Acting Commissioner of Customs vs. Court of Tax Appeals, et al.

[CA-G.R. SP No. 19840. July 30, 1993.] (C.T.A. Case No. 2573) ACTING COMMISSIONER OF CUSTOMS , petitioner , vs . COURT OF TAX APPEALS and CALTEX (PHILIPPINES), INC. , respondents . D E C I S I O N KAPUNAN , J p : This a petition for review on certiorari of the decision of the Court of Tax Appeals dated September 26, 1984 which reversed the decision of the Commissioner of Customs and ordered him to refund to private respondent Caltex (Philippines) Inc., the checking charges paid by the latter in the amount of P30,958.30 or to treat the same as tax credit in favor of private respondent. The decision was arrived at after the Court of Tax Appeals allowed private respondent to present evidence, over the objection of herein petitioner, to prove that neither the Bureau of Customs nor the arrastre operator/contractor performed checking services relative to the importation. Petitioner questioned the propriety of such trial de novo proceedings ten (10) years after the checking charges were collected. The disputed checking charges were collected in advanced by the Collector of Customs of Manila on 21 different shipments of lubricating oil and additives from May 1970 to May 1973, which private respondent paid under protest (pp. 13-15, Rollo ). Said decision was affirmed by petitioner in his resolution dated November 21, 1973 (pp. 77-78, Rollo ). Hence, private respondent appealed to the Court of Tax Appeals where it was allowed to present evidence that the checking services on the importation was not performed (pp. 95-96, Rollo ). After the proceedings in the Court of Tax Appeals was concluded, a decision was rendered on September 26, 1984, as already mentioned, reversing the decision of the Commissioner of Customs and ordering a tax refund or tax credit in favor of private respondent (pp. 133-146, Rollo ). While upholding the statutory authority of the Collector of Customs to impose the disputed checking charges (p. 140, Rollo ), the Court of Tax Appeals nonetheless found that "no actual checking services were rendered by the Bureau of Customs personnel or its arrastre contractor on the oil shipments" of herein private respondent (p. 145, Rollo ), Hence, petitioner brought the instant petition, raising the following issues and grounds in support of its appeal: " I S S U E S " "A. Whether or not respondent Court of Tax Appeals erred in having trial de novo on appeal and in the process, allowing private respondent Caltex (Philippines) Inc. to present evidence for the first time on the matter of checking services relative to the importations involved in this case, despite the objections of petitioner Acting Commissioner of Customs, ten (10) years after said importation, when petitioner no longer has rebuttal evidence available to it. "B. Whether or not respondent Court of Tax Appeals erred in holding that the statutory authority of the Bureau of Customs as operator of the Customs Arrastre Service to collect checking charges at the Port of Manila during the period from May 1970 to May 1973 was Section 3302 of Republic Act No. 1937 (1957), otherwise known as the Tariff and Customs Code of the Philippines, instead of Section 3102(f) thereof. "C. Whether or not respondent Court of Tax Appeals erred in holding that the checking charges paid in advanced by private respondent are refundable." (pp. 24-25, Rollo .) " GROUNDS IN SUPPORT OF APPEAL "A. RESPONDENT COURT OF TAX APPEALS ERRED IN HAVING TRIAL DE NOVO ON APPEAL AND IN THE PROCESS, ALLOWING PRIVATE RESPONDENT CALTEX (PHILIPPINES) INC. TO PRESENT EVIDENCE FOR THE FIRST TIME ON THE MATTER OF CHECKING SERVICES RELATIVE TO THE IMPORTATIONS INVOLVED IN THIS CASE, DESPITE THE OBJECTION OF THE PETITIONER ACTING COMMISSIONER OF CUSTOMS, TEN (10) YEARS AFTER SAID IMPORTATIONS, WHEN PETITIONER NO LONGER HAS REBUTTAL EVIDENCE AVAILABLE TO IT. "B. RESPONDENT COURT OF TAX APPEALS ERRED IN HOLDING THAT THE STATUTORY AUTHORITY OF THE BUREAU OF CUSTOMS AS OPERATOR OF THE CUSTOMS ARRASTRE SERVICE TO COLLECT CHECKING CHARGES AT THE PORT OF MANILA DURING THE PERIOD FROM MAY 1970 TO MAY 1973 WAS SECTION 3302 OF REPUBLIC ACT NO. 1937 (1957), OTHERWISE KNOWN AS THE TARIFF AND CUSTOMS CODE OF THE PHILIPPINES, INSTEAD OF SECTION 3102(f) THEREOF. "C. RESPONDENT COURT OF TAX APPEALS ERRED IN HOLDING THAT THE CHECKING CHARGES PAID IN ADVANCED BY PRIVATE RESPONDENT ARE REFUNDABLE." As regards the first issue, there appears no legal barrier that would prevent the Court of Tax Appeals from conducting a trial de novo when it deems it necessary in order to bring out the missing facts (C.F. Sharp & Co., Inc. vs. Commissioner of Customs, 22 SCRA 760). More so in this case that the Bureau of Customs failed to submit a complete record of the checking services it undertook. In the absence of the records, the Court of Tax Appeals had no other way of threshing out the factual issues raised before it. Further, the Court of Tax Appeals is not bound by the technical rules of evidence (Purakan Plantation Co. vs. Domingo, 15 SCRA 151). The fact that ten (10) years had already elapsed from the time of importation to the date private respondent rested its case is of no moment, for, private respondent has consistently raised the issue that there was no actual checking services rendered. Even the decision of the Acting Commissioner of Customs dated November 21, 1973, adverted to Customs Memorandum Order No. 55-69 dated October 3, 1969 which provides, among others that "the summary report of the Arrastre checkers shall be proof of actual checking services rendered. " (p. 78, Rollo ). However, no such summary report was presented before the Court of Tax Appeals. Such trial de novo would not have been necessary if the records of the Collector of Customs were complete and intact. Petitioner, as second issue, questions the citation by the Court of Tax Appeals of Section 3302 of the Tariff and Customs Code as statutory authority for the imposition of the checking charges, What is applicable, according to petitioner, is Section 3102(f) of the same Code, which makes it mandatory the imposition and collection of charges on importation without any qualification. As to the statutory provision which authorizes the collection of checking charges, there seems to be no apparent conflict between the two sections of the Tariff and Customs code (Republic Act No. 1937). Section 3302 of the law, provides: "Sec. 3302. Other charges . When any article is sold or any service rendered by the Bureau of Customs in any matter for which a charge may be collected legally, no fee therefore having been fixed by law, such charge shall be on such amount as may from time to time be fixed by regulation or order of the Commissioner and approved by the department head; and the payment of such charge may be made by affixing and cancelling the documentary customs stamps." While Section 3102(f) of the same law, reads: "f. Shipping Charges . There shall be collected on all import cargo falling under Customs Administrative Order No. 137 (old series), as amended by Customs Administrative Orders Nos. 113, 255, 18-64 and other subsequent Customs Administrative Orders relative to shipside delivery, the following charge P0.70." Section 3302 pertaining to "other charges" that the Commissioner may fix from time to time with the approval of the department heads compliments Section 3102(f). Whether the authority to impose and collect the charges is based on one or the other is immaterial. What is important is that the collection of checking services has statutory basis. To our mind, the principal issue in this case is whether or not there were actual checking services rendered that would justify the collection of the disputed checking charges. In deciding this issue in the negative, respondent Court quoted the testimony of private respondent's witness, Mr. Conrado Mendoza, an independent surveyor, to wit: "Q. Mr. Mendoza, in performing the surveying functions in connection with the shipments involved in this case, would you know if there were any representative from the Bureau of Customs or Arrastre which conducted the same? "A. In every vessel, they have customs inspector on board and customs guard. There are cases where checkers are boarding vessels also which are arrastre checkers. "Q. Now, on those cases where there were representatives from the arrastre operator, what did these representatives perform in connection with these shipments? "A. I don't exactly know the scope of their work. What I know is, sometimes they come to us and get quantities we computed, sometimes the measurement. After that they just leave for somewhere. xxx xxx xxx "Q. When you said they came to you and got figures you computed, what figures were you referring to? "A. Figures on the quantities of the product. We compute the quantities, later or after these figures have been already prepared they came to us and ask how much. But if you actual gauging performed by them together with us, I cannot remember whether they did the actual gauging." (CTA Decision, pp. 144-145, Rollo , citing TSN, July 1, 1983, pp. 6-7.) Above witness did not categorically state that no checking services were rendered whatsoever. He admitted having no knowledge as to the scope of duties of the checkers. He could not even remember whether the checkers performed the actual gauging or not. On the contrary, said witness even acknowledged the presence of arrastre checkers or customs inspector in every vessel containing the cargo, and further admitted these checkers came to gather the figures compute by him. A plain reading of the foregoing testimony unmistakably proves that the arrastre checkers had, in fact, conducted an actual checking of the figures as listed by the independent surveyors. It is evident that these checkers, tried to tally these figures with their report. There being an actual participation by these checkers, it can be safely concluded that they performed the checking services disputed by private respondent, in the absence of any proof to the contrary. The presumption that official duty has been regularly performed (Rule 131, Section 5[m], Rules of Court) has not been overcome by private respondent's evidence. The ruling of respondent Court that "the presumption of correctness of assessment being a mere presumption cannot be made to rest on another presumption" (p. 143, Rollo ) holds true if it was known that the arrastre checkers were not even on the site of the inspection and at the same time, no record of their summary reports existed. In this case, while in record could have been produced in court owing to the lapse of time, nevertheless, an independent surveyor testified having actually seen and coordinated work with the arrastre checkers who boarded the carrying vessels. It is for private respondent to adduce convincing evidence to dispute the presumption that the checker had regularly performed their duties. WHEREFORE, premises considered, the decision of the Court of Tax Appeals is hereby REVERSED and SET ASIDE. Accordingly, the decision of the Acting Commissioner of Customs is hereby REINSTATED. SO ORDERED. Benipayo and Martinez, JJ ., concur.