Propriety of Procedure of Elevating Claims for Refund from Bureau of Customs for DOF Approval

November 2, 2010 DOF MEMORANDUM TO : Atty. Simplicio N. Domingo II Director, Legal Service Bureau of Customs Port Area, Manila Atty. Giovanni Ferdinand A. Leynes Chief, Ruling and Research Division This refers to your Letter dated October 1, 2010 seeking our opinion on the propriety of the procedure of elevating the claims for refund from your Office for approval of this Department. In reply, please be informed while Section 1708 of the Tariff and Customs Code of the Philippines (TCCP), as amended, which governs the procedure for all claims of refund, does not provide for the approval of the Secretary of Finance, the result of the refund of customs duties in favor of the claimant is tantamount to a decision adverse to the government. Accordingly, any resolution/decision granting such refund approved by the Commissioner shall be elevated to and reviewed by the Secretary of Finance pursuant to Section 2315 of the TCCP, as amended, the pertinent portion of which provides that: "Sec. 2315. Supervisory Authority of Commissioner and Secretary of Finance in Certain Cases. If any case involving the assessment of duties, the Collector renders a decision adverse to the Government, such decision shall be automatically elevated to, and reviewed by, the Commissioner, and if the Collector's decision Commissioner , and if the Collector's decision would be affirmed by the Commissioner, such decision shall be automatically elevated to, and be finally reviewed by the Secretary of Finance : . . ." (Emphasis Supplied) AHDacC In other words, under the supervisory authority of the Secretary of Finance, he can review all decisions/resolutions of the Commissioner granting such claims for refund, in the same manner that the latter decisions in seizure and forfeiture and protest cases adverse to the government are automatically elevated to the Secretary of Finance. Besides, this has been the established practice of your office to elevate all cases of refunds to this Department. This is consistent with the basic principle that since tax refunds are in the nature of tax exemptions the same should be carefully examined with the end view of protecting the interest of the government. For information and guidance. By Authority of the Secretary: (SGD.) CARLO A. CARAG Undersecretary Revenue Operations and Legal Affairs Group