CTA Case No. 1149 (Resolution)

'EPUBLIC OF TBE PBILIPPINEI COURT OF TAX APPEALI QUEZON CITY �: CALTEX (PHILIPPINE.S) HIC . , c�'"'T.;I 1149 C� m..L � .B�. . �et1tioner, 'I' i�i.~J .::!J ~o . - - versus - COl�ll�iiSSIONER OF Ii'J~~Eill-JAL l\j}","\JElJUE , Hespond. e nt . x- - - -- - - - - - - -- - x � RE S 0 LUT I 0 N This i s a nrvrotion to Dismiss 11 the present peti- tion for review for lack of jurisdiction by this Court t o try t his case . Stripped of .nonessent :ials, the fact s material to the i s sues herein are as follows: Petitioner , a dome stic corpor a tion duly organized in accordance \vith our la"'-�ls with office at No. 5'40 Pad~"e Faura St ., i�;lanila , all eges in _its petition t ha t on several occasio ns in 1959 it imported fro m abroad various articles on which the respondent, t hrough t he Collector of Customs of Manila , l evied and col lected compensating and/or sales taxes under Sec tions 186 and 190 of the Tax Code . In the computatio n of said taxes , r espondent included in the landed .cos t of the im- ported articles t he special impor t tax imposed under lte- p~blic Act l'fo. 1394 at the r a te of 17% a nd not at 15. 3% which is allegedly the correct rate . Upon this t heory , petitioner made an overpayment of iJt , 874oOO compensating taxes for which petitioner seas onably filed a claim for

RESOLUTION - C'rA GA E No . 114-9 . 2 refund with respondent upon discovery of the error . I Fearing that t he right to claim for refund vmuld lapse, petitioner filed the present petition on December 7, 1961 , vli thout .v:aiting for respondent 1 s dec is ion on the claim. In his aL1Svl~r , respondent alleges that petitioner has not filed any protest with the Bureau of Customs w~thin thirty days after final liquidation of the importa- tion questioning the legality of the rate of special im- port tax collected by the Collector of Customs and so this Court has no jurisdiction to take cognizance of the pre- sent action for failure of petitioner to exhaust all its administrative remedies . Subsequently, respondent filed a motion to dismiss the petition citing the case of Caltex (Philippines) Inc . vs . Comm. of Int . Rev . (G. R. No. L-20462 , June 30 , 1965). The line of thought in said case is that the Special Im- port Tax Law , epublic ct No. 1394 , is one of the laws administered by the Bureau of Customs , hence , any iss ue involving liability for, or exemption from, said tax as well as the procedure on protest and appeal.s should be governed by the pertinent provisions of the Tariff and Customs Code . ~ithout an adverse ruling on t he protest by the Commissioner of Customs, no appeal can be had to this Court purs uant to Section 7(2) of Republic Act 1125 in relation to Section 2402 of Republic Act 1937. II

RESOLUTION - �' ' ' CTA CASE No . 1149 r3 And an action for reimbursement of comp ensating taxes on the ground that the tax was i mproperly computed because t he special i mport tax which vJas ille gally collected vJas included in the landed cost of the article , is not feasi- ble because it is , in the last analysis , an action t hat raises t he legality of t he collection of the Spec i al Im- port Tax without f oll mving the proper procedure . Here- under we quot o the pertinent portion of t he decision in the aforecited case: It i s f i rst contended by petitioner that the special import tax imposed by Republic J.� ct No. 1394 is an internal revenue tax , and , as such, a cla im for refund of t~~es so er- roneously or illegally levied and collected by the Collector of Customs pursuant to said law should be lodged with t he Commissioner of Internal Revenue and not with the Commission- er of Customs . Petitioner argues that t he Customs head and his subordinates are merely agents of the Revenue Commissioner in the collection of na t i onal internal revenue on imported articles ( ec t i o.n 6, National In- ternal Revenue Code)� and that per customs regulations , 11protest against the payment of internal revenue taxes on imported merchan- dise shall , if filed with the Collec tor of Customs , be transmitted dir ec t ly to t he Col- lector of Internal Revenue for act i on in ac - cordance with t he provisions vo,f the National Internal Revenue Code 11 (Par . first sen- tence , Customs J,dministrative Order No . 226, da ted December 3 , 1957; 54 O. G. 301). Petitioner 1 s contention is not �well- taken . In the guise of a dema n-. for reim- bursement of compensa t ing taxes, petitioner ' s case is actually one f or exemption from the special import tax under Republic .l1.ct No . 1394. C..ince Section 4 of epublic ct No . 1394 provides tha t~

RESOLUTION CT c~sE No . 1149 4 11The special import tax shall be paid by the importer to the Bureau of Customs in accordance ;,'lith t he regulations to be promulgated by the Dep artment .of Finance and prior to the release of t he imported goods, articles or products from customs cus tody . 11 and it being undi sputed that the � pecial Im- port Tax Law (Republic Act No . 139~) is one of the laws . administered by the Bureau of Custo :':s, it is evident tha t saic1 la1tJ s hould be considered as customs law , to which the secti on of Customs Administrative Order No . 226 (invoked by Caltex) does not apply , since t he s ection, by its terms, refers only to internal revenue taxes . XX XX XX XX XX Having arrived at the foregoing conclu- sion, and since t he Bureau of Customs has jurisdiction ov er the special import tax in question (See also Section 602(a) and (j) of the Tariff and Customs Code), it also follows , as a logical cons equence thereof, that any issue involving liability for , or exemption from , said tax as well as the pro- cedure on protests and appeals sho ul d be governed by t he pertinent provisions of the Tariff and Customs Code ( Republic ct No . 1937) , more specifically Sections 2308 to 2313 thereof . In fact , these provisions had been implemen ted by Customs Administra- tive Order I o. 226, dated December 3 , 1957 � ( publis hed in 54 O. G. 300-302), in w~ich the special import tax is enumerated as . among those to be governed by said customs order. It is also undisuuted that t he Collect- or of Customs of 1-tlanlla has not yet a cted upon the protests of petitioner. Hence, there is no advers e ruling from which an appeal may be taken to t he Commissioner of customs in acc or dance with Section 2313 of t he Tariff and Customs Code . Like1vise, there is no decis ion or ruling of the Commissioner of Customs �which may be appealed to the

F.ESOLUTION - CT CASE No . 1149 5 Court of Tax l?peals , . pursuant to Section 7(2) of Republlc Act No . 1125 in relation to Section 2402 of _epublic Act l'J" o . 1937, both of vlh i ch read - IlSee . 7. J�urisd iction . - The Court of Tax _ppeals shall exercise exclusive app ellate jurisdiction to revie\�J by app eal, as herein pro- vided - XXX ( 2 ) Dec i sions of t he Ccm~issioner of Customs in cases involving liabi- lity for customs dut i es , fees or other money c harg es ; seizur e , detention or release of property affected" ; fin es, forfeitures or other uenalties im- posed in r el ation t hereto; or other matters arising under t he Customs Law or othe r 1aw or pa.::.."t of la�:J adminis - tered by t he Bu.reau of Customs'; rr ( Re - p'.l"blic -~ct No . 1125.) Se c. 2402 . HevL~;,,r by Court of Tax Appeals.- The p~rty aggri av e~ by a ruling of the Commissiot1er in any matter brought before him upon pro- t est or by his action or ruling in any case of s eizure may appeal to the Court of Tax Appeals , in t he manner and within the period prescribed by law a.nd regul_:. tions . 11 (first paragraph, Republic Act l~To . 1937) In the absence of any dec is ton or ruling "l.vhich may be the subject of an appeal or pe titio n fo r review to s t he Ctoau~cret of Tax ~ppeals said court has no ca e to cogn izance of (se e CNS :Ss - tate, Inc . vs . Commissioner of Customs , G. R. No. 1-18773, January 31, 1964) . So that the low- er court correctly d is mis sed t he pe tition for revi e\-.7 of pe ti tioner for being pr;:,L'la t ure or for not stating a caus e of action . The present mot.ion for di smissal . is submitted on t he pJ.eadings a nd we are not in a position to say

'"' RY LU'I'I ON - CTA C SE No . 1149 whether a protest has been filed by petitioner within 30 "ays from the date of the final liquidation of the imp orted article 3 as this point is under controversy in t he pleadings of the parti �3S . Be t ha t c-.s it may , it is obv:iou~ t "1a t if t here was such a protest t he same remains unacted upon by the Scmmis i9ner of Customs and under the doctr:'_ ne of the aforecite ' Caltex case (Go n � No . 1- 20462) wh ich is s ~ uarely in point, this petition should be dismissed "for bei ng pr emature or for lack of a caus o of action.n etitioner , however , d istin uishes the present from the aforesaid Caltex ( hilippines ) Inc . (G. 3 . No . L- 20462) case. Petitioner points out that in said case t he legality of t be imposition of the spec i al im- port tax ha- not been decided yet by t he Conmissioner of Customs vlh en t he appeal to t his Court \:Jas filed and i.v:1en the Court passed upon t D.e motion to d ismiss there- in . On the other hand , although t he protest in t his petition is still unacted upon b~r t he Commissioner of Customs , subsequent to the filing t her eof the Supreme Cot1rt rul eel in Commls ioner of Customs vs. Cal te;,;: ( :Jhilippines) Inc ., G. R. No . L- 2lf-192 , Nay 22 , 1968, that the special Lnport tax rate collectible for im- portations during the year 1959, which covers the period involved herein , is 15.3;~ , the rate claimed by

RESOLUTION - CTA CASE No. 1149 7 petitioner . This distinction is immat erial to the issues in this pres en t motion. The decision referred to in Caltex (PHilippines) ..::nc . vs . Commissioner of In- ternal Revenue , G. R. No . 20462 , i s t he decision of the Commiss i oner of Customs on the very protest t ha t is in- vo'lved in the action for refund of comp ensating t ax , not just any ruling or decision of the Commissioner of Customs or of a court rendered in another case involving simil ar issues . The Tariff and Customs Code provides that a tax- payer should file a protest before t he Co llector of Customs if he desires to question the legality of a col- lection of duties ; failure to comply \�Ji t h this requisite makes the action of the Collector final and conclus i ve (Luzon Stevedoring Cor p . vs . Court of Tax ppeals , G. H. No. 1- 21005 , October 22 , 1966) . From t he decision of t he Collector , the taxpayer may appeal to the Commis - s i oner of Customs and thereafter to the Co urt of Tax Appeals . Except as a guide to the Collector , the Com- missioner and the Cour ts, a decision in another protest or case, even if relevant to the present case , is extra- neous to the procedural steps co�ns t i tut i.ng t he due pro- cess of the present case. He nce , it ca nnot be the bas is of the presen t appeal to this Court and , t herefore , can not be a f a ctor in determining vlhether t he present ap- peal is prema tur e or not . Petitioner ' s t heory in effect

RES LUTION - CTA CASE No . 1149 8 viola tes t he p~oced ural steps consti t uting t he due pro- cess for ques tioni ng t he legality of collectio ns of duties . ~-IEREF0:::-"3 , t he present petition is hereby dismissed for being pre~1 ture or for lack of a cause of action . SO ORDERED . uezon City, December 5, 1970 . f'lE CO JCUR: UJ.vL LI Presiding Judg e Wti.-. g ~~ ~ICLAO R. J: v. L <,..z"- As sociate Judg