Casco Chemical Co. vs Gimenez Facts: Casco Chemical Co.

, is a manufacture of synthetic resin glues used in bonding lumber and veneer by plywood and hardwood producers, The said company imports urea and formaldehyde which are the main raw materials in their production. Pursuant to the provisions of Republic Act No. 2609, known as the Foreign Exchange Margin Fee Law, the Central Bank of the Philippines issued a Circular No. 95. fixing a uniform margin fee of 25% on foreign exchange transactions. Later on the Bank promulgated a memorandum for the exemption from the payment of said fee. As a margin fee the company paid P 33,765.42 in November and December 1949 and P6345.72 in May 1960. The petitioner sought the refund of the first and second sum 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. The Auditor of the Bank, Pedro Gimenez, refused to pass and approve the said refund on the ground that the exemption granted by the board is not in accord with the provision of section 2 of RA 2609. Issue: Whether or Not Urea and formaldehyde are exempt by law from the payment of the margin fee. Held: No, it is not exempt from payment of the marginal fee because Section 2 of RA 2609 cited that one particular exception as urea formaldehyde not urea and formaldehyde. The urea formaldehyde is patentedly different from urea and formaldehyde. Urea formaldehyde is not a chemical solution. It is the synthetic resin formed as a condensation product from definite proportions of urea and formaldehyde. 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. It is conclusive to say that, "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". Thus the distinction is contradicting to the petitioners, contention that the conjunction "and" between the terms "urea" and "formaldehyde", is intended by the framer to exempt "urea" and "formaldehyde" separately as essential elements in the manufacture of the synthetic resin glue called urea formaldehyde. Decision appealed from is AFFIRMED with cost against the petitioner.