COLGATE-PALMOLIVE PHILIPPINES, INC., PETITIONER VS. HON. PEDRO M. GIMENEZ AS AUDITOR GENERAL AND ISMAEL MATHAY AS AUDITOR OF THE CENTRAL BANK OF THE PHILIPPINES, RESPONDENTS.

The petitioner Colgate-Palmolive Philippines, Inc., is a corporation
duly organized and existing under Philippine laws engaged in the
manufacture of toilet preparations and household remedies. On several
occasions, it imported from abroad various materials such as irish moss
extract, sodium benzoate, sodium saccharinate, precipitated calcium
carbonate and dicalcium phosphate, for use as stabilizers and flavoring
of the dental cream it manufactures. For every importation made of
these materials, the petitioner paid to the Central Bank of the
Philippines the special excise tax on the foreign, exchange used for
the payment of the cost, transportation and other charges incident
thereto, pursuant to Republic Act No. 601, as amended, commonly known
as the Exchange Tax Law.

On March 14, 1956, the petitioner
filed with the Central Bank three applications for refund of the 17%
special excise tax it had paid in the aggregate sum of P113,343.99. The
claim for refund was based on section 2 of Republic Act 601, which
provides that “foreign exchange used for the payment of the cost,
transportation and/or other charges incident to the importation into
the Philippines of * * * stabilizer and flavors * * * shall be refunded
to any importer making application therefor, upon satisfactory proof of
actual importation under the rules and regulations to be promulgated
pursuant to section seven thereof.” After the applications were
processed by the Officer in-Charge of the Exchange Tax Administration
of the Central Bank, that official advised the petitioner that of the
total sum of P113,343.99 claimed by it for refund, the amount of
P23,958.13 representing the 17% special excise tax on the foreign
exchange used to import irish moss extract, sodium benzoate and
precipitated calcium carbonate had been approved. The auditor of the
Central Bank, however, refused to pass in audit its claims for refund
even for the reduced amount fixed by the Officer-in-Charge of the
Exchange Tax Administration, on the theory that toothpaste stabilizers
and flavors are not exempt under section 2 of the Exchange Tax Law.

Petitioner appealed to the Auditor General, but the latter on December
4, 1958 affirmed the ruling of the auditor of the Central Bank,
maintaining that the term “stabilizer and flavors” mentioned in section
2 of the Exchange Tax Law refers only to those used in the preparation
or manufacture of food or food products. Not satisfied, the petitioner
brought the case to this Court thru the present petition for review.

The decisive issue to be resolved is whether or not the foreign
exchange used by petitioner for the importation of dental cream
stabilizers and flavors is exempt from the 17% special excise tax
imposed by the Exchange Tax Law (Republic Act No. 601) so as to entitle
it to refund under section 2 thereof, which reads as follows:

“SEC.
2. The tax collected under the preceding section on foreign exchange
used for the payment of the cost, transportation and/or other charges
incident to importation into the Philippines of rice, flour, canned
milk, cattle and beef, canned fish, soya beans, butter, fat, chocolate,
malt syrup, tapioca, stabilizer and flavors, vitamin concentrate,
fertilizer poultry feed; textbooks, reference books, and supplementary
readers approved by the Board on Textbooks and/or established public or
private educational institutions; newsprint imported by or for
publishers for use in the publication of books, pamphlets, magazines
and newspapers; book paper, book cloth, chip board imported for the
printing of supplementary readers (approved by the Hoard of Textbooks)
to be supplied to the Government under contracts perfected before the
approval of this Act, the quantity thereof to be certified by the
Director of Printing; anesthetics, antibiotics, vitamins, hormones,
X-Ray films, Laboratory reagents, biologicals, dental supplies, and
pharmaceutical drugs necessary for compounding medicines; medical and
hospital supplies listed in the appendix to this Act, in quantities to
be certified by the Director of Hospitals as actually needed by the
hospitals applying therefor; drugs and medicines listed in the said
appendix; and such other drugs and medicine as may be certified by the
Secretary of Health from time to time to promote and protect the health
of the people of the Philippines shall be refunded to any importer
making application therefor, upon satisfactory proof of actual
importation under the rules and regulations to be promulgated pursuant
to section seven thereof.” (Italic supplied.)

The ruling of the Auditor General that the term “stabilizer and
flavors” as used in the law refers only to those materials actually
used in the preparation or manufacture of food and food products is
based, apparently, on the principle of statutory construction that
“general terms may be restricted by specific words, with the result
that the general language will be limited by the specific language
which indicates the statute’s object and purpose.” (Statutory
Construction by Crawford, 1940 ed. p. 324-325.) The rule, however, is,
in our opinion, applicable only to cases where, except for one general
term, all the items in an enumeration belong to or fall under one
specific class. In the case at bar, it is true that the term
“stabilizer and flavors” is preceded by a number of articles that may
be classified as food or food products, but it is likewise true that
the other items immediately following it do not belong to the same
classification. Thus “fertilizer” and “poultry feed” do not fall under
the category of food or food products because they are used in the
farming and poultry industries, respectively. “Vitamin concentrate”
appears to be more of a medicine than food or food product, for, as a
matter of fact, vitamins are among those enumerated in the list of
medicines and drugs appearing in the appendix to the law. It should
also here be stated that “cattle”, which is among those listed
preceding the term in question, includes not only those intended for
slaughter but also those for breeding purposes. Again, it is noteworthy
that under Republic Act 814 amending the above-quoted section of
Republic Act No. 601, “industrial starch”, which does not always refer
to food for human consumption, was added among the items grouped with
stabilizer and flavors”. Thus, on the basis of the grouping of the
articles alone, it cannot validly be maintained that the term
“stabilizer and flavors” as used in the above-quoted provision of the
Exchange Tax Law refers only to those used in the manufacture of food
and food products. This view is supported by the principle “Ubi lex non
distinguit nec nos distinguire debemos”, or “where the law does not
distinguish, neither do we distinguish”. (Ligget & Myers Tobacco
Company vs. Collector of Internal Revenue, 101 Phil., 106; 53
Off. Gaz. [15], page 4831). Since the law does not distinguish between
“stabilizer and flavors” used in the preparation of food and those used
in the manufacture of toothpaste or dental cream, we are not authorized
to make any distinction and must construe the words in their general
sense. The rule of construction that general and unlimited terms are
restrained and limited by particular recitals when used in connection
with them, does not require the rejection of general terms entirely. It
is intended merely as an aid in ascertaining the intention of the
legislature and is to be taken in connection with other rules of
construction. (See Handbook of the Construction and Interpretation of
Laws by Black, p. 215-216, 2nd ed.)

Having arrived at the above conclusion, we deem it now idle to pass upon the other questions raised by the parties.

Wherefore, the decision under review is reversed an4 the respondents
are hereby ordered to audit petitioner’s applications for refund which
were approved by the Office In-Charge of the Exchange Tax
Administration in the total amount of P23,958.13.

Bengzon, Bautista Angelo, Concepcion, Reyes, J. B. L., Barrera, Paredes, and Dizon, JJ., concur.