G.R. No. L-12991 - Hamlin vs. Collector of Internal Revenue

On September 17, 1950, the S/S President Wilson carried a Mercury automobile consigned to F. F. Hamlin, an American resident of Cebu City, towards the Philippine ports.
The vehicle was transhipped and arrived in Cebu on September 21, 1950, via the F/S Albert.
Upon arrival, Hamlin secured the vehicle from the customs custody on September 23, 1950 after complying with the payment of the compensating tax.

The compensating tax was initially paid at a rate of 15% of the total value of the automobile.
An Official Receipt dated September 22, 1950, evidencing a payment of P927.95, substantiated this transaction.
The computation of tax at 15% was based on the rate prevailing according to the official records and practice at the time of withdrawal from customs custody.

Republic Act 588, effective September 22, 1950, increased the compensating tax rate to 50% of the total value.
In 1954, the Collector of Internal Revenue demanded a deficiency tax of P2,164.31, based on the higher rate, arguing that the tax should have been computed at 50% in accordance with the new law.
F. F. Hamlin contested this demand by claiming that:

He had actually paid the tax on September 21, 1950 (despite the receipt bearing the date September 22).
Under such circumstances, the applicable rate should have remained at 15% rather than 50%.

The official documents, including the Official Receipt and steps preceding the payment, consistently bore the date September 22, 1950.
Testimonies from employees were offered by Hamlin to assert an earlier payment date; however, these were not found credible given the weight of the documentary evidence.
A letter from Hamlin’s representative, dated November 4, 1954, referred exclusively to the payment made on September 22, 1950, without indicating any earlier payment date.

Section 190 of the Tax Code specifies that the compensating tax is to be paid upon the withdrawal or removal of imported goods from customs custody.
This provision mandatorily requires that the tax be computed based on the total value, which includes additional charges incident to delivery (e.g., freight, brokerage, warehousing).
As such, the applicable tax rate is that prevailing on the date of withdrawal or removal, not necessarily the date of the actual cash payment.

Should the compensating tax be computed at the rate of 15% (the rate originally used when the automobile was imported) or at 50% (the rate effective as of September 22, 1950, due to Republic Act 588)?

Is the actual date of tax payment properly established as September 22, 1950, based on the official receipt and related official actions?
Can the testimony of employees regarding an earlier payment date (September 21, 1950) override the documentary evidence?

Does Section 190’s mandate that the tax be paid upon withdrawal or removal from customs custody validate the application of the higher tax rate effective on the day of withdrawal?