PHILIPPINE BRITISH ASSURANCE COMPANY, INC. vs. BUREAU OF CUSTOMS- Customs Bonds
Philippine British Assurance Company was an insurance company which regularly issued customs bonds to its clients in favor of the BOC. The bonds secure the release of imported goods in order that the goods may be released without prior payment of duties and taxes. Under these bonds, Petitioner and its clients jointly bind themselves to pay BOC the value of the bonds in the event that the bonds expire without the imported goods being re-exported or the proper duties being paid. BOC then filed a collection case alleging that Petitioner had unliquidated customs bonds. The RTC decided in favor of BOC but the appeal filed with the Court of Appeals was dismissed as the CA claimed lack of jurisdiction and said that the appeal lies with the CTA as a case for collection of taxes.
Did the CA, not the CTA, have jurisdiction over the appeal filed from the RTC?
YES. An action to collect on a bond used to secure the payment of taxes is not a tax collection case but rather a simple case for enforcement of contractual liability. This was the same ruling in Mambulao Lumber where to satisfy its deficiency sales tax, the parties agreed for the taxpayer to pay in installments and as a security a bond was executed. Upon default, the government proceeded against the bond while the taxpayer argued that the 5-year period to collect had set in. The Court ruled that the prescription rules under the Tax Code do not apply and instead those under the Civil Code apply.