Colgate-Palmolive Phil, Inc v.

Gimenez
G.R. No. L-14787 (January 28, 1961)

FACTS: Petitioner Corporation engages in manufacturing toilet preparations and household

remedies. Importation of materials including “stabilizers and flavors” is among those Petitioner
imports. For every importation, Petitioner pays the Central Bank of the Philippines 17% special
excise tax on the foreign exchange used for the payment of the cost, transportation and other
charges pursuant to RA 601, the Exchange Tax Law. Under such law, it was also provided that:
“Foreign exchanged used for the payment of cost, transportation and/or other charges incident to
the importation into the Philippines of … stabilizer and flavors … shall be refunded to any
importer making application therefore.” The petitioner therefore seeks a refund of the 17%
special excise tax.

ISSUE: WON the imports of “dental cream stabilizers and flavors” are subject to a 17%
transportation tax exemption under the Exchange Tax Law.

HELD: No. The refusal to deny refund was based on the following argument: All the items
enumerated for the tax exemption falls under one specific class, namely: food products, books
supplies/ materials and medical supplies. The “stabilizers and flavors” the petitioners refer to are
items which must fall under the category of food products. Because such items will be used for
toothpaste, it is not a food product and therefore not subject to exemption. Petitioner’s
arguments effected the grant of the refund: RA 601 does not categorize the exceptions as stated
above. Though “stabilizers and flavors” are preceded by items that might fall under food
products, the following which were included are hardly such: fertilizer, poultry feed, vitamin
concentrate, cattle, and industrial starch. Therefore, the law must be seen in its entire context, not
the parts and categorizations posited by the respondent.