Nestle Philippines, Inc. vs.

CA
GRN 134114 July 6, 2001
De Leon, Jr. &:
Facts:
CTA Dismissed petitioners motion to grant refund on allegedly overpaid impost
duties, on its various importations of milk and milk products in the amount of 5M.
Petitioners were assessed customs duties and advance sales taxes by Collector of
Customs for each separate importations on the basis of the published Home
Consumption Value. Petitioners paid the same but under protests. On October
1986, petitioner finally failed a claim for refund of before BIR and the following
day, filed the petition for review with CTA which ordered BIR to refund P 4,489
representing the overpaid advance and Sales Taxes. The refund for alleged
overpaid customs duties amounting to P 5.008M were left with the collector of
customs undecided after almost 6 years. On Aug 22, 1990, petition filed a petition
for review with CTA dismissed for what of jurisdiction. Case was filed with CA on
certiorari (Rule 45) but dismissed for CTA jurisdiction is not concurrent with the
appellate jurisdiction of Commissioner since there was no decision yet from
Collector from Customs.
Issue:
Whether or not petitioner is entitled for alleged overpayment of customs duties on
importations thus be remanded to CTA for further review.
Ruling:
We find that the recommended remand of the case to CTA is warranted. For the
proper verification and determination of the factual basis and merits of this
petition and in order that the ends of substantial justice and fair play my be sub
served. Tariff and Customs Code provides that in all claims for refund of customs
duties are paid and upon receipts of such claims is mandated to verify the same by
the record of his office. In such claim is found correct and in accordance with law,
the collector shall certify the same to the commissioner with his recommendation
together with all the necessary papers and documents.
Solutio indebt its misplaced because there is no factual showing that the collection
was more than what is required of the petitioner when it made the importations.
There is no factual finding yet that petitioner is indeed entitled to its claim of
overpayment and if how much is he entitled.

Facts:
Petitioner Nestle Philippines, Inc. transacted sixteen separate
importations of milk and milk products from different countries between the
period of July and November 1984. It paid the corresponding customs duties
and advance sales taxes to the Collector of Customs of Manila for each
transaction based on the published Home Consumption Value (HCV) as

indicated in the Bureau of Customs Revision Orders, but it seasonably filed

the corresponding protests before the said Collector of Customs. In the said
protests, petitioner claimed for the refund of the alleged overpaid import
duties and advance sales taxes. With regards to the advance sales taxes, the
Court of Tax Appeals eventually ruled in favor of the petitioner. However, the
Collector of Customs failed to render a decision on the sixteen protest cases
for almost six years for the alleged overpaid customs duties. In order to
prevent the claims from becoming stale on the ground of prescription,
petitioner immediately filed a petition for review with the Court of Tax
Appeals (CTA). The CTA dismissed the said petition for want of jurisdiction.
The issue was raised to the Court of Appeals by way of petition for review,
but it was also dismissed for failure to exhaust administrative remedies.
Issue:
Whether or not the petitioners claims are governed by the rule on
quasi-contracts or solutio indebiti which prescribes in six (6) years under
Article 1145 of the New Civil Code.
Held:
No. The Supreme Court ruled that the rule on quasi-contracts or solution
indebiti is not applicable in this case. In order for the rule on solution indebiti
to apply, it is an essential condition that petitioner must first show that its
payment of the customs duties was in excess of what was required by the
law at the time when the subject sixteen importations of milk and milk
products were made. Unless shown otherwise, the disputable presumption of
regularity of performance of duty lies in favor of the Collector of Customs.
In the present case, there is no factual showing that the collection of
the alleged overpaid customs duties was more than what is required of the
petitioner when it made the aforesaid separate importations. There is no
factual finding yet by the government agency concerned that petitioner is
indeed entitled to its claim of overpayment and, if true, for how much it is
entitled. It bears stress that in determining whether or not petitioner is
entitled to refund of alleged overpayment of customs duties, it is necessary
to determine exactly how much the Government is entitled to collect as
customs duties on the importations. Thus, it would only be just and fair that

the petitioner-taxpayer and the Government alike be given equal

opportunities to avail of the remedies under the law to contest or defeat
each other's claim and to determine all matters of dispute between them in
one single case. If the State expects its taxpayers to observe fairness and
honesty in paying their taxes, so must it apply the same standard against
itself in refunding excess payments, if truly proven, of such taxes. Indeed,
the State must lead by its own example of honor, dignity and uprightness.
Thus, the remand of this case to the CTA is warranted for the proper
verification and determination of the factual basis and merits of the petition
and in order that the ends of substantial justice and fair play may be
subserved. In the light of Sections 2308 and 2309 of the Tariff and Customs
Code, it appeared that in all cases subject to protest, the claim for refund of
customs duties may be foreclosed only when the interested party claiming
refund fails to file a written protest before the Collector of Customs.
Accordingly, once a written protest is seasonably filed with the Collector of
Customs the failure or inaction of the latter to promptly perform his
mandated duty under the Tariff and Customs Code should not be allowed to
prejudice the right of the party adversely affected thereby. Technicalities and
legalisms, however exalted, should not be misused by the government to
keep money not belonging to it, if any is proven, and thereby enrich itself at
the expense of the taxpayers.