G.R. No. L-47980. October 16, 1992
ACTING COMMISSIONER OF CUSTOMS, PETITIONER, VS. WISE & COMPANY, INC., AND HONORABLE COURT OF TAX APPEALS, RESPONDENTS.
MELO, J.:
Before Us is a petition for the review and consequent reversal of
the decision of the Court of Tax Appeals dated December 29, 1977, ordering the
refund to private respondent Wise & Company, Inc. of customs duties it had
overpaid.
The facts are simple and undisputed.
Sometime in 1974, private respondent Wise & Company, Inc.
imported titanium dioxide from British Titan Product Co. Ltd. (England) in
three shipments, as follows:
1) 10 pallets containing
10,000 kilos paper bags of titanium dioxide (Import Entry No. 54941-74);
2) 25 pallets containing
25,000 kilos paper bags of titanium dioxide (Import Entry No. 68391-74); and
3) 10 pallets containing
10,000 kilos paper bags of titanium dioxide (Import Entry No. 82428-74).
Customs duties and advance sales tax in the amount of P14,393.00,
P52,131.00 and P19,674.00 on the respective shipments were assessed by the
customs appraiser according to home consumption value based on the CIF purchase
price. Private respondent paid under
protest the appraisal or assessment made by the customs appraiser, contending
that the basis of the home consumption value (HCV) should have been that
indicated in the consular invoice or invoices.
On October 30, 1974, the Collector of Customs dismissed private
respondent’s protest for lack of merit. A subsequent recourse to the Commissioner of Customs fared no better, as
the latter official affirmed the decision of the Collector of Customs.
On appeal, respondent Court of Tax Appeals found merit in private
respondent’s contention that the dutiable value of its importation is that
declared in the consular invoice and not according to home consumption value
(HCV) based on the purchase price. The
Court of Tax Appeals ordered the refund of P61,199.00 as overpaid customs
duties on Import Entries Nos. 54941-74 and 68391-74. However, on Import Entry No. 82428-74, the third shipment, refund
was denied by respondent court for failure of both petitioner and private
respondent to itemize or show the exact amount of customs duties refundable and
also for failure of private respondent to file a written claim for refund
therefor with the Commissioner of Internal Revenue, who was not also made a
party to the case (p. 55, Rollo).
Hence, the instant petition.
Petitioner Commissioner of Customs contends that in estimating
the value or price of the shipments of titanium dioxide, the appraiser
entertained doubts that the home consumption value (HCV) declared in the
consular invoice reflected the true value of the articles. Consequently, the CIF purchase price of the
importations was relied upon as basis for taxation inasmuch as said CIF
purchase price was reflective of the true home consumption value of the
articles. Petitioner further contends
that in disregarding the home consumption value declared in the consular
invoice, the customs appraiser only acted in accordance with Section 1405 of
the Tariff and Customs Code that:
“Appraisers shall, by all reasonÂable ways and means,
ascertain, estimate and determine the value or price of the articles as
required by law, any invoice or affidavit thereto or statement of cost, or of
cost of production to the contrary notwithstanding, and after revising and
correcting the reports of the examiners as they may judge proper, shall report
in writing on the face of the entry the value so determined irrespective of
whether such value is equal, higher or lower than the invoice and/or entered
value of the articles.”
The issue herein involved can be reduced to the sole question of
whether the appraisal on the basis of the purchase price, not the declared
value indicated in the consular invoice, was proper.
Section 201 of the Tariff and Customs Code, as amended by
Presidential Decree No. 34, is the law applicable to the controversy at bar,
and accordingly provides:
“SECTION 201. Basis of
Dutiable Value. –The dutiable value of an imÂported article subject to an ad
valorem rate of duty shall be based on the home consumption value or price
(excluding internal excise taxes) of same, like or similar articles, as bought
and sold or offered for sale freely in the usual wholesale quantities in the
ordinary course of trade, in the principal marÂkets of the country from where
exported on the date of the exportation to the Philippines, or where there is
none on such date, then on the home consumption value or price nearest to the
date of exportation including the value of all containers, coverings and
expenses incident to placing the article in a condition ready for shipment to
the Philippines, plus (10) per cent of such home consumption value or price.
The home consumption value or price under this section shall be the
value or price declared in the consular, commerÂcial, trade or sales
invoice. Where there exists a
reasonable doubt as to the value or price of the imported article declared in
the entry, the correct dutiable value of the article shall be ascertained from
the reports of the Revenue Attache or Commercial Attache (Foreign Trade
Promotion Attache), pursuant to Republic Act Numbered fifty-four hundred and
sixty-six or other Philippine diplomatic officers and from such other
information that may be available to the Bureau of Customs.
From the data thus gathered, the Commissioner of Customs shall
ascertain and establish the home consumption values of articles exported to the
Philippines and shall publish such lists of value from time to time.”
Justice Melencio-Herrera in Commissioner of Customs vs. Court
of Tax Appeals (161 SCRA 376), had occasion to paraphrase the above section
in this wise:
“The law is clear and mandatory. The dutiable value of an imported article subject to an ad
valorem rate of duty is based on its home consumption value or price as freely
offered for sale in wholesale quantities in the ordinary course of trade in the
principal markets of the country from where exported on the date of exportation
to the Philippines. That home
consumption value or price is the value or price declared in the consular,
commercial, trade or sales invoice.
But where there is a reasonable doubt as to the value of the
imported article declared in the entry, the correct dutiable value is to be
ascertained from the reports of the Revenue Attache or Commercial Attache and
from such other information that may be available to the Bureau of
Customs. The Commissioner of Customs is
required, however, to publish from time to time the lists of the home
consumption values.” (p. 381)
In the case at bar, reasonable doubt was not established to have
existed as to the veracity of the value or price declared in the consular
invoice, for which reason, recourse to reports from commercial attaches or
other information became necessary. Unfortunately, no such recourse was done. Instead, the CIF value was unjustifiÂably made the basis for
computing the duties to be paid. This
in the face of (a) the affidavits of Thomas George Sinclair, joint secretary of
the exporter company, attestÂing to the correctness of the home consumption
value of the imported titanium dioxide declared in the consular invoice (pp.
17-18, 20-21, Original Record), and (b) the consular invoices duly certified by
the Philippine Consul (pp. 20, 34, 74, Original Record). The requirement of publication of the lists
of dutiable values of imported articles from time to time was neither complied
with nor resorted to by the examiner (p. 36, Rollo). Withal, the appraisal made by the Bureau of Customs of the
dutiable values was not made in accordance with the provisions of Section 201
of the Tariff and Customs Code, but was made arbitrarily.
Petitioner’s contention that he only acted in accordance with
Section 1405 of the Tariff and Customs Code in disregarding the home
consumption value decared in the consular invoice is untenable. Verily, the “reasonable doubt” of
the appraiser was not explained. And
even if explained, recourse to CIF purchase price was not proper, for as
provided in the aforequoted Section 201, if reasonÂable doubts are entertained
concerning home consumption value, then the dutiable value of the article shall
be ascertained from reports of the Revenue Attache or Commercial Attache. In the case of Commissioner of Customs
vs. Court of Tax Appeals (152 SCRA 641), the appraisal was done on the
basis of “alert notices” from Finance Attaches abroad, but still such
recourse was not found a justifiable deviation from “the value or price
declared in the consuÂlar, commercial, trade, or sales invoice”, mentioned
in Section 201. Declared thus this
Court:
“Clearly, the dutiable value of an imported article is based
on the home consumption value or price as declared in the consular, commercial,
trade or sales invoice. But where there
is a reasonable doubt, the correct dutiable value shall be ascertained from the
reports of the Revenue Attache or Commercial Attache and from such other
information that may be available to the Bureau of Customs. Also required by the statute is the
publication from time to time of the lists of the home consumption values.
In the corresponding Import Entries, Respondent Company quoted the
prices of the imported merchandise as declared in the consular invoices and as
required by Section 201. Reasonable
doubt regarding the declarations was not shown to have existed such that
recourse to reports from commercial attaches or other information became
necessary. Neither was there compliance
with the requirement in Section 201 regarding publication of the lists of
dutiable values of imported articles from time to time. The re-appraisal made by the Bureau of
Customs was based on ‘Alert Notices’ received from Finance Attaches abroad,
which, however, were not disclosed, neither to Respondent Company nor to
respondent Court. As respondent Court
had bewailed:
x x x x
x x x x x
While it is true that appraisers of the Bureau of Customs are given
ample leeway in determining the correct customs duties under Section 1405 of
the Tariff and Customs Code, Section 201 of the same Code, which prescribes the
criteria for the determination of the dutiable value of imported articles, has
not been complied with. What is more,
administrative proceedings are not exempt from the operation of due process
requirements one of which is that a finding by an administrative tribunal
should be supported by substantial evidence presented at the hearing or at
least contained in the records or disclosed to the parties affected. ….”
(pp. 645-646)
In fine, there is little that one can add to the pronouncements
of respondent court, to wit:
“… Before the amendment of SecÂtion 201, the dutiable value of
imported articles is their ‘market value or price’ at which the imported
articles are freely offered for sale in the principal markets of the exporting
country for export to the Philippines in the usual wholesale quantities and in
the ordinary course of trade (excluding internal excise taxes), plus
ordinary expenses prior and incidental to the lading of such article on board
the vessel or aircraft at the port of export (including taxes or duties, if
any), and freight as well as the insurance premium paid covering the articles’
transportation to the Philippines. In
other words, before the amendment of Section 201 by P.D. 34, the dutiable value
of an imported article is its (1) cost plus (2) insurance and (3) freight. This was otherwise known as the CIF value or
price. But the CIF value or price is no
longer the basis of the dutiable value under Section 201 of the Tariff and
Customs Code, as amended by P.D. 34.” (pp. 39-40, Rollo.)
x x x x
x x x x x
“Inasmuch as the dutiable values or the true home consumption
values of the titanium dioxide were shown in the consular invoice and the price
lists, the home consumption value of the said titanium dioxide prevails over
the CIF value declared by petitioner in its aforesaid Import Entry No.
82428-74. Accordingly, and as stated,
heretofore, in the absence of contrary evidence presented by respondent to show
that the home consumption values are not those found in the consular invoices
and price lists for purposes of imposing the customs duties, the home
consumption values found in said consular invoices and price lists shall be the
basis of the dutiable values of the titanium dioxide.” (pp. 53-54, Rollo)
WHEREFORE, the
decision appealed from is hereby AFFIRMED.
Gutierrez, Jr., (Chairman), Bidin, Davide, Jr., and Romero, JJ., concur.