PHILIPPINE IRON MINES, INC., PETITIONER, VS. THE COMMISSIONER OF CUSTOMS AND COURT OF TAX APPEALS, RESPONDENTS.

These three cases are herein jointly decided, since they involve
similar facts and the common issue of whether or not wharfage
dues are collectible, under sections 2801 and 2802 of Republic Act No. 1937,
commonly known as the Tariff and Customs Code, on goods loaded or unloaded at
private wharves.

In L-23359, petitioner Philippine Iron Mines, Inc. protested the
assessment and collection by customs autho­rities of wharfage
dues in the total sum of P11.00 on its two importations of certain goods
unloaded at its private wharf at Larap, Panganiban, Camarines
Norte.

In L-23679, petitioner Caltex (Philippines)
Inc. pro­tested the assessment and collection by customs authorities of wharfage dues in the total sum of P150, 513.00 on its four
importations of crude oil unloaded at its private wharf at Bauan,
Batangas.  In
this case, petitioner, aside from in­voking the common ground of the other
petitioners in the two other cases that they had not used government wharves or
facilities, claims that it should be exempted from payment of the wharfage dues as a petroleum concessionaire under the
Petroleum Act of 1949, Republic Act No. 387.

In L-25400, petitioner Bislig Bay
Lumber Co., Inc. protested the assessment and collection by customs autho­rities
of wharfage dues in the total sum of P7, 945.00 on its twelve shipments of
logs loaded at its private wharves at Mangagoy, Bislig, Surigao del Sur.

The Commissioner of Customs sustained in due course the actions
of the respective Port Collectors of Customs at Camarines
Norte, Batangas and Tacloban,
Leyte, under whose
jurisdiction falls the Port
of Manga­goy,
Bislig, where petitioner Bislig
Bay Lumber Co., Inc. has its private wharves. 
On appeal, the Court of Tax Appeals upheld the decision of the Customs
Commissioner.  Hence, these appeals,
where petitioners seek the reversal of the respective decisions rendered
against them by the Tax Court.

The common issue in the three cases at bar has already been
resolved in the affirmative by this Court. 
In Procter and Gamble Philippine Manufacturing Corpo­ration vs.
Commissioner of Customs,^[1]
decided on April 27, 1967, this Court, confronted with an identical issue, held
that cargoes of goods unloaded shipside from vessels anchored amidst the safety
of the Port of Manila and discharged at the company’s private wharf at Tondo, Manila, were liable for the payment of wharfage dues, even though no government wharf or facility
was used to unload the cargoes, under the express provisions of Sec­tion 2802
of the Tariff and Customs Code.

The imposition of such wharfage dues or
charges was traced back to 1901, when the original Customs Tariff of 1901 was
enacted by the Philippine Commission under authority of the President of the United
States,^[2]
when the Philippine Government did not have, own or operate a single pier or
wharf.  When the collection of such wharfage charge at the rate of $1 per gross ton on sugar
shipments loaded from a private wharf was protested for the first time after
twenty-six years, this Court, in Philip­pine Sugar Centrals Agency vs.
Collector of Customs,^[3]
upheld the imposition.  It pointed out
therein that since the first enactment of the Act in 1901, imposing a wharfage charge of $0. 75 per gross ton, its reenactment as
an Act of the U.S. Congress in 1905 and the subsequent enactment on August 5,
1909 by the U.S. Congress of the Philippine Tariff Act of 1909, imposing such wharfage charges at the increased rate of $1 per gross ton,
the wharfage charge was consistently and continuously
construed by government officials as a proper charge on all goods exported
through Philippine ports, and “that construction has been acquiesced in
and accepted, and the money paid without any protest or objection for
twenty-six years, for many years of which the Government never even owned or
operated a wharf.”^[4]
This Court therefore refused to overthrow the long continued construction of
the law as authorizing the collection of wharfage
charges on all shipments, whether through government or private wharves,
considering that the legislature was pre­sumed to be cognizant of such
construction and never evinced its dissent therefrom.  This Court further noted that the funds
derived from such sources were deemed as a trust fund appropriated and used by
the Government for the construc­tion of wharves and the improvement of its harbors.

In the 1967 Procter and Gamble case above-cited, this Court noted
that the Philippine Congress enacted Republic Act No. 1371 in 1955, expressly
exempting importations of goods unloaded on private wharves from the cur­rent wharfage due of P2 per gross ton; but that the exemp­tion
was again eliminated from Section 2802 of the Tariff and Customs Code upon its
enactment by Congress in 1957.  This
Court rejected the contention that wharfage dues
should be deemed as compensation or rental for the use of govern­ment wharves only, and thus stated the reasons and justification for the
imposition of the charges:  “A
vessel ordi­narily enters a harbor and lays anchor or moors in a port to load,
to unload or both.  In doing so, the
vessel derives benefit from port facilities provided and maintained by the
Government.  For this reason, they are in
fairness made to contribute a share in said Government undertaking by payment
of berthing charges and harbor fees.                 Similarly, cargoes discharged
to a Philippine port from a
vessel en­gaged in foreign trade derive benefit from Port facilities provided
and maintained by the Government; said cargoes should also share the cost of
providing and keeping a safe port, in the form of wharfage
dues. Accordingly, a vessel that anchors at Manila
Bay to seek protection from a storm
is not charged wharfage dues by Bureau of Customs, al­though
it may have to pay harbor fees and berthing charges.  But when a vessel anchors at the Bay and
discharges or unloads its cargo, wharfage dues are
forthwith collected.  For, as stated,
said dues are assessed against the cargo discharged.  This is clear from the provision of the law
under which the assessment is based on the quantity, weight or measure of the
cargo received by the importer and/or discharged by such vessel.  And wharfage dues
on the cargo are distinct from harbor fees or berthing charges on the vessel,
so much so that different sections of the law cover them.”^[5]

This ruling upholding the imposition of wharfage
dues on goods loaded or unloaded at private wharves has been reiterated by this
Court in a second Procter and Gamble case against the Customs Commissioner in
1968^[6]
and several other cases.^[7]
In the 1968 Procter and Gamble case, Mr. Chief Justice Concepcion,
speaking for the Court, further emphasized that “moreover, wharfage dues are charged, not for the use of any
wharf.  Like ‘harbor fees, berthing
charges, storage charges and the net income from the share of arrastre charges,’ wharfage fees
are imposed to ‘x x x form a special fund to be known
as ‘Port Works Fund,’ x x x
for the study, investigation, field surveys, research, planning, development,
construction, improvement, maintenance, and repair of ports, ports facilities
and port areas, warehouses, sheds and offices, buoys, lighthouses and other
aides to navigation including the pur­chase, maintenance, rental charges and
replacement of necessary equipment x x x.  (As provided in
Act No. 3592, as amended by Commonwealth Act No. 130 and Re­public Acts Nos.
1216 and 2695.)”

We, therefore, find no compelling reason that has been adduced by
petitioners to warrant a modification or setting aside of the doctrine
previously enunciated by the Court.

The contention of petitioner Caltex (Philippines)
Inc. in Case L-23679 that it should have been exempted from payment of the wharfage dues as a petroleum concessionaire under the
Petroleum Act of 1949 remains for resolution. 
Article 103 of the Act, Republic Act 387 provides that “Cus­toms
duties. – During the first five years following the grant­ing of any
concession, the concessionaire may import free of customs duty, all equipment,
machinery, material, instruments, supplies and accessories.  x x
x.” Said pe­titioner contended that since
its five-year exemption period thereunder expired on
June 30, 1958 and its four importa­tions of crude oil undisputedly arrived
prior thereto in March and April, 1958, its privilege of exemption from customs
duties^[8]
should include exemption from the wharfage dues
in question.

A similar contention that exemption as a new and necessary
industry under Republic Act No. 901 included exemp­tion from wharfage dues was rejected by the Court in the 1968 Procter
and Gamble Case (supra).  In that
case, the Court held that both under our Constitution and the Tariff and Cus­toms
Code, wharfage dues are distinct from
and not consi­dered as part of customs duties:  “Our Constitution provides that ‘the
Congress x x x may not
deprive the Supreme Court x x x
of its jurisdiction to review, revise, reverse, modify or affirm on appeal, certiorari, or writ of error x x x final judgments and decrees
of inferior courts’ in inter alia, ‘all cases
involving the legality of any tax, impost, assess­ment, or toll or any penalty
imposed in relation thereto,’ and that ‘Congress may by law authorize the
President x x x to fix x x x tariff rates, import or
export quotas, and tonnage and wharfage dues.’  Thus our fundamental law distin­guishes
between taxes, on the one hand, and ‘imposts’ – that is to say, tariff rates or
duties imposed for the importation of goods – on the other.  Similarly, the Constitution does not consider
‘wharfage dues’ as part of ‘tariff rates’ or customs
duties.  And neither does our Tariff and
Customs Code.  Cus­toms duties are
governed by Book I, Title I, of said Code, under the headings ‘tariff Law’ and
‘Import Tariff’, respectively, whereas wharfage dues
are collectible pursuant to Book II thereof, Title VII of said book, under the
caption ‘Fees and Charges Collectible by the Bureau of Customs.’ Indeed, said
Code regards customs duties, taxes and wharfage
charges as three (3) distinct and separate concepts.”

Considering furthermore that as earlier stated, wharfage dues are specifically alloted
by law for the special Port Works Fund and that exemptions are regarded as in
derogation of sovereign authority and of common right and are construed strictissimi juris
against the person or entity claiming exemption, the contention of petitioner Caltex that its exemption from customs duties
should be liberally construed to include exemption from wharfage
dues must fail.

ACCORDINGLY, the decisions appealed from are hereby
affirmed, with costs against the respective petitioners.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Sanchez,
Castro, and Fernando, JJ.,
concur.

Zaldivar and Barredo, JJ.,
took no part.

^[1]
L-22819, 19 SCRA 883.

^[2]
The Philippines
then was U. S. Territory.

^[3]
51 Phil. 131 (1927).

^[4]
Idem, at p. 143.

^[5]
19 SCRA 883, at 888-889.

^[6]
L-24173, May 23, 1968; 23 SCRA 691.

^[7]
Hawaiian-Phil. Co. vs. Auditor General, L-18440, Oct. 25, 1967, 21 SCRA 481; Cia. General de Tabacos vs.
Actg. Commissioner of Customs, L-24247, May
13, 1968, 23 SCRA 600.

^[8]
Upheld by the Court in Commissioner vs. Caltex
(Phil.) Inc., 106 Phil. 829 (1959).