DOJ Opinion No. 054, s. 2001

DOJ OPINION NO. 054 , s. 2001 October 3, 2001 Mr. Hermenegildo C. Zayco Chairman, Networking Committee on Trade Policies and Procedures Simplification Export Development Council 6th Floor, New Solid Building 367 Sen. Gil J. Puyat Avenue Makati City Sir : This pertains to your request for opinion on the apparent conflict between Section 3(a) of Republic Act No. 8502, or the "Jewelry Industry Development Act of 1998", pertaining to the importation of raw material for jewelry manufacture, and of Section 101(g) of the Tariff and Customs Code of the Philippines, as amended, on prohibited importations. The aforesaid legal provisions respectively provide: "SEC. 3. Development Incentives . The following incentives shall be available to qualified jewelry enterprises in the jewelry industry: a) Entitlement to zero (0) duty on imported raw materials which include precious metals, loose gems, precious stones, jewelry parts, accessories and supplies for use by jewelry enterprise, as specifically mentioned in Chapter 5 of Section 5 of Section I, Chapter 12 of Section II, Chapter ( sic ) 25, 26 and 27 of Section V, Chapters 28, 34 and 38 of Section VI, Chapter 70 of Section XIII, Chapter 71 of Section XIV, chapter ( sic ) 83 of Section XV, and Chapter 96 of Section XX of the Tariff and Customs Code, as amended; . . . " (R.A. No. 8502; Emphasis supplied) "SEC. 101. Prohibited Importations . The importation into the Philippines of the following articles is prohibited: xxx xxx xxx (g) Any article manufactured in whole or in part of gold, silver or other precious metals or alloys thereof, the stamps, brands or marks of which do not indicate the actual fineness or quality of said metals or alloys." (Title I, Book I, Tariff and Customs Code, as amended; emphasis supplied). The request arose in the wake of your concern towards the practice of importers of importing finished products made of gold, silver, or other precious metals or alloys but declaring them as raw materials under Section 3(a) of RA. No. 8502. Specifically, you want to be enlightened on the intent of RA. No. 8502 in providing said incentive which according to a key industry player, appears to be in conflict with the provision of Section 101(g) of the Tariff and Customs Code, as amended. At the outset, we do not see any conflict between the two provisions, above-quoted, as they touch on two different subject matters. Section 3(a) of RA No. 8502 speaks of imported raw materials, whereas Section 101(g) of the Tariff and Customs Code refers to "article manufactured" which obviously means "finished product". The importation of finished products under Section 101(g) of the Code is banned if the brand, stamp, label or mark of the article does not indicate its actual fineness or quality of the precious metal or alloy used; otherwise, it is not a prohibited importation. But whether prohibited or not under Section 101(g), such finished product cannot be imported and passed off as raw material under Section 3(a) of R.A. No. 8502. The term "raw" is too plain to require definition in order to distinguish it from finished or manufactured article. It is a settled rule of interpretation of statutes that when the words and phrases of a statute are clear and unequivocal, their meaning must be determined from the language employed and the statute must be taken to mean exactly what it says (Baranda vs. Gustillo, 165 SCRA 757, 770). In any case, the dictionary meaning of "raw" states "not being in polished, finished, or processed form"; "in the natural or crude state" (Websters Ninth New Collegiate Dictionary, p. 978). Anent the intent of R.A. No. 8502 in providing the subject incentive, the law is clear that said incentive, like the other development incentives provided therein, is intended to promote and encourage the growth and development of the predominantly small and medium scale jewelry industries in recognition of the industry's "potential for more employment generation, enhance tax collection efficiency, increase the industry linkages with the other sectors of the economy, and to increase our foreign exchange earnings through exports and imports substitutes" (Sec. 2, R.A. No. 8502). Very truly yours, (SGD.) HERNANDO B. PEREZ Secretary