G.R. No. 56705 - Commissioner of Customs vs. Procter and Gamble Philippine Manufacturing Corp.

In April 1975, Procter and Gamble Philippine Manufacturing Corporation imported 5,000 bags of soda ash dense (weighing about 200 metric tons) from Japan.
The shipment entered the port of Manila under Entry No. 33511, Series of 1975, and was originally valued at US$37,606.16 (or US$188.03 per metric ton) as evidenced by the supplier’s invoice and the consular invoice of merchandise.

Based on the consular invoice value, the imported shipment incurred customs duty and taxes amounting to P59,753.00, which was duly paid (covered by O.R. No. 62797 dated April 10, 1975).
Before final liquidation, the Bureau of Customs reappraised the shipment using its RVIC No. 4-438 dated April 14, 1975 and determined the home consumption value at US$307.00 per metric ton, raising the total assessed value to US$61,400.00, which resulted in an additional customs duty and taxes of P34,680.00.

Private respondent paid the additional duty and taxes under protest, but the Collector of Customs dismissed the protest on June 20, 1975 for lack of merit.
Upon appeal, the Commissioner of Customs on March 9, 1976 affirmed the Collector’s decision, and subsequently, private respondent filed a petition for review with the Court of Tax Appeals on April 12, 1976 seeking a refund of at least a portion of the additional duty and taxes.
The Court of Tax Appeals, in its decision on February 27, 1981, modified the initial ruling by ordering a partial refund of P18,453.00, without pronouncing on costs.

The central controversy revolves around the appropriate basis for determining the home consumption value (HCV) of the importation—whether it should be the declared value in the consular (commercial/trade) invoice or the value ascertained by the Bureau of Customs through its reappraisal (RVIC No. 4-438).
Private respondent argued that there was no “reasonable doubt” regarding the consular invoice value, citing evidence from the Japan Chemical Week which indicated a lower market price (US$137.40 per metric ton) to support the accuracy of the consular entry.
Petitioner contended that the disparity between the consular invoice value and prevailing market rates established through other reliable sources created reasonable doubt, thereby justifying the use of the “established” or “information” value in RVIC No. 4-438 for duty assessment.

Whether the home consumption value (HCV) of an importation subject to customs duty should be based solely on the value declared in the consular, commercial, or trade invoice.
Or, whether the HCV should instead be determined by the Bureau of Customs using alternative sources (such as the revenue or commercial attache reports and other relevant data), as provided under Section 201 of the Tariff and Customs Code when there is a reasonable doubt on the declared value.

The issue of whether the Japan Chemical Week, cited as evidence to reflect the prevailing market price, qualifies as admissible evidence under the exceptions to the hearsay rule.
Whether the slight discrepancy between the invoice value and the market price in Japan Chemical Week (about US$50 difference) is sufficient to establish reasonable doubt regarding the consular invoice’s accuracy.

Whether the fact that the “established” or “information” value in RVIC No. 4-438 was approved by Customs only after the importation was effected impacts its validity as a basis for assessing customs duty.
Whether the non-publication of the RVIC value at the time of importation deprives it of legal force in computing the dutiable value.