Colgate-Palmolive Philippine, Inc. vs. Gimenez

The term “stabilizer and flavors” in Section 2 of Republic Act No. 601 (the Exchange Tax Law) is not restricted to materials used in the preparation or manufacture of food or food products; it includes stabilizers and flavors used in dental cream. The absence of any statutory distinction, together with the presence in the same enumeration of articles that do not belong to a single class of foodstuffs, precluded application of the ejusdem generis rule and mandated the term be given its ordinary meaning.

Colgate-Palmolive Philippines, Inc. manufactured toilet preparations and household remedies, including dental cream. In the course of its operations, it imported irish moss extract, sodium benzoate, sodium saccharinate, precipitated calcium carbonate, and dicalcium phosphate for use as stabilizers and flavoring. On each importation, the company paid the 17% special excise tax on foreign exchange imposed by Republic Act No. 601, as amended. Section 2 of that Act enumerated articles the importation of which entitled an importer to a refund of the tax paid; among those articles were “stabilizer and flavors.” Petitioner filed three applications for refund, seeking to recover a total of P113,343.99. The officer-in-charge of the Exchange Tax Administration of the Central Bank processed the claims and approved a reduced amount of P23,958.13 for the tax attributable to irish moss extract, sodium benzoate, and precipitated calcium carbonate. The auditor of the Central Bank, however, refused to pass the claims in audit even for that reduced sum, and the Auditor General affirmed the refusal on the view that the exemption extended only to stabilizers and flavors used in food or food products.

• Nature of Petitioner: Colgate-Palmolive Philippines, Inc. was a domestic corporation engaged in the manufacture of toilet preparations and household remedies, including dental cream.
• Importations: Over time, petitioner imported irish moss extract, sodium benzoate, sodium saccharinate, precipitated calcium carbonate, and dicalcium phosphate for use as stabilizers and flavoring in its dental cream.
• Tax Payments: For each importation, petitioner paid the 17% special excise tax on the foreign exchange used for the cost, transportation, and other charges, pursuant to Republic Act No. 601 (the Exchange Tax Law).
• Refund Applications: On March 14, 1956, petitioner filed with the Central Bank three applications for refund of the tax, claiming an aggregate amount of P113,343.99 under Section 2 of Republic Act No. 601, which listed, among other articles, “stabilizer and flavors” as giving rise to a refund.
• Partial Approval by Central Bank Officer: After processing, the officer-in-charge of the Exchange Tax Administration advised petitioner that P23,958.13 of the total claim, representing the tax on the foreign exchange used to import irish moss extract, sodium benzoate, and precipitated calcium carbonate, had been approved for refund.
• Auditor’s Refusal: The Auditor of the Central Bank refused to pass the claims in audit even for the reduced amount, on the theory that toothpaste stabilizers and flavors were not exempt under Section 2.
• Appeal to Auditor General: Petitioner appealed to the Auditor General, who, on December 4, 1958, affirmed the auditor’s ruling. The Auditor General maintained that the term “stabilizer and flavors” in the law referred only to those used in the preparation or manufacture of food or food products.
• Petition to Supreme Court: Petitioner then filed the present petition for review.

• Plain Meaning of “Stabilizer and Flavors”: Petitioner maintained that the term “stabilizer and flavors” in Section 2 bears its ordinary, unrestricted sense and that the materials it imported were admittedly stabilizers and flavors used in dental cream, thus plainly falling within the exempt class.
• Absence of Statutory Restriction: Petitioner contended that the Exchange Tax Law imposes no limitation confining the exemption to stabilizers and flavors for food products, and that the Auditor General’s restrictive interpretation had no foundation in the statutory text.

• Ejusdem Generis: Respondent Auditor General argued that the general term “stabilizer and flavors” should be restricted by the specific words preceding it in the enumeration—which mostly referred to food items such as rice, flour, canned milk, and butterfat—pursuant to the principle that general terms may be limited by specific words indicating the statute’s object and purpose.
• Legislative Intent: Respondents maintained that the exemption was intended for essential food and nutrition items and that the grouping of “stabilizer and flavors” with food products showed a legislative design to limit the term to those used in the preparation of food or food products.

• Scope of Exemption under Section 2: Whether the term “stabilizer and flavors” in Section 2 of Republic Act No. 601 includes stabilizers and flavors used in the manufacture of dental cream, or is limited to those used in the preparation of food or food products.

• Scope of Exemption under Section 2: The foreign exchange used for the importation of dental cream stabilizers and flavors was exempt from the 17% special excise tax, entitling petitioner to a refund. The term “stabilizer and flavors” was not confined to materials used in food or food products. The enumeration in Section 2 did not all fall under a single class of foodstuffs: items such as “fertilizer,” “poultry feed,” and “vitamin concentrate” immediately followed the term and were not food products; “cattle” included animals for breeding, and an amendment by Republic Act No. 814 had added “industrial starch” to the same grouping. Thus, the ejusdem generis rule—which limits general words to the class of the specific preceding words—could not be invoked because the specific terms did not all belong to one distinct class. Moreover, under the maxim ubi lex non distinguit nec nos distinguere debemos (where the law does not distinguish, neither do we distinguish), the courts must not add distinctions the legislature did not make. Since Section 2 drew no distinction between stabilizers and flavors used in food and those used in other products, the term had to be given its ordinary meaning, which encompassed the materials imported by petitioner.

• Ejusdem Generis (Limitation) — The rule that general words following an enumeration of specific terms are restricted to objects of the same kind or class as those specifically mentioned applies only when all the enumerated specific items belong to a single, homogeneous class. In this case, the presence in Section 2 of Republic Act No. 601 of articles such as “fertilizer,” “poultry feed,” and “vitamin concentrate,” which did not all fall under the class of food or food products, prevented application of the rule to restrict “stabilizer and flavors” to food-related uses.
• Ubi Lex Non Distinguit Nec Nos Distinguere Debemos — Where the law does not distinguish, courts must not distinguish. Because Republic Act No. 601 made no distinction between stabilizers and flavors used in food and those used in other products, the term was to be understood in its general, ordinary sense, covering all stabilizers and flavors without regard to their end use.

• “The rule, however, is, in our opinion, applicable only to cases where, except for one general term, all the items in an enumeration belong to or fall under one specific class.” — The Court circumscribed the reach of the ejusdem generis canon, emphasizing that a mixed enumeration defeats its application.
• “Thus, on the basis of the grouping of the articles alone, it cannot validly be maintained that the term ‘stabilizer and flavors’ as used in the above-quoted provision of the Exchange Tax Law refers only to those used in the manufacture of food and food products. This view is supported by the principle ‘Ubi lex non distinguit nec nos distinguere debemos’, or ‘where the law does not distinguish, neither do we distinguish’.” — The passage encapsulates the ratio decidendi, grounding the conclusion on both the textual character of the enumeration and the fundamental canon against judicial legislation.
• “Since the law does not distinguish between ‘stabilizer and flavors’ used in the preparation of food and those used in the manufacture of toothpaste or dental cream, we are not authorized to make any distinction and must construe the words in their general sense.” — This underscores the determinative weight given to legislative silence in the text.

• Ligget & Myers Tobacco Company vs. Collector of Internal Revenue, 53 Off. Gaz. No. 15, p. 4831 — Cited as authority for the maxim ubi lex non distinguit nec nos distinguere debemos, supporting the principle that courts should not read distinctions into a statute where the legislature made none.

• Section 2, Republic Act No. 601 (Exchange Tax Law) — Enumerated the articles for which the 17% special excise tax collected on foreign exchange used for importation shall be refunded, including “stabilizer and flavors.” The Court interpreted the term as extending beyond foodstuffs, applying its ordinary meaning.
• Republic Act No. 814 — An amendment that added “industrial starch” to the same group of items as “stabilizer and flavors,” confirming that the legislative grouping was not confined to food or food products and thus reinforcing the conclusion that the term should not be restricted to food-related uses.

Bengzon, Bautista Angelo, Concepcion, Reyes, J.B.L., Barrera, Paredes, and Dizon, JJ., concurred. Labrador, J., reserved his vote.