Commissioner v. CA (G.R. # 119761; 08-29-1996) by yurei Facts: 1.

RA 7654 was enacted by Congress on June 10, 1993 and took effect July 3, 1993. It amended partly Sec. 142 (c) of the NIRC1 2. Fortune Tobacco manufactured the following cigaretter brands: Hope, More and Champion. Prior to RA 7654, these 3 brands were considered local brands subjected to an ad valorem tax of 20 to 45%. Applying the amendment and nothing else, (see footnote below) the 3 brands should fall under Sec 142 (c) (2) NIRC and be taxed at 20 to 45%. 3. However, on July 1, 1993, petitioner Commissioner of Internal Revenue issued Revenue Memorandum Circular37-93 which reclassified the 3 brands as locally manufactured cigarettes bearing a foreign brand subject to the 55% ad valorem tax. The reclassification was before RA 7654 took effect. 4. In effect, the memo circular subjected the 3 brands to the provisions of Sec 142 (c) (1) NIRC imposing upon these brands a rate of 55% instead of just 20 to 45% under Sec 142 (c) (2) NIRC. 5. There was no notice and hearing. CIR argued that the memo circular was merely an interpretative ruling of the BIR which did not require notice and hearing. Issue: WON RMC 37-93 was valid and enforceable No; lack of notice and hearing violated due process required for promulgated rules. Moreover, it infringed on uniformity of taxation / equal protection since other local cigarettes bearing foreign brands had not been included within the scope of the memo circular. Ratio: 1. Contrary to petitioners contention, the memo was not a mere interpretative rule but a legislative rule in the nature of subordinate legislation, designed to implement a primary legislation by providing the details thereof. Promulgated legislative rules must be published. 2. On the other hand, interpretative rules only provide guidelines to the law which the administrative agency is in charge of enforcing. 3. BIR, in reclassifying the 3 brands and raising their applicable tax rate, did not simply interpret RA 7654 but legislated under its quasi-legislative authority. BELLOSILLO separate opinion: the administrative issuance was not quasi-legislative but quasi-judicial. Due process should still be observed of course but use Ang Tibay v. CIR.