G.R. No. L-23425; February 26, 1968
THE COMMISSIONER OF CUSTOMS and THE COMMISSIONER OF INTERNAL REVENUE, petitioners, vs. MIGUEL FORTICH CELDRAN and THE COURT OF TAX APPEALS, respondents.

FACTS

Miguel Fortich Celdran, a Filipino physician returning from a two-year stay in the United States, arrived at the Port of Cebu in October 1960. He brought with him, as part of his personal belongings, a 1959 model Chevrolet “Impala” car. The Collector of Customs of Cebu exempted the car from customs duty but imposed and collected a special import tax of P889.52, a compensating tax of P11,295.12, and a P25.00 fine for alleged non-filing of a consular invoice. Celdran paid these sums under protest. His protest was overruled by the Collector, and his subsequent appeal to the Commissioner of Customs was likewise denied, except for the refund of the P25.00 fine. Celdran then appealed to the Court of Tax Appeals. The Court of Tax Appeals modified the decision by eliminating the 25% margin fee from the tax base and using the car’s invoice value of $2,150.00 as the taxable value, ordering a recomputation and refund of overpaid taxes. The Commissioners of Customs and Internal Revenue appealed this decision to the Supreme Court.

ISSUE

1. Whether the 25% margin fee under Central Bank Circular No. 95 should be added to the value of the car as part of the tax base for computing the special import and compensating taxes.
2. Whether the taxable value of the car should be its invoice price of $2,150.00 or its published retail factory price (“red book” value) of $2,717.00 as determined under Finance Department Order No. 289-A.

RULING

1. On the first issue, the Supreme Court ruled that the 25% margin fee should NOT be included in the tax base. The margin fee under Republic Act No. 2609 and implementing Central Bank Circular No. 95 applies only to sales of foreign exchange by authorized agent banks of the Central Bank. The evidence showed that Celdran purchased the car in the United States using savings from his earnings there, and no authorized agent bank sold foreign exchange in connection with this importation. Therefore, the margin fee provision was inapplicable. The Court cited the analogous case of Commissioner of Customs vs. Icamen, which held that goods purchased abroad with foreign earnings and not involving a sale of foreign exchange from the Philippines are not subject to such provisions.
2. On the second issue, the Supreme Court ruled that the invoice value of $2,150.00 should be used as the taxable value, not the published retail factory price. The car was covered by a certified “Bill of Sale” from the dealer and a consular invoice from the Philippine Consulate in New York, both stating the selling price as $2,150.00. There was no evidence that this invoice price was not the actual purchase price or that it was questionable. Furthermore, there was no showing that a customs examiner had made a written report on the entry, as required by Section 1405 of the Tariff and Customs Code, determining a value higher than the invoice price. Therefore, the official documents were entitled to credence, and the Court of Tax Appeals’ decision to use the invoice value was correct.
The decision of the Court of Tax Appeals was AFFIRMED.