CTA Case No. 2995 (Decision)

~� KF. PUP.U r OF �; : ; ��. PlllU'?'PfN'ES COURT \.~ ;: T.:\~ : APPEALS Ol ' l:~ Z0 '\1 C I TY SOLID MIL LS, I NC., REMERCO GAR1"1ENTS� MANUFACTURING CO., MENZI DEVELOPMEN T CORPO- RATION, ET. AL ., Petitioners, - versus - C.T.A. CASE NO. 2995 COMM ISSIONER OF CUSTOHS, Respondent. X- - - - - - - - - - - - X DE C I S I 0 N At bar is a suit for the (1) _nullification of Customs Administrative Order No. 3-77 of respondent Commiss i oner of Customs issued on February 14, 1977 on the ground t hat it is repugnant to and violative o f the provisions of Section 1903 of the Tariff and Customs Code as amended, and to enjoin respondent f r om further c ollecting the bonded warehousing fees p r ovid e d therein ; and (2) .recovery of the amount of war ehousing fee s claimed to have been collected from each of here in petitioners under said Customs Admi- n i strative Order No. 3-77. As born e out by the pleadings submitted by the parties, it appears that: 1. Petitione r s , ~s listed in the attached An n ex "A" o f the petition for review , are corporations duly organized and exis t ing under the laws of the Ph ilippines , with business addresses as indicated 7 .'Ji r-�i

DECISION - CTA CASE NO. 2995 2 therein. They are all customs bonded warehouse operators duly authorized as such by the Bureau of Customs thru their respective District Collectors of Customs. 2. On February 14, 1977 respondent Commissioner of Customs issued, pursuant to the provisions of Sections 608 and 1903 of the Tariff and Customs Code, . as amended by Presidential Decree No. 34, Customs Administrative Order No. 3-77 entitled "Fixing and Establishing Customs Bonded Warehousing Fees." This customs administrative order promulgates regulations prescribing fees for customs bonded warehouses in the Philippines and directs all Collectors of Customs to collect annual warehousing fees from operators of customs bonded warehouses as indicated therein. It further provides that failure on the part of the bonded warehouse operators to pay the warehousing fees would be ground for either suspension/revocation or non-issuance of the license to operate a customs bonded warehouse . J. On Apri l 15, 1977 counsel for petitioners sent a letter to respondent -Commissioner of Customs suggesting that the legality of said administrative order be thoroughly reviewed and at the same time requesting that pending such rev iew the implementation of the customs administrative order be suspended.

DECISION - CTA CASE NO. 2995 - 3- There being no reply, a follow-up letter was sent by counsel for petitioners on December 13 , 1978 making r eference to the previous letter, and again requesting t hat the enforcement of Customs Administrative Order No. 3-77 be s uspended until the legality thereof has been reviewed . 4. In a letter of January 15, 1979, respondent Commissioner of Customs, after pointing out the legal basis for the imposition of warehousing fees under Customs Administrative Order No. 3-77, maintained that the Bureau of Customs has the legal authority to collect the bonded warehousing fees specified therein and therefore denied the request for the revocation of said customs administrative order. 5. In view of this action of the Commissioner ) of Customs, pe titioners thru counsel filed the instant pet ition for r e vi ew pray ing . that t h is Cour t rende r . L judgment: 1. Declaring Customs Administrative Order No. 3-77 null and void for being repugnant to and violative of the provisions of Section 1903 of the Tariff and Customs Code a s amended, and ordering the Respon- dent Comm issioner of Cu~toms to desist f rom f ur ther c ollecti ng the bonded ware- h o u s i ng fees prov1ded iherei n~ ~. Orderi ng the ref u nd t o Petitioners of the amount of warehousing fees already collected from each of them under Customs Administrative Order No. 3-77.

DECI S ION - CTA CASE NO. 2995 - 4- In a mo t ion to dismiss the petition for review, t he ju r isdic t ion of thi s Court ove r the case is now b ein g que s t ioned by res p onden t . Respondent maintains t hat Cu s tom s Administrative Orde r No. 3-77 is not a deci sjon o f the Commissioner o f Customs appealable .//' t o the Court of Tax Appe als unde r Section 7(2) ?f Republic Ac t No. 1125. The said customs administrative o rd e r wa s i ssue d pursuan t to Sec t ion 608 o f the Tariff a ~ us t oms_ ~o de which a uthoriz g s~e Commissioner, s ubject to the appr-oval of the ~etary (now Min~st-er) ~ of F inance, t o promulgate all rules and regulations necessar y to enforce the provisions of the Code, and not a decis ion in the exercise of his quasi-judicial functions under Se ctions 2313 and 2315 of the same Code . And his j ; eply / letter of January 15 , 1979 sus- ...__ - "' taining the a uthority of the Bureau of Customs to c o llect bonded warehousing f ees and deny ing the r e quest f or re vocation o f Customs Administrative Or d e r No. 3- 77 is mer ely ~ n answe r to pe tit i o ne r s ' a s t o t he l e ga l ity of said a dmi n istrative o r de r. For a pe tition for r e v i e w of or an appeal f r om a d e cis ion of the Commission e r of Cu s toms in a c a se involv i ng liability for the warehousing fees cov e red in Customs Administrative Order No. 3- 77 to p r osper a nd be c og niz abl e by t he Court , responde n t t herefor e a r gues t hat pet itioners shou l d have availed

DECISION - CTA CASE NO. 2995 - 5- first of the administrative remedy of protest by ~ following the procedure laid down by the Tariff and Customs Code (Sec. 2308) _and the formalities pres- . cribed in connection therewith. Petitioners 1 ~ailure to do so is fatal to their cause of action. Petitioners contend, on the other hand, that Customs Ad ministrative Order No. 3-~7 which directs all collectors of customs to collect the warehousing fees prescribed therein with the sanction provided in Section 5 thereof that "Failure on the part of the owner/ope r a tor of Customs bonded warehouse to comply with any provision of this Order requiring action on their part shall constitute as ground for suspen- sian/revocat i on or non-issuance of the license to operate" is the decision of respondent Commissioner of Customs wh i ch is appealable to the Court of Tax Appeals because it is his interpretation of the manner o f imple menting and en f orcing the provisions of Section 1903 of the Tariff and Customs Code as amended. Since it requires the collection of customs bonded warehousing fees, Customs Administrative Order No. 3-17 would be within the� con t emplation of Section 7(2) _of Repub lic Act No. 112 5 as a de c is i o n either one involving "liabili ty f o r fees ", or a deci sion on "other matters arising under the Customs Law. 11

DECISION - CTA CASE NO. 2995 - 6- Does t his Court have jurisdiction over the instant petition for review? Secti on 7 (2) _of Re public Act No. 1125 confers upon this Court exclusive appellate jurisdiction to re vie~ by appe al decisions of the Commissioner of Customs in cases involving liability for customs duties, fees or other money charges~ sei z ure, detention or re lease of property affected; fines, f or fe itur es or other penalties imposed in relation thereto; or other matters arising under t he Customs Law or other law or part of law administered by the Bureau of Customs. And SeQtiQQll of the same Act authorize s this Court, at any stage of the proceeding, to suspend collection of customs duties if the col- lection thereof by the Commissioner would "jeopardize the interest of the Government and/or the taxpayer", after requiring the taxpayer to deposit the amount claimed or to file a surety bond for not more than double the amount . Under the Tariff and Customs Code , the party aggrieve d by a ruling of the Com- missioner o� Customs in any matter brought before him upon protest or by his attion or ruling in any case of seizure may also appeal to this Court in the manner and within the period prescribed by law and regulations. (Sec. 2402, id.) ~r), ~� ) I.) ( ..,.�

DECISION - CTA CASE NO. 2995 - .7 - B~f~~the 1 enactment of Republic Act No. 1125 the sole and exclusive remedy in a case involving liability for customs duties, fees or other money charges was to pay such du t ies, fe es or charges and to fi le 2 prote st; and if the protest was denied by the Collector of Customs, to appeal to the Commis- . sioner and to the courts. (See Sections 1370, et seq. of the Adminis trative Code ; Sections 2308, et seq. of the Tariff and Customs Code.) But with the enact- ment of Republi c Act No . 1125 the requirement of "payment and protest" has c eased to be the exclusive remedy . Sec tion _1j_2t _of said Act permits the appeal to this Court of a dec ision or ruling of the - -Commissioner of Customs in cases involving liability for customs duties, fees or other money charges; and Section 11 authorizes this Court to suspend collection o f such duties, fees or other money charges upon compliance with the requi r ements provided therein. From these provisions , it ma y be inferred that an appe al may be made bef ore p a y~en t of customs du t1e s, fees or other money charges , in which case, this Court i s authorized, at any stage of the proceeding, to suspend collection of the duties, fees or other money c harges if collection thereof before final determination of the case would "jeopardioze the i n t erest of the Government and/or the taxpayer" and J~ .,_-;, 0.))

DECIS ION - CTA CASE NO. 2995 - 8- upon the filing of an adequate bond. However, if payment of the customs duties, fees or other money charges has been made, the procedure outlined in Section 23 08, et seq. of the Tariff and Customs Code, specifically with respect to the f iling of a protest, must be f ollowed . (Caltex fPhilippine~7 Inc. vs. Commissioner of Customs and Collector of Customs for th e Port of Man ila, CTA Case No. J70, May 10, 195 , certior ari denied in G.R. No. L-15708, August 14, 1959; Cinema Audi o, Inc. vs. Acting Commissioner of Customs, CTA Case No. 2806, Januar y 16, 1978, certiorari denied in G.R. No. L-48726, October 18, 1978.) It appearing from the petition for review that th e bond e d warehousi ng fees fixed and es tabl ished by Customs Administra tiv e Order No . 3-77 have already been paid by petit ioners and this suit seeks the refund of the amount of warehousing fees paid by them, the petition f or review should be dismissed on the ground that pet itioners f ailed to avail of the admi- nistrative remedy of protest in a cc ordance with the I Tariff and Customs Code . Under Section 23 08 of the Tariff and Cu s toms Code, when a ruling or decision of the Coll ector of Customs (bonded customs warehousing f ee s are collected by collectors of customs) is made whereby liability for duties, taxes, fees or other charges is d e termined , the party advers e l y af fecte -d

DECISION - CTA CASE NO. 2995 - 9- should prote st such ruling or decision by presenting to the Collector at the time when payment of the amount claimed to be due the government is made, or within fifteen (15) _days thereafter, a written protest; otherwise, under Section 2309 of the same Code, the action of the Collector shall be final and conclusive against the taxpayer. An appeal - - from the decision or action of the Collector, if -adverse to the taxpayer, to the Commissioner of Customs, may be made under Section 2313 of the Code, - - whose decision in such appeal may , in turn, be reviewed Prote st is required in matters affecting the legality of the collection under Customs Law of other fee s and charges . (See Luzon Stevedoring Corporation vs. Court of Tax Appeals a~d Commissioner of Custom s , L-2100 5 , October 22, 1966, 18 SCRA 43 6; Victorias Milling Co., I nc. vs. Auditor General, L-17414, November 30, 1962, 6 SCRA 822.) The customs bonded warehousing feei paid by petitioners under Customs Administrative Order No. 3-77 were collected pursuant to Section 1903 of ~he Tariff and Customs Code. Sinc e t h e a sses s ment a nd collec ti o n of the warehousing fe es in quest i on i s done by the Collector of Customs u'nder the 'l'ar iff and Customs Code, protest is therefore required i n cases involving the legality

DECISION - CTA CASE NO. 2995 - 10 - or correctness of the assessment and collection of warehousing fees. Anent p e titioners' argument that Customs Admi- nistrative Order No. 3-77 would be within the con- templation of Section 7 (2) _of Republic Act No. 1125 as a decision on "other matters arising under the Customs Law" appealable to this Court, suffice it to state that the law gives to the Court of Tax Appeals exclusive appellate jurisdiction to review the decision of the Commissioner of Customs . In defining the cases that may be reviewed, the law begins by enumerating them and then adds a general clause pertaining to other matters that may arise under Customs law. 'This shows that the "other matters" that may come under the general clause should be of the same nature as those that have preceded them applying t he rule of c o n s tr uction known a s e jusdem generis. In other words, in order that a matter may come under the general clause, it is necessary that it belongs to the same kind or class therein specllically enu- merated. Otherwise, it should be deemed foreign or extraneous and is not included. (Enrile v. Court of Appeals, L-27 5 49, Sept. 3 0 , '1969, 29 SCRA 505.) For a petition f or rev iew o r an appeal from a decision or ruling of the Bureau of Customs in cases involving liability for bonded warehousing fees to-

DECISION - CTA CASE HO. 2995 - 11 - prosper and be cognizable by this Court, petitioners must therefore avail first of the administrative remedy of protest by following the procedure laid down by the law and the formalities prescribed in connection therewith. Their failure to do so is fatal to their appeal. WHEREFORE, the instant petition for review is hereby dismissed, with cost against petitioners. SO ORDERED. Quezon City, Metro Manila, November 28, 1980. ~& AMANTE ILLER Presiding Judge vJE CONCUR: 38 7 /