CTA Case No. 5079 (Decision)

------ ------- -/'-1 REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY DEL MONTE PHILIPPINES, INC., C.T.A. CASE NO. 5079 Petitioner, �,;; Promulgated: , - versus - APR 021996 THE COMMISSIONER OF CUSTOMS, Respondent. X- - - - - - - - - - - - - - - - - - - - - - - - - - - X DECISION This is a petition to review the decision of respondent in Customs Case No.94-06, affirming in toto the twenty-six (26) decisions of the Acting District Col lector of Customs of Cagayan de Oro City, Phi I ippines involving two shipments of frozen orange juice concentrate (designated as Protest Case Nos. 01-93 and 02-93) and twenty-four shipments of industrial tomato paste (designated as Protest Case Nos.03-93 to 26-93) which were alI bought from Del Monte Corporation, U.S.A. during the period, May 2, 1992 to October 10, 1992. The aforesaid decisions of the Acting District Col lector had the following uniform dispositive portion, to wit: "WHEREFORE, in view of the foregoing, this Office holds to maintain the CRF Value less 30 % (as discount> as the correct FMV and thus, hereby denies the protest of herein Protestant, 342 i I __ j

DECISION C.T.A. CASE NO. 5079 - 2- for the refund of alleged excess payment of duties and taxes, SO ORDERED." The facts are undisputed. Petitioner Is a domestic corporation organized and existing under the Iaws of the Republic of the Phi I ippines with principal office at Bugo, Cagayan de Oro City. It has for its purposes, among others, to develop and cultivate agricultural lands; to buy, hold, produce, sel I, export, import and otherwise dispose of alI kinds of personal property; and to obtain and use I icenses In respect to any trade-marks, trade names, patents and inventions, processes, and the I ike. The. herein controversy arose when respondent subjected to Societe Generale de Surveillance (SGS for brevity} inspection said frozen orange juice concentrate contained in 68 articles of 55-gal Jon capacity drums. Petitioner contends that the shipments fai I under the category of frozen foodstuff pursuant to Section 3 (e) of Joint Order No. 1-91 of the Department of Finance, Department of Trade and Industry, and the Central Bank of the Phi I ippines, and were thus exempt from pre-shipment Inspection by SGS. Worse sti I I, petitioner avers that respondent adopted the SGS-Ciean Report of Findings (CRF for short} valuation for the shipments based on the price of 24/12 oz. retai I can instead of the 55-gal Jon capacity drums they were actually stored in. 343

DECISION C.T.A. CASE NO. 5079 - 3- In the same manner, petitioner asserts that, while admittedly subject to SGS inspection, respondent erroneously valued its shipments of tomato paste based on the SGS-CRF valuation of 24/12-oz. retail can, instead of considering their packaging in 300-gal lon capacity bins. In both instances, petitioner claims that the shipments were of different technical specification as compared to their valuation in retai I can made by SGS. It thus insists on the invoice valuation as per import entry as the true and correct valuation of the shipments. Records show that petitioner, pursuant to Customs Memorandum Order No.51-92, questioned the Fair Market Value� (FMV for short> of each of the shipments as determined by SGS before the Customs-SGS Import Valuation and Classification Committee (Committee for brevity). The Committee, taking into account the packaging condition of the shipments, resolved to adjust the SGS- CRF valuation by deducting a 30% discount from it, which was found sufficient to reflect the true and correct valuation of the shipments. During the deliberations of the Committee, petitioner cited the technical differences between its shipments and that of the 24/12 oz. ret a i I can used by SGS as the basis for its CRF valuation. It also submitted in evidence a copy of the February 22, 1993 344

j DECISION C.T.A. CASE NO. 5079 - 4- issue of the Food Institute Report, a US publ lcatlon Indicating the prices of tomato paste on a weekly basis for the year 1992 as proof of the correctness of Its Invoice valuations. At the same time, the SGS, through its representative, Alex Pel lereto, acknowledged that the CRF valuation was based on a wholesale distributor's price I 1st for cases of 24/12 oz. retai I pack rather than for the 300-gal lon capacity bins. (Indorsement of Committee Findings dated October 30, 1992, p.437, Customs records) Despite the above, however,, the Committee still maintained its position to adopt the 30% discount due to the nature of packaging of the shipments, and the unconfirmed status of the publication. In view of the fact that under paragraph I I (f) of Customs Memorandum Order No.12-93, the resolutions of the Committee are final and unappealable, petitioner pursued Its various protests with th~ Col lector of Customs of Cagayan de Oro City. Subsequently, it paid the required deficiency duties and taxes in the aggregate amount of P3,420,648.00. (Petition for Review, par.11.6; Answer, par.7; Exhibit "C"> Meanwh i I e, Committee report somehow reveals that the July 1993 issue of the Food Institute Report had already been adopted by the Committee itself for import 345

DECISION C.T.A. CASE NO. 5079 - 5- valuation of similar shipments.(lst Indorsement dated October 1993 by the Chairman of the Committee, pp. 441 to 443, Customs records} On December 6, 1993, the Col lector eventually denied alI of the 26 protest cases, and on appeal, respondent wholly affirmed on February 15, 1994 all of the decisions of said Col lector. Hence, this appeal. At the trial, respondent presented his case for decision based on the records an~ waived his right to fl le his memorandum. Petitioner, on the other hand, filed its memorandum on July 5, 1995. The issues to be resolved thus center on: 1} Whether or not respondent is justified in disregarding the probative value of the February 22, 1993 Issue of the Food Institute Report as a basis of valuation, for the reason that It was unverified; and 2} Whether or not respondent Is justified in the SGS-CRF va I uat ion I ess 30% discount In adopting at the true and correct FMV of petitioner's arriving goods. For better understanding, the pertinent provision of the Tariff and Customs Code of the Phi I ippines, as amended, governing the issues involved herein, Is hereunder quoted (hereinafter cal led the "law"), to wit: "SEC.201. Basis of Dutiable Value.-The dutiable value of an imported article subject to an ad valorem rate of duty sha I I be based on the cost (fair market value) of same, I ike or similar articles, as bought and sold or offered 346

DECISION C.T.A. CASE NO. 5079 - 6- for sale freely in the usual wholesale quantities In the ordinary course of trade In the principal markets of the exporting country on the date of exportation to the Phi I ipplnes (excluding internal excise taxes to be remitted or rebated) or where there Is none on such date, then on the cost (fair market value) nearest to the date of exportation, Including the value of at I containers, coverings and/or packlngs of any kind and at I other expenses, costs and charges incident to placing the article in a condition ready for shipment to the Phi I ippines, and freight as well as Insurance premiums covering the transportation of such articles to the port of entry in the Ph I I I pp i nes. Where the fair market value or price of the article cannot be ascertained thereat or where there exists a reasonable.doubt as to the fairness of such value or price, then the fair market value or price in the principal market in the country of manufacture or origin, if it is . not the country of exportation, or in a third country with the same stage of economic development as the country of exportation shal I be used. When the dutiable value of the article cannot be ascertained in accordance with the preceding paragraphs or where there exists a reasonable doubt as to the cost (fair market value> of the imported article declared In the entry, the correct dutiable value of the article shall be ascertained by the Commissioner of Customs from the reports of the Revenue or Commercial Attache <Foreign Trade Promotion Attache), pursuant to Republic Act Numbered Fifty-Four Hundred and Sixty-Six or other Phi I ipplne diplomatic officers or Customs Attaches and from such other Information that may be avai table to the Bureau of Customs. Such values shal I .be published by the Commissioner of Customs from time to time. When the dutiable value cannot be ascertained as provided in the preceding paragraphs, or where there exists a reasonable doubt as to the dutiable value of the imported article declared In the entry, it shal I be the 347

DECISION C.T.A. CASE NO. 5079 - 7- dom~stic wholesale sel I ing price of such or similar article In Mani Ia or other principal markets in the Phi I ippines on the date the duty become payable on the article under appraisement, on the usual wholesale quantities and In the ordinary course of trade, minus: (a) not more than twenty-five (25) per cent thereof for expenses and profits; and (b) duties and taxes paid thereon." (as amended by E.O. No.156) At a glance, we do not see in the provisions of the law the kind of procedure taken by the respondent in determining the dutiable value of the questioned shipments. Analyzed from the facts of the case, it is only on the ground of "reasonable doubt" as provided under the third paragraph of said section that the act of respondent may be approximated. The high FMV indicated in the various SGS-CRFs was enough basis, in it Ia I Iy, for the respondent to have reasonable doubt on the correctness of the valuations declared by petitioner. Upon later appea I to the Committee, petitioner, in the case of tomato paste, presented the prices I isted in the Food Institute Report to support its case. Unfortunately, the Committee disregarded the evidentiary value of the publication because it only indicated price trends, and, on the basis of SGS findings, that the same did not reflect domestic wholesale level. (Apri I 14-16, 1993 and September 22-23, 348

DECISION C.T.A. CASE NO. 5079 - 8- 1993 Committee reports, pp. 324, 416, Customs records) Subsequently, however, the Committee cited another reason for not accepting the publication. It said that the publication has not been confirmed or verified, but stated otherwise that future shipments of simi Jar nature shal I be assessed based on such publication. (2nd Indorsement, November 12, 1993 of the Chairman of the Committee, p.424, Customs records) On appeal, the Committee findings were adopted and affirmed in the decisions of the Col lector and herein respondent respectively. It .appears from the foregoing narration that, eventually, respondent upheld the decision of the Col lector to disregard the validity of the Food Institute Report because It was so unverified at the time of shipments and during its presentation before the Committee, but afterwards, made use of the same. We deem such disregard of the publication as an error on the part of the respondent. Let It be understood that at the time the Col lector handed down his decisions on December 6, 1993, simI Iar shipments of tomato pastes were already being subjected to valuation based on the prices I isted in the Food Institute Report which has been previously Ignored for being unverified. 348

DECISION C.T.A. CASE NO. 5079 - 9- The subsequent acceptance of the publication should be made to benefit the petitioner as the protested cases were then sti I I pending in status, meaning not yet terminated. By its acceptance, common sense dictates that prior Issues of the publ lcatlon should have been given weight In determining the correct dutiable value. We observe that the publication was on its 66th year of publication at the time Its February 22, 1993 Issue was presented by petitioner In evidence (p. 445, Customs records). The later adoption of the July, 1993 Issue of the publ !cation (p.443, Customs records) as the basis for establ lshing the dutiable value necessarl ly resulted In giving ful I faith and credence to the trustworthiness of the entire publ !cation, most especially on issues released only a few months prior to such adoption. Its recognition retroacts to prior issues. In effect, it was verified whl le the protest cases were sti I I pending with the Collector. Applying the Rules of Court " x x x by analogy or In a suppletory character and whenever practicable and convenient x x x " <Rule 143, Revised Rules of Court), the Food Institute Report, which is a weekly posting of the American Institute of Food Distribution, Inc. can 35CJ

DECISION C.T.A. CASE NO. 5079 - 10 - easily qualify as a commercial I ist under Section 45, Rule 130 of the same, which states, thusly: "Evidence of statements of matters of interest to persons engaged In an occupation contained In a I ist, register, periodical, or other published campi lation is admissible as tending to prove the truth of any relevant matter so stated If that campi lation is published for use by persons engaged In that occupation and is generally used and rei led upon by them therein." SGS has already rei led on the publ lcation. There is no justifiable reason therefore for this Court not to validate the other issues of said publ icatlon. Courts would justly be the subject of ridicule if they should deliberately shut their eyes to the sources of Information which the rest of the world rei ies upon and demand evidence of a less certain and satisfactory character. (20 Am. Jur. 818: Sisson vs. Cleveland and T.R. Co., 90 Am. Dec. 252 as cited in Compendium on Evidence by Sibal and Salazar, 3rd Ed.) With the adoption of the publ lcation, it is obvious that SGS committed a mistake in not knowing the existence of tomato paste In bins and correspondingly basing thereon the true and correct dutiable value. In our earl ler discussion on reasonable doubt as to the FMV of the imported articles declared in the entry, 3 v l r~

DECISION C.T.A. CASE NO. 5079 - 11 - respondent Is mandated to ascertain the correct dutiable value from, among others, "such other information" that may be aval lable to him (3rd par., Section 201, Tariff and Customs Code, supra). We assume In this case that "such other Information" pertains to the SGS-CRF, it being found to be different from the declaration of the petitioner. Under Customs Memorandum No.39-92, pars. 11-1 and 4, SGS is the Inspector of goods destined for importation Into the Phi I ipplnes from alI countries, whi.le CRF refers to the Inspection report Issued by SGS for inspection as to quality, quantity, price, dutiable value, verification of Customs and Tariff Code Classification and Verification of tariff rate of the imported goods prior to shipment to the Ph I I I pp i nes. In this instance, however, where the Food Institute Report has been uti I ized by respondent, the CRF should have been disregarded and the publ icatlon wei !-considered as the true Information. In so adopting the Food Institute Report, respondent has in effect acceded to the fact that the cost (FMV) of the goods imported by petitioner is truly reflected by the prices indicated in such report. The reasonable doubt initially entertained by respondent was eventually obi iterated by the later adoption of the publ !cation, hence, there is no Ionger 352

DECISION C.T.A. CASE NO. 5079 - 12 - the need to resort to other modes of determining the dutiable value as prescribed in the second up to the fourth paragraphs of Section 201 of the Tariff and Customs Code, as amended. In earl ler cases decided by the Honorable Supreme Court, before the amendment Introduced by E.O. No. 156, the failure to substantiate "reasonable doubt" has resulted in the adoption of home consumption value or price as declared In the consular, commercial, trade, or sales invoice. (Commissioner of Customs vs. Court of Tax Appeals, 162 SCRA 730; Acting Commissioner of Customs vs. Wise and Company, Inc., 214 SCRA 597). With the aforesaid amendment and the consequent abandonment of "reasonable doubt" through the later adoption of the publication as above discussed, we firmly believe that the cost <FMV> as declared in the Import entry Is the true and correct valuation of the shipments in question. Examined from another angle and assuming that there Is "reasonable doubt", the decisions of the Col lector consistently declare that the basis for the 30% discount was attributable to the different packaging condition of the subject shipments. We consider such basis on the nature of packaging and the 30% discount as arbitrary. First, let us discuss the nature of packaging. 353

DECISION C.T.A. CASE NO. 5079 - 13 - Petitioner has sufficiently demonstrated the wide differences in production specifications between Industrial tomato paste (300 gallon bins> and consumer paste (12 oz. retal I can) which are as follows: 12 oz. Retal I Can 300-Gallon Bins Description Consumer size for home Bulk pack for use remanufacture Processing Aseptic method Hot f I I 1/ cook 31.3 So lids 24.7 (Brlx) 9.45 Specific 9.18 Gravity (lbs./gal.) 8.0 max 4-6 VIscosity <Bostwick) Enameled steel three Flexible bag Container piece can $0.12 each In wooden bin Container $130.00 each cost $0.160 $0.046 Pkg. cost/1 b. of Product p.3, pp.348, 340, etc., Customs records.) (Protest, The two Items above are different In packaging, processing method, sol Ids, specific gravity, viscosity, container, cost of container and packaging cost. What respondent took into consideration was the packaging condition only. Assuming that 30% discount could have taken care of the disparity. In packaging, still it Is evident that the other factors were not considered at aII� In the usual course of trade, the packaging and the contents of a wholesale product Is no different from the 354

DECISION C.T.A. CASE NO. 5079 - 14 - retal I product. The main difference I ies in the volume of purchase of the particular product and in its stage of entry in the distribution channels of the market, and not on any variation In the container and substance of the product. To i I lustrate, a retai 1- sized can of tomato paste when bought at a sari-sari store would surely command a higher price when compared to a tomato paste of similar size and packaging bought In I arge quantity from a wholesaler or manufacturer. The manufacturer of the product would, as industry practice dictates, give discounts on the retai I price of the product when bought In large volume because it would rei ieve him of so many variable costs attendant to marketing the product when sold through retai I. That, however, is not the scenario in this case. Specifically, petitioner's "wholesale",or more accurately, bulk shipments were industrial grade materials needing further processing whl le the 12 oz. retai I can of SGS was based on ready to eat finished products. <Protest of petitioner, pp.348-349, 340-341, etc., Customs records) The Honorable Supreme Court has invariably defined "wholesale" and "retail" In this wise, to quote: "If the use made or to be made by the purchaser of goods or merchandise be for resale at profit, the goods being unaltered when resold, the quantity of the goods sold being 3 r� r~ v\J

DECISION C.T.A. CASE NO. 5079 - 15 - large not to be used by the purchaser or in excess of the requirements of his business and the merchant sel I ing the goods habitually engaged In the sa Ie of such goods In Iarge quantities to his customers, the sale may be deemed wholesale. Otherwise, it is retai 1." (Tan vs. De Ia Fuente, 90 Phi I. 522 as cited In Phi I lpplne Law Dictionary, 3rd Ed. by Moreno; emphasis suppl led), and; "A term [wholesale] which accurately imports a sel I ing, the primary and usual meaning of which Is the sale of goods in gross to retal lers who sel I to consumers. Prima facie, a sale by a merchant to a retailer; a sale by large parcels, generally in original packages, and not by retai I; a sale of goods by the piece or in Iarge quantity, as distinguished from those made in samal I quantities. A sale in large quantity to one who intends to resel I; selling by the original or unbroken package or barrel only to dealers for resale; sel I ing in unbroken pieces or parcels, or In a number of pieces or parcels; sel I ing to retailers or jobbers rather than to consumers; the sale of goods in gross to retailers who se I I to consumers; or the sa Ie of goods In mass, in the gross, in great quantities." < Ciudad de Manila vs. Tanjuangco, 18230, February 28, 1958 as cited in Phi I ippine Law Dictionary, ibid; emphasis suppl led) From the foregoing definitions and elucidations, it is crystal clear that the determination made by the respondent in arriving at the wholesale price of the imported shipments of petitioner is tainted with arbitrariness. On the 30% discount, this Court declares it to be not In conformity with the law. It could not have been 356

DECISION C.T.A. CASE NO. 5079 - 16 - derived based on "such other information" as abovestated because no SGS report or finding was ever made on the matter. The Committee merely described It as a "x x standard discount in accordance with a previous Committee decision x x" <2nd Indorsement by the Chairman of the Committee, p.424, Customs records) and one "x x which may be logically approximated x x." ( Decision of Col lector, p. 2) These descriptions can not override the validity of the information provided by the publ ioation, which are based on factual figures. It Is not even possible to think that the 30% discount is a "standard" derived from "such other Information" described under the third paragraph of the law because to construe it that way would, in effect, render InutIle and nugatory the fourth paragraph of the same law, requiring the dutiable value to be based on the domestic wholesale sel I ing price minus 25% for expenses and profits, and duties and taxes paid thereon. To accept such "standard" would cause alI goods or articles placed under "reasonable doubt" as subject to an across the board 30% discount In determining wholesale valuation In a I I i nstanoes, wIthout qua I if i oat ion. The aforesaid fourth paragraph would be moot and academic. Clearly, this is not the intendment of the law. 357

DECISION C.T.A. CASE NO. 5079 - 17 - With regard to the shipments of frozen orange juice concentrate, we, I lkewlse, conclude that respondent acted arbitrarily in adopting the SGS-CRF valuation less 30% discount as their true and correct FMV. Ditto in the case of tomato paste, we can not fathom the logic and legality behind respondent's resort to 30% discount due to nature of packaging. For one, It Is evident that SGS used the retai I price of 12 oz. in computing the FMV of 55 gallon capacity drums of the orange juice imported by petitioner. A copy of the facsimile message of SGS representative Alex Pel lereto dated May 11, 1992 shows the following calculations, to wit: $2.19 retail .76% <retai I market $17.7536 per price for 12 ga I Ion oz. of can x rate per U.S. Dept. = of Commerce,Census Bureau) (Customs records, p.365) The above computation iII ustrates the price of orange juice concentrate on a per gallon basis. When it is multipl led by 55 gallon times the number of drums imported, It tal I les with the figures stated in the corresponding CRFs' <Petitioner's Exhibits "C-5" and "D- 5") We observe, however, that the price of one gallon in the abovequoted computation applies to the retai I market price of a finished product. In our opinion, the 55 358

DECISION C.T.A. CASE NO. 5079 - 18 - gal len drums were priced based on wholesale cost of Industrial grade orange juice concentrate. To apply the retai I price per gal ion to drums which were purchased in bulk and deduct 30% Is simply non sequitur. Even worse is that the SGS calculation is mathematically incorrect. Multiplying $2. 19 X � 76% equals $0.016644 and not $17.7536. Also, how the dry weight of ounce is converted into I iquld measure of gal len escapes our Imagination. Secondly, petitioner cited the following technical differences between the two packaging to prove its point that the 55-gal len drums it imported were different from SGS 12 oz. retai I can valuation, to wit: Description 12 oz. Retai I Can 55-Ga I I on Drums Brlx Consumer size for Bulk pack for Ratio (Base/Acid) home use remanufacture Plate Count (CFU/ 41.8 to 42.2 62.8 to 63.3 mI) OSA 14.2:1 to 16.5:1 14.5:1 to 18.0:1 Weight (lb/gal) 50,000 1,000 Container 9.887 to 9.904 10.866 to 10.891 Container Cost Enameled steel Steel drum Pkg. cost/lbs. three piece can $14.00 each of product $0.07 each $0.0021 $0.0058 We conclude that the above comparison of the technical characteristics of the orange juice concentrate are at variance In every respect. Again, respondent 358

DECISION C.T.A. CASE NO. 5079 - 19 - solely considered the nature of packaging in imposing a flat appl icatlon of 30% discount. Verily, adjusting the packaging, assuming that it is correct, would not result In simi larlty of the two products. To reiterate, wholesale and retal I are different only in terms of distrlbutlpn channels and volume of purchase. Respondent would have been correct if the orange juice concentrate were of ready to drink quality similar to that of the retai I packs. That is not the case, however. VIewed from the language of the __ law, the 30% discount on the orange juice concentrate Is also deemed to be without basis. The declaration of the Col lector that the discount was found sufficient on the basis of the formula uti I I zed by the SGS <Decision of Col lector, Customs records) is not substantiated by the evidence on record. In fact, we have already elaborated in the above discussion that the calculation of the SGS was erroneous. We frown upon the flat appl lcation of 30% discount on alI the shipments Involved in the case at bar as a way of determining dutiable value. It runs afoul with the essence of the law on cost <FMV). As defined, FMV is the fair value of a property as between one who desires to purchase and one who desires to sel 1. <Manl Ia Railroad Co. vs. Fable, 17 Phi 1. 206) 360

DECISION C.T.A. CASE NO. 5079 - 20 - The law requires that the articles subject of FMV be "x x bought and sold or offered for sale freely In the casual wholesale quantities in the ordinary course of trade In the principal markets of the exporting country x X� " The flat appl lcatlon of 30% discount ignores the preceding circumstances. It removes the element of "buy and set I or offer for sale" In the price valuation. The law is clear and unambiguous. It requires FMV to be based on "wholesale quantities" and when It talks of the same, it must be the actual, which should have been ascertained by respondent from "such other information", set I lng and buying or offer for sale freely in the ordinary course of trade. There are no shortcuts. A discount of 30% of the supposed wholesale price (SGS-CRF valuation) derived by using retal I price is simply not the FMV contemplated by law, especial Jy that the products differ in content specifications. Moreso, when It is ably shown that the supposed wholesale price was premised on fal Jure to get the correct pricing of the articles then actually avai table in the country of origin (as in the case of wholesale price of tomato paste) and on wrong calculations (as in the case of orange juice concentrate). 361

DECISION C.T.A. CASE NO. 5079 - 21 - In recapitulation, we arrive at the following observations, to wit: 1. Respondent committed a grave error In not considering the February 22, 1993 issue of the Food Institute Report. 2. Respondent committed a grave error In determining the wholesale price of petitioner's shipments through the use of retai I price stated in the SGS-CRF. 3. Respondent committed a grave error in applying the flat 30% discount due to the nature of packaging to arrive at the wholesale price of petitioner's shipments. In fine, the findings of respondent are hereby set aside and the FMV stated in the invoice of alI the 26 shipment~ in question are hereby declared by this Court to actually represent the true and correct valuation thereof. While findings by administrative or quasi-judicial agencies are entitled to the greatest respect and are practically binding and conclusive, they may be reviewed and reversed or nul I ified where they are patently arbitrary or capricious or are not supported by substantial evidence. (Republic vs. Sandiganbayan, 206 SCRA 506) Prescindlng from the above, we would I ike to make one last clarification on the particular idea advanced by petitioner that dutiable value should be based on invoice 362

DECISION C.T.A. CASE NO. 5079 - 22 - valuation, in view of the exemption from pre-shipment Inspection and the corresponding non-issuance of CRF for shipments of orange juice concentrate, pursuant to Joint Order No.1-91. Petitioner's attention is peremptorily directed to the provisions of said Order, more particularly par. 11.2.2 thereof, which states that shipments not pre-inspected by SGS or for which a CRF has not been Issued, shall be subject to one hundred per cent (100%) examination. Assuming thus that the SGS-CRFs for the shipments of orange juice concentrate were not in accordance with the Order and hence, nul I and void, said shipment are nevertheless subject to 100% Inspection. And in inspection, respondent is not precluded from treating the wrongly issued SGS-CRF as a ground to engender reasonable doubt based on such information. WHEREFORE, In view of the foregoing, the decision of respondent in Customs Case No. 94-06 is hereby REVERSED and NULLIFIED. ACCORDINGLY, respondent Is ORDERED to REFUND In favor of petitioner the amount of P3,420,648.00 representing excess duties and taxes paid under Protest Case Nos. 01-93 to 26-93. No Costs. SO ORDERED. Q~{Q.Q~ ERNESTO D. ACOSTA Presiding Judge 363

DECISION C.T.A. CASE NO. 5079 - 23 - e Judge RAL<W:. ~~j Associate Jud~ CERTIFICATION hereby certify that this decision was reached after due consultation among the members of the Court of Tax Appeals in accordance with Section 13, Article VI I I of the Constitution. ~.,ZQ.~~ ERNESTO D. ACOSTA Presiding Judge Court of Tax Appeals 364 ~- ----�---"