Facts:

The case involves Allied Brokerage Corporation (petitioner) as the appellant against the Commissioner of Customs and the Court of Tax Appeals (respondents). The dispute centers around a request for a refund of P35,227.00 paid by the petitioner to the Customs Arrastre Service, which it claims was paid in excess as per the Tariff and Customs Code. The petitioner is engaged in customs brokerage, primarily obtaining clearance and release of goods from the Bureau of Customs for its clients. The case emerged from the interpretation of Section 3102 of the Tariff and Customs Code, which stipulates handling charges for 'Heavy Cargo' over two tons. An unnumbered memorandum order issued by Customs Commissioner Norberto Romualdez, Jr. on April 30, 1963, defined “one ton” as either 1,000 kilos or 40 cubic feet volume, whichever is greater. A formal protest against this memorandum was initiated by the Association of Customs Brokers, Inc. on May 7, 1963. Subsequently, the petitioner fi

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Facts:

Overview of the Case

• Allied Brokerage Corporation, a duly licensed customs broker whose primary function is to secure clearance and release of imported merchandise for its clients, sought a refund of customs charges allegedly collected in excess of those prescribed by law.
• The refund claim amounted to P35,227.00, representing excess payments under the Tariff and Customs Code.

Legal Framework and Administrative Basis

• Section 3102(e) of the Tariff and Customs Code was cited, which stipulates that “Heavy Cargo” on any single package weighing more than two (2) tons, handled on a pier or wharf, shall be charged at P13.50 per ton or any fraction thereof, provided that the charge shall not apply to automobiles, motor trucks, and transit cargo for coastwise ports.
• An unnumbered Customs Memorandum Order dated April 30, 1963, issued by then Commissioner Norberto Romualdez, Jr., clarified that one ton would be determined as equivalent to 1,000 kilos or 40 cubic feet volume, whichever is higher.

Chronology of Events and Administrative Proceedings

• On May 7, 1963, the President of the Association of Customs Brokers, Inc. protested the application of the memorandum order, objecting to the imposed method of computing the arrastre charge.
• On May 25, 1964, Allied Brokerage Corporation filed a claim for a refund of P20,658.85 for amounts collected from April 30, 1963, to May 25, 1964, based on the allegedly erroneous charge computation.
• Subsequent to several written representations, the Customs Commissioner disapproved the refund claim in a letter dated October 26, 1964.
• On February 18, 1965, the Chief of the Law Division recommended the repeal or abrogation of the disputed memorandum order through his 3rd Indorsement.

Arguments Presented by the Parties

• Petitioner (Allied Brokerage Corporation) contended that the memorandum order was contrary to law, violated established international shipping practices, and was void ab initio.
• Respondent (Commissioner of Customs) argued that petitioner lacked a cause of action because:
• The payment was not tendered under protest at the time of collection.
• Administrative remedies, specifically the filing of a written protest with the proper Collector of Customs, were not exhausted as mandated by statute.

Procedural and Legal Implications

• The Court of Tax Appeals, after considering relevant provisions (Sections 2308, 2309, and 2313 of the Tariff and Customs Code) and precedents (such as Sampaguita Shoe and Slipper Factory v. Commissioner of Customs and CMS Estate, Inc. v. Commissioner of Customs), dismissed the petition on the ground that the administrative requirement for a written protest had not been fulfilled.
• The dismissal underscored that the mandatory filing of a protest is a condition precedent for any judicial review of assessments or refunds involving customs duties.

Issue:

Whether the petitioner’s refund claim can proceed given that it failed to comply with the mandatory administrative requirement of filing a written protest at the time of or shortly after payment.

• Does the failure to file the protest with the Collector of Customs foreclose the petitioner’s cause of action?
• Is the alleged invalidity or contrary nature of the memorandum order determinative in light of the procedural lapse?

Whether the established administrative rules under Sections 2308, 2309, and 2313 of the Tariff and Customs Code are to be applied strictly, thereby barring the petitioner’s claim for judicial review when those remedies are not exhausted.

• Should the failure to satisfy the protest requirement be considered fatal to the action?
• Are precedents that require the exhaustion of administrative remedies applicable despite factual differences in the cases cited?

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)