CTA Case No. 644 (Decision)

, . . . �~~ C.T.A. CASE NO. 644 STANDARD-VAC.WM OIL COMPAi 'Y, Petitioner, - versus - CX)IVJlviiSSIONffi OF CUSTOMS, Respondent. X- - - - ~ � ~ ~ - - - - - X DECISION This is an appeal from the decision of the Com- missioner of Customs dated March 6, 1959 denying a claim for refund in the sum of ~~J718.74.paid by pe- titioner Standard~Vacuum Oil Company as wharfage on 10 1 359 1 371 kilos of bulk fuel oil which arrived on board the tanker S/S 11 Kirishima Maruu. The facts of the case are, as stipulated by the partiess quoted below~ ~1. That petitioner is a foreign corp- oration organized and existing under the laws of the State of Delaware, U.S.A., and duly licensed to do business in the Philip- pines; that respondent is the duly quali- fied and acting Commissioner of Customs; ;1 2. That on or about July 28 1 19551 a shipment of 10,359,371 kilos of bulk fuel oil consigned to petitioner arrived at the Port of Manila on board the tanker S/S �Kirishima Marut (Registry Noo 877) and was geclared under ~ntry No. 6E021, series of 1955; u3o !hat the said tanker on arrival at the Port of Manila anchored outside the breakwater at a place assigned by the Bureau of Customs; that the said vessel remained outside the breakwater during its stay at said port; ~~4. That pursuant to Special Permit 1 Oo 1529 issued by the Bureau of Customs on July 27 1 1955, after the filing of the necessary bond and deposit to secure pay- ment of the customs duties, taxes and other

DECI.:iiON ~ C. T.A. CASE NO . 644 - 2- charges, the aforesaid 10 1 359$371 kilos of bulk fuel oil were pumped by means of ex- haust pumps from the importing vessel into the barges of the Luzon Stevedoring Company of ~anila , which were towed and moored alongside the importing vessel outside the breakwater, in the presence of and under the supervision of the customs officers; v5 . hat after said barges were filled and sealed they were towed along the Fasig River by launches of the Luzon Stevedoring Company to petitioner 's installation in Pan - dacan, Manilai that a customs guard accom- panied each ot said barges while enroute to Pandacan; n6 . That upon arrival of said barges in PaQdacan, they were moored alongside three (3) wharves owned and constructed by petitioner and which adjoin its Pandacan installation. A sketch of the said wharves With their dimension's in meters is hereto attached as Annex 'A' hereof; � u7. That on the - water surface right alongside said three wharves were floating movable pumps owned by petitioner and which (pumps) were connected to pipelines. These pipelines were in turn connected to the Pandacan storage tanks of petitioner; va . That a customs examiner was stationed in th~ petitioner 1 s Pandacan installation who , upon receipt of the notice of the arrival of the importing vessel, measured petitioner's Pandacan storage tanks and determined the quantity of fuel oil contained therein; that after measuring their contents, the fuel oil in said barges wa s pumped into the Pandacan storage tanks andJ thereafter, a customs ex- aminer again measured the storage tanks and determined the quantity of fuel oil thus pumped into petitioner's Pandacan storage tanks; that after ascertain}~g the quantity of fuel oil thus pumped into the Pandacan storage tanks the customs examiner computed the exact amount of the taxes 1 duties and other charges due on the imported fuel oil; 11 9o That the Collector of Customs of Manila assessed1 levied and collected the sum of ~20 ,718.74 as wharfage fees on the imported fuel oil, as evidenced by Official Receipts Nos. 34467 and 37314, dated July 28, and August 15, 1955, respectively, and li-

DECISION - C. T. A. CASE NO . 644 - 3 ... quidated under Voucher No. 12664 , dated February 21 1956J pursuant to Sections 1(b) and 3 of Republic Act No. 1371; 11 10 . That on February 25, 1956 , peti- tioner filed with the Collector of Customs of Manila a protest (Manila Protest No . 148) against the assessment and collection of the amount of �2J 1. 718 . 74 as wharfage fees on the fuel oil imported by it ; ~t llo !hat the Collector of Customs of Manila in his de c ision dated June 24 , 1958 , denied petitioner's protest; 11 12. !hat petitioner appealed to res- ponde Qt 1 Co~i ss ioner of Customs in accord- ance with law , and on March 13, 1959 , peti- tioner received the decision of respondent dated March 6, 1959 , affirming the decision of the Collector of Customs of Manila;" (Partial Stipulation of Facts , CTA rec ., pp . 30 - 32. ) On April 8 , 1959t petitioner filed its petition for review in this case. The only issue to be re~olved in this case is whether or not the Collector of Customs of Manila legally assessed and collected , pursuant to the provisions of Section 3 of Republic Act No � .1371, from p~titioner Standard-Vacuum Oil Company wharfage fees on its import - oil ation of bulk fuel/ discharged from the S/S ~'Kirishima Maru" outside the breakwater and pumped into barges which were towed along the Fasig River to petitioner's wharves in Pandacan , Manila , where the oil was piped to storage tanks . Petitioner contends that inasmuch as its imported bulk fuel oil was unloaded from the tanker S/S 11Kirishima Maruu unto privately owned barges from which the bulk fuel �oil was finally unloaded on private wharves without

DECISION - C.T . A. CASE NO. 644 - 4- using government wharves , no wharfage fee should be collected thereon . Petitioner predicates its conten- tion on the last proviso of Section 3 of Republic Act Noo 1371 which exempts from the payment of wharfage fees imported articles unloaded on private wharves . On the other hand, respondent as sert s that peti- tioner cannot invoke the exemption proviso of Section 3 of Republic Act Noo 1371 inasmuch as the bulk fuel oil imported by petitioner was not unloaded directly on a private wharf, but was discharged and delivered shipside unto barges which in turn unloaded the bulk fuel oil on the wharves owned by petitioner . Respon- dent argues that in order to be exempted from wharfage fees, the imported articles should be unloaded directly from the importing vessel (in this case_, the ~/S u.Kir i - shima l1aruJJ) to private wharves. We find no merit in respondent's contention. Section 3 of Republic Act No. 1371 r~ads: 11 SEC. 3o !here shall be levied, collect - ed and paid on all articles imported or brought into the. Philippines, and on pro- ducts of the hilippines, except coal, lumber, creosoted and other pressure treated materials as well as other minor forest products, ce - ment, guano, natural rock asphalt, the mine - rals and ores of base metals (e . g. , copper, lead, zinc, iron, chromite, manganese, mag- nesite and steel), and sugar molasses, ex- ported from the Philippines, a charge of two pesos per gross metric ton as a fee for whar- fage; Provided, That in the case of logs, or flitches twelve inches square or equivalent cross- sectional area, or over, a charge of sixty centavos per cubic meter shall be col - lected: Provided , further , That such whar- fage fee shall not be levied on articles im- ported or brought into the Philippines which are unloaded on riva e wharves.n (Under - scoring suppliedo

DECISION C.!.A. C .sE NOo 644 - 5- I It may be observed that the exemption proviso used the phrase 11unloaded on private wha vesu. the word 1'directlyu is nowhere to be foundo A c lose perusal of all the pro- visions of Republic Act No. 1371 does not yield an inten - tion of Congress to require imported articles to be di- rectly unloaded from the importing vessel to private wharves in oraer to be exempted from the payment of whar- fage fees . f oreover 1 it should be borne in mind that at the time Republic 1 ct No . 1371 was enact edt the waters and channels off most private wharves throughout the archi- pelago were not deep enough to allow ocean- going vessels to doc k alongside said wharves , so much so that when ocean-going vessels unloaded on private wharves 1 lighters, barges or cascos were availed of to convey the articles from the vessel 1 whic h ordinarily was anc hored off - shore in deep waters~ to the wharves . This situation was un - doubtedly well known to the members of Congress who en- acted the lawo Having been aware of the prevailing con- dition when the exemption from payment of wharfage fees ~f imported articles unloaded on private wharve s was pro - vided 1 Congress could have specifically decreed that the exemption wa s limited only to imported articles dire ctly unloaded on private wharvest if its intention was to so limit the exemptiono It is also urged upon us that the common defini- tion of uwharfageu , used in the United States , should - not be applied in this jurisdiction for the reason that Republic Act No . 1371 itself defines the same as the

DECISION - C�� A. CASE NO . 644 - 6- vamount assessed againgt the cargo of a vessel engaged i- n the foreign trade~1 ., Accordingly, for the purpose of imposing the wharfage fees under Section 3 of Re - public Act No . 1371, it is immate~ial whether or not facilities of a government wharf are used in loading and unloading cargoes inasmuch as said wharfage fees are not charges for the us~ of such facilities, but are impositions on goods imported into and exported from the Philippines for the purpose of raising the s o-called Port vworks Fund. !his pretension has previously been passed upon by this Court in an appeal (Superior Gas and Equipment Co. vs. Commissioner of Customs; C.I.A. Case No. 396 1 June 30, 1958) inv~lving a question similar to the c as e at bar. In resolving the question as to whether or not the universal and common definition of '1wharfage'' may be applied, insofar as Section 3 of Republic ct Nco 1371 is concerned, we held& flAccording to the explanatory note to House Bill No. 4015, later enacted into Republic Act No. 1371, the purpose of the bill 'is to fix, define, classify, regu- late �nd consolidate all the charges and fees to be collected in the Philippine ports in keeping with present conditions, not only locally but also of the entire shipping world as has been observed in the trips abroad by officials of the Executive Department of the Government and alsb of the different Congressmen' (p. 2844, Vol. II, No. 69, Congressional _Records, House of~ epresentatives). � s afore-quoted it was the manifest intent of the legislative body in the enactment of Republic Act Noo 1371 to fix, define, classify, regulate and consolidate all the charges and fees to be collected in the Philippine ports in

r I' DECISIOl~ - C. T. f .. GA~E NO. 644 - 7- keeping with the universal practice ac- cepted by the entire shipping world . In other words, by legislative irtent , the terms iwharfage c harge ' defined in Section 1 , of ~epublic Act No . _l371 1 a s ' the amount assessed again st the c argo of a ye ssel en- gaged in the foreign trade , based on the quantity, weight or measure received and/or discharged by such vessel � should be given a meaning no different from the univer s all� acc epted c onnotation of the term �wharfage ~. (Superior Gas and Equipment Co . v~ . Com- .: mi ss ioner of Customs, C. ! . A. Case No . 396 , June 30 1 1958 o) ~1 Yiharfage"t is c ommonly and universally defined ass The c harge for the use of wharf by way of rent or c ompens ation . (Vol. 45 1 Permanent p. 41 , c iting~ Marine Ed o Words & Phrases , Lighterage Corpo v . Luckenbach SoS . Co., 248 N.Y. 71, 72o) The money paid for landing goods upon, or loading them from a wharf . (Vol. 3, Bou - vier t s law .:D.i�t L .3d Revi s ion � p. 3450 c iting: Sacr amento v. !he �JNew Wor ld�1 , 4 Cal. 41 . ) � The fee or duty ~aid for the privilege of using a wharf . l'r ebster 1 s Unabr idged l ew International Diet . 2nd J?d. p. 2907 . ) ~Applying the above - quoted universally acc epted meaning of the term ~wharfaget 2 it would seem that by 1wharfage charges 1 , as defined in Section 1 of Republic Act No . 1371~ our - legislators authorized only the levy- ing and collection of fees , dues or charges for the use of the fa c ilities of government wharves or piers . And to stres s this legislative intent and avoid the possi- bility that the s ame be over - looked or misapplied , our lawmakers expressly exempted from the payment of wharfage dues tartic le s imported or brought into the Philippines

DECISION - C.T.A. CASE l Oo 644 - 8- which are unloaded on private wharves~ (Sec. 3, R.A . No. 1371). 11 {Superior Gas and Equipment Co. vs. Commissioner of Customs, supra.) The evidence shows that in unloading the 10,359,371 kilos of bulk fuel oil from the S/S 41 Kirishima lvlaru" on its Pandacan installations, petitioner used no facilities of a government wharf . As elsewhere discussed, said bulk " fuel oil was unloaded on private wharves belonging to pe- titioner. Said bulk fuel oil comes within the contempla- tion of the last proviso of Section 3 of Republic Act No. 1371 exempting from the payment of wharfage fees unported articles unloaded on private wharves. Consequently, the sum of 20,718.74 paid by petitioner as wharfage fees on 10 , 359,371 kilos of bulk fuel oil was illegally assessed and collected by the Collector of Customs of ianila. I~ VIE~ OF THE FOREGOING , the decision dated March 6, 19~9 of the Commissioner of Customs denying peti- tionerts claim for refund in the sum of ~2),718 .74 is hereby-reversed. The Commissioner of Customs is ordered to refund to the Standard-Vacuum Oil Company the amount of 20,718.74 erroneously collected as wharfage fees on l0,359o371 kilos of bulk fuel oil imported by petitioner. ithout pronouncement as to costso 00 ORDERED. Manila, June 13, 19W. I c::orCUR: Judge R.OiviAN M. UMALI Associate Judge Associate Judge AUGUSTO M. LUCIANO is on leave.