Yting v. Court of Tax Appeals

ELEVENTH DIVISION [CA-G.R. SP No. 52008. 1 April 10, 2006.] NARCISO YTING , petitioner , vs .COURT OF TAX APPEALS and COMMISSIONER OF CUSTOMS , respondents . D E C I S I O N PERLAS-BERNABE, E ., J p : Before the Court is a Petition for Review which seeks to reverse and set aside the Decision 2 of the Court of Tax Appeals (CTA) dated January 14, 1999 in CTA Case No. 5462 which dismissed the petition for review of the Decision 3 of the Commissioner of Customs (hereinafter Commissioner) dated August 29, 1996 in Seizure Identification (S.I.) No. 94-175 (MICP),for lack of jurisdiction. The instant controversy arose out of the following antecedent facts: In 1994, Duty Free Philippines, Inc. (hereinafter DFP) shipped some of its slow-moving imported goods for sale from its sales outlet designated as Customs Bonded Warehouse (CBW) No. 84-005 located at Master International Hotel in Bajada, Davao, back to its main warehouse in Taguig, Metro Manila, designated as CBW No. 84. The goods, covered by Bill of Lading (B/L) No. 03-7306032 4 and consigned to petitioner "Narciso Yting, Duty Free Phils. FTI Cmplx.,Taguig, MM" (hereinafter Narciso), 5 were shipped under a "door-to-door" delivery service from Davao to Manila on board the vessel M/V Mega One. When the shipment arrived at the Manila North Harbor, a seizure and forfeiture proceedings was instituted with the Manila International Container Port (MICP) for alleged violation of Section 2503 in relation to Section 2530 (f) and (l) 3, 4 and 5 of the Tariff and Customs Code of the Philippines (TCCP),as amended, docketed as S.I. No. 94-175 (MICP).The shipment was seized 6 upon the order of District Collector Buenaventura C. Maniego of the MICP on the recommendation of Acting Collector Pacifico M. Bautista of the Manila North Harbor Sub-Port on the grounds that the same was not covered by a transshipment permit from its port of origin, that there was no advance notice from such port of origin to the Sub-port regarding its arrival, and that it was not continuously underguarded when transported. 7 After due proceedings, District Collector Maniego ordered the forfeiture of the subject shipment on the ground that there was an attempt to deviate the articles to outlets other than the DFP. Appeal to the Commissioner of Customs proved futile, 8 hence, the petition for review 9 with the CTA which, however, dismissed 10 the case for lack of jurisdiction. The CTA ruled that "Duty Free Philippines, Inc.,the owner of the consigned goods, is admittedly an instrumentality of the Philippine Tourism Authority, an agency of the government attached to the Department of Tourism" 11 making the case "solely between or among the departments, bureaus, offices, agencies and instrumentalities of the National Government." Accordingly, following the pronouncement in Development Bank of the Philippines vs. Court of Appeals , 12 it has no jurisdiction over the petition as DFP's recourse is under Section 1 13 of Presidential Decree (PD) No. 242, now Section 66, 14 Chapter 14, Book IV of the Administrative Code of 1987, which prescribes the procedure for administrative settlement or adjudication of disputes, claims and controversies between or among government departments, bureaus, offices, agencies and instrumentalities. Narciso's motion for reconsideration of the dismissal was denied in the CTA Resolution 15 dated March 5, 1999, hence, the instant petition challenging the CTA Decision on the ground that DFP is not "an instrumentality of the National Government" as contemplated under Section 66 above and that the CTA has jurisdiction over the case. 16 The core issues for resolution are: 1. Whether or not DFP is an instrumentality of the government; 2. Whether or not the CTA has jurisdiction over the controversy. There is merit in the petition. DFP was created under Executive Order (EO) No. 46 17 on September 4, 1986 primarily to augment the service facilities for tourists and to generate foreign exchange and revenue for the government. 18 In order for the government to exercise direct and effective control and regulation over the tax and duty free shops, 19 their establishment and operation were vested in the Ministry, now Department of Tourism (DOT),through its implementing arm, 20 the PTA, a corporate body attached to the DOT 21 whose functions were expressly declared to be government. 22 DFP is under the exclusive authority of the PTA 23 and all the net profits from the merchandising operations of the shops accrued to the DOT. 24 That DFP is a "private contractor" and not an agency or instrumentality of the government, or a government owned or controlled corporation, or even a corporation at all, as claimed by Narciso, is misplaced. DFP as an instrumentality of the government cannot be disputed considering that its officials and employees, like those of the PTA, are subject to the Civil Service rules and regulations. 25 Republic Act (RA) Nos. 8424 (Tax Reform Act of 1997) and 9334 likewise expressly referred to DFP as a " government-owned and operated duty free shop." Besides, other than his bare allegations, Narciso failed to present proof of any award/contract/memorandum of agreement by which the PTA supposedly contracted the operation of the duty and tax free shops to a private entity. Thus, DFP's status as an instrumentality of the Government must be maintained. cTDECH Narciso further contends that even on the assumption that DFP is indeed an instrumentality of the Government, nevertheless, the requirement of administrative action is not absolute where there is a provision of law to the contrary, like RA 1125 which vests the CTA with exclusive jurisdiction over decisions of the Commissioner of Customs. This is further bolstered by the elimination of the clause "(p)rovisions of law to the contrary notwithstanding" found at the beginning of Section 1 of PD No. 242 in Section 66 of the Administrative Code which indicates a "modified legislative will" to respect a contrary provision of law. Thus, the CTA erred in refusing to assume jurisdiction over the case. On this score is the case of Philippine National Oil Company vs. Court of Appeals , 26 where the Supreme Court en banc vacated its ruling in Development Bank of the Philippines vs. Court of Appeals 27 on the interpretation of Section 7(2) of RA 1125 vis--vis the provisions of P.D. No. 242. The High Tribunal declared: "After re-examining the provisions on jurisdiction of Rep. Act No. 1125 and P.D. No. 242, this Court finds itself in disagreement with the pronouncement made in Development Bank of the Philippines v. Court of Appeals, et al .,and refers to the earlier case of Lichauco & Company, Inc. v. Apostol, et al .,for the guidelines in determining the relation between the two statutes in question, to wit: The cases relating to the subject of repeal by implication all proceed on the assumption that if the act of later date clearly reveals an intention on the part of the law making power to abrogate the prior law, this intention must be given effect; but there must always be a sufficient revelation of this intention, and it has become an unbending rule of statutory construction that the intention to repeal a former law will not be imputed to the Legislature when it appears that the two statutes, or provisions, with reference to which the question arises bear to each other the relation of general to special .... Where there appears to be an inconsistency or conflict between two statutes and one of the statutes is a general law, while the other is a special law, then repeal by implication is not the primary rule applicable. The following rule should principally govern instead: Specific legislation upon a particular subject is not affected by a general law upon the same subject unless it clearly appears that the provisions of the two laws are so repugnant that the legislators must have intended by the later to modify or repeal the earlier legislation. The special act and the general law must stand together, the one as the law of the particular subject and the other as the general law of the land. ....(Citations omitted) Where there are two acts or provisions, one of which is special and particular, and certainly includes the matter in question, and the other general, which, if standing alone, would include the same matter and thus conflict with the special act or provision, the special must be taken as intended to constitute an exception to the general act or provision, especially when such general and special acts or provisions are contemporaneous, as the Legislature is not to be presumed to have intended a conflict. (Citations omitted) It has, thus, become an established rule of statutory construction that between a general law and a special law, the special law prevails Generalia specialibus non derogant . ... P.D. No. 242 is a general law that deals with administrative settlement or adjudication of disputes, claims and controversies between or among government offices, agencies and instrumentalities, including government-owned or controlled corporations. Its coverage is broad and sweeping, encompassing all disputes, claims and controversies. It has been incorporated as Chapter 14, Book IV of E.O. No. 292, otherwise known as the Revised Administrative Code of the Philippines. On the other hand, Rep. Act No. 1125 is a special law dealing with a specific subject matter the creation of the CTA, which shall exercise exclusive appellate jurisdiction over the tax disputes and controversies enumerated therein. Following the rule on statutory construction involving a general and a special law previously discussed, then P.D. No. 242 should not affect Rep. Act No. 1125, Rep. Act No. 1125, specifically Section 7 thereof on the jurisdiction of the CTA, constitutes an exception to P.D. No. 242. Disputes, claims and controversies, falling under Section 7 of Rep. Act No. 1125, even though solely among government offices, agencies, and instrumentalities, including government-owned and controlled corporations, remain in the exclusive appellate jurisdiction of the CTA. Such a construction resolves the alleged inconsistency or conflict between the two statutes, and the fact that P.D. No. 242 is the more recent law is no longer significant ." (Emphasis Ours) Applying the foregoing disquisition, the subject matter of the instant controversy properly falls within the jurisdiction of, and would be best resolved by, the CTA, that has been specifically created to review tax and customs cases and which by the nature of its functions, has necessarily developed an expertise on the matter. WHEREFORE, the instant petition is GRANTED. The assailed CTA Decision dated January 14, 1999 in CTA Case No. 5462 is REVERSED and SET ASIDE. The case is hereby remanded to the CTA for its proper disposition. SO ORDERED. Salazar-Fernando and Abdulwahid, JJ., concur. Footnotes 1. Part of the initial caseload assigned to the Ponente pursuant to Office Order No. 16-05-RB dated February 17, 2005. 2. CTA Records, pp. 83-91. 3. Customs Records, pp 146-151. 4. Id. at 130. 5. The warehouseman of CBW No. 84; Id. at 19. 6. Warrant of Seizure and Detention (WSD) dated May 24, 1994; Id. at 19. 7. 1st Indorsement dated May 19, 1994; Id. at 18. 8. 2nd Indorsement of Deputy Commissioner Licerio C. Evangelista dated December 6, 1999; Id .at 155. 9. CTA Records, pp. 1-8. 10. Assailed Decision dated January 14, 1999; Id .at 83-91. 11. Id .at 90. 12. 180 SCRA 609, 617. 13. SECTION 1. Provisions of law to the contrary notwithstanding, all disputes, claims and controversies solely between or among the departments, bureaus, offices, agencies, and instrumentalities of the National Government, including government-owned or controlled corporations, but excluding constitutional offices or agencies, arising from the interpretation and application of statutes, contracts or agreements, shall henceforth be administratively settled or adjudicated as provided hereinafter; Provided, That this shall not apply to cases already pending in court at the time of the effectivity of this decree. 14. All disputes, claims and controversies, solely between or among the departments, bureaus, offices, agencies and instrumentalities of the National Government, including government-owned or controlled corporations, such as those arising from the interpretation and application of statutes, contracts or agreements, shall be administratively settled or adjudicated in the manner provided in this Chapter. ..." 15. CTA Records, pp. 108-111. 16. Rollo ,p. 3. 17. Granting the Ministry of Tourism, through the Philippine Tourism Authority (PTA), Authority to Establish and Operate a Duty and Tax Free Merchandising System in the Philippines. 18. Section 1 of EO No. 46 reads: "The Ministry of Tourism, though the Philippine Tourism Authority (PTA) is hereby authorized to establish a duty and tax free merchandising system in the Philippines to augment the service facilities for tourists and to generate foreign exchange and revenue for the government. Under this system, the Philippine Tourism Authority shall have the exclusive authority to operate stores and shops that would sell, among others, tax and duty free merchandise, goods and articles, in international airports and sea ports throughout the country in accordance with the rules and regulations issued by Ministry of Tourism. In the event that the operation of the stores is to be contracted to private parties, the award thereof shall be through the usual bidding." 19. Duty Free Philippines vs. Rossano J. Mojica ,G.R. No. 166365, 30 September 2005. 20. PTA was created to implement the policies and programs of the DOT. 21. Section 21, Chapter 6, Title XIII, EO No. 292, otherwise known as the "Administrative Code of 1987;" Presidential Decree (PD) No. 564. 22. Section 9, PD No. 189 issued on May 11, 1973. 23. Duty Free Philippines vs. Rossano J. Mojica, supra . 24. Section 3, EO No. 46. 25. Duty Free Philippines vs. Rossano J. Mojica, supra . 26. 457 SCRA 32. 27. 180 SCRA 609, 617.