Commissioner of Customs vs.

Esso Standard Eastern Inc

GR No. L-28329

Facts:

 Respondent ESSO is a holder of Refining Concession and operates a petroleum refining plant in
Bataan. It enjoys exemption of customs duty under RA 387 or the Petroleum Act of 1949.
 The Collector of Customs held that ESSO was subject to the payment of special import tax
provided in RA 1394 and paid under protest several import tax assessments.
 The Commissioner of Customs upheld the ruling of the Collector of Customs prompting
respondent to appeal to the Court of Tax Appeals. The CTA reversed the rulings of the previous
arbitrators and ordered the refund of the amount of P775.62 to ESSO.
 Petitioners appealed to the Supreme Court contending that the special import tax under RA
1394 is separate and distinct from the customs duty and that the exemption enjoyed by ESSO
from the payment thereof under RA 387 does not include the exemption from payment of the
special import tax provided in RA 1394.

Issue: Whether or not the exemption enjoyed by ESSSO from customs duties granted by RA 387 should
embrace or include the special import tax imposed by RA no 1394

Ruling:

Yes. Where a statute is ambiguous, as RA 1394 appears to be, courts may examine both the printed
pages of the published Act as well as those extrinsic matters that may aid in construing the meaning of
the Statute, such as the history of its enactment, the reasons for the passage of the bill and the purposes
to be accomplished by the measure.

Republic Act 387 was enacted to encourage the exploitation and development of the petroleum
resources of the country. It declared in no uncertain terms that the intensification of the exploration for
petroleum must be carried on unflinchingly even if, for the time being, no taxes may be collected from
the industry. Until this law or any substantial portion thereof is amended or repealed by a subsequent
statute, the intention of the legislature must be upheld.

RA 1394 on the other hand, upon its enactment repealed 6 earlier statutes which had something to do
with the imposition of special levies and/or exemption of certain importations from the burden of the
special import tax on levies. It is apparent that that RA 387, the Petroleum Act had been spared from the
pruning knife of Congress, although this latter law, RA 387, had granted more concessions and tax
exemption privileges than any of the statutes that were amended, repealed or revoked by RA 1394. It
therefore follows that the Congress saw fit to preserve the privileges granted under the RA 387 or
Petroleum Law of 1949 in order to keep the door open to the exploitation and development of
petroleum resources of the country.