Colgate-Palmolive Philippines, Inc. v.

Commissioner of Customs
CTA Case No. 7806
First Division

On Exhaustion of Administrative Remedies

In the case at bar, petitioner's immediate recourse to respondent after receipt of the FARR
without waiting for the response of the PEAG' s head in its protest to the SFR does not by itself
constitute premature resort to the court which is proscribed under the doctrine of exhaustion of
administrative remedies. Considering that respondent acted upon petitioner's letters contesting the
PEAG's recommendation, as in fact, he affirmed the FARR in his letter dated May 5, 2008, such
action of respondent partakes the nature of a final decision that is appealable to this Court under
Section 11 of Republic Act No. 1125, as amended by Section 7 ofRA 9282.40 In other words, under
the circumstances, petitioner may not be considered to have violated the doctrine of exhaustion of
hdministrative remedies. As aforestated, petitioner appealed to this Court only after receipt of the
assailed decision of respondent contained in its Letter dated May 5, 2008 and received by CPPI on
May 26, 2008.

Customs Duties on Royalty Payments Relating to Importation

xxx in order for royalties and license fees to be added as part of the dutiable value, the following are
indispensable: (1) the royalties and license fees are related to the goods being valued (relationship);
(2) the royalties and license fees are paid by the buyer directly or indirectly (payment); and (3) the
payment of royalties and license fees is a condition of sale pfthe goods to the buyer (condition).