GR 27641; (August, 1971) (Digest)
G.R. No. L-27641 August 31, 1971
ALLIED BROKERAGE CORPORATION, petitioner, vs. THE COMMISSIONER OF CUSTOMS and the COURT OF TAX APPEALS, respondents.
FACTS
Petitioner Allied Brokerage Corporation, a customs broker, sought a refund of P35,227.00 paid to the Customs Arrastre Service, claiming the charges were excessive under the Tariff and Customs Code. The excess stemmed from an unnumbered Customs Memorandum Order which redefined the measurement of a “ton” for heavy cargo arrastre charges to mean “1,000 kilos or 40 cubic feet volume, whichever is higher,” contrary to the petitioner’s interpretation of the Code. The petitioner did not file a written protest with the Collector of Customs at the time of payment. Instead, it directly filed a claim for refund with the Commissioner of Customs, which was subsequently disapproved.
The respondent Commissioner of Customs contended before the Court of Tax Appeals (CTA) that the petitioner lacked a cause of action due to its failure to pay under protest and exhaust administrative remedies. The CTA agreed, dismissing the petition. The case was elevated to the Supreme Court for review.
ISSUE
Whether the Court of Tax Appeals correctly dismissed the petitioner’s claim for refund due to its failure to comply with the mandatory protest procedure under the Tariff and Customs Code.
RULING
Yes, the Supreme Court affirmed the CTA’s dismissal. The legal logic is anchored on the mandatory and jurisdictional nature of the protest procedure outlined in the Tariff and Customs Code. Sections 2308 and 2309 of the Code require that a party adversely affected by a customs ruling must file a written protest with the Collector of Customs at the time of payment or within thirty days thereafter. This protest is a condition precedent for any subsequent judicial or quasi-judicial action, including a refund claim. The law explicitly states that without such a protest, the Collector’s action becomes final and conclusive.
The Court emphasized that where the law speaks in categorical terms, it must be applied strictly. Non-compliance with this clear procedural mandate is fatal to the cause of action. The petitioner’s direct recourse to the Commissioner, bypassing the required protest to the Collector, constituted a failure to exhaust administrative remedies. This omission deprived the CTA of jurisdiction to entertain the refund claim. The principle, as illustrated in prior cases like Sampaguita Shoe and Slipper Factory v. Commissioner of Customs, is that adherence to statutory protest periods is not a mere technicality but a fundamental requirement for seeking redress against customs collections. Therefore, the absence of a proper protest rendered the petitioner’s claim for refund legally untenable.