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Petition for review from a decision of the Court of Tax Appeals, which declared respondent
MERALCO exempt from taxes on its importation of insulating oil. The SC denied the petition, ruling
that petitioners contention (that insulating oil is not covered by the tax exemption on insulators) is a
question of fact that is not reviewable by the SC.
DOCTRINE
The CTA enjoys wide discretion in construing tax statutes. The SC is thus bound by the findings of
fact of the CTA, and if the question before the SC is one of fact, it is no longer reviewable.
Alhambra Cigar and Cigarette Manufacturing Co. v. Commissioner of Internal Revenue: "Nor as a
matter of principle is it advisable for this Court to set aside the conclusion reached by an agency such
as the Court of Tax Appeals which is, by the very nature of its function, dedicated exclusively
to the study and consideration of tax problems and has necessarily developed an expertise on
the subject, unless there has been an abuse or improvident exercise of its authority
IMPORTANT PEOPLE
Acting Commissioner of Customs petitioner
MERALCO respondent
FACTS
1. MERALCO sought an exemption from import tax on its insulating oil. It cited the special import
tax set out in the ff. laws:
Sec. 6, RA 1394, which exempts from import tax equipment and spare parts for use in
industries; and
Par. 9, Part Two of MERALCOs franchise, which expressly exempts its insulators from
all taxes of whatever kind or nature. (p. 471 of the case states the provision verbatim)
2. The then-Acting Commissioner of Customs, the late Norberto Romualdez, Jr., determined that
MERALCO was not exempt from the tax.
He held that insulating oil does not come within the purview of insulators as stated in
MERALCOs franchise.
3. On appeal, the CTA reversed the Customs Commissioners decision and held that
MERALCO was not liable for import tax on its insulating oil.
It held that insulating oil does in fact come within the meaning of the term insulator. (refer
to p. 472 of the case for the full text of the CTA decision)
The last portion of the CTA decision states:
o There is no question that insulating oils of the type imported by petitioner are 'used
for cooling as well as for insulating,' and when used in oil circuit breakers, they are
'required to maintain insulation between the contacts inside the tank and the tank
itself.' ... The decision appealed from not being in accordance with law, the same is
hereby reversed. Respondent is ordered to refund to petitioner the sum of P995.00
within thirty days from the date this decision becomes final, without pronouncement
as to costs."
1
4. Thus, this petition for review by the Customs Commissioner to the SC.
DISPOSITIVE PORTION
Petition denied.