SOUTHERN CROSS CEMENT CORPORATION, petitioner, vs.

THE PHILIPPINE CEMENT

MANUFACTURERS CORP., THE SECRETARY OF THE DEPARTMENT OF TRADE &
INDUSTRY, THE SECRETARY OF THE DEPARTMENT OF FINANCE, and THE
COMMISSIONER OF THE BUREAU OF CUSTOMS, respondents.
[G.R. No. 158540. July 8, 2004]

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. Private respondent Philippine Cement Manufacturers Corporation (Philcemcor) is an association
of domestic cement manufacturers.
Respondent Department of Trade and Industry (DTI) accepted an application from Philcemcor, alleging
that the importation of gray Portland cement in increased quantities has caused declines in domestic
production, capacity utilization, market share, sales and employment; as well as caused depressed local
prices. Philcemcor sought the imposition at first of provisional, then later, definitive safeguard measures on
the import of cement pursuant to the SMA. After preliminary investigation, the Bureau of Import Services
of the DTI, determined that critical circumstances existed justifying the imposition of provisional measures.
DTI issued an Order, imposing a provisional measure
The Tariff Commission, on 19 November 2001, received a request from the DTI for a formal investigation
to determine whether or not to impose a definitive safeguard measure on imports of gray Portland cement,
the Tariff Commission issued its Formal Investigation Report stating that The elements of serious injury
and imminent threat of serious injury not having been established, it is hereby recommended that no
definitive general safeguard measure be imposed on the importation of gray Portland cement. DTI
Secretary disagreed with the conclusion of the Tariff Commission, DTI requested an opinion from the
Department of Justice ,
DOJ Secretary rendered an opinion stating that the DTI that it was bound by the negative finding of the
Tariff Commission. The DTI has no alternative but to abide by the [Tariff] Commissions recommendations.
Thus the DTI issued an order that the application for safeguard measures against the importation of gray
Portland cement filed by PHILCEMCOR (Case No. 02-2001) is hereby denied.
Philcemcor received a copy of the DTI Decision on 12 April 2002. Ten days later, it filed with the Court of
Appeals a Petition for Certiorari, Prohibition and Mandamus, likewise applied for a Temporary Restraining
Order/Injunction to enjoin the DTI and the BOC from implementing the questioned Decision and Report.
The CA granted the writ sought. the two-hundred (200)-day period for the imposition of the provisional
measure expired. Despite the lapse of the period, the BOC continued to impose the provisional measure on
all importations of Portland cement made by Southern Cross. Sothern cross file a MR Alleging that
Philcemcor was not entitled to provisional relief, Southern Cross likewise sought a clarificatory order as to
whether the grant of the writ of preliminary injunction could extend the earlier imposition of the
provisional measure beyond the two hundred (200)-day limit imposed by law. CA render its decision held
that the DTI Secretary is not bound by the factual findings of the Tariff Commission since such findings are
merely recommendatory and they fall within the ambit of the Secretarys discretionary review. It
determined that the legislative intent is to grant the DTI Secretary the power to make a final decision on the
Tariff Commissions recommendation. But It refused to annul the findings of the Tariff Commission, citing
the rule that factual findings of administrative agencies are binding upon the courts and its corollary, that
courts should not interfere in matters addressed to the sound discretion and coming under the special
technical knowledge and training of such agencies. Thus southern cross filed an appeal to the Supreme
court argues that the Court of Appeals has no jurisdiction over Philcemcors petition, the proper remedy
being 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 conditions warranting the imposition of general
safeguard measures are binding upon the DTI Secretary.

ISSUE:
1.
2.

Whether or not the CA has jurisdiction over the case.

whether or not the DTI Secretary may impose general safeguard measures in the absence of a positive
final determination by the Tariff Commission.

Held :
As to the issue of jurisdiction the SC held that;
Under Section 29 of the SMA, there are three requisites to enable the CTA to acquire jurisdiction over the
petition for review contemplated therein: (i) there must be a ruling by the DTI Secretary; (ii) the petition must be
filed by an interested party adversely affected by the ruling; and (iii) such ruling must be in connection with the
imposition of a safeguard measure. The first two requisites are clearly present. The third requisite deserves closer
scrutiny.
This theoretical quandary need not come to pass. Section 29 of the SMA is worded in such a way that it
places under the CTAs judicial review all rulings of the DTI Secretary, which are connected with the imposition of a
safeguard measure. This is sound and proper in light of the specialized jurisdiction of the CTA over tax matters. In
the same way that a question of whether to tax or not to tax is properly a tax matter, so is the question of whether to
impose or not to impose a definitive safeguard measure.
On another note, the second paragraph of Section 29 similarly reveals the legislative intent that rulings of
the DTI Secretary over safeguard measures should first be reviewed by the CTA and not the Court of Appeals. It
reads: The petition for review shall comply with the same requirements and shall follow the same rules of
procedure and shall be subject to the same disposition as in appeals in connection with adverse rulings on tax
matters to the Court of Appeals. This is the only passage in the SMA in which the Court of Appeals is mentioned.
The express wish of Congress is that the petition conform to the requirements and procedure under Rule 43 of the
Rules of Civil Procedure. Since Congress mandated that the form and procedure adopted be analogous to a review of
a CTA ruling by the Court of Appeals, the legislative contemplation could not have been that the appeal be directly
taken to the Court of Appeals.
On the issue of Binding Effect of Tariff Commissions Factual Determination on DTI Secretary.
Court of Appeals relied upon Section 13 of the SMA in ruling that the findings of the Tariff Commission do
not necessarily constitute a final decision. Section 13 details the procedure for the adoption of a safeguard measure,
as well as the steps to be taken in case there is a negative final determination. The implication of the Court of
Appeals holding is that the DTI Secretary may adopt a definitive safeguard measure, notwithstanding a negative
determination made by the Tariff Commission. Undoubtedly, Section 13 prescribes certain limitations and
restrictions before general safeguard measures may be imposed. However, the most fundamental restriction on
the DTI Secretarys power in that respect is contained in Section 5 of the SMA that there should first be a
positive final determination of the Tariff Commission which the Court of Appeals curiously all but ignored. The
plain meaning of Section 5 shows that it is the Tariff Commission that has the power to make a positive final
determination. This power lodged in the Tariff Commission, must be distinguished from the power to impose the
general safeguard measure which is properly vested on the DTI Secretary.
Section 5 plainly evinces legislative intent to restrict the DTI Secretarys power to impose a general safeguard
measure by preconditioning such imposition on a positive determination by the Tariff Commission. Such 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, by nature and by command of the fundamental law, being a preserve of the
legislature. 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 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.
WHEREFORE, the petition is GRANTED. The assailed Decision of the Court of Appeals is DECLARED NULL
AND VOID and SET ASIDE. The Decision of the DTI Secretary dated 25 June 2003 is also DECLARED NULL
AND VOID and SET ASIDE. No Costs.