TARIFF AND CUSTOMS CODE OF THE PHILIPPINES (TCCP)

PART I. A. GENERAL PRINCIPLES AND BASIC CONCEPTS OF TAXATION

FUNDAMENTAL POWERS OF THE STATE; POWER TO TAX 1. POWER OF TAXATION IS AN INHERENT ATTRIBUTE OF SOVEREIGNTY; LIFEBLOOD DOCTRINE; NECESSITY THEORY

The power of taxation is an inherent attribute of sovereignty; the government chiefly relies on taxation to obtain the means to carry on its operations. Taxes are essential to its very existence; hence, the dictum that "taxes are the lifeblood of the government." Commissioner of Internal Revenue vs. Eastern Tele ommuni ations P!ils." In ." G.R. No. 163 3!" #$%& '" ()1)" 6(* SCRA 3*). Taxes are the lifeblood of the government, for without taxes, the government can neither exist nor endure. A principal attribute of sovereignty, the exercise of taxing power derives its source from the very existence of the state whose social contract with its citizens obliges it to promote public interest and common good. The theory behind the exercise of the power to tax emanates from necessity; without taxes, government cannot fulfill its mandate of promoting the general welfare and well-being of the people.

n recent years, the increasing social challenges of the times expanded the scope of state activity, and taxation has become a tool to realize social !ustice and the e"uitable distribution of wealth, economic progress and the protection of local industries as well as public welfare and similar ob!ectives. National Po#er Cor$oration vs. Cit% of Ca&anatuan" G.R. No. 1*+11)" A,-.% +" ())3" *)1 SCRA (!+.

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TAXATION IS ESSENTIALLY LEGISLATIVE

t is a power that is purely legislative. #ssentially, this means that in the legislature primarily lies the discretion to determine the nature $%ind&, ob!ect $purpose&, extent $rate&, coverage $sub!ects& and situs $place& of taxation. t

has the authority to prescribe a certain tax at a specific rate for a particular public purpose on persons or things within its !urisdiction. n other words, the legislature wields the power to define what tax shall be imposed, why it should be imposed, how much tax shall be imposed, against whom $or what& it shall be imposed and where it shall be imposed. As a general rule, the power to tax is plenary and unlimited in its range, ac%nowledging in its very nature no limits, so that the principal chec% against its abuse is to be found only in the responsibility of the legislature $which imposes the tax& to its constituency who are to pay it. 'evertheless, it is circumscribed by constitutional limitations. C!am&er of Real Estate an'

Buil'ers( Asso iation" In . vs. Al&erto Romulo" et al. GR. No. 16)'!6" M/-01 +" ()1)" 61* SCRA 6)!.

3. PRIMARY PURPOSE OF TAXATION IS REVENUE GENERATION

)hile it is true that the power of taxation can be used as an implement of police power, the primary purpose of the levy is revenue generation. f the purpose is primarily revenue, or if revenue is, at least, one of the real and substantial purposes, then the exaction is properly called a tax. Planters Pro'u ts" In . vs. Ferti$!il Cor$." GR No. 166))6" M/-01 1*" ()) " !* SCRA * !. n distinguishing tax and regulation as a form of police power, the determining factor is the purpose of the implemented measure. f the purpose is primarily to raise revenue, then it will be deemed a tax even though the measure results in some form of regulation. *n the other hand, if the purpose is primarily to regulate, then it is deemed a regulation and an exercise of the police power of the state, even though incidentally, revenue is generated. C!evron P!il." In . vs. Bases Conversion Develo$ment Aut!orit%" et. al." G.R. No. 1'3 63" S2,32452- 1!" ()1)" 63) SCRA !1+. +eanwhile, in the case of Gar ia vs. E)e utive Se retar%" G.R. No. 1)1('3" #$%& 3" 1++(" (11 SCRA (1+" the #xecutive *rder 'os. ,-. and ,-/ issued by the 0resident which imposed additional duty of 12 ad valorem and

special duty to crude oil and other imported oil products were held by the 4upreme 5ourt to be substantially moved by the desire to generate additional public revenues and at the same time have some 6protective7 impact upon indigenous oil production8 xxx customs duties which are assessed at the prescribed tariff rates are very much li%e taxes which are fre"uently imposed for both revenue-raising and for regulatory purposes. Thus, it has been held that "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." The levying of customs duties on imported goods may have in some measure the effect of protecting local industries 9 where such local industries actually exist and are producing comparable goods. 4imultaneously, however, the very same customs duties inevitably have the effect of producing governmental revenues. 5ustoms duties li%e internal revenue taxes are rarely, if ever, designed to achieve one policy ob!ective only. +ost commonly, customs duties, which constitute taxes in the sense of exactions the proceeds of which become public funds 9 have either or both the generation of revenue and the regulation of economic or social activity as their moving purposes and fre"uently, it is very difficult to say which, in a particular instance, is the dominant or principal ob!ective. n the instant case, since the 0hilippines in fact produces ten $:;& to fifteen percent $:.2& of the crude oil consumed here, the imposition of increased tariff rates and a special duty on imported crude oil and imported oil products may be seen to have some "protective" impact upon indigenous oil production. <or the effective price of imported crude oil and oil products is increased. At the same time, it cannot be gainsaid that substantial revenues for the government are raised by the imposition of such increased tariff rates or special duty.

B. LIMITATIONS OF THE TAXING POWER (CONSTITUTIONAL AND INHERENT)

Arti le II. Se tion *. The 0hilippines renounces war as an instrument of national policy, adopts the generally
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accepted principles of international law as part of the law of the land and adheres to the policy of peace, e"uality, !ustice, freedom, cooperation, and amity with all nations. Arti le +I. Se tion *,. All appropriation, revenue or tariff bills, bills authorizing increase of the public debt, bills of local application, and private bills, shall originate exclusively in the =ouse of >epresentatives, but the 4enate may propose or concur with amendments. Arti le +I. Se tion *-.$:& The rule of taxation shall be uniform and e"uitable. The 5ongress shall evolve a progressive system of taxation. Se tion *-.*/. The 5ongress may, by law, authorize the 0resident to fix within specified limits, and sub!ect to such limitations and restrictions as it may impose, tariff rates, import and export "uotas, tonnage and wharfage dues, and other duties or imposts within the framewor% of the national development program of the ?overnment.

*. SOVEREIGNTY LIMITED BY INTERNATIONAL LAW AND TREATIES

The :1/- 5onstitution in its @eclaration of 0rinciples and 4tate 0olicies "adopts the generally accepted principles of international law as part of the law of the land, and adheres to the policy of peace, e"uality, !ustice, freedom, cooperation and amity, with all nations." Ay the doctrine of incorporation, the country is bound by generally accepted principles of international law, which are considered to be automatically part of our own laws. *ne of the oldest and most fundamental rules in international law is pacta sunt servanda 9 international agreements must be performed in good faith. )ith the treaties
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entered into by the 0hilippines, it has effectively agreed to limit the exercise of its sovereign powers of taxation, eminent domain and police power. Ta0a'a vs. An1ara" G.R. No.11 (+!" M/& (" 1++'" ('( SCRA 1 .

!. NON6DELEGATION OF THE POWER TO TAX; EXCEPTION TO THE RULE

As a general rule, the power of taxation being essentially legislative in nature, cannot be exercised by anyone. An exception to this is the delegation of legislative powers to the 0resident under 4ection (/$(& of Article B of the 5onstitution. *ne of the relevant statutes to execute this provision is The Tariff and 5ustoms 5ode particularly the flexible tariff clause. n the case of E)e utive Se retar% vs. Sout!#in1 2eav% In'ustries" In ." G.R. No7. 16*1'1" 16*1'( 8 16 '*1" F25-$/-& ()" ())6" * ( SCRA 6'3" the consolidated petitions see% to annul and set aside the @ecisions of the >T5 of *longapo 5ity which declared Article (, 4ection 3.: of #xecutive *rder 'o. :.C issued by then 0resident ?+A unconstitutional. The said #* prohibited the importation into the country, inclusive of the <reeport, of all types of used motor vehicles with some exceptions. *n appeal, the 5A affirmed the decision of the >T5 and invalidated #* :.C for lac% of statutory basis for the 0resident to issue the same. )ith respect to the basis for the 0resident to issue #* :.C, the 4upreme 5ourt ruled that the 5onstitution explicitly authorizes the 0resident to issue the same. t held8

5ontrary to the conclusion of the 5ourt of Appeals, #* :.C actually satisfied the first re"uisite of a valid administrative order. t has both constitutional and statutory bases. @elegation of legislative powers to the 0resident is permitted in 4ection (/$(& of Article B of the 5onstitution. t provides8
$(& The 5ongress may, by law, authorize the 0resident to fix within specified limits, and sub!ect to such limitations and restrictions as it may impose, tariff rates, import and export "uotas, tonnage and wharfage dues, and other duties or imposts within the framewor% of the national development program of the ?overnment. :1 $#mphasis supplied&

The relevant statutes to execute this provision are8 :& The Tariff and 5ustoms 5ode which authorizes the 0resident, in the interest of national economy, general welfare andDor national security, to, inter alia, prohibit the importation of any commodity. 4ection ,;: thereof, reads8
4ec. ,;:. <lexible 5lause. 9 a. n the interest of national economy, general welfare andDor national security, and sub!ect to the limitations herein prescribed, the 0resident, upon recommendation of the 'ational #conomic and @evelopment Authority $hereinafter referred to as '#@A&, is hereby empowered8 . . . $(& to establish import "uota or to ban imports of any commodity, as may be necessary; . . . 0rovided, That upon periodic investigations by the Tariff 5ommission and recommendation of the '#@A, the 0resident may cause a gradual reduction of protection levels granted in 4ection *ne hundred and four of this 5ode, including those subse"uently granted pursuant to this section. $#mphasis supplied&

6. LIMITATIONS ON THE PRESIDENT9S DELEGATED LEGISLATIVE POWER TO IMPOSE TARIFFS AND IMPOSTS
0hilcemcor, an association of domestic cement manufacturers filed with the @T a petition, see%ing the imposition of safeguard measures on imported

gray 0ortland cement, in accordance with >epublic Act 'o. //;;, the 4afeguard +easures Act $"4+A"&. The case was referred to the Tariff 5ommission which subse"uently issued a negative finding. @T promulgated its Decision with an expressed disagreement with the conclusions of the Tariff 5ommission, but at the same time, ultimately denying 0hilcemcorEs application for safeguard measures. 0hilcemcor appealed the said decision with the 5ourt of Appeals which partially granted the petition. The 5A held that the @T 4ecretary was not bound by the factual findings of the Tariff 5ommission since such findings are merely recommendatory and they fall within the ambit of the 4ecretaryEs discretionary review. Aased on the 5AFs decision, @T reversed itself and issued another Decision imposing safeguard measures on the importation of 0ortland cement. The 4upreme 5ourt ruled otherwise and accordingly set aside the 5A and @T Fs decision. t held that 4ection . of the 4+A, which re"uires that there should first be a positive final determination of the Tariff Commission before the @T can impose safeguard measures, is restriction on the executive power to impose safeguard measures. 64ection . plainly evinces legislative intent to restrict the @T 4ecretaryEs power to impose a general safeguard measure by preconditioning such imposition on a positive determination by the Tariff 5ommission. 4uch legislative intent should be given full force and effect, as the executive power to impose definitive safeguard measures is but a delegated power 9 the power of taxation, by nature and by command of the

fundamental law, being a preserve of the legislature. 4ection (/$(&, Article B of the :1/- 5onstitution confirms the delegation of legislative power, yet ensures that the prerogative of 5ongress to impose limitations and restrictions on the executive exercise of this power. Sout!ern Cross Cement Cor$oration vs. P!ili$$ine Cement 3anufa turers Cor$oration" ?.>. 'o. :./.,;, Guly /, (;;,, ,3, 45>A C.. xxx The 4+A provides an exceptional instance wherein it is the @T or Agriculture 4ecretary who is tas%ed by 5ongress, in their capacities as alter egos of the 0resident, to impose such measures. 5ertainly, the @T 4ecretary has no inherent power, even as alter ego of the 0resident, to levy tariffs and imports. 5oncurrently, the tas%ing of the Tariff 5ommission under the 4+A should be li%ewise construed within the same context as part and parcel of the legislative delegation of its inherent power to impose tariffs and imposts to the executive branch, sub!ect to limitations and restrictions. n that regard, both the Tariff 5ommission and the @T 4ecretary may be regarded as agents of 5ongress within their limited respective spheres, as ordained in the 4+A, in the implementation of the said law which significantly draws its strength from the plenary legislative power of taxation. Indeed, even the President may be considered as an agent of Congress for the purpose of imposing safeguard measures. It is Congress, not the President, which possesses inherent powers to impose tariffs and imposts. Without legislative authori ation through

statute, the President has no power, authority or right to impose such safeguard measures because taxation is inherently legislative, not executive. When Congress tas!s the President or his"her alter egos to impose safeguard measures under the delineated conditions, the President or the alter egos may be properly deemed as agents of Congress to perform an act that inherently belongs as a matter of right to the legislature. t is basic agency law that the agent may not act beyond the specifically delegated powers or disregard the restrictions imposed by the principal. Sout!ern

Cross Cement Cor$oration vs. Cement 3anufa turers Asso iation of t!e P!ili$$ines" ?.>. 'o. :./.,;, Resolution dated August 3, (;;., ,C. 45>A .3(.

'. EXTENT OF THE POWER OF THE PRESIDENT TO FIX TARIFF RATES

The 0resident may increase tariff rates as authorized by law even for revenue purposes solely. n determining the validity of #xecutive *rders 'os. ,-. and ,-/ issued by the 0resident which imposes additional duty of 12 ad valorem and special duty to crude oil and other imported oil products, the 4upreme 5ourt held that8 6There is thus explicit constitutional permission to 5ongress to authorize the 0resident "sub!ect to such limitations and restrictions as H5ongressI may impose" to fix "within specific limits" "tariff rates . . . and other duties or imposts . . . ." The relevant congressional statute is the Tariff and 5ustoms 5ode of the 0hilippines, and 4ections :;, and ,;:, the
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pertinent provisions thereof. These are the provisions which the 0resident explicitly invo%ed in promulgating #xecutive *rders 'os. ,-. and ,-/. The 5ourt was '*T persuaded by the argument that the 0resident is authorized to act under the Tariff and 5ustoms 5ode only "to protect local industries and products for the sa!e of the national economy, general welfare and"or national security." nstead, it held that there is nothing in the language of either 4ection :;, or of ,;: of the Tariff and 5ustoms 5ode that suggest such a sharp and absolute limitation of authority. xxx The 5ourt believed that #xecutive *rders 'os. ,-. and ,-/ which may be conceded to be substantially moved by the desire to generate additional public revenues, are not, for that reason alone, either constitutionally flawed, or legally infirm under 4ection ,;: of the Tariff and 5ustoms 5ode. Gar ia vs. E)e utive Se retar%" su$ra.

. E:UAL PROTECTION CLAUSE; UNIFORMITY AND E:UITABILITY IN TAXATION

>A 133- was declared constitutional, not violative of the constitutional limitations on e"ual protection clause and uniformity in taxation. The e"ual protection clause under the 5onstitution means that "no person or class of persons shall be deprived of the same protection of laws which is en!oyed by other persons or other classes in the same place and in li%e circumstances." The power of the 4tate to ma%e reasonable and natural classifications for the
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purposes of taxation has long been established. xxx The e"ual protection clause does not re"uire the universal application of the laws on all persons or things without distinction. This might in fact sometimes result in une"ual protection. )hat the clause re"uires is e"uality among e"uals as determined according to a valid classification. Ay classification is meant the grouping of persons or things similar to each other in certain particulars and different from all others in these same particulars. Jniformity in taxation means that all taxable articles or %inds of property of the same class shall be taxed at the same rate. @ifferent articles may be taxed at different amounts provided that the rate is uniform on the same class everywhere with all people at all times. A&a4a'a Guro Part% List vs. Ermita" su$ra. +eanwhile, the 4upreme 5ourt upheld the constitutionality of >epublic Act $>A& 133. $Attrition Act of (;;.& with the exception of 4ection :( of the said law. The classification and treatment accorded to the A > and the A*5 under >A 133. fully satisfy the demands of e"ual protection. 4ince the

sub!ect of the law is the revenue-generation capability and collection of the A > and the A*5, the incentives andDor sanctions provided in the law should logically pertain to the said agencies. +oreover, the law concerns only the A > and the A*5 because they have the common distinct primary function of generating revenues for the national government through the collection of taxes, customs duties, fees and charges. xxx They principally perform the

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special function of being the instrumentalities through which the 4tate exercises one of its great inherent functions 9 taxation. ndubitably, such substantial distinction is germane and intimately related to the purpose of the law. A&a4a'a Guro Part% List vs. Purisima" G.R. No. 166'1!" A$;$73 1*" ()) " !6( SCRA (!1.

+. REVENUE OR TARIFF BILLS SHALL ORIGINATE EXCLUSIVELY IN THE HOUSE OF REPRESENTATIVES

Article B , 4ection (, of the :1/- 5onstitution provides that all appropriation, revenue or tariff bills, bills authorizing increase of the public debt, bills of local application, and private bills shall originate exclusively in the =ouse of >epresentatives, but the 4enate may propose or concur with amendments. >epublic Act 'o. --:C was held constitutional notwithstanding the bill from which it originated underwent extensive changes in the 4enate. t is not the law 9 but the revenue bill 9 which is re"uired by the 5onstitution to "originate exclusively" in the =ouse of >epresentatives. A bill originating in the =ouse may undergo such extensive changes in the 4enate that the result may be a rewriting of the whole. Tolentino vs. Se retar% of Finan e" G.R. No7. 11!*!!" 11!!(!" 11!!*3" 11!!**" 11!'!*" 11!' 1" 11! !(" 11! '3" 11!+31" A$;$73 (!" 1++*" (3! SCRA 63). n the exercise of this power, the 4enate may propose an entirely new bill as a substitute measure. xxx because revenue bills are re"uired to originate
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exclusively in the =ouse of >epresentatives, the 4enate cannot enact revenue measures of its own without such bills. After a revenue bill is passed and sent over to it by the =ouse, however, the 4enate certainly can pass its own version on the same sub!ect matter. Tolentino vs. Se retar% of Finan e" su$ra. R27o%$3.o< =/32= O03o52- 3)" 1++!" (*+ SCRA 6( .

PART II. TARIFF AND C5STO3S D5TIES A. MEANING AND PURPOSE FOR ITS IMPOSITION 1). CUSTOMS DUTIES

"5ustoms 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." The levying of customs duties on imported goods may have in some measure the effect of protecting local industries 9 where such local industries actually exist and are producing comparable goods. 4imultaneously, however, the very same customs duties inevitably have the effect of producing governmental revenues. 5ustoms duties li%e internal revenue taxes are rarely, if ever, designed to achieve one policy ob!ective only. +ost commonly, customs duties, which constitute taxes in the sense of exactions the proceeds of which become public funds 9 have either or both the generation of revenue and the regulation of economic or social activity as their moving purposes and fre"uently, it is very difficult to

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say which, in a particular instance, is the dominant or principal ob!ective. Gar ia vs. E)e utive Se retar%" su$ra.

C. CLASSIFICATION OF IMPORTATIONS (SECTIONS 1))" 1)1 8 1)! OF THE TCCP) SEC. 1)). IMPORTED ARTICLES SUB#ECT TO DUTY
All articles, when imported from any foreign country into the 0hilippines, shall be sub!ect to duty upon each importation, even though previously exported form the 0hilippines, except as otherwise specifically provided for in this 5ode or in other laws.

SEC. 1)1. PROHIBITED IMPORTATIONS

:. (. 3. ,. .. C. -. <irearms and explosives 4ubversiveDseditious materials *bsceneDimmoral articles Abortive articlesDdrugsDsubstances ?ambling apparatusDdevices KotteryDsweepsta%es tic%ets except authorized by the government Articles made of precious metal which do not indicate the actual fineness of said metals /. AdulteratedDmisbranded articles of foodDdrug in violation of <ood and @rugs Act 1. Articles which are habit-forming e.g. mari!uana, coca leaves, etc. :;.*pium pipes and parts ::.*ther prohibited importations

SEC. 1)!. CONDITIONALLY6FREE IMPORTATIONS

:. A"uatic products gathered by vessels of 0hilippine registry (. #"uipment for use in the salvage of vessels or aircrafts upon posting of bond

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3. 5ost of repairs in foreign countries upon 0hilippine vessels or aircraft; ,. Articles for repair upon posting of bond .. +edals, badges, or those received or accepted as honorary distinction C. 0ersonal and household effects belonging to residents of the 0hilippines returning from abroad -. )earing apparel, articles of personal adornment and similar effects of travelers, or tourists upon posting of bond /. 0ersonal and household effects and vehicles of foreign consultants and experts hired by the government upon posting of bond 1. 0rofessional instruments and implements of *verseas <ilipinos who come to settle in the 0hilippines :;.Articles used exclusively for public entertainment and for display in public expositions upon posting of bond ::.Articles for ma%ing or recording motion picture films in the 0hilippines upon posting of bond :(. mportations for the official use of foreign embassies :3.@onated articles :,.5ontainers for re-export upon posting of bond :..4upplies of vessel or aircraft :C.4alvaged articles :-.5offins or urns except vehicles of the deceased person :/.4amplesDmodels upon posting of bond :1.Animals except race horses for scientific, experimental, national defense, etc purposes (;.Aoo%s for scientific, philosophical, etc purposes (:.Articles previously exported from the 0hilippines ((.Aircraft, e"uipment, spare parts for the use of airlines with congressional franchise (3.+achineries and e"uipment for use of mines (,.4pare parts of vessel for use as replacements or emergency repair (..Articles exported from the 0hilippines for repair and subse"uently reimported (C.Trailer chassis upon posting of bond

11.

DOCTRINE OF CLASSIFICATION BY USE

0arts of machines, apparatus of appliances which are suitable for use solely or principally with a particular %ind of machine or with a number of
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machines falling within a specific heading, as a rule, are to be classified with the machines in the same heading $4ee +ontano A. Te!am, 5ommentaries on the >evised Tariff and 5ustoms 5ode of the 0hilippines, p. ::,;, Bol. ,

:1/, >evised #dition&. There being a clear showing that the sub!ect imported flashers are to be used solely and principally to signal or indicate a right or left hand turn in front and at the rear of motor vehicles, they should be classified under Tariff =eading 'o. /..;1 as electrical lighting and signalling e"uipment. The 4upreme 5ourt citing #a Compa$a %eneral de Tobacos de &ilipinas v. 'nited (tates, / 0hil. ,3/, it ruled8 "The general purpose for which an article is used must govern the assessment of duty; any other rule would lead to confusion and in!ustice. t is the general use to which articles are chiefly adopted and for which they are chiefly used that determine their character within the meaning of the Tariff laws. t is the predominating use to which articles are generally applied or used that determines their character for the purpose of fixing the duty, and not the specific or special use which any particular importer may ma%e of the articles imported $=artranft v. Kangfeld, :(. J.4., :(/&. Commissioner of Customs vs. Cam$os Rue'a Cor$." G.R. No. !!)()" A$;$73 ()" 1++)" 1 SCRA 613.

C. CLASSIFICATION OF DUTIES 1. ORDINARY>REGULAR DUTIES /. A' valorem S203.o< ()1" TCCP substantially provides8
.6/ 7 Transa tion value L the price actually paid or payable for the goods when sold for export to the 0hilippines ad!usted by adding commissions and bro%erage fees $except buying commissions&; cost of containers; cost of pac%ing, whether for labor or materials; value of the goods and services incorporated
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in the goods; amount of royalties and license fees; value of the proceeds of any subse"uent sale of the imported goods; cost of transport; handling charges and insurance cost. .*/ 7 Transa tion value of I'enti al 1oo's. L the transaction value of identical goods sold for export to the 0hilippines and exported at or about the same time as the goods being valued. " dentical goods" shall mean goods which are the same in all respects, including physical characteristics, "uality and reputation. +inor differences in appearances shall not preclude goods otherwise conforming to the definition from being regarded as identical. .8/ 7 Transa tion value of Similar 1oo's L the transaction value of similar goods sold for export to the 0hilippines and exported at or about the same time as the goods being valued. "4imilar goods" shall mean goods which, although not ali%e in all respects, have li%e characteristics and li%e component materials which enable them to perform the same functions and to be commercially interchangeable. .,/ 7 De'u tive value L the unit price at which the imported goods or identical or similar imported goods are sold in the 0hilippines, in the same condition as when imported sub!ect to deductions of commissions; costs of transport and insurance and associated costs incurred within the 0hilippines; costs and charges referred to in subsection $A& $3&, $,& and $.&; and the customs duties and other national taxes payable in the 0hilippines by reason of the importation or sale of the goods. .9/ 7 Com$ute' value L computed value which shall be the sum of the cost or the value of materials and fabrication or other processing employed in producing the imported goods; the amount for profit and general expenses e"ual to that usually reflected in the sale of goods of the same class or %ind as the goods being valued which are made by producers in the country of exportation for export to the 0hilippines; the freight, insurance fees and other transportation expenses for the
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importation of the goods; and the cost of containers and pac%ing. .:/ 7 Fall&a 4 value - f the dutiable value cannot be determined under the preceding methods described above, it shall be determined by using other reasonable means and on the basis of data available in the 0hilippines.

5. S,20.?.0 @ S20. ()(" TCCP substantially provides8

$:& 1ross #ei1!t - the dutiable weight shall be the weight of same, together with the weight of all containers, pac%ages, holders and pac%ing, of any %ind, in which said articles are contained, held or pac%ed at the time of importation. $(& le1al #ei1!t - legal weight thereof shall be the weight of same, together with the weight of the immediate containers, holders andDor pac%ing in which such articles are usually contained, held or pac%ed at the time of importation andDor, when imported in retail pac%ages, at the time of their sale to the public in usual retail "uantities $3& net #ei1!t - the actual weight of the articles at the time of importation, excluding the weight of the immediate and all other containers, holders or pac%ing in which such articles are contained, held or pac%ed. $,& ;!en affi)e' to a !ol'er - dutiable together with the weight of such holders. $.& )hen a single pac%age contains imported articles dutiable according to different weights, or to weight and value, the common exterior receptacles shall be prorated and the different proportions thereof treated in accordance with the provisions of this 5ode as to the dutiability or non-dutiability of such pac%ing.
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SPECIAL DUTIES IN REGULAR DUTIES

ADDITION

TO

THE

SECTIONS 3)163)*" TCCP substantially provides8

SEC. 8<6. Anti=Dum$in1 Dut% L )henever any article of commerce imported into the 0hilippines at an export price less than its normal value in the ordinary course of trade for the li%e article destined for consumption in the exporting country is causing or is threatening to cause material in!ury to a domestic industry, or materially retarding the establishment of a domestic industry, the anti-dumping duty shall be imposed which is e"ual to the margin of dumping on such product, commodity or article and on li%e product, commodity or article thereafter imported to the 0hilippines under similar circumstances, in addition to ordinary duties, taxes and charges imposed by law on the imported product, commodity or article. $As amended by >A /-.(& SEC. 8<*. Countervailin1 Dut% - )henever any article of commerce is granted directly or indirectly by the government in the country of origin, any %ind or form of specific subsidy upon the production, manufacture or exportation of such article, and the importation of such subsidized article has caused or threatens to cause material in!ury to a domestic industry or has materially retarded the growth or prevents the establishment of a domestic industry as determined by the Tariff 5ommission the countervailing duty shall be imposed which is e"ual to the ascertained amount of the subsidy. $As amended by >A /-.:& SEC. 8<8. 3ar4in1 Dut% - f at the time of importation any article $or its container, as provided in subsection "b" hereof&, is not mar%ed in accordance with the re"uirements of this section, there shall be levied, collected and paid upon such article a mar%ing duty of . per cent ad valorem, which shall be deemed to have
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accrued at the time of importation, except when such article is exported or destroyed under customs supervision and prior to the final li"uidation of the corresponding entry. SEC. 8<,. Dis riminator% Dut% - The 0resident may impose new or additional duties in an amount not exceeding one hundred $:;;& per cent ad valorem upon articles wholly or in part the growth or product of, or imported in a vessel of, any foreign country whenever he shall find that such country imposes unreasonable charge and discriminates against the commerce of the 0hilippines.

PART III. I3PORTATION IN GENERAL A. ENTRY OF ARTICLES THROUGH CUSTOMHOUSE (SECTIONS 1()1" 1()( 8 13)(" TCCP)
Se tion 6*<6. Arti le to Be Im$orte' Onl% T!rou1! Custom!ouse. 9 All articles imported into the 0hilippines whether sub!ect to duty or not shall be entered through a customhouse at a port of entry. Se . 6*<*. ;!en Im$ortation Be1ins an' Deeme' Terminate'. 9 mportation begins when the carrying vessel or aircraft enters the !urisdiction of the 0hilippines with intention to unlade therein. mportation is deemed terminated upon payment of the duties, taxes and other charges due upon the articles, or secured to be paid, at a port of entry and the legal permit for withdrawal shall have been granted, or in case said articles are free of duties, taxes and other charges, until they have legally left the !urisdiction of the customs. Se . 68<*. Im$ort Entries. 9 All imported articles, except importations admitted free of duty under 4ubsection "%", 4ection one hundred and five of this 5ode, shall be sub!ect to a formal or informal entry.
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Articles of a commercial nature intended for sale, barter or hire, the dutiable value of which is Two thousand pesos $0(,;;;.;;& or less, and personal and household effects or articles, not in commercial "uantity, imported in passengerEs baggage, mail or otherwise, for personal use, shall be cleared on an informal entry whenever duty, tax or other charges are collectible. The 5ommissioner may, upon instruction of the 4ecretary of <inance, for the protection of domestic industry or of the revenue, re"uire a formal entry, regardless of value, whatever be the purpose and nature of the importation. A formal entry may be for immediate consumption, or under irrevocable domestic letter of credit, ban% guarantee or bond for8 $a& 0lacing the article in customs bonded warehouse; $b& 5onstructive warehousing and immediate transportation to other port of the 0hilippines upon proper examination and appraisal; or $c& 5onstructive warehousing and immediate exportation. mport entries under irrevocable domestic letter of credit, ban% guarantee or bond shall be sub!ect to the provisions of Title B, Aoo% of this 5ode. All importations entered under formal entry shall be covered by a letter of credit or any other verifiable document evidencing payment.

B. ABANDONMENT
Se . 6-<6. A&an'onment" >in's an' Effe ts of . 9 An imported article is deemed abandoned under any of the following circumstances8 $a& )hen the owner, importer or consignee of the imported article expressly signifies in writing to the 5ollector of 5ustoms his intentions to abandon; or $b& )hen the owner, importer, consignee or interested party after due notice, fails to file an entry within thirty $3;& days, which shall not be extendible, from the date of
((

discharge of the last pac%age from the vessel or aircraft, or having filed such entry, fails to claim his importation within fifteen $:.& days which shall not li%ewise be extendible, from the date of posting of the notice to claim such importation. Any person who abandons an article or who fails to claim his importation as provided for in the preceding paragraph shall be deemed to have renounced all his interests and property rights therein. Se . 6-<*. A&an'onment of Im$orte' Arti les. 9 An abandoned article shall ipso facto be deemed the property of the ?overnment and shall be disposed of in accordance with the provisions of this 5ode. 'othing in this section shall be construed as relieving the owner or importer from any criminal liability which may arise from any violation of law committed in connection with the importation of the abandoned article. Any official or employee of the Aureau of 5ustoms or of other government agencies who, having %nowledge of the existence of an abandoned article or having control or custody of such abandoned article, fails to report to the 5ollector within twenty-four $(,& hours from the time the article is deemed abandoned, shall be punished with the penalties prescribed in 0aragraph :, 4ection 3C;, of this 5ode.

1(.

WHEN IMPORTATION BEGINS AND ENDS

4ection :(;( of the Tariff and 5ustoms 5ode provides that importation begins when the carrying vessel or aircraft enters the !urisdiction of the 0hilippines with intention to unload therein. t is clear from the provision of the law that mere intent to unload is sufficient to commence an importation. And "intent," being a state of mind, is rarely susceptible of direct proof, but must ordinarily be inferred from the facts, and therefore can only be proved
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by unguarded, expressions, conduct and circumstances generally. n this case, petitioner is guilty of illegal importation, there having been an intent to unload, is amply supported by substantial evidence. Fee'er International Line" Pte." Lt'. vs. Court of A$$eals" G.R. No. +*(6(" M/& 31" 1++1" 1+' SCRA *( 0.3.<; Peo$le vs. Court of First Instan e of Ri?al" et ." et al ." 1)1 SCRA 6.

mportation ta%es place when merchandise is brought into the customs territory of the 0hilippines with the intention of unloading the same at port. An exception to this rule is transit cargo entered for immediate exportation under 4ection (:;3 of the T550. xxx <or an entry for immediate exportation to be allowed under this provision, the following must concur8 $a& there is a clear intent to export the article as shown in the bill of lading, invoice, cargo manifest or other satisfactory evidence; $b& the 5ollector must designate the vessel or aircraft wherein the articles are laden as a constructive warehouse to facilitate the direct transfer of the articles to the exporting vessel or aircraft; $c& the imported articles are directly transferred from the vessel or aircraft designated as a constructive warehouse to the exporting vessel or aircraft and $d& an irrevocable domestic letter of credit, ban% guaranty or bond in an amount e"ual to the ascertained duties, taxes and other charges is submitted to the 5ollector $unless it appears in the bill
(,

of lading, invoice, manifest or satisfactory evidence that the articles are destined for transshipment&. 'one of the re"uisites above was present in this case. )hile respondents insist that the shipment was sent to the 0hilippines only for temporary storage and warehousing, the bill of lading clearly denominated "4outh +anila, 0hilippines" as the port of discharge. This not only negated any intent to export but also contradicted K <<5Es representation. +oreover, the shipment was unloaded from the carrying vessel for the purpose of storing the same at K <<5Es warehouse. mportation therefore too% place and the only logical conclusion is that the refined sugar was truly intended for domestic consumption. Commissioner of Customs vs. Court of Ta) A$$eals" G.R. No7. 1'1!1661'" Resolution =/32= F25-$/-& 13" ())+" !'+ SCRA ( +. )here the transfer of the shipment was made by virtue of the Aoat 'otes issued by the 5ustoms nspector giving specific instruction that the shipment should be 6under continuous guarding7 by the 5ustoms guard 6until released by the 5ustoms authorities,7 the physical and legal custody over the shipment remained with the 5ustoms authorities. Acceptance by the Aureau of 5ustoms of the importerFs payment of the customs duties and taxes on the shipment legally terminates the importation of goods or articles. Commissioner of Customs vs. 3il#au4ee In'ustries Cor$oration" G.R. No. 13!(!3" D202452- +" ())*" **! SCRA 6)*.

(.

)hen the Bessel was allowed to be released tax and duty-free sub!ect to bond and re-exportation, its subse"uent sale without paying the duties and taxes never completed and terminated the importation. n order for an importation to be deemed terminated, the payment of the duties, taxes, fees and other charges of the item brought into the country must be in full. <or as long as the importation has not been completed, the imported item remains under the !urisdiction of the A*5. Se retar% of Finan e vs. Oro 3aura S!i$$in1 Lines" G.R. No. 1!6+*6" #$%& 1!" ())+" !+3 SCRA 1*.

13. MEANING OF AENTRYB IN CUSTOMS LAW; FILING OF BOTH IED AND IEIRD ARE NECESSARY TO CONSTITUTE ENTRY UNDER TCCP; WHAT CONSTITUTES ABANDONMENT

The term "entry" in customs law has a triple meaning. t means $:& the documents filed at the customs house; $(& the submission and acceptance of the documents and $3& the procedure of passing goods through the customs house. The operative act that constitutes "entry" of the imported articles at the port of entry is the filing and acceptance of the "specified entry form" together with the other documents re"uired by law and regulations. Aoth the Import )ntry Declaration *I)D+ and Import )ntry and Internal ,evenue Declaration *I)I,D+ should be filed within a non-extendible period of thirty $3;& days from the date of discharge of the last pac%age from the vessel or aircraft.

(C

n delaying the filing of # >@s to ta%e advantage of the reduction in import duties on petroleum products from :;2 to 32 under >epublic Act $>A& 'o. /:/;, which too% effect on April :C, :11C, the importer petroleum company is deemed to have abandoned the imported products, resulting in forfeiture; the abandoned articles shall ipso facto be deemed the property of the government. C!evron P!ili$$ines" In . vs. Commissioner of t!e Bureau of Customs, ?.>. 'o. :-/-.1, August ::, (;;/, .C: 45>A -:;.

PART I+. TAX RE3EDIES I. RE3EDIES A+AILABLE TO T2E GO+ERN3ENT A. SEARCH" SEICURE AND ARREST
Se . **<8. Persons 2avin1 Poli e Aut!orit%. 9 <or 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 laws8 a. *fficials of the Aureau of 5ustoms, district collectors, deputy collectors, police officers, agents, inspectors and guards of the Aureau of 5ustoms; b. *fficers of the 0hilippine 'avy and other members of the Armed <orces of the 0hilippines and national law enforcement agencies when authorized by the 5ommissioner; c. *fficials of the Aureau of nternal >evenue on all cases falling within the regular performance of their duties, when payment of internal revenue taxes are involved;

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d. *fficers generally empowered by law to effect arrests and execute processes of courts, when acting under direction of the 5ollector. n order to avoid conflicts, and insure coordination among these persons having authority to effect searches, seizures and arrests for the effective enforcement of, and conformably with tariff and customs laws, the 4ecretary of <inance, shall, sub!ect to the approval of the 0resident of the 0hilippines, define the scope, areas covered, procedures and conditions governing the exercise of such police authority including custody and responsibility for the goods seized. The rules and regulations to this effect shall be furnished to all the government agencies and personnel concerned for their guidance and compliance, and shall be published in a newspaper of general circulation. Se . **<-. Ri1!t of Poli e Offi er to Enter In losure. 9 <or the more effective discharge of his official duties, any person exercising the powers herein conferred, may at anytime enter, pass through, or search any land or inclosure or any warehouse, store or other building, not being a dwelling house. A warehouse, store or other building or inclosure used for the %eeping or storage of articles does not become a dwelling house within the meaning hereof merely by reason of the fact that a person employed as watchman lives in the place, nor will the fact that his family stays there with him alter the case.

1*.MERE FLAGGING DOWN OF VEHICLE DOES NOT CONSTITUTE SEARCH

0etitioners were members of the 0hilippine 'ational 0olice $0'0&5riminal nvestigation and @etection ?roup $5 @?&. 0etitioners, upon the order of 0olice 4enior 4uperintendent Aoac, but without the authority from and coordination with the Aureau of 5ustoms $A*5&, flagged down three
(/

container vans consigned to Ma%iage 4urplus. The 4andiganbayan found the petitioners guilty beyond reasonable doubt for violation of 4ection ((;3 of the Tariff and 5ustoms 5ode. The 4upreme 5ourt reversed the ruling of the 4andiganbayan. The act of flagging down the vehicles is not among those proscribed by 4ec. ((;3 of the Tariff and 5ustoms 5ode. +ere flagging down of the container vans is not punishable under the said law. 5oordination between A*5 and 0'0 is emphasized in the laws. 4hould the 0'0 suspect anything, it should coordinate with the A*5 and obtain the written authority from the 5ollector of 5ustoms in order to conduct searches, seizures, or arrests. Boa vs. Peo$le" G.R. No. 1 )!+'" NoD2452- '" ()) " !') SCRA !33.

1!.NO SEARCH OR SEICURE SHALL BE MADE WITHOUT A WARRANT; EXCEPTION TO THE RULE; VALIDITY OF SEARCH" SEICURE AND ARREST IN CUSTOMS CASES
0etitioner was arrested and charged of smuggling of blue-seal cigarettes. =e assailed the validity of his arrest contending that the Arrest 4earch and 4eizure *rder $A44*& 'o. ,-., was invalid. Thus, he asserted, any evidence obtained pursuant thereto is inadmissible in evidence. =e maintained his lac% of %nowledge of the illegal nature of goods. The 4upreme 5ourt affirmed the decision of the lower court which found the 0etitioner guilty as charged. )arrantless search and seizure in

(1

customs search can be made, without violation of the constitutional provision, as it is one of the exceptions to the rule. 6xxx the search and seizure of goods, suspected to have been introduced into the country in violation of customs laws, is one of the seven doctrinally accepted exceptions to the constitutional provision. xxx Jnder the Tariff and 5ustoms 5ode, a search, seizure and arrest may be made even without a warrant for purposes of enforcing customs and tariff laws. 0ersons found to be in possession of smuggled items are presumed to be engaged in smuggling, pursuant to the last paragraph of 4ection 3C;: of the Tariff and 5ustoms 5ode; claim of good faith and lac% of %nowledge of the unlawful source of the cigarettes is not enough to rebut the presumption. Rieta vs. Peo$le" G.R. No. 1*' 1'" A$;$73 1(" ())*" *36 SCRA ('3.

16.CUSTOMS SEARCH; WARRANTLESS SEARCH; WHO MAY EXERCISE POLICE AUTHORITY UNDER CUSTOMS LAW
ntelligence operatives of the 0hilippine Air <orce $0A<& were tas%ed to conduct a surveillance operation to verify reports of drug traffic%ing and smuggling by certain 0AK personnel when they apprehended petitioner for alleged smuggling of !ewelries. 0etitioner contented that the warrantless search and seizure was illegal. The 4upreme 5ourt denied the petition. The search made by 0A< team while petitioner was on board a moving 0AK aircraft tow truc% within the vicinity of the airport was in the nature of a

3;

customs search. 0A< properly effected the search and seizure without a search warrant since it exercised police authority under the customs law. Salva'or vs. Peo$le" G.R. No. 1*6')6" #$%& 1!" ())!" *63 SCRA * +.

B. ADMINISTRATIVE PROCEEDINGS
Se . *98*. Con'itions Affe tin1 Forfeiture of Arti le. 9 As regards imported or exported article or articles whereof the importation or exportation is merely attempted, the forfeiture shall be effected only when and while the article is in the custody or within the !urisdiction of the customs authorities or in the hands or sub!ect to the control of the importer, exporter, original owner, consignee, agent of other person effecting the importation, entry or exportation in "uestion, or in the hands or sub!ect to the control of some persons who shall receive, conceal, buy, sell or transport the same or aid in any such acts, with %nowledge that the article was imported, or was the sub!ect of an attempt at importation or exportation, contrary to law. Se . *988. Enfor ement of Lien" A'ministrative Fines" an' Forfeitures. 9 Administrative fines and forfeitures shall be enforced by the seizure of the vehicle, vessel or aircraft or other property sub!ect to the fine or forfeiture and by subse"uent proceedings in conformity with the provisions of 0arts ( and 3, Title B , Aoo% , of this 5ode. <or the purpose of enforcing the lien for customs duties, fees and other charges on any seized or confiscated article in the custody of the Aureau of nternal >evenue, the Aureau of nternal >evenue is hereby authorized to impose and enforce the said lien. Se . *98,. Sei?ure of +essel or Air raft for Delin@uen % of O#ner or Offi er. 9 )hen the owner, agent, master, pilot in command or other responsible officer of any vessel or aircraft becomes liable to be fined under the tariff and customs laws on account of a delin"uency in the discharge of a duty imposed upon him with reference to the said vessel or aircraft, the vessel or
3:

aircraft itself may be seized and sub!ected in an administrative proceeding for the satisfaction of the fine for which such person would have been liable.

1'.NATURE OF FORFEITURE PROCEEDINGS" NOT CRIMINAL IN NATURE; PROOF BEYOND REASONABLE DOUBT IS NOT RE:UIRED
The vessel +T 6JKJ )A 7 and its cargoes were declared forfeited by the 5ommissioner of 5ustoms whose Decision was affirmed by both the 5TA and 5A. The owner of the vessel assailed the Decision contending that the forfeiture proceeding was not !ustified as the Decision was not supported by proof beyond reasonable doubt. The 4upreme 5ourt affirmed the decision in toto. "xxx A forfeiture proceeding under the tariff and customs laws is not criminal in nature since they do not result in the conviction of the wrongdoer nor in the imposition upon him of a penalty, proof beyond reasonable doubt is not re"uired in order to !ustify the forfeiture of the goods; xxx the degree of proof re"uired is merely substantial evidence which means such relevant evidence as a reasonable mind might accept as ade"uate to support a conclusion.7 6xxx seizure proceedings, such as those instituted in this case, are purely civil and administrative in character, the main purpose of which is to enforce the administrative fines or forfeiture incident to unlawful importation of goods or their deliberate possession. The penalty in seizure cases is distinct and separate from the criminal liability that might be imposed against the

3(

indicted importer or possessor and both %inds of penalties may be imposed. xxx the decision of the 5ollector of 5ustoms, as in other seizure proceedings, concerns the res rather than the persona.7 Fee'er International Line" Pte." Lt'. vs. Court of A$$eals" su$ra. 0.3.<; Peo$le vs. Court of First Instan e of Ri?al" et ." et al." 1)1 SCRA 6. xxx forfeiture retroacts to the date of the commission of the offense; Thus, when the vessel and its cargo are ordered forfeited, the effect will retroact to the moment the vessel entered 0hilippine waters. Commissioner of Customs vs. Court of A$$eals" G.R. No7. 111()(6)!" #/<$/-& 31" ())6" * 1 SCRA 1)+.

1 .NATURE OF FORFEITURE" PROCEEDING IN RE3; LACE OF ENOWLEDGE OF ILLEGAL IMPORTATION IS A PERSONAL DEFENSE" BUT CANNOT ABSOLVE THE VESSEL FROM FORFEITURE
5TA modified the Decision of petitioner 5ommissioner of 5ustoms by ordering only the payment of a fine in lieu of the forfeiture of the vessel +DA "+aria Bictoria-0" used in the illegal importation. The 5TA anchored its Decision on the ownerFs lac% of %nowledge of the vesselFs involvement in illegal importation. The 4upreme 5ourt set aside the assailed Decision and held that 6forfeiture proceedings are in the nature of proceedings in rem $Bierneza vs. 5ommissioner of 5ustoms, (, 45>A 31,& and are directed against the res. The fact that private respondent has allegedly no actual

33

%nowledge that +DA "+aria Bictoria-0" was used illegally does not render the vessel immune from forfeiture. This is so because the forfeiture proceedings *sic+ in this case was instituted against the vessel itself. 0rivate respondentEs defense that he has no actual %nowledge that the vessel was used illegally is personal to him but cannot absolve the vessel from liability of forfeiture.7 Commissioner of Customs vs. Court of Ta) A$$eals " No. L631'33" S2,32452- ()" 1+ !" 13 SCRA ! 1.

A t bears stressing that the forfeiture of seized goods in the Aureau of

5ustoms is a proceeding against the goods and not against the owner. t is in the nature of a proceeding in rem, i.e., directed against the res or imported articles and entails a determination of the legality of their importation. n this proceeding, it is, in legal contemplation, the property itself which commits the violation and is treated as the offender, without reference whatsoever to the character or conduct of the owner. Asian Terminals" In . vs. Bautista= Ri afort" su$ra.

1+.ENFORCEMENT OF A TAX LIEN

Bessel +DB 6=A>J'AF with declared dutiable value of 0C,:-:,;1( and estimated customs duty of 0:,(1C,-:; was allowed to be released tax and duty-free to ?lory 4hipping Kines $?4K& upon posting of a bond and conditioned on re-exportation upon termination of .-year bareboat charter. After the expiration of the bond, ?4K failed to pay the duties and taxes. t
3,

instead sold the vessel to *ro +aura 4hipping Kines who applied for Authority to mport, based on ac"uisition cost of 0:,:;;,;;; with assesses duties and taxes of 0:,1,1/1. At this point, bad faith already intervened. *ro +aura 4hipping Kines !oined ?4K in attempt to evade payment of customs duties N charges demanded by +actan 5ollector by pushing through with purchase without notification to +actan 5ollector. +actan 5ollector subse"uently instituted seizure proceedings. Jndervaluation resulting in decrease of /;2 $more than 3;2& pursuant to 4ection (.;3 T550. )ithout the renewal of the vesselEs re-export bond, the obligation to pay customs duties, taxes and other charges on the importation in the amount of 0:,(1C,-:;.;; arose and attached to the vessel. The obligation is a tax lien that attaches to imported goods, regardless of ownership. *ro +aura was ordered to pay the duties and taxes without considering depreciation in determining dutiable value. Se retar% of Finan e vs. Oro 3aura S!i$$in1 Lines" su$ra.

C. COMPROMISE AGREEMENT
Se . *86:. Aut!orit% of Commissioner to ma4e Com$romise. L 4ub!ect to the approval of the 4ecretary of <inance, the 5ommissioner of 5ustoms may compromise any case arising under this 5ode or other laws or part of laws enforced by the Aureau of 5ustoms involving the imposition of fines, surcharges and forfeitures unless otherwise specified by law.

3.

().

WHO CAN COMPROMISE TAX CASES; COMPROMISE ENTERED INTO BY DEPUTY COMMISSIONER WITHOUT PROPER AUTHORITY IS WITHOUT EFFECT

@eputy 5ommissioner Balera filed in the >T5 of +anila, for an on behalf of the Aureau of 5ustoms a collection case for the collection of 03-,:1.,/.1.;; in unpaid duties and taxes against 4teel Asia +anufacturing 5orporation $4A+5&. Balera and 4A+5 entered into a compromise agreement wherein the latter offered to pay on a staggered basis through thirty $3;& monthly e"ual installments the 03-,:1.,/.1.;; duties and taxes sought to be collected in the civil case. The 4upreme 5ourt ruled that there is no conflict between 4ection (3:C $-uthority of Commissioner to ma!e Compromise & and 4ection (,;: $(upervision and Control over Criminal and Civil Proceedings & of the T550. 4ection (,;: covers the matter of the institution and filing of civil and criminal actions by customs officers, which is sub!ect to the approval of the 5ommissioner if filed for the recovery of duties or the enforcement of any fine, penalty or forfeiture under the 5ode. t does not cover the

compromise of such civil or criminal actions, while 4ection (3:C is the provision that deals with such a situation. n fact, the latter is categorical in providing an encompassing scope for the strict conditions for any compromise. ts coverage includes 6an% ase arisin1 un'er t!is o'e or

ot!er la#s or $art of la#s enfor e' &% t!e Bureau of Customs involvin1 t!e im$osition of fines" sur !ar1es an' forfeitures unless ot!er#ise s$e ifie' &%
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la#.7 xxx #.*. 'o. :.C, as amended by #.*. 'o. 3/, is clear in its re"uirement that in ases involvin1 ta) re'it s ams t!e favora&le

re ommen'ation for a$$roval &% t!e S$e ial Tas4 For e an' t!e a$$roval &% t!e Presi'ent of t!e Re$u&li are &ot! re@uire' . The approval by the 5hairmen of the 4pecial Tas% <orce is still sub!ect to approval of the 0resident. 0rior presidential approval is the highest form of chec% and balance within the #xecutive branch of government and cannot be satisfied by mere failure of the 0resident to reverse or reprobate the acts of subordinates. +alera vs. Offi e of t!e Om&u'sman" G.R. No. 16'(' " F25-$/-& ('" ()) " !*' SCRA *(.

D. #UDICIAL ACTION AGAINST THE TAXPAYER

S20. (*)1. Su$ervision an' Control Over Criminal an' Civil Pro ee'in1s. . 5ivil and criminal actions and proceedings instituted in behalf of the government under the authority of this 5ode or other law enforced by the Aureau shall be brought in the name of the government of the 0hilippines and shall be conducted by customs but no civil or criminal action for the recovery of duties or the enforcement of any fine, penalty or forfeiture under this 5ode shall be filed in court without the approval of the 5ommissioner. Se . *,<*. Revie# &% Court of Ta) A$$eals. 9 The party aggrieved by the ruling of the 5ommissioner in any matter brought before him upon protest or by his action or ruling in any case of seizure may appeal to the 5ourt of Tax Appeals, in the manner and within the period prescribed by law and regulations. Jnless an appeal is made to the 5ourt of Tax Appeals in the manner and within the period prescribed by laws
3-

and regulations, the action or ruling 5ommissioner shall be final and conclusive.

of

the

(1.COLLECTION OF OUTSTANDING CUSTOMS DUTIES AND TAXES MAY PROCEED WITHOUT AWAITING THE RESOLUTION OF PETITION WITH THE CTA
0ilipinas 4hell 0etroleum 5orporationFs $4hell& tax debit memos $T@+s& and tax credit certificates $T55s& were cancelled due to fraud. The 5ommissioner of 5ustoms demanded immediate payment of unpaid customs duties and taxes. 4hell protested, however, the A*5 did not act on the protest. t then filed a petition for review in the 5TA "uestioning the legality of the cancellation of the T55s. 0ending petition, A*5 filed a complaint for

collection in >T5 +anila. 4hell moved for the dismissal of the collection case but >T5 denied the motion. The 4upreme 5ourt upheld the >T5 and ruled that 6)e are not unmindful of petitionerEs pending petition for review in the 5TA where it is "uestioning the validity of the cancellation of the T55s. =owever, respondent cannot and should not await the resolution of that case before it collects petitionerEs outstanding customs duties and taxes for such delay will unduly restrain the performance of its functions. +oreover, if the ultimate outcome of the 5TA case turns out to be favorable to petitioner, the law affords it the ade"uate remedy of see%ing a refund.7 Pili$inas S!ell Petroleum Cor$oration vs. Re$u&li " G.R. No. 161+!3" M/-01 6" ()) " !*' SCRA ')1.
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((.GOVERNMENT NEED NOT AWAIT THE RESULT OF THE CRIMINAL PROCEEDINGS BEFORE IT CAN COLLECT THE TAXES; INVALID PAYMENT
The A*5 instituted a 5omplaint for 5ollection of +oney with @amages against 0roton 0ilipinas 5orporation $0roton& see%ing the payment of customs duties and taxes which remain unpaid by reason of cancellation of the Tax 5redit 5ertificates $T55s& for being spurious. 0rior to the collection case, a criminal case against the officers of 0roton was pending with the 4andiganbayan. 0roton moved for the dismissal of the collection case arguing, among others, that the collection case is the civil aspect of the criminal case pending with the 4andiganbayan, hence, it is deemed instituted in the latter, and; the determination of the validity of the T55s was a pre!udicial issue. The 4upreme 5ourt sustained the governmentFs right to collect unpaid customs duties and taxes, T55s being found to be fa%e and spurious notwithstanding validation by the @epartment of <inance. t held8 6The payment of taxes is a duty which the law re"uires to be paid. 4aid obligation is not a conse"uence of the felonious acts charged in the criminal proceeding nor is it a mere civil liability arising from crime that could be wiped out by the !udicial declaration of non-existence of the criminal acts charged. =ence, the payment and collection of customs duties and taxes in itself creates civil liability on the part of the taxpayer. xxx the determination of the validity or invalidity of the T55s cannot be regarded as a pre!udicial
31

issue that must first be resolved with finality in the 5riminal 5ases filed before the 4andiganbayan. The ?overnment should not and must not await the result of the criminal proceedings in the 4andiganbayan before it can collect the outstanding customs duties and taxes of the petitioner for such will unduly restrain the ?overnment in doing its functions. The machineries of the ?overnment will not be able to function well if the collection of taxes will be delayed so much so if its collection will depend on the outcome of any criminal proceedings on the guise that the issue of collection of taxes is a pre!udicial issue that need to be first resolved before enforcing its collection.7 Proton Pili$inas Cor$oration vs. Re$u&li " G.R. No. 16!)('" O03o52- 16" ())6" !)* SCRA !( .

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THE PARTICIPATION OF BOC IN CRIMINAL AND CIVIL ASPECT OF THE CASE IS LIMITED TO THAT OF A WITNESS; OSG HAS THE PRIMARY RESPONSIBILITY TO APPEAR FOR THE GOVERNMENT

The A*5 filed a criminal complaint before the @epartment of Gustice against the officers of +ar% 4ensing 0hilippines, nc. $+40 & for unlawful importation. An nformation was filed with the 5TA after determination of probable cause. )hile the case was pending, the 4ecretary of Gustice reversed the 4tate 0rosecutorFs >esolution and accordingly directed the withdrawal of the nformation. 5TA granted the motion to withdraw. A*5 assailed the 5TAFs resolution. The 4upreme 5ourt dismissed A*5Fs petition. t ruled that
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public prosecutor has control and supervision over the cases.

The

participation in the case of a private complainant, li%e A*5, is limited to that of a witness, both in the criminal and civil aspect of the case. Also, the 4upreme 5ourt noticed that A*5 was not represented by the *ffice of the 4olicitor ?eneral $*4?& in instituting the petition, which contravenes established doctrine that 6the *4? shall represent the ?overnment of the 0hilippines, its agencies and instrumentalities and its officials and agents in any litigation, proceeding, investigation, or matter re"uiring the services of lawyers.7 Bureau of Customs vs. Peter S!erman" et. al." G.R. No. 1+)* '" A,-.% 13" ()11. Ay the 4olicitor ?eneral L *n appeal in criminal cases N in all civil cases. S203.o< 3!" C1/,32- 1(" T.3%2 III" 312 R2D.72= A=4.<.73-/3.D2 Co=2 o? 1+ ' (1+ ' RAC); CIR v. La Suerte Ci1ar an' Ci1arette Fa tor% , ?> :,,1,(, Gune (/, (;;: Ay the 4ecretary of Gustice, through the 5hief 4tate 0rosecutor N 0rovincialD5ity 0rosecutors in original criminal cases - S203.o< (()" C1/,32(" T.3%2 III" 312 1+ ' RAC.

I. RE3EDIES A+AILABLE TO T2E TAXPAAER A. ADMINISTRATIVE REMEDIES

Se . *8<6. ;arrant for Detention of Pro$ert%=Cas! Bon'. 9 Jpon ma%ing any seizure, the 5ollector shall issue a warrant for the detention of the property; and if the owner or importer desires to secure the release of the property for legitimate use, the 5ollector shall, with
,:

the approval of the 5ommissioner of 5ustoms, surrender it upon the filing of a cash bond, in an amount to be fixed by him, conditioned upon the payment of the appraised value of the article andDor any fine, expenses and costs which may be ad!udged in the case8 Provided, That such importation shall not be released under any bond when there is a prima facie evidence of fraud in the importation of article8 Provided, further, That articles the importation of which is prohibited by law shall not be released under any circumstance whatsoever8 Provided, finally, That nothing in this section shall be construed as relieving the owner or importer from any criminal liability which may arise from any violation of law committed in connection with the importation of the article. Se . *8<-. Protest an' Pa%ment u$on Protest in Civil 3atters. 9 )hen a ruling or decision of the 5ollector is made whereby liability for duties, taxes, fees, or other charges are determined, except the fixing of fines in seizure cases, the party adversely affected may protest such ruling or decision by presenting to the 5ollector at the time when payment of the amount claimed to be due the ?overnment is made, or within fifteen $:.& days thereafter, a written protest setting forth his ob!ection to the ruling or decision in "uestion, together with the reasons therefore. 'o protest shall be considered unless payment of the amount due after final li"uidation has first been made and the corresponding doc%et fee, as provided for in 4ection 33;:. Se . *8<B. Protest E) lusive Reme'% in Protesta&le Case. 9 n all cases sub!ect to protest, the interested party who desires to have the action of the 5ollector reviewed, shall ma%e a protest, otherwise, the action of the 5ollector shall be final and conclusive against him, except as to matters collectible for manifest error in the manner prescribed in section one thousand seven hundred and seven hereof. Se . *86*. De ision or A tion &% Colle tor in Protest an' Sei?ure Cases. 9 )hen a protest in proper form is presented in a case where protest is re"uired, the
,(

5ollector shall issue an order for hearing within fifteen $:.& days from receipt of the protest and hear the matter thus presented. Jpon termination of the hearing, the 5ollector shall render a decision within thirty $3;& days, and if the protest is sustained, in whole or in part, he shall ma%e the appropriate order, the entry reli"uidated necessary. n seizure cases, the 5ollector, after a hearing shall in writing ma%e a declaration of forfeiture or fix the amount of the fine or ta%e such other action as may be proper. Se . *868. Revie# &% Commissioner. 9 The person aggrieved by the decision or action of the 5ollector in any matter presented upon protest or by his action in any case of seizure may, within fifteen $:.& days after notification in writing by the 5ollector of his action or decision, file a written notice to the 5ollector with a copy furnished to the 5ommissioner of his intention to appeal the action or decision of the 5ollector to the 5ommissioner. Thereupon the 5ollector shall forthwith transmit all the records of the proceedings to the 5ommissioner, who shall approve, modify or reverse the action or decision of the 5ollector and ta%e such steps and ma%e such orders as may be necessary to give effect to his decision8 Provided, That when an appeal is filed beyond the period herein prescribed, the same shall be deemed dismissed. f in any seizure proceedings, the 5ollector renders a decision adverse to the ?overnment, such decision shall be automatically reviewed by the 5ommissioner and the records of the case elevated within five $.& days from the promulgation of the decision of the 5ollector. The 5ommissioner shall render a decision of the automatic appeal within thirty $3;& days from receipt of the records of the case. f the 5ollectorEs decision is reversed by the 5ommissioner, the decision of the 5ommissioner shall be final and executory. =owever, if the 5ollectorEs decision is affirmed, or if within thirty $3;& days from receipt of the records of the case by the 5ommissioner no decision is rendered or the decision involves imported articles whose published value is <ive million pesos
,3

$0.,;;;,;;;& or more, such decision shall be deemed automatically appealed to the 4ecretary of <inance and the records of the proceedings shall be elevated within five $.& days from the promulgation of the decision of the 5ommissioner or of the 5ollector under appeal, as the case may be8 0rovided, further, That if the decision of the 5ommissioner or of the 5ollector under appeal, as the case may be, is affirmed by the 4ecretary of <inance, or if within thirty $3;& days from receipt of the records of the proceedings by the 4ecretary of <inance, no decision is rendered, the decision of the 4ecretary of <inance, or of the 5ommissioner, or of the 5ollector under appeal, as the case may be, shall become final and executory. n any seizure proceeding, the release of imported articles shall not be allowed unless and until a decision of the 5ollector has been confirmed in writing by the 5ommissioner of 5ustoms.

(*.

POSTING OF BOND; SEICED ARTICLES MAY NOT BE RELEASED UNDER BOND IF THERE IS PRI3A FACIE EVIDENCE OF FRAUD; WHEN IMPORTATION TAEES PLACE" EXCEPTION TO THE RULE

The 5ommissioner of 5ustoms affirmed the decision of the 5ollector of 5ustoms which ordered the forfeiture of the imported refined sugar for failure of its importer to secure the re"uired import allocation from the 4ugar >egulatory Administration $4>A&. )hile on appeal to the 5TA, the importer filed a motion to release cargo for exportation upon filing of a surety bond. The 5TA granted the motion and ordered the release of the shipment sub!ect to the filing of a continuing surety bond. The 4upreme 5ourt reversed the 5TAFs resolution and ruled that 6seized articles may not be released under

,,

bond if there is prima facie evidence of fraud in their importation. xxx7 4ection (3;: of the Tariff and 5ustoms 5ode of the 0hilippines $T550& prohibits the release under bond of seized importation in such case. Commissioner of Customs vs. Court of Ta) A$$eals" su$ra.

(!.

TAX PROTEST; LI:UIDATION

*n account of the cancellation of the fraudulently issued T55s, the A*5 thru its @eputy 5ommissioner for >evenue 5ollections +onitoring ?roup sent collection letters demanding payment from 0ilipinas 4hell 0etroleum 5orporation $4hell& of the amount covered by the cancelled T55s it paid in :11- and :11/. Three collection cases against 4hell were filed before >T5 +anila. 4hell then filed with the 5TA a 0etition for >eview "uestioning the A*5 collection efforts. The parties argue over which act serves as the decision of the 5ommissioner that, under the law, can be the sub!ect of an appeal before the 5TA, and from which act the 3;-day period to appeal shall be rec%oned. The 4upreme 5ourt denied 4hellFs petition. The 5TA has no !urisdiction, the case did not involve a tax protest case, but payment and collection issues. The decisions of the 5ommissioner which is appealable to the 5TA involving customs duties specifically refer to his decisions on administrative tax protest cases in relation to 4ection (,;( of the T550.

,.

A tax protest case, under the T550, involves a protest of the li"uidation of import entries. A li"uidation is the final computation and ascertainment by the collector of the duties on imported merchandise, based on official reports as to the "uantity, character, and value thereof, and the collectorEs own finding as to the applicable rate of duty; it is a%in to an assessment of internal revenue taxes under the 'ational nternal >evenue 5ode where the tax liability of the taxpayer is definitely determined. Pili$inas S!ell Petroleum Cor$oration vs. Commissioner of Customs" G.R. No. 1'63 )" #$<2 1 " ())+" ! + SCRA !'*.

(6. PROTEST RE:UIREMENT

The change in tariff classification by 5ustoms- (oci/t/ %/n/rale de (urveillance $4?4& mports Baluation and 5lassification 5ommittee resulting in higher valuation leading to petitionerFs liability for additional duties and taxes is protestable. Accordingly, failure to protest the demand of the 5ollector adopting valuation is fatal. <or failure of petitioner to pay under protest, the action of the 5ollector to collect additional duties became final and conclusive. GST P!ili$$ines" In . vs. Commissioner of Customs C Se . of Finan e, 5TA #A 'o. ,,1, Gune :., (;;1, 4upreme 5ourt denied with finality petitionerFs 0etition for >eview and +otion for >econsideration in >esolutions dated *ctober (C, (;;1 and Ganuary (-, (;:;. #ntry of Gudgment dated <ebruary (,, (;:;.
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('.

BOC HAS EXCLUSIVE ORIGINAL #URISDICTION ON SEICURE AND FORFEITURE OF GOODS; THE RULE THAT THE RTC MUST DEFER TO BOC9S #URIDICTION IS ABSOLUTE

>T5 of *longapo 5ity issued an *rder rendering 4eaport @epartment ?eneral +anager 5anlas and two other lawyers guilty of indirect contempt for refusing to honor the T>* issued by the >T5 which restrained them to interfere on the withdrawal and release of the imported rice consigned to ) >A nternational Trading, nc. The 4upreme 5ourt declared the *rder void. 6 t is well settled that the 5ollector of 5ustoms has exclusive !urisdiction over seizure and forfeiture proceedings, and regular courts cannot interfere with his exercise thereof or stifle or put it at naught. The 5ollector of 5ustoms sitting in seizure and forfeiture proceedings has exclusive !urisdiction to hear and determine all "uestions touching on the seizure and forfeiture of dutiable goods. >egional trial courts are devoid of any competence to pass upon the validity or regularity of seizure and forfeiture proceedings conducted by the A*5 and to en!oin or otherwise interfere with these proceedings. >egional trial courts are precluded from assuming cognizance over such matters even through petitions for certiorari, prohibition or mandamus. xxx from the moment imported goods are actually in the possession or control of the 5ustoms authorities, even if no warrant for seizure or detention
,-

had previously been issued by the 5ollector of 5ustoms in connection with the seizure and forfeiture proceedings, the A*5 ac"uires exclusive !urisdiction over such imported goods for the purpose of enforcing the customs laws, sub!ect to appeal to the 5ourt of Tax Appeals whose decisions are appealable to this 5ourt. Su&i Ba% 3etro$olitan Aut!orit% vs.

Ro'ri1ue?" G.R. No. 16)(')" A,-.% (3" ()1)" 61+ SCRA 1'6" 0.3.<; Dao vs. Court of A$$eals" G.R. No7. 1)*6)* /<= 111((3" O03o52- 6" 1++!" (*+ SCRA 3!.

( .

RTC HAS NO REVIEW POWER OVER SEICURE AND FORFEITURE PROCEEDINGS CONDUCTED BY THE BOC

mporters of right hand drive buses filed a complaint with the >T5 of 0araOa"ue 5ity for replevin with prayer for the issuance of a writ of preliminary and mandatory in!unction and damages. The >T5 granted the application for a writ of replevin. n a subse"uent order issued by the >T5, it dismissed the complaint on the ground of lac% of !urisdiction while Asian Terminal, nc. $AT &, a custom bonded warehouse where the vehicles were previously stored, "uestioned the said *rder alleging that it had a lien on the vehicles. The 4upreme 5ourt sustained the dismissal. t held that >T5s are devoid of any competence to pass upon the validity or regularity of seizure and forfeiture proceedings conducted by the Aureau of 5ustoms and to en!oin or
,/

otherwise interfere with these proceedings. t is the 5ollector of 5ustoms, sitting in seizure and forfeiture proceedings, who has exclusive !urisdiction to hear and determine all "uestions touching on the seizure and forfeiture of dutiable goods. The >T5s are precluded from assuming cognizance over such matters even through petitions of certiorari, prohibition or mandamus. xxx actions of the 5ollector of 5ustoms are appealable to the 5ommissioner of 5ustoms, whose decision, in turn, is sub!ect to the exclusive appellate !urisdiction of the 5ourt of Tax Appeals xxx Asian Terminals" In . vs. Bautista=Ri afort" G.R. No. 166+)1" O03o52- ('" ())6" !)! SCRA '* 0.3.<; Dao vs. Court of A$$eals" G.R. No7. 1)*6)* /<= 111((3" O03o52- 6" 1++!" (*+ SCRA 3!" *(. >T5 has no !urisdiction to entertain a replevin suit involving an article sub!ect of customs seizure and forfeiture proceeding. A*5 has exclusive !urisdiction in seizure and forfeiture cases even if it be assumed that in the exercise of such exclusive competence a taint of illegality may be correctly imputed. Pon e Enrile vs. +inu%a" No. L6(+)*3" #/<$/-& 3)" 1+'1" 3' SCRA 3 1.

(+.

DETERMINATION OF PROBABLE CAUSE IN SEICURE CASE IS NOT FOR THE RTC TO DETERMINE

A )arrant of 4eizure and @etention of (.,;;; bags of rice was issued by the @istrict 5ollector of 5ustoms of 5ebu. The consignee of the sac%s of rice and
,1

his buyer filed a complaint for in!unction in the >T5 of 5ebu 5ity. The >T5 ruled that the )arrant of 4eizure and @etention issued by the Aureau of 5ustoms cannot divest the court of !urisdiction since its issuance is without legal basis as it was anchored merely on suspicion that the items in "uestion were imported or smuggled. 5A affirmed the >T5. t stated that regular courts still retain !urisdiction "where, as in this case, for lac% of probable cause, there is serious doubt as to the propriety of placing the articles under 5ustoms !urisdiction through seizureDforfeiture proceedings." The 4upreme 5ourt reversed both the >T5 and 5A. t was held that 6the "uestion of whether probable cause exists for the seizure of the sub!ect sac%s of rice is not for the >egional Trial 5ourt to determine. The customs authorities do not have to prove to the satisfaction of the court that the articles on board a vessel were imported from abroad or are intended to be shipped abroad before they may exercise the power to effect customs searches, seizures, or arrests provided by law and continue with the administrative hearings. Bureau of Customs vs. O1ario" G.R. No. 13 ) 1" M/-01 3)" ()))" 3(+ SCRA ( +.

3).

BOC HAS #URISDICTION OVER THE GOODS SEICED; WHERE TO APPEAL THE DECISION OF COLLECTOR OF CUSTOMS

Jpon effecting the seizure of the goods, the Aureau of 5ustoms ac"uired exclusive !urisdiction '*T only over the case but also over the goods seized for the purpose of enforcing the tariff and customs laws.
.;

A party dissatisfied with the decision of the 5ollector may appeal to the 5ommissioner of 5ustoms, whose decision is appealable to the 5ourt of Tax Appeals in the manner and within the period prescribed by law and regulations. The decision of the 5ourt of Tax Appeals may be elevated to the 4upreme 5ourt for review. C!ia vs. A tin1 Colle tor of Customs" G.R. No. L6*3 1)" S2,32452- (6" 1+ +" 1'' SCRA '!!.

31.COLLECTOR9S DECISION IN SEICURE PROCEEDINGS WHEN ADVERSE TO THE GOVERNMENT IS SUB#ECT TO AUTOMATIC REVIEW BY COMMISSIONER OF CUSTOMS" BY SECRETARY OF FINANCE
The @ecision of the 5ollector of 5ustoms when adverse to the government shall be automatically reviewed by the 5ommissioner of 5ustoms. The 5ommissioner shall render a decision on the automatic appeal within thirty $3;& days from receipt of the records of the case. n case the A*5 5ommissioner fails to decide on the automatic appeal of the 5ollectorEs @ecision within 3; days from receipt of the records thereof, the case shall again be deemed automatically appealed to the 4ecretary of <inance. (S203.o< (313" TCCP)" El Gre o S!i$ 3annin1 an' 3ana1ement Cor$oration vs. Commissioner of Customs" G.R. No. 1''1 '). " D202452- *" ()) " !'3 SCRA

3(.

#URISDICTION OF COLLECTOR OF CUSTOMS OVER ABANDONMENT PROCEEDINGS

.:

The @istrict 5ollector of 5ustoms initiated Abandonment 0roceedings on overstaying cargoes located at the customs-bonded warehouse. Aefore the goods can be inventoried and sold at public auction, part of the warehouse containing the shipment was burned including that of the private respondentFs shipments. 0rivate respondent filed a complaint for damages before the >T5 of 0asig 5ity claiming the value of the shipment. The >T5 ruled ineffective the A*5Fs declaration of abandonment. The 4upreme 5ourt reversed the decision of the >T5. The resolution of the issue of abandonment and ownership of the shipment $4ections:/;: N :/;( T55& is within the exclusive competence of the @istrict 5ollector of 5ustoms, the 5ommissioner of 5ustoms and within the appellate !urisdiction of the 5TA. The @istrict 5ollector of 5ustoms did not lose !urisdiction over the abandonment proceedings notwithstanding the loss of the cargo nor render functus oficio her declaration that the sub!ect shipment had been abandoned. >T5 was incompetent to pass upon and nullify seizure and abandonment proceedings as well as the issue on ownership over the goods seized. R.+. 3ar?an Frei1!t" In . vs. Court of A$$eals" G.R. No. 1( )6*" M/-01 *" ())*" *(* SCRA !+6.

B.

#UDICIAL REMEDIES

33.LIABILITY OF THE GOVERNMENT IN CASE OF LOSS OF ARTICLES WHILE IN CUSTODY; EXCEPTION TO STATE IMMUNITY; NON6 LIABILITY FOR INTEREST
.(

As an exception to the principle of state immunity from suit, due to gross negligence in the loss of imported goods in its custody, the Aureau of 5ustoms was held liable to pay the value of the shipment, payment to be ta%en from the sale or sales of goods or properties seized or forfeited, upon payment of the necessary customs duties; liability may be paid in Philippine currency, computed at the exchange rate prevailing at the time of actual payment . Re$u&li of t!e P!ili$$ines" Re$resente' &% t!e Commissioner of Customs v. 5nime) 3i ro=Ele troni s .G3B2/" G.R. No. 1663)+61)" M/-01 +" ())'" !1 SCRA 1+" /7 0.32= .< 312 -202<3 0/72 o? Commissioner of

Customs vs. A1f!a In or$orate'" G.R. No. 1 '*(!" M/-01 ( " ()11. n addition to the value of the shipment lost while in the custody of A*5, respondent J' +#P was awarded legal interest of C2 p.a. from 4eptember ., (;;: $date of !udicial demand by filing the petition for revival of the Gune :., :11(& until the finality of the +arch 1, (;;- 45 decision. Thereafter, the rate of legal interest shall be :(2 p.a. until the A*5 fully pays its obligation. Re$u&li of t!e P!ili$$ines" Re$resente' &% t!e

Commissioner of Customs v. 5nime) 3i ro=Ele troni s .G3B2/ " G.R. No. 1663)+61)" Resolution =/32= D202452- 1)" ())'.

C.

CLAIM FOR REFUND

.3

Se . 6E<-. Claim for Refun' of Duties an' Ta)es an' 3o'e of Pa%ment. 9 All claims for refund of duties shall be made in writing and forwarded to the 5ollector to whom such duties are paid, who upon receipt of such claim shall verify the same by the records of his *ffice, and if found to be correct and in accordance with law, shall certify the same to the 5ommissioner with his recommendation together with all necessary papers and documents. Jpon receipt by the 5ommissioner of such certified claim he shall cause the same to be paid if found correct. f as a result of the refund of customs duties there would necessarily result a corresponding refund of internal revenue taxes on the same importation, the 5ollector shall li%ewise certify the same to the 5ommissioner who shall cause the said taxes to be paid, refunded, or tax credited in favor of the importer, with advice to the 5ommissioner of nternal >evenue. Se . *8<-. Protest an' Pa%ment u$on Protest in Civil 3atters. @ see A. Administrative remedies available to the taxpayer Se . *8<B. Protest E) lusive Reme'% in Protesta&le Case. = see A. Administrative remedies available to the taxpayer

3*.PERIOD TO FILE REFUND; APPEAL TO CTA WAS ALLOWED EVEN WITHOUT DECISION OF THE COMMISSIONER OF CUSTOMS
The right to claim for refund of customs duties is specifically governed by 4ection :-;/ of the Tariff and 5ustoms 5ode which provides that in all claims for refund of customs duties, the 5ollector to whom such customs duties are paid and upon receipt of such claim is mandated to verify the same by the records of his *ffice. f such claim is found correct and in accordance

.,

with law, the 5ollector shall certify the same to the 5ommissioner with his recommendation together with all the necessary papers and documents. *0ote1 0o specific period for filing the claim for refund was provided under the said section.+ +eanwhile, 4ections (3;/ and (3;1 finds application in all cases sub2ect to protest, the claim for refund of customs duties shall be preceded by a protest before the 5ollector of 5ustoms either at the time when payment of the amount claimed to be due the government is made or within fifteen $:.& days thereafter a written protest shall be made. n con!unction with this right of the claimant is the duty of the 5ollector of 5ustoms to hear and decide such protest within thirty $3;& days upon termination of the hearing. $4ection (3:(, T550& Appeal to 5TA on protest cases was allowed even without decision of the 5ollector as well as 5ommissioner of 5ustoms due to inaction by 5ollector for an unreasonable length of time $almost C years&. Nestle

P!ili$$ines" In . vs. Court of A$$eals" G.R. No. 13*11*" #$%& 6" ())1" 36) SCRA !'!. 5TA ac"uires !urisdiction in a refund of customs duties even in the absence of the decision of the 5ommissioner of 5ustoms; tax officialFs silence is a denial of its claim; the two $(&-year prescriptive period under 4ection (3; $now 4ection ((1& of the ' >5 was applied. Commissioner of Customs an'

..

Commissioner of Internal Revenue vs. T!e 2onora&le Court of Ta) A$$eals an' Planters Pro'u ts" In ." G.R. No. (61 " M/-01 16" 1+ +. A duly registered enterprise under the #0QA $now 0#QA& Kaw was allowed refund of erroneously or mista%enly paid customs duties applying the provision of the 5ivil 5ode on solutio indebiti $within C years from date of payment&. Commissioner of Customs vs. P!ili$$ine P!os$!ate Fertili?er Cor$oration" G.R. No. 1****)" S2,32452- 1" ())*" *3' SCRA *!(.

3!.

PERIOD TO FILE REFUND; CAO !6+(; PAYMENT OF REFUND PROCESSING FEE

)hether or not the failure to pay the refund processing fee with the A*5 is fatal to a claim for tax refund of advance deposit for customs duties and taxes arising from unused Ketter of 5redit $K5s& for the supposed importation which did not materialize. 5ustoms Administrative *rder $5A*& 'o. .-1(, period to file claim for refund. Gran'te@ In'ustrial Steel Pro'u ts" In . !erein re$resente' &% its Presi'ent" A&elar'o Gon?ale? vs. 2on. Se retar% of t!e De$artment of Finan e, 5TA 5ase 'o. /(;:.

PART IV. CTA9S #URISDICTION OVER CUSTOM CASES A. CTA9S #URISDICTION @SPECIAL AND LIMITED
TCCP S20. (*)1. Su$ervision an' Control Over Criminal an' Civil Pro ee'in1s. 4ee Gudicial Action
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against the taxpayer. Se . *,<*. Revie# &% Court of Ta) A$$eals. 4ee Gudicial Action against the taxpayer. AN ACT CREATING THE COURT OF TAX APPEALS" RA 11(! AS AMENDED BY RA +( ( SEC. E. Duris'i tion. 9 The 5TA shall exercise8

$a& #xclusive appellate !urisdiction to review by appeal, as herein provided8 xxx $,& xxx xxx

@ecisions of the 5ommissioner of 5ustoms in cases involving liability for customs duties, fees or other money charges, seizure, detention or release of property affected, fines, forfeitures or other penalties in relation thereto, or other matters arising under the 5ustoms Kaw or other laws administered by the Aureau of 5ustoms; xxx xxx xxx

$C& @ecisions of the 4ecretary of <inance on customs cases elevated to him automatically for review from decisions of the 5ommissioner of 5ustoms which are adverse to the ?overnment under 4ec. (3:. of the Tariff and 5ustoms 5ode; $-& @ecisions of the 4ecretary of Trade and ndustry, in the case of nonagricultural product, commodity or article, and the 4ecretary of Agriculture in the case of agricultural product, commodity or article, involving dumping and countervailing duties under 4ections 3;: and 3;(, respectively, of the Tariff and 5ustoms 5ode, and safeguard measures under >epublic Act no. //;;, where either party may appeal the decision to impose or not to impose duties. xxx xxx
.-

xxx

Se . 66. ;!o 3a% A$$ealF 3o'e of A$$ealF Effe t of A$$eal. 9 Any party adversely affected by a decision, ruling or inaction of the 5ommissioner of nternal >evenue, the 5ommissioner of 5ustoms, the 4ecretary of <inance, the 4ecretary of Trade and ndustry or the 4ecretary of Agriculture or the 5entral Aoard of Assessment Appeals or the >egional Trial 5ourts may file an appeal with the 5TA within thirty $3;& days after the receipt of such decision or ruling or after the expiry of the period fixed by law for action as referred to in 4ection -$a&$(& herein. Appeal shall be made by filing a petition for review under a procedure analogous to that provided for under >ule ,( of the :11- >ules of 5ivil 0rocedure with the 5TA within thirty $3;& days from the receipt of the decision or ruling or in the case of inaction as herein provided, from the expiration of the period fixed by law to act thereon. A @ivision of the 5TA shall hear the appeal8 xxx xxx xxx All other cases involving rulings, orders, or decisions filed with the 5TA as provided for in 4ection - shall be raffled to its @ivisions. A party adversely affected by a ruling, order or decision of a @ivision of the 5TA may file a motion for reconsideration or new trial before the same @ivision of the 5TA within fifteen $:.& days from notice thereof8 Provided, however, That in criminal cases, the general rule applicable in regular 5ourts on matters of prosecution and appeal shall li%ewise apply. 'o appeal ta%en to the 5TA from the decision of the 5ommissioner of nternal >evenue or the 5ommissioner of 5ustoms xxx or the 4ecretary of <inance, the 4ecretary of Trade and ndustry or the 4ecretary of Agriculture, as the case may be, shall suspend the payment, levy, distraint, andDor sale of any property of the taxpayer for the satisfaction of his liability as provided by existing law8 Provided, however, That when in the opinion of the 5ourt the collection by the aforementioned government agencies may !eopardize the interest of the ?overnment andDor
./

the taxpayer the 5ourt at any stage of the proceeding may suspend the said collection and re"uire the taxpayer either to deposit the amount claimed or to file a surety bond for not more than double the amount with the 5ourt. xxx xxx xxx Se . 6-. A$$eal to t!e Court of Ta) A$$eals En Ban . 7 'o civil proceeding involving matters arising under the 'ational nternal >evenue 5ode, the Tariff and 5ustoms 5ode or the Kocal ?overnment 5ode shall be maintained, except as here in provided, until and unless an appeal has been previously filed with the 5TA and disposed of in accordance with the provisions of this Act. A party adversely affected by a resolution of a @ivision of the 5TA on a motion for reconsideration or new trial, may file a petition for review with the 5TA en banc. Se . 6B. Revie# &% Certiorari. 7 A party adversely affected by a decision or ruling of the 5TA en banc may file with the 4upreme 5ourt a verified petition for review on certiorari pursuant to >ule ,. of the :11>ules of 5ivil 0rocedure.

36. CTA@LIMITED #URISDICTION

The 5ourt has long recognized the legislative determination to vest sole and exclusive !urisdiction on matters involving internal revenue and customs duties to such a specialized court. Ay the very nature of its function, the 5TA is dedicated exclusively to the study and consideration of tax problems and has necessarily developed an expertise on the sub!ect. At the same time, since the 5TA is a court of limited !urisdiction, its !urisdiction to ta%e cognizance of a case should be clearly conferred and should not be deemed to exist on mere
.1

implication. The acts of other bodies that were granted some powers by the 4afeguard +easures Act, such as the Tariff 5ommission, are not sub!ect to direct review by the 5TA. #ven prior to >.A. 1(/(, the 5TA, not the 5A, has !urisdiction over the non-imposition of safeguard measures, citing rule against split !urisdiction. Sout!ern Cross Cement Cor$oration vs. P!ili$$ine Cement 3anufa turers Cor$oration" su$ra. The *ne 4top 4hop nter-Agency Tax 5redit and @uty @rawbac% 5enter $the 5enter&- cancelled the Tax 5redit 5ertificates assigned to 0ilipinas 4hell. 5TA has no !urisdiction over decisions of the 5enter. Pili$inas S!ell Petroleum Cor$oration vs. Commissioner of Customs " G.R. No. 1'63 )" #$<2 1 " ())+" ! + SCRA !'*.

3'.

DECISION>ORDER OF THE COLLECTOR CUSTOMS IS NOT APPEALABLE TO THE CTA

OF

An *rder issued by the @istrict 5ollector of the 0ort of +anila ordering the forfeiture in favor of the ?overnment of the sub!ect importation shipments of flour by petitioner is not the decision appealable before the 5TA. To properly invo%e the !urisdiction of the 5TA, the "decisions" mentioned in 4ection - $a& $,& of >A ::(., as amended by >A 1(/( pertain to decisions of the 5ommissioner of 5ustoms involving liability for customs duties, fees or other money charges, seizure, detention or release of property affected, fines, forfeitures or other penalties in relation thereto, or other matters arising under

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the 5ustoms Kaw or other laws administered by the Aureau of 5ustoms. The decision or order of the 5ollector of 5ustoms, as such in this case, is not the decision being contemplated by the provision of law. 5TA is a court of special appellate !urisdiction, it can only try cases permitted by statute. Ru&ills International" In . et. al. vs. Na$oleon L. 3orales" et al." CTA EB No. *'1 (CTA C/72 No. '' ()" #$%& (+" ())+.

3 .MERE REFERRAL LETTER ISSUED BY THE COMMISSIONER OF CUSTOMS DOES NOT CONSTITUTE DECISION APPEALABLE TO THE CTA
The 5TA 5ourt in @ivision has exclusive appellate !urisdiction to review by appeal the decisions of the 5ommissioner of 5ustoms. 4ettled is the rule that the decision or order which is appealable to the 5TA, is that which has resolved the case with finality, and in effect terminates or finally disposes of a case, as it leaves nothing to be done by the 5ommissioner of 5ustoms, as the case has been decided on the merits. A mere referral letter issued by the 5ommissioner of 5ustoms referring the case to the * 5-@istrict 5ollector for appropriate action is not a decision appealable to the 5TA. 5nioil Petroleum P!ili$$ines" In . vs. Na$oleon 3orales" et. al., CTA EB No. !)3 (CTA C/72 No. ' '+)" A,-.% 1!" ()1).

3+.CTA HAS NO APPELLATE #URISDICTION OVER AN ACTION TO COLLECT ON A BOND USED TO SECURE THE PAYMENT OF TAXES" SUCH ACTION
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IS NOT A TAX COLLECTION CASE BUT A SIMPLE ENFORCEMENT OF CONTRACTUAL LIABILITY

The >epublic of the 0hilippines represented by the Aureau of 5ustoms $A*5& filed a 5ollection of +oney with @amages before the >egional Trial 5ourt $>T5& against 0hilippine Aritish Assurance 5ompany, nc. $0AA5& for the outstanding unli"uidated customs bonds issued by the latter to its clients to secure the release of imported goods with the A*5. The >T5 ruled in favor of the >epublic. 0AA5 appealed the decision to the 5ourt of Appeals $5A&. Thereafter, 5A dismissed the appeal for lac% of !urisdiction. According to 5A, the case is rooted on the payment of taxes and duties, one which involves a collection of taxes where the !urisdiction is with the 5TA. The 45 reversed the 5A and ruled that 6an action based upon a surety bond cannot be considered a tax collection case. >ather, such action would properly be a case based on a contract.7 P!ili$$ine Britis! Assuran e Co. In . vs. Re$u&li of t!e P!ili$$ines re$resente' &% t!e Bureau of Customs" ?.>. 'o. :/..//, <ebruary (, (;:;.

*).#URISDICTION OF THE CTA; ISSUES OF OWNERSHIP OVER GOODS IN THE CUSTODY OF CUSTOM OFFICIALS ARE WITHIN THE POWER OF CTA TO DETERMINE
n order to enforce a maritime lien over the sub!ect of a seizure and detention proceeding in customs cases, several cases where filed both in the
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>T5 and the 5A raising, among others, the issue of ownership over the sub!ect of seizure. The 5A en!oined the 5TA from exercising !urisdiction over the case. This was reversed by the 4upreme 5ourt. 6)hile the party contended that the 5ommissioner of 5ustomEs custody was illegal, such fact, even if true, does not deprive the 5ommissioner of 5ustoms of !urisdiction thereon. This is a "uestion that ought to be resolved in the seizure and forfeiture cases, which are now pending with the 5TA, and not by the regular courts as a collateral matter to enforce his lien. xxx 6the 5A was clearly in error when it issued an in!unction against it from deciding the forfeiture case on the basis that it interfered with the sub!ect of ownership over the vessel which was, according to the 5A, beyond the !urisdiction of the 5TA. xxx allegations of ownership neither divest the 5ollector of 5ustoms of such !urisdiction nor confer upon the trial court !urisdiction over the case. *wnership of goods or the legality of its ac"uisition can be raised as defenses in a seizure proceeding. The actions of the 5ollectors of 5ustoms are

appealable to the 5ommissioner of 5ustoms, whose decision, in turn, is sub!ect to the exclusive appellate !urisdiction of the 5TA. 5learly, issues of ownership over goods in the custody of custom officials are within the power of the 5TA to determine.7 Commissioner of Customs vs. Court of A$$eals" su$ra.

B. APPEAL

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*1.PERIOD TO APPEAL; PERFECTION OF AN APPEAL IN THE CTA EN BANC IS NOT ONLY MANDATORY BUT ALSO #URISDICTIONAL
The assailed >esolution dated Ganuary ., (;:; issued by the 5TA <irst @ivision dismissing the criminal case for failure to prosecute was received by the @epartment of Gustice and Aureau of 5ustoms $A*5& on Ganuary :., (;:;. 0etitioner A*5 filed the 0etition for >eview in the 5TA )n 3anc on <ebruary (, (;:;. An appeal to the 5ourt #n Aanc in criminal cases shall be ta%en by filing a petition for review within fifteen $:.& days from receipt of a copy of the decision or resolution appealed from. =owever, for good cause, the time for filing the petition may be extended for an additional period not exceeding fifteen days. H4ection 1 $b&, >ule 1 of the (;;. >evised >ules of the 5ourt of Tax Appeals $>>5TA&I 0etition was filed out of time. The period for filing is mandatory unless good cause is shown. 0erfection of an appeal in the manner and within the period laid down by law is not only mandatory but also !urisdictional. Peo$le of t!e P!ili$$ines vs. Allan Fran is o" et. al." CTA EB C-.4 C/72 No. ))' (CTA C-.4 C/72 No. O6 )+ )" F25-$/-& 1!" ()11 0.3.<; Commissioner of Internal Revenue vs. Fort Bonifa io Develo$ment Cor$oration" G.R. No. 16'6)6" A$;$73 11" ()1).

*(.CTA EN BANC HAS EXCLUSIVE APPELLATE #URISDICTION OVER DECISIONS AND RESOLUTIONS OF CTA DIVISION; FAILURE TO FILE MOTION FOR RECONSIDERATION SHALL
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RENDER THE DECISION OF THE CTA DIVISION FINAL AND EXECUTORY

The 5ommissioner of 5ustoms $5*5& assailed the @ecision of 5TA <irst @ivision, reversing the formerFs decree of forfeiture, lifting the )arrants of 4eizure and @etention $)4@&, and ordering the release to ?elmart ndustries 0hilippines, nc. of its imported fabrics. As found by the 4upreme 5ourt, 5*5 committed procedural missteps when if failed to observe 4ections 1 and :: of >A 1(/( as well as the >evised >ules of the 5ourt of Tax Appeals. A party adversely affected by a ruling, order or decision of a @ivision of the 5TA may file a motion for reconsideration or new trial before the same @ivision of the 5TA within fifteen $:.& from thereof. $4ec. 1 of >.A. 'o. 1(/(& 4ec. :: of the same law provides that, ". . . A party adversely affected by a resolution of a @ivision of the 5TA on a motion for reconsideration or new trial may file a petition for review with the 5TA en banc." n turn, "A party adversely affected by a decision or ruling of the 5TA en banc may file with the 4upreme 5ourt a verified petition for review on certiorari pursuant to >ule ,. of the :11- >ules of 5ivil 0rocedure." $4ec. :( of >.A. 'o. 1(/(& 4ec. (, >ule , of the >evised >ules of the 5ourt of Tax Appeals $>>5TA& reiterates the exclusive appellate !urisdiction of the 5TA en banc relative to the review of decisions or resolutions on motion for reconsideration or new trial of the courtEs two $(& divisions in cases arising from
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administrative agencies such as the Aureau of 5ustoms. xxx 0etitionerEs failure to file a motion for reconsideration of the assailed decision of the 5TA <irst @ivision, or at least a petition for review with the 5TA en banc, invo%ing the latterEs exclusive appellate !urisdiction to review decisions of the 5TA divisions, rendered the assailed decision final and executory. Commissioner of Customs vs. Gelmart In'ustries P!ili$$ines" In ." G.R. No. 16+3!(" F25-$/-& 13" ())+" !'+ SCRA ('(. A 0etition for >eview )n 3anc filed by the 5ommissioner of 5ustoms before the 5TA )n 3anc was dismissed for failure to file a +otion for >econsideration before the 5TA @ivision. The 4upreme 5ourt agrees with the 5TA )n 3anc that the 5ommissioner failed to comply with the mandatory provisions of >ule /, 4ection : of >>5TA re"uiring that "the petition for review of a decision or resolution of the 5ourt in @ivision must be preceded by the filing of a timely motion for reconsideration or new trial with the @ivision." The word "must" clearly indicates the mandatory 9 not merely directory 9 nature of a re"uirement." Commissioner of Customs vs. 3arina Sales" In ." G.R. No. 1 3 6 " NoD2452- ((" ()1).

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SUSPENSION OF COLLECTION OF TAXES *3.SUSPENSION OF COLLECTION OF TAXES; FILING OF PETITION DOES NOT SUSPEND THE COLLECTION OF TAXES

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'o appeal ta%en to the 5TA from the decision of the 5ommissioner of nternal >evenue or the 5ommissioner of 5ustoms or the >egional Trial 5ourt, provincial, city or municipal treasurer or the 4ecretary of <inance, the 4ecretary of Trade and ndustry or the 4ecretary of Agriculture, as the case may be, shall suspend the payment, levy, distraint, andDor sale of any property of the taxpayer for the satisfaction of his tax liability as provided by existing law8 Provi'e'" !o#ever, That when in the opinion of the 5ourt the collection by the aforementioned government agencies may !eopardize the interest of the ?overnment andDor the taxpayer the 5ourt at any stage of the proceeding may suspend the said collection and re"uire the taxpayer either to deposit the amount claimed or to file a surety bond for not more than double the amount with the 5ourt. .Se . 66" RA 66*9" amen'e' &% Se . B" RA B*-*/ F-ssociation of Pilipinas (hell Dealers, et al. vs. Cesar 4. Purisima, et al. N &rancis 5oseph %. )scudero, et al. vs. Cesar 4. Purisima, et al., ?.>. 'os. :C/,C: N :C/,C3, >esolution, Guly :, (;;., issuing T>; on enforcement and implementation of >A 133-, #xpanded BAT Act of (;;. and consolidating cases with -3-6-D- %uro Party #ist 7&ormerly --(5(8 9fficers (amson (. -lcantara, et al. vs. :on. )xecutive (ecretary )duardo ,. )rmita, et al., ?.>. 'o. :C/;.C N -;uilino <. Pimentel, et al. vs. )xecutive (ecretary )duardo ,. )rmita, et al., ?.>. 'o. :C/(;-, @ecision 4eptember :, (;;. upholding constitutionality and lifting T>* upon finality; Fili$ino 3etals Cor$. vs. Se retar% of t!e De$artment of Tra'e an' In'ustr% , ?.>. 'o. :.-,1/, Guly :., (;;., writ of in!unction issued by >T5 sustained G EH02,3.o<" .Se . *8<6" TCCP/ Commissioner of Customs v. CTA" Las Islas

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Fili$inas Foo' Cor$oration an' Pat=Pro Overseas Co." Lt'. " GR 1'1!1661'" R27. F25-$/-& 13" ())+. 4ection (1 of >A 'o. //;; $the 64afeguard +easure Act7& provides that8 6Any interested party who is adversely affected by the ruling of the 4ecretary in connection with the imposition of a safeguard measure may file with the 5ourt of Tax Appeals, a petition for review of such ruling within thirty $3;& days from receipt thereof8 0rovided, however, That the filing of such petition for review shall not in any way stop, suspend or otherwise toll the imposition or collection of the appropriate tariff duties or the adoption of other appropriate safeguard measures, as the case may be.7 0etitionerFs prayer for a Temporary >estraining *rder andDor 0reliminary n!unction was denied for failure to prove that the collection of safeguard duties shall !eopardize their interest. Com1las o A1uila Cor$oration" San Fran is o 3irror Cor$oration" All Plus Cor$oration" An' G!ani Float Glass" Limite' vs. Se retar% of t!e De$artment of Tra'e an' In'ustr%" et. al." CTA C/72 No. '*!3" R27o%$3.o< =/32= A$;$73 (+" ())6. 0etitionerFs 6+otion to 4uspend 5ollection of @isputed Tax Kiability,7 with allegation that the collection of the sub!ect taxes would cause serious pre!udice and irreparable damage leading to ban%ruptcy and closure of business, was granted sub!ect to the filing of a bond. t appearing that the collection of deficiency taxes will seriously !eopardize not only the interest of petitioner but also of the governmentFs. International P!arma euti als In .

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vs. Commissioner Lillian 2efti in !er a$a it% as Commissioner of Internal Revenue" et al." CTA C/72 No. ''36" R27o%$3.o< =/32= M/& '" ()) .

D.

OTHER SIGNIFICANT ISSUES **. NO GRAVE ABUSE OF DISCRETION WHEN THE COURT9S CONCLUSION IS SUPPORTED BY LEGAL BASES

<A5T48

A certiorari case was filed against 5TA for alleged grave abuse of discretion in granting the +otion to >elease ?oods Jnder Aond. The goods sub!ect of seizure for alleged violation of 4ection (.3; of the T550 consisted of bags of rice loaded in container vans.

>JK '?8

)hile this case was pending before the 45, the 5TA decided the main case which rendered this petition moot and academic. At any rate, the 45 dismissed the petition as there was no grave abuse of discretion and the assailed >esolution was bac%ed by legal bases, i.e., the sub!ect goods were merely 6regulated7 and not 6prohibited7 commodities. 6An act of a court or tribunal can only be considered to be tainted with grave abuse of discretion when such act is done in a capricious or whimsical exercise of !udgment as is e"uivalent to lac% of !urisdiction. n order to be "ualified as 6grave,7 the abuse of discretion must be so patent or gross as to constitute an evasion of a positive duty or a virtual refusal to perform the duty or to act at all in contemplation of law.7 Se retar% of T!e De$artment of Finan e v. CTA .* n'

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Div./ an' >utan1&ato Conventional Tra'in1 3ulti=Pur$ose Coo$erative, ?.>. 'o. :C/:3-, Aug. -, (;:3. *!. MERE SUBSTANTIAL EVIDENCE IS NECESSARY TO #USTIFY FORFEITURE IN CUSTOMS CASES; VESSELS MAY BE CONSIDERED DUTIABLE ARTICLES

The sub!ect vessel +DB 5oco #xplorer (, a.%.a. -:;- slands 5ruise entered the 0hilippines allegedly for purposes of repair. =owever, what was proven was its sale prior to repair. 4ection :;. of the T550 allows as 6conditionally free importations7 articles brought into the 0hilippines for repair sub!ect to re-exportation and posting of bond. There was no showing of compliance with the re"uirements, hence, the vessel was forfeited. <orfeiture proceeding under tariff and customs laws is not penal in nature since it does not result in the conviction of the wrongdoer nor in the imposition upon him of a penalty; proof beyond reasonable doubt is not re"uired in order to !ustify the forfeiture of the goods. The degree of proof re"uired is merely substantial evidence, which means such relevant evidence as a reasonable mind might accept as ade"uate to support a conclusion citing Fee'er International Line" PTE." LTD." et al. vs. CA" et al." ?.>. 'o. 1,(C(, +ay 3:, :11:. E6<E Islan's S!i$$in1 Cor$. vs. Se . of Finan e , 5TA 5ase 'o. -1.., +ar. C, (;:(. )hen used with reference to importation and exportation, articles include goods, merchandise and in general anything that may be made the sub!ect of importation or exportation. 4hips, boats and floating structures such as the sub!ect vessels are dutiable articles under =eading /1.;,-.;. of 5hapter
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/1 of the T550. Bessels may be considered articles sub!ect of importation. Cornelio G. Casi'o vs. RP" et al., 5TA 5ase 'o. /;/-, <eb. /, (;:(. *6. THE PARTICIPATION OF BOC IN CRIMINAL AND CIVIL ASPECT OF THE CASE IS LIMITED TO THAT OF A WITNESS; OSG HAS THE PRIMARY RESPONSIBILITY TO APPEAR FOR THE GOVERNMENT The A*5 filed a criminal complaint before the @epartment of Gustice against the officers of +ar% 4ensing 0hilippines, nc. $+40 & for unlawful importation. An nformation was filed with the 5TA after determination of probable cause. )hile the case was pending, the 4ecretary of Gustice reversed the 4tate 0rosecutorFs >esolution and accordingly directed the withdrawal of the nformation. 5TA granted the motion to withdraw. A*5 assailed the 5TAFs resolution. The 4upreme 5ourt dismissed A*5Fs petition. t ruled that public prosecutor has control and supervision over the cases. The

participation in the case of a private complainant, li%e A*5, is limited to that of a witness, both in the criminal and civil aspect of the case. Also, the 4upreme 5ourt noticed that A*5 was not represented by the *ffice of the 4olicitor ?eneral $*4?& in instituting the petition, which contravenes established doctrine that 6the *4? shall represent the ?overnment of the 0hilippines, its agencies and instrumentalities and its officials and agents in any litigation, proceeding, investigation, or matter re"uiring the services of lawyers.7 Bureau of Customs vs. Peter S!erman" et. al." G.R. No. 1+)* '" A,-.% 13" ()11.
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Ay the 4olicitor ?eneral L *n appeal in criminal cases N in all civil cases. S203.o< 3!" C1/,32- 1(" T.3%2 III" 312 R2D.72= A=4.<.73-/3.D2 Co=2 o? 1+ ' (1+ ' RAC); CIR v. La Suerte Ci1ar an' Ci1arette Fa tor% , ?> :,,1,(, Gune (/, (;;: Ay the 4ecretary of Gustice, through the 5hief 4tate 0rosecutor N 0rovincialD5ity 0rosecutors in original criminal cases - S203.o< (()" C1/,32(" T.3%2 III" 312 1+ ' RAC. *'. REGULAR COURTS AND NOT CTA HAS THE #URIDICTION TO RULE ON THE CONSTITUTIONALITY OR VALIDITY OF A LAW" RULE OR REGULATION ISSUED BY COC>CIR 45 sustained the >T5 when the latter struc% down 5ustoms +emorandum *rder $5+*& 'o. (--(;;3 on the tariff classification of wheat issued by 5ommissioner of 5ustoms $5*5& for being invalid and of no force and effect. 45 sustained the ruling upon finding that 5*5 violated taxpayerFs right to due process in the issuance of 5+* (--(;;3 when they failed to observe the re"uirements of notice and hearing under the >evised Administrative 5ode. 5*5 li%ewise violated respondentFs right to e"ual protection of laws when they provided for an unreasonable classification in the application of the regulation. <inally, 5*5 went beyond his powers of delegated authority when the regulation limited the powers of the customs officer to examine and assess imported articles. COC an' t!e Distri t

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Colle tor of t!e Port of Su&i vs. 2%$ermi) Fee's Cor$. , ?.>. 'o. :-1.-1, <eb. :, (;:(. t is not within the !urisdiction of the 5TA to determine the validity of 5ustoms Administrative *rder 'o. --1( $,ules and ,egulations %overning the 9vertime Pay and 9ther Compensations ,elated Thereto Due to Customs Personnel at the 0-I-&. The !urisdiction over the validity and constitutionality of rules and regulations issued by the 5*5 by virtue of its rule ma%ing power under 4ection C;/, T550 lies before the regular courts. Ser1io I. Car&onilla" et al vs. Boar' of Airlines Re$resentative .BAR/" et al" ?.>. 'o. :13(,-, OP" re$resente' &% 2on. Pa@uito N. O !oa" et al vs. BAR" et al , ?.>. 'o. :1,(-C, 4ept. :,, (;::. 5TAFs !urisdiction to resolve tax disputes excludes the power to rule on the constitutionality or validity of a law, rule of regulation, which is vested in the regular courts citing Britis! Ameri an To&a o vs. Dose Isi'ro Cama !o, et al, ?.>. 'o. :C3./3, Aug. (;, (;;/.

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