G.R. No. L-11717, October 16, 1917
E. VIEGELMANN & CO., plaintiff-appellant, vs. INSULAR COLLECTOR OF CUSTOMS, defendant-appellee.

FACTS:
The plaintiff-appellant, E. Viegelmann & Co., imported 17 cases of cotton laces into the Philippine Islands, invoiced at £673.14.8. The Insular Collector of Customs appraised the merchandise at a higher value of £741.11.7, thereby imposing a correspondingly higher duty. The appellant paid the duty under protest and appealed the Collector’s decision to the Court of First Instance, which affirmed the appraisal. The appellant then elevated the case to the Supreme Court.

The record showed that the merchandise was purchased by Reissmann & Co. (not the manufacturer) and consigned to the appellant. The Collector found that Reissmann & Co., due to the large quantity purchased, obtained a greater discount than what was available to the average purchaser in the country of manufacture. Based on this finding, the Collector added 10% to the invoice value. The Collector relied on a report from a special commissioner sent to Europe to investigate the value of such goods, among other methods, to determine the true market value.

ISSUE:
Whether the Collector of Customs correctly appraised the value of the imported cotton laces by rejecting the invoice value and imposing a higher valuation based on the market value for the average purchaser in the country of export.

RULING:
Yes, the Collector of Customs correctly appraised the merchandise. The Supreme Court affirmed the decision of the lower court, upholding the Collector’s appraisal.

The Court held that the Collector of Customs is not bound by the invoice value and has the authority to independently ascertain the true market value of imported goods in the country where they are manufactured and exported. The Collector may use various means, including independent investigations and reports, to determine such value. The objective is to ensure uniformity and fairness in appraisal, so that all importers are assessed duties based on the price an average purchaser would pay, regardless of any special discounts obtained by particular importers due to bulk purchasing or other advantages.

The Court reiterated established doctrines: (1) the valuation fixed by the Collector is conclusive unless the importer affirmatively shows that the appraisal was based on a wrong principle or contrary to law; (2) the burden of proof lies on the importer to overcome the presumption that the official appraisement is legal and just; and (3) to recover duties paid, the importer must prove that the Collector’s action was illegal.

In this case, the appellant failed to demonstrate that the Collector’s appraisal was erroneous or illegal. The evidence supported the Collector’s finding that the invoice value did not reflect the market value for the average purchaser, and the adjusted valuation was approximately correct. Thus, the appealed judgment was affirmed.

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