CUSTOMS DUTIES Customs duties is the name given to taxes on the importation and exportation of commodities, the tariff

or tax assessed upon merchandise imported from, or exported to, a foreign country. (Nestle Phils. v. Court of Appeals, et al., G.R. No. 134114, Ju y !, "##1$ % artic es imported from any country into the &hi ippines, sha 'e su'(ect to duty upon each importation, even though previous y exported from the &hi ippines, except as other)ise specifica y provided for in the *ariff and Customs Code or in other a)s. (Sec. 101, TCC) &referentia *ariff is the imposition of high customs duties )hich resu ts to ma+ing the foreign goods more expensive compared )ith oca y produced artic es. *his is to protect &hi ippine manufacturers from competition posed 'y foreign manufacturers. General Rule: *here sha 'e no exemptions from the payment of customs duties. Exceptions: 1. *hose provided under the *ariffs and Customs Code (e.g. conditiona y,free importations$ ". *hose granted to government agencies, instrumenta ities or government,o)ned or contro ed corporation )ith existing contracts, commitments, agreements, or o' igations (re-uiring such exemptions$ )ith foreign countries. 3. /nternationa institutions, associations or organi0ation entit ed to exemption pursuant to agreements or specia a)s. 4. *hose that may 'e granted 'y the &resident recommendation of the Nationa 1conomic 2eve opment %uthority in the interest of nationa economic deve opment. (Sec. 105, TCC) General Rule: % importations 'y the government for its o)n use or that of its su'ordinate 'ranches or instrumenta ities, or corporations, agencies or instrumenta ities o)ned or contro ed 'y the government sha 'e su'(ect to the duties, taxes, fee and other charges provided for in the *ariff and Customs Code. (Sec. 1205, TCC) Exceptions: 1. /f express y exempted under a specia a). ". /f imported as conditiona y,free importations. 3. *hose granted to government agencies, instrumenta ities or government,o)ned or contro ed corporations )ith existing contracts, commitments, agreements or o' igations (re-uiring such exemptions$ )ith foreign countries. Kinds of Tariffs or Customs duties 1. Regular tariff or custo s !uties " these are imposed and co ected mere y as a source of revenue. (3ec 1#4 *CC$ ". Special tariffs or custo !uties , *hose imposed in addition to the ordinary customs duties usua y to protect oca industries against foreign competition. Regular Custom Duties 1. A! valore !ut# $ Customs duties that are computed on the 'asis of va ue of imported artic e. ". Specific !ut# $ Customs duties that are computed on the 'asis of dutia' e )eight of good i.e. a unit of measure such as per +i ogram, per iter, etc.

3. Co pou%! !ut# $ Customs duties that impose 'oth a! valore &.g. 10' a! valore plus P100 per liter. 4. Alter%ati%g !ut# $ a ternates 'et)een ad va orem and specific d !alorem Dut"

and specific customs duties.

*he tax rates are 'ased on the cost (456$ or price imported artic es, in )ho esa e -uantities in the principa mar+et of the exporting country or the country of origin, inc uding expenses connected )ith the importation, such as insurance, freight, pac+aging, oading and un oading charges, 'ut exc uding interna excise taxes to 'e remitted or re'ated, or , in case such va ue is not ascertaina' e, the reports of Revenue or commercia attaches, or if sti not ascertaina' e, the domestic )ho esa e mar+et price of trade ess import duty and not more than "78 for expenses and profits. (3ec "#1 *CC as amended 'y 19 17! 5arch 3#, 1:;<$. =pon reasona' e dou't on the accuracy of the dec ared va ue, the Commission may a so determine the home consumption va ue from other ia' e and avai a' e sources. (Commissioner vs. C*% GR <"#!:, 1:;;$ Specific Dut" Rates are 'ased on unit of )eight num'er or measurement. >eights may 'e either 'e 1. gross (entire 'u +$, ". ega ()eight as of sa e of the artic es to the pu' ic in retai -uantities$ 3. net ()eight as of importation ess the immediate and a containers$ (3ec "#" *CC$ Special Custom Duties Concept? 3pecia duties are imposed in addition to regu ar or ordinary duties principa y in order to protect oca industries against unfair competition from foreign manufacturers or producers (such as dumping and countervai ing duties$, the consumers against possi' e deceptions (such as mar+ing duties$, and the nationa interest (such as the discriminatory duties and duties imposed under the f exi' e tariff c ause$. 1. =nder the *ariff and Customs Code a. %nti,2umping duty. (3ec 3#1 *CC$ '. Countervai ing duty. (3ec 3#" *CC$ c. 5ar+ing duty. and (3ec 3#3 *CC$ d. 2iscriminatory duty. (3ec 3#4 *CC$ e. 2uties imposed under the f exi' e tariff (3ec 4#1 *CC$ ". %dditiona tariff imposed as a safeguard measure under the 3afeguard 5easure %ct (R.A. ((00).

DUTIES S#ECI $ DUT%

& TURE

#UR#OSE

MOU&T' R TE

IM#OSI&G UT(ORIT%

)UDICI $ RE!IE*

&TI+DUM#I&G DUT%

/mposed on imported goods )here it appears that a specific +ind or c ass of foreign artic e is 'eing imported into or so d or is i+e y to 'e so d in the &hi ippines at a price ess than its fair va ue

2ifference 'et)een the export price and the norma price (e)port price " %or al price * a%ti"!u pi%g !ut#)

No%"agricultural pro!ucts? 3ecretary of *rade and /ndustry Agricultural pro!ucts? 3ecretary of %gricu ture

COU&TER+ ! I$I&G DUT%

M RKI&G DUT%

2uty e-ua to the ascertained or estimated amount of the su'sidy or 'ounty or su'vention granted 'y the foreign country on the production, manufacture, or exportation into the &hi ippines of any artic e i+e y to in(ure an industry in the &hi ippines or retard or considera' y retard the esta' ishment of such industry 2uty imposed on an ad va orem 'asis imposed for improper y mar+ed artic es. 2uty imposed on imported goods )henever it is found as a fact that the country of origin discriminates against the commerce of the &hi ippines in such a manner as to p ace the commerce of the &hi ippines at a disadvantage compared )ith the commerce of any foreign country. a. G1N1R%A B imposed upon goods or products imported in increased -uantities '. 3&1C/%A B vo ume of imports

*o protect oca industries from undue competition

%mount su'sidy

of

%ny interested party )ho is adverse y affected 'y a fina ru ing imposing an anti, dumping duty may fi e )ith the C*% a petition for revie) )ithin thirty (3#$ days from his receipt of notice of the assai ed decision. @ut such appea s sha not stop or suspend the imposition of the duty %ny interested party )ho is adverse y affected 'y a fina ru ing imposing a countervai ing duty may fi e )ith the C*% a petition for revie) )ithin thirty (3#$ days from his receipt of notice of the assai ed decision. @ut such appea s sha not stop or suspend the imposition of the duty N9N1

*o prevent possi' e deception

78 ad va orem of the goods

Commissioner of Customs

DISCRIMI& TOR %' RET $I TOR% DUT%

*o protect the nationa interest

Not exceeding 1##8 ad va orem

&resident of the &hi ippines

S ,EGU RD

*o protect domestic industries and producers from increased imports

a. G1N1R%A B tariff increase, either ad va orem or specific or 'oth, to 'e paid through a cash 'ond set at a eve sufficient to redress or

a. G1N1R%A B 3ecretary of *rade and /ndustry and 3ecretary of %gricu ture '. 3&1C/%A B 3ecretary of

exceed a 'ase trigger eve or price fa s 'e o) a trigger price eve

prevent in(ury to the domestic industry '. 3&1C/%A i. 6o ume *est ii. &rice *est

%gricu ture

Kinds of specific su-sid" .Counter/ailing duties0 1. +ou%t# B cash a)ard paid to an exporter or manufacturer ". Su,si!# B financia incentives not in the form of direct or cash a)ard to encourage manufacturers or exporters 3. Su,ve%tio% B any assistance other than a 'ounty or su'sidy given 'y the government for the manufacture andCor exportation of an artic e. Import articles t1at are exempt from t1e mar2ing re3uirements 1. 3uch artic e is incapa' e of 'eing mar+ed ". 3uch artic e cannot 'e mar+ed prior to shipment to the &hi ippines )ithout in(ury 3. 3uch artic e cannot 'e mar+ed prior to shipment to the &hi ippines, except at an expense economica y prohi'itive of its importation 4. *he mar+ing of a container of such artic e )i reasona' y indicate the origin of such artic e 7. 3uch artic e is a crude su'stance !. 3uch artic e is imported for use 'y the importer and not intended for sa e in its imported or any other form <. 3uch artic e is to 'e processed in the &hi ippines 'y the importer or for his account other)ise than for the purpose of concea ing the origin of such artic e and in such manner that any mar+ contemp ated 'y this section )ou d necessari y 'e o' iterated, destroyed or permanent y concea ed ;. %n u timate purchaser, 'y reason of the character of such artic e or 'y reason of the circumstances of its importation must necessari y +no) the country of origin of such artic e even though it is not mar+ed to indicate its origin :. 3uch artic e )as produced more than t)enty years prior to its importation into the &hi ippines 1#. 3uch artic e cannot 'e mar+ed after importation except at an expense )hich is economica y prohi'itive, and the fai ure to mar+ the artic e 'efore importation )as not due to any purpose of the importer, producer, se er or shipper to avoid comp iance )ith this section. (Sec. -0-, TCC) Duties imposed under t1e flexi-le tariff /mport duties )hich are modified 'y the &resident upon investigation of the *ariff Commission and recommendation of the Nationa 1conomic and 2eve opment %uthority in the interest of nationa economy, genera )e fare and nationa security. *he &resident upon recommendation of N12% has the fo o)ing po)ers? 1. to increase, reduce or remove existing protective rates of import duty, the existing rates may 'e increased or decreased to any eve in one or severa stages 'ut in no case sha 'e higher than 1##8 ad va orem ". to esta' ish import -uota or to 'an imports of any commodity as may 'e necessary 3. *o impose additiona duty on a imports not to exceed 1#8 adva orem Safeguard Measures

3afeguard measures are defined as DemergencyE actions )ith respect to increased imports of particu ar products, )here such imports have caused or threaten to cause serious in(ury to the importing 5em'erFs domestic industry. (Article ./. of 0ATT 1112) /t is a measure provided 'y the 3tate to protect domestic industries and producers from increased imports )hich cause or threaten to cause serious in(ury to those domestic industries and producers. (Sec. 2, R.A. ((00) =pon, and on y upon, positive fina determination 'y the *ariff Commission, the fo o)ing sha app y a genera safeguard measure? 1. Secretar# of Agriculture $ /f the artic e in -uestion is an agricu tura product. ". Secretar# of Tra!e a%! /%!ustr# $ /f the artic e is non,agricu tura product. (Sec. 5, /,i!.)

CUSTOMS ! $U TIO& Customs va uation is a procedure for determining the customs va ue of imported goods. /f the rate of duty is ad va orem, the customs va ue is essentia to determine the duty to 'e paid on an imported good. *he importerC'ro+er sha compute the duties and taxes using the appropriate va uation method. *here are t)o processes invo ved in the computation of customs duties on imported artic es? 1. C assification of the artic es into their appropriate tariff heading. ". 2etermination of the va uation if the rate is ad va orem or mixed. &ote: *he 'asis of dutia' e va ue is the transaction va ue. 9n y )hen it cannot 'e determined that the other methods may 'e used, in the fo o)ing order. Identical and Similar Goods 1. Identical goods B goods )hich are the same in a respects, inc uding physica characteristics, -ua ity and reputation. 5inor differences in appearances sha not prec ude goods other)ise conforming to the definition from 'eing regarded as identica . ". Similar goods B goods )hich a though not a i+e in a respects have i+e characteristics and i+e component materia s )hich ena' e them to perform the same functions and to 'e commercia y interchangea' e. *he -ua ity of the goods, their reputation and the existence of a trademar+ sha 'e among the factors to 'e considered in determining )hether goods are simi ar. Met1ods of !aluation 1. TR &S CTIO& ! $UE B the dutia' e va ue of an imported artic e su'(ect to an ad va orem rate of duty sha 'e the transaction va ue, )hich sha 'e the #RICE CTU $$% # ID OR # % 4$E ,OR T(E GOODS )hen so d for export to the &hi ippines ad(usted 'y adding? a. *he fo o)ing to the extent incurred 'y the 'uyer 'ut not inc uded in price actua y paid? i. Commission and 'ro+erage fees ii. Cost of container iii. Cost of pac+ing iv. 6a ue of the goods, materia s and services used in the production or in connection )ith the production and sa e of the imported good

v. %mount of roya ties and icense fees re ated to the goods 'eing va ued that the 'uyer must pay '. 6a ue of any of the proceeds of any su'se-uent resa e, disposa or use of the imported goods that accrues direct y or indirect y to the se er c. *ransport cost of import goods from port of exportation to port of entry in the &hi ippines d. =n oading and hand ing charges associated )ith transport of imported goods e. Cost of insurance ". TR &S CTIO& ! $UE O, IDE&TIC $ GOODS B the dutia' e va ue sha 'e the transaction va ue of identica goods SO$D ,OR E5#ORT TO T(E #(I$I##I&ES &D E5#ORTED T OR 4OUT T(E S ME TIME S T(E GOODS 4EI&G ! $UED6 3. TR &S CTIO& ! $UE O, SIMI$ R GOODS B )here the dutia' e va ue cannot 'e determined under the preceding method, the dutia' e va ue sha 'e the transaction va ue of simi ar goods SO$D ,OR E5#ORT TO T(E #(I$I##I&ES &D E5#ORTED T OR 4OUT T(E S ME TIME S T(E GOODS 4EI&G ! $UED. 4. DEDUCTI!E ! $UE 7 the dutia' e va ue of the imported goods under this method sha 'e the deductive va ue )hich sha 'e 'ased on the U&IT #RICE T *(IC( T(E IM#ORTED GOODS OR IDE&TIC $ OR SIMI$ R IM#ORTED GOODS RE SO$D I& T(E #(I$I##I&ES, in the same condition as )hen imported, in the greatest aggregate -uantity, at or a'out the time of the importation of the goods 'eing va ued, to persons not re ated to the persons from )hom they 'uy such goods, su'(ect to deductions? a. 1ither the commissions usua y paid or agreed to 'e paid or the additions usua y made for profit and genera expenses in connection )ith sa es. '. *he usua costs of transport and insurance and associated costs. c. *he costs and charges. d. Customs duties and other nationa taxes 7. COM#UTED ! $UE B the dutia' e va ue of this method sha 'e the computed va ue )hich sha 'e the 3=5 of? a. *he COST OR T(E ! $UE O, M TERI $S and fa'rication of other processing emp oyed in producing the imported goods. '. *he MOU&T ,OR #RO,IT &D GE&ER $ E5#E&SES e-ua to that usua y ref ected in the sa e of goods of the same c ass or +ind as the goods 'eing va ued )hich are made 'y producers in the country of exportation for export to the &hi ippines. c. *he ,REIG(T8 I&SUR &CE ,EES &D OT(ER TR &S#ORT TIO& E5#E&SES for the importation of the goods. d. &% SSIST, if its va ue is not inc uded under paragraph 1 hereof. and e. *he COST O, CO&T I&ERS &D # CKI&G , if their va ues are not inc uded under paragraph 1 hereof. &ote? %t the re-uest of the importer, the order of app ication of Deducti/e !alue and Computed !alue may 'e reversed. Go)ever, if the Commissioner of Customs deems that he )i experience rea difficu ties in determining the dutia' e va ue using Computed !alue, he may refuse such re-uest !. , $$4 CK ! $UE B if the dutia' e va ue cannot 'e determined under the preceding methods descri'ed a'ove, it sha 'e determined 'y using RE SO& 4$E ME &S consistent

)ith the princip es and genera provisions of the %greement on *ariffs and *rade of 1::4 and of %rtic e 6// of G%** of 1::4 and on the 'asis of data avai a' e in the country of importation. &ote: /f the importer so re-uests, he sha 'e informed in )riting of the dutia' e va ue determined under ,all-ac2 !alue and the method used to determine such va ue. #RO(I4ITED MET(ODS O, ! $U TIO& No customs va ue sha 'e determined under the provisions of this %rtic e on the 'asis of? 1. the se ing price in the country of importation of goods produced in such country. ". a system )hich provides for the acceptance for customs purposes of the higher of t)o a ternative va ues. 3. the price of goods on the domestic mar+et of the country of exportation. 4. the cost of production other than computed va ues )hich have 'een determined for identica or simi ar goods in accordance )ith the provisions of %rtic e !. )urisprudence: 96 !idu"a /s6 4erdiago G6R6 &o6 $+:;:9< Octo-er :;8 9;=> / portatio% is !ee e! ter i%ate! o%l# upo% pa# e%t of the !uties, ta)es a%! other charges upo% the articles, or secure! to ,e pai!, at the port of e%tr# a%! the legal per it for 3ith!ra3al shall have ,ee% gra%te!. ,acts: *he search )arrant issued 'y petitioner 6iduya )ho )as the former Co ector of Customs is -uashed 'y the o)er court upon motion 'y private respondent @erdiago. *he )arrant of sei0ure and detention )as issued on the 'asis of re ia' e inte igence that fraudu ent documents )ere used 'y @erdiago in securing the re ease from the @ureau of Customs of a Ro s Royce, it 'eing made to appear that such car )as a 1:!1 mode instead of a 1:!!, thus ena' ing respondent to pay o)er custom duties. *here )as a demand for the correct amount due and Respondent expressed his )i ingness to pay. =nfortunate y, he )as not a' e to ive up to his promise so a search )arrant )as issued, pursuant to 3ection "#:: of the *ariff and Customs Code )hich re-uires a search )arrant if such goods are ocated in a d)e ing house 'ecause the car )as ocated in the Ha'ut Compound. 5oreover, it )as not sho)n that @erdiago did not o)n the d)e ing house )hich )as searched. Nonethe ess, respondent (udge -uashed the )arrant. Issue: >hether or not there )as grave a'use of discretion on the part of the (udge in -uashing the search )arrantI (eld: &etition is granted. %s the car )as +ept in a d)e ing house in >a+as, @arrio 3an 2ionisio, &araJa-ue, Ri0a , petitioner through t)o of his officers in the Customs &o ice 3ervice app ied for and )as a' e to o'tain the search )arrant. Gad there 'een no such move on the part of petitioner, the duties express y en(oined on him 'y a) name y to assess and co ect a a)fu revenues, to prevent and suppress smugg ing and other frauds, and to enforce tariff and customs a) )ou d not have 'een performed.

%s ong as the importation has not 'een terminated the imported goods remain under the (urisdiction of the @ureau of Customs. /mportation is deemed terminated on y upon payment of the duties, taxes and other charges upon the artic es, or secured to 'e paid, at the port of entry and the ega permit for )ithdra)a sha have 'een granted. *he payment of the duties, taxes, fees and other charges must 'e in fu . :6 Rigor /s6 Rosales G6R6 &o6 $+??=@> Octo-er :?8 9;<: Articles su,4ect to sei5ure !o %ot have to ,e goo!s i porte! fro a foreig% cou%tr#. The provisio%s of the Co!e refer to u% a%ifeste! articles fou%! o% vessels or aircraft e%gage! i% the coast3ise tra!e. ,acts: Co ector 3a'ino Rigor issued a >arrant of 3ei0ure and 2etention against the vesse AC*,<7: and its cargo, consisting of 1#3 pieces of ogs for fai ure to present a manifest for the said ogs )ithin the period prescri'ed. *he parties )ho )ere du y notified and represented, vo untari y su'mitted to the (urisdiction of the respondent Co ector. %fter hearing, the Co ector rendered a decision ordering the sei0ed ogs forfeited in favor of the government to 'e disposed of according to a). /nstead of appea ing the Co ectorKs decision to the Commissioner of Customs, the private respondents fi ed an origina petition for certiorari )ith the 2avao C4/. Respondent a eged ac+ of (urisdiction of the C4/. Issue: >hether the o)er court has (urisdiction to revie) a decision of the Co ector of Customs (eld: *he 3upreme Court he d in the negative. %rtic es su'(ect to sei0ure do not have to 'e goods imported from a foreign country. *he provisions of the Code refer to unmanifested artic es found on vesse s or aircraft engaged in the coast)ise trade. *he customs authorities do not have to prove to the satisfaction of a court of first instance that the artic es on 'oard a vesse )ere imported from a'road or are intended to 'e shipped a'road 'efore they may exercise the po)er to effect customsK searches, sei0ure, or arrests provided 'y a) and to continue )ith the administrative hearings on )hether or not the a) may have 'een vio ated. Regarding the nature of the port of origin and the port of destination, it is enough if one of the ports is a port of entry. *he respondent courtKs finding that Dport of entryL must 'e imited to the )harves of 3ta. %na and 3asa )here the customs house is ocated and not extended to Devery inch of the City of 2avaoL )ou d undu y hamper if not cripp e the effective enforcement of customs and tariff a)s. Customs officia s cannot stand 'y he p ess y for )ant of (urisdiction simp y 'ecause a restrictive interpretation of Dport of entryL )ou d ena' e coast)ise vesse s to oad or un oad unmanifested goods )ith impunity outside of the specific area )here the )harves and the customs house are ocated. 4urthermore, the 3upreme Court ru ed that the customsK officia s have authority under the a) to ma+e the initia determination on the imits of their administrative (urisdiction, to act speedi y and to ma+e decisions on the 'asis of that determination, and to have such act or decision revie)a' e on y in the manner provided 'y the Customs and *ariff Code. *he Co ectorKs

decisions are appea a' e to the Commissioner of Customs, )hose decisions, in cases invo ving sei0ure, detention or re ease of property, may in turn 'e revie)ed on y 'y the C*%. ?6 )ardeleAa /s6 #eople G6R6 &o6 9>@:>@ ,e-ruar" >8 :BB> S uggli%g is co itte! ,# a%# perso% 3ho6 (1) frau!ule%tl# i ports or ,ri%gs i%to the Philippi%es a%# article co%trar# to la37 (2) assists i% so !oi%g a%# article co%trar# to la37 or (-) receives, co%ceals, ,u#s, sells or i% a%# a%%er facilitate the tra%sportatio%, co%ceal e%t or sale of such goo!s after i portatio%, 8%o3i%g the sa e to have ,ee% i porte! co%trar# to la3. ,acts: Jarde e0a a f ight ste)ardess of &%A )as charged )ith vio ation of the *CC for "#.1 +i ograms of assorted go d (e)e ry )ith an estimated va ue of &<,7!","31.7#. 3uch )as effected 'y hiding said (e)e ry inside a hanger 'ag and, 'y not dec aring it in the Customs 2ec aration form and, 'y ver'a y denying that she is carrying said items 'y ans)ering DnoL )hen as+ed 'y @ureau of Customs if she has anything to dec are prior to the actua inspection of her uggage. *he accused denied the a egations against her. Issue: /s the accused gui ty of smugg ing the (e)e riesI (eld? Hes. % person arriving in the &hi ippines )ith 'aggage containing dutia' e artic es is 'ound to dec are the same in a respects. %de-uate reporting of dutia' e merchandise 'eing 'rought into the country is a'so ute y necessary to the enforcement of customs a)s, and fai ure to comp y )ith those re-uisites is as condemna' e as fai ure to pay customs fees. %ny administrative pena ty imposed on the person arriving in the &hi ippines )ith undec ared dutia' e artic es is separate from and independent of crimina ia'i ity for smugg ing under 3ec. 3!#1 of the *CC and for vio ation of other provisions in the *CC. *he phrase Dcontrary to a)L in 3ec. 3!#1 of the *CC -ua ifies the phrases Dimports or 'rings into the &hi ippinesL and Dassists in so doing,L and not the )ord Dartic eL. *he )ord D a)L inc udes regu ations having the force and effect of a), meaning su'stantive or egis ative type ru es as opposed to genera statements of po icy or ru es of agency, organi0ation, procedures or positions. 3mugg ing is committed 'y any person )ho? (1$ fraudu ent y imports or 'rings into the &hi ippines any artic e contrary to a). ("$ assists in so doing any artic e contrary to a). or (3$ receives, concea s, 'uys, se s or in any manner faci itate the transportation, concea ment or sa e of such goods after importation, +no)ing the same to have 'een imported contrary to a). *he ingenuity )ith )hich accused tried to concea from vie) her (e)e ry shattered a her pretensions of having dec ared or even (ust an intention to dec are them for proper assessment of the corresponding customs duties and taxes. 9n the contrary, her stac+ing the enve ope )ith )orth ess commercia 'rochures as decoys to confuse or divert the attention of the Customs inspectors and her de i'erate 'rea+ing of the stitches of the ining of the 'ags to create a secret poc+et in )hich to hide and concea from vie) her (e)e ry are unmista+a' e 'adges of an intention to spirit them a)ay into this country in vio ation of its customs and tariffs a). /n this sense, it is a direct evidence of the crime of smugg ing.

C6 &estle #1ilippines /s6 Court of ppeals G6R6 &o6 9?C99C6 )ul" >8 :BB9 /f the State e)pects its ta)pa#ers to o,serve fair%ess a%! ho%est# i% pa#i%g their ta)es, so ust it appl# the sa e sta%!ar! agai%st itself i% refu%!i%g e)cess pa# e%ts, if trul# prove%, of such ta)es. /%!ee!, the State ust lea! ,# its o3% e)a ple of ho%or, !ig%it# a%! upright%ess. ,acts? &etitioner Nest e &hi ippines, /nc. transacted sixteen separate importations of mi + and mi + products from different countries 'et)een the period of Ju y and Novem'er 1:;4. /t paid the corresponding customs duties and advance sa es taxes to the Co ector of Customs of 5ani a for each transaction 'ased on the pu' ished Gome Consumption 6a ue (GC6$ as indicated in the @ureau of Customs Revision 9rders, 'ut it seasona' y fi ed the corresponding protests 'efore the said Co ector of Customs. /n the said protests, petitioner c aimed for the refund of the a eged overpaid import duties and advance sa es taxes. >ith regards to the advance sa es taxes, the Court of *ax %ppea s eventua y ru ed in favor of the petitioner. Go)ever, the Co ector of Customs fai ed to render a decision on the sixteen protest cases for a most six years for the a eged overpaid customs duties. /n order to prevent the c aims from 'ecoming sta e on the ground of prescription, petitioner immediate y fi ed a petition for revie) )ith the Court of *ax %ppea s (C*%$. *he C*% dismissed the said petition for )ant of (urisdiction. *he issue )as raised to the Court of %ppea s 'y )ay of petition for revie), 'ut it )as a so dismissed for fai ure to exhaust administrative remedies. Issue: >hether or not the petitionerKs c aims are governed 'y the ru e on -uasi,contracts or so utio inde'iti )hich prescri'es in six (!$ years under %rtic e 1147 of the Ne) Civi Code. (eld: No. *he 3upreme Court ru ed that the ru e on -uasi,contracts or so ution inde'iti is not app ica' e in this case. /n order for the ru e on so ution inde'iti to app y, it is an essentia condition that petitioner must first sho) that its payment of the customs duties )as in excess of )hat )as re-uired 'y the a) at the time )hen the su'(ect sixteen importations of mi + and mi + products )ere made. =n ess sho)n other)ise, the disputa' e presumption of regu arity of performance of duty ies in favor of the Co ector of Customs. /n the present case, there is no factua sho)ing that the co ection of the a eged overpaid customs duties )as more than )hat is re-uired of the petitioner )hen it made the aforesaid separate importations. *here is no factua finding yet 'y the government agency concerned that petitioner is indeed entit ed to its c aim of overpayment and, if true, for ho) much it is entit ed. /t 'ears stress that in determining )hether or not petitioner is entit ed to refund of a eged overpayment of customs duties, it is necessary to determine exact y ho) much the Government is entit ed to co ect as customs duties on the importations. *hus, it )ou d on y 'e (ust and fair that the petitioner,taxpayer and the Government a i+e 'e given e-ua opportunities to avai of the remedies under the a) to contest or defeat each otherFs c aim and to determine a matters of dispute 'et)een them in one sing e case. /f the 3tate expects its taxpayers to o'serve fairness and honesty in paying their taxes, so must it app y the same standard against itse f in refunding excess payments, if tru y proven, of such taxes. /ndeed, the 3tate must ead 'y its o)n examp e of honor, dignity and uprightness.

*hus, the remand of this case to the C*% is )arranted for the proper verification and determination of the factua 'asis and merits of the petition and in order that the ends of su'stantia (ustice and fair p ay may 'e su'served. /n the ight of 3ections "3#; and "3#: of the *ariff and Customs Code, it appeared that in a cases su'(ect to protest, the c aim for refund of customs duties may 'e forec osed on y )hen the interested party c aiming refund fai s to fi e a )ritten protest 'efore the Co ector of Customs. %ccording y, once a )ritten protest is seasona' y fi ed )ith the Co ector of Customs the fai ure or inaction of the atter to prompt y perform his mandated duty under the *ariff and Customs Code shou d not 'e a o)ed to pre(udice the right of the party adverse y affected there'y. *echnica ities and ega isms, ho)ever exa ted, shou d not 'e misused 'y the government to +eep money not 'e onging to it, if any is proven, and there'y enrich itse f at the expense of the taxpayers. @6 ,E$ICISIMO RIET :BBC /s6 #EO#$E O, T(E #(I$I##I&ES G6R6 &o6 9C=<9= a# ,e ugust 9:8

9%!er the Tariff a%! Custo s Co!e, a search, sei5ure a%! arrest 3arra%t for purposes of e%forci%g custo s a%! tariff la3s.

a!e eve% 3ithout a

,acts: %fter a car chase, Co . Aacson and his men searched a vehic e and found severa firearms. *he persons in the car 'e onged to the " nd C93%C 2etachment. *hey )ere found not to 'e e-uipped )ith mission orders. 2uring that same incident, )hen the cargo truc+ )hich )as accompanied 'y the car during the car chase )as searched, 3#7 cases of ' ue sea or untaxed cigarettes )ere found inside. Rieta, one of the passengers of the sei0ed cargo truc+, denied any +no) edge of the a eged smugg ing of the ' ue,sea cigarettes. Ge a eged that the cargo truc+ )as not opened in their presence, nor )ere the contents thereof sho)n to them upon their apprehension. *hese a egations )ere corro'orated 'y one of his companions during the incident. R*C and C% found Rieta gui ty of smugg ing. Issue: >ere the evidence o'tained against the accused inadmissi' e in evidence 'ecause petitioner and his co,accused )ere arrested )ithout a )arrant 'ut 'y virtue of an arrest and sei0ure order (%339$ )hich )as su'se-uent y dec ared i ega and inva id 'y this Gonora' e 3upreme CourtI (eld: *he Chicot doctrine cited in *aJada advocates that, prior to the nu ification of a statute, there is an imperative necessity of ta+ing into account its actua existence as an operative fact negating the acceptance of Ea princip e of a'so ute retroactive inva idity.E>hatever )as done )hi e the egis ative or the executive act )as in operation shou d 'e du y recogni0ed and presumed to 'e va id in a respects. *he %339 that )as issued in1:<: under Genera 9rder No. !# ,, ong 'efore our 2ecision in *aJada and the arrest of petitioner ,, is an operative fact that can no onger 'e distur'ed or simp y ignored. *he search and sei0ure of goods, suspected to have 'een introduced into the country in vio ation of customs a)s, is one of the seven doctrina y accepted exceptions to the constitutiona provision. 3uch provision mandates that no search or sei0ure sha 'e made except 'y virtue of a )arrant issued 'y a (udge )ho has persona y determined the existence of pro'a' e cause.

=nder the *ariff and Customs Code, a search, sei0ure and arrest may 'e made even )ithout a )arrant for purposes of enforcing customs and tariff a)s. >ithout mention of the need to prior y o'tain a (udicia )arrant, the Code specifica y a o)s po ice authorities to enter, pass through or search any and, enc osure, )arehouse, store or 'ui ding that is not a d)e ing house. and a so to inspect, search and examine any vesse or aircraft and any trun+, pac+age, 'ox or enve ope or any person on 'oard. or to stop and search and examine any vehic e, 'east or person suspected of ho ding or conveying any dutia' e or prohi'ited artic e introduced into the &hi ippines contrary to a). >6 %ao2asin /s6 Commissioner of Customs G6R6 &o6 <C999 Decem-er ::8 9;<;

:ithout the auto atic revie3 ,# the Co issio%er of Custo s a%! the Secretar# of ;i%a%ce, a collector i% a%# of our cou%tr#<s far"flu%g ports, 3oul! have a,solute a%! u%,ri!le! !iscretio% to !eter i%e 3hether goo!s sei5e! ,# hi are locall# pro!uce!, he%ce, %ot !utia,le or of foreig% origi%, a%! therefore su,4ect to pa# e%t of custo s !uties a%! ta)es. ,acts: M*he &hi ippine Coast Guard sei0ed :### sac+s of refined sugar o)ned 'y petitioner Hao+asin, )hich )ere then 'eing un oaded from the 5C6 *ac o'an, and turned them over to the custody of the @ureau of Customs. 9n June <, 1:;;, the 2istrict Co ector of Customs ordered the re ease of the cargo to the petitioner 'ut this order )as su'se-uent y reversed on June 17, 1:;;. *he reversa )as 'y virtue ofCustoms 5emorandum 9rder (C59$ "#,;< in imp ementation of the /ntegrated Reorgani0ation & an under &.2. 1, )hich provides that in protest and sei0ure cases )here the decision is adverse to the government, the Commissioner of Customs has the po)er of automatic revie). &etitioner o'(ected to the enforcement of 3ec. 1" of the & an and C59 "#,;< contending that these )ere not pu' ished in the 9fficia Ga0ette. *he & an )hich )as part of &.2. 1 )as ho)ever pu' ished in the 9fficia Ga0ette. ISSUE: /s the enforcement of the 3ec. 1" of the /ntegrated Reorgani0ation & an and thereafter C59 No. "#,;< va id )hen these a)s have not 'een pu' ished in the 9fficia Ga0etteI DECISIO&: Hes. C59 and 3ec 1" of the /ntegrated Reorgani0ation & an is enforcea' e. *he re-uirement of %rt. " of the Civi Code does not app y to C59 No. "#,;< since it is on y an administrative order of the Commissioner of Customs to his su'ordinates, name y the customs co ectors. % so in the Common)ea th %ct No. !3;, )hich enumerates )hat sha 'e pu' ished in the 9fficia Ga0ette, states that administrative orders and proc amations sha 'e pu' ished except )hen these have no genera app ica'i ity. C59 No. "#,;< re-uiring co ectors of customs to comp y strict y )ith 3ection 1" of the & an, is an issuance )hich is addressed on y to particu ar persons or a c ass of persons, hence no genera app ica'i ity therefore need not 'e pu' ished in the 9fficia Ga0ette. 3ection 1" of the & an app ies to petitionerFs shipment of :,### 'ags of sugar. *axes 'eing the ife' ood of the Government, 3ection 1", )hich the Commissioner of Customs in his

Customs 5emorandum 9rder No. "#,;<, en(oined a co ectors to fo o) strict y, is intended to protect the interest of the Government in the co ection of taxes and customs duties in those sei0ure and protest cases )hich, )ithout the automatic revie) provided therein, neither the Commissioner of Customs nor the 3ecretary of 4inance )ou d pro'a' y ever +no) a'out. >ithout the automatic revie) 'y the Commissioner of Customs and the 3ecretary of 4inance, a co ector in any of our countryFs far,f ung ports, )ou d have a'so ute and un'rid ed discretion to determine )hether goods sei0ed 'y him are oca y produced, hence, not dutia' e or of foreign origin, and therefore su'(ect to payment of customs duties and taxes. Gis decision, un ess appea ed 'y the aggrieved party (the o)ner of the goods$, )ou d 'ecome fina )ith Fthe no one the )iser except himse f and the o)ner of the goods. *he o)ner of the goods cannot 'e expected to appea the co ectorFs decision )hen it is favora' e to him. % decision that is favora' e to the taxpayer )ou d corresponding y 'e unfavora' e to the Government, 'ut )ho )i appea the co ectorFs decision in that case certain y not the co ector. 1vident y, it )as to cure this anoma ous situation ()hich may have a ready defrauded our government of huge amounts of unco ected taxes$, that the provision for automatic revie) 'y the Commissioner of Customs and the 3ecretary of 4inance of unappea ed sei0ure and protest cases )as conceived to protect the government against corrupt and conniving customs co ectors.