G.R. No. L-14115; May 25, 1960
THE COMMISSIONER OF CUSTOMS, petitioner, vs. SUPERIOR GAS AND EQUIPMENT CO. and the COURT OF TAX APPEALS, respondents.

FACTS

In August 1956, the steamship “Chi Chung” arrived in Manila from Formosa carrying 1,200 metric tons of industrial salt consigned to Superior Gas & Equipment Co. (Sugeco). With an official permit, the cargo was discharged shipside within the harbor sea wall but outside the breakwater into four lighters of the Luzon Stevedoring Co. for final unloading at the private wharf of Atlantic Gulf & Pacific Co. at Punta, Sta. Ana, Manila. There, the shipment was transferred to Sugeco’s trucks. Before taking delivery, Sugeco was required to pay and paid P2,400.00 as wharfage fee on August 23, 1956. After protesting the payment unsuccessfully, Sugeco filed a case with the Court of Tax Appeals, arguing that its importation should not be subject to wharfage fees because it did not use any government wharf or pier facilities, having discharged the cargo through a private wharf. The Tax Court ruled in favor of Sugeco and ordered a refund.

ISSUE

Whether wharfage fees under Section 3 of Republic Act No. 1371 (the law in force in August 1956) are collectible on imported articles that are unloaded on a private wharf without using government wharf or pier facilities.

RULING

No. The Supreme Court affirmed the order of the Court of Tax Appeals for a refund. The Court interpreted Section 3 of Republic Act No. 1371, which imposed a wharfage fee of two pesos per metric ton on imported articles but contained a proviso exempting articles “unloaded on private wharves.” The Court distinguished the present case from the earlier ruling in Sugar Central Agency vs. Insular Collector of Customs (51 Phil. 134) under the Tariff Act of 1909, where wharfage fees were upheld even for goods loaded from a private wharf, because at that time the government had no wharves of its own and the fee was intended as a trust fund for constructing government wharves. By the time Republic Act No. 1371 was enacted, the government already owned wharves, and the legislative intent, as evidenced by congressional debates, was to levy wharfage fees only when government wharf or pier facilities were used. The proviso exempting goods unloaded on private wharves made this intention clear. The Court noted that while Republic Act No. 1937 (effective June 22, 1957) later eliminated this proviso, that amendment was not material to the case since Sugeco’s importation and the fee collection occurred before its passage. Therefore, Sugeco was not liable for the wharfage fee.