PHILIPPINE VS GIMENEZ GR No L-17931 1963-02-28

G.R. No. L-17931, February 28, 1963 CASCO PHILIPPINE CHEMICAL CO., INC.
, PETITIONER,
VS. HON. PEDRO GIMENEZ, IN HIS CAPACITY AS AUDITOR-GENERAL OF THE PHILIPPINES,
AND HON. ISMAEL MATHAY, IN HIS CAPACITY AS AUDITOR OF THE CENTRAL BANK,
RESPONDENTS.
DECISION
CONCEPCION, J.:
This is a petition for review of a decision of the Auditor General denying a claim for refund of
petitioner Casco Philippine Chemical Co., Inc.
The main facts are not disputed. Pursuant to the provisions of Republic Act No. 2609, otherwise
known as the Foreign Exchange Margin Fee Law, the Central Bank of the Philippines issued on July
1, 1959, its Circular No. 95, fixing a uniform margin fee of 25% on foreign exchange transactions. To
supplement the circular, the Bank later promulgated a memorandum establishing the procedure for
applications for exemption from the payment of said fee, as provided in said Republic Act No. 2609.
Several times in November and December 1959, petitioner Casco Philippine Chemical Co., Inc.
which is engaged in the manufacture of synthetic resin glues, used in bonding lumber and veneer by
plywood and hardboard producers-bought foreign exchange for the importation of urea and
formaldehyde-which are the main raw materials in the production of said glues and paid therefor the
aforementioned margin fee aggregating P33.765.42. In May, 1960, petitioner made another purchase
of foreign exchange and paid the sum of P6,345.72 as margin fee therefor.
Prior thereto, petitioner had sought the refund of the first sum of P33,765.42, relying upon Resolution
No. 1529 of the Monetary Board of said Bank, dated November 3, 1959, declaring, that the separate
importation of urea and formaldehyde is exempt from Said fee. Soon after the last importation of
these products, petitioner made a similar request for refund of the sum of P6,345.72 paid as margin
fee therefor. Although the Central Bank issued the corresponding margin fee vouchers for the refund
of said amounts, the Auditor of the Bank refused to pass in audit and approve said vouchers, upon
the ground that the exemption granted by the Monetary Board for petitioner's separate importations of
urea and formaldehyde is not in accord with the provisions of Section 2, paragraph XVIII of Republic
Act No. 2069. On appeal taken by petitioner, fie Auditor General subsequently affirmed said action of
the Auditor of the Bank. Hence, this petition for review.
The only question for determination in this case is whether or not "urea" and "formaldehyde" are
exempt by law from the payment of the aforesaid margin fee. The pertinent portion of Section 2 of
Republic Act No. 2069 reads:
"The margin established by the Monetary Board pursuant to the provision of section one
hereof shall not be imposed upon the sale of foreign exchange for the importation of the
following:
"XVIII. Urea, formaldehyde for the manufacture of plywood and hardboard when imported by
and for the exclusive use of endusers "
Petitioner maintains that the term "urea formaldehyde" appearing in this provision should be
construed as "urea and formaldehyde" (italic ours) and that respondents herein, the Auditor General
and the Auditor of the Central Bank have erred in holding otherwise. In this connection, it should be
noted that, whereas "urea'" and "formaldehyde" are the principal raw materials in the manufacture of
synthetic resin glues, the National Institute of Science and Technology has expressed, through its
Commissioner, the view that
"Urea formaldehyde is not a chemical solution. It is the synthetic resin formed as a

condensation product from definite proportions of urea and formaldeyhe under certain
conditions relating to temperature, acidity, and time of reaction. This produce when applied in
water solution and extended with inexpensive fillers constitutes' a fairly low cost adhesive for
use in the manufacture of plywood."
Hence, "urea formaldehyde" is clearly a finished product, which is patently distinct and different from,
"urea" and "formaldehyde", as separate articles used in the manufacture of the synthetic resin known
as "urea formaldehyde", Petitioner contends, however, that the bill approved, in Congress contained
the copulative conjunction "and" between the terms "urea" and, "formaldehyde", and that the
members of Congress intended to exempt "urea", and "formaldehyde" separately as essential
elements in the manufacture of the synthetic resin glue called "urea and formaldehyde", not the latter
a finished product, citing in support of this view the statements made on the floor of the Senate,
during the consideration of the bill before said House, by members thereof. But, said individual
statements do not necessarily reflect the view of the Senate. Much less do they indicate the intent of
the House of Representatives (see Song Kiat Chocolate Factory vs. Central Bank, 102 Phil., 477 54.
Off. Gaz., 615; Mayon Motors, Inc. vs. Acting Commissioner of Internal Revenue, 111 Phil. 52-A,
Manila Jockey Club, Inc. vs. Games & Amusement Board, 107 Phil., 151. Furthermore, it is well
settled that the enrolled billwhich uses the term "urea formaldehyde" instead of "urea and
formaldehyde" is conclusive upon the courts as regards the tenor of the measure passed by
Congress and approved by the President (Primicias vs. Paredes, 61 Phil., 118, 120; Mabanag vs.
Lopez Vito, 78 Phil., I; Macias vs. Comm. on Elections, L-18684, September 14, 1961). If there has
been any mistake in the printing of the bill before it was certified by the officers of Congress and
approved by the Executiveon which we cannot speculate, without jeopardizing the principle of
separation of powers and undermining one of the cornerstones of our democratic system the remedy
is by amendment or curative legislation, not by judicial decree."
Wherefore, the decision appealed from is hereby affirmed, with costs against the petitioner. It is so
ordered.
Bengzon, C. J., Padilla, Bautista Angelo, Labrador, Reyes, J. B. L., Barrera, Paredes, Dizon,
Regala and Makalintal. J.J., concur.
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G.R. No. L-17931, February 28, 1963 CASCO PHILIPPINE CHEMICAL CO., INC.

"Urea formaldehyde is not a chemical solution. It is the synthetic resin formed as a

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