CTA Case No. 2816 (Decision)

HF.I'lll~l . J C OF H I !<: PII IUPPI NES COUPT 0/ �1.\.;C APPEALS QUEZON CITY N,Y:I ONi\L DLN:"i\L SUPPLY, H!C ., Petitioner , - versus - ,.H F- CO! ' r'.I SS IOi JL:), OF Cl_TSTOLiS , t./J.'/n Hcsponde nt . X- - - - - - - - - - - - - X DEC I S I 0 N /\rpeal brought t.) uc by DCtitiJne-c ::a'-.ion;:::l 1cn - tal Supply, Inc., from a decisi on of r rspnndent Corn- missioner of Cuctorns dated ~a y 6 , 1976, aFfi~rnin~ th~ dec i s i on of the Collector of Cus~oms of the ~ort of Ma ni la ( in Cust8ms C3se NJ . 75 - 173) , denying peti - ti ~ n er's protest and c laim for rrfun~ o[ the arnou ntr of 1' 5 , 585 . 86 and .i--1,39 2. 94, rc:pre~ c nt.in~: allc:~:ed illc - gal l y c olle c ted c u~tons duty and s J les t~x , respcc - tivcly , or a tot a l of f6 ,87 6 . 31 : , c>n a shipr.1en+. of v ar ious articles de c lared t nd er Entry No . 66806 -7 5. This case has been submitted for de c ision on the bas is of the pleadings, r ecords of the Bureau of Cus - tons , evidence addu c ed by oc+itionc r, a nd resncc~ivG memo~Jnrla o~ the parties . It aopcars that sonctimc in the niddle of 1975, rc-'"it.ioncr import.crl from �t.he trnitcr St .:::�tcs v ; :-:-i'Jus articles, amon9 which wer e scv Gr~ l ca c kares and car- tons of Jcltratc and Lucitone . The whole importa tion 219

DECISI ON - CT,\ C/\SE NO . 2816 - 2- had a tot a l inv Ji c c pricE of ~4 ,9 05 . 15, and the c or - r esponding value per un i t of Jeltr ate and Luci tone , as specified in the comme rci a l and cbn sular in v o ic es , was $12 .15 and 585 . 80, r espective ly. Af ter aprra is a l by t h( Bure au of Cuc~oms, the value of the: ':Jholc: ~hiJ' - Dent was increased to $5,421.28 because the c usto ms ar;p raisers .disrE~; cr ded the vulue ( per unit) of Jeltr <1�re and Lucit one as ctilted and declared in the com~ercial and c ons ular inv ci ~es Jnd, inctcad , applied the c us+o~~ valu at i on thereof ::>c::r unit o�~ .:i)l9. 2G u n'~ .397 . 50 , rc c- p~c+ivc:ly , as est<1bli~hcd ~ n d p ublis hed by the Bur eau of Customs. On August 4 , 1975, in or~er to facili+atc the rt- lea s<: of the: whole impo~-:-tat i on , rct i t i r.er [)a� l,e�,I- ; ,( 1,... amount of Pl 9,46 2 . 00 ( as cu ~toms duty) and the ~urn of f 5,890. 00 ( as s~le~ tax) acscsse~ by t hr ~u r c~u c~ :u c- toms . I-JotN<? ver , on ,\usus�:- J 9, J9 75, DOit i -.no:: f iJ e:-1 wit h th( Collc:ctor of C ustom~ ~ written p r J~es t , as - sailing as errone ous the c ust o~ s Vi1luati nn of th r f ~J - ( i\: Jcl":~n-:-e )12 .15 19.20 12 . 15 97.50 \n((") -c a n 85 . 80 car t;ns) (B) Jcltr .i +c:: (loo~ ;~uch c a:c tons) (C) Lucitonl? (199/1 20- unit ;;a c- ka~� E s)

DECISION - CTA CASf NO. 2816 - 3- and askin~ f~r the refund of th e amounts of ?5 ,58 3.86 lcctcd cus+om~ du ty and cales tax, ~ cspc cti vely , or a t o t a 1 o f :.r-6 , 8 7 6 � 8 0. On Se pter.ber 17, 1975 , in Cuc +-oms C-1c:E :~; . 75- 173, the Collector of Custo~s rrndcrcd n ~c c i~ion tioncr on th e fo1Jow i n0 ~rou n ds: Th( ~rotGstant contcnd c~ that the true and correct v<il.uE ocr uni +� is )12.15 f or JEJ.- trJtcs an~ 585 . ~:30 f cH Lucit onE 19<) whic:1 ',Jcr�c: increasEd to $19 . 20 and ~97 . 50 , rcs oE c~ivEly, which the ~ rotEstant con ~ Endcd to be illegal and basEless . Granting , without admitting, th3t the protestant'~ contenti on , that is, $12 . 15 anri $85 . 80 urE +-r,c true ond c orrt c t prices whi c h th ( ir.~a rt c~ actuo1ly o~ id for ~he articles , this bffice nev ( rthcl~ss be - lievEs that the same are no~ the c orr ect Hom e Consu~p t ion Vdlue pursuont to Section 201 of the Tar iff und Customs Code: . ThE va.Jues ap- plied by the Appraiser ' s Division arc the es - tablishEd (publishEd) vaJ. uc for Jcltr~tcs a nd Lucit onc: , and until ancl unless the: said values h ~ ve changed in thE c ou rse of time and in the: ordinary -c ourse of trade , this Office has no altErnati v e but to apply them . Th e protE~tant fail ed to realize thf fact that the: prices of the arti c les arc: c omoilrd from time to time and vaJ. uc:s appliEd i"n t h r insta nt cJse arc: thE e stablished Home Cons umpti on Value for articles of similar nature from the country of origin at the time of exporta~ion . If Cu c+-o ms ~utho rities are always to be bound by thE inv oice vd ue , it is evident th ~t thEy would be , to a c onsidErable extent , at the mercy of farc: i gn and local i moortcrs a nd would ooEn wide the avE n u~ f or r.~ r e fraud upon the t u stoms . WHE R EFO~E, by virtuE of authority vested in me under Section 2312 of the Tariff an d Cus- to ms Code, � us amended, it is hereby ordered a nd dEcreed that Manila Protest N8. 9775 be , as it i s hereb y d ec lared DISWISSED.

DECISION - CTA CASE NO. 2816 -4 - On May 6, 1976, after appeal by petitioner, the . Commi~sioncr of Customs affirmed the decision of t~e Collector. H0nce the prese nt recourse. There is no controversy between the parties as to the computation of the amounts of customs duty and sales tax claimed by petitioner as rFfundable. The only qu0stio n presented for the Court's res olu- tion is whether, under the provisions of Section 201 of the Tariff and ~ustoms Code , as amen ded by Prcsi- dcntial Decree No. 34, the corr 0ct home consumption value of the subject articles (Jelt~atc and Lucit onc) , which should be the basis of the custom s duty and sale~ tax, is the v~lue or price de clared in th e commerci al and eonsular invoices or the value or price cstabli~ hcd and published by the Burc~u of Cus to ms. Section 201 of the Tariff and Customs Code, as amended by Pr0si- dcntial Decree No. 34, textually reads as follo ws: -or-"J-nfmpcrt SEC. 201. Basis of Duti able Value.- The dutiable va.rue cd-�a-rtic 1e subject t o an ad val2rcm rate of duty shall be baied on the home consumption valu e or price (excluding in ternai excise taxes) of same , like or similar articles, as bought and sold or offered for sale freely in the usual wholesale qua ntities in the ordinary course of trade , in the principal markets of the c :untry from where exported on the date of exportation to the Philippines, or where there is none on such date, then on the home c onsumption value or price nearest to the da te of ex- portation includin? the value of all con- tainers, covcrin <;s and/or packings of any kin0 and all other costs, charges and expenses incident to placing the article in a con- ') ') ') /y rw ; .,

DECISION - CTA CASE NO. 2816 - 5- clition ready for shipment to the Philippines, plus ten (10) per CEnt of such how e consur.m- tion va lue or price. . The homE consuDpti on value or price under this section shall be the vill. ue or price declared in the consular, C0)";1m crci al , trade or sales invoice. Where there exists a reasonable doubt as to the value or nrice of the imported article declared in thE en- try, the corrEct dutiable value of the arti- cle shall be ascertained from the reports of the Revenue Attache or Comwercial Attache (Foreign Trade Promotion Attache), pursuant t~ Republic Act Numbered Fifty-four hundred and sixty-six p r other Ph il ippine diplomatic officers and from such other information that may be available to the Bureau of Customs . From the data thus gathered , the Cow- missioner of Customs shall ascert ain and es- tablish the home con suwption vcl ucs of arti- cles exported ~o the Philippines and shall publish such lists of vcl ues from time to time. When the dutiable vaJue provided for in the pre ceding paragraphs cannot be as cer- , .. tained for failure of the importc:r to produ ce the documents mention ed in the second para- graph , or where there exists a rea so nable I doubt as to dutiable vw. ue of the imported I article declared in the entry, it shall be I the domestic wholesale scllin� oricc of such I or "similar article in Ma niJa or. other prin- I cipal markets in the Philipcines on the date I� the duty becomes payable on the article under appra is erne nt', in th c usual whoJ e s J le quanti- ties and in t he ordinary course of trJde, minus - (a) Twe::nty (20) Q.U cent thereof for expenses and - pr;fits; and (b) Duties and taxes paid thereon. The c ontention of petitioner is tha~ the corr ect home consumptioh value of subject articles should be the value or price stated in the consular invoice as

DECISION - CTA CASE NO . 2816 - 6- allegedly authehticated by a consular certification. (See petition for review and memorand um of peti- tioner). On the other hand, respondent maintains that the correct home consumption vcl ue of subject ar-ticles should be the value or price established and published by the Bureau of Cu~toms, stressing the reasons th~refor in his memorandum , as follows: (pp. 106-108, CTA records.) The recoids show that the establi~hed and published value of "Jeltru1:e 11 is .::>19.20 per unit and $97.50 per unit for "Lucitonc: 11 at the time of exoortation. These v~lues � were dEtermined for purposes of uniform taxa- tion and after a thorough study and research by the Valuati~n and Classificati on Division, Bureau of Customs, which is the sole reposi- tory of all reports, information and other data regarding the correct dutiable value on imported articles as ascertained from the re- ports of revenue attaches, commercial attaches and other diplomatic and consular officers. Indeed, any isolated value information obtained by the i~porter fron any outside source should bE consi dered with ca ution vis- Q=Yis the dutiable value arrived at by th(-- Bufeau of Customs. To act otherwise will make the system adopted by the Gurrau of Customs of publishing the home consumptiod value of im- ported arti~lcs from time to time vulnerable to at+acks by importers who can e a sily offer value information obtained from abroad whose genuineness and veracity might be difficult to ascertain. This will pave the way for un- scrupulous importers to co mmit fraud against the: gover nm (nt. Petitioner contends tha+ the true a nd corr e: ct va1ue per unit is .�~12.15 for "Jel- trate11 and $85.80 for "Lucitone ", citing the val ue of the shipment appe ac i ng in thE con- sular invoice , which it claims is the primary evidence as to the h8me consumption value of

DFCISION - CTA CASE NO. 2816 - 7- the articles pursuant to Secticn 201 of ~he Tariff and Customs Code. There is no merit to petitioner's con- tention. Sec. 201 itself provides that where there exists a reasonable doubt as to the Value or price of the imported ar- ticles declared in the entry, resort should be made to the lists of values published by the Bureau of Customs. If Customs authorities should be bound by �the invoice value, they would bG, to a considerable extent, at the mercy of foreign expar ters and locctl importers, thc;rcby open- ing the ave"nue wide; for fraud upon the Bure::au of Custo�ms. \Je agree with the: stand of ~rcsrondent Commissioner cl Customs. It is cl ear from the provisions of Sccti~n 201 of the Tariff and Cus~oms Code, a~ amended, that the home consumption value:: of -~he imported article:; shaJ.J. be the value or price declared in the commercial, con- sular, trnde or sales invoice. l-lowcvc::r, the� c:.ar:JC pro- visions state that whc::~e there exists a reasonable doubt as to +he corr0ctness of the value or price declared in the ent~y, the correct dutiable value of the article . shnll be ascertained from the reports of the Revenue . Attache or Comr.1e rc ial ,\ttache or other Phi 1ippin E diplo- matic officers and fro~ such other information that may be available to the Bureau of Cuc;�l-oms. ,\nd from the data thu s gathered, the Commi~sioncr�of Customs shall ascertain and establish +he home consur.1ption values of articles ~xported to the Philippines nnd shall publish such lists of values from time to time. 225

DLCISION - CTi\ Ci-\SE NO. 2816 -8- ) In other words, while the law prescribes the rule that the home consumption value of the imported article shall be the vill ue or price declared in the commercial, consular, trade or sales invoice, the same should not be applied in c ase the correctne~s of such value or price declared in the invoice is vitiated by reasonable doubt . And what should then be considc~ed as the correct home consumptio n v alue, i n s uc h c a s G, s h ou1d bE thE val uE or p ric e a s c e r t ai ncd by the Bure a u of Cus+ oms from the rep orts of the Rc- venue Atta che or Commercial A~ta che or other 1hilip- pine diplomatic officers, and :Jhi ch v alue has be::n cstablichcd and published by said Bur eau from time to time. Tn the cas e at bar , the reasonable doubt as to the corrc::ctness of the val uc d<:clared in the c ommer - ci al and consular invoices is too apparent to be ig - n orcd . The very cvidenc<: presented , and ~ he memoran- sur.1 filed b.y p<?t~tioner, would indicat<: that befo re the f i 1in g o f the imp o rt entry , pet it ion er f i 1 c: d with �ficCJti'on inforQ.Q.thQ.D. rt:la�l-ing to the subject articles, altho ugh it had already in its possession the commer- cial and consular invoices a~ the time. (See Memoran- � dum of petition.er & Exh. �'c;n, p. 60, C-r:A rec.) And the vcl ues sup~li cd and furnished by t he 2ure 2u of 226

DECISION - CTA C1\SE no. 2816 - 9- Customs (i.e. , $19.20 Lper unit/ for J cl �!: r <:H-c i:l nd $97 . 50 Lpcr unit / for Luc iton r ) a-r c: th e vdues de- clared in the import entry J nd sub ~ cri bcd un de r oat h as true .:mr~ c or rEct by petiti o ner. (Se e Exh . '1H11 , p. 61, CTA rec . ). Indeed, if the values of th e sub - j cct articl es stated in the commrrc i }l and consular in voices (t . e., $12 . 80 per unit for Jel t rat e and $85 . 8 0 per UGit for Luc ito nc) ar c t r ue and correct , why s hould petitione r still requ e st th<::: l3 ur co u of Cu st oms for value and classificat i on inf or mat i on be- fore fili ng +he i mport entry , and su bs equ ently de- c l ure therein as t r ue and _genuine the val ue s fur- nish ed by the Sur c au of Cu st om~? Ccrt J inly, under these circum s tance s , we find no v~ i d grounds to rejec ~ the home c ~ nsunp~ ion values Qp plicd by th e Bure a u of Cus to ms . This ic es peciall y so when these v:1l uc:s arc , ad:-:littcd ly , th e values esta - blished and ~ublis hc d by th e Bur co u of Cu st oms from t ime ~ o ti me ; and petitio ner has not in a ny way d is - p utcd and dispro v Ed thut the sai d values had been� gathered and as c ertained by the Gur cJ u of Customs fr om the reports of the Revenu e At t ache , Commercial A+tachc or other Philippi n e diplomJ t i c of f ice r s at t he c ou ntry of export atio n . To the exte nt thnt the Burenu of Cus - toms adhered literally to 'the provisions of the law ap plicable, its v alua t io n cannot be assailed as er- 227

DECISION - CTA CASE NO. 2816 - 10 - roneous. . In thf case of Bell Hobart Man ufacturina Incor- -' porated vs. Commissioner of Customs, CTA Cases Nos . 2750, 2751, 2752 & 2753, March 10, 1978, wherein th e issue for r eso lution involves the determina+ion of the correct dutiable v~ue of an imported article as pre~cribed �in Section .201 of the Tariff and Customs Code, as ameoded by Presidential Decree No. 34, this Court made the following observation: If resp ondent had ~ny reas o nabl~ doubt as to the vcl ue or price of the importe~ article declared in the entry, the correct dutiable value should have bee�n ascertained, in . accordance with the mandate of the: la�.v, from the re ports of the Revenue Attache or Commercial At tache (Foreign Trade Promotion Attache), pursuant to Republic Act No. 5466, or other Philippine diplomatic officers and from such other information that may be available to the Bureau of Customs, From the data thus gathered, rc::spondent should ascertain and establish the home consumption v~ues of articl es exported tot he PhilippinEs and publish such lists of values from time to time. It is to be: stressed that respon- dent Commission er of Customs is required by law to ascertain and establish thE home:; consumption values of articles exportc:od to the Philippin.Gs and pub_1_ish such lists of vill ues from time to time. He does not only h ave to ascertain and establish the home consumpti on vill. ucs, but must also publish such lists of values from time to time. Public poli cy would sec:om to require that importers be in- formed in advance of the home consumD- tion vill ues of articles exported to ~he Philippines. This would prevent unc er- tainty, let alone the exercise of purely 228

DECISION - CT~ CASE NO . 2816 - 11 - personal discretion, speci~lly on th( part of cust o ~s appraisers, in the matter of the ascertainment and dcter ~i nation of the ori ce or value of imported articles. Furthermore, if import0rs are fnformed in advance of t he home consumption �values of articl0s exported to the Philippines, they can properly-declare the dutiable values of +heir shiomcnt and thus avoid the h ea vy pcnaltie::s' imposed for misdcc- lar~tion, if no t delays in the rclea~e of goods from cucto ms cus tody whi ch e n- tail lose 6f time, mane; and energy. Coin� back to the inst ant cases, it sh ould ~c unequivo cally st a ted, as the records ~ilJ ~ho~, ~hat there was no published vaJue of the subject steel wire rods declared or disscmina+cd by rc~pon dcnt, as rc~ulrcd by par ~ grnph 3 of Sec- ti on 201 , di~ cuss cd above. Clc crly, there - fore, there w~s no reasonable d oubt enter- t oi ncd by resp ondent Commissi oner of Cus- toms as to the value .or price of the impor- ted steel ~ire rods declared in the entries; otherwi~e, as mandated by the law , the c or - rect dutiable value of the shipments in question should have b~en ascertained from reports of the Revenue Attache J r Commer- cial Attache or other Philippine disploma - tic officdrs and fron such other inform~ tion that may be available to the Bureau of Customs, and from the data gathered , the Commi~sionrr of Custo~s should h ave ascer- tained a nd established the home consumption value of the imported articlr . i\eco:cding1y, under the se cond paragraph of Section 201, 13..up r a , � t h c: home:: c on s uffi!="J t i on vill ue:: o r pr i c <? should be the value or price declared in the consular, c ommo:cci al , tra~e or sales invoice. Fr om the foregoing pronouncement of this Court, t h e Commissioner of Customs should disr~gard the va lue declared in the c ommercial or consular invoice whe n it is shown that he c:ntcrtuins a reasonable: doubt as to the correctness of the value declared therein or in the entry; that the correct dutiable value of the 229

!)LCISION - CTA CJ\SE NO. 2816 - 12 - imported article has been ascert ained by h i m from . the reports of th e Revenue Attach e or Comm er cial Attache or other Philippine diplona t ic officers, as well as from other d ata or information available to the Bureau of Customs; and that the caid value has been established and published by the Bureau of Cus- toms from t"ime to time.. ~/here, as h ere, there is . fidelity t o the requirements of the le �al provisions app licable, there is no basis for the ass ertion th at the valuation of the Bureau of Cu ~ toms of th e a r ti- cles in question is illegal and baseless. In any case, the act . here of petiti oner in re- questing the Burc ~ u of Cu s toms for value an rl classi- fication information before filing the import entry, and in declaring in the en�rry, under r..u th, that the true and correct home consumption values of Jeltra t e and Lucitone per unit arc $19.20 and $97.50, respec- tively, which values are the established and pub- lished valoes furnish ed to it, and applied, by the Burc, a u of Customs, bars or estopps petitioner from claiming that the correct hom e consumption values are those sta+cd in the com~ erci a l and con s ular invoices. The settled doctrine st 2tes that: x x x, the import entry in this c ase wherein the itemization of the subject ar- ticles and the pricing thereof per piece or unit had been set forth and declared (Exh. A), and which is supported by a writ-

DECISION - CTA CASE NO. 2816 - 13 - ten declaration of petitioner, under oath, II that it is true and correct (p. 15, Customs rec.), should be conclusive and binding on pEtitioner. When an import entry has been made, it is conclusive on the im- porter as to the contents and de- 1. cJ 1red value of the goods, x x x. I (21 AM JUR, 2d � .Sec. 75, p. 814.) (IMM Bruk<: Clutch Mfg., Inc. vs. Commisci oncr of Customs, CTA Case No. 2800, January 22, 1979.) Accordingly, since the correct home consumption values of th~ subject articles (Jeltrate and Lucit onc) are $19.20 und $97.50 per unit, r espectively, the cluim for refund of ~etitioner has no proper and legal basis. WHEREFORE, the decision appealed from is hcr:-eby affirmed at petitioner's costs. SO OR~ERLD. Quezon City, Metro Wanilu, June 29, 1979. I CONCUR: /J ./ / '--t?"c Cc~ _ COl\J.ST N!TE C / ROJ\QUIN Associate Judge 231