CTA Case No. 4339 (Decision)

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CI'l'Y PHILIPPINE CLEARING HOUSE C.T.A. Case No. 4339 CORPORATION, Petitioner, - versus - THE COMMISSIONER OF CUSTOMS, Hespondent. X- - - - - - - - - - - - - X LJ.Ec~_r S I O N " This is a claim for refund in the amount of Pl,024,342.00 representing the alleged excess import duties paid by petitioner for the two units ot electroni c data processing equipments with peripherals and controls. Petitioner, Philippine Clearing House Corporation, is a n on-prof it corporation engaged in providing facilities tor interbank clearing of c hecks and other clearing items such as treasury \-larrants and settlement of interbank balances. In furnishing such facilities, p e t i t i one r c h a r g e s the v a r i o u s banks � \-I h i c h part i c i pate in said c learing operations minimal sums in accord with public i nterest by reason of \elhich it has not dec�lared divi dend s to its stockholders which are the banks themseJ.ves part icipating i n the clea ring operati ons. (Petitioner tor Heview, pp. 1 -� 2 ; C .'l'.A. Record s. pp. 1~2) 88

DECISION - C.T.A. C~se No. 4339 - 2- During the month of December 1988, petitioner imported one item of MICR Reader/Sorter Unit (89190 Document System 1625 DPM). It paid the a mount of P512,171.00 on October 12, 1988 as duties representing ten per centum (10 %) of the dutiable value of the equipment. '!'hereaf ter, or on December 5, 1988 , herein petitioner paid an additional amount of P521,888.00 to co mplet e the total sum of P1 1 034 1 051.00 which is twenty per centum ( 20% ) of the dutiable value in the a mount of P5,170,255.SO. Petitioner, in its letter of December 5, 1988 addressed to the 'l'ariff Commission 1 requested that the taritt classification c ode heading of Burroughs 89190 Document Processor be changed form " 84.53.900" to " 8 4.53.500" 1 the latter classification being subject merely to a ten per centum (10 %) ad valorem duties. On December 6, 1988, petitioner wrote the respondent Commissioner of Customs, the letter (Exhibit "R"; C.T.A. Records, p. 112) of which is quoted hereunder in full: V6 December 1988 'l'HE COJ1MISSIONER BUREAU OF CUS7'0MS Port of Manila Department of Finance 90

DECISION - C.T.A. Case No. 4339 - 3- Dear Sir: It/ e fur n i s h h ere r�i t h a copy of our 1 e t t e r ( wi til enclosures) to the Tariff Commission request~ng for a reconsideration of the cl ass .i fica t i on / heading used on our importation ot one (1) unit Burroughs 89190 Document Processor. ft/e trust that this shall serve to justify ou r posit~on that the subject equipment indeed qualifies . the classification code: 752 .50-00, under Tariff Heading: 84-53-500 and Harmonized Code: 8471.92-00. Yours very truly, FRANCISCO V. YAP, JR. Executive Vice President En c losed: a / s Respondent, on December lY, 1988, answered the above letter co n tinning the taritt classification of the machine as rendered by the 'l'aritt Commission. In the said letter, received by petitioner on January 23, 1988, respondent stated that1 " Evaluation of the pertinent documents presented shows that subject article is indeed a magnetic reader tor automatic document pro cessi ng, specifically tor the purpose of readjng checks with magnetic encoded characters and so rting them accordingly. Hence, such peripheral unit is classified under the Harm o n ize d System (HS) Code 8471.99-90 with the rate ot duty at 20%" (Exhibit "S"1 C.T.A. Records, p. 113) Not satisti ed the respondent's action, petitioner .instituted this instant petition tor review 91

DECISION - C.T.A. Case No. 4339 - 4- pr a ying that it be refunded the sum of P512,171.00 representing excess import duties paid. After the respondent filed his Answer to the petition, petitioner moved that its amended petition be admitted by this Court claiming that sometime in January 1989, it imported another equipment and paid the corresponding twenty per centum (20%) ad valorem duties. Petitioner prayed that its claim for refunds be increased to P1,024,34 2 .00 representing th~ excess import duties it paid for the two equipments it imported plus interest thereon at the legal rate from December 6, 1988 up to the date of refund. Respondent, in his Answer and Hemorandum, opposes the refund claiming that this Court has no jurisdiction over the subject of the petition. The issues before this Court are 1) Whether or not this Court has jurisdiction to render judgment on this case; and in the affir mative 2 ) Whether or not petitioner is entitled to a refund in the amount of Pl,U24,342.0U representing the alleged excess import duties paid. Section '1 of Republic Act (R.A.) No. 11 2 5 (An Ac t Creating the Court of Tax Appeals) provides ()I I dr:..

DECISION - C.T.A. Case No. 4339 - 5- "Jurisdiction 'I'he Court of Tax Appeals shall exercise exclusive appellate jurisdiction to review by appeal, as herein provided - XXX XXX XXX ( 2) Decisions of the Commissioner of Customs in cases involving liability for customs duties, fees or other money charges; seizure, detention or release of property affected; fines, forfeitures or other penalties imposed in relation thereto; or other matters arising under the Customs Law or . other law or part of law administered by the Bureau of Customs; and XXX XXX xxx" This Court has no jurisdiction. Under the statute above-cited, the cause of action accrues from the time the Commissioner issues his final decision on the protest made by the taxpayer. 'l'he pertinent provisions of the Tariff and Customs Code are as follows: 1) Sec. 2308. Protest and payment upon Protest in Civil Hatters. When a ruling or decision of the Collector is made whereby liability for duties, taxes, fees or other charges are determined, except the fixin g of fines in seizure cases, the . party adversely affected may protest such ruling or decision by ~enting to the Collector at the time when payment of the amount clai med to be due the government is made, or within fifteen (15) days thereafter, a written protest setting forth his objection to the ruling or decision in question, together with the reasons therefor. No protest shall be considered unless payment o t the amount due after final 1 i quid a tion has first been made and the corresponding docket tee, as provided for in Section 3301.

DECISION - C.T.A. Case No. 4339 - 6- 2 ) Sec. 2309. Protest Exclusive Remedy in Prote s table Case. In all cases subject to protest, the interested party who desires to have the action of the Collector reviewed, shall make a protest, otherwise, the action of the Collector shall be final and conclusive against him, except as to matters collectible for manifest error in the manner prescribed in section one thousand seven hundred and seven hereof. 3) Sec. 2313. Revierv by Commissioner. The person aggrieved by the decision or action o ~~_l_:!~___J;_g_:!: l e c tor i n any matte r p r e s e n t e d upon protest or by his action in any case of seizure may, within fifteen ( 15) days after notification in wri tin9 by the Collector of his action or decision, give written notice to the Collector and one copy furnished to the Commissioner of his desire to have the matter rev~J:_\_i_~s_l___by the Commissioner. 'rhe reupon the Collector shall forthwith � transmit all the records of the proceedings to the Commissioner, who shall approve, modify or reverse the action or decision of the Collector and take such steps and make such orders as may be necessary to give effect to his decision. 4) Sec. 2402. Revierv by Court of Tax Appeals. - The party aggrieved by a r_:uling of the Com missioner in any matter brought before him ~pan protest or by his action or ruling in 9~case of seizure may appeal to the Co urt of Tax Appeals, in the manner and within the period prescribed by law and regulations. (Underscoring supplied) Unless an appeal is made to the Court of Tax Appeal in the manner and within the period prescribed by laws and regulations, the action or ruling of the Commissioner shall be final and con c lusive. Pursuant to the Code, the adverse party aggrieved by the assessment issued by the Collector may question the assessment by filing a written protest, otherwise the

DEClSlUN - C.T.A. Case No. 4339 - '1 - action ot the Collector shall become final and unappealable. '1' he r e a t t e r , i t the Co 11 e c to r ' s de c i s i on i s ad v e r s e to th e party, the later can then appeal the matter to the Commissioner of Customs Hhose decision can be elevated before this Court for review. lt is ironic that when petitioner paid the additional duties in the amount of P5 2I,eeo.uo on December s I 1':188, it did n o t file a protest before the Collector ot Customs pursuant to Section 23 09. ot the 'l'ari f t and Customs Code. Instead, it sent a letter to the '1' a r i t t Com mi s s i on r e que s t i n g t o r a 1 owe r rate o f ad valorem duties. Respondent is correct in saying that: " First ot all, xxx petitioner did not file any prot:est: under Sections 2308 to )3 1 2 of the � '1' a r i t t and C u s toms Code , H h i c h co u 1 d t h e r e a f t e r have been reviewed by respo ndent Commissioner under Sec t ions L 3 1 3 to 2 3 1 4 of the '1' a r i t f and Cust om code, and whose deci sio n thereon could have been reviev1ed on appeal by the Honorable Court under Section 2402 ot the Tariff and Cu s to 111 Code an d S e c t i on �1 ( 2 ) o 1 H . A . No . 11 2 5 . Secondly, the letter from respondent Commj ss.i.o ne r (Anne x " D" ) merely disapproved the reclassi.t:icatiou ot t. h e imported article from c l assificatio n c ode 84. S3. 900 to 84. 53. 500, as VTas the objective of petitioner in its letter ot De cember b, 1988 to respondent Commissi o ner tAnn e x "C" o t Petition), a nd tn its l ette r to th e 'l'aritt Commissioner dated December 5, 1988 tAnne x "C- J " of Petition) . Nothing Has menti o n ed about petitioner ' s questioning the

DECISION - C.T.A. Case No. 4339 - 8- amount of duties assessed," (Answer, p. 5�, C.T.A. Records, p. 35) This court cannot take cognizance of this case for it is evident that petitioner failed to avail of the legal remedies provided for by laH amounting to lack of jurisdiction. In the case of Commissioner of Internal Revenue vs. Villa ( 22 SCRA 3) the Supreme Court held: "Jurisdiction over the subject matter is fundamental for a court to act on a given controversy . It is conferred by law, not by consent of the parties. It can be challenged at any stage of the proceedings and for lack of it, a court can dismiss a case ex mero motu. To inquire into the existence of jurisdiction over the subject matter is the primary concern of a court, for thereon would depend the ability of its entire proceedings xxx." Notwithstanding the fact that this case , after the pre sen ta tion of vTi tne sse s ,� documents and memoranda, ha s already been submitted for decision, this Court cannot pass judgment on a case where it has no jurisdiction. Having thus ruled that this Court has no jurisdiction, the resolution of the other issue raised in this case v10uld only result to an empty academic discussion. WHEREFORE, in view of all the foregoing, this Court hereby DISMISSES this case for lack of juri s diction.

DECISION - C.T.A. Case No. 4339 - 9- SO ORDERED. Quezon City, Metro Manila, February 4,1994 : Judge WE CONCUR: L ~J1�: RAMON 0. DE YRA Associate J dge C:E.R ~z--~- .F�~ � c:-A 7.'.1- 0 N I hereby certify that the decision was reac hed after due consul tat ion among the members of the Court of Tax Appeals in accorda nce Hi th Section 13, Article VIII of the Constitution. c~�-:o --Q_,D~ . ACOS'l'A Presiding Judge Court of Tax Appeals