Commissioner of Customs, petitioner, vs Hypermix Feeds, respondent

G.R. No. 179579 (February 1, 2012) Case Digest

Topic: Retroactivity; equal protection clause

Facts:
 On 7 November 2003, petitioner Commissioner of Customs issued CMO (Customs
Memorandum Order) 27-2003. Under the Memorandum, for tariff purposes, wheat was
classified according to the following: (1) importer or consignee; (2) country of origin; and
(3) port of discharge. Either as food grade or feed grade.
 A month after the issuance of CMO 27-2003, on 19 December 2003, respondent filed a
Petition for Declaratory Relief with the RTC of Las Piñas City.
 Respondent contended that CMO 27-2003 was issued without following the mandate of the
Revised Administrative Code on public participation, prior notice, and publication or
registration with the University of the Philippines Law Center.
 Respondent alleged that the regulation adjudged it to be a feed grade supplier without the
benefit of prior assessment and examination; thus, despite having imported food grade
wheat, it would be subjected to the 7% tariff, forcing them to pay 133% more
 Respondent claimed that the equal protection clause was violated when the regulation
treated non-flour millers differently from flour millers for no reason at all and asserted that
the retroactive application of the regulation was confiscatory in nature.

Issue: Whether or not the CMO 27-2003 of the petitioner met the requirements for the Revised
Administrative Code? Whether or not the content of the CMO 27-2003 met the requirement of the
equal protection clause of the constitution?

Held:
No. The petitioners violated respondents’ right to due process in the issuance of CMO 27-2003
when they failed to observe the requirements under the Administrative Code which are:
Sec 3. Filing (1) Every agency shall file with the University of the Philippines Law Center
three (3) certified copies of every rule adopted by it.
Sec 9. Public Participation (1) An agency shall, as far as practicable, publish or circulate notices of
proposed rules and afford interested parties the opportunity to submit their views prior to the
adoption of any rule.
(2) In the fixing of rates, no rule or final order shall be valid unless the proposed rates
shall have been published in a newspaper of general circulation at least 2 weeks before
the first hearing thereon.
(3) In case of opposition, the rules on contested cases shall be observed.
 CMO 27-2003 is unconstitutional because it failed to meet the equal protection
clause. We do not see how the quality of wheat is affected by who imports it,
where it is discharged or which country it came from.
 For a classification to be reasonable, it must be shown that a) it rests on substantial
distinctions; b) it is germane to the purpose of the law; c) it is not limited to existing
conditions only; and d) it applies equally to all members of the same class.
 Petitioners violated respondents right to equal protection of laws when they provided
for unreasonable classification in the application of the regulation.