By: Braynel Pural

SOUTHERN CROSS CEMENT CORPORATION vs.

THE PHILIPPINE CEMENT MANUFACTURERS CORP., ET AL.

G.R. No. 158540, July 8, 2004, TINGA, J.

Topic: Tariff Powers

The Congress may, by law, authorize the President to fix within specified limits, and subject to
such limitations and restrictions as it may impose, tariff rates, import and export quotas, tonnage
and wharfage dues, and other duties or imposts within the framework of the national
development program of the Government.

Facts:

Petitioner Southern Cross Cement Corporation ("Southern Cross") is a domestic corporation

engaged in the business of cement manufacturing, production, importation and exportation. Its
principal stockholders are Taiheiyo Cement Corporation and Tokuyama Corporation,
purportedly the largest cement manufacturers in Japan

Philippine Cement Manufaturers Corporation is an association of domestic cement

manufacturers. It contended that because of the importation of Gray Portland cement, it affected
caused declines in domestic production, capacity utilization, market share, sales and
employment; as well as caused depressed local prices.

It sought the imposition of provisional remedies but the Tariff Commissioner did not grant such
imposition. DTI then imposed the provisional remedies in violation of the Safeguard Measures
(SMA). This was then alleged by South Cement that DTI cannot impose provisional remedies
since Tariff Commissioner did not approve such. It was contended by South Cement that the
power delegated by Congress to President in case of tariff and customs is absolute.

- Philippine Cement Manufacturers Corporation (Philcemcor), an association of domestic

cement manufacturers, filed with the Department of Trade and Industry (DTI) an
application for the imposition of a definitive safeguard measure on the importation of
gray Portland cement.
- Philcemcor alleged that gray Portland cement was being imported in increased quantities,
thus causing declines in domestic production, capacity utilization, market share, sales and
employment, as well as depressed local prices.
- Southern Cross Cement Corporation, a domestic corporation engaged in the business of
cement manufacturing, production, exportation, and importation opposed Philcemcor’s
application.
- In accordance with the procedure laid down in RA 8800, the Bureau of Import Services
of the DTI conducted a preliminary investigation, after which it determined the existence
of critical circumstances justifying the imposition of provisional measures.
- DTI issued an Order imposing a provisional measure in the form of a safeguard duty
equivalent to twenty pesos and sixty centavos (P20.60) per forty- kilogram (40-kg) bag
on all importations of gray Portland cement for a period not exceeding two hundred (200)
days from the date of issuance by the Bureau of Customs (BOC) of the implementing
Customs Memorandum Order
- It then forwarded the application for formal investigation and final determination to the
Tariff Commission.
- Tariff Commission found no cause for Safeguard Measures (negative determination).
DTI disagreed but upon consultation with DOJ, dismissed the application as it is bound
by the determination of the Tariff Commission.
- Philcemcor appealed in the CA. The CA granted Philcemcor’s petition in part, saying the
negative determination is not binding. DTI released a MO imposing Safeguard Measures
because of the CA decision.
- Southern Cross filed this petition in the SC.
- On 23 June 2003, Southern Cross filed the present petition, arguing that the Court of
Appeals has no jurisdiction over Philcemcors petition, as the proper remedy is a petition
for review with the CTA conformably with the SMA, and; that the factual findings of the
Tariff Commission on the existence or non-existence of conditions warranting the
imposition of general safeguard measures are binding upon the DTI Secretary.
- Despite the fact that the Court of Appeals Decision had not yet become final, its binding
force was cited by the DTI Secretary when he issued a new Decision on 25 June 2003,
wherein he ruled that that in light of the appellate courts Decision, there was no longer
any legal impediment to his deciding Philcemcors application for definitive safeguard
measures.
- The Court of Appeals had held that based on the foregoing premises, petitioner’s prayer
to set aside the findings of the Tariff Commission in its assailed Report dated March 13,
2002 is DENIED. On the other hand, the assailed April 5, 2002 Decision of the Secretary
of the Department of Trade and Industry is hereby SET ASIDE. Consequently, the case is
REMANDED to the public respondent Secretary of Department of Trade and Industry for
a final decision in accordance with RA 8800 and its Implementing Rules and
Regulations. Hence, the appeal.
- Yet on 25 June 2003, the DTI Secretary issued a new Decision, ruling this time that that
in light of the appellate courts Decision there was no longer any legal impediment to his
deciding Philcemcors application for definitive safeguard measures.[41] He made a
determination that, contrary to the findings of the Tariff Commission, the local cement
industry had suffered serious injury as a result of the import surges.[42] Accordingly, he
imposed a definitive safeguard measure on the importation of gray Portland cement, in
the form of a definitive safeguard duty in the amount of P20.60/40 kg. bag for three years
on imported gray Portland Cement. Hence, the appeal.
Issue:

1.) Whether the power of the President delegated by the Congress in case of tariffs and customs
code is absolute and not subject to limitation.

2.) Whether or Not the DTI secretary could impose a general safeguard measure only upon a
positive final determination by the Tariff Commission?

Ruling:

1.) NO. Section 28(2), Article VI of the 1987 Constitution confirms the delegation of legislative
power, yet ensures that the prerogative of Congress to impose limitations and restrictions on the
executive exercise of this power:
The Congress may, by law, authorize the President to fix within specified limits, and subject to
such limitations and restrictions as it may impose, tariff rates, import and export quotas, tonnage
and wharfage dues, and other duties or imposts within the framework of the national
development program of the Government.
This delegation of the taxation power by the legislative to the executive is authorized by the
Constitution itself. At the same time, the Constitution also grants the delegating authority
(Congress) the right to impose restrictions and limitations on the taxation power delegated to the
President. The restrictions and limitations imposed by Congress take on the mantle of a
constitutional command, which the executive branch is obliged to observe.
The SMA empowered the DTI Secretary, as alter ego of the President, to impose definitive
general safeguard measures, which basically are tariff imposts of the type spoken of in the
Constitution. However, the law did not grant him full, uninhibited discretion to impose such
measures. The DTI Secretary authority is derived from the SMA; it does not flow from any
inherent executive power. Thus, the limitations imposed by Section 5 are absolute, warranted as
they are by a constitutional fiat.
2.) YES, according to Sec 5 of SMA, procedure requires a positive determination from TC
before DTI can impose safeguard measures. The plain meaning of Section 5 was that only if the
Tariff Commission rendered a positive determination could the DTI secretary impose a safeguard
measure. The TC’s power to make a “positive final determination” must be distinguished from
the power to impose general safeguard measures, a power that is vested in the DTI secretary. The
legislative intent should be given full force and effect, as the executive power to impose
definitive safeguard measures is but a delegated power -- the power of taxation which is, by
nature and by command of the fundamental law, a preserve of the legislature. The SMA
empowered the DTI secretary, as alter ego of the President, to impose definitive safeguard
measures, which were basically tariff imposts of the type spoken of in the Constitution. The law,
however, did not grant the executive official full and uninhibited discretion to impose such
measures.