Taxation I

Case Digest Compilation

the collector of customs, of such a character as to be
Asturias Sugar Central v. Commissioner readily identifiable may be delivered to the importer
1969 thereof upon identification and the giving of a bond
with sureties satisfactory to the collector of customs in
[EN BANC]
an amount equal to double the estimated duties
thereon, conditioned for the exportation thereof or
Facts: The petitioner Asturias Sugar Central, Inc. is
payment of the corresponding duties thereon within
engaged in the production and milling of centrifugal sugar
one year from the date of importation, under such rules
for export, the sugar so produced being placed in containers
known as jute bags. It made two importations of jute bags. and regulations as the Insular Collector of Customs
shall provide."
The first shipment consisting of 44,800 jute bags and
declared under entry 48 on January 8, 1957, entered free of To implement the said section 23, Customs
customs duties and special import tax upon the petitioner’s Administrative Order 389 dated December 6, 1940 was
filing of Re-exportation and Special Import Tax Bond no. 1 promulgated, paragraph XXVIII of which provides that
in the amounts of P25,088 and P2,464.50 conditioned upon "bonds for the re-exportation of cylinders and other
the exportation of the jute bags within one year from the containers are good for 12 months without extension,"
date of importation. The second shipment consisting of and paragraph XXXI, that "bonds for customs brokers,
75,200 jute bags and declared under entry 243 on February commercial samples, repairs and those filed to
8, 1957, likewise entered free of customs duties and special
guarantee the re-exportation of cylinders and other
import tax upon the petitioner’s filing of Re-exportation and
containers are not extendible."
Special Import Tax Bond no. 6 in the amounts of P42,112
and P7,984.44, with the same conditions as stated in bond
no. 1. And insofar as jute bags as containers are concerned,
Customs Administrative Order 66 dated August 25,
Petitioner failed to comply the above conditions. The total 1948 was issued, prescribing rules and regulations
number of imported jute bags only 33,647 bags were governing the importation, exportation and
exported within one year after their importation. The identification thereof under section 23 of the Philippine
remaining 86,353 bags were exported after the expiration Tariff Act of 1909. Said administrative order provides:
of the one-year period but within three years from their
importation. "That importation of jute bags intended for use as
containers of Philippine products for exportation to
On February 6, 1958 the petitioner, thru its agent Theo. H. foreign countries shall be declared in a regular import
Davies & Co., Far East, Ltd., requested the Commissioner of
entry supported by a surety bond in an amount equal
Customs for a week’s extension of Re-exportation and
to double the estimated duties, conditioned for the
Special Import Tax Bond no. 6 which was to expire the
exportation or payment of the corresponding duties
following day, giving the following as the reasons for its
failure to export the remaining jute bags within the period thereon within one year from the date of importation."
of one year: (a) typhoons and severe floods; (b) picketing
of the Central railroad line by certain union elements which Held: It will be noted that section 23 of the Philippine
hampered normal operations; and (c) delay in the arrival of Tariff Act of 1909 and the superseding sec. 105(x) of
the vessel aboard which the petitioner was to ship its sugar the Tariff and Customs Code, while fixing at one year
which was then ready for loading. This request was denied the period within which the containers therein
by the Commissioner. mentioned must be exported, are silent as to whether
the said period may be extended. It was surely by
Due to the petitioner’s failure to show proof of the reason of this silence that the Bureau of Customs
exportation of the balance of 86,353 jute bags within one
issued Administrative Orders 389 and 66, already
year from their importation, the Collector of Customs of
adverted to, to eliminate confusion and provide a guide
Iloilo, required it to pay the amount of P28,629.42
representing the customs duties and special import tax due as to how it shall apply the law, and, more specifically,
thereon, which amount the petitioner paid under protest. to make officially known its policy to consider the one-
year period mentioned in the law as non-extendible.
The petitioner demanded the refund of the amount it had
paid, on the ground that its request for extension of the Considering that the statutory provisions in question
period of one year was filed on time, and that its failure to have not been the subject of previous judicial
export the jute bags within the required one-year period interpretation, then the application of the doctrine of
was due to delay in the arrival of the vessel on which they "judicial respect for administrative construction,"
were to be loaded and to the picketing of the Central would, initially, be in order.
railroad line. Alternatively, the petitioner asked for refund of
the same amount in the form of a drawback under section "Only where the court of last resort has not previously
106(b) in relation to section 105(x) of the Tariff and
interpreted the statute is the rule applicable that courts
Customs Code.
will give consideration to construction by administrative
or executive departments of the state."
Issue: Whether or not the Commissioner of Customs is
vested, under the Philippine Tariff Act of 1909, the then
applicable law, with discretion to extend the period of one "The formal or informal interpretation or practical
year provided for in section 23 of the Act. construction of an ambiguous or uncertain statute or
law by the executive department or other agency
Section 23 reads: charged with its administration or enforcement is
entitled to consideration and the highest respect from
"SEC. 23. That containers, such as casks, large metal, the courts, and must be accorded appropriate weight in
glass, or other receptacles which are, in the opinion of determining the meaning of the law, especially when
1
Based on the syllabus of Atty. Kriska Marna A. Buena
Ateneo De Davao University S.Y. 2020-2021
Digested by: Ampatuan, Ballos, Mahusay, Malicay, Nono, Paclibar, Picot, Teng
 Taxation I
Case Digest Compilation
the construction or interpretation is long continued and
uniform or is contemporaneous with the first workings
of the statute, or when the enactment of the statute
was suggested by such agency."

The administrative orders in question appear to be in

consonance with the intention of the legislature to limit
the period within which to export imported containers
to one year, without extension, from the date of
importation. Otherwise, in enacting the Tariff and
Customs Code to supersede the Philippine Tariff Act of
1909, Congress would have amended section 23 of the
latter law so as to overrule the long- standing view of
the Commissioner of Customs that the one-year period
therein mentioned is not extendible.

"Implied legislative approval by failure to change a

long- standing administrative construction is not
essential to judicial respect for the construction but is
an element which greatly increases the weight given
such construction."

"The correctness of the interpretation given a statute

by the agency charged with administering its provision
is indicated where it appears that Congress, with full
knowledge of the agency’s interpretation, has made
significant additions to the statute without amending it
to depart from the agency’s view."

Considering that the Bureau of Customs is the office

charged with implementing and enforcing the
provisions of our Tariff and Customs Code, the
construction placed by it thereon should be given
controlling weight.

"In applying the doctrine or principle of respect for

administrative or practical construction, the courts
often refer to several factors which may be regarded as
bases of the principle, as factors leading the courts to
give the principle controlling weight in particular
instances, or as independent rules in themselves.
These factors are the respect due the governmental
agencies charged with administration, their
competence, expertness, experience, and informed
judgment and the fact that they frequently are the
drafters of the law they interpret; that the agency is
the one on which the legislature must rely to advise it
as to the practical working out of the statute, and
practical application of the statute presents the agency
with unique opportunity and experiences for
discovering deficiencies, inaccuracies, or improvements
in the statute; . . ."

If it is further considered that exemptions from taxation

are not favored, 9 and that tax statutes are to be
construed in strictissimi juris against the taxpayer and
liberally in favor of the taxing authority, 10 then we are
hard put to sustain the petitioner’s stand that it was
entitled to an extension of time within which to export
the jute bags and, consequently, to a refund of the
amount it had paid as customs duties.

In the light of the foregoing, it is our considered view

that the one-year period prescribed in section 23 of the
Philippine Tariff Act of 1909 is non-extendible and
compliance therewith is mandatory.

2
Based on the syllabus of Atty. Kriska Marna A. Buena
Ateneo De Davao University S.Y. 2020-2021
Digested by: Ampatuan, Ballos, Mahusay, Malicay, Nono, Paclibar, Picot, Teng