TARIFF AND CUSTOMS LAWS

ORGANIZATION AND FUNCTIONS OF THE BUREAU OF INTERNAL REVENUE

TARIFF AND CUSTOMS CODE

1. When does importation begin, and why is it important to know whether

importation has already begun or not ?
SUGGESTED ANSWER: Importation begins when the conveying vessel or aircraft enters
the jurisdiction of the Philippines with intention to unlade therein. (Sec. 1202, TCCP)
The jurisdiction of the Bureau of Customs to enforce the provisions of the TCCP including
seizure and forfeiture also begins from the beginning of importation. Thus, the Bureau of
Customs obtains jurisdiction over imported articles only after importation has begun.

2.

When importation is deemed terminated and why is it important to know

whether importation has already ended?

SUGGESTED ANSWER: Importation is deemed terminated upon payment of the duties,
taxes and other charges due upon the agencies, or secured to be paid, at the port of entry and the
legal permit for withdrawal shall have been granted.
In case the articles are free of duties, taxes and other charges, until they have legally left
the jurisdiction of the customs. (Sec. 1202, TCCP) The Bureau of Customs loses jurisdiction to
enforce the TCCP and to make seizures and forfeitures after importation is deemed terminated.

3. The flexible tariff clause is a provision in the Tariff and Customs Code, which
implements the constitutionally delegated power to the Congress to further delegate to the
President of the Philippines, in the interest of national economy, general welfare and/or national
security upon recommendation of the NEDA (a) to increase, reduce or remove existing protective
rates of import duty, provided that, the increase should not be higher than 100% ad valorem; (b) to
establish import quota or to ban imports of any commodity, and (c) to impose additional duty on all
imports not exceeding 10% ad valorem, among others.
Tariff and Customs Code

Page 1

4.

Customs duties defined. Customs duties is the name given to taxes on the

importation and exportation of commodities, the tariff or tax assessed upon merchandise imported
from, or exported to, a foreign country. (Nestle Phils. v. Court of Appeals, et al., G.R. No. 134114,
July 6, 2001)

5. Special customs duties are additional import duties imposed on specific kinds
of imported articles under certain conditions. The special customs duties under the Tariff and
Customs Code (TCCP) are the anti-dumping duty, the countervailing duty, the discriminatory duty,
and the marking duty, and under the Safeguard Measures Act (SMA) additional tariffs as
safeguard measures.

6. The special customs duties are imposed for the protection of consumers and
manufacturers, as well as Philippine products.

7. Dumping duty is an additional special duty amounting to the difference

between the export price and the normal value of such product, commodity or article (Sec.
301 (s) (1), TCC, as amended by Rep. Act No. 8752, Anti-Dumping Act of 1999.) imposed on
the importation of a product, commodity or article of commerce into the Philippines at less than its
normal value when destined for domestic consumption in the exporting country which is causing
or is threatening to cause material injury to a domestic industry, or materially retarding the
establishment of a domestic industry producing the like product. [Sec. 301 (s) (5), TCC, as
amended by Rep. Act No. 8752, Anti-Dumping Act of 1999]

8. When is the anti-dumping duty imposed ?

SUGGESTED ANSWER: The anti-dumping duty is imposed
a. Where a product, commodity or article of commerce is exported into the Philippines at a
price less than its normal value when destined for domestic consumption in the exporting country,
b. and such exportation is causing or is threatening to cause material injury to a domestic
industry, or materially retards the establishment of a domestic industry producing the like
product. [Sec. 301 (a), TCC, as amended by Rep. Act No. 8752, Anti-Dumping Act of 1999]
Tariff and Customs Code

Page 2

9.

Normal value for purposes of imposing the anti-dumping duty is the

comparable price at the date of sale of like product, commodity, or article in the ordinary course of
trade when destined for consumption in the country of export. [Sec. 301 (s) (3 ), TCC, as
amended by Rep. Act No. 8752, Anti-Dumping Act of 1999]

10.

The imposing authority for the anti-dumping duty is the Secretary of Trade

and Industry in the case of non-agricultural product, commodity, or article or the Secretary
of Agriculture, in the case of agricultural product, commodity or article, after formal
investigation and affirmative finding of the Tariff Commission. [Sec. 301 (a), TCC, as amended by
Rep. Act No. 8752, Anti-Dumping Act of 1999]

11.

Even when all the requirements for the imposition have been fulfilled, the

decision on whether or not to impose a definitive anti-dumping duty remains the

prerogative of the Tariff Commission. [Sec. 301 (a), TCC, as amended by Rep. Act No. 8752,
Anti-Dumping

Act

of

1999] Thus,

the

cabinet

secretaries

could

not

contravene

the recommendation of the Tariff Commission. They could not impose the anti-dumping duty or
any special customs duty without the favorable recommendation of the Tariff Commission.

12. In the determination of whether to impose the anti-dumping duty, the Tariff
Commission, may consider among others, the effect of imposing an anti-dumping duty on
the welfare of the consumers and/or the general public, and other related local
industries. (Sec. 301 (a), TCC, as amended by Rep. Act No. 8752, Anti-Dumping Act of 1999)

13. The amount of anti-dumping duty that may be imposed is the difference between
the export price and the normal value of such product, commodity or article. (Sec. 301 (s)
(1), TCC, as amended by Rep. Act No. 8752, Anti-Dumping Act of 1999)
The anti-dumping duty shall be equal to the margin of dumping on such product, commodity
or article thereafter imported to the Philippines under similar circumstances, in addition to ordinary
duties, taxes and charges imposed by law on the imported product, commodity or article.

Tariff and Customs Code

Page 3

14. What are countervailing duties and when are they imposed ?
SUGGESTED ANSWER: Countervailing duties are additional customs duties imposed on
any product, commodity or article of commerce which is granted directly or indirectly by the
government in the country of origin or exportation, any kind or form of specific subsidy upon the
production, manufacture or exportation of such product commodity or article, and the importation
of such subsidized product, commodity, or article has caused or threatens to cause material injury
to a domestic industry or has materially retarded the growth or prevents the establishment of a
domestic industry. (Sec. 302, TCCP as amended by Section 1, R.A. No. 8751)

15. The imposing authority for the countervailing duties is the Secretary of Trade
and Industry in the case of non-agricultural product, commodity, or article or the Secretary
of Agriculture, in the case of agricultural product, commodity or article, after formal
investigation and affirmative finding of the Tariff Commission.
Even when all the requirements for the imposition have been fulfilled, the decision on
whether or not to impose a definitive anti-dumping duty remains the prerogative of the Tariff
Commission. (Sec. 301 (a), TCC, as amended by Rep. Act No. 8752, Anti-Dumping Act of
1999)

16. The countervailing duty is equivalent to the value of the specific subsidy.

17. Marking duties are the additional customs duties imposed on foreign articles (or its
containers if the article itself cannot be marked), not marked in any official language in the
Philippines, in a conspicuous place as legibly, indelibly and permanently in such manner as to
indicate to an ultimate purchaser in the Philippines the name of the country of origin.

18. The Commissioner of Customs imposes the marking duty.

19. The marking duty is equivalent to five percent (5%) ad valorem.

Tariff and Customs Code

Page 4

 20. A discriminatory duty is a new and additional customs duty imposed upon articles
wholly or in part the growth or product of, or imported in a vessel, of any foreign country which
imposes, directly or indirectly, upon the disposition or transportation in transit through or reexportation from such country of any article wholly or in part the growth or product of the
Philippines, any unreasonable charge, exaction, regulation or limitation which is not equally
enforced upon like articles of every foreign country, or discriminates against the commerce of the
Philippines, directly or indirectly, by law or administrative regulation or practice, by or in respect to
any customs, tonnage, or port duty, fee, charge, exaction, classification, regulation, condition,
restriction or prohibition, in such manner as to place the commerce of the Philippines at a
disadvantage compared with the commerce of any foreign country.

21. The President of the Philippines imposes the discriminatory duties.

22. Safeguard measures are emergency measures, including tariffs, to protect

domestic industries and producers from increased imports which inflict or could inflict serious
injury on them.
The CTA is vested with jurisdiction to review decisions of the Secretary of Trade and
Industry imposing safeguard measures as provided under Rep. Act No. 8800 the Safeguard
Measures Act (SMA). (Southern Cross Cement Corporation v. The Philippine Cement
Manufacturers Corp., et al., G. R. No. 158540, July 8, 2004)
The DTI Secretary cannot impose the safeguard measures if the Tariff Commission does
not favorably recommend its imposition.

23.

Imposing authority for safeguard measures. The imposing authority for the

countervailing duties is the Secretary of Trade and Industry in the case of non-agricultural
product, commodity, or article or the Secretary of Agriculture, in the case of agricultural
product, commodity or article, after formal investigation and affirmative finding of the Tariff
Commission.

Tariff and Customs Code

Page 5

24.

Safeguards measures that may be imposed. Additional tariffs, import quotas

or banning of imports.

25. The basis of dutiable value of merchandise that is subject to ad valorem

customs duties is the transaction value, which shall be the price actually paid or payable for
the goods when sold for export to the Philippines, adjusted by adding certain cost elements to the
extent that they are incurred by the buyer but are not included in the price actually paid or payable
for the imported goods, and may include the following:
a.

Cost of containers and packing,

b.

Insurance, and

c.

Freight. (Sec. 201, TCC as amended by Sec. 1, Rep. Act No. 9135)

26. The above transaction value is the primary method of determining dutiable
value. If the transaction value of the imported article could not be determined using the
above, the following alternative methods should be used one after the other:
a.

Transaction value of identical goods

b.

Transaction value of similar goods

c.

Deductive method

d.

Computed method

e.

Fallback method

27.

How and to whom should claims for refund of customs duties be made ?

SUGGESTED ANSWER: All claims for refund of duties shall be made in writing and
forwarded to the Collector of Customs to whom such duties are paid, who upon receipt of such
claim, shall verify the same by the records of his Office, and if found to be correct and in
accordance with law, shall certify the same to the Commissioner of Customs with his
recommendation together with all necessary papers and documents. Upon receipt by the
Commissioner of such certified claim he shall cause the same to be paid if found correct. (Sec.
1708, TCC)

Tariff and Customs Code

Page 6

28.

What is mean by the term entry in Customs Law ?

SUGGESTED ANSWER: It has a triple meaning.

a.

the documents filed at the Customs house;

b.

the submission and acceptance of the documents; and

c.

Customs declaration forms or customs entry forms required to be accomplished

by passengers of incoming vessels or passenger planes as envisaged under Sec. 2505 of the
TCCP (Failure to declare baggage). (Jardeleza v. People, G.R. No. 165265, February 6, 2006)

29. A flight stewardess arrived from Singapore. Upon her arrival she was asked
whether she has anything to declare. She answered none, and she submitted her
Customs Baggage Declaration Form which she accomplished and signed with nothing
or written on the space for items to be declared. When her hanger bag was examined
some pieces of jewelry were found concealed within the lining of said bag.
She was then convicted of violating of Sec. 3601 of the Tariff and Customs Code for
unlawful importation which penalizes any person who shall fraudulently import or bring
into the Philippines any article contrary to law.
She now appeals claiming that lower court erred n convicting her under Sec. 3601
when the facts alleged both in the information and those shown by the prosecution
constitute the offense under Sec. 2505 Failure to Declare Baggage, of which she was
acquitted. Is she correct ?
SUGGESTED ANSWER: No. Sec. 3601 does not define a crime. It merely provides, inter
alia, the administrative remedies which can be resorted to by the Bureau of Customs when
seizing dutiable articles found the baggage of any person arriving in the Philippines which is not
included in the accomplished baggage declaration submitted to the customs authorities, and the
administrative penalties that such person must pay for the release of such goods if not imported
contrary to law.
Such administrative penalties are independent of the criminal liability for smuggling that
may be imposed under Sec. 3601, and other provisions of the TCC which can only be determined
after the appropriate criminal proceedings, prescinding from the outcome in any administrative
case that may have been filed and disposed of by the customs authorities.
Tariff and Customs Code

Page 7

Indeed the second paragraph of Sec. 2505 provides that nothing shall prevent the bringing
of a criminal action against the offender for smuggling under Section 3601. (Jardeleza v.
People, G. R. No. 165265, February 6, 2006)

30. Payment is not a defense in smuggling. When upon trial for violation of this
section, the defendant is shown to have possession of the article in question, possession shall be
deemed sufficient evidence to authorize conviction, unless the defendant shall explain the
possession to the satisfaction of the court: Provided, however, That payment of the tax due after
apprehension shall not constitute a valid defense in any prosecution under this section. (last par.,
Sec. 3601, TCC)

31.

How is smuggling committed ?

SUGGESTED ANSWER: Smuggling is committed by any person who:

a.

fraudulently imports or brings into the country any article contrary to law;

b.

assists in so doing any article contrary to law; or

c.

receives, conceals, buys, sells or in any manner facilitates the transportation,

concealment or sale of such goods after importation, knowing the same to have been imported
contrary to law. (Jardeleza v. People, G.R. No. 165265, February 6, 2006 citing Rodriguez v.
Court of Appeals, G. R. No. 115218, September 18, 1995, 248 SCRA 288, 296)
NOTES AND COMMENTS:
a.

Importation consists of bringing an article into the country from the

outside. Importation begins when the conveying vessel or aircraft enters the jurisdiction of the
Philippines with intention to unload therein.
b.

When unlawful importation is complete. In the absence of a bona fide intent

to make entry and pay duties when the prohibited article enters the Philippine
territory. Importation is complete when the taxable, dutiable commodity is brought within the
limits of the port of entry. Entry through a custom house is not the essence of the
act. (Jardeleza v. People, G.R. No. 165265, February 6, 2006)

Tariff and Customs Code

Page 8

 32. The Collector of Customs sitting in seizure and forfeiture proceedings has
exclusive jurisdiction to hear and determine all questions touching on the seizure and
forfeiture of dutiable goods. RTCs are precluded from assuming cognizance over such
matters even through petitions of certiorari, prohibition or mandamus. (The Bureau of
Customs, et al., v. Ogario, et al., G.R. No. 138081, March 20, 2000)
What is the rationale for this doctrine ?
SUGGESTED ANSWER:
a.

Regional Trial Courts have no jurisdiction to replevin a property which is subject to

seizure and forfeiture proceedings for violation of the Tariff and Customs Code otherwise, actions
for forfeiture of property for violation of the Customs laws could easily be undermined by the
simple device of replevin. (De la Fuente v. De Veyra, et al., 120 SCRA 455)
b.

The doctrine of exclusive customs jurisdiction over customs cases to the

exclusion of the RTCs is anchored upon the policy of placing no unnecessary hindrance on the
governments drive, not only to prevent smuggling and other frauds upon Customs,
c.

but more importantly, to render effective and efficient the collection of import and

export duties due the State, which enables the government to carry out the functions it has been
instituted to perform. (Jao, et al., v. Court of Appeals, et al., and companion case, 249 SCRA 35,
43)
d.

The issuance by regular courts of writs of preliminary injunction in seizure and

forfeiture proceedings before the Bureau of Customs may arouse suspicion that the issuance or
grant was for consideration other than the strict merits of the case. (Zuno v. Cabredo, 402 SCRA
75 [2003])
e. Under the doctrine of primary jurisdiction, the Bureau of Customs has exclusive
administrative jurisdiction to conduct searches, seizures and forfeitures of contraband without
interference from the courts. It could conduct searches and seizures without need of a judicial
warrant except if the search is to be conducted in a dwelling place.
Where an administrative office has obtained a technical expertise in a specific subject, even
the courts must defer to this expertise.

Tariff and Customs Code

Page 9

NOTES AND COMMENTS: The Bureau of Customs could search and seize articles
without need of a judicial warrant unless the place to be searched is a dwelling place. In such a
case customs requires a judicial warrant.

33.

A claiming to be the owner of a vessel which is the subject of customs

warrant of seizure and detention sought the intercession of the RTC to restrain the
Bureau of Customs from interfering with his property rights over the vessel. Would the
suit prosper?
SUGGESTED ANSWER: No. His remedy was not with the RTC but with the CTA, as
issues of ownership of goods in the custody of customs officials are within the power of the CTA
to determine.
The Collector of Customs has exclusive jurisdiction over seizure and forfeiture
proceedings and trial courts are precluded from assuming cognizance over such matters even
through petitions for certiorari, prohibition or mandamus. (Commissioner of Customs v. Court of
Appeals, et al., G. R. Nos. 111202-05, January 31, 2006)

34.

The customs authorities do not have to prove to the satisfaction of the court

that the articles on board a vessel were imported from abroad or are intended to be
shipped abroad before they may exercise the power to effect customs searches, seizures,
or arrests provided by law and continue with the administrative hearings. (The Bureau of
Customs, et al., v. Ogario, et al., G.R. No. 138081, March 20, 2000)

35. The Tariff and Customs Code allows the Bureau of Customs to resort to
the administrative remedy of seizure, such as by enforcing the tax lien on the imported
article when the imported articles could be found and be subject to seizure and forfeiture.

36. The Tariff and Customs Code allows the Bureau of Customs to resort to the judicial
remedy of filing an action in court when the imported articles could not anymore be found.

Tariff and Customs Code

Page 10

 37. Section 2301 of the TCCP states that seized articles may not be released
under bond if there is prima facie evidence of fraud in their importation. Commissioner of
Customs v. Court of Tax Appeals, et al., G. R. No. 171516-17, February 13, 2009
Section 2301. Warrant for Detention of Property-Cash Bond. Upon making any seizure,
the Commissioner shall issue a warrant for the detention of the property; and if the owner or
importer desires to secure the release of the property for legitimate use, the Collector shall, with
the approval of the Commissioner of Customs, surrender it upon the filing of a cash bond, in an
amount fixed by him, conditioned upon the payment of the appraised value of the article and/or
any fine, expenses and costs which may be adjudged in the case: Provided, That such
importation shall not be released under any bond when there is prima facie evidence of
fraud in the importation of the article: Provided,further, That articles the importation of which
is prohibited by law shall not be released under any circumstances whatsoever: Provided,
finally, That nothing in this section shall be construed as relieving the owner or importer from
any criminal liability which may arise from any violation of law committed in connection with the
importation of the article. (emphasis supplied)

38.

Instances where there is no right of redemption of seized and forfeited

articles:
a.

There is fraud;

b.

The importation is absolutely prohibited, or

c.

The release of the property would be contrary to law. (Transglobe International,

Inc. v. Court of Appeals, et al., G.R. No. 126634, January 25, 1999)

39.

In Aznar v. Court of Tax Appeals, 58 SCRA 519, reiterated in Farolan, Jr. v. Court

of Tax appeals, et al., 217 SCRA 298, the Supreme Court clarified that the fraud contemplated
by law must be actual and not constructive. It must be intentional, consisting of deception,
willfully and deliberately done or resorted to in order to induce another to give up some right.

40.

Requisites for forfeiture of imported goods:

Tariff and Customs Code

Page 11

a.

Wrongful making by the owner, importer, exporter or consignee of any declaration

or affidavit, or the wrongful making or delivery by the same person of any invoice, letter or paper
all touching on the importation or exportation of merchandise.
b.

the falsity of such declaration, affidavit, invoice, letter or paper; and

c.

an intention on the part of the importer/consignee to evade the payment of the

duties due.(Republic, etc., v. The Court of Appeals, et al., G.R. No. 139050, October 2, 2001)

41.

On January 7, 1989, the vessel M/V Star Ace, coming from Singapore

laden with cargo, entered the Port of San Fernando, La Union for needed repairs. When
the Bureau of Customs later became suspicious that the vessels real purpose in docking
was to smuggle cargo into the country, seizure proceedings were instituted and
subsequently two Warrants of Seizure and Detention were issued for the vessel and its
cargo.
Cesar does not own the vessel or any of its cargo but claimed a preferred maritime
lien. Cesar then brought several cases in the RTC to enforce his lien. Would these suits
prosper ?
SUGGESTED ANSWER: No. The Bureau of Customs having first obtained possession of
the vessel and its goods has obtained jurisdiction to the exclusion of the trial courts.
When Cesar has impleaded the vessel as a defendant to enforce his alleged maritime lien,
in the RTC, he brought an action in rem under the Code of Commerce under which the vessel
may be attached and sold.
However, the basic operative fact is the actual or constructive possession of the res by the
tribunal empowered by law to conduct the proceedings. This means that to acquire jurisdiction
over the vessel, as a defendant, the trial court must have obtained either actual or constructive
possession over it. Neither was accomplished by the RTC as the vessel was already in the
possession of the Bureau of Customs. (Commissioner of Customs v. Court of Appeals, et al., G.
R. Nos. 111202-05, January 31, 2006)
NOTES AND COMMENTS:
a.

Forfeiture of seized goods in the Bureau of Customs is in the nature of a

proceeding in rem, i.e. directed against the res or imported goods and entails a determination of
Tariff and Customs Code

Page 12

the legality of their importation. In this proceeding, it is in legal contemplation the property itself
which commits the violation and is treated as the offender, without reference whatsoever to the
character or conduct of the owner.
The issue is limited to whether the imported goods should be forfeited and disposed of in
accordance with law for violation of the Tariff and Customs Code. .(Transglobe International, Inc.
v. Court of Appeals, et al., G.R. No. 126634, January 25, 1999)
Forfeiture of seized goods in the Bureau of Customs is a proceeding against the goods and
not against the owner. (Asian Terminals, Inc. v. Bautista-Ricafort, G .R. No. 166901, October 27,
2006 citingTransglobe)

42. The Collector of Customs upon probable cause that the articles are imported or
exported, or are attempted to be imported or exported, in violation of the tariff and
customs laws shall issue a warrant of seizure. (Sec. 6, Title III, CAO No. 9-93)
If the search and seizure is to be conducted in a dwelling place, then a search warrant
should be issued by the regular courts not the Bureau of Customs.
There may be instances where no warrants issued by the Bureau of Customs or the regular
courts is required, as in search and seizures of motor vehicles and vessels.

43. Smuggled goods seized by virtue of a court warrant should be surrendered to

the court that issued the warrant and not to the Bureau of Customs because the goods are
in custodia legis.

44. Decisions of the Commissioner of Customs in cases involving liability for

customs duties, fees or other money charges that must be appealed to the Court of Tax
Appeals Division within thirty (30) days from receipt specifically refer to his decisions
onadministrative tax protest cases, as stated in Section 2402 of the Tariff and Customs Code of
the Philippines (TCCP):

Section 2402. Review by Court of Tax Appeals. The party aggrieved by a ruling of
the Commissioner in any matter brought before him upon protest or by his action or ruling
Tariff and Customs Code

Page 13

in any case of seizure may appeal to the Court of Tax Appeals, in the manner and within the
period prescribed by law and regulations.

Unless an appeal is made to the Court of Tax Appeals in the manner and within
the

period prescribed by laws and regulations, the action or ruling of the Commissioner

shall be

final and conclusive. [Emphasis supplied.] (Pilipinas Shell Petroleum Corporation

v. Commissioner of Customs,G. R. No. 176380, June 18, 2009)

45. Administrative tax protest under the Tariff and Customs Code (TCCP). A
tax protest case, under the TCCP, involves a protest of the liquidation of import entries.
(Pilipinas Shell Petroleum Corporation v. Commissioner of Customs, G. R. No. 176380, June
18, 2009)

46.

Liquidation, defined. A liquidation is the final computation and ascertainment

by the collector of the duties on imported merchandise, based on official reports as to the
quantity, character, and value thereof, and the collectors own finding as to the applicable rate of
duty; it is akin to an assessment of internal revenue taxes under the National Internal Revenue
Code where the tax liability of the taxpayer is definitely determined. (Pilipinas Shell Petroleum
Corporation v. Commissioner of Customs,G. R. No. 176380, June 18, 2009)

47. The following letters of demand cannot be considered as liquidation or an

assessment of Shells import tax liabilities that can be the subject of an administrative
tax protest proceeding before the Commissioner of Customs whose decision is
appealable to the Court of Tax Appeals:
a.

the One Stop Shop Inter-Agency Tax Credit and Duty Drawback Center (the

Center)November 3 letter, signed by the Secretary of Finance, informing it of the cancellation of

the Tax Credit Certificates (TCCs);
b.

the Commissioner of Customs November 19 letter requiring Shell to replace the

amount equivalent to the amount of the cancelled TCCs used by Shell; and

Tariff and Customs Code

Page 14

c.

the Commissioner of Customs collection letters, issued through Deputy

Commissioner Atty. Valera, formally demanding the amount covered by the cancelled TCCs.
None of these letters, however, can be considered as a liquidation or an assessment of
Shells import tax liabilities that can be the subject of an administrative tax protest proceeding
before the respondent whose decision is appealable to the CTA. Shells import tax liabilities had
long been computed and ascertained in the original assessments, and Shell paid these liabilities
using the TCCs transferred to it as payment.
It is even an error to consider the letters as a reassessment because they refer to the
same tax liabilities on the same importations covered by the original assessments. The letters
merely reissued the original assessments that were previously settled by Shell with the use of
the TCCs. However, on account of the cancellation of the TCCs, the tax liabilities of Shell under
the original assessments were considered unpaid; hence, the letters and the actions for
collection.
When Shell went to the CTA, the issues it raised in its petition were all related to the
fact and efficacy of the payments made, specifically the genuineness of the TCCs; the absence
of due process in the enforcement of the decision to cancel the TCCs; the facts surrounding the
fraud in originally securing the TCCs; and the application of estoppel. These are payment and
collection issues, not tax protest issues within the CTAs jurisdiction to rule upon.
Shell never protested the original assessments of its tax liabilities and in fact settled
them using the TCCs. These original assessments, therefore, have become final,
incontestable, and beyond any subsequent protest proceeding, administrative or judicial, to rule
upon.
To be very precise, Shells petition before the CTA principally questioned the validity of
the cancellation of the TCCs a decision that was made not by the Commissioner of Customs,
but by the Center. As the CTA has no jurisdiction over decisions of the Center, Shells remedy
against the cancellation should have been a certiorari petition before the regular courts, not a
tax protest case before the CTA. Records do not show that Shell ever availed of this remedy.
Alternatively, as held in Shell v. Republic of the Philippines, G.R. No. 161953, March 6,
2008, 547 SCRA 701, the appropriate forum for Shell under the circumstances of this case
should be at the collection cases before the RTC where Shell can put up the fact of its payment
Tariff and Customs Code

Page 15

as a defense. (Pilipinas Shell Petroleum Corporation v. Commissioner of Customs, G. R. No.

176380, June 18, 2009)

48. A case becomes ripe for filing with the Regional Trial Court (RTC), as a
collection

matter

after

the

finality

of

the

Commissioner

of

Customs

assessment. (Pilipinas Shell Petroleum Corporation v. Commissioner of Customs, G. R. No.

176380, June 18, 2009 citing Shell v. Republic of the Philippines, G.R. No. 161953, March 6,
2008, 547 SCRA 701)
The assessment has long been final, and this recognition of finality removes all
perceived

hindrances,

based

on

this

case,

to

the

continuation

of

the

collection

suits.
A suit for the collection of internal revenue taxes, where the assessment has already
become final and executory, the action to collect is akin to an action to enforce the judgment. No
inquiry can be made therein as to the merits of the
In light of the conclusion that the present case does not involve a decision of the
Commissioner of Customs on a matter brought to him as a tax protest, Atty. Valeras lack of
authority to issue the collection letters and to institute the collection suits is irrelevant. For this
same reason, the injunction against Atty. Valera cannot be invoked to enjoin the collection of
unpaid taxes due from Shell. (Pilipinas Shell Petroleum Corporation v. Commissioner of
Customs, supra)

Tariff and Customs Code

Page 16