DOJ Opinion No. 054, s. 1981

DOJ OPINION NO. 054 , s. 1981 March 17, 1981 Mr. Maximo Dumlao, Jr. Assistant Executive Officer Philippine Ports Authority Intramuros, Manila Sir : This has reference to your request for opinion "on whether or not articles or cargoes transshipped (unloaded) through other ports, and not directly brought into any Export Processing Zone", are entitled to the exemptions provided in Section 3 of P.D. No. 1716, which reads: "Section 3. All merchandise, raw materials, supplies, articles, equipment, machineries, spare parts and wares of every description brought into the zones by the zone enterprises in connection with their registered operation shall be exempted from all dues, fees, charges and rates, including wharfage and storage dues, collectible under Title VII the Tariff and Customs Code". Your query should be answered in the affirmative in view of the discussion hereinbelow. We take it that when you speak of transshipment, you are referring to the unloading of cargoes for the purpose of transferring the same to another vessel for further transportation. In the present query you refer to a situation where merchandise or articles destined for zone enterprise are not "directly brought" into a port inside an export processing zone, but are unloaded vessel for eventual shipment to an export processing zone. Under the above-quoted provision, in order that the exemptions provided therein may apply, only two requirements need be present, namely, (1) the merchandise is brought into a zone by a zone enterprise, and (2) such merchandise is brought into the zone in connection with the registered operations of such enterprise. It bears emphasis that the first requirement does not distinguish and to the manner, whether directly or indirectly, by which the goods or merchandise are brought into the zone. By settled rules of statutory construction, when no distinction is made by the terms of the law, no distinction should be made in its implementation. Besides, we do not see any plausible reason why a discrimination should be made with respect to goods destined for an export zone but transshipped through ports outside the zone. Indeed, an interpretation to the contrary could lead to absurd situations. For instance, merchandise imported by a zone enterprise which is unloaded at one port during transit due to mechanical breakdown of the transporting vessel and then reloaded in another vessel for transportation to a port in the export zone, would be disqualified from enjoying the exemption on the mere ground that it was not brought directly to the export zone. It is presumed that the legislative authority did not intend an absurdity or that its enactments should produce absurd results. (Martin, Statutory Construction, 5th Ed., p. 133) prcd Wherefore, we reiterate our answer to the query hereinabove set forth. However, we wish to add that there is the possibility that the view expressed herein may spawn violations of the tariff and customs laws of the country. This contingency may, however, be met if EPZA, pursuant to its authority under Section 8 of Presidential Decree No. 1716, adopts the appropriate safeguards to forestall any attempt at circumvention of abovesaid laws. Very truly yours, (SGD.) RICARDO C. PUNO Minister of Justice