Nestle Philippines, Inc. vs. CAGRN 134114 July 6, 2001De Leon, Jr. &:

Facts:CTA Dismissed petitioners motion to grant refund on allegedly overpaid impost duties, on its various importations of milk and milk products in the amount of 5M. Petitioners were assessed customs duties and advance sales taxes by Collector of Customs for each separate importations on the basis of the published Home Consumption Value. Petitioners paid the same but under protests. On October 1986, petitioner finally failed a claim for refund of before BIR and the following day, filed the petition for review with CTA which ordered BIR to refund P 4,489 representing the overpaid advance and Sales Taxes. The refund for alleged overpaid customs duties amounting to P 5.008M were left with the collector of customs undecided after almost 6 years. On Aug 22, 1990, petition filed a petition for review with CTA dismissed for what of jurisdiction. Case was filed with CA on certiorari (Rule 45) but dismissed for CTA jurisdiction is not concurrent with the appellate jurisdiction of Commissioner since there was no decision yet from Collector from Customs.

Issue:Whether or not petitioner is entitled for alleged overpayment of customs duties on importations thus be remanded to CTA for further review.

Ruling:We find that the recommended remand of the case to CTA is warranted. For the proper verification and determination of the factual basis and merits of this petition and in order that the ends of substantial justice and fair play my be sub served. Tariff and Customs Code provides that in all claims for refund of customs duties are paid and upon receipts of such claims is mandated to verify the same by the record of his office. In such claim is found correct and in accordance with law, the collector shall certify the same to the commissioner with his recommendation together with all the necessary papers and documents.Solutio indebt it’s misplaced because there is no factual showing that the collection was more than what is required of the petitioner when it made the importations. There is no factual finding yet that petitioner is indeed entitled to its claim of overpayment and if how much is he entitled.

Facts:

Petitioner Nestle Philippines, Inc. transacted sixteen separate

importations of milk and milk products from different countries between the

period of July and November 1984. It paid the corresponding customs duties

and advance sales taxes to the Collector of Customs of Manila for each

transaction based on the published Home Consumption Value (HCV) as

indicated in the Bureau of Customs Revision Orders, but it seasonably filed

the corresponding protests before the said Collector of Customs. In the said

protests, petitioner claimed for the refund of the alleged overpaid import

duties and advance sales taxes. With regards to the advance sales taxes, the

Court of Tax Appeals eventually ruled in favor of the petitioner. However, the

Collector of Customs failed to render a decision on the sixteen protest cases

for almost six years for the alleged overpaid customs duties. In order to

prevent the claims from becoming stale on the ground of prescription,

petitioner immediately filed a petition for review with the Court of Tax

Appeals (CTA). The CTA dismissed the said petition for want of jurisdiction.

The issue was raised to the Court of Appeals by way of petition for review,

but it was also dismissed for failure to exhaust administrative remedies.

Issue:            Whether or not the petitioner’s claims are governed by the rule on quasi-contracts or solutio indebiti which prescribes in six (6) years under Article 1145 of the New Civil Code. 

Held:

No. The Supreme Court ruled that the rule on quasi-contracts or solution indebiti is not applicable in this case. In order for the rule on solution indebiti to apply, it is an essential condition that petitioner must first show that its payment of the customs duties was in excess of what was required by the law at the time when the subject sixteen importations of milk and milk products were made. Unless shown otherwise, the disputable presumption of regularity of performance of duty lies in favor of the Collector of Customs.

In the present case, there is no factual showing that the collection of

the alleged overpaid customs duties was more than what is required of the

petitioner when it made the aforesaid separate importations. There is no

factual finding yet by the government agency concerned that petitioner is

indeed entitled to its claim of overpayment and, if true, for how much it is

entitled. It bears stress that in determining whether or not petitioner is

entitled to refund of alleged overpayment of customs duties, it is necessary

to determine exactly how much the Government is entitled to collect as

customs duties on the importations. Thus, it would only be just and fair that

the petitioner-taxpayer and the Government alike be given equal

opportunities to avail of the remedies under the law to contest or defeat

each other's claim and to determine all matters of dispute between them in

one single case. If the State expects its taxpayers to observe fairness and

honesty in paying their taxes, so must it apply the same standard against

itself in refunding excess payments, if truly proven, of such taxes. Indeed,

the State must lead by its own example of honor, dignity and uprightness.

Thus, the remand of this case to the CTA is warranted for the proper

verification and determination of the factual basis and merits of the petition

and in order that the ends of substantial justice and fair play may be

subserved. In the light of Sections 2308 and 2309 of the Tariff and Customs

Code, it appeared that in all cases subject to protest, the claim for refund of

customs duties may be foreclosed only when the interested party claiming

refund fails to file a written protest before the Collector of Customs.

Accordingly, once a written protest is seasonably filed with the Collector of

Customs the failure or inaction of the latter to promptly perform his

mandated duty under the Tariff and Customs Code should not be allowed to

prejudice the right of the party adversely affected thereby. Technicalities and

legalisms, however exalted, should not be misused by the government to

keep money not belonging to it, if any is proven, and thereby enrich itself at

the expense of the taxpayers.