CTA Case No. 3133 (Decision)

REPUB l.IC �.r-' TI'E PU ILIPP!NEI COURT Lh.. "f,-.X APPU l.S ~- . QUUON CITY . PHILEX MINING CORPORATION, C.T.~. CASE NO. 313 3 Pe titioner, - - versus - COMMISSIONER OF CUSTOMS, Re spondent. X- - - - - - - - - - - - X DEC I S I 0 N This refers to pe t itioner� s appe a l seeking t he ... review of respondent � s decision dated July 7, 1980 , denying its claim for r efund and/or t ax credit of the t otal amo u n t o f ~ 2,368,853.24, r epresenting the export t ax and premium duty, paid by it under Offici al Receipt No . 14007 1 on it s exportat io n of c opper concentr ates abroad. Petitioner is a corporation .organized under the laws of the Phili ppines , wi th offices at Philex Building, Brixton and Fai rla ne Stree t s , Pasig, Metro Man i la. (Par . 2, Amended Pet ition , p . 23 , CTA rec .; admi t ted in Par . 2, Answer, p. 30 , CTA rec . ) It is enga ged in t he bus iness of expor ting copper concent rates a broad. (Annex C 11 11 p. 10 , CTA re c. ) , Sometime on J u ly 1, 1 973 , the Pres ident of the ~h i lippines i ss ued a n d promulga ted Presidential De cree 169

DECI S ION - CTA CASE NO. 3 133 - 2- No. 230 , imposing expor t ta x and p r e mium d u t y on , among other s , mi neral products inclusive of copper conc ent r a t e s . The i mpo s i ti o n.._ of s ai d e x por t ta x and p r em i u m d u ty was , however , l i fte d b y the Pr e sident when h e i ss ued the fo llowi n g Executive Order s on va ri o us I dat e s , n a mely: Exec utive Or der No . 434 . on Oc t ober 2 , 1 9 74 , Exe c utive Or der No . 450 on Ma r c h 25, 1975, E~ec u tive Order No . 457 o n No vember 4 , 1 9 7 5 , and Executi ve Orde r ~o . 5 68 o n Novemb e r 1 9, 1 979. (Par . 1 , St ifac t, p. 6 4, CTA r e c . ) � on Mar ch 11 , 1 98 0 , t h e Presi dent again i s s ued Execu t i ve Ord e r No . 5 8 1 , r e imposi ng export t ax and p :ce - mium d u ty o n c ertain e xpor t product s , includ i ng t h e copper conce nt r ate s i n que stio n . On Ma rch 2 2 , 1 980 , pe ti t io ner ma d e a s hi pme nt of sa i d c oppe r concen t ra te s on boa rd the ve sse l "Sun El z a " a t the Port of San Fer nando , La Uni on , u nd er Expo r t En t r y No . 012 971 - 8 0 a nd Sh i pme n t No . 38 2 . Aft e r the p e ti tioner ha s ef fec t e d the s aid expor t a t ion of c oppe r concentrates c overed by s aid Expo r t Entry No . 0 12971 - 8 0 , the Pr eside nt aga i n promu l g a ted Execu ti ve Order No . 587 o n Ma rch 25 , 1 980 , s u spe nding once mo r e the imp o s ition of expor t t a x a n d p remiu du ty on those produc ts which i n cluded the copper concent ra t es stated in sai d Executive Ord e r No . 58 1, exc ept v e neer a nd lumb er . (Pa r s. 2 , 3 and 4 , Sti f a c t , pp . 64-6 5 , CTA rec . )

DECISION - CTA CASE NO. 3133 - 3- On Ma r ch 27, 1980 , pet it ioner rece i ved the Order of Payment dated March 27, 1 980 , di r ecti ng it to pay the amounts of ~1,579 , 235.49 and ~789 , 6 17 . 75 as export t ax and pre mium duty, re spe5t ively, on the export~tion o f copper concentrates shipped on Ma rch 22, 19 80 , and accordingly paid the correspondi ng export t a x and pre- mi um duty in t he total amo unt of P2 , 368 , 853 .2 4 , covered by Official Receipt No. CB-140071 dated June 19, 1980 . Subsequently, pe titioner filed a cla im f or refund and/or tax credi t with t he Commiss ioner of Customs of the said total amount of P2,368,853.24 in its favor on the g round that Executive Order No . 581, which i mposes such expor t t a x and premi um duty, was suspended by Execu- tive Order No. 587 dated March 25, 1980 . (Annex "C", p. 10, CTA rec.: Pars . 5, 6 and 7, Stifact , pp. 65-6 6, CTA rec.) Howeve r, this c l aim for ref u nd and/or tax credit was denied by respondent Commissioner of Customs, in h is lett e r dated J uly 7, 1980, for lack of legal basis. (Annex "D" , p. 13, CTA rec.: Par . 8 , St i fact , p. 66, CTA rec . ) On the basis of the denial of re s - pendent Commiss i oner of Customs, p etit ioner appealed to this Court on August 18, 19 80 . (p . 1, CTA r ec . ) On October 18, 1980, petitioner filed an amended petition for review (p. 23, CTA rec. ): and, in answer to the said Amen de d Pe titi o n , responde nt set up t he fo ll o wing specia l � and aff i rmat ive d efenses, to wit: 171

DECISION - CTA CASE NO . 31 3 3 - 4- 6 . Petitioner has no va lid and suffi- cient cause of action agai ns t r espondent . Under sections 2308, 2309, 2310 , 2312 and 2313 of the Tariff and Customs Code , as amended, petit i oner should have presented to the Collector of Customs of the Port of San Fernando, La Unidh a writt e n pro- test setting forth its objections to the assessment and collection of t he sum of ~2,368,853.24, repre s enting expor t and p r e- mium duties o n i ts copper c onc e n t rate s exportation, toget h e r with t he r easons therefor. In the event of an adverse rul- ing an appe a l there fr om may be b ro ught to the respondent," whose dec ision in such appeal may, i n turn, be reviewed by th i s Honorable Court. Pe titione r failed to follow the procedure prescribed by l aw . Instead of presenting its writt en pro test to the Coll e ctor of Customs of San Fernando, .La Union, petitioner direc tly requested respondent for the refund of the sum i n question. This explains the absence of a ruling or decis ion of responden t on the matter o f r e fund, which could have been the subject of r ev i ew by this Honorable Court. It i s plain that petitioner has failed to exhaus t the administrative re - medies provided by law, hence, petitione r has no- cause of a ction against respondent Commissioner of Cust oms (Allied Broker age Corporat ion v s. Commissioner of Cus to ms , 40 SCRA 5 55 ). 7. Respondent's letter d a ted J uly 7, 1980, addressed to petitioner's lawyers inf orming t h em that the ir request fo r the ref und of the amount o f ~2 ,3 68,853 .2 4, rep r esenting export and premium duties paid by petitioner could not be gra nted f or lack of legal basis is not a rul i ng or decision o f the Commiss ioner of Cu s toms as contem..:. pla ted in Section 2402, of the Tariff and Customs Code, as amended, which may be the subject of a ppeal t o this Ho no rabl e Court. Sa id lette r was me rely in r espons e t o pe t i - ti oner 0s r eque st for r efund . There i s , therefore no r u ling or decision of res- pondent t hat th i s Honorable Court may re- view or t ake c ogniza nce of . 172

DECISION - CTA CASE NO . 31 3 3 - 5- 8. Assumi ng arguendo t hat respondent' s let t er da ted July 7, 1980 may be considered a d ecision and is r eviewable by t h is Honor- able Co urt, petitioner �s ac tion for refund is devoid of factual and legal basis. On March 22, 1 98 0 ~en peti ti oner caused the exportation of the copper con- centrates, t he law enforced was Exe cutive Order No. 581 which i mpos e d expo rt and premi um duties on export a tion of mineral products, i ncluding �copper concentrates. Executive Order No . 58 7 which suspended the imposition of e xport and premium duties on exportation o f copper concentrates took effect on Ma r ch 25 , 1980. Petitioner could not avail i t s e l f of the latter Executive o rder because it was not given retrospect- ive effect. Any interpretation that will g ive i t retroactive effect will be in dero- .gatio n of the car dinal precept that "where a provision of law speaks cat egori cally the need for interpretation is obviated, no plausible pretense being entertained to j ustify non-compl iance. Al l that has to be done i s to a pply it in every case that falls withi n it s terms ." (pp . 40-42 , CTA rec .) After the hearing and dur ing t he submission of the case for decision , responden t had abandoned the gro und of l ack of jurisdiction o f this Court. (See Respondent's Memo ., pp . 123-12 8 , CTA rec . ) The sol e i ssue , therefore , posed for decision of this Co u r t is whe ther or not peti tioner is entitled to the refund and/ o r tax credit i n t he tota l sum of ~2,368,85 3 . 24 r epre senting the export tax and premium duty p aid by it to respo nden t unde r O.R. No �. CB- 1400 71 dated June 19, 1980. There i s no dispute over the fa ct that petitioner, oh March 22 , 1980, ha s export ed c opper c oncentrates shipped on board t he vessel "Sun Elza" at the Port of 173

- -- DECISION - CTA CASE NO . 3 1 33 r I - 6- San Fernando , La Union; t hat at the time this expor t- ati on was effected, t he law t hen enfor c ed was Executive Order No. 581, promul gated by t he Pres ident o n Ma r ch 1 1 , 1980, and whi ch r e i mpos ed th~ export tax and premium duty on mineral products, which i ncluded c opper c oncen- trates, which p et iti o n e r had exported eleven ( 1 1) days after the effectiv i ty of said Executive Order No. 581 . (Par . 3, Stifacts, p . 65 , CTA rec .) Section 1 of Executive Order No. 5 81 , as far as pertinen t , is h ereby quoted a s f ollows: " Sec. 1 . - The export duty on c e rtain export products, namely : go l d , silver, coppe r ore/ concentra t es, refracto r y chrome , veneer and l umber provided for i n Pres idential Decree No . 230, as amended, the im9osition of which was temporar i ly suspended by vir - t ue of the provisions of Executive Order Nos . 434, 450, 4 57 and 568 i s hereby r e- imposed in accordance with the following s c hedule spec ifi ed in the c ol umn Export Duty : In a ddition to t he export duty, herein referred to as the basic rate, there s hall be l evi ed , a s s es s ed and c o l lected a premium duty based on the difference between the c urrent price as established by the Bureau o f Customs and the base price in accordance with the schedule s pecified under the c olumn Premi um Du ty. x x x Th is orde r sha ll take effect immedi a tel y . " (Underlining suppl i ed) � The af orequoted provision o f Executive Order No . 581 i s cle a r and explicit . The Preside n t intended to r e - i mpose the export t ax and premium duty on the articles �exported a nd enumerated in said Exe cutive Order 5 81 , 174

t DECISION - CTA CASE NO. 31 33 - 7. which included the subject expor tation of copper c on- centrate s, i mmediately or on March 11, 1980, the date the l aw was promulgated and effective. Whe re the i n- tenti o n of the Pr esiden t in ~p romu l gating t he law is clearly shown f rom the provisi on of the law itse l f , the fundamental rule to be observed i s that the law as worded is only to be applied and no interpr etation of the same should be a l lowed. The statutory cons7 truction of t he l aw shou l d be ma de on ly where the pro - vis ions thereo f is ambi guous or where there is doubt- _ful~ess or obscureness in mea ning. In statu tory cons - truction , the following rule is well settled: "A statute is not open to construction as a matter of course . It is open t o c ons- truction only where the language use d i n the statute requires interpretation, that is, where the statute is ambigious, or will bear t wo or more con s truction, or is of suc h doubt- ful or obscure meaning, that reasonable minds might be uncertain or disagree a s to its meaning. Where the language of a statute is plain and unambiguous and conveys a clear and definite meaning , there is no occas i on for resorting to the rules of statutory in- t e rpretation, and the court has no ri ght to look for or i mpo s e another meaning. In t he case of such unambiguity, i t is the estab- l i shed policy of the c ourts t o rega rd the statu te as meaning what it says, and to avoid giving it any other construction ihan that wh ich its words demand . The pl ain and obvi ous meaning of t he l anguage used is not only the safest guide to f ollow in construing i t, but it has been presumed conc lus ive ly that t he clear and explicit terms of a sta- tute expresses t he legislative i ntention , so t hat such pl ain and obvious provisions must contro l. A plain and unambiguous sta- tute is to be appl i ed , and not interpreted, 175 )

DECI SION - CTA CASE NO . 3133 - 8- since such a statute speaks for itself, and an y a tte mpt to make i t cl ea rer is a v ain l abor a nd t e nds o nly to obscurity . " {50 Am. Jur. 2 04 - 207 .) It i s the inevi table conc lusion, therefore, that inasmuc h a s the subjec t c o pper c oncentrates was expor t ed on Mar ch 22 , 1980 , or during the effectivity of Execu- tive Or der No. 581, petit ione r is d efi nitel y lia ble f o r the expo rt tax and premi um d u t y on the subject export- ation. With r espect to petitioner' s claim for refund o r tax credit of the amount i t paid as export t ax and pre- . mium duty o n its exportati on on Ma rch 22, 19 80, pet i- tione r based it s claim on its interpretation ~nd beli ef that the i ntention of the President in promulgating Execut i ve Orde r No. 587 , on Mar ch 2 5 , 1980 was to com- pletely cancel the i mpo sition of the export t axes and premium dut ies as of March 11, 1980 , among others , on copper �concentrates, and no t merel y to suspend the enforcement of sa i d Executive Order No . 581 , effective on March 11, 1980 . Petiti oner c onc l udes tha t said Execut ive Order No . 5 87 shou l d and must , therefore, be given r etroactive effect in line with the supposed in- tention of t he President. This Court c annot subscribe to t he contention of the peti tioner. To b egin with , 'I it is wise t o quote the pertinent p rovisions of Execu- I t ive Order No . 5 87 , which state s as fol lows : 176

1 DEC IS ION CTA CASE NO . 31 33 - 9- " Now , Therefore , I Ferdinand. E . Marcos, President of the Philippines , by virtue of the powe rs vested in me by law, do hereby order and direct that the export tax and premium duty r e - imposed by Executive Order No . 58 1 dated Mar c h 11, 1 980, be suspended, with the exception of lbmber and veneer. Thi s Order shall take effect immed i a t ely ." (p . 65, CTA re c .) The intention of the President in promulgating Executive Order No . 587 is clearly manifested when he merely suspended the impos ition of the export tax a nd premium duty effective Ma rch 25, 1 980 . There is nowhere in said law where he said he c a ncels or condons the export tax and premium duty already levied and the pay- ment the reof already due upon t hose exportati on of mineral produc t s under Executive Order No . 581 as of March 11, 1980 a nd t hereafter but prior to the effectivity of Executive Order No. 58 7 on March 25, 1980 . When the President used the word " suspend", he meant to withdraw temporaril y , cease for a time, set aside or make tempo- rarily i noperative, the function of collecting t:1e export tax and premium duty. (See Webster's Third New Inte r- natio nal Dictionary, 1976 Ed ., G & C Meriam Co. , p . 2303 . ) The primary and sign ificant reason for the President's suspending t he imposition of the export tax and pre- mium duty � s because of business reverses prevalent i n our economy . We re this Court give retroact ive effect to Execu- t ive Orde r No . 587 and grant petitioner a refund of the

DECISION - CTA CASE NO . 3133 - 10 - export tax and premium duty it has paid on the export- ation of copper c oncentrates effected during the 8ffectivity of Executive Order No. 581 is contrary t o the well-settled principle ~at ~ statute should be prospec tively enforced, whether it enacts, amend , or repeal a l aw , unle ss the l0nguage of that statute states in very clea r language that it shall have retro- active effect . (Lorenzo vs. Posadas, 64 Phi l. 366-367; See a l so Americ a n Airlines Inc . vs. The Commissioner of Internal Reve nue , CTA Case No. 3046 , April 16 , 1984 .) In the instant case, we find no provision in Executive Order No. 58 7, positively and clearly, which grants the retroacti ve effect the reof or which exempts the exporter front the payment of the export tax and premium duty on t he exportations of mineral products, among which is the c opper concentrates i n question, effected duri ng the enforcement of Executive Order No . 581, or from March 11 , 1980 t o March 25, 1980 . I t is well settled too in our jurisdiction tha t tax refund cases partakes of the nature of an exemption, and as such, tax exemption cannot be allowed . unless granted in the most explicit and categorical language . (Resin I nco rpo rated vs . Au ditor General of . t he Philippines , e t. a l., G.R . No. 17888, October 29 , 19801 Union Carbide Philippines vs . Co mmissioner o f Interna l Revenu e, CTA Case No. 2876, Au gust 15, 1983 : Union Carbi de Philippines 178

DECISION - CTA CASE NO . 3133 - 11 - vs . Commissioner of Internal Re venue, CTA Case No . 2891, August 15 , 1983 ; Union Carbide Philippines vs. Corrmis- sioner of Internal Re venue, CTA Case No . 28 9 2, Augus t 15 , 1983.) ..�. Petit i oner also contends that inasmuch as the Or der of Payment wa s issued by respondent on March 27, 1 980 when Executive Order No . 581 was no longer in effect since the said Executive Order was repealed or cancelled by Exe c utive Order No . 587, which too k effect on March 25, 1980, respondent cannot, consequently, legally issue the ~aid Order of Payment and there wil l be no legal obl i gation whatsoever on the part of petitioner to pay sai d export tax and premium duty called for in said order of payment after March 25, 1983. We find this view devo i d of merit . We are in full agreement wi th res- pendent when he stated as follows : "Said contention is untenable. Export and premium duties accrue at the time of ~portation . Cons idering that exportation took place on March 22, 1980 , during the effectiv i ty of Executive Order No. 581, hence , the same is subject to the payment of p remium and export duties ." (pp. 127- 128, CTA r ec .) In the case at bar, since the exportation in question was effected on March 22, 1980 , or during the effect- ivity of Executive Order No. 581 , we find petitioner 1 s claim for r efund and/or tax credit without merit, and, therefore , the s ame is hereby DENIED. 179

DECIS I ON - CTA CASE NO . 31 33 - 12 - WHEREFORE, t h e petition for review is hereby dismissed . With costs against petitioner. SO ORDERED. Quezon City, yo Metro Mani\a, July 31 , 1984. ~ C~TANTE c./ROAQUIN / soc ia te Judge WE CONCUR: ~AMA~ NT0L~J ~ Presid1ng Judge 180