DOJ Opinion No. 107, s. 1992

DOJ OPINION NO. 107 , s. 1992 August 21, 1992 Commissioner Guillermo Parayno, Jr. Bureau of Customs Manila Sir : This refers to your queries concerning Section 1401 of the Tariff and Customs Code, which read: "A) Is the examination of the imported articles under Section 1401 mandatory? B) Assuming that the examination as provided for under Section 1401 is mandatory, is such requirement complied with by [the Bureau of] Customs delegating and adopting the inspection report of SGS as required of it under its Comprehensive Import Supervision Service (CISS) contract with the Philippine Government?" You state that the Bureau of Customs is committed to the speedy issuance of clearances of importations; that the system is designed, in the case of producers' goods, to help Philippine exporters to be competitive in the world market, and, in the case of consumer products, to lower the prices of commodities in the local marker; that the Comprehensive Import Substitution Service contracted with the Societe Generale de Surveillance ("SGS") now covers all countries of origin to inform the Government of the quantity, quality and price of any imported item. It is your position that Section 1401 of the Tariff Code is not mandatory since the official action prescribed thereunder is subject to some conditions and that the legislative intention is to make said section directory; however, even assuming Section 1401 is mandatory, the same has been substantially observed with the delegation to the SGS of the duty to examine importation and the adoption of its inspection report. This Office finds tenable the view that Section 1401 of the Tariff and Customs Code is merely directory. The section of law in question reads: "SECTION 1401. Designation of all Packaging To Be Examined . Unless the Collector is of the opinion that the examination of a less or greater production of packages will amply protect the government revenue and public interest, there shall be designated for examination and appraisal at least one package of every invoice, and at least one package of every ten packages of articles imported; Provided, that nothing in this Section shall preclude the examiner from examining additional or all the packages when the deems it necessary to protect the government revenue and public interest." It is noted that in conferring the duty to examine, the aforequoted legal provision uses the word "shall", which is generally interpreted to the mandatory in character (Guiao vs. Figueroa, 94 Phil. 1022). However, it is well-recognized that the ordinary acceptation of "shall" and "may" as being obligatory and permissive, respectively, is not an absolute and inflexible criterion (Vda. de Mesa vs. Mencias, 18 SCRA 533). prcd The rule had been laid down that "Whether a statutory requirement is mandatory or directory depends on its effects. If no substantial right depends upon it and no injury can result from ignoring it; and the purpose of the legislature can be accomplished in a manner other than prescribed and substantially the same results obtained, then the statute will be generally regarded as directory; but if not, it will be mandatory" (Agpalo, Statutory Construction, 1990 Ed., p. 238 citing Miller vs. Lakewood Housing Co., 180 NE 700) The subject provision of law prescribes the procedure for examining packages containing imported items. However, such examination would be rendered superfluous and unnecessary after the SGS, in accordance with its contract with the Government, had inspected such imported packages, pursuant to which the quantity, quality and price of imported goods are determined at the country of origin. The examination required under Section 1401, supra , is conducted to ensure correct appraisal of the dutiable value of the imported items, but this is likewise the object of the SGS examination. Thus, no taxes are lost if the examination prescribed in Section 1401 is dispensed with as the correct imposable taxes can already be assessed based on the SGS inspection report. There is therefore no conceivable injury to either the Bureau or the importer concerned if Section 1401 is ignored and that the purpose of the said section can be addressed thru the operation of the Comprehensive Import Supervision Service. Moreover, it has likewise been ruled that the word "shall" is to be construed as merely permissive where no public benefit or private right requires that it be given an imperative meaning (Sheldon vs. Sheldon, 134 A 904). In the case of Section 1401, its express objective is to "amply protect the government revenue and public interest". It is believed that no public benefit is served if said section is given an imperative meaning inasmuch as the aforestated purpose has been satisfied with the inspection conducted by the SGS and the submission of its Clear Report of Findings to the Bureau of Customs. Neither can it be said that a private right is served by giving the section a mandatory character; verily, the importer would be disinterested, even hostile, to such examination since it will result in the imposition of taxes for his importations. Thus, there have been instances when the term "shall" was interpreted as merely directory or permissive (See Govt. vs. El Hogar Filipino, 50 Phil. 399; Diokno vs. Rehabilitation Finance Corporation, 9 Phil. 608). prcd Upon the foregoing, this Department believes that Section 1401 may be construed as being merely permissive or directory in nature. Hence, the resolution of the second query is rendered academic. LLpr Please be advised accordingly. Very truly yours, (SGD.) FRANKLIN M. DRILON Secretary of Justice