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CASCO v. Gimenez

1) The document discusses whether "urea" and "formaldehyde" are exempt from foreign exchange margin fees when imported separately. 2) Petitioner argues they should be exempt as the key materials to make "urea formaldehyde". However, experts state "urea formaldehyde" is a finished product, not just the separate materials. 3) The court affirms the previous decision, finding the enrolled bill uses the term "urea formaldehyde", not "urea and formaldehyde". It cannot speculate about legislative intent beyond what is in the final approved law.

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Princess Loyola Tapia
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147 views2 pages

CASCO v. Gimenez

1) The document discusses whether "urea" and "formaldehyde" are exempt from foreign exchange margin fees when imported separately. 2) Petitioner argues they should be exempt as the key materials to make "urea formaldehyde". However, experts state "urea formaldehyde" is a finished product, not just the separate materials. 3) The court affirms the previous decision, finding the enrolled bill uses the term "urea formaldehyde", not "urea and formaldehyde". It cannot speculate about legislative intent beyond what is in the final approved law.

Uploaded by

Princess Loyola Tapia
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Republic of the Philippines formaldehyde is not in accord with the provisions of

SUPREME COURT section 2, paragraph XVIII of Republic Act No. 2609. On


Manila appeal taken by petitioner, the Auditor General
subsequently affirmed said action of the Auditor of the
EN BANC Bank. Hence, this petition for review.

G.R. No. L-17931             February 28, 1963 The only question for determination in this case is
whether or not "urea" and "formaldehyde" are exempt by
law from the payment of the aforesaid margin fee. The
CASCO PHILIPPINE CHEMICAL CO., INC., petitioner, 
pertinent portion of Section 2 of Republic Act No. 2609
vs.
reads:
HON. PEDRO GIMENEZ, in his capacity as Auditor
General of the Philippines, 
and HON. ISMAEL MATHAY, in his capacity as The margin established by the Monetary Board
Auditor of the Central Bank, respondents. pursuant to the provision of section one hereof
shall not be imposed upon the sale of foreign
exchange for the importation of the following:.
Jalandoni & Jamir for petitioner.

xxx     xxx     xxx
Officer of the Solicitor General for respondents.

XVIII. Urea formaldehyde for the manufacture of


CONCEPCION, J.:
plywood and hardboard when imported by and
for the exclusive use of end-users.
This is a petition for review of a decision of the Auditor
General denying a claim for refund of petitioner Casco
Wherefore, the parties respectfully pray that the
Philippine Chemical Co., Inc.
foregoing stipulation of facts be admitted and
approved by this Honorable Court, without
The main facts are not disputed. Pursuant to the prejudice to the parties adducing other evidence
provisions of Republic Act No. 2609, otherwise known as to prove their case not covered by this
the Foreign Exchange Margin Fee Law, the Central stipulation of facts. 1äwphï1.ñët
Bank of the Philippines issued on July 1, 1959, its
Circular No. 95. fixing a uniform margin fee of 25% on
Petitioner maintains that the term "urea formaldehyde"
foreign exchange transactions. To supplement the
appearing in this provision should be construed as
circular, the Bank later promulgated a memorandum
"urea andformaldehyde" (emphasis supplied) and that
establishing the procedure for applications for exemption
respondents herein, the Auditor General and the Auditor
from the payment of said fee, as provided in said
of the Central Bank, have erred in holding otherwise. In
Republic Act No. 2609. Several times in November and
this connection, it should be noted that, whereas "urea"
December 1959, petitioner Casco Philippine Chemical
and "formaldehyde" are the principal raw materials in the
Co., Inc. — which is engaged in the manufacture of
manufacture of synthetic resin glues, the National
synthetic resin glues, used in bonding lumber and
Institute of Science and Technology has expressed,
veneer by plywood and hardwood producers — bought
through its Commissioner, the view that:
foreign exchange for the importation of urea and
formaldehyde — which are the main raw materials in the
production of said glues — and paid therefor the Urea formaldehyde is not a chemical solution. It
aforementioned margin fee aggregating P33,765.42. In is the synthetic resin formed as a condensation
May, 1960, petitioner made another purchase of foreign product from definite proportions of urea and
exchange and paid the sum of P6,345.72 as margin fee formaldehyde under certain conditions relating
therefor. to temperature, acidity, and time of reaction.
This produce when applied in water solution and
extended with inexpensive fillers constitutes a
Prior thereto, petitioner had sought the refund of the first
fairly low cost adhesive for use in the
sum of P33,765.42, relying upon Resolution No. 1529 of
manufacture of plywood.
the Monetary Board of said Bank, dated November 3,
1959, declaring that the separate importation of urea and
formaldehyde is exempt from said fee. Soon after the Hence, "urea formaldehyde" is clearly a finished product,
last importation of these products, petitioner made a which is patently distinct and different from urea" and
similar request for refund of the sum of P6,345.72 paid "formaldehyde", as separate articles used in the
as margin fee therefor. Although the Central Bank issued manufacture of the synthetic resin known as "urea
the corresponding margin fee vouchers for the refund of formaldehyde". Petitioner contends, however, that the
said amounts, the Auditor of the Bank refused to pass in bill approved in Congress contained the copulative
audit and approve said vouchers, upon the ground that conjunction "and" between the terms "urea" and
the exemption granted by the Monetary Board for "formaldehyde", and that the members of Congress
petitioner's separate importations of urea and intended to exempt "urea" and "formaldehyde"
separately as essential elements in the manufacture of
the synthetic resin glue called "urea" formaldehyde", not
the latter as a finished product, citing in support of this
view the statements made on the floor of the Senate,
during the consideration of the bill before said House, by
members thereof. But, said individual statements do not
necessarily reflect the view of the Senate. Much less do
they indicate the intent of the House of Representatives
(see Song Kiat Chocolate Factory vs. Central Bank, 54
Off. Gaz., 615; Mayon Motors Inc. vs. Acting
Commissioner of Internal Revenue, L-15000 [March 29,
1961]; Manila Jockey Club, Inc. vs. Games &
Amusement Board, L-12727 [February 29, 1960]).
Furthermore, it is well settled that the enrolled bill —
which uses the term "urea formaldehyde" instead of
"urea and formaldehyde" — is conclusive upon the
courts as regards the tenor of the measure passed by
Congress and approved by the President (Primicias vs.
Paredes, 61 Phil. 118, 120; Mabanag vs. Lopez Vito, 78
Phil. 1; Macias vs. Comm. on Elections, L-18684,
September 14, 1961). If there has been any mistake in
the printing ofthe bill before it was certified by the officers
of Congress and approved by the Executive — on which
we cannot speculate, without jeopardizing the principle
of separation of powers and undermining one of the
cornerstones of our democratic system — the remedy is
by amendment or curative legislation, not by judicial
decree.

WHEREFORE, the decision appealed from is hereby


affirmed, with costs against the petitioner. It is so
ordered.

Bengzon, C.J., Padilla, Bautista Angelo, Labrador,


Reyes, J.B.L., Barrera, Paredes, Dizon, Regala and
Makalintal, JJ., concur.

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