Case Summary (G.R. No. 179579)
Petitioners
Commissioner of Customs and the District Collector of Subic who, on 7 November 2003, promulgated CMO 27-2003 prescribing tariff classifications for imported wheat based on importer identity, country of origin, and port of discharge.
Respondent
Hypermix Feeds Corporation, a flour‐milling company, importing Chinese milling wheat and asserting that CMO 27-2003 would subject its food-grade wheat to higher “feed-grade” tariffs without proper assessment, hearing, or publication.
Key Dates
– 7 November 2003: Issuance of CMO 27-2003.
– 19 December 2003: Filing of Petition for Declaratory Relief in RTC Las Piñas City.
– 19 January 2004: RTC grants TRO.
– 10 March 2005: RTC renders decision nullifying CMO.
– CA appeal denied.
– 1 February 2012: Supreme Court resolves Rule 45 petition.
Applicable Law
– 1987 Philippine Constitution (due process, equal protection, judicial power).
– Rule 63, Sec. 1, Rules of Court (declaratory relief).
– Revised Administrative Code, Book VII, Chapter 2 (rule‐making procedures: filing, publication, hearing).
– Tariff and Customs Code, Sec. 1403 (duties of customs officers).
– Jurisprudence on administrative rules (Smart Communications v. NTC; Misamis Oriental Ass’n of Coco Traders; Taqueda v. Tuvera; Michel J. Lhuiller Pawnshop).
Procedural History
RTC Las Piñas City assumed jurisdiction, dismissed motion to dismiss, and granted declaratory relief, declaring CMO 27-2003 invalid for lack of public participation and undue delegation. CA affirmed. Petitioners elevated the case under Rule 45.
Issues
- Whether declaratory relief was the proper remedy and whether the RTC had jurisdiction.
- Whether CMO 27-2003 complied with procedural requirements for rule‐making.
- Whether the classification scheme violated due process and equal protection.
- Whether the Commissioner exceeded statutory authority under the Tariff and Customs Code.
Jurisdiction and Remedy
The Supreme Court held that:
– A justiciable controversy existed over the constitutionality of CMO 27-2003.
– Adverse interests and concrete legal stakes (higher tariffs, cash bond requirements) vested respondent with standing.
– The controversy was ripe for judicial resolution as litigation over classification and tariff differential was inevitable each importation.
Procedural Validity under the Revised Administrative Code
CMO 27-2003 imposed new burdens and thus constituted a legislative (substantive) rule requiring:
– Filing with UP Law Center.
– Notice, publication, and opportunity to be heard.
Petitioners failed to observe these requirements. Consequently, the regulation was void for procedural due process defects.
Equal Protection Analysis
Classification based on importer identity, origin, and port lacked a
Case Syllabus (G.R. No. 179579)
Parties
- Petitioners: Commissioner of Customs and the District Collector of the Port of Subic
- Respondent: Hypermix Feeds Corporation
Relevant Facts
- On November 7, 2003, the Commissioner of Customs issued Customs Memorandum Order (CMO) No. 27-2003 to classify imported wheat for tariff purposes.
- The memorandum prescribed classification criteria based on (1) importer or consignee, (2) country of origin, and (3) port of discharge, referencing an annexed list of flour millers, ports, commodity descriptions, and countries of origin.
- Food grade wheat under HS 1001.9090 attracted a 3% tariff; feed grade wheat under HS 1001.9010 attracted a 7% tariff.
- CMO 27-2003 provided procedures for protests and Valuation and Classification Review Committee (VCRC) cases, including filing cash bonds for tariff differentials, tentative release, and automatic review by the Commissioner of Customs.
Respondent’s Declaratory Relief Petition
- December 19, 2003: Hypermix Feeds Corporation filed a petition for declaratory relief with the Regional Trial Court (RTC) of Las Piñas City, anticipating application of the new regulation to its perishable Chinese milling wheat in transit.
- Respondent’s contentions:
- CMO 27-2003 was issued without required public participation, prior notice, publication, or registration under the Revised Administrative Code.
- The regulation summarily classified respondent’s importations as feed grade without assessment or examination, resulting in a 7% tariff instead of 3%, an effective overcharge of 133%.
- The classification scheme violated the equal protection clause by treating non-flour millers differently from flour millers without a rational basis.
- Retroactive application of the order was claimed to be confiscatory.
RTC Proceedings
- January 19, 2004: RTC issued a Temporary Restraining Order (TRO) effective for 20 days.
- Petitioners filed a Motion to Dismiss arguing lack of jurisdiction, impropriety of declaratory relief, internal administrative nature of CMO 27-2003, and prematurity of respondent’s claims.
- February 28, 2005: Parties agreed to resolve the Motion to Dismiss and the preliminary injunction application in the main case.
- March 10, 2005: RTC rendered Decision granting respondent’s petition, declaring CMO 27-2003 invalid and of no force and effect, and enjoining petit