Case Summary (G.R. No. 225007)
Antecedents and Trial Court Dispositions
SteelAsia filed a petition for declaratory relief seeking nullification of DAO No. 5 (and its IRR) and DAO No. 15-01 on grounds of conflict with Republic Act No. 4109 (RA 4109) and equal protection violation. The RTC declared the orders ultra vires and without force and effect (Decision, November 10, 2017) and denied reconsideration (Order, March 23, 2018).
Issues on Appeal
- Proper remedy to challenge the validity of DTI regulations (declaratory relief vs. certiorari).
- Whether DAO No. 5 (and IRR) and DAO No. 15-01 conflict with RA 4109 and RA 7394 (Consumer Act).
- Alleged defect in exclusive issuance by DTI without joint promulgation with the Commissioner of Customs.
- Alleged equal protection violation by treating imported goods differently from local products.
Proper Remedy: Declaratory Relief vs. Certiorari
The Court held that SteelAsia’s use of declaratory relief was improper once its equal protection right was already infringed; certiorari was the correct remedy for assailing ultra vires administrative acts. Nevertheless, due to the case’s public importance and far-reaching economic impact, the Supreme Court treated the petition as one for certiorari and proceeded to review the merits.
Statutory Framework and In Pari Materia Doctrine
RA 4109 (1964) assigns the BPS power to inspect and certify imported goods before release by Customs. RA 7394 (1992) requires consumer products to be tested, inspected, and certified prior to distribution. Under the in pari materia doctrine, both statutes, though passed years apart, form a uniform system mandating prior testing and certification for all imported merchandise, consumer or otherwise.
Delegation of Rule-Making Power and Validity of DTI Regulations
Executive Order No. 293 (1993) empowers the DTI Secretary to promulgate rules implementing trade and industry laws. Valid subordinate legislation requires:
- Completeness of the statute, leaving only execution to the delegate;
- Presence of sufficient standards setting boundaries for the delegate’s authority.
Sections 4(d) of RA 4109 and Article 14 of RA 7394 furnish clear standards for testing, inspection, and certification. DAO No. 5 and DAO No. 15-01 merely detail the mechanics—conditional release of shipments to accredited warehouses pending compliance—without contradicting statutory commands.
Analysis of Conditional Release Provisions
DAO No. 5 § 4.1.1.1 permits conditional physical release from Customs custody to secure, accredited storage, subject to sealing, padlocking, inventory, and verification by BPS/DTI personnel. These measures ensure integrity and custodia legis over goods until full testing and certification. Far from bypassing statutory requirements, conditional release facilitates efficient compliance, reduces port congestion, and addresses practical constraints—limited Customs space and reliance on a single steel-testing laboratory (MIRDC, DOST).
Joint Promulgation Requirement under RA 7394 Article 15(c)
Article 15(c) applies only when non-conforming imported consumer products may be modified within ten days under a joint DTI-Customs regulation before final admission. It does not pertain to pre-testing physical transfers. Joint promulgation in that context does not invalidate general DTI rules on conditional release, and administrative practice confirms that Customs issuances often implement agency regulations without a single, unified document.
Equal Protection Analysis
Classi
Case Syllabus (G.R. No. 225007)
Facts and Antecedents
- On June 24, 2016, Steelasia Manufacturing Corporation, claiming status as a local steel‐bar manufacturer, filed a petition for declaratory relief in RTC‐Br. 142, Makati City (Civil Case No. R-MKT-16-00874-SC).
- Steelasia assailed the validity of:
• DTI Department Administrative Order No. 5, Series of 2008 (DAO No. 5)
• Implementing Rules and Regulations (IRR) of DAO No. 5
• DTI Department Administrative Order No. 15-01, Series of 2015 (DAO No. 15-01) - It challenged the provisions allowing conditional release of imported goods from Bureau of Customs (BOC) custody prior to testing, inspection, and certification.
- Steelasia argued these provisions conflicted with Republic Act No. 4109 (RA 4109) and violated the equal protection clause by favoring importers over local manufacturers.
Statutory and Constitutional Provisions
- RA 4109 (1964):
• Section 3 – Empowers Bureau of Product Standards (BPS) to inspect and certify imported commodities before release.
• Section 6 – Prohibits any release certificate or customs entry unless inspection under Section 4 has occurred. - RA 7394 (1992), Consumer Act:
• Article 14 – Requires inspection and certification of consumer products prior to distribution in commerce.
• Article 15(c) – Permits joint DTI‐Customs regulations to release under bond substandard imports for modification. - Executive Order No. 293 (1987), Section 2 – Delegates to DTI rule‐making power to implement trade and industry laws.
- Rules of Court, Rule 63, Section 1 – Governs declaratory relief to challenge statutes or regulations.
Assailed Regulatory Provisions
- DAO No. 5, Section 4.1.1.1 – Allows “conditional release” of imports from BOC custody pending compliance with BOC and DTI requirements.
- IRR of DAO No. 5, Section 3.6 – Permits BOC release upon BPS or DTI regional office advice via conditional release or ICC (Import Commodity Clearance).
- IRR of DAO No. 5, Sections 4.1.1.6.1 & 4.1.1.6.4 – Provides procedures if laboratory tests disclose noncompliance, including re‐export or destruction.
- DAO No. 15-01, Section 1.4 – Mandates issuance of ICC certificate even without valid test reports, subject to inspection, sampling, and testing before ICC sticker release.
Trial Court Ruling
- By Decision (November 10, 2017), RTC Br. 142