Ponente: GUTIERREZ DAVID, J.
The petitioner Colgate-Palmolive Philippines imported from abroad various materials such as irish moss extract, sodium benzoate, sodium saccharinate precipitated calcium carbonate and dicalcium phosphate, for use as stabilizers and flavoring of the dental cream it manufactures. For every importation made of these materials, the petitioner paid to the Central Bank of the Philippines the 17% special excise tax on the foreign exchange used for the payment of the cost, transportation and other charges incident thereto, pursuant to Republic Act No. 601, as amended, commonly known as the Exchange Tax Law. The petitioner filed with the Central Bank three applications for refund of the 17% special excise tax it had paid. The auditor of the Central Bank, refused to pass in audit its claims for refund fixed by the Officer-in-Charge of the Exchange Tax Administration, on the theory that toothpaste stabilizers and flavors are not exempt under section 2 of the Exchange Tax Law.
Petitioner appealed to the Auditor General, but the latter affirmed the ruling of the auditor of the Central Bank, maintaining that the term “stabilizer and flavors” mentioned in section 2 of the Exchange Tax Law refers only to those used in the preparation or manufacture of food or food products. Not satisfied, the petitioner brought the case to the Supreme Court thru the present petition for review.
Whether or not the foreign exchange used by petitioner for the importation of dental cream stabilizers and flavors is exempt from the 17% special excise tax imposed by the Exchange Tax Law (Republic Act No. 601).
YES. The decision under review was reversed.
General and special terms. The ruling of the Auditor General that the term “stabilizer and flavors” as used in the law refers only to those materials actually used in the preparation or manufacture of food and food products is based, apparently, on the principle of statutory construction that “general terms may be restricted by specific words, with the result that the general language will be limited by the specific language which indicates the statute’s object and purpose.” The rule, however, is applicable only to cases where, except for one general term, all the items in an enumeration belong to or fall under one specific class (ejusdem generis). In the case at bar, it is true that the term “stabilizer and flavors” is preceded by a number of articles that may be classified as food or food products, but it is likewise true that the other items immediately following it do not belong to the same classification.
The rule of construction that general and unlimited terms are restrained and limited by particular recitals when used in connection with them, does not require the rejection of general terms entirely. It is intended merely as an aid in ascertaining the intention of the legislature and is to be taken in connection with other rules of construction.