convers u ly, its no n- publication is no obstac le to the a ss e s sment o f customs duty and taxes bas~d on such "established" or "infot'mation" va lue. The publi c ation :l.s i n te nded as nuide in the ass es s menti of fu t ure shipment of &imil ar ar' ticles. While suc h p u bli s hed value of an a~ti q le is r e li a ble, nevert h e l ess , in th e a b s ence of t he same, the C om missioner of Cu s toms may e s tablish said value fl'' Om othet' sout' ces a s above provided by l a w. <Co��issioner of Custo�s v. Procter and Ga�ble Philippine Manufacturing Corporation, et al., 169 BCRA 701.) All told, petitionel'~ aftel'' having defused the impos:l.tion of the h't'essistible legal s anctions 1 by declaring the published va llte of $7 00/MT, now starvellingly agitates fo r another v a luation b as ed 3:2-/

DECISION CTA CASE NO. 4171 - 6- on the c dmrnet~ci al invoice value to avaii of a re'fund as s weet en e\�, as we 11. This comes as an .~ ....______..-) a ggrava t _9 . It wa nts to have it 5 cake and eat it to o, so to s tn~al<. Such a quick shuttle of a posture in prying loose from it& own declared v111l�.1ati on is somethin g of a convoluted expedient d~nouem e nt that is hot entirely justified. not to co nfuse the bi r c umstances that might be but aft t h e y act u a 1 1 y we t' e at t h e t i me o f en t t~ y � We therefor e distt~ust the logic that leads to such a ,~:hy. No matter how petitioner harps and tinkers with the idea of he:wing thll! revision rendered inutile, the basic fact t' emains that the import and force of such published values subsists precisely as then contemplated to the extent that the value infot' mation can validly be located. "It i� to be stressed that the Commissioner of Customs i� requit'ed by law to publish such l ist of values from time to time. He does not only have to ascet~tain and establi'sh the home consumption value, but must also publish si..tch lists of values ft'om time to time. Public policy would seem to require that impor, tet,s be infot~med in advance of the home con�umption values exported to the

DEC IS ION CTA CASE NO. 4171 - 7- Phi 1 i p pin e s. T11 i s yJ o u 1 d p ~- e v e n t Ll n c e ~- t a i n t y , 1 e t alon e the e>< e l�'c i se o f pllt' ely pet's onal di sc t' etion, s pecia lly on th e part of customs appraiser, in the rna t t u r of as c e t' t a i n 111 en t and d e t e t' mi nat i on o f t h e pric u or value 6f i mported arti c les, F Lit' t h e t ' mo t ' e , i f i rn pot' t e 1-' s at' e i n f lH' me d i n a d vance o f t h e h o me co Iii.! Ill pt i 011 �value s or infol�' ma tion values of arti c le's e><pot't ed to the Philippines , they can pt'Op tH' lY decl a r e t he duti a bl e values of their shipru ~ nts and thu s avoid th~ heavy penalties i mp o s a d for mi s d e c 1 a I-' a t i on , i f n o t d e 1 a y s i n t h e rele e.s e of good s f t' Oin the customs custody which entail loss of time, money and e THH' gy. <Bell Hobart Manufacturing Incorporated v. Co�missioner of Custo � s, CTA Cases Nos. 2750,2751,2152 and 2753, March 10, 1978; Procter & PMC v. CTA Case No. 2357; cited in Co��i�sioner of Custo�s v. Procter & Ga�ble Phil. Mfg. Corp. 169 SCRA 699.) And neither do we think that the consulal-' invoice was intended to di s combobulate the effective application of the published value as "such valuation is pt' esumed to be COI-' t' ect and there fore cone 1 us i v e in the ab s ence of ft' aud ot' illegality of an affirmative showing by protesting

�..... .. UEL ISICIH CH'I cn ~ ; r: ~10. 4 1 71 1.\ -- � t: , ~; fJ!'>S il lli L h ~J v ;:~ l. l.l�.c u l' t: I1 P i m put~ t C:~tiO il <H' j n ' n c:.�e ec.led iJ 1wj TH . i pl e ''-' n Ll C <.o11l;i �' i:H' Y t: n 1 C.i W. 11 (C ommia ~ io ne r of C u stoms v. Co u r t of Tax Appeals a nd NCR <Philipppine s l, G.R. No. L - 48027, Ma rch 11, 19 91' ci ting Coca - c ola E ><port Corpot~at ion v. C ommis1>i n uer of lut e l~ n c~ l Reven ue, 56, 8Cf~A 5. > I�.Je ~ It <:1 J i IH~ .l t.. <., '.. < I k ill v� e c: 1J e c L .l 11u t ll e f'l. tl d n cJ f m~ tiH~ �r� r.: ><c e p l; i o 1i i '' L n i. L � P etJ LJOIII.H'' C i.l ll I I ii 1: l1 d Ve til l! l.itJ s t; of b ot; I1 v iD'r'' 1 d s. ACCO HDINGLY, p et :t t ion is her e l.1y c.Jismi ssed with co s t s a~~ i n s t p et i t i on c , � � SD CJH DERED. WE CONCUR: (u n le a v e) CONSTRNTE C. ROAQUIN ERNE EJTO D. ACO STA 3 cJ- n \iluociio\t<:.� ,Judt i �,� .:l