G.R. No. L-29078. January 9, 1976.
COMMISSIONER OF CUSTOMS, petitioner, vs. ESSO STANDARD EASTERN, INC., (Formerly Standard-Vacuum Oil Company) and HONORABLE COURT OF TAX APPEALS, respondents.

FACTS

Respondent ESSO Standard Eastern, Inc., holder of a petroleum refining concession under Republic Act No. 387 (The Petroleum Act of 1949), imported various equipment, materials, and supplies such as Bentanite, drilling mud additives, pump parts, and oil well drilling machinery for its own use in its operations. R.A. No. 387 grants concessionaires the privilege to import such articles “free of customs duty.” However, the Collector of Customs assessed and levied a special import tax on these importations under Republic Act No. 1394 . ESSO paid the total sum of P7,072.00 under protest and subsequently sought a refund.
The Collector of Customs denied the protests, a ruling affirmed by the Commissioner of Customs. ESSO then appealed to the Court of Tax Appeals, which reversed the Commissioner’s decision. The Tax Court held that the term “customs duty” in the Petroleum Act includes the special import tax, thereby exempting ESSO’s importations. The Commissioner of Customs elevated the case to the Supreme Court for review.

ISSUE

Whether the special import tax levied under Republic Act No. 1394 is included in the term “customs duty” from which ESSO’s importations are exempt under Republic Act No. 387 (The Petroleum Act of 1949).

RULING

The Supreme Court dismissed the petition and affirmed the decision of the Court of Tax Appeals, ordering the refund of the special import taxes paid. The Court ruled that this case is identical in all essential aspects to a prior case, Commissioner of Customs v. Esso Standard Eastern, Inc. (G.R. No. L-28329, August 7, 1975). In that precedent, the Court had already resolved the same legal question involving the same parties, facts, and arguments.
The legal logic is grounded on the doctrine of stare decisis. The Court found no material distinction between the two cases. Both involved ESSO importing articles for its petroleum operations under the same concession privileges, the same assessment of the special import tax under R.A. No. 1394 , and the same core issue of statutory interpretation: whether the exemption from “customs duty” in R.A. No. 387 encompasses the later-enacted special import tax. Since the earlier case definitively held that the exemption applied, the Court applied that ruling directly to the present case. The rationale is that once a point of law has been settled by decision, it forms a precedent which is to be followed in subsequent cases where the same legal issue arises under identical circumstances. Therefore, the Court saw no reason to deviate from its prior judgment and applied it conclusively to affirm ESSO’s exemption and right to refund.