G.R. No. L‑2841

FACTS
– In April 1904 Rubert & Guamis imported 2 cases of textiles and 5 cases of shoes into the Philippine Islands, paying ₱733.80 (including a ₱91.50 fine).
– They protested the assessment of a 100 % surtax on the textiles under the third paragraph of letter (d), Rule B, group 3, class 4 of the Tariff Revision Act of 1901, and the fine imposed pursuant to Sec. 311 of the Customs Administrative Act.
– The Collector of Customs rejected the protest; the matter went to the Court of Customs Appeals.

ISSUE
1. Does the 100 % surtax under the Tariff Revision Act apply to the imported cotton textiles that were merely cut into plain pieces without a specific design or purpose?
2. Was the fine imposed under Sec. 311 proper, given the classification of the textiles as “dyed” rather than “manufactured with dyed yarns”?

RULING
– The Court held that the term “cut” in the statute signifies cutting with a particular design to produce a finished article. The imported textiles were only cut into undifferentiated pieces; therefore, they are not “cut” within the statutory meaning, and the 100 % surtax is inapplicable.
– The fine under Sec. 311 was presumed to have been levied for the failure to declare the correct classification (“manufactured with dyed yarns”). Because the classification was erroneous, the fine does not fall within Sec. 311 and is improperly imposed.
– The Collector’s decision was modified; the entry was to be re‑liquidated without the surtax and fine. The lower‑court judgment was affirmed, and the case was remanded to the Manila Court of First Instance for entry of judgment in accordance with this decision.