CTA Case No. 4478 (Decision)

REPUBLIC OF TilE PHILIPPINES COURT OF TAX APPEALS UUEZON CITY NESTLE PI-IILIPPINES, INC. C.T.A. CASE NO. 4478 <Formerly Filipro>, HAY 3019 Petitioner, COMMISSIONER OF CUSTOMS, Respondent. X- - - - - - - - - - - - - - - - - - - - - - - - - - - X DECISION This is a Petition for Review filed by petitioner Nestle Philippines, Inc. (formerly Filipro) to COIIpel respondent Commissioner of Customs to grant petitioner's claims for refund of allegedly overpaid import duties on various i mpot�tat ions of milk powder totalling P5,008,029.00. Petitioner is domestic corporation duly organized and existing under the laws of the Philippines. It is a regular milk and ntilk products processing, distribution and sale in the Philippines. On various dates between July and November 1984, petitioner made sixteen <16> separate importations of various mil~ and milk products from Belgium, France, Canada, Holland, New Zealand and Australia. These importations were covered by separate consumption entries 810

DECISION - C.T.A. CASE NO. 4478 - 2- duly filed with the Bureau of Customs, to wit: consumption entries 46218, 46988, 52043, 46217, 45799, 45764, 483&7, 51183, 457&3, 20647, 21361, 21844, 22516, 22907, 51694 and 52540. For each of these importations, the Bureau of Customs assigned the corresponding home consumption values based on existing published revision orders, which in turn became the basis for the computation of the import duties that petitioner was required to pay. Based on the published home consumption values, petitioner was required to pay the following import duties, to wit: Entry No. Home Consumpt. ion Import Duties Paid Value <Per R. 0) 46218 p 1,712,318.00 46988 us� 1,693.oo 1,501,156.00 52043 1,771,989.00 46217 1' 693.00 ' 1,759,217.00 45799 1' 693.00 164,415.00 45764 2' ()0(). 00 991,861.00 48367 3,396.54 367,315.00 51183 1' 039.91 122,253.00 45763 1,039.91 21,219.00 20647 1' 039. 91 3,804,123.00 21361 3,375.00 1,812,393.00 21844 1,812,392.74 22516 993.00 1, 17 6' 11 3. 00 22907 993.00 1,695,887.00 21694 993.00 716,217.00 52540 993.00 530,235.00 993.00 817.08 3.29 Petitioner after payment filed various protests with the Collector of Customs which uniformly alleged that the Bureau of Customs had used the wrong home consumption 811

DECISION -- C.T.A. CASE NO. 4478 - 3- values in determining the dutiable value of petitioner's i 111portat ions. On various dates, Petitioner claimed a refund of the alleged overpaid i111port duties totalling P5,008,029.08, broken down as follows: Entr)! Duties Paid Dt..ae Based on Difference No. Correct HCV P1,712,318.00 46218 1' 501' 156. 00 P1,4801 451.00 p 231,867.00 46988 1, 771,989.00 1,297,882.00 203,273.00 52043 1,759,217.00 1,548,733.00 223,245.00 46217 164,415.00 1,395,876.00 363,241.00 45799 991,861.00 120,403.00 45,910.00 45764 367,315.00 679,751.00 312,110.00 48367 122,253.00 249,183.00 118,132.00 51183 21,219.00 82,934.00 39,319.00 45763 3,804,123.00 14,734.00 6,485.00 20647 1,812,393.00 2,606,757.00 21361 1,812,392.74 1,241,934.00 1,197,366.00 21844 1' 176, 113. 00 1' 241, 933. 66 570,459.00 22516 1,695,887.00 805,926.00 570,459.00 22907 716,217.00 1,156,280.00 370,187.00 21694 530,235.00 621,989.00 539,607.00 52540 408,289.00 94,228.00 1211946.00 P51 0081 029.08 It appears from the Petition for Review filed before Us that neither the Collector of Customs nor respondent Commissioner of Customs acted upon petitioner's various claims for refund. Hence, this appeal. The issues raised before Us for resolution are the following: 1. Whether or not petitioner is entitled to the clai111 for refund; 812

DECISION - C.T.A. CASE NO. 4478 4- 2. Whet he�~ oJ~ not this Court has j ~..n~i sd ict ion ovel~ this case thel~e being no resolution Ol~ decision yet on the pJ~ot est either f�~om the Collector of Custo�s Ol~ from the .~espondent Comm iss i one�~ of Customs; 3. Whether or not petitioner has cause of action. Let Us first discuss the issue of jurisdiction which We answer in the negative. And right 1 y so. This Court indeed has no jurisdiction over this case since there was no decision rendered yet by the Collector of Customs as well as the Commissioner of Customs for which this Court could take cognizance of contrary to Section 2402 of the Tariff and Customs Code of the Philippines which provides, thus: SEC. 2402. Review by Cotwt or Ta.'lt llppeals. - The party aggrieved by a ruling of the Commissioner in any matter brought before him upon protest or by his action or ruling in any case of seizure may appeal to the Court of Tax Appeals, in the manner and within the period prescribed b~ law and regulations. XXX XXX XXX and under Section 7 of Republic Act No. 1125 which provides, thus: Sec. 7. Jurisdiction. - The Court of Tax Appeals shall exercise exclusive appellate jurisdiction to review by appeal, as herein provided (1) XXX X)()( XXX (2) Decisions of the Commissioner of in cases involving liability for Customs dt..tt i es, fees or other money charges; customs detention or release of property seizure, 813

DECISION - C.T.A. CASE NO. 4478 - 5- affected; fines, forfeitures or other penalties imposed in relation thereto; or other �atters arising under the Customs Law or other law or part of law administered by the Bureau of Customs; Hence, "in a petition for review seeking refund paid on various dates of customs duties, special import tax, sales tax or compensating tax, said petition �ust state that a decision of the Collector of Customs as well as the Commissioner of Customs has been rendered which was the occasion for its appeal bo the Court and failure to so state is fatal to said petition. The Supreme Court in at least two cases and t~e Court of Tax appeals in a long line of resolutions rejected the appeal of taxpayers relative to their respective claims where no decision of t h e Commissioner of Customs had yet been l~endered .. <Rufino Lopez & sons vs. CTR, G.R. No. 9274, Feb. 1, 1957 and a long line of other decisions; TEJRM, Commentaries on the Tariff and Customs Code of the Philippines, Vol. IV, 1986 ed. p. 2312) In fine, the Court cannot take cognizance of petitioner's appeal for refund of duties and special import tax for the reason that there is as yet no decision of the Commissioner of Customs upon which to base the petition for refund. <Reynolds <Phil.) Corp. YS. Co�. of Int. Rev. & Coil. of Custo�s, CTA Case No. 1101, Aug. 1, 1961>. 814

DECISION - C.T.A. CASE NO. 4478 - G- In the case at bar, there was no allegation that there was a decision of the Collector of Custo�s. Neither was there an allegation that a decision by the Co�mi~sioner of Custo�s has been rendered. Th\.ts, it cannot be denied that this Court, indeed, lacks jurisdiction to take cognizance of this case. We, however, unaware of a more recent decision promulgated by the Court of Appeals that under � "peculiar circumstances" this Court may take cognizance of a Customs case even without the decision of the Com mi s s i one.~ of Cus t oms :.:..f_,.o~�-~~a:..::s<--___..l_,.o<..:n:.:..o::~-__,a=s__,t...,h"'""'e_ _,p"'-'-r_,o..c.:..e=d'-"u""r'-a=l prerequisites have been complied. Said, the Court of Appeals, th\.tS: In the matter of whether or not the CTA has jurisdiction over the petition for review filed within by PMC, We are of the persuasion that the CTA under the peculiar circumstances herein obtaining may take cognizance of the case and decide it on its merits. There is no dispute concerning the requirement in the filing of petition for review with the CTA that need first be made. But as the petitioner had eHplained, the Commissioner of Customs for well over three <3> years and despite the requests in several letters -by PMC for a t~esolution of the protest, said office had not acted which had caused the petitioner to file with it the letter of December 17, 1976 informing said office that petitioner would consider the Commissioner of Customs denying the protest if no resolution is received from that office by January 5, 1977 and thus had coursed on January 13, 1977 with the Court of TaH Appeals the aforesaid petition for review. Indeed, as the petitioner has 81fj

DECISION -- C.T.A. CASE NO. 4478 - 7- stated, it and other persons similarlY situated would practically be at the mercy of respondent Commissioner of Customs who would interminably delay resolution of matters pending before him and orevent said petitioner from filing an appeal to the CTA and other courts. <Emphasis supplied> The situation of the petitioner in the instant case is different from the cited cases by CTA which involved the failure of the petitioners therein to follow the procedures set by law which is to file a protest with the Coli ect ot~ of Customs, appeal the decision of the Collector of Custoas to the respondent Com�i ss i oner of Customs. In the case at bat~, petitioner PMC had followed all the procedures provided for by law and it went to the Court of Tax Appeals despite the failure of the Commissioner of Customs to decide the case but only because it had waited for over three (3) years and had given�the Co��issioner of Custpms an alert of what it will assume the Commissioner of Customs as having affirmed the collector's decision denying petitioner's protest and thus i�plicitly, that it intended to file a petition for review with the Court of Tax Appeals considering the Commissioner of Customs' assumed denial of its protest. XXX XXX XXX The principle of exhaustion of administrative remedies invoked by the CTA is subject to certain exceptions, one of which is when under the circumstances, an administrative remedy is not a plain, speedy and adequate remedy <De Lara vs. Cloribel, 14 SCRA 267, 272- 273>, its aoolication would result to nullification of a claim <Gravador vs. Ma�igo, 20 SCRA 742, 748>, or would leave no other recourse <Sta. Maria vs. Lopez, 31 SCRA 637, 670> or if there is unreasonable delay or official inaction <Azuelo vs. Arnaldo, 108 Phil. 293, 296>. <Emphasis supplied> <Procter & Ga�ble Philippine Manufacturing Corporation vs. Hon. Court of Tax Appeals and Co��issioner of Custo�s, CA-G.R. SP No. 25594, May 19, 1992) 816

DECISION - C.T.A. CASE NO. 4478 - a- We thus agree with the Court of Appeals if only to give justice to hapless taHpayers who would be practically at the mercy of the Collector of Customs or the Commissioner of Customs who would interminably delay resolution of matters pending before them and prevent said taHpayer from filing an app~al to this Court. Otherwise, this Court would cease to be the refuge of victims of injustice because of administrative omission or inaction. We cannot allow that. The ruling enunciated in the above cited case should have been applied to the present case but \.mfort\.matel y, We cannot, because of procedural infirmity which proved fatal to the cause of the petitioner. And, regardless of the alleged merits of the case, as procedural rules have not been complied with, the same cannot by itself resurrect what has been from the start a dead case. We are referring to the fact that petitioner in its failed to attach the required customs documentary stamps which "is in the nature of a docket fee and failure to pay the docket fee for appeals on time is fatal." <Lipat vs. Co��issioner o~ Custo�s, CTA Case_ '� No. 1442, Oct. 2&, 19&&>. Hence, such notice of appeal can only be considered a mere "scrap of papel~" since it was not perfected for the failure of Petitioner to affiH to the notice of appeal the required customs sta�ps 81'?

DECISION -- C.T.A. CASE NO. 4478 - 9- pursuant to Sections 2308 and 3301 of the Tariff �and Customs Code. -<see also Consul idated Plywood Industries, Inc. vs. Coaaissioner Gr Custoas, CTA Case No. 4&13, March 2, 1993). Unfortunately, We cannot condone procedural defects as they are within the control of the taxpayers unlike the inaction or oaission of the Collector or Commissioner of Customs to decide a case which is clearly beyond their control and thus, need the compassion of this Court. Such being the case, the discussion of the other issues and the merits or demerits of the case will only be purely an academic exercise as this Court lacks the required jurisdiction. ACCORDINGLY, this case is hereby DISMISSED for want j of jurisdiction. SO ORDERED. GRUBA Judge WE CONCUR: '--""""""...... Q.~ 0 D. ACOSTA iding Judge ~~ !)<~ AMON 0. DE U Y Associate Jltdg 818

, DEC IS ION -- C.T.A. CASE NO. 4478 - 10 - CERTIFICATION I hereby certify that this decision was reached after due consultation a�ong the members of the Court of Tax Appeals in accordance with Section 13, Article Vlll of the Constitution. ~().~ ERNESTO D. ACOSTA Presiding Judge Court of Tax Appeals 819