CASCO VS. GIMENEZ

CASCO PHILIPPINE CHEMICAL CO. VS.  HON PEDRO GIMENEZ AND ISMAEL MATHAY

GR No. L- 17931

February 28, 1963

FACTS:

Casco Philippine Chem. Co is a manufacturer of synthetic glue. In November and December 1959 and in May 1960 , the company bought foreign exchange for the importation of urea and formaldehyde and paid a margin fee to the central bank in the amount of 40, 111.14. Prior to this, the central bank, pursuant to the Republic Act 2906 otherwise known as Foreign Exchange Margin Fee Law, issues a circular no. 95 fixing a margin fee of 25 % effective July 1, 1959 and later on issues a memorandum order establishing a procedure for the exemption thereof.

The petitioner thereof requested for a refund of the said amount. However,  although the central bank issued a voucher for a refund, the auditor did not approved its release on the ground that it was not in accordance with section 2 paragraph 8 of RA 2906 which was affirmed by the Auditor General, hence the petitioner sought an appeal to the Supreme Court.

ISSUE:   Whether or not urea and formaldehyde are exempted by law for the payment of margin fee in reference to RA 2906?

RULING: The court affirmed the decision of the Auditor General denying the claim for a refund of the petitioner on the premise that “urea formaldehyde” is a finish product and not a chemical solution and is therefore different from urea and formaldehyde which are raw materials used to produce synthetic glue as clearly defined by DOST and the enrolled bill which uses the term “urea formaldehyde” instead of urea and formaldehyde being conclusive upon the courts.