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contractor's 3 per cent tax (instead of 7 per cent) under section 191 of thesame Code; and having failed to convince the Bureau of Internal Revenue,it brought the matter to the Court of Tax Appeals, where it also failed. Saidthe Court:

To support his contention that his client is an ordinary contractor . . .counsel presented . . . duplicate copies of letters, sketches of doors

and windows and price quotations supposedly sent by the managerof the Oriental Sash Factory to four customers who allegedly madespecial orders to doors and window from the said factory. Theconclusion that counsel would like us to deduce from these fewexhibits is that theOriental Sash Factory does not manufactureready-made doors, sash and windows for the public but only uponspecial order of its select customers. . . . I cannot believe thatpetitioner company would take, as in fact it has taken, all the troubleand expense of registering a special trade name for its sashbusiness and then orders company stationery carrying the bold

print "Oriental Sash Factory(Celestino Co & Company, Prop.) 926Raon St. Quiapo, Manila, Tel. No. 33076, Manufacturers of all kindsof doors,windows, sashes, furniture, etc. used season-dried andkiln-dried lumber, of the best quality workmanships"solely for thepurpose of supplying the needs for doors, windows and sash of itsspecial and limited customers. One ill note that petitioner haschosen for its tradename and has offered itself to the public as a"Factory", which means it is out to do business, in its chosen lineson a big scale. As a general rule, sash factories receive orders for

doors and windows of special design only in particular cases butthe bulk of their sales is derived from a ready-made doors andwindows of standard sizes for the average home. Moreover, asshown from the investigation of petitioner's book of accounts, duringthe period from January 1, 1952 to September 30, 1952, it soldsash, doors and windows worth P188,754.69. I find it difficult tobelieve that this amount which runs to six figures was derived bypetitioner entirely from its few customers who made special ordersfor these items.

Even if we were to believepetitioner's claim that it does notmanufacture ready-made sash, doors and windows for the publicand that it makes these articles only special order of its customers,that does not make it a contractor within the purview of section 191of the national Internal Revenue Code. there are no less than fiftyoccupations enumerated in the aforesaid section of the national

Internal Revenue Code subject to percentage tax and after readingcarefully each and every one of them, we cannot find under whichthe businessof manufacturing sash, doors and windows uponspecial order of customers fall under the category of "road, building,navigation, artesian well, water workers and other construction workcontractors" are those who alter or repair buildings, structures,streets, highways, sewers, street railways railroads logging roads,electric lines or power lines, and includes any other work for theconstruction, altering or repairing for which machinery driven bymechanical power is used. (Payton vs. City of Anadardo 64P. 2d

878, 880, 179 Okl. 68).Having thus eliminated the feasibility off taxing petitioner as acontractor under 191 of the national Internal Revenue Code, thisleaves us to decide the remaining issue whether or not petitionercould be taxed with lesser strain and more accuracy as seller of itsmanufactured articles under section 186 of the same code, as therespondent Collector of Internal Revenue has in fact been doing theOriental Sash Factory was established in 1946.The percentage tax imposed in section 191 of our Tax Code is

generally a tax on the sales of services, in contradiction with the taximposed in section 186 of the same Code which is a tax on theoriginal sales of articles by the manufacturer, producer or importer.(Formilleza's Commentaries and Jurisprudence on the NationalInternal Revenue Code, Vol. II, p. 744). The fact that the articlessold are manufactured by the seller does not exchange the contractfrom the purview of section 186 of the National Internal RevenueCode as a sale of articles.

There was a strong dissent; but upon careful consideration of the whole

matter are inclines to accept the above statement of the facts and the law.

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The important thing to remember is that Celestino Co & Companyhabitually makessash, windows and doors, as it has represented in itsstationery and advertisements to the public. That it "manufactures" thesame is practically admitted by appellant itself. The fact that windows anddoors are made by it only when customers place their orders, does not alterthe nature of the establishment, for it is obvious that it only accepted such

orders as called for the employment of such material-moulding, frames,panels-as it ordinarily manufactured or was in a position habitually tomanufacture.Perhaps the followingparagraph represents in brief the appellant's positionin this Court:

Since the petitioner, by clear proof of facts not disputed by therespondent, manufacturers sash, windows and doors only forspecial customers and upon their special orders and in accordancewith the desired specifications of the persons ordering the sameand not for the general market: since the doors ordered by Don

Toribio Teodoro & Sons, Inc., for instance, are not in existence andwhich never would have existed but for the order of the partydesiring it; and since petitioner's contractual relation with hiscustomers is that of a contract for a piece of work or since petitioneris engaged in the sale of services, it follows that the petitionershould be taxed under section 191 of the Tax Code and NOT undersection 185 of the same Code." (Appellant's brief, p. 11-12).

But the argument rests on a false foundation. Any builder or homeowner,with sufficient money, may order windows or doors of the kind

manufactured by this appellant. Therefore it is not true that it serves specialcustomersonlyor confines its services to them alone. And anyone whosees, and likes, the doors ordered by Don Toribio Teodoro & Sons Inc. maypurchase from appellant doors of the same kind, provided he pays theprice. Surely, the appellant will not refuse, for it can easily duplicate or evenmass-produce the same doors-it is mechanically equipped to do so.That the doors and windows must meet desired specifications is neitherhere nor there. If these specificationsdo not happen to be of the kindhabitually manufactured by appellant special forms for sash, mouldings

of panels it would not accept the orderand no sale is made. If they

do, the transaction would be no different from a purchasers ofmanufactured goods held is stock for sale; they are bought because theymeet the specifications desired by the purchaser.Nobody will say that when a sawmill cuts lumber in accordance with thepeculiar specifications of a customer-sizes not previously held in stock forsale to the public-it thereby becomes an employee or servant of the

customer,1

not the seller of lumber. The same consideration applies to thissash manufacturer.The Oriental Sash Factory does nothing more than sell the goods that itmass-produces or habitually makes; sash, panels, mouldings, frames,cutting them to such sizes and combining them in such forms as itscustomers may desire.On the other hand, petitioner's idea of being a contractor doing construction

jobs is untenable. Nobody would regard thedoing of two window panels aconstruction work in common parlance.2

Appellant invokes Article 1467 of the New Civil Code to bolster its

contention that in filing orders for windows and doors according tospecifications, it did not sell, but merely contracted for particular pieces ofwork or "merely sold its services".Said article reads as follows:

A contract for the delivery at a certain price of an article which thevendor in the ordinary course of his business manufactures orprocures for the general market, whether the same is on hand atthe time or not, is a contract of sale, but if the goods are to bemanufactured specially for the customer and upon his special order,

and not for the general market, it is contract for a piece of work.It is at once apparent that the Oriental Sash Factory did not merely sell itsservices to Don Toribio Teodoro & Co. (To take one instance) because italso sold the materials. The truth of the matter is that it sold materialsordinarily manufactured by it sash, panels, mouldingsto Teodoro &Co., although in such form or combination as suited the fancy of thepurchaser. Such new form does not divest the Oriental Sash Factory of itscharacter as manufacturer. Neither does it take the transaction out of thecategory of sales under Article 1467 above quoted, because although the

Factory does not, in the ordinary course of its business, manufacture and