G.R. No. L-20462 June 30, 1965
CALTEX (PHILIPPINES), INC., petitioner-appellant, vs. COMMISSIONER OF INTERNAL REVENUE, respondent-appellee.

FACTS

Caltex (Philippines) Inc., a domestic corporation and holder of a petroleum refining concession, imported various items of machinery, equipment, accessories, and spare parts in 1958 and 1959. The Collector of Customs levied and collected the special import tax imposed by Republic Act No. 1394 on these importations. This tax was included in the landed costs for computing the compensating tax due under Section 190 of the National Internal Revenue Code, which Caltex paid. Caltex claimed it was exempt from the special import tax under Section 6 of Republic Act No. 1394, which exempts “machinery, equipment, accessories and spare parts for the use of industries.” Consequently, it filed claims for refund of the overpaid compensating taxes totaling P5,781.68 with the Commissioner of Internal Revenue. When the Commissioner did not act on the claims, and the two-year prescriptive period under Section 306 of the National Internal Revenue Code was about to expire, Caltex filed a petition for review in the Court of Tax Appeals (CTA Case No. 966) seeking a refund. It was established that when the petition was filed on November 9, 1960, the Collector of Customs had not yet acted on Caltex’s protests against the imposition of the special import tax, and the Commissioner of Internal Revenue had not yet decided on the refund claims.

ISSUE

Whether the Court of Tax Appeals correctly dismissed Caltex’s petition for review for being premature, on the grounds that the issue of exemption from the special import tax falls under the jurisdiction of the Bureau of Customs and must first be resolved by customs authorities before any claim for refund of compensating taxes can be determined.

RULING

Yes, the Court of Tax Appeals correctly dismissed the petition. The Supreme Court affirmed the resolution of the Court of Tax Appeals, holding that the special import tax imposed by Republic Act No. 1394 is a customs law administered by the Bureau of Customs, not an internal revenue tax. Therefore, any issue regarding liability for or exemption from this tax, including protests and appeals, is governed by the Tariff and Customs Code (Republic Act No. 1937), specifically Sections 2308 to 2313. Since the Collector of Customs had not yet acted on Caltex’s protests, there was no adverse ruling to appeal to the Commissioner of Customs, and consequently, no decision of the Commissioner of Customs that could be appealed to the Court of Tax Appeals under Section 7(2) of Republic Act No. 1125 in relation to Section 2402 of the Tariff and Customs Code. The Court of Tax Appeals thus had no jurisdiction to take cognizance of the case, making the petition premature and failing to state a cause of action. The dismissal was without prejudice.