G.R. No. L-28329 - Commissioner of Customs vs. Esso Standard Eastern, Inc.

Petitioner: Commissioner of Customs
Respondent: ESSO Standard Eastern, Inc. (formerly Standard-Vacuum Refining Corp. (Phil.))
ESSO operates a petroleum refining plant in Limay, Bataan and holds Refining Concession No. 2 issued on December 9, 1957.

Under Article 103 of Republic Act No. 387 (the Petroleum Act of 1949), ESSO was entitled to import free of customs duty all equipment, machinery, materials, etc., during five years after granting the concession.
ESSO imported several items (scientific instruments, recorder parts, valves, boiler parts, x-ray films) and was assessed a special import tax totaling P775.62 on these items under Republic Act No. 1394, the Special Import Tax Law.
ESSO paid the tax under protest and filed administrative protests which were denied by the Collector of Customs on February 16, 1962, and by the Commissioner of Customs on March 19, 1965.

ESSO filed a petition for review with the Court of Tax Appeals (CTA) on July 2, 1965.
On September 30, 1967, the CTA reversed the decision of the Commissioner of Customs and ordered the refund of P775.62 to ESSO.
The Commissioner of Customs appealed to the Supreme Court to review the CTA decision.

Petitioner argued that the special import tax under R.A. No. 1394 is distinct and separate from customs duties under the Tariff and Customs Code. Hence, exemption from customs duties under R.A. No. 387 does not extend to exemption from the special import tax.
Petitioner cited legislative intent, noting that R.A. No. 1394 separately mentions customs duties and special import tax, and that exemptions must be clearly expressed, not implied.
Respondent ESSO and the CTA contended that the special import tax is in essence a customs duty or at least akin to it, and thus covered by the exemption in the Petroleum Act.

Whether the term "customs duty" in Article 103 of Republic Act No. 387 includes the special import tax imposed by Republic Act No. 1394.

Whether the exemption from payment of customs duties under Republic Act No. 387 also exempts the respondent from payment of the special import tax imposed by Republic Act No. 1394.