Title
Asturias Sugar Central, Inc. vs. Commissioner of Customs
Case
G.R. No. L-19337
Decision Date
Sep 30, 1969
Asturias Sugar Central imported jute bags duty-free, failed to export within one year due to alleged force majeure, and sought a refund. The Supreme Court denied the claim, ruling the one-year period non-extendible, force majeure unproven, and no entitlement to drawback under the Tariff Code.
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Case Digest (G.R. No. L-19337)

Facts:

  1. Petitioner and Business Operations:

    • The petitioner, Asturias Sugar Central, Inc., is engaged in the production and milling of centrifugal sugar for export. The sugar is placed in containers known as jute bags.
  2. Importation of Jute Bags:

    • In 1957, the petitioner made two importations of jute bags:
      • First Shipment: 44,800 jute bags declared under Entry 48 on January 8, 1957. These entered free of customs duties and special import tax upon the filing of Re-exportation and Special Import Tax Bond No. 1, conditioned upon exportation within one year.
      • Second Shipment: 75,200 jute bags declared under Entry 243 on February 8, 1957. These also entered free of duties and taxes upon the filing of Re-exportation and Special Import Tax Bond No. 6, with the same conditions.
  3. Exportation of Jute Bags:

    • Only 8,647 jute bags from the first shipment and 25,000 from the second shipment were exported within one year. The remaining 86,353 bags were exported after the one-year period but within three years.
  4. Request for Extension:

    • On February 6, 1958, the petitioner requested a one-week extension for Bond No. 6, citing reasons such as typhoons, floods, picketing of the Central railroad line, and delays in vessel arrival. The request was denied by the Commissioner of Customs.
  5. Payment Under Protest:

    • Due to the failure to export within one year, the Collector of Customs required the petitioner to pay P28,629.42 in customs duties and special import tax, which the petitioner paid under protest.
  6. Claim for Refund:

    • The petitioner demanded a refund, arguing that its request for extension was timely and that the delay was due to force majeure. Alternatively, it sought a refund under Section 106(b) of the Tariff and Customs Code as a drawback.
  7. Administrative and Judicial Proceedings:

    • The Collector of Customs denied the claim, and the Commissioner of Customs upheld the decision. The Court of Tax Appeals affirmed the Commissioner's decision.

Issue:

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Ruling:

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Ratio:

  1. Mandatory Nature of the One-Year Period:

    • The one-year period for exporting containers under Section 23 of the Philippine Tariff Act of 1909 is mandatory and non-extendible. Administrative orders issued by the Bureau of Customs, which implement the law, confirm this interpretation.
  2. Judicial Respect for Administrative Construction:

    • Courts give weight to the interpretation of statutes by administrative agencies, especially when the interpretation is long-standing and consistent. The Bureau of Customs' interpretation of the one-year period as non-extendible is entitled to judicial respect.
  3. No Justification for Force Majeure:

    • The petitioner failed to provide sufficient evidence that the alleged force majeure events prevented the exportation of the jute bags within the required period.
  4. Drawback Not Available:

    • The petitioner cannot shift from the exemption under Section 105(x) to the drawback under Section 106(b) after failing to comply with the conditions of the former. The two provisions offer distinct options, and the petitioner must adhere to the conditions of the option it initially chose.
  5. Strict Construction of Tax Statutes:

    • Tax exemptions are construed strictly against the taxpayer and liberally in favor of the taxing authority. The petitioner's failure to comply with the conditions of the exemption precludes it from claiming a refund.


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