REPUBLIC FLOUR MILLS INC., petitioner, vs. THE COMMISSIONER OF CUSTOMS and THE COURT OF TAX APPEALS, respondents; G.R. No. L-28463 May 31, 1971

TOPIC: Article 10. In case of doubt in the interpretation or application of laws, it is presumed that the lawmaking body intended right and justice to prevail.

RATIONALE: Justice Moreland:

"The first and fundamental duty of courts, in our judgment, is to apply the law. Construction and interpretation come only after it has been demonstrated that application is impossible or inadequate without them." Petitioner ought to have been aware that deference to such a doctrine precludes an affirmative response to its contention. The law is clear; it must be obeyed. It is as simple, as that.

GIST: RFMI wants 'darak' and 'ipa' be construed to be not products of the Philippines as they are just 'waste' and consequently be exempted from wharfage dues. Obviously, the goods are produced in the country, they fall within the term 'products of the Philippines' under Section 2802 of the Tariff and Custom Code. Thus, wharfage dues (P7,948.00) collected need not be refunded. RFMI is not exempted from wharfage dues. The law is clear; it must be obeyed. 

FACTS:

1. Republic Flour Mills, Inc., (RFMI) is a domestic corporation, primarily engaged in the manufacture of wheat flour, and produces pollard (darak) and bran (ipa) in the process of milling.

2. December, 1963 to July, 1964: petitioner exported Pollard and/or bran which was loaded from lighters alongside vessels engaged in foreign trade while anchored near the breakwater

3. The respondent Commisioner of Customs assessed the petitioner by way of wharfage dues on the said exportations in the sum of P7,948.00, which assessment was paid by petitioner under protest.

4. Thus, petitioner Republic Flour Mills, Inc. moves that bran (ipa) and pollard (darak) are excluded from products of the Philippines" under Section 2802 of the Tariff and Custom Code on the ground that, coming as they do from wheat grain which is imported in the Philippines, they are merely waste and not the products, which is the flour produced.

ISSUE:

Whether or not petitioner RFMI be liable for wharfage dues on its exportation of bran and pollard as they are not "products of the Philippines", coming as they did from wheat grain which were imported from abroad, and being "merely parts of the wheat grain milled to produce flour which had become waste.

RULING:

YES. Petitioner RFMI is liable for wharfage dues. 

Section 2802 appears to be quite explicit: "There shall be levied, collected and paid on all articles imported or brought into the Philippines, and on products of the Philippines ... exported from the Philippines, a charge of two pesos per gross metric ton as a fee for wharfage ...."

One category refers to what is imported. The other mentions products of the Philippines that are exported. 

Petitioner is primarily engaged in the manufacture of flour from wheat grain. In the process of milling the wheat grain into flour, petitioner also produces 'bran' and 'pollard' which it exports abroad but considers these as "waste." Even without undue scrutiny, it does appear quite obvious that as long as the goods are produced in the country, they fall within the terms of the above section. The law is clear; it must be obeyed. It is as simple, as that. 

If petitioner were to prevail, subsequent pleas motivated by the same desire to be excluded from the operation of the Tariff and Customs Code would likewise be entitled to sympathetic consideration. It is desirable then that the gates to such efforts at undue restriction of the coverage of the Act be kept closed. Otherwise, the end result would be not respect for, but defiance of, a clear legislative mandate. That kind of approach in statutory construction has never recommended itself. It does not now.

'Bran' and 'pollard' having been produced in the Philippines, regardless of it being considered by petitioner as "waste," are clearly products of the Philippines. Thus, petitioner is not exempt from wharfage dues.

SC Ruling: the decision of respondent Court of Tax Appeals of November 27, 1967 is affirmed. With costs against petitioner.