G.R. No. 233974 - Isla vs. Estorga

Five petitioners—Associated Sugar, Inc., Bacolod-Murcia Milling Co., Inc., Talisay-Silay Milling Co., Inc., Ma-Ao Sugar Central Co., Inc., and Financing Corporation of the Philippines—exported raw sugar to the United States.
The shipments were made on various dates between 1959 and 1966.
The sugar was loaded at two private wharves: the Sto. Niño Wharf in Bacolod City and the wharf of the Philippine Bulk Corporation at Pulupandan, Negros Occidental.

The Collector of Customs for the Port of Iloilo levied wharfage dues amounting to P904,236.38 on the export shipments.
These dues were imposed pursuant to sections 2801 and 2802 of the Tariff and Customs Code.
Although the petitioners paid the fees, they did so under protest, disputing the imposition of the wharfage dues.

The Collector of Customs dismissed the petitioners’ protest against the wharfage fees.
The petitioners appealed the decision, but the Commissioner of Customs affirmed the Collector’s ruling.
On February 16, 1967, the petitioners filed a petition for review with the Court of Tax Appeals challenging the decision.
The case was eventually dismissed by the Tax Court on December 28, 1968 for lack of a cause of action.
Subsequently, the petitioners appealed to the Supreme Court.

The petitioners contended that wharfage dues, being a fee for the use of a wharf or government facilities therein, should not apply to cargo loaded at private wharves.
They argued that since their sugar was exported using private facilities and no government port facilities were utilized, imposing such dues constituted an undue burden.
The petitioners further criticized the Tax Court for rendering a summary judgment on what they considered a properly merited issue.

Sections 2801 and 2802 of the Tariff and Customs Code provide for the assessment and collection of wharfage dues.
The Code defines wharfage dues as a charge assessed against the cargo based on its quantity, weight, or measure, and not as a fee for using a wharf.
When cargo is loaded or unloaded offshore or on private wharves, the applicable rate is reduced to fifty (50%) percent of the standard rate.

Prior cases (e.g., Procter and Gamble PMC vs. Commissioner of Customs; Luzon Stevedoring Corp. vs. CTA; Victorias Milling Co., Inc. vs. Auditor General) upheld the collection of wharfage dues on cargo even when private wharves were used.
The Philippine Sugar Centrals Agency vs. Insular Collector of Customs decision from 1927, wherein similar facts were echoed, was cited as establishing a long-standing practice.
The Solicitor General argued that the petition for review was untimely due to a misapplication of an extension period for filing a motion for reconsideration; however, the Supreme Court opted to decide the merits of the case.

Whether the imposition of wharfage dues on cargo exported using private wharves, without employing government facilities, contravenes the provisions of the Tariff and Customs Code.

Is the fee collected for the use of a wharf, or is it merely a charge against the cargo?

Whether the Tax Court’s dismissal—which was characterized as a summary judgment but has been described as a judgment on the pleadings—was proper under the circumstances.
Whether the petition for review was valid despite allegations of procedural technicalities related to the extension for filing a motion for reconsideration.