CTA Case No. OC-2749 (Resolution)

RE PURf,TC "OF THE PBILIPPINEB COURT IOF TAX APP.EALS QUEZON CITY ;' TAGUM ELECTRIC COMPANY, INC � .., Petitioner, - - versus - C oTo A. CASE NO . 2749 THE CO~~ISSIONER OF CUSTOMS , Respondent " X- - - - - - - - --X RES 0 LUT I 0 N On November 21# 1975, respondent filed a motion with this Court praying for the dismissal of petitioner's appeal for lack of a cause of ac- Petitioner is a domestic corporation with principal office and place _of business at Tagum, Davaoo In the course of its operation, petitioner imported "One (l) case, one (1) unit40 Alfa/De Laval Centrifugal Separator.. Type MAB l03-,B024 1 11 valued at $3,305 9 80, which arrived at the Port of Manila � on board the M/S "Hirado" on January 17, 1975o Thereafter,. the Collector of Customs, Port of Manila, assessed and collected on the said equip- ment ten per cent (10%) ad valorem customs duty amounting to ~2 11 537 oOO and seven per cent (7%) compensating tax of ~1.8 73~00, which petitioner paid under protest on March 4, 1975o On June 27, 1975, the Collector of Customs of the Port of Manila dismissed petitioner's pro-

RE S OLUTION CTA CASE NOo 2749 , - 2- test for lack of merit. A copy of said decision was received by petitioner on August 26~ 1975 0 On September 8, 1975, petitioner appealed to the Commissioner of customs and, thereafter, without waiting for respondent�s decision, peti- tioner filed its petition for review with this Court on October 81 1975, praying that judgment be rendered declaring and ordering respondent to refund to i t the said amounts of ~1,873 .00 and ~2.537.00o On November 21,., 1975. respondent moved to dismiss the instant petition for failure of pe- titioner to e~haust the administrative remedies prescribed in Section 2313 of the Tariff and Customs Code, as amended~ and that petitioner has no cause of action against respondento Petitioner, however, contends that it is not obliged to exhaust administrative remedies because the dispute invo~ves purely a legal ques- tiono Moreover, since the case involves also a claim for refund of the compensating tax~ i t can bring this action within two years fi0m pay- ment of the tax under Section 306 of the Tax Code, without waiting for the decision of the Commissioner 0

RESOLUTION - C~A CASE NO. 2749 3- of Customs on its protesto The issue boils down to whether or not this Court has jurisdiction to entertain the present appealo Petitione r's .appeal is fatally defective on two fundamental pointso First* the claim for re- fund of customs duty is premature because there is as yet no decision by the Commissioner of customs which is appealable to this Court under Section 7, in relation to 11 of Republic Act No . 1125 0 (See Rufino Lopez & Sons, Inc. vs. CTA, G~Ro Noo L-9274, Febo 1, 1957; Sampaguita Shoe & Slipper Factory vso Comm. of Customs, G.R Q No. L-10285, Jan. 14~ 1958; Negros Navigation co., Inc. vs. Comm. of Customs, G.R. No. L-18629, May 31, 1963; Southwest Agricultural Marketing Corporation v. The Secretary of Finance, et al., G.R. No. L- 24797* October 8 1 1969; P .J. Kiener CO oi Ltdo vs. Comm. of Customs�"' CTA Case /_Res-;?No. 1141� Jano 13, 1962; Gumagda vs. Comm . of Int., Rev . & Commo of Customs., CTA Case Lfiei;lNo. 1529.1 October 28, 1964; Borden Chemical Company (Phil.), Inc. vso Comm . o f Customs, CTA Case ZRe~No. 15521

RESOLUTION CTA CASE NO . 2749 I - 4- ..... I May 28, 1965; Sy vso Commo of Customs, CTA Case LRes;l No. 2163, August 12, 1976 ,and Procter & Gamble PMC vs. Comm. of Customs, CTA Case No. 21551 LRes;l, April 15, 1971.) In the second place the claim for refund 1 of the compensating tax has not been filed by petitioner with the Commissioner of Internal Revenue as required by section 309 of the Tax .code. Moreover the Commissioner of Internal was not made a par-ty respondent in this case and, therefore, petitioner's appeal is subject to dis- missal for lack of jurisdiction. (See Luna vs. Comm. of Customs, CTA Noe 1947 , Nov. 29, 1968; / Phil. vlallboard Corp . vs . Comm. of Customs" CTA No. 2136, Sept . 30, 1972; Procter & Gqmble PMC vs. Comm. of Customs, CTA' case !Res~ No. 2155, April 15, 1971; citing Ace Publications, Inc. I vs. The Commissioner of customs and the Collector of customs, G.R. No. L-18808 1 May 29, 1964.) � The procedure for protests and/or claims for refund of customs duty and claims for refund ' of compensating tax and/or advance sales tax (which are internal reven~e taxes) is governed by diff~rent laws. The former is governed by

� RESOLUTION - CTA CASE NO . 2749 - 5- t he Tariff and customs Coder but on appeal there- from to this Cc ourt must comply with the provisions of Sections 7{2) and 11 of Republic Act N0 � 1125Q However, with respect to refund of revenue taxes~ it is governed by the National Internal Revenue Code (particularly Seco 306 thereof) and Sections 7(1) and 11 of Republic Act Noo 1125 0 The pro- cedure set by law for the refund of customs duty cannot be availed of for the refund of revenue taxeso Thus, it was held: Philippine Wallboard Corp . � vs . Comm. of Customs, supra. There is another flaw in petitioner's appeal. Petitioner seeks to recover in this appeal not only customs duties but also com- pensating tax, a national internal revenue tax imposed by Section 190 of the National Internal Revenue Code. The recovery of na- � tional internal revenue taxes erroneously or illegally collected is governed by the Na- tional Internal Revenue Code and not by the Tariff and Customs Code�,. and the proper party . respondent in appeal to this Court in cases of refunds of such taxes is the Commissioner � of Internal Revenue and not the Commissioner of Customs. Lung. vs . Comm . of customs, supra ��� � It should be noted that the compensa- ting tax is a national internal revenue tax and any claim for immunity therefrom must have to be lodged with an decided by the Commissioner of Internal Revenue. Only in an appeal from an adverse decision of the said

RESOLUTION - '' CTA CASE NO. 2749 6- Commissioner can this Court pass upon the question of immunityo As regards the lia- bility of said car to customs duty, the re- medy of petitioner is provided in Sections 23061 et seq. of the Tariff and Customs Code.; American International Dairy Coo 1 Inc 0 vso M1sael Vera in his capacity as Com- missioner of Internal Rsvenue and Rolando Geotina in his capacity as Commissioner of Customs, CTA Case No. 1975, June 30e .1.21lo The claims for refund involved herein consist of� two different charges. namely advance sales tax and customs duty . With respect to the advance sales tax, the same is governed by Section 306 of the National Internal Revenue. Code. Under said section, a written claim for refund of the alleged overpayment must be filed with the Commissioner of Internal Revenue within two years from the date of payment. and if the lat~ ter fails to act on the claim, the taxpayer can bring a judicial action without waiting for the decision of the Commissioner also within two years. (Coll. v. Sweeney~ 106 Philo 59; Gibbs Vo Collet 107 Philo 232 ; Colle Vo Convention of Phil . Baptist Churches, G.R. No. L-11807� Jan. 28 1961; Coll. v. Manila Hume Pipe. G.R. No. L-11494, Jan. 28� 1961; Koppel v~ Coll. G.R. No. L- 10550, Sept o 161 1961; Commo of Int. Rev. vso Victorias Milling co., No. L-24108, Jano 3, 1968; 22 SCRA 12.) Of course, where the Commissioner renders a decision denying the claim of the taxpayer for refund, the tax- - payer must appeal from the decision of the Commissioner within 30 days from the date .. of receipt of the decision, bu� in no case beyond two years from the date of payment. (Gibbs v. Collector, supra.) As regards the customs duties, it is the general rule that when a ruling or decision of the Collector is made whereby liability for

RE SOLUTION CTA CASE NO. 2749 - 7- duties, taxes and other charges or any other matter is determined, except the fixing of fines in seizure cases, the party adversely affected is required to file a protest with the Collector. at the time when payment of the amount claimed to be due the Government is made., or within thirty days thereafter. (Sec o 2308 Tariff and Customs Code.) The decision of the Collector of customs is appealable to the Commissioner of Customs within 15 days from receipt thereof 0 (Sec. 2313, Tariff and customs Code.) ��� It has been consistently held that in matters involving customs duties, only decisipns of the Co~missi. oner of Customs areappealable to this Court. (Rufino Lo- pez v.� CTA 100 Phil . 850; Chan Kian v. CTA 105 Phil. 904.) Without a decision o f the commisa~oner of customs. this Court ~cquires no jurisdiction over cases arising under Customs Laws. (See Sampaguita Shoe & �Slipper Factory vs. Commissioner of cus- toms, 102 Phil o 850.) Procter & Gamble PMC vsq Comm . of Customs, supra. There is no merit in petitioner's pretension that its appeal should be en- tertained by us because it is filed to comply with the two-year period provided by law within which to file an action for 11 recovery of duties and surcharges illegally or erroneously collected." The law referred to by petitioner is obviously Section 306 of the National Internal Re- venue Code vrhich provides as follows: XXX XXX XXX B~t this provision app lies only to internal revenue taxes as specifically stated therein, and not tp customs duties and surcharges which are governed by the Tariff and customs Code� not by the National Internal Revenue Codeo Thus, says the Supreme Court on this point : J

RESOLUTION CTA CASE NOo 2749 8- .� � o Th~t there is no decision or ruling by the Collector of Customs or Commissioner of customs on the re- quest of appellant for refund, is abun~ � dantly clear from the very allegations in the petition;; Pursuant, therefore, to the above ruling of this Court# the pre- sentation of the petition for review with the CTA was premature, for as things stand then, there was nothing to reviewo We cannot1 b� mere analogy, apply the interpretation given to Section 306 of the Internal Rev. Code to Sec. 7, parQ 2 of Rep. Act No .o 1125o Not only was the petition directed against the Customs of- ficials, but it also appears that Seco 306 has no counterpart in the Tariff and Customs Codeo There is no statutory grant for importers claiming refund of du- ties to go directly to the CTA without waiting the decisions of the cbllector 'of Customs or the Commissioner of Customs. for one thing.,. the Collector or commi�ssioner may order the 'refund of taxes in question, in which event a review would not be . neces~ saryo (Ace Publicationsr Inco Vo The Com- missioner of Customs and the Collector of Customs, G.R 0 Noo L_l8808~ May 29� 1964.) IN VIEW OF THE FOREGOING CONS IDERATIONS, the instant petition for review filed by petitioner is hereby dismissed, without pronouncement as to ' costs;; SO ORDEREDo