Casco Philippines Chemical Co. Inc v.

Gimenez and Mathay

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

FACTS:
On July 1, 1959, the Central Bank issued Circular No.95 implementing a
uniform margin fee of 25% on foreign exchange transactions pursuant to Republic
Act No. 2609 or the Foreign Exchange Margin Fee Law. In November and
December 1959, petitioner Casco Philippines Chemical Co., which was engaged in
the manufacture of resin glues used in bonding lumber and hardwood, bought
foreign exchange for the importation of urea and formaldehyde that were the main
raw materials for the said glues. In total Casco paid for 33,765 pesos as the 25%
margin fee for the said transactions. On November 3, 1959, Casco actually asked
the Monetary Board of the Central Bank for a refund stating that Resolution No.
1529 of the said Board exempted the importation of urea and formaldehyde from
the 25% margin fee. After another purchase of foreign exchange on May 1960 with
the sum of 6,345 as margin fee, Casco again requested for a refund. Central issued
vouchers for the refund of a little over 40,000 pesos to Casco but Respondent
Auditor Ismael Mathay refused to pass the same in audit. Auditor General Pedro
Gimenez affirmed Mathays act based on Section 2, Paragraph 18 of R.A. No.
2609.

ISSUE: W/N urea and formaldehyde are exempt by law from the payment of
margin fee?

HELD: NO. Section 2, Paragraph 18 of R.A. No. 2609 exempts the imposition of
margin fee to Urea formaldehyde for the manufacture of plywood and hardboard.
The Auditor of Central Bank and Auditor General were correct in not exempting
Casco from payment of the margin fee since they bought foreign exchange for urea
and formaldehyde as raw materials whereas the exemption in R.A. No. 2609
referred to Urea formaldehyde as a finished product. The National Institute of
Science and Technology posits that Urea formaldehyde is not a mere chemical
solution but a completely different product. Cascos contention that the bill passed
by Congress contained the conjuction and between urea and formaldehyde is of
no merit as the exemption of urea and formaldehyde as separate products was not
the view of Senate and such interpretation will go against the enrolled bill doctrine.
Decision of Auditor General is AFFIRMED.

Enrolled Bill Doctrine: Signing of a bill by House Speaker and Senate President
and certifications of secretaries of both Houses should suffice for the bills
enactment and the Court can no longer alter, interpret, or assume that a printing
mistake has been made.