Professional Documents
Culture Documents
CASES: ISSUE:
WON the RTC has jurisdiction over cases questioning the
JAO VS. CA validity of seizure and forfeiture proceedings conducted by the
Bureau of Customs
FACTS:
HELD: NO.
The Office of the Director, Enforcement and Security Services (ESS),
Bureau of Customs, received information regarding the presence of The RTC is devoid of any competence to pass upon the validity
untaxed vehicles and parts in the premises owned by Pat Hao located or regularity of seizure and forfeiture proceedings conducted by
along Quirino Avenue, Paranaque and Honduras St., Makati. the Bureau of Customs and to enjoin or otherwise interfere with
these proceedings .
After conducting a surveillance of the two places, respondent Major
Jaime Maglipon, Chief of Operations and Intelligence of the ESS, The Collector of Customs sitting in seizure and forfeiture
recommended the issuance of warrants of seizure and detention. proceedings has exclusive jurisdiction to hear and determine all
District Collector of Customs Titus Villanueva issued the warrants of questions touching on the seizure and forfeiture of dutiable
seizure and detention. goods. The Regional Trial Courts are precluded from assuming
cognizance over such matters even through petitions of
Maglipon coordinated with the local police to assist in the execution of certiorari, prohibition or mandamus.
the respective warrants of seizure and detention. The team searched
the two premises. It is likewise well-settled that the provisions of the Tariff and Customs
Code and RA1125 "An Act Creating the Court of Tax Appeals," specify
They were barred from entering the place, but some members of the the proper for a and procedure for the ventilation of any legal
team were able to force themselves inside and were able to inspect the objections or issues raised concerning these proceedings.
premises and noted that some articles were present which were not
included in the list contained in the warrant. Actions of the Collector of Customs are appealable to the
Commissioner of Customs, whose decision, in turn, is subject to
Amended warrants of seizure and detention were subsequently issued the exclusive appellate jurisdiction of the Court of Tax Appeals
by Villanueva. and from there to the Court of Appeals.
Consequently customs personnel started hauling the articles pursuant The rule that Regional Trial Courts have no review powers over such
to the amended warrants. proceedings is anchored upon the policy of placing no unnecessary
hindrance on the government's drive, not only to prevent smuggling
Narciso Jao and Bernardo Empeynado filed a case for Injunction and and other frauds upon Customs, but more importantly, to render
Damages with prayer for Restraining Order and Preliminary Injunction effective and efficient the collection of import and export duties due the
before RTC Makati Branch 56on August 27, 1990 against respondents. State, which enables the government to carry out the functions it has
been instituted to perform.
On the same date, the trial court issued a Temporary Restraining
Order. Respondents filed a Motion to Dismiss on the ground that RTC The illegality of a seizure by the Collector of Customs does not deprive
has no jurisdiction over the subject matter, claiming that it was the the Bureau of Customs of jurisdiction thereon. The allegations of
petitioners regarding the propriety of the seizure should properly be - Vinuya filed a complaint for replevin in the sala of respondent Judge
ventilated before the Collector of Customs. We have had occasion to on the ground of alleged illegality of the seizure which, in the opinion of
declare: respondents, did not confer jurisdiction on the Collector of Customs.
The Collector of Customs when sitting in forfeiture proceedings - Petitioners filed a motion to dismiss on the ground that forfeiture
constitutes a tribunal expressly vested by law with jurisdiction to hear proceedings had already been instituted before the Collector of
and determine the subject matter of such proceedings without any Customs who has the sole jurisdiction to determine questions affecting
interference from the Court of First Instance. the disposition of property under seizure as well as the absence of a
cause of action. This was denied for lack of merit. Thus this petition.
(AuyongHian v. Court of Tax Appeals, et al., 19 SCRA 10
ISSUE
WON the court of first instance is vested with jurisdiction to
REPUBLIC VS. BOCAR entertain a complaint for replevin for the recovery of a Cadillac
car, subject of a seizure and forfeiture proceeding in the Bureau
FACTS: of Customs
HELD NO.
Reasoning
ENRILE VS. VINUYA The governmental agency concerned, the Bureau of Customs, is vested
with exclusive authority. Even if it be assumed that in the exercise of
FACTS: such exclusive competence a taint of illegality may be correctly
- The then Collector of Customs of the Port of Manila issued a warrant imputed, the most that can be said is that under certain circumstances
of seizure and detention against the Cadillac car involved in this case, the grave abuse of discretion conferred may oust it of such jurisdiction.
the owner-claimant being a certain Rodolfo Ceza, as the taxes and
duties had not been paid. It does not mean however that correspondingly a court of first instance
lh /CITE> The warr is vested with competence when clearly in the light of the above
- It was moreover shown in the petition that the owner, Rodolfo Ceza, decisions the law has not seen fit to do so.
had sold such car to one Francisco Dee from whom respondent Vinuya
acquired the same. b. "the Court of First Instance should yield to the jurisdiction of the
Collector of Customs. The jurisdiction of the Collector of Customs is
provided for in Republic Act 1937i which took effect on July 1, 1957,
much later than the Judiciary Act of 1948ii. It is axiomatic that a later need of a search warrant in said cases. But in the search of a dwelling
law prevails over a prior statute. house, the Code provides that said "dwelling house may be entered and
searched only upon warrant issued by a judge or justice of the peace ...
c. Moreover, on grounds of public policy, it is more reasonable to ." It is our considered view, therefore, that except in the case of the
conclude that the legislators intended to divest the Court of First search of a dwelling house, persons exercising police authority under
Instance of the prerogative to replevin a property which is a subject of the customs law may effect search and seizure without a search
a seizure and forfeiture proceedings for violation of the Tariff and warrant in the enforcement of customs laws."
Customs Code. Otherwise, actions for forfeiture of property for violation
of Customs laws could easily be undermined by the simple devise of
replevin."
d. Section 2303 of the Tariff and Customs Code requires the Collector COMCUS VS. CA
of Customs to give to the owner of the property sought to be forfeited
written notice of the seizure and to give him the opportunity to be FACTS:
heard in his defense. This provision clearly indicates the intention of the
law to confine in the Bureau of Customs the determination of all
questions affecting the disposal of property proceeded against in a
seizure and forfeiture case. The judicial recourse of the property owner
is not in the Court of First Instance but in the Court of Tax Appeals, and
only after exhausting administrative remedies in the Bureau of 2. ADMINISTRATIVE PROCEEDINGS
Customs."
e Collector of Customs is not final. An appeal lies to the Sec. 2301. Warrant for Detention of Property Bond. Upon
DISPOSITION making any seizure, the Collector shall issue a warrant for the
The writ of certiorari prayed for is granted, respondent Judge being detention of the property; and if the owner or importer desires to
clearly without jurisdiction. secure the release of the property for legitimate use, the Collector may
surrender it upon the filing of a sufficient bond, in an amount to be
fixed by him, conditioned for the payment of the appraised value of the
article and/or any fine, expenses and costs which may be adjudged in
the case: Provided, That articles the importation of which is
PAPA VS. MAGO prohibited by law shall not be released under bond.
Sec. 2312. Decision or Action by Collector in Protest and Seizure Section 1201. Articles to Be Imported Only Through
Cases. When a protest in proper form is presented in a case where Customhouse. All articles imported into the Philippines, whether
protest in required, the Collector shall reexamine the matter thus subject to duty or not, shall be entered through a customhouse at a
presented, and if the protest is sustained, in whole or in part, he shall port of entry.
enter the appropriate order, the entry reliquidated if necessary.
Sec. 1202. When Importation Begins and Deemed Terminated.
In seizure cases, the Collector, after a hearing, shall in writing make a Importation begins when the carrying vessel or aircraft enters
declaration of forfeiture or fix the amount of the fine or take such other the jurisdiction of the Philippines with intention to unlade
action as may be proper. therein. Importation is deemed terminated upon payment of the
duties, taxes and other charges due upon the articles, or secured
Sec. 2313. Review by Commissioner. The person aggrieved by to be paid, at a port of entry and the legal permit for withdrawal shall
the decision or action of the Collector in any matter presented upon have been granted, or in case said articles are free of duties, taxes and
protest or by his action in any case of seizure may, within fifteen days other charges, until they have legally left the jurisdiction of the
after notification in writing by the Collector of his action or decision, customs.
give written notice to the Collector of his desire to have the matter
reviewed by the Commissioner. Thereupon the Collector shall forthwith Sec. 1210. Disposition of Imported Articles Remaining on Vessel
transmit all the records of the proceedings to the Commissioner, who After Time for Unlading. Imported articles remaining on board any
shall approve, modify or reverse the action or decision of the Collector vessel after the expiration of the said period for discharge, and not
and take such steps and make such orders as may be necessary to give reported for transshipment to another port, may be unladen by the
effect to his decision. customs authorities and stored at the vessel's expense.
Sec. 2314. Notice of Decision of Commissioner. Notice of the Articles so stored may be claimed and entered at any time within
decision of the Commissioner shall be given to the party by whom the fifteen days after discharge or such longer period not beyond thirty
case was brought before him for review, and in seizure cases such days as the Collector shall approve. If not entered it shall be sold at
notice shall be effected by personal service if practicable. public auction at the next ensuing regular sale, though at any time
prior to sale it may be entered for consumption or warehouse, and be
Sec. 2315. Supervisory Authority of Commissioner And of withdrawn upon payment of duties, taxes and other charges, and
Department Head in Certain Cases. If in any case involving the expenses.
assessment of duties the importer shall fail to protest the ruling of
the Collector, and the Commissioner shall be of the opinion that
the ruling was erroneous and unfavorable to the Government, the EFFECT OF FAILURE TO FILE ENTRY
latter may order a reliquidation; and if the ruling of the
Commissioner in any unprotested case should, in the opinion of
the department head, be erroneous and unfavorable to the ABANDONMENT OF IMPORTED ARTICLES
Government, the department head may require the
Commissioner to order a reliquidation. Sec. 1801. Abandonment, Kinds and Effect of Abandonment is
express when it is made direct to the Collector by the interested party
Except as in the preceding paragraph provided, the supervisory in writing, and it is implied when, from the action or omission of the
authority of the department head over the Bureau of Customs shall not interested party, an intention to abandon can be clearly inferred. The
extend to the administrative review of the ruling of the Commissioner failure of any interested party to file the import entry within
in matters appealed to the Court of Tax Appeals. fifteen days or any extension thereof from the discharge of the
vessel or aircraft, shall be implied abandonment. An implied
abandonment shall not be effective until the article is declared
by the Collector to have been abandoned after notice thereof is
given to the interested party as in seizure cases. Issues:
1. whether entry under Section 1301 in relation to Section
Any person who abandons an imported article renounces all his 1801 of the TCC refers to the IED or the IEIRD?
interests and property rights therein.
\ The filing of the IEIRDs has several important purposes: to ascertain
Sec. 1802. Abandonment of Imported Articles. The owner or the value of the imported articles, collect the correct and final amount
importer of any articles may, within ten days after filing of the of customs duties and avoid smuggling of goods into the country. Entry
import entry, abandon to the Government all or a part of the refers to both. They must be filed within 30 days.
articles included in an invoice, and, thereupon, he shall be relieved
from the payment of duties, taxes and all other charges and 2. whether fraud was perpetrated by petitioner? yes
expenses due thereon: Provided, That the portion so abandoned is
not less than ten per cent of the total invoice and is not less than one There was fraud. Fraud, in its general sense, is deemed to comprise
package, except in cases of articles imported for personal or anything calculated to deceive, including all acts, omissions, and
family use. The article so abandoned shall be delivered by the owner concealment involving a breach of legal or equitable duty, trust or
or importer at such place within the port of arrival as the Collector shall confidence justly reposed, resulting in the damage to another, or by
designate, and upon his failure to so comply, the owner or importer which an undue and unconscionable advantage is taken of another. It is
shall be liable for all expenses that may be incurred in connection with a question of fact and the circumstances constituting it must be alleged
the disposition of the articles. and proved in the court below. The finding of the lower court as to the
existence or non-existence of fraud is final and cannot be reviewed
Nothing in this section shall be construed as relieving such owner or here unless clearly shown to be erroneous. In this case, fraud was
importer from any criminal liability which may arise from any violation established by the IPD-CIIS of the BOC. Both the CTA First Division and
of law committed in connection with the importation of the abandoned en banc agreed completely with this finding. Chevron bid edits time to
article. avail of lower rate. Hence, due to the presence of fraud, the one year
prescriptive period of the finality of liquidation under Section 1603 was
inapplicable and
CHEVRON PHILIPPINES VS. COMMISSIOER OF CUSTOMS 3. whether the importations can be considered abandoned
under Section 1801. Yes.
Effective date of reduction of tariff rate from 10% to 3% per RA 8180
(Apr 16, 1996) while importations arrived in the Phils prior to Apr 16, Per Sec 1801 as amended by RA 7651. Notice was not necessary
1996; Import Entry Declarations [IED] were filed prior to said later date because BOC learned of fraud after 3 years and importations had been
but the Import Entry Internal Revenue Declarations [IEIRD] were filed released. Abandoned article ipso facto deemed the property of the
after said date. Chevron paid customs duties at3%. Three years later, government per Sec 1802. This section cannot be questioned as
an informer reported the transactions and investigation conducted. The unconstitutional collaterally. Besides, there is clear intent to do away
CBOC declared the importations abandoned for failure to enter them with seizure proceedings in abandonment. Ordered to pay P893Million
within 30 days from unloading and issued assessments for more than plus 6% legal interest per annum accruing from the date of
P1 Billion. Hence the appeal to CTA division which ruled that 10% promulgation of this decision until its finality. Upon finality of this
applied per Sec 204, 205 and 1408; there was fraud but no decision, the sum so awarded shall bear interest at the rate of twelve
abandonment. Both parties went to CTA en banc, which ruled that percent (12%) per annum until its full satisfaction.
there was abandonment because IEIRD was not filed within 30 days per
Sec 1301 in relation to Sec 205, thus abandonment ensued per Sec
1801 and 1802; notice of abandonment per CMO 15-94was not
necessary because Chevron had knowledge; and agreed there was 4. ARTICLES SUBJECT TO DUTY
fraud for failure file entry that was intended to avoid higher rate of
duties.
Section 101. Imported Articles Subject to Duty. All articles,
when imported from any foreign country into the Philippines, shall be kinds of tariffs or customs duties
subject to duty upon each importation, even though previously
exported from the Philippines, except as otherwise specifically provided 1. Regular tariff or customs duties - these are taxes imposed
for in this Code or in other laws. or assessed upon merchandise from, or exported to, a foreign
country for the purpose of raising revenues.
Sec. 1205. Importations by the Government. Except as 2. Special tariffs or custom duties - these are additional import
otherwise specifically provided, all importations by the government for duties imposed on specific kinds of imported articles under
its own use or that of its subordinate branches on instrumentalities, or certain conditions. They are imposed for the protection of
corporations, agencies or instrumentalities owned or controlled by the consumers and manufacturers, as well as Philippine products
government, shall be subject to the duties, taxes, fees and other from undue competition posed by foreign made products,
charges provided for in this Code: Provided, however, That upon specifically:
certification of the head of the department or political subdivision
concerned, with the approval of the Auditor General, that the a. Safeguard duties
imported article is actually being used by the government or b. Dumping duties
any of its political subdivision concerned, the amount of duty, tax, c. Countervailing duties
fee or charge shall be refunded to the government or the political d. Marking duties
subdivision which paid it. e. Retaliatory duties
Sec. 205. Effective Date of Rates of Import Duty. Imported Safeguard measures are defined as emergency"
articles shall be subject to the rate or rates of import duty existing at actions with respect to increased imports of particular
the time of entry, or withdrawal from warehouse in the Philippines, for products, where such imports have caused or threaten
consumption. to cause serious injury to the importing Member's
domestic industry.
On and after the day when this Code shall go into effect all articles
previously imported, for which no entry has been made, and all articles It is a measure provided by the State to protect
previously entered without payment of duty and under bond for domestic industries and producers from increased
warehousing, transportation, or any other purpose, for which no permit imports which cause or threaten to cause serious injury
of delivery to the importer or his agent has been issued, shall be to those domestic industries and producers.
subject to the rates of duty imposed by this Code and to no other duty,
upon the entry, or withdrawal thereof from warehouse, for Authorized person to impose safeguard measures
consumption. 1. Secretary of Agriculture If the article in question is
an agricultural product;
On articles abandoned or forfeited to, or seized by, the government, 2. Secretary of Trade and Industry If the article is
and then sold at public auction, the rate of duty and the tariff in force non-agricultural product.
on the date of the auction shall apply: Provided, That duty based on
the weight, volume and quantity of articles shall be levied and The factual findings of the Tariff Commission on
collected on the weight, volume and quantity at the time of their the existence or non-existence of conditions
entry into the warehouse or the date of abandonment, forfeiture warranting the imposition of general safeguard
and/or seizure. measures binding upon the DTI Secretary
(b) The amount of any import duties imposed by the 5. The "cost of production" of an imported article shall be the
country of exportation which have been rebated, or sum of
which have not been collected, by reason of the
exportation of the article to the Philippines; and (a) The cost of materials of, and of fabrication, manipulation or other
(c) The amount of any taxes imposed in the country of process employed in manufacturing or producing, identical or
exportation upon the manufacturer, producer or seller substantially identical article, at a time preceding the date of shipment
in respect to the manufacture, production or sale of the of the particular article under consideration which would ordinarily
article, which have been rebated, or which have not permit the manufacture or production of the particular article under
been collected, by reason of its exportation to the consideration in the usual course of business;
Philippines. The following amount, if included, shall (b) The usual general expenses not less than 10 per cent of such cost,
be deducted in the case of identical or substantially identical articles;
(1) The amount of costs, charges and expenses, (c) The cost of all containers and coverings, and all other costs, charges
and Philippine customs duties, incident to and expenses incident to placing the particular article under
bringing the article from the place of consideration in condition, packed ready for shipment to the
shipment in the country of exportation to the Philippines; and
place of delivery in the Philippines; (d) An addition for profit not less than 8 per cent of the sum of the
(2) The amount of commissions, if any, for selling amounts determined under subparagraphs (a) and (b) hereof, equal to
in the Philippines the particular article under the profit which is originally added, in the case of articles of the same
consideration; general character as the particular article under consideration, by
(3) An amount equal to the expenses, if any, manufacturers or producers in the country of manufacture or
generally incurred by or for the account of the production who are engaged in the same general trade as the
exporter in the Philippines in selling identical manufacturer or producer of the particular article under consideration.
or substantially identical article; and
(4) The amount of any export tax paid in the f. For the purposes of this section the "exporter" of an imported
country of exportation on the exportation of article shall be the person by whom or for whose account the article
the article to the Philippines. is imported into the Philippines
1. If such person is the agent or principal of the exporter,
4. The "foreign market value" of an imported article shall be the manufacturer or producer; or
price, at the time of exportation of such article to the 2. If such person owns or controls, directly or indirectly, through
Philippines, at which such or similar article is sold or freely offered for stock ownership or control or otherwise, any interest in the
sale to all purchasers in the principal markets of the country from which business of the exporter, manufacturer or producer; or
exported, in the usual wholesale quantities and in the ordinary course 3. If the exporter, manufacturer or producer owns or controls,
of trade for home consumption (or, if not sold or offered for sale for directly or indirectly, through stock ownership or control or
home consumption, then for exportation to countries other than the otherwise, any interest in any business conducted by such
Philippines), including the cost of all containers and coverings and persons; or
all other costs, charges and expenses incident to placing the article 4. If any person or persons, jointly or severally, directly or
in condition packed ready for shipment to the Philippines, indirectly, through stock ownership or control or otherwise, own
except that in the case of articles purchased or agreed to be or control in the aggregate 20 per cent or more of the voting
purchased by the person by whom or for whose account the power or control in the business carried on by the person by
whom or for whose account the article is imported into the k. It shall be the duty of collectors of customs at all ports of entry
Philippines, and also 20 per cent or more of such power or to levy and collect the dumping duty in accordance with subsection
control in the business of the exporter, manufacturer or "d" hereof on the specific kind or class of article as to which the
producer. Secretary has made a decision of dumping.
g. Pending investigation and final decision of the case, the article in It shall also be their duty to bring to the attention of the Secretary,
question, and articles of the same specific kind or class subsequently thru the Commissioner of Customs, any case coming within their notice
imported under similar circumstances, shall be released to the owner, which may, in their opinion, require action as provided in this section.
importer, consignee or agent upon the giving of a bond in an amount
equal to the double the estimated value thereof. Articles which may l. The Secretary shall promulgate all rules and regulations necessary to
have been delivered under the provision of section fifteen hundred and carry out the provisions of this section.
three of this Code prior to the institution of the investigation provided
in this section shall, pending final decision, be ordered returned to the
custody of the collectors of customs unless released under bond in f. COUNTERVAILING DUTIES
accordance with this section.
Sec. 302. Countervailing Duty. a. On articles dutiable under this
h. Any aggrieved party may only appeal the amount of dumping Code, upon the production, manufacture or export of which any bounty,
duty that is levied and collected by the Commissioner of subsidy or subvention is directly or indirectly granted in the country of
Customs to the Court of Tax Appeals in the same manner and origin and/or exportation, and the importation of which has been
within the same period provided for by law in the case of appeals from determined by the Secretary, after investigation and report of the
decisions of the Commissioner of Customs. Commission, as likely to materially injure an established industry, or
prevent or considerably retard the establishment of an industry in the
i. Philippines, there shall be levied a countervailing duty equal to the
(1) The article, if it has not been previously released under bond as ascertained or estimated amount of such bounty, subsidy or
provided in subsection "g" hereof, shall be released after subvention: Provided, That the exception of any exported article from
payment by the party concerned of the corresponding dumping a duty or tax imposed on like articles when destined for consumption in
duty in addition to any other duties, taxes and charges, if any, the country of origin and/or exportation or the refunding of such duty
or re-exported by the owner, importer, consignee or agent, at or tax, shall not be deemed to constitute a grant of a bounty, subsidy
his option and expense, upon the filing of a bond in an amount or subvention within the meaning of this section; however, should an
equal to double the estimated value of the article, conditioned article be allowed drawback by the country of origin and/or exportation,
upon the presentation of a landing certificate issued by a only the ascertained or estimated excess of the amount of the
consular officer of the Philippines at the country of destination; drawback over the total amount of the duties and/or internal taxes, if
or any, shall constitute a bounty, subsidy or subvention.
(2) If the article has been previously released under bond, as
provided in subsection "g" hereof, the party concerned shall be b. The Commission, on its own motion or upon application of any
required to pay the corresponding dumping done in addition to interested party, when in its judgment there is good and sufficient
any other duties, taxes and charges, if any. reason therefor, shall ascertain, determine or estimate the net amount
of such bounty, subsidy or subvention and shall transmit to the
j. Any investigation to be conducted by the Commission under Secretary the amounts so ascertained, determined or estimated, if any.
this section shall include a hearing or hearings where the Wherever it is ascertained that the conditions which
owner, importer, consignee or agent of the imported article, the local necessitated the imposition of the countervailing duty have
producers of a like article, other parties directly affected, and such ceased to exist, and the Commission shall so certify to the Secretary,
other parties as in the judgment of the Commission are entitled to the latter shall take the necessary steps to suspend or discontinue
appear, shall be given an opportunity to be heard and to present the imposition of such duty.
evidence bearing on the subject matter.
c. The Secretary shall make all rules and regulations necessary to carry concealing the origin of such article and in such manner that
out the provisions of this section. any mark contemplated by this section would necessarily be
obliterated, destroyed or permanently concealed;
g. Marking duties (h) An ultimate purchaser, by reason of the character of such
article or by reason of the circumstance of its importation, must
necessarily know the country of origin of such article even
Sec. 303. Marking of Imported Articles and Containers. though it is not marked to indicate its origin;
(i) Such article was produced more than twenty years prior to its
a. Marking of Articles. Except as hereinafter provided, every article importation into the Philippines; or
of foreign origin (or its container, as provided in subsection "b" hereof) (j) Such article cannot be marked after importation except at an
imported into the Philippines shall be marked in any official language of expense which is economically prohibitive, and the failure to
the Philippines and in a conspicuous place as legibly, indelibly and mark the article before importation was not due to any purpose
permanently as the nature of the article (or container) will permit in of the importer, producer, seller or shipper to avoid compliance
such manner as to indicate to an ultimate purchaser in the Philippines with this section.
the name of the country of origin of the article. The Commissioner of
Customs shall, with the approval of the department head, issue rules b. Marking of Containers. Whenever an article is excepted under
and regulations to subdivision (3) of subsection "a" of this section from the requirements
of marking, the immediate container, if any, of such article, or such
(1) Determine the character of words and phrases or abbreviations other container or containers of such article as may be prescribed by
thereof which shall be acceptable as indicating the country of origin and the Commissioner of Customs with the approval of the department
prescribe any reasonable method of marking, whether by printing, head, shall be marked in such manner as to indicate to an ultimate
stenciling, stamping, branding, labeling or by any other reasonable purchaser in the Philippines the name of the country of origin of such
method, and a conspicuous place on the article or container where the article in any official language of the Philippines, subject to all
marking shall appear; provisions of this section, including the same exceptions as are
applicable to articles under subdivision (3) of subsection "a".
(2) Require the addition of any other words or symbols which may be
appropriate to prevent deception or mistake as to the origin of the c. Marking Duty for Failure to Mark. If at the time of importation
article or as to the origin of any other article with which such imported any article (or its container, as provided in subsection "b" hereof), is
article is usually combined subsequent to importation but before not marked in accordance with the requirements of this section, there
delivery to an ultimate purchaser; and shall be levied, collected and paid upon such article a marking duty of 5
per cent ad valorem, which shall be deemed to have accrued at the
(3) Authorize the exception of any article from the requirements of time of importation, except when such article is exported or
marking if destroyed under customs supervision and prior to the final
(a) Such article is incapable of being marked; liquidation of the corresponding entry.
(b) Such article cannot be marked prior to shipment to the
Philippines without injury; d. Delivery Withheld until Marked. No imported article held in
(c) Such article cannot be marked prior to shipment to the customs custody for inspection, examination or appraisement shall be
Philippines, except at an expense economically prohibitive of its delivered until such articles and/or their containers, whether released
importation; or not from customs custody, shall have been marked in accordance
(d) The marking of a container of such article will reasonably with the requirements of this section and until the amount of duty
indicate the origin of such article; estimated to be payable under subsection "c" of this section shall have
(e) Such article is a crude substance; been deposited. Nothing in this section shall be construed as excepting
(f) Such article is imported for use by the importer and not any article or its container from the particular requirements of marking
intended for sale in its imported or any other form; provided for in any provisions of law.
(g) Such article is to be processed in the Philippines by the
importer or for his account otherwise than for the purpose of
e. The failure or refusal of the owner or importer to mark the articles as c. Any proclamation issued by the President under the authority of this
herein required within a period of thirty days after due notice shall section shall, if he deems it consistent with the interests of the
constitute as an act of abandonment of said articles and their Philippines, extend to the whole of any foreign country or may be
disposition shall be governed by the provisions of this Code relative to confined to any subdivision or subdivisions thereof; and the President
abandonment of imported articles. shall, whenever he deems the public interests require, suspend,
revoke, supplement or amend any such proclamation.
(4) Loading, unloading and handling charges associated with the (v) One of them directly or indirectly controls the other;
transport of the imported goods from the country of exportation to the
port of entry in the Philippines; and (vi) Both of them are directly or indirectly controlled by a third person;
(5) The cost of insurance. (vii) Together they directly or indirectly control a third person; or
All additions to the price actually paid or payable shall be made (viii) They are members of the same family, including those related by
only on the basis of objective and quantifiable data. affinity or consanguinity up to the fourth civil degree.
No additions shall be made to the price actually paid or payable Persons who are associated in business with one another in that
in determining the customs value except as provided in this Section: one is the sole agent, sole distributor or sole concessionaire, however
Provided, That Method One shall not be used in determining the described, of the other shall be deemed to be related for the purposes
dutiable value of imported goods if: of this Act if they fall within any of the eight (8) cases above.
(a) There are restrictions as to the disposition or use of the (B) Method Two. Transaction Value of Identical Goods.
goods by the buyer other than restrictions which: Where the dutiable value cannot be determined under method
one, the dutiable value shall be the transaction value of identical goods
(i) Are imposed or required by law or by Philippine authorities; sold for export to the Philippines and exported at or about the same
time as the goods being valued. "Identical goods" shall mean goods
(ii) Limit the geographical area in which the goods may be resold; or which are the same in all respects, including physical characteristics,
quality and reputation. Minor differences in appearances shall not
(iii) Do not substantially affect the value of the goods. preclude goods otherwise conforming to the definition from being
regarded as identical.
(C) Method Three. Transaction Value of Similar Goods. If neither the imported goods nor identical nor similar imported
Where the dutiable value cannot be determined under the preceding goods are sold at or about the time of importation of the goods being
method, the dutiable value shall be the transaction value of similar valued in the Philippines in the conditions as imported, the customs
goods sold for export to the Philippines and exported at or about the value shall, subject to the conditions set forth in the preceding
same time as the goods being valued. "Similar goods" shall mean paragraph hereof, be based on the unit price at which the imported
goods which, although not alike in all respects, have like characteristics goods or identical or similar imported goods sold in the Philippines in
and like component materials which enable them to perform the same the condition as imported at the earliest date after the importation of
functions and to be commercially interchangeable. The quality of the the goods being valued but before the expiration of ninety (90) days
goods, their reputation and the existence of a trademark shall be after such importation.
among the factors to be considered in determining whether goods are
similar. If neither the imported goods nor identical nor similar imported
If the dutiable value still cannot be determined through the goods are sold in the Philippines in the condition as imported, then, if
successive application of the two immediately preceding methods, the the importer so requests, the dutiable value shall be based on the unit
dutiable value shall be determined under method four or, when the price at which the imported goods, after further processing, are sold in
dutiable value still cannot be determined under that method, under the greatest aggregate quantity to persons in the Philippines who are
method five, except that, at the request of the importer, the order of not related to the persons from whom they buy such goods, subject to
application of methods four and five shall be reversed: Provided, allowance for the value added by such processing and deductions
however, That if the Commissioner of Customs deems that he will provided under Subsections (D)(1), (2), (3) and (4) hereof.
experience real difficulties in determining the dutiable value using
method five, the Commissioner of Customs may refuse such a request (E) Method Five. Computed Value. The dutiable value
in which event the dutiable value shall be determined under method under this method shall be the computed value which shall be the sum
four, if it can be so determined. of:
(D) Method Four. Deductive Value. The dutiable value of (1) The cost or the value of materials and fabrication or other
the imported goods under this method shall be the deductive value processing employed in producing the imported goods;
which shall be based on the unit price at which the imported goods or
identical or similar imported goods are sold in the Philippines, in the (2) The amount for profit and general expenses equal to that
same condition as when imported, in the greatest aggregate quantity, usually reflected in the sale of goods of the same class or kind as the
at or about the time of the importation of the goods being valued, to goods being valued which are made by producers in the country of
persons not related to the persons from whom they buy such goods, exportation for export to the Philippines;
subject to deductions for the following:
(3) The freight, insurance fees and other transportation
(1) Either the commissions usually paid or agreed to be paid or expenses for the importation of the goods;
the additions usually made for profit and general expenses in
connection with sales in such country of imported goods of the same (4) Any assist, if its value is not included under paragraph (1)
class or kind; hereof; and
(2) The usual costs of transport and insurance and associated (5) The cost of containers and packing, if their values are not
costs incurred within the Philippines; and included under paragraph (1) hereof.
(3) Where appropriate, the costs and charges referred to in The Bureau of Customs shall not require or compel any person
subsection (A) (3), (4) and (5); and not residing in the Philippines to produce for examination, or to allow
access to, any account or other record for the purpose of determining a
(4) The customs duties and other national taxes payable in the computed value. However, information supplied by the producer of the
Philippines by reason of the importation or sale of the goods. goods for the purposes of determining the customs value may be
verified in another country with the agreement of the producer and Provided, however, That goods, the importation of which is prohibited
provided they will give sufficient advance notice to the government of by law shall not be released under any circumstance whatsoever.
the country in question and the latter does not object to the
investigation. Nothing in this Section shall be construed as restricting or calling
into question the right of the Collector of Customs to satisfy himself as
(F) Method Six. Fallback Value. If the dutiable value to the truth or accuracy of any statement, document or declaration
cannot be determined under the preceding methods described above, it presented for customs valuation purposes. When a declaration has
shall be determined by using other reasonable means and on been presented and where the customs administration has reason to
the basis of data available in the Philippines. doubt the truth or accuracy of the particulars or of documents produced
in support of this declaration, the customs administration may ask the
If the importer so requests, the importer shall be informed in importer to provide further explanation, including documents or other
writing of the dutiable value determined under Method Six and the evidence, that the declared value represents the total amount actually
method used to determine such value. paid or payable for the imported goods, adjusted in accordance with
the provisions of Subsection (A) hereof.
No dutiable value shall be determined under Method Six on the
basis of: If, after receiving further information, or in the absence of a
response, the customs administration still has reasonable doubts about
(1) The selling price in the Philippines of goods produced in the the truth or accuracy of the declared value, it may, without prejudice to
Philippines; an importers right to appeal pursuant to Article 11 of the World Trade
Organization Agreement on customs valuation, be deemed that the
(2) A system that provides for the acceptance for customs customs value of the imported goods cannot be determined under
purposes of the higher of two alternative values; Method One. Before taking a final decision, the Collector of Customs
shall communicate to the importer, in writing if requested, his grounds
(3) The price of goods in the domestic market of the country of for doubting the truth or accuracy of the particulars or documents
exportation; produced and give the importer a reasonable opportunity to respond.
When a final decision is made, the customs administration shall
(4) The cost of production, other than computed values, that communicate to the importer in writing its decision and the grounds
have been determined for identical or similar goods in accordance with therefor."
Method Five hereof;
(5) The price of goods for export to a country other than the (b) POST ENTRY AUDIT
Philippines;
(6) Minimum customs values; or "SEC. 3515. Compliance Audit or Examination of Records. - The
importers/customs brokers shall allow any customs officer authorized
(7) Arbitrary or fictitious values. by the Bureau of Customs to enter during office hours any premises or
place where the records referred to in the preceding section are kept to
If in the course of determining the dutiable value of imported conduct audit examination, inspection, verification and/or investigation
goods, it becomes necessary to delay the final determination of such of those records either in relation to specific transactions or to the
dutiable value, the importer shall nevertheless be able to secure the adequacy and integrity of the manual or electronic system or systems
release of the imported goods upon the filing of a sufficient guarantee by which such records are created and stored. For this purpose. A duty
in the form of a surety bond, a deposit, cash or some other appropriate authorized customs officer shall be full and free access to all books,
instrument in an amount equivalent to the imposable duties and taxes records, and documents necessary or relevant for the purpose of
on the imported goods in question conditioned upon the payment of collecting the proper duties and taxes.
customs duties and taxes for which the imported goods may be liable:
In addition, the authorized customs officer may make copies of, (a) Relative magnitude of customs revenue from the firm;
or take extracts from any such documents. The records or documents (b) The rates of duties of the firms imports;
must, as soon as practicable after copies of such have been taken, be (c) The compliance tract records of the firm; and
returned to the person in charge of such documents. (d) An assessment of the risk to revenue of the firms import activities.
A copy of any such document certified by or on behalf of the (2) When errors in the import declaration are detected;
importer/broker is admissible in evidence in all courts as if it were the
original. (3) When firms voluntarily request to be audited, subject to the
approval of the Commissioner of Customs.
An authorized customs officer is not entitled to enter any
premises under this Section unless, before so doing, the officer (b) Brokers shall be audited to validate audits of their importer
produces to the person occupying or apparently in charge of the clients and/or fill information gaps revealed during an audit of their
premises written evidence of the fact that he or she is an authorized importers clients."
officer. The person occupying or apparently in charge of the premises
entered by an officer shall provide the officer with all reasonable
facilities and assistance for the effective exercise of powers under this "SEC. 3517. Documents in Foreign Language. - Where a document in a
Section. foreign language is presented to a customs officer in relation to the
carrying out of any duty or the exercise of any power of the Bureau of
Unless otherwise provided herein or in other provisions of law, the Customs under this Code, said document in a foreign language must
Bureau of Customs may, in case of disobedience, invoke the aid of the be accompanied with a translation in the official language of
proper regional trial court within whose jurisdiction the matter falls. The this country."
court may punish contumacy or refusal as contempt. In addition, the
fact that the importer/broker denies the authorized customs officer full
and free access to importation records during the conduct of a post- "Sec. 3518. Records to Be Kept by Customs. The Bureau of
entry audit shall create a presumption of inaccuracy in the transaction Customs shall likewise keep a record of audit results in a database of
value declared for their imported goods and constitute grounds for the importer and broker profiles, to include but not be limited to:
Bureau of Customs to conduct a re-assessment of such goods.
(a) Articles of Incorporation;
This is without prejudice to the criminal sanctions imposed by (b) The company structure, which shall include but not be limited to:
this Code and administrative sanctions that the Bureau of Customs may (1) Incorporators and Board of Directors;
impose against contumacious importers under existing laws and (2) Key officers; and
regulations including the authority to hold delivery or release of their (3) Organizational structure;
imported articles." (c) Key importations;
(d) Privileges enjoyed;
(e) Penalties; and
"SEC. 3516. Scope of the Audit. (f) Risk category (ies)."
When, upon trial for a violation of this section, the defendant is shown d. Any part of the cargo of a vessel or aircraft arriving from a foreign
to have or to have had possession of the article in question, such port which is unladen before arrival at the vessel's or aircraft's port of
possession shall be deemed sufficient evidence to authorize conviction, destination and without authority from the proper customs official; but
unless the defendant shall explain the possession to the satisfaction of such cargo shall not be forfeited if such unlading was due to accident,
the court. stress of weather or other necessity and is subsequently approved by
the Collector.
Sec. 3602. Various Fraudulent Practices Against Customs
Revenue. Any person who makes or attempts to make any entry of e. Any article which is fraudulently concealed in or removed from any
imported or exported article by means of any false or fraudulent public or private warehouse under customs supervision.
invoice, declaration, affidavit, letter, paper, or by means of any false
statement, written or verbal, or by means of any false or fraudulent f. Any article of prohibited importation or exportation, the importation
practice whatsoever, or shall be guilty of any willful act or omission by or exportation of which is effected or attempted contrary to law, and all
means of whereof the Government might be deprived of the lawful other articles which, in the opinion of the Collector, have been used,
duties, taxes and other charges, or any portion thereof, accruing from are or were intended to be used as instrument in the importation or
the article or any portion thereof, embraced or referred to in such exportation of the former.
invoice, declaration, affidavit, letter, paper, or statement, or affected
by such act or omission, shall, for each offense g. Unmanifested article found on any vessel or aircraft, if manifest
PUNISHABLE BY a fine of not less than P600 nor more than P5,000 therefor is required.
and by imprisonment for not less than 6months nor more than 2years
and if the offender is an alien, he shall be deported after serving the h. Sea stores or stores for aircraft adjudged by the Collector to be
sentence. excessive, when the duties assessed by the Collector thereon are not
paid or secured forthwith upon assessment of the same.
PROPERTIES SUBJECT TO FORFEITURE i. Any package of imported article which is found by the examining
official to contain any article not specified in the invoice or entry,
Sec. 2530.Property Subject to Forfeiture Under Tariff and including all other packages purportedly containing imported articles
Customs Laws. Any vessel or aircraft, cargo, articles and other similar to those declared in the invoice or entry to be the contents of
objects shall, under the following conditions, be subject to forfeiture: the misdeclared package, provided the Collector is of the opinion that
the misdeclaration was caused with fraudulent intent.
a. Any vessel or aircraft, including cargo, which shall be used lawfully in
the importation or exportation of articles into or from any Philippine j. Boxes, cases, trunks, envelopes and other containers of whatever
port or place except a port of entry; and any vessel which, being of less character used as receptacles or as devices to conceal article which is
than thirty tons capacity shall be used in the importation of articles into itself subject to forfeiture under the customs and tariff laws or which is
any Philippine port or place except into a port of the Sulu sea where so designed as to conceal the character of such article.
importation in such vessel may be authorized by the Commissioner,
with the approval of the department head. k. Any beast actually being used for the conveyance of article subject
to forfeiture under the customs and tariff laws with its equipage or
b. Any vessel engaging in the coastwise trade which shall have on trappings, and any vehicles similarly used, together with its equipage
board any article of foreign growth, product or manufacture in excess and appurtenances, including the beast, team or other motive power
drawing or propelling the same; but the forfeiture shall not be effected Section 2530(a) of the Tariff and Customs Code in
if it is established that the owner of the means of conveyance used as unmistakable terms provides that a vessel engaged in smuggling "in a
aforesaid or his agent in charge thereof at the time, has no knowledge port of entry" cannot be forfeited. This is the clear and plain meaning of
of the unlawful act. the law. It is not within the province of the Court to inquire into the
wisdom of the law, for indeed, we are bound by the words of the
l. Any money or thing of value offered as a bribe or for the purpose of statute.
exerting improper influence over a customs official or employee.
Forfeiture proceedings are proceedings in rem and are directed against
m. Any article sought to be imported or exported: the res. It is no defense that the owner of the vessel sought to be
(1) Without going through a customhouse, whether the act was forfeited had no actual knowledge that his property was used illegally.
consummated, frustrated or attempted; The absence or lack of actual knowledge of such use is a defense
personal to the owner himself which cannot in any way absolve the
(2) By failure to mention to a customs official, articles found in the vessel from the liability of forfeiture.
baggage of a person arriving from abroad.
Facts:
(3) On the strength of a false declaration or affidavit executed by
the owner, importer, exporter or consignee concerning the Private respondents Manila Star Ferry, Inc. and the United
importation or exportation of such article. Navigation & Transport Corporation are domestic corporations engaged
in the lighterage business and are the owners and operators,
(4) On the strength of a false invoice or other document executed respectively, of the tugboat Orestes and the barge-lighter UN-L-106.
by the owner, importer, exporter or consignee concerning the Private respondent Ceaba Shipping Agency, Inc. (Ceaba) is the local
importation or exportation of such article. shipping agent of the Chiat Lee Navigation Trading Co. of Hongkong,
the registered owner and operator of the S/S Argo, an ocean-going
(5) Through any other fraudulent practice or device by means of vessel.
which such articles was entered through a customhouse to the
prejudice of the government. On June 12, 1966, the S/S Argo, the Orestes and the UN-L-106, as well
as two wooden bancas of unknown ownership, were apprehended for
Sec. 2531. Conditions Affecting Forfeiture of Article. As smuggling by a patrol boat of the Philippine Navy along the Explosives
regards imported or exported article or articles whereof the importation Anchorage Area of Manila Bay. The patrol boat caught the crew of the
or exportation is merely attempted, the forfeiture shall be effected only S/S Argo in the act of unloading foreign-made goods onto the UN-L-
when and while the article is in the custody or within the jurisdiction of 106, which was towed by the Orestes and escorted by the two wooden
the customs authorities or in the hands or subject to the control of the bancas. All of the goods consisting of 330 cases of foreign-made
importer, exporter, original owner, consignee, agent or other person cigarettes, assorted ladies' wear, clothing material and plastic bags
effecting the importation, entry or exportation in question, or in the were not manifested and declared by the vessel for discharge in Manila.
hands or subject to the control of some person who shall receive, No proper notice of arrival of the S/S Argo was given to the local
conceal, buy, sell or transport the same or aid in any such acts, with customs authorities.
knowledge that the article was imported, or was the subject of an
attempt at importation or exportation, contrary to law. Consequently, seizure and forfeiture proceedings were separately
instituted before the Collector of Customs for the Port of Manila against
the S/S Argo and its cargo, the Orestes, the UN-L-106 and the two
bancas, charging them with violations of Section 2530 (a), (b) and (c)
COMMISSIONER OF CUSTOM VS. MANILA STAR FERRY of the Tariff and Customs Code. Criminal charges were likewise filed
against the officers and crew of said vessels and watercraft.
Doctrine:
The Collector of Customs rendered a consolidated decision declaring the
forfeiture of said vessels and watercraft in favor of the Philippine
government by virtue of Section 2530 (a) and (b) of the Tariff and Nevertheless, although the vessel cannot be forfeited, it is subject to a
Customs Code. fine of not more than P10,000.00 for failure to supply the requisite
manifest for the unloaded cargo under Section 2521 of the Tariff and
On separate appeals taken by all the respondents therein, except the Customs Code.
owner of the two wooden bancas, the Acting Commissioner of Customs
found the Collector's decision to be in order and affirmed the same The barge-lighter UN-L-106 and the tugboat Orestes, on the other
accordingly. hand, are subject to forfeiture under paragraph (c) of Section 2530 of
the Tariff and Customs Code. The barge-lighter and tugboat fall under
The same respondents separately elevated the matter to the Court of the term "vessel" which includes every sort of boat, craft or other
Tax Appeals, which substantially modified the decision of the artificial contrivance used, or capable of being used, as a means of
Commissioner of Customs, ordering only the payment of a fine, in lieu transportation on water (R.A. No. 1937, Section 3514). Said section
of the forfeiture of vessels. In its decision, the Court of Tax Appeals 2530 (c) prescribes the forfeiture of any vessel or aircraft into which
held that while the S/S Argo was caught unloading smuggled goods in shall be transferred cargo unladen contrary to law before the arrival of
Manila Bay, the said vessel and the goods cannot be forfeited in favor the vessel or aircraft at her port of destination. Manila was not the port
of the government because the Port of Manila is a port of entry (R.A. of destination, much less a port of call of the S/S Argo, the importing
1937, Sec. 701). vessel. The S/S Argo left Hongkong and was bound for Jesselton, North
Borneo, Djakarta and Surabaja, Indonesia; and yet it stopped at the
The Commissioner of Customs argues that the phrase "except a port of Port of Manila to unload the smuggled goods onto the UN-L-106 and
entry" should mean "except a port of destination," and inasmuch as the Orestes.
there is no showing that the Port of Manila was the port of destination
of the S/S Argo, its forfeiture was in order. 2. Forfeiture proceedings are proceedings in rem and are directed
against the res. It is no defense that the owner of the vessel sought to
Hence, this petition for review under Rule 44 of the Revised Rules of be forfeited had no actual knowledge that his property was used
Court illegally. The absence or lack of actual knowledge of such use is a
defense personal to the owner himself which cannot in any way absolve
Issues: the vessel from the liability of forfeiture.
1. Whether or not the S/S Argo, a vessel engaged in smuggling WHEREFORE, the consolidated Decision dated September 30, 1969 of
"in a port of entry", can be forfeited. respondent Court of Tax Appeals in C.T.A. Cases Nos. 1836, I837 and
1839 is MODIFIED as follows: (1) that the S/S Argo through
2. Are forfeiture proceedings in rem? respondent Ceaba Shipping Agency, Inc. is ordered to pay a fine of
P10,000.00, to be satisfied from the deposit of the same amount by
Held: respondent Ceaba to the Cashier of this Court per Resolution of July 9,
1978; (2) that the Cashier of this Court is ordered to release the said
1. Section 2530(a) of the Tariff and Customs Code in amount for payment to the Commissioner of Customs, within thirty
unmistakable terms provides that a vessel engaged in smuggling "in a (30) days from the date this decision becomes final; and 3) the tugboat
port of entry" cannot be forfeited. This is the clear and plain meaning of Orestes and the barge-lighter UN-L-106 of respondents Manila Star
the law. It is not within the province of the Court to inquire into the Ferry, Inc. and the United Navigation & Transport. Corporation
wisdom of the law, for indeed, we are bound by the words of the respectively, are ordered forfeited in favor of the Philippine
statute. Neither can we put words in the mouths of the lawmaker. A Government.
verba legis non est recedendum.
It was only in 1972, after this case was instituted, when the questioned
exception ("except a port of entry") in Section 2530(a) of the Tariff and
Customs Code was deleted by P.D. No. 74.