CHEVRON PHILIPPINES INC.

, Petitioner,
vs.
COMMISSIONER OF THE BUREAU OF CUSTOMS, Respondent.

G.R. No. 178759 August 11, 2008

FACTS

Petitioner Chevron is engaged in the business of importing, distributing, and marketing of

petroleum products in the Philippines. In 1996, importations subject of this case were covered by
8 bills of lading. Such importations were appraised at the rate of 3% under R.A. 8180, and
petitioner paid import duties amounting to P316,499,021. Prior to the effectivity of R.A. 8180,
the rate of duty on imported crude oil was 10%.
In 1999, Finance Secretary Edgardo Espiritu received a letter from a certain Alfonso
Arioste denouncing the deliberate concealment, manipulation and scheme employed by Chevron
and Pilipinas Shell in the importation of crude oil, resulting to huge losses of revenue for
government. Said letter was endorsed to the Bureau of Customs (BOC) for investigation.
Petitioner received a subpoena duces tecum/ad testificandum from Unlayao, Chief of
Investigation and Prosecution Division, Customs Intelligence and Investigation Service (IPD-
CIIS) of the BOC, to submit pertinent documents in connection with the subject shipments. But
at that time, legal division of BOC was also carrying out a separate investigation. This prompted
Chevron to seek the creation of a unified team to exclusively handle the investigation.
Petitioner then received from the District Collector a demand letter requiring immediate
settlement of the amount of P73,535,830 representing the difference between the 10% and 3%
tariff rates on the shipments. Chevron objected to the demand and argued that the 3% rate must
be applied. It further wrote the District Collector to inform him of the pending request for the
creation of a unified team with exclusive authority to investigate the matter.
In response to the letter of Chevron, respondent stated that it was the IPD-CIIS which
was authorized to handle the investigation, not the District Collector.
The IPD-CIIS issued findings of irregularity which contains:
That the import entries were filed beyond the 30-day non-extendible period prescribed
under Sec. 1301 of the Tariff and Customs Code (TCC),
That the importations were already considered abandoned in favor of the government,
and
That there was fraud committed by petitioner in collusion with the former District
Collector
Respondent then ordered the petitioner to pay P1,18,170,769.21 representing the total dutiable
value of importations.
This prompted petitioner to file petition for review in the CTA First Division. CTA First
Division ruled:
That there was existence of fraud on the part of petitioner, thus defense of prescription is
inapplicable
That petitioner did NOT abandon shipments
That shipments must be subjected to the 10% rate of tariff
That petitioner is liable to pay P105,899,569.05 for deficiency
Petitioner sought reconsideration while respondent filed a motion for partial reconsideration.
Both motions were denied. Thus, both parties filed petitions for review with CTA en banc, and
petitions were consolidated. CTA en banc ruled:
That it was the filing of import entry and internal revenue declarations (IEIRDs), not
import entry declaration (IEDs), that constituted entry under TCC
That since the IEIRDs were filed beyond the 30-day period, they were deemed
abandoned
That notice to the petitioner was not necessary because of the latters actual knowledge
of the arrival of the shipment
That petitioner committed fraud when it failed to file IEIRDs on time with the intent to
evade the higher rate of 10%.
Petitioner was ordered to pay P893,781,768.21 as total dutiable value.
Hence, this petition for review.

ISSUE/S

1. whether the entry under Sec. 1301 in relation to Sec. 1801 of the TCC refers
to the IED or IEIRD;
2. whether fraud was perpetrated by petitioner
3. whether the importations can be considered abandoned in favor of the
government under Sec. 1801
4. whether a notice is necessary before importations could be deemed
abandoned

LAW/S

Sec. 1301 of the TCC. Imported articles must be entered in the customhouse at the port of entry
within 30 days, which shall not be extendible from date of discharge of the last package from the
vessel or aircraft. xxx

Sec. 1801 of TCC. An imported article is deemed abandoned under any of the following
circumstances:
xxx xxx xxx
b. When the owner, importer, consignee or interested party after due notice, fails to file an entry
within 30 days, which shall not be extendible, from the date of discharge o fthe last package
from the vessel or aircraft, or having filed such entry, fails to claim his importation within 15
days, which shall not likewise be extendible, from the date of posting of the notice to claim such
importation.

Sec. 205 of the TCC. Imported articles shall be deemed entered in the Philippines for
consumption when the specified entry form is properly filed and accepted, together with any
related documents xxx

Sec. 1603 of TCC. Finality of Liquidation. When articles have been entered and passed free of
duty or final adjustments of duties made, with subsequent delivery, such entry and passage free
of duty or settlements of duties will, after the expiration of 1 year, from the date of the final
payment of duties, in the absence of fraud or protest or compliance audit pursuant to the
provisions of this Code, be final and conclusive upon all parties, unless the liquidation of the
import entry was merely tentative.

ARGUMENTS

Chevron BOC Commissioner

(Petitioner)
Shipments must be subject to 3% rate of
tariff.
IED is the entry contemplated under Sec.
1301 and Sec. 1801. Since IED is a BOC
form that serves as basis for payment of
advance duties on importation, it suffices as
an entry.
Petitioner denies the commission of fraud.
The reason for the delayed filing of IEIRD
was due to the late arrival of original copies
of bills of lading and commercial invoices.
BOC requires these documents be attached to
the IEIRD. Hence, prescription sets in.
Shipments should not be considered
(Respondent)
Shipments must be subject to 10% rate of
tariff.
It was IPD-CIIS who is authorized to handle
the investigation. It affirmed the findings of
the IPD-CIIS in the existence of fraud and
collusion between petitioner and former
District Collector. Thus, prescription will not
apply.
Since import entries were filed beyond the
30-day non-extendible period, it is deemed
that petitioner has renounced all of his
interest and property rights to the importation
and shall be considered impliedly abandoned
in favor of the government.
impliedly abandoned because none of its
overt acts (filing od IEDs and paying
advance duties) revealed any intention to
abandon the importations.
Importations could not be deemed impliedly
abandoned because respondent did not give
any notice required by Sec. 1801

CONCLUSION

Petition was denied. Chevron was ordered to pay P893,781,768.21 plus interest.

1. The entries referred to under Sec. 1301 and Sec. 1801 of the TCC refer to both IED and
IEIRD. Both of them should be filed within the 30-day non-extendible period from the
date of last discharge of package from the vessel or aircraft. IED serves as basis for the
payment of advance duties on importation while IEIRD evidences the final payment of
duties and taxes. Clearly, the operative act that constitutes entry of the imported articles
at the port of entry is the filing and acceptance of the specified form together with other
documents required by law and regulations. Hence, the filing of IED is not sufficient to
constitute entry under the TCC.

2. The existence of fraud was established by IPD-CIIS. Fraud is anything calculated to

deceive, including all acts, omissions, and concealment involving a breach or equitable
duty, trust or confidence justly reposed, resulting in the damage to another, or by which
an undue and unconscionable advantage is taken of another. It is a question of fact. The
finding of the lower court as to the existence or non-existence of fraud is final and cannot
be reviewed unless clearly shown to be erroneous. In this case, there was calculated and
perceived course of action adopted by petitioner purposely to evade the payment of the
correct custom duties then prevailing, and this was done in collusion with former District
Collector. A clear indication of fraud was the non-disclosure of discrepancies on the
duties declared in the IED (10%) and IEIRD (3%) covering the shipments. Due to the
presence of fraud, the prescriptive period of the finality of liquidation under Sec. 1603
was inapplicable.

3. The importations were abandoned in favor of the government. Sec. 1801 of the TCC is
clear. TCC no longer requires that there be other acts or omissions where an intent to
abandon can be inferred. It is enough that importer fails to file the required import entries
within the reglementary period.

4. Notice was not necessary under the circumstances of the case. By the time respondent
learned of the anomaly, entries had already been belatedly filed and oil imports were
release and presumably consumed or sold. It was fait accompli. It would have been
against all logic to require respondent to still post an urgent notice to file entry before
declaring the shipments abandoned. Notice was also unnecessary due to the fact that
petitioner was a regular, large-scale and multinational importer of oil falling under the
category of knowledgeable importer which was familiar with the governing rules and
procedure in the release of importations. Chevron was also fully aware that its shipments
had in fact arrived in the port and has actual physical possession of its oil importations.
RAUL BASILIO D. BOAC, ET AL., Petitioner,
vs.
PEOPLE OF THE PHILIPPINES, Respondent.

G.R. No. 180597 November 7, 2008

FACTS

Boac, Golong, Beltran, Basadre, and Alfonso are members of the PNP Criminal
Investigation and Detection Group (CIDG) and they were charged with violation of Sec. 2203 in
relation to Sec. 3612 of the Tariff and Customs Code (TCC). In the Sandiganbayan. They were
alleged to be taking advantage of their official positions while committing the offense in relation
to office with gave abuse thereof, without lawful authority or delegation from the Collector of
Customs, flag down, search and seize 3 container vans consigned to Kakiage surplus.
The Sandiganbayan ruled that the petitioners are guilty beyond reasonable doubt as they
needed a written authority from the Commissioner of Customs or District Collector in order to
conduct searches, seizures and arrests. The prosecution established the lack of said written
authority. The PNP-CIDG can only effect search and seizure upon the direction of the Collector
of Customs.
Petitioners filed motion for reconsideration but were denied. Hence, this petition.

ISSUE/S

1. Whether petitioners are guilty beyond reasonable doubt of violation of

Sec. 2203 of the TCC
2. Whether there is conflict between TCC and RA No. 6975

LAW/S

Sec. 602 of the TCC. The Bureau of Customs, headed by a commissioner, has, among other
things, the following general duties, powers and jurisdiction, in respect to the levy of customs
duties, to wit:
xxx
b. the prevention and suppression of smuggling and other frauds upon the customs;
xxx
j. the enforcement of the tariff and customs laws and all other laws, rules and regulations in
relation to the tariff and customs administration.

Sec. 2203 of the TCC. Persons Having Police Authority. For the enforcement of the tariff and
customs laws, the following persons are authorized to effect searches, seizures and arrests
conformably with the provisions of said laws.
xxx
d. Officers generally empowered by law to effect arrests and execute processes of the courts,
when acting under the direction of the Collector.

Sec. 3612 of the TCC. Violations of Tariff and Customs Laws and Regulations in General. Any
person who violates a provision of this Code or regulations pursuant thereto, for which
delinquency no specific penalty is provided, shall be punished by a fine of not more than P1,000
or by imprisonment for not more than 1 year, or both. If the offender is an alien, he shall be
deported after serving the sentence, and if the offender is a public official or employee, he shall
suffer disqualification to hold public office, to vote and participate in any public election for 10
years.

Sec. 24 of R.A. No. 6975. Powers and Functions. The PNP shall have the following powers and
functions:
(a) Enforce all laws and ordinances relative to the protection of lives and properties;
(b) Maintain peace and order and take all necessary steps to ensure public safety;
 (c) Investigate and prevent crimes, effect the arrest of criminal offenders, bring offenders to
justice and assist in their prosecution;
(d) Exercise the general powers to make arrest, search, and seizure in accordance with the
Constitution and pertinent laws;
xxx
In addition, the PNP shall absorb the office of the National Action Committee on Anti-
Hijacking (NACAH) of the Department of National Defense, all functions of the present
Philippine Air Force Security Command (PAFSECOM), as well as the police functions of
the Coast guard. In order to perform its powers and functions efficiently and effectively, the
PNP shall be provided with adequate land, sea, and air capabilities and all necessary material
means of resources.

Sec. 35 of R.A. No. 6975. Support Units. The PNP shall be supported by administrative and
operational support units.
xxx

ARGUMENTS

Boac, et al. (Petitioner) Pp. of the Philippines (Respondent)

They did not violate Sec. 2203. Petitioners violated Sec. 2203. Petitioners
Assert that they did not conduct any search, took advantage of their official positions
seizure or arrest; hence, there was no while committing the offense in relation to
violation of the TCC. They allege that they office with grave abuse thereof. They
only witnessed the search. conducted search without authorization
They invoke Sec. 24 and Sec. 35 of RA from BOC.
6975. Regular PNP members are generally
empowered by law to effect search, seizures
and arrests.
Petitioners contend that they were
investigating a possible connivance of
smugglers with some corrupt customs
personnel. Smuggling, being a form of
economic sabotage is within the powers of
the PNP-CIDG.

CONCLUSION

The petition is meritorious. Petitioners are acquitted of charge.

1. Petitioners are not guilty beyond reasonable doubt. The prosecution has the burden of
proving the guilt of the accused beyond reasonable doubt. It is clear that petitioners
neither searched the container vans nor effected seizure and arrest. The testimony of the
Customs Broker supports this finding. Container vans were brought to the consignees
warehouse and not to the CIDG headquarters. The container vans were searched but not
by petitioners. The prosecution did not rebut the testimony of the petitioners and the
prosecutions witness even attested to the same facts. The search was done by the
Customs Police and not by the petitioners. Furthermore, the act of flagging down the
vehicle is not among those proscribed by Sec. 2203 of the TCC. Thus, flagging down of
container vans is not punishable under said law.
2. There is no conflict between TCC and RA No. 6975. The jurisdiction of the
Commissioner of Customs is clearly with regard to customs duties. Should the PNP
suspect anything, it should coordinate with the BOC and obtain the written authority from
the Collector of Customs in order t conduct searches, seizures or arrests. Coordination is
emphasized in the laws. While it is an admitted fact that there was no such coordination
initiated by the PNP-CIDG in this instance, nevertheless, petitioners cannot be convicted
under the TCC since there is no evidence that they did actually search the container vans.