Facts:

The case involves a petition for review on certiorari filed by The Hon. Cornelio Balmaceda, in his capacity as Secretary of Commerce and Industry and Chairman of the Producers Incentive Board, against Corominas & Company, Inc. The events leading to the case began on January 29, 1959, when Corominas was issued Barter Permit No. 1604-Spl. by then Secretary of Commerce and Industry, Pedro C. Hernaez. This permit allowed Corominas to export 20,000 metric tons of Rhodesian corn valued at $1,575,100.00 to Japan and to import commodities of equivalent value under a straight barter system as stipulated in Republic Act No. 1410. The permit included a condition that non-essential imports should not exceed 10% of the total imports.

Corominas successfully exported the corn, but the Japanese buyer faced restrictions from the Japanese government regarding dollar remittances. Consequently, the buyer was allowed to settle the remaining balance of $485,030.33 in commodities. Corominas s...

Facts:

Background and Statutory Framework

• Republic Act No. 1410 (“No Dollar Imports” Law) was enacted on September 10, 1959 to restrict imports under the “no-dollar remittance” scheme, except under specified conditions.
• Section 1(d) of RA 1410 permits importations by way of straight barter when authorized by the Secretary of Commerce and Industry.
• Implementation of RA 1410 was delegated to the Department of Commerce and Industry, which was empowered to draft and promulgate the necessary rules and regulations.
• The then Secretary of Commerce and Industry, Pedro C. Hernaez, promulgated the Consolidated Rules and Regulations approved by the Cabinet on August 20, 1958, which, among other provisions, allowed consolidated imports through a straight barter scheme subject to set percentages (70% for machineries, equipment, and/or essential commodities; non-essentials not to exceed 10% of the total imports).

Facts on the Transaction and Importation Process

• Corominas Company, Inc., a corporation engaged in export and import activities, was issued Barter Permit No. 1604-Spl on January 29, 1959 by Secretary Pedro C. Hernaez.
• The permit authorized the export of 20,000 metric tons of Rhodesian corn valued at US$1,575,100.00 to Japan on a barter basis, in exchange for commodities of like value to be imported into the Philippines.
• The permit was subject to the classification rule that non-essential goods should not exceed 10% of the total import value.
• In execution of the barter transaction, Corominas exported the corn, and the Japanese buyer began remitting payment in U.S. dollars through the Central Bank of the Philippines.
• Before the full payment could be completed, the Japanese Government halted further remittance of dollars, allowing instead the balance payment (US$485,030.33) to be made in commodities through its Hongkong agent, Kim Guan Lee Hong.

Administrative Actions and Communications

• In response to the changed payment mode, Corominas requested the new Secretary of Commerce and Industry, Manuel Lim—who was concurrently Chairman of the Producers Incentives Board—to authorize the importation of goods worth US$485,030.33.
• The request was granted on May 13, 1960 by the Acting Undersecretary of Commerce and Industry, Mariano G. Pineda, under specific conditions:
• The imported commodities must adhere to the percentages provided in the original barter permit (70% for essential items; non-essentials capped at 10%).
• The total import value must not exceed the permitted amount of US$1,575,100.00.
• A bond equivalent to US$485,030.33 must be posted to guarantee the importation.
• Between May 19, 1960 and July 22, 1960, Corominas submitted to the Producers Incentives Board the firm offers from the Japanese buyer’s agent, detailing the description, quantity, unit price, and total dollar value of the commodities.
• In response, the Producers Incentives Board issued several letters (Exhibits D, D-1 to D-10) that:
• Confirmed the classification and price quotations of the commodities as stated in the firm offers.
• Stated that the confirmation served as an authority for the importation, but only for the account of the buyer and contingent upon adherence to the percentage limits.
• Subsequently, on August 8, 1960, Ernesto Y. Golez, Coordinator of the Producers Incentives Board, informed Corominas that the “NEC items” (non-essential commodities) submitted for importation had already exceeded the 10% limitation.
• Corominas sought reconsideration on August 29 and September 16, 1960, but the request was formally denied on October 4, 1960.
• As a consequence, Corominas filed a “Complaint with Preliminary Mandatory Injunction” on October 4, 1960 in the Court of First Instance of Manila, seeking the issuance of release certificates for its imported goods.
• The lower court ruled in favor of Corominas by authorizing the importation and ordering the issuance of release certificates, a decision later affirmed by the Court of Appeals.
• The petitioner-appellant (the Secretary of Commerce and Industry and Chairman, Producers Incentives Board) then elevated the case to the Supreme Court, challenging the issuance of release certificates and the interpretation of administrative communications and percentage limitations.

Conflict on the Interpretation of the Authority and Percentage Limit

• Petitioner-appellant contended that the reply letters (Exhibits D, D-1 to D-10) were mere confirmations of the price quotations and commodity classification, and not import authorities.
• It further argued that Corominas exceeded the 10% cap on non-essential imports since the total importation value of US$485,030.33 served as the basis for the percentage computation.
• Respondent-appellee (Corominas) asserted that under Central Bank Circular No. 133 (dated January 21, 1962), there was a decontrol on foreign exchange and importation, which allowed free purchase of dollars and unrestricted importation of non-essential commodities.
• The petitioner-appellant opposed this view, asserting that CB Circular No. 133 evolved from RA No. 2609, which provided for a gradual decontrol program and did not grant absolute or total decontrol.

Issue:

Authority of the Reply Letters

• Whether the letters (Exhibits D, D-1 to D-10) issued by the Producers Incentives Board are to be construed as definitive authority for Corominas to import goods, or merely as confirmations of price quotations and commodity classifications.

Application and Interpretation of the 10% Rule

• Whether the computation of the 10% ceiling for non-essential commodities should be based on the total amount authorized for importation (US$485,030.33) rather than the original permit value (US$1,575,100.00).
• Whether Corominas legitimately exceeded the allowed limit by importing non-essential items amounting to an excess of US$54,730.44.

Impact of Central Bank Circular No. 133 on Import Controls

• Whether the provisions contained in CB Circular No. 133, which imply a decontrol of certain import restrictions, effectively override the limitations set in the Consolidated Rules and Regulations promulgated under RA 1410.

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Ruling:

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Ratio:

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Doctrine:

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