Violation of the Provisions of RR No. V-7 by Dollar Tobacco Company

September 30, 1959 BIR RULING NO. 495-59 2nd Indorsement Returned to the Chief, Tobacco & Miscellaneous Tax Division, thru the Revenue Operations Executive (Assessment) B.I.R., Manila, the case of the Dollar Tobacco Company, 825 Reina Regente Street, Manila, involving an alleged violation of the requirements of Revenue Regulations No. V-7 of the Department of Finance, otherwise known as the Cigarette Paper Regulations. On June 25, 1958, Menzi & Co., Inc. notified the Bureau of Internal Revenue and requested permission to import cigarette paper (bobbins) for the Dollar Tobacco Company in the total number of 446 bobbins "cigarette paper, Escusta Brand, Ref. # 268, Highly Combustible, 29 mm x 6000 meters, 21 Grams, Unsweet", which request was made of record by this Office in its letter to the said permittee dated July 18, 1958. On September 15, 1958, the Dollar Tobacco Company, the consignee of the said bobbins, requested a written authority from this Bureau to release from customs custody the aforesaid cigarette paper (bobbins) which was imported by Menzi & Co., Inc. for the said tobacco company. This Office, however, in its letter of September 18, 1958, denied the said request and instead, requested the said tobacco company to pay the sum of P300.00 in extrajudicial settlement of the said violation. A perusal of both Revenue Regulations No. V-7 and the papers on the importation of the said cigarette papers (bobbins) readily show that both the permittee company, as importer, and the tobacco company, as consignee and for whom the said bobbins were imported, sufficiently complied with the provisions of said revenue regulations. Section 3, paragraph 2 of said revenue regulations read as follows: "A permittee, before making an order for the purchase of cigarette paper from without the Philippines, shall secure a written authority from the Collector of Internal Revenue. The request therefor shall state the number, brand and color of the bobbins or rolls and the length in meters of each, and upon arrival, the permittee shall accordingly notify the Collector of Internal Revenue, if in Manila, or the Provincial Revenue Agent, if in the province. In case an importer orders for such article through a broker, it shall be the duty of such broker to notify the Collector of Internal Revenue in writing, within five (5) days after receipt of such order of the quantity, color or brand, and length in meters of the cigarette paper ordered." Menzi & Co., Inc., the permittee and the party who caused the importation of the bobbins in question, adhered strictly to the provisions of the regulations, particularly section 3, paragraph 2 thereof, when it notified the Bureau of Internal Revenue to import the cigarette paper for the Dollar Tobacco Company dated June 25, 1958. This Office, having approved the request of the permittee to import cigarette papers (bobbins) for the said tobacco company, could not now charge the latter to have violated the provisions of Revenue Regulations No. V-7. While it is true that the Dollar Tobacco Company is the importer thru Menzi Co., Inc., acting as the broker-permittee, nowhere in the records of the case is it shown that these parties violated the regulations prescribed by this Bureau. To penalize the tobacco company for allegedly violating the provisions of the said revenue regulations is, therefore, without legal basis. In view of the foregoing circumstances, the Dollar Tobacco Company, has to be, as it is hereby, found not to have violated the provisions of Revenue Regulations No. V-7. (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue