Case Summary (G.R. No. L-17931)
Factual Background
The Central Bank fixed a uniform margin fee of 25% on foreign exchange transactions by virtue of Circular No. 95, issued July 1, 1959, pursuant to Republic Act No. 2609. The Central Bank promulgated a memorandum establishing the procedure for applications for exemption from the margin fee under the statute. Casco Philippine Chemical Co., Inc. engaged in the manufacture of synthetic resin glues purchased foreign exchange on several occasions in November and December 1959 for the importation of urea and formaldehyde, and paid margin fees totaling P33.765.42. In May, 1960, the petitioner purchased foreign exchange again for similar imports and paid P6,345.72 as margin fee. The petitioner relied upon Monetary Board Resolution No. 1529, dated November 3, 1959, which declared that the separate importation of urea and formaldehyde was exempt from the margin fee. The National Institute of Science and Technology advised that urea formaldehyde is a synthetic resin formed as a condensation product of urea and formaldehyde and is a finished product distinct from the separate chemicals urea and formaldehyde.
Procedural History
Petitioner sought refunds of the margin fees it had paid, invoking the Monetary Board resolution. The Central Bank issued margin fee vouchers corresponding to the claimed refunds, but the Auditor of the Central Bank refused to pass in audit and approve the vouchers. The Auditor of the Bank held that the exemption granted by the Monetary Board for the petitioner’s separate importations of urea and formaldehyde was not in accord with Section 2, paragraph XVIII of Republic Act No. 2069 as quoted in the record. The Auditor-General affirmed the Auditor of the Bank’s refusal on appeal. Petitioner then filed the present petition for review in this Court.
Issue
The sole question presented was whether the words appearing in Section 2, paragraph XVIII of Republic Act No. 2069 exempt by law the separate importation of urea and formaldehyde from the foreign exchange margin fee.
Parties' Contentions
Petitioner argued that the statutory phrase should be read as referring to urea and formaldehyde separately, thereby exempting each chemical when imported for the manufacture of plywood and hardboard. Petitioner urged that the legislative history, including statements made on the floor of the Senate, showed that the intent of Congress was to exempt the separate raw materials. Respondents maintained that the enrolled statute used the term urea formaldehyde and that that term denotes the finished synthetic resin, not the separate chemicals; accordingly, the exemption did not extend to separate imports of urea and formaldehyde.
Legal Basis and Reasoning
The Court observed the expert opinion of the National Institute of Science and Technology that urea formaldehyde is a finished synthetic resin distinct from the separate chemicals urea and formaldehyde. The Court emphasized the settled principle that the text of an enrolled bill is conclusive as to the measure passed by Congress and approved by the President. The Court rejected reliance on individual floor statements in the Senate as determinative of Congressional intent, and cited precedents establishing that such statements do not necessarily reflect the view of the Senate or the House; the Court cited Song Kiat Chocolate Factory vs. Central Bank, Mayon Motors, Inc. vs. Acting Commissioner of Internal Revenue, and Manila Jockey Club, Inc. vs. Games & Amusement Board in support. The Court further cited Primicias vs. Paredes, Mabanag vs. Lopez Vito, and Macias vs. Comm. on Elections for the proposition that the enrolled text is binding on the courts. The Court stated that if a printing error occurred in the enrolled bill, the proper remedy lay with amendment or curative legislatio
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Case Syllabus (G.R. No. L-17931)
Parties and Procedural Posture
- Casco Philippine Chemical Co., Inc. filed a petition for review from a denial of its claim for refund of margin fees.
- Hon. Pedro Gimenez, in his capacity as Auditor-General of the Philippines, affirmed the refusal of the Auditor of the Central Bank to pass and approve refund vouchers.
- Hon. Ismael Mathay, in his capacity as Auditor of the Central Bank, refused to pass in audit the margin-fee refund vouchers issued by the Central Bank.
- The petition sought judicial review of the Auditor General's decision denying refunds of margin fees paid on several purchases of foreign exchange.
Key Factual Allegations
- The Central Bank issued Circular No. 95 on July 1, 1959, fixing a uniform margin fee of 25% on foreign exchange transactions pursuant to Republic Act No. 2609.
- Casco purchased foreign exchange in November and December 1959 for the importation of urea and formaldehyde and paid margin fees aggregating P33,765.42.
- Casco made another purchase in May 1960 and paid a further margin fee of P6,345.72.
- Casco sought refunds relying on Resolution No. 1529 of the Monetary Board, dated November 3, 1959, declaring separate importations of urea and formaldehyde exempt from the margin fee.
- The Central Bank issued margin-fee vouchers for the refunds, but the Auditor of the Bank refused to pass them in audit, and the Auditor General affirmed that refusal.
Statutory Provision
- The decision reproduced the pertinent portion of Section 2 of Republic Act No. 2069, which provided that the margin shall not be imposed upon the sale of foreign exchange for importation of, among other items, "Urea, formaldehyde for the manufacture of plywood and hardboard when imported by and for the exclusive use of endusers."
- The lower court record also referenced Republic Act No. 2609 as the Foreign Exchange Margin Fee Law authorizing the Monetary Board to fix the margin.
Issue Presented
- The sole question presented was whether "urea" and "formaldehyde" are exempt from the 25% margin fee under the cited provision as interpreted by the Monetary Board and claimed by Casco.
Contentions of the Parties
- Casco contended that the phrase appearing in the statute as "urea formaldehyde" should be construed as "urea and forma