Celestino and Co v Collector (Contract of Sale and not Contract for Labor or Piece of Work)

FACTS:
Celestino and Co is a duly registered general co-partnership doing business under the trade name Oriental Sash
Factory.
It used to pay percentage taxes of 7% on the gross receipts of its sash, door, and window factory in accordance
with Sec. 186 of the National Internal Revenue Code imposing taxes on sale of manufactured articles.
Later on, the company began to claim liability only 3%, a rate applicable only to contractors under Sec. 191 of the
same code.
Both the Bureau of Internal Revenue and the Court of Tax Appeals were not convinced that the company is a
contractor, and ruled that Sec. 186 must apply to it. The CTA discussed:
Oriental Sash has the word Factory in its trade name which means it is set to do business on a big scale.
Sash factories receive orders for doors and windows of special design only in particular cases. The bulk of
their sales is from ready-made doors and windows of standard sizes for the average home.
The six figure amount Oriental Sash earns cannot come entirely from few customers who made special
orders.
Even if the company claims it does not manufacture ready-made sash, doors, and windows for the public,
it is still not a road, building, navigation, artesian well, water workers and other construction work
contractor contemplated in Sec. 191.
Those who alter or repair buildings, structures, streets, highways, sewers, street railways railroads
logging roads, electric lines or power lines, and includes any other work for the construction,
altering or repairing for which machinery driven by mechanical power is used.
An appeal was filed to this Court.

ISSUE:
Whether or not Celestino Co is a contractor

RULING:
No. It is a manufacturer.
Any builder or homeowner may order windows or doors of the kind manufactured by the company. It is not true
that it serves special customers only or confines its services to them alone.
Oriental Sash does nothing more than sell the goods it mass produces or habitually makes.
No extraordinary or additional equipment or the doing of services not generally performed by Oriental Sash are
present in manufacturing the materials. There is no contract for a piece of work.