Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-23623 June 30, 1977
ACTING COMMISSIONER OF CUSTOMS, petitioner,
vs.
MANILA ELECTRIC COMPAN !n" COURT OF TA# APPEALS, respondents.
Solicitor General Arturo A. Alafriz Assistant Solicitor General Felicisimo R. Rosete and Solicitor Alejandro
B. Afurong for petitioner.
Ross, Selph Salcedo, Del Rosario Bito & Misa for priate respondent.

FERNAN$O, J.:
he reversal b! respondent Court of a" #ppeals of a deter$ination b! the then #ctin% Co$$issioner of
Custo$s, the late Norberto Ro$ualde&, 'r., that private respondent Manila Electric Co$pan! (as not
e"e$pt fro$ the pa!$ent of the special i$port ta" under Republic #ct No. )*+,
1
for ship$ent to it of
insulatin% oil, respondent Court entertainin% the contrar! vie(
2
led to this petition for revie(. he contention pressed in
support of the petition is that as a ta" e"e$ption is to be construed strictl!, the decision of the respondent Court, (hich
assu$ed that insulatin% oil can be considered as insulators $ust be reversed and set aside. he appealed decision of
respondent Court in the li%ht of applicable authorities supplies the best refutation of such contention. It $ust be sustained.
he appealed decision
3
set forth that petitioner Manila Electric Co., nor private respondent, in appealin% fro$ a
deter$ination b! the then #ctin% Co$$issioner of Custo$s, no( petitioner, -clai$s that it is e"e$pt fro$ the special
i$port ta" not onl! b! virtue of Section . of Republic #ct No. )*+,, (hich e"e$pts fro$ said ta" e/uip$ent and spare
parts for use in industries, but also under Para%raph +, Part (o, of its franchise, (hich e"pressl! e"e$pts is insulators
fro$ all ta"es of (hatever 0ind and nature.
%
It then $ade reference to the franchise of private respondent Manila Electric
Co.1 -Par. +. he %rantee shall be liable to pa! the sa$e ta"es upon its real estate, buildin%s, plant 2not includin% poles,
(ires, transfor$ers, and insulators3, $achiner! and personal propert! as other persons are or $a! be hereafter re/uired
b! la( to pa!. In consideration of Part (o of the franchise herein %ranted, to (it, the ri%ht to build and $aintain in the Cit!
of Manila and its suburbs a plant for the conve!in% and furnishin% of electric current for li%ht, heat, and po(er, and to
char%e for the sa$e, the %rantee shall pa! to the Cit! of Manila t(o and one4half per centu$ of the %ross earnin%s
received fro$ the business under this franchise in the cit! and its suburbs1 ... and shall be in lieu of all ta"es and
assess$ents of (hatsoever nature, and b! (hatsoever authorit! upon the privile%es, earnin%s, inco$e, franchise, and
poles, (ires, transfor$ers, and insulators of the %rantee, fro$ (hich ta"es and assess$ents the %rantee is hereb!
e"pressl! e"e$pted.-
&
It noted that the above -e"e$pts it fro$ all ta"es of (hatever nature, and b! (hatever authorit!,
(ith respect to its insulators in consideration for the pa!$ent of the percenta%e ta" on its %ross earnin%s.-
6
he /uestion then, accordin% to such decision of respondent Court is1 -Does the insulatin% oil in /uestion
co$e (ithin the $eanin% of the ter$ 5insulator 56-
7
hen it (ent on1 -insulatin% oils are $ineral oils of hi%h di4
electrics stren%th and hi%h flash point e$plo!ed in circuit brea0ers, s(itches, transfor$ers and other electric apparatus.
#n oil (ith a flash point of 789 : ; and fire point of *)< : ; is considered safe. # clean, (ell4 refined oil (ill have a
$ini$u$ dielectric of 77,<< volts, but the presence of a slo( as <.<)= (ater (ill reduce the di4electric stren%th drasticall!.
he insulatin% oils, therefore, cannot be stored for lon% periods because of the dan%er of absorbin% $oisture. I$purities
such as acids or al0alies also detract fro$ the stren%th of the oil. Since insulatin% oils are used for coolin% as (ell as for
insulatin%, the viscosit! should be lo( enou%h for free circulation, and the! should not %u$. 2Materials >andboo0 b!
?eor%e '. @rad!, 8th Edition )+9., pp. ,7)4,7*.3 ... .-
'
he last portion of the appealed decision e"plained (h! the deter$ination of the #ctin% Co$$issioner of
Custo$s $ust be reversed1 -here is no /uestion that insulatin% oils of the t!pe i$ported b! petitioner are
5used for coolin% as (ell as for insulatin%,5 and (hen used in oil circuit brea0ers, the! are 5re/uired to
$aintain insulation bet(een the contacts inside the tan0 and the tan0 itself.5 ... he decision appealed
fro$ not bein% in accordance (ith la(, the sa$e is hereb! reversed. Respondent is ordered to refund to
petitioner the su$ of P++9.<< (ithin thirt! da!s fro$ the date this decision beco$es final, (ithout
pronounce$ent as to costs.-
9
It (as therein $ade clear that private respondent (as not liable for the pa!$ent of the
special i$port ta" under Republic #ct No. )*+,.
#s noted at the outset, the decision spea0s for itself. It cannot be sti%$ati&ed as sufferin% fro$ an! fla(
that (ould call for its reversal.
). It is to be ad$itted, as contended b! petitioner, that this Court is co$$itted to the principle that an
e"e$ption fro$ ta"ation $ust be Austified b! (ords too clear to be $isread. #s set forth in !ommissioner
of "nternal Reenue . Guerrero#
10
-;ro$ )+<., in !atholic !hurch . $astings to )+.., in %sso Standard %astern,
"nc. . Acting !ommissioner of !ustoms, it has been the constant and unifor$ holdin% that e"e$ption fro$ ta"ation is not
favored and is never presu$ed, so that if %ranted it $ust be strictl! construed a%ainst the ta"pa!er. #ffir$ativel! put, the
la( fro(ns on e"e$ption fro$ ta"ation, hence, an e"e$ptin% provision should be construed strictissimi juris.-
11
Such a
rulin% (as reaffir$ed in subse/uent decisions.
12
It does not $ean, ho(ever, that petitioner should prevail, for as (as
une/uivocall! set forth in the leadin% ease of Repu&lic Flour Mills . !ommissioner of "nternal Reenue,
13
this Court
spea0in% throu%h 'ustice '.@.B. Re!es. -It is true that in the construction of ta" statutes ta" e"e$ptions 2and deductions
are of this nature3 are not favored in the la(, and are construed strictissimi juris a%ainst the ta"pa!er. >o(ever, it is
e/uall! a reco%ni&ed principle that (here the provision of the la( is clear and una$bi%uous, so that there is no occasion
for the court5s see0in% the le%islative intent, the la( $ust be ta0en as it is, devoid of Audicial addition or subtraction. In this
ease, (e find the provision of Section )8.4# 4(henever a ta' free product is utili&ed, ... C all enco$passin% to
co$prehend ta"4free ra( $aterials, even if i$ported. Dhere the la( provided no /ualification for the %rantin% of the
privile%e, the court is not at libert! to suppl! an!.
1%
hat is (hat (as done b! respondent Court of a" #ppeals. It sho(ed
fealt! to this e/uall! (ell. settled doctrine. It construed the statutor! provision as it is (ritten. It is precluded, in the
lan%ua%e of Ethe Republic ;lour Mills opinion, considerin% that the la( is clear and a$bi%uous, to loo0 further for an!
le%islative intent, as -the la( $ust be ta0en as it is, devoid of Audicial addition or subtraction.-
1&
If there is an e"tended
discussion of this point, it is due solel! to the e$phasis placed on the $atter b! petitioner.
7. Moreover, the decision of respondent Court under revie( finds support in Bal&as . Domingo.
16
hus1
-No other conclusion is possible in vie( of the (ell4settled principle that this Court is bound b! the findin% of facts of the
Court of a" #ppeals, onl! /uestions of la( bein% open to it for deter$ination. #s stated in another decision, 5onl! errors of
la(, and not rulin%s on the (ei%ht of evidence, are revie(able b! this Court.5 he facts then as above ascertained cannot
be disturbed. In our latest decision, there is a cate%orical assertion that (here the /uestion is one of fact, it is no lon%er
revie(able.
17
Such a doctrine is not of li$ited application. It is a reco%nition of the (ide discretion enAo!ed b! the Court of
a" #ppeals in construin% ta" statutes. So it (as cate%oricall! held in Alham&ra !igar and !igarette Manufacturing !o. .
!ommissioner of "nternal Reenue1
1'
-Nor as a $atter of principle is it advisable for this Court to set aside the conclusion
reached b! an a%enc! such as the Court of a" #ppeals (hich is, b! the ver! nature of its function, dedicated e"clusivel!
to the stud! and consideration of ta" proble$s and has necessaril! developed an e"pertice on the subAect, unless, as did
not happen here, there has been an abuse or i$provident e"ercise of its authorit!.
19
hat sa$e approach (as reflected
in Re(es . !ommissioner of "nternal Reenue,
20
!hu $oi $orn . !ourt of )a' Appeals,
21
*i *e !hemical +roducts .
!ommissioner of !ustoms,
22
and ,asiad . !ourt of )a' Appeals.
23
he Vi Ve decision has so$e relevance. here the
stand of the state that the Court of a" #ppeals could ri%htfull! deter$ine that 5-priopionic %l!cine- is the sa$e as %luta$ic
acid-
2%
(as considered as (ell (ithin the authorit! of respondent Court. It (ould be an affront to the sense of fairness and
of Austice if in another case, respondent Court, in the e"ercise of its discretionar! authorit!, after deter$inin% that insulatin%
oil co$es (ithin the ter$ insulator, is not be upheld.
D>ERE;ORE, the petition for revie( is dis$issed. No costs.
Barredo, Antonio and !oncepcion, -r., --., concur.
A.uino, -., concurs in the result.

Foo(no(e)
) Cf. See. + of Rep. #ct No. )*+, 2)+993.
7 he decision (as penned b! the then 'ud%e Ro$an F$ali.
* #nne" C, Petition.
, "&id, ).
9 "&id, )47
. "&id, 7.
G "&id.
8 "&id, 74*.
+ "&id, *4,. Dhile references (as $ade to the franchise of private respondent, the decision
(as li0e(ise $ade to rest on the lan%ua%e of Republic #ct No. )*+,.
)< B47<8)7, Septe$ber 77, )+.G, 7) SCR# )8<.
)) "&id, )8*4)8,. Catholic Church v. >astin%s in reported in 9 Phil. G<) 2)+<.3 and Esso
Standard Eastern, Inc. v. #ctin% Co$$issioner of Custo$s, B47)8,), October 78,)+.., in
)8 SCR# ,88. he opinion also cited ?overn$ent v. Monte de Piedad, *9 Phil. ,7 2)+).3.
#siatic Petroleu$ ?o. vs. Blanes ,+ Phil. ,.. 2)+7.3E >ouse v. Posadas, 9* Phil. **8
2)+7+3E Phil. el. and el. Co. vs. Collector, 98 Phil. .*+ 2)+**3E ?reenfiled v. Meer, GG Phil.
*+, 2)+,.3E Collector of Internal Revenue v. Manila 'oc0e! Club, +8 Phil. .G< 2)+9.3E Phil.
?uarant! Co., Inc. v. Co$$issioner, B477<G,, Septe$ber ., )+.9, )9 SCR# )E and #bad v.
Court of a" #ppeals, B47<8*,, October )+, )+.., )8 SCR# *G,.
)7 Cf. Co$$issioner of Internal Revenue v. Visa!an Electric Co., B477.)), Ma! 7G, )+.8,
7* SCR# G)9E E. Rodri%ue& v. Collector of Internal Revenue, B47*<,), 'ul! *), )+.+, 78
SCR# )))+E #sturias Su%ar Central v. Co$$issioner of Custo$s, B4) +**G. Sept. *<, )+.+,
7+ SCR# .)GE Philippine Iron Mines v. Co$$issioner of Custo$s v. Philippine #cet!lene
Co., B477,,*, Ma! 7+, )+G), *+ SCR# G<E Davao Bi%ht and Po(er Co. v. Co$$issioner of
Custo$s, B478G*+, March 7+, )+G7, ,, SCR# )77E Donder Mechnical En%ineerin% Corp. v.
Court of a" #ppeals, B4778+9, 'une *<, )+G9, ., SCR# 999E Co$$issioner of Internal
Revenue v. P. '. Hiener Co., B47,G9,, 'ul! )8, )+G9, .9 SCR# ),7E Manila Electric Co. v.
Vera, B47++8G, Oct. 77, )+G9, .G SCR# *9).
)* B479.<7, ;ebruar! )8, )+G<, *) SCR# 97<.
), "&id, 97G.
)9 "&id.
). B4)+8<,, October 7*,)+.8,7) SCR# ,,,.
)G "&id, ,,8. he opinion cited Sanche& v. Co$$issioner of Custo$s, )<7 Phil. *G 2)+9G3E
Castro v. Collector of Internal Revenue, )), Phil. )<*7 2)+.73E Co$$issioner of Internal
Revenue v. Priscila Estate, Inc., B4)8787, Ma! 7+, )+.,, )) SCR# vs. Philippine ?uarant!
Co., Inc. v. Co$$issioner of Internal Revenue, B477<G,, Sept. ., )+.9, )9 SCR# )E and
Republic v. Ra&on, B4)G,.7, Ma! 7+, )+.G,7< SCR# 7*,.
)8 B47*77., Nove$ber 78, )+.G, l SCR# )))).
)+ "&id, )))84)))+.
7< B47,<7<, 'ul! 7+, )+.8, 7, SCR# )+8.
7) B477<,., October 7+, )+.8, 79 SCR# 8<+.
77 B478.+*, Septe$ber *<, )+G,, .< SCR# 97.
7* B47+*)8, Nove$ber 7+, )+G,, .) SCR# 7*8.
7, .< SCR# 97, 9+.