Scribd
Upload
60 views2 pages

CPCC vs. Gimenez

The Supreme Court of the Philippines affirmed the Auditor General's denial of Casco Philippine Chemical Co.'s claim for a refund of margin fees paid on foreign exchange transactions. While Casco argued that "urea" and "formaldehyde" should be exempt separately under the law, the Court found that the enrolled bill specifically exempted only "urea formaldehyde", which is a finished product distinct from its raw materials. As the enrolled bill is conclusive, the Court could not speculate about legislative intent from individual statements and must interpret the law as written.

Uploaded by

Babes Aubrey DelaCruz Aquino
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
60 views2 pages

CPCC vs. Gimenez

The Supreme Court of the Philippines affirmed the Auditor General's denial of Casco Philippine Chemical Co.'s claim for a refund of margin fees paid on foreign exchange transactions. While Casco argued that "urea" and "formaldehyde" should be exempt separately under the law, the Court found that the enrolled bill specifically exempted only "urea formaldehyde", which is a finished product distinct from its raw materials. As the enrolled bill is conclusive, the Court could not speculate about legislative intent from individual statements and must interpret the law as written.

Uploaded by

Babes Aubrey DelaCruz Aquino
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 2

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-17931             February 28, 1963

CASCO PHILIPPINE CHEMICAL CO., INC., petitioner, 


vs.
HON. PEDRO GIMENEZ, in his capacity as Auditor General of the Philippines, 
and HON. ISMAEL MATHAY, in his capacity as Auditor of the Central Bank, respondents.

Jalandoni & Jamir for petitioner.


Officer of the Solicitor General for respondents.

CONCEPCION, J.:

This is a petition for review of a decision of the Auditor General denying a claim for refund of
petitioner Casco Philippine Chemical Co., Inc.

The main facts are not disputed. Pursuant to the provisions of Republic Act No. 2609,
otherwise known as the Foreign Exchange Margin Fee Law, the Central Bank of the
Philippines issued on July 1, 1959, its Circular No. 95. fixing a uniform margin fee of 25% on
foreign exchange transactions. To supplement the circular, the Bank later promulgated a
memorandum establishing the procedure for applications for exemption from the payment of
said fee, as provided in said Republic Act No. 2609. Several times in November and
December 1959, petitioner Casco Philippine Chemical Co., Inc. — which is engaged in the
manufacture of synthetic resin glues, used in bonding lumber and veneer by plywood and
hardwood producers — bought 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
aforementioned margin fee aggregating P33,765.42. In May, 1960, petitioner made another
purchase of foreign exchange and paid the sum of P6,345.72 as margin fee therefor.

Prior thereto, petitioner had sought the refund of the first sum of P33,765.42, relying upon
Resolution No. 1529 of 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
last importation of these products, petitioner made a similar request for refund of the sum of
P6,345.72 paid as margin fee therefor. Although the Central Bank issued the corresponding
margin fee vouchers for the refund of said amounts, the Auditor of the Bank refused to pass in
audit and approve said vouchers, upon the ground that the exemption granted by the
Monetary Board for petitioner's separate importations of urea and formaldehyde is not in
accord with the provisions of section 2, paragraph XVIII of Republic Act No. 2609. On appeal
taken by petitioner, the Auditor General subsequently affirmed said action of the Auditor of the
Bank. Hence, this petition for review.

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 pertinent portion of
Section 2 of Republic Act No. 2609 reads:

The margin established by the Monetary Board pursuant to the provision of section one
hereof shall not be imposed upon the sale of foreign exchange for the importation of the
following:.
xxx     xxx     xxx

XVIII. Urea formaldehyde for the manufacture of plywood and hardboard when imported
by and for the exclusive use of end-users.

Wherefore, the parties respectfully pray that the foregoing stipulation of facts be
admitted and approved by this Honorable Court, without prejudice to the parties
adducing other evidence to prove their case not covered by this stipulation of
facts. 1äwphï1.ñët

Petitioner maintains that the term "urea formaldehyde" appearing in this provision should be
construed as "urea andformaldehyde" (emphasis supplied) and that respondents herein, the
Auditor General and the Auditor of the Central Bank, have erred in holding otherwise. In this
connection, it should be noted that, whereas "urea" and "formaldehyde" are the principal raw
materials in the manufacture of synthetic resin glues, the National Institute of Science and
Technology has expressed, through its Commissioner, the view that:

Urea formaldehyde is not a chemical solution. It is the synthetic resin formed as a


condensation product from definite proportions of urea and formaldehyde under certain
conditions relating to temperature, acidity, and time of reaction. This produce when
applied in water solution and extended with inexpensive fillers constitutes a fairly low
cost adhesive for use in the manufacture of plywood.

Hence, "urea formaldehyde" is clearly a finished product, which is patently distinct and
different from urea" and "formaldehyde", as separate articles used in the manufacture of the
synthetic resin known as "urea formaldehyde". Petitioner contends, however, that the bill
approved in Congress contained the copulative conjunction "and" between the terms "urea"
and "formaldehyde", and that the members of Congress 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.

You might also like