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Comm. Of Customs v. CTA & Campos Rueda Co. –

Melencio-Herrera, J.

Petitioner: Commissioner of Customs

Respondent: Court of Tax Appeals & Campos Rueda Co.

Concept: Constitutional Limitations: Due Process Clause

Brief Facts: Campos Rueda Co. imported "tungsol flashers"

and sealed beams from the US. The Bureau of Customs

re-appraised them on a higher rate based on alert

notices sent by Finance Attaches abroad. Campos

Rueda paid in protest and argued that it had overpaid

the duties, claiming that the Commissioner of Customs

violated Sec. 201 of the Tariff and Customs Code (RA

1937, as amended by PD 34 & 1464).

Doctrine: The dutiable value of an imported article is

based on the home consumption price as declared in

the consular, commercial, sales, or trade invoice. But

where there is reasonable doubt, the correct dutiable

value shall be ascertained from the reports of the

Revenue Attache or Commercial Attache and from such

other information that may be available. Also required is

the publication from time to time of the lists of the home

consumption value.

FACTS:

1. Campos Rueda Co. imported several articles

from United States (“tungsol flashers and sealed

beams).

2. Campos Rueda filed the corresponding import

entry.

3. The Bureau of Customs re-appraised the items for

higher rate based on alert notices sent by

Finance Attaches abroad.

4. Campos Rueda paid under protest Php 18,000,

Php 52,000, and Php 67,000 for import duties.

5. Campos Rueda argued that it had overpaid the

duties and filed for refund.

Campos Rueda: The Commissioner of Customs violated

Sec. 201 of the Tariff and Customs Code (RA 1937, as

amended by PD 34 & 1464).

There was violation of due process.

o Reasonable doubt as to the value or price of

the imported article declared in the entry

was not proven to have existed; the “Alert

Notices” from the Finance Attaches were not

shown.

6. The protest was denied by the Collector of

Customs.

7. Campos Rueda appealed to the Commissioner

of Customs, but the re-appraisal was confirmed.

8. Campos Rueda appealed to the Court of Tax

Appeals, which favored them.

Court of Tax Appeals: The Bureau of Customs violated the

Tariff Code.

9. The CTA ordered the Bureau of Customs to

refund the overpaid amount.

Hence this petition by the Commission of Customs.

ISSUES:

1. WON the appraisal made by the Commissioner was in

accordance with Sec. 201 of the Tariff and Customs

Code. (NO)

RATIO:

1. NO. Sec. 201 of the same Tariff and Customs Code

(prescribing the criteria for the determination of the

dutiable values of imported articles) has not been

complied with, even if appraisers of the Bureau of

Customs are given ample leeway in determining the

correct customs duties under Sec. 1405 of the TCC.

According to Sec. 201 of the TCC:

o The dutiable value of an imported article is

based on the home consumption value or

price as declared in the consular, trade or

sales invoice.

o Where there is reasonable doubt, the correct

dutiable value shall be ascertained from the

reports of the Revenue Attache or

Commercial Attache and from such other

information that may be available to the

Bureau of Customs.

o Also required by the statute is the publication

from time to time of the lists of the home

consumption values.

In the corresponding Import Entries, Campos

Rueda Co. quoted the prices of the imported

merchandise as declared in the consular invoices

and as required by Sec. 201.

o Reasonable doubt wasn’t proven by the

Commissioner in reassessing the values.

o There was also no compliance to the

publication from time to time of the list of

home consumption values.

The "Alert Notices" from Finance Attaches abroad

(which the Bureau of Customs based its re-

appraisals) were not disclosed during the

proceedings of Campos Rueda Co. nor

presented in evidence before the Court.

o Under these circumstances, the re-appraisal

was clearly not in accordance with the

provisions of Section 201 of the Tariff and

Customs Code.

o The re-appraisal made by the Bureau of

Customs, therefore, can be faulted with

arbitrariness in disregard of the standard of

due process to which all governmental

action should conform to impress upon it the

stamp of validity.

Administrative proceedings are not exempt from

the operation of due process requirements.

o One of which is that a finding by an

administrative tribunal should be supported

by substantial evidence presented at the

hearing or at least contained in the records

or disclosed to the parties affected.

DISPOSITIVE: Petition is DENIED. Appealed Judgment is

AFFIRMED.

NOTES:

Digested by: André