BIR Ruling [DA-243-98]

June 15, 1998 BIR RULING [DA-243-98] Ms. Marietta T. Lorenzo Chief, Large Taxpayers Division Proj. Mgr. External Linkages Proj. Bureau of Internal Revenue M a d a m : There are returned to you herewith the herein papers bearing on your request for opinion regarding the legality of a provision in the proposed Memorandum of Agreement (MOA) between the Bureau of Internal Revenue and the Bureau of Customs (BOC) which provides that the importer is required to present a written permit to import duly issued by the BOC before allowing the removal of the following articles, to wit : LexLib 1. Apparatus or mechanical contrivances specially for the manufacture of articles subject to excise tax; 2. Excisable finished goods intended for resale or use in business; and 3. Raw materials to be used in manufacture of articles subject to excise tax; You have correctly pointed out that under Section 164 of the Tax Code, an importer of any apparatus or mechanical contrivance specially for the manufacture of articles subject to excise tax is only required to secure a written permit from the Commissioner of Internal Revenue when such apparatus or mechanical contrivance will be setup, dismantled or transferred. On the other hand, Sections 138, 139,140 and 142 of the Tax Code do not require an importer of excisable articles, e.g., alcohol products, cigars and cigarettes, to secure a written permit before making the importation of such articles. You also pointed out that Revenue Regulations Nos. 1-97 and 2-97 already provide for the administrative procedures and guidelines in the importation of excisable articles. From the foregoing, it is our opinion that the provision in the proposed MOA which introduces an additional requirement on the part of the importer of exciseable articles which is not specifically provided for in the Tax Code is not justified and, hence, should not be adopted. Otherwise, we will be effecting an amendment to the Tax Code in the guise of a MOA which only Congress can lawfully do. However, that provision which in effect delegates to the BOC the authority to issue a written permit before allowing the importation of raw materials to be used in the manufacture of excisable articles, i. e., cigarette paper bobbins or rolls, cigarette tipping paper or cigarette filter tips, is legally feasible considering that the Commissioner of Customs is constituted as agent of the Commissioner of Internal Revenue with respect to the collection of national internal revenue taxes on imported goods under Section 16 of the Tax Code. cdpr Very truly yours, (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal and Enforcement Group)