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TARIFF AND CUSTOMS CODE OF THE PHILIPPINES (TCCP)

PART I. GENERAL PRINCIPLES AND BASIC CONCEPTS OF


TAXATION
A. 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 Teleommuniations P!ils." In." G.R. No. 1633!"
#$%& '" ()1)" 6(* SCRA 3*).
Taxes are the lifeblood of the government, for without taxes, the
government can neither exist nor endure. A principal attribute of
sovereignty, the exercise of taxing power derives its source from the very
existence of the state whose social contract with its citizens obliges it to
promote public interest and common good. The theory behind the exercise
of the power to tax emanates from necessity; without taxes, government
cannot fulfill its mandate of promoting the general welfare and well-being of
the people.
n recent years, the increasing social challenges of the times
expanded the scope of state activity, and taxation has become a tool to
realize social !ustice and the e"uitable distribution of wealth, economic
progress and the protection of local industries as well as public welfare and
similar ob!ectives. National Po#er Cor$oration vs. Cit% of Ca&anatuan"
G.R. No. 1*+11)" A,-.% +" ())3" *)1 SCRA (!+.
(. 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
$which imposes the tax& to its constituency who are to pay it. 'evertheless,
it is circumscribed by constitutional limitations. C!am&er of Real Estate an'
Buil'ers( Assoiation" In. vs. Al&erto Romulo" et al. GR. No. 16)'!6"
M/-01 +" ()1)" 61* SCRA 6)!.
3. PRIMARY PURPOSE OF TAXATION IS REVENUE
GENERATION
(hile it is true that the power of taxation can be used as an
implement of police power, the primary purpose of the levy is revenue
generation. f the purpose is primarily revenue, or if revenue is, at least, one
of the real and substantial purposes, then the exaction is properly called a
tax. Planters Pro'uts" In. vs. Ferti$!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. 1'363" S2,32452- 1!" ()1)" 63) SCRA !1+.
*eanwhile, in the case of Garia vs. E)eutive Seretar%" G.R. No.
1)1('3" #$%& 3" 1++(" (11 SCRA (1+" the #xecutive )rder 'os. +,- and
+,. issued by the /resident which imposed additional duty of 01 ad
valorem and special duty to crude oil and other imported oil products were
held by the 2upreme 3ourt to be substantially moved by the desire to
generate additional public revenues and at the same time have some
4protective5 impact upon indigenous oil production6
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 7 where such local industries actually exist and
are producing comparable goods. 2imultaneously,
however, the very same customs duties inevitably have the
effect of producing governmental revenues. 3ustoms 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 7 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 /hilippines in fact produces ten $89&
to fifteen percent $8-1& 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)
Artile II. Setion *. The /hilippines
renounces war as an instrument of national
policy, 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.
Artile +I. Setion *,. 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 2enate may
propose or concur with amendments.
Artile +I. Setion *-.$8& The rule of taxation
shall be uniform and e"uitable. The 3ongress
shall evolve a progressive system of taxation.
Setion *-.*/. The 3ongress may, by law,
authorize the /resident to fix within specified
limits, and sub!ect to such limitations and
restrictions as it may impose, tariff rates, import
and export "uotas, tonnage and wharfage
dues, and other duties or imposts within the
framewor% of the national development
program of the =overnment.
2
*. SOVEREIGNTY LIMITED BY INTERNATIONAL LAW AND
TREATIES
The 80., 3onstitution in its >eclaration of /rinciples and 2tate
/olicies "adopts the generally accepted principles of international law as
part of the law of the land, and adheres to the policy of peace, e"uality,
!ustice, freedom, cooperation and amity, with all nations." ?y the doctrine of
incorporation, the country is bound by generally accepted principles of
international law, which are considered to be automatically part of our own
laws. )ne of the oldest and most fundamental rules in international law is
pacta sunt servanda 7 international agreements must be performed in good
faith. (ith the treaties entered into by the /hilippines, it has effectively
agreed to limit the exercise of its sovereign powers of taxation, eminent
domain and police power. Ta0a'a vs. An1ara" G.R. No.11(+!" M/& ("
1++'" ('( SCRA 1.
!. NON6DELEGATION OF THE POWER TO TAX; EXCEPTION TO
THE RULE
As a general rule, the power of taxation being essentially legislative
in nature, cannot be exercised by anyone. An exception to this is the
delegation of legislative powers to the /resident under 2ection @.$@& of
Article A of the 3onstitution. )ne of the relevant statutes to execute this
provision is The Tariff and 3ustoms 3ode particularly the flexible tariff
clause.
n the case of E)eutive Seretar% vs. Sout!#in1 2eav% In'ustries"
In." G.R. No7. 16*1'1" 16*1'( 8 16'*1" F25-$/-& ()" ())6" *( SCRA
6'3" the consolidated petitions see% to annul and set aside the >ecisions of
the <T3 of )longapo 3ity which declared Article @, 2ection B.8 of #xecutive
)rder 'o. 8-C issued by then /resident =*A unconstitutional. The said #)
prohibited the importation into the country, inclusive of the :reeport, of all
types of used motor vehicles with some exceptions. )n appeal, the 3A
affirmed the decision of the <T3 and invalidated #) 8-C for lac% of statutory
basis for the /resident to issue the same. (ith respect to the basis for the
/resident to issue #) 8-C, the 2upreme 3ourt ruled that the 3onstitution
explicitly authorizes the /resident to issue the same. t held6
3ontrary to the conclusion of the 3ourt of Appeals,
#) 8-C actually satisfied the first re"uisite of a valid
administrative order. t has both constitutional and statutory
bases.
>elegation of legislative powers to the /resident is
permitted in 2ection @.$@& of Article A of the 3onstitution. t
provides6
$@& The 3ongress may, by law, authorize
the /resident 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. 80 $#mphasis supplied&
The relevant statutes to execute this provision are6
8& The Tariff and 3ustoms 3ode which
authorizes the /resident, in the interest of national
economy, general welfare andDor national security, to, inter
alia, prohibit the importation of any commodity. 2ection +98
thereof, reads6
2ec. +98. :lexible 3lause. 7
a. n the interest of national economy,
general welfare andDor national security, and
sub!ect to the limitations herein prescribed,
the /resident, upon recommendation of the
'ational #conomic and >evelopment
Authority $hereinafter referred to as '#>A&,
is hereby empowered6 . . . $@& to establish
import "uota or to ban imports of any
commodity, as may be necessary; . . .
/rovided, That upon periodic investigations
by the Tariff 3ommission and
3
recommendation of the '#>A, the /resident
may cause a gradual reduction of protection
levels granted in 2ection )ne hundred and
four of this 3ode, including those
subse"uently granted pursuant to this
section. $#mphasis supplied&
6. LIMITATIONS ON THE PRESIDENT9S DELEGATED LEGISLATIVE
POWER TO IMPOSE TARIFFS AND IMPOSTS
/hilcemcor, an association of domestic cement manufacturers filed
with the >T a petition, see%ing the imposition of safeguard measures on
imported gray /ortland cement, in accordance with <epublic Act 'o. ..99,
the 2afeguard *easures Act $"2*A"&. The case was referred to the Tariff
3ommission which subse"uently issued a negative finding. >T promulgated
its Decision with an expressed disagreement with the conclusions of the
Tariff 3ommission, but at the same time, ultimately denying /hilcemcorEs
application for safeguard measures. /hilcemcor appealed the said decision
with the 3ourt of Appeals which partially granted the petition. The 3A held
that the >T 2ecretary was not bound by the factual findings of the Tariff
3ommission since such findings are merely recommendatory and they fall
within the ambit of the 2ecretaryEs discretionary review. ?ased on the 3AFs
decision, >T reversed itself and issued another Decision imposing
safeguard measures on the importation of /ortland cement.
The 2upreme 3ourt ruled otherwise and accordingly set
aside the 3A and >TFs decision. t held that 2ection - of the 2*A, which
re"uires that there should first be a positive final determination of the Tariff
Commission before the >T can impose safeguard measures, is restriction
on the executive power to impose safeguard measures. 42ection - plainly
evinces legislative intent to restrict the >T 2ecretaryEs power to impose a
general safeguard measure by preconditioning such imposition on a positive
determination by the Tariff 3ommission. 2uch legislative intent should be
given full force and effect, as the executive power to impose definitive
safeguard measures is but a delegated power 7 the power of taxation, by
nature and by command of the fundamental law, being a preserve of the
legislature. 2ection @.$@&, Article A of the 80., 3onstitution confirms the
delegation of legislative power, yet ensures that the prerogative of 3ongress
to impose limitations and restrictions on the executive exercise of this
power. Sout!ern Cross Cement Cor$oration vs. P!ili$$ine Cement
3anufaturers Cor$oration" =.<. 'o. 8-.-+9, Guly ., @99+, +B+ 23<A C-.
xxx The 2*A provides an exceptional instance wherein it is the >T
or Agriculture 2ecretary who is tas%ed by 3ongress, in their capacities as
alter egos of the /resident, to impose such measures. 3ertainly, the >T
2ecretary has no inherent power, even as alter ego of the /resident, to levy
tariffs and imports.
3oncurrently, the tas%ing of the Tariff 3ommission under the 2*A
should be li%ewise construed within the same context as part and parcel of
the legislative delegation of its inherent power to impose tariffs and imposts
to the executive branch, sub!ect to limitations and restrictions. n that regard,
both the Tariff 3ommission and the >T 2ecretary may be regarded as
agents of 3ongress within their limited respective spheres, as ordained in
the 2*A, in the implementation of the said law which significantly draws its
strength from the plenary legislative power of taxation. Indeed, even the
President may be considered as an agent of Congress for the purpose of
imposing safeguard measures. It is Congress, not the President, which
possesses inherent powers to impose tariffs and imposts. Without
legislative authoriation through statute, the President has no power,
authority or right to impose such safeguard measures because taxation is
inherently legislative, not executive.
When Congress tas!s the President or his"her alter egos to impose
safeguard measures under the delineated conditions, the President or the
alter egos may be properly deemed as agents of Congress to perform an
act that inherently belongs as a matter of right to the legislature. t is basic
agency law that the agent may not act beyond the specifically delegated
powers or disregard the restrictions imposed by the principal. Sout!ern
Cross Cement Cor$oration vs. Cement 3anufaturers Assoiation of t!e
P!ili$$ines" =.<. 'o. 8-.-+9, Resolution dated August B, @99-, +C- 23<A
-B@.
'. EXTENT OF THE POWER OF THE PRESIDENT TO FIX TARIFF
RATES
4
The /resident 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 /resident which imposes additional duty of
01 ad valorem and special duty to crude oil and other imported oil products,
the 2upreme 3ourt held that6
4There is thus explicit constitutional permission to
3ongress to authorize the /resident "sub!ect to such
limitations and restrictions as H3ongressI may impose" to fix
"within specific limits" "tariff rates . . . and other duties or
imposts . . . ."
The relevant congressional statute is the Tariff and
3ustoms 3ode of the /hilippines, and 2ections 89+ and
+98, the pertinent provisions thereof. These are the
provisions which the /resident explicitly invo%ed in
promulgating #xecutive )rders 'os. +,- and +,..
The 3ourt was ')T persuaded by the argument that the /resident is
authorized to act under the Tariff and 3ustoms 3ode 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 2ection 89+ or of +98 of the Tariff and 3ustoms 3ode
that suggest such a sharp and absolute limitation of authority. xxx The 3ourt
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 2ection +98 of the Tariff and 3ustoms 3ode. Garia vs.
E)eutive Seretar%" su$ra.
. E:UAL PROTECTION CLAUSE; UNIFORMITY AND
E:UITABILITY IN TAXATION
<A 0BB, was declared constitutional, not violative of the
constitutional limitations on e"ual protection clause and uniformity in
taxation. The e"ual protection clause under the 3onstitution means that "no
person or class of persons shall be deprived of the same protection of laws
which is en!oyed by other persons or other classes in the same place and in
li%e circumstances." The power of the 2tate to ma%e reasonable and natural
classifications for the purposes of taxation has long been established. xxx
The e"ual protection clause does not re"uire the universal application of the
laws on all persons or things without distinction. This might in fact
sometimes result in une"ual protection. (hat the clause re"uires is e"uality
among e"uals as determined according to a valid classification. ?y
classification is meant the grouping of persons or things similar to each
other in certain particulars and different from all others in these same
particulars.
Jniformity in taxation means that all taxable articles or %inds of
property of the same class shall be taxed at the same rate. >ifferent articles
may be taxed at different amounts provided that the rate is uniform on the
same class everywhere with all people at all times. A&a4a'a Guro Part%
List vs. Ermita" su$ra.
*eanwhile, the 2upreme 3ourt upheld the constitutionality of
<epublic Act $<A& 0BB- $Attrition Act of @99-& with the exception of 2ection
8@ of the said law. The classification and treatment accorded to the ?< and
the ?)3 under <A 0BB- fully satisfy the demands of e"ual protection.
2ince the sub!ect of the law is the revenue-generation capability and
collection of the ?< and the ?)3, the incentives andDor sanctions provided
in the law should logically pertain to the said agencies. *oreover, the law
concerns only the ?< and the ?)3 because they have the common distinct
primary function of generating revenues for the national government through
the collection of taxes, customs duties, fees and charges. xxx They
principally perform the special function of being the instrumentalities through
which the 2tate exercises one of its great inherent functions 7 taxation.
ndubitably, such substantial distinction is germane and intimately related to
the purpose of the law. A&a4a'a Guro Part% List vs. Purisima" G.R. No.
166'1!" A$;$73 1*" ())" !6( SCRA (!1.
+. REVENUE OR TARIFF BILLS SHALL ORIGINATE EXCLUSIVELY
IN THE HOUSE OF REPRESENTATIVES
Article A, 2ection @+ of the 80., 3onstitution provides that all appropriation,
revenue or tariff bills, bills authorizing increase of the public debt, bills of
local application, and private bills shall originate exclusively in the ;ouse of
<epresentatives, but the 2enate may propose or concur with amendments.
5
<epublic Act 'o. ,,8C was held constitutional notwithstanding the
bill from which it originated underwent extensive changes in the 2enate. t is
not the law 7 but the revenue bill 7 which is re"uired by the 3onstitution to
"originate exclusively" in the ;ouse of <epresentatives. A bill originating in
the ;ouse may undergo such extensive changes in the 2enate that the
result may be a rewriting of the whole. Tolentino vs. Seretar% of Finane"
G.R. No7. 11!*!!" 11!!(!" 11!!*3" 11!!**" 11!'!*" 11!'1" 11!!("
11!'3" 11!+31" A$;$73 (!" 1++*" (3! SCRA 63).
n the exercise of this power, the 2enate may propose an entirely
new bill as a substitute measure. xxx because revenue bills are re"uired to
originate exclusively in the ;ouse of <epresentatives, the 2enate cannot
enact revenue measures of its own without such bills. After a revenue bill is
passed and sent over to it by the ;ouse, however, the 2enate certainly can
pass its own version on the same sub!ect matter. Tolentino vs. Seretar% of
Finane" su$ra. R27o%$3.o< =/32= O03o52- 3)" 1++!" (*+ SCRA 6(.
PART II. TARIFF AND C5STO3S D5TIES
A. MEANING AND PURPOSE FOR ITS IMPOSITION
1). CUSTOMS DUTIES
"3ustoms duties" is "the name given to taxes on the importation and
exportation of commodities, the tariff or tax assessed upon merchandise
imported from, or exported to, a foreign country." The levying of customs
duties on imported goods may have in some measure the effect of
protecting local industries 7 where such local industries actually exist and
are producing comparable goods. 2imultaneously, however, the very same
customs duties inevitably have the effect of producing governmental
revenues. 3ustoms duties li%e internal revenue taxes are rarely, if ever,
designed to achieve one policy ob!ective only. *ost commonly, customs
duties, which constitute taxes in the sense of exactions the proceeds of
which become public funds 7 have either or both the generation of
revenue and the regulation of economic or social activity as their moving
purposes and fre"uently, it is very difficult to say which, in a particular
instance, is the dominant or principal ob!ective. Garia vs. E)eutive
Seretar%" su$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
/hilippines, shall be sub!ect to duty upon each importation, even though
previously exported form the /hilippines, except as otherwise specifically
provided for in this 3ode or in other laws.
SEC. 1)1. PROHIBITED IMPORTATIONS
8. :irearms and explosives
@. 2ubversiveDseditious materials
B. )bsceneDimmoral articles
+. Abortive articlesDdrugsDsubstances
-. =ambling apparatusDdevices
C. 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
0. Articles which are habit-forming e.g. mari!uana, coca
leaves, etc.
89. )pium pipes and parts
88. )ther prohibited importations
SEC. 1)!. CONDITIONALLY6FREE IMPORTATIONS
8. A"uatic products gathered by vessels of /hilippine registry
@. #"uipment for use in the salvage of vessels or aircrafts
upon posting of bond
6
B. 3ost of repairs in foreign countries upon /hilippine vessels
or aircraft;
+. Articles for repair upon posting of bond
-. *edals, badges, or those received or accepted as honorary
distinction
C. /ersonal and household effects belonging to residents of
the /hilippines returning from abroad
,. (earing apparel, articles of personal adornment and similar
effects of travelers, or tourists upon posting of bond
.. /ersonal and household effects and vehicles of foreign
consultants and experts hired by the government upon posting
of bond
0. /rofessional instruments and implements of )verseas
:ilipinos who come to settle in the /hilippines
89. Articles used exclusively for public entertainment and for
display in public expositions upon posting of bond
88. Articles for ma%ing or recording motion picture films in the
/hilippines upon posting of bond
8@. mportations for the official use of foreign embassies
8B. >onated articles
8+. 3ontainers for re-export upon posting of bond
8-. 2upplies of vessel or aircraft
8C. 2alvaged articles
8,. 3offins or urns except vehicles of the deceased person
8.. 2amplesDmodels upon posting of bond
80. Animals except race horses for scientific, experimental,
national defense, etc purposes
@9. ?oo%s for scientific, philosophical, etc purposes
@8. Articles previously exported from the /hilippines
@@. Aircraft, e"uipment, spare parts for the use of airlines with
congressional franchise
@B. *achineries and e"uipment for use of mines
@+. 2pare parts of vessel for use as replacements or
emergency repair
@-. Articles exported from the /hilippines for repair and
subse"uently reimported
@C. Trailer chassis upon posting of bond
11. DOCTRINE OF CLASSIFICATION BY USE
/arts of machines, apparatus of appliances which are suitable for
use solely or principally with a particular %ind of machine or with a number of
machines falling within a specific heading, as a rule, are to be classified with
the machines in the same heading $2ee *ontano A. Te!am, 3ommentaries
on the <evised Tariff and 3ustoms 3ode of the /hilippines, p. 88+9, Aol. ,
80.+ <evised #dition&. There being a clear showing that the sub!ect
imported flashers are to be used solely and principally to signal or indicate a
right or left hand turn in front and at the rear of motor vehicles, they should
be classified under Tariff ;eading 'o. .-.90 as electrical lighting and
signalling e"uipment. The 2upreme 3ourt citing #a Compa$a %eneral de
Tobacos de &ilipinas v. 'nited (tates, . /hil. +B., it ruled6
"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 $;artranft v.
Kangfeld, 8@- J.2., 8@.&.
Commissioner of Customs vs. Cam$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 provides6
.6/ 7 Transation value L the price actually
paid or payable for the goods when sold for
export to the /hilippines ad!usted by adding
7
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 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 Transation value of I'ential 1oo's. L
the transaction value of identical goods sold for
export to the /hilippines 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 Transation value of Similar 1oo's L the
transaction value of similar goods sold for
export to the /hilippines and exported at or
about the same time as the goods being
valued. "2imilar 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'utive value L the unit price at which
the imported goods or identical or similar
imported goods are sold in the /hilippines, in
the same condition as when imported sub!ect
to deductions of commissions; costs of
transport and insurance and associated costs
incurred within the /hilippines; costs and
charges referred to in subsection $A& $B&, $+&
and $-&; and the customs duties and other
national taxes payable in the /hilippines by
reason of the importation or sale of the goods.
.9/ 7 Com$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
/hilippines; the freight, insurance fees and
other transportation expenses for the
importation of the goods; and the cost of
containers and pac%ing.
.:/ 7 Fall&a4 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
/hilippines.
5. S,20.?.0 @
S20. ()(" TCCP substantially provides6
$8& 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.
8
$@& 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
$B& 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.
$-& (hen a single pac%age contains imported
articles dutiable according to different
weights, or to weight and value, the
common exterior receptacles shall be
prorated and the different proportions
thereof treated in accordance with the
provisions of this 3ode as to the dutiability
or non-dutiability of such pac%ing.
(. SPECIAL DUTIES IN ADDITION TO THE REGULAR DUTIES
SECTIONS 3)163)*" TCCP substantially provides6
SEC. 8<6. Anti=Dum$in1 Dut% L (henever
any article of commerce imported into the
/hilippines 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 /hilippines 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 3ommission the
countervailing duty shall be imposed which is
e"ual to the ascertained amount of the subsidy.
$As amended by <A .,-8&
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
9
have 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<,. Disriminator% Dut% - The /resident
may impose new or additional duties in an
amount not exceeding one hundred $899& per
cent ad valorem upon articles wholly or in part
the growth or product of, or imported in a
vessel of, any foreign country whenever he
shall find that such country imposes
unreasonable charge and discriminates against
the commerce of the /hilippines.
PART III. I3PORTATION IN GENERAL
A. ENTRY OF ARTICLES THROUGH CUSTOMHOUSE
(SECTIONS 1()1" 1()( 8 13)(" TCCP)
Setion 6*<6. Artile to Be Im$orte' Onl%
T!rou1! Custom!ouse. 7 All articles imported
into the /hilippines whether sub!ect to duty or
not shall be entered through a customhouse at
a port of entry.
Se. 6*<*. ;!en Im$ortation Be1ins an'
Deeme' Terminate'. 7 mportation begins
when the carrying vessel or aircraft enters the
!urisdiction of the /hilippines with intention to
unlade therein. mportation is deemed
terminated upon payment of the duties, taxes
and other charges due upon the articles, or
secured to be paid, at a port of entry and the
legal permit for withdrawal shall have been
granted, or in case said articles are free of
duties, taxes and other charges, until they have
legally left the !urisdiction of the customs.
Se. 68<*. Im$ort Entries. 7 All imported
articles, except importations admitted free of
duty under 2ubsection "%", 2ection one hundred
and five of this 3ode, shall be sub!ect to a
formal or informal entry. Articles of a
commercial nature intended for sale, barter or
hire, the dutiable value of which is Two
thousand pesos $/@,999.99& 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
3ommissioner may, upon instruction of the
2ecretary 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 for6
$a& /lacing the article in customs bonded
warehouse;
$b& 3onstructive warehousing and immediate
transportation to other port of the /hilippines
upon proper examination and appraisal; or
$c& 3onstructive warehousing and immediate
exportation. mport entries under irrevocable
domestic letter of credit, ban% guarantee or
10
bond shall be sub!ect to the provisions of Title
A, ?oo% of this 3ode.
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' Effets of . 7
An imported article is deemed abandoned under
any of the following circumstances6
$a& (hen the owner, importer or consignee of the
imported article expressly signifies in writing to the
3ollector of 3ustoms his intentions to abandon; or
$b& (hen the owner, importer, consignee or
interested party after due notice, fails to file an
entry within thirty $B9& 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 $8-& days which shall not li%ewise be
extendible, from the date of posting of the notice to
claim such importation.
Any person who abandons an article or who fails to
claim his importation as provided for in the
preceding paragraph shall be deemed to have
renounced all his interests and property rights
therein.
Se. 6-<*. A&an'onment of Im$orte' Artiles. 7
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 3ode.
'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 ?ureau of 3ustoms
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 3ollector within twenty-
four $@+& hours from the time the article is deemed
abandoned, shall be punished with the penalties
prescribed in /aragraph 8, 2ection BC9+ of this
3ode.
1(. WHEN IMPORTATION BEGINS AND ENDS
2ection 8@9@ of the Tariff and 3ustoms 3ode provides that
importation begins when the carrying vessel or aircraft enters the !urisdiction
of the /hilippines 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 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$$eals" G.R. No. +*(6("
M/& 31" 1++1" 1+' SCRA *( 0.3.<; Peo$le vs. Court of First Instane of
Ri?al" et." et al." 1)1 SCRA 6.
11
mportation ta%es place when merchandise is brought into the
customs territory of the /hilippines with the intention of unloading the same
at port. An exception to this rule is transit cargo entered for immediate
exportation under 2ection @89B of the T33/. xxx :or an entry for immediate
exportation to be allowed under this provision, the following must concur6
$a& there is a clear intent to export the article as shown in the
bill of lading, invoice, cargo manifest or other satisfactory
evidence;
$b& the 3ollector must designate the vessel or aircraft wherein
the articles are laden as a constructive warehouse to
facilitate the direct transfer of the articles to the exporting
vessel or aircraft;
$c& the imported articles are directly transferred from the vessel
or aircraft designated as a constructive warehouse to the
exporting vessel or aircraft and
$d& an irrevocable domestic letter of credit, ban% guaranty or
bond in an amount e"ual to the ascertained duties, taxes
and other charges is submitted to the 3ollector $unless it
appears in the bill of lading, invoice, manifest or satisfactory
evidence that the articles are destined for transshipment&.
'one of the re"uisites above was present in this case. (hile
respondents insist that the shipment was sent to the /hilippines only for
temporary storage and warehousing, the bill of lading clearly denominated
"2outh *anila, /hilippines" as the port of discharge. This not only negated
any intent to export but also contradicted K::3Es representation. *oreover,
the shipment was unloaded from the carrying vessel for the purpose of
storing the same at K::3Es warehouse. mportation therefore too% place
and the only logical conclusion is that the refined sugar was truly intended
for domestic consumption. Commissioner of Customs vs. Court of Ta)
A$$eals" G.R. No7. 1'1!1661'" Resolution =/32= F25-$/-& 13" ())+" !'+
SCRA (+.
(here the transfer of the shipment was made by virtue of the ?oat
'otes issued by the 3ustoms nspector giving specific instruction that the
shipment should be 4under continuous guarding5 by the 3ustoms guard
4until released by the 3ustoms authorities,5 the physical and legal custody
over the shipment remained with the 3ustoms authorities. Acceptance by
the ?ureau of 3ustoms of the importerFs payment of the customs duties and
taxes on the shipment legally terminates the importation of goods or articles.
Commissioner of Customs vs. 3il#au4ee In'ustries Cor$oration" G.R. No.
13!(!3" D202452- +" ())*" **! SCRA 6)*.
(hen the Aessel 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 ?)3. Seretar% of Finane vs.
Oro 3aura S!i$$in1 Lines" G.R. No. 1!6+*6" #$%& 1!" ())+" !+3 SCRA 1*.
13. MEANING OF AENTRYB IN CUSTOMS LAW; FILING OF BOTH
IED AND IEIRD ARE NECESSARY TO CONSTITUTE ENTRY
UNDER TCCP; WHAT CONSTITUTES ABANDONMENT
The term "entry" in customs law has a triple meaning. t means $8&
the documents filed at the customs house; $@& the submission and
acceptance of the documents and $B& the procedure of passing goods
through the customs house. The operative act that constitutes "entry" of the
imported articles at the port of entry is the filing and acceptance of the
"specified entry form" together with the other documents re"uired by law
and regulations. ?oth the Import )ntry Declaration *I)D+ and Import )ntry
and Internal ,evenue Declaration *I)I,D+ should be filed within a non-
extendible period of thirty $B9& days from the date of discharge of the last
pac%age from the vessel or aircraft.
n delaying the filing of #<>s to ta%e advantage of the reduction in
import duties on petroleum products from 891 to B1 under <epublic Act
$<A& 'o. .8.9, which too% effect on April 8C, 800C, the importer petroleum
company is deemed to have abandoned the imported products, resulting in
forfeiture; the abandoned articles shall ipso facto be deemed the property of
the government. C!evron P!ili$$ines" In. vs. Commissioner of t!e Bureau
of Customs, =.<. 'o. 8,.,-0, August 88, @99., -C8 23<A ,89.
PART I+. TAX RE3EDIES
12
I. RE3EDIES A+AILABLE TO T2E GO+ERN3ENT
A. SEARCH" SEICURE AND ARREST
Se. **<8. Persons 2avin1 Polie Aut!orit%.
7 :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
laws6
a. )fficials of the ?ureau of 3ustoms, district
collectors, deputy collectors, police officers,
agents, inspectors and guards of the ?ureau of
3ustoms;
b. )fficers of the /hilippine 'avy and other
members of the Armed :orces of the
/hilippines and national law enforcement
agencies when authorized by the
3ommissioner;
c. )fficials of the ?ureau of nternal <evenue
on all cases falling within the regular
performance of their duties, when payment of
internal revenue taxes are involved;
d. )fficers generally empowered by law to
effect arrests and execute processes of courts,
when acting under direction of the 3ollector.
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
2ecretary of :inance, shall, sub!ect to the
approval of the /resident of the /hilippines,
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 Polie Offier to Enter
Inlosure. 7 :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
/etitioners were members of the /hilippine 'ational /olice $/'/&-
3riminal nvestigation and >etection =roup $3>=&. /etitioners, upon the
order of /olice 2enior 2uperintendent ?oac, but without the authority from
and coordination with the ?ureau of 3ustoms $?)3&, flagged down three
container vans consigned to Ma%iage 2urplus. The 2andiganbayan found
the petitioners guilty beyond reasonable doubt for violation of 2ection @@9B
of the Tariff and 3ustoms 3ode.
13
The 2upreme 3ourt reversed the ruling of the 2andiganbayan. The
act of flagging down the vehicles is not among those proscribed by 2ec.
@@9B of the Tariff and 3ustoms 3ode. *ere flagging down of the container
vans is not punishable under the said law. 3oordination between ?)3 and
/'/ is emphasized in the laws. 2hould the /'/ suspect anything, it should
coordinate with the ?)3 and obtain the written authority from the 3ollector
of 3ustoms in order to conduct searches, seizures, or arrests. Boa vs.
Peo$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
/etitioner was arrested and charged of smuggling of blue-seal
cigarettes. ;e assailed the validity of his arrest contending that the Arrest
2earch and 2eizure )rder $A22)& 'o. +,-+ was invalid. Thus, he asserted,
any evidence obtained pursuant thereto is inadmissible in evidence. ;e
maintained his lac% of %nowledge of the illegal nature of goods.
The 2upreme 3ourt affirmed the decision of the lower court which
found the /etitioner guilty as charged. (arrantless search and seizure in
customs search can be made, without violation of the constitutional
provision, as it is one of the exceptions to the rule. 4xxx the search and
seizure of goods, suspected to have been introduced into the country in
violation of customs laws, is one of the seven doctrinally accepted
exceptions to the constitutional provision. xxx Jnder the Tariff and 3ustoms
3ode, a search, seizure and arrest may be made even without a warrant for
purposes of enforcing customs and tariff laws.
/ersons found to be in possession of smuggled items are presumed
to be engaged in smuggling, pursuant to the last paragraph of 2ection BC98
of the Tariff and 3ustoms 3ode; claim of good faith and lac% of %nowledge
of the unlawful source of the cigarettes is not enough to rebut the
presumption. Rieta vs. Peo$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 /hilippine Air :orce $/A:& were
tas%ed to conduct a surveillance operation to verify reports of drug traffic%ing
and smuggling by certain /AK personnel when they apprehended petitioner
for alleged smuggling of !ewelries. /etitioner contented that the warrantless
search and seizure was illegal. The 2upreme 3ourt denied the petition. The
search made by /A: team while petitioner was on board a moving /AK
aircraft tow truc% within the vicinity of the airport was in the nature of a
customs search. /A: properly effected the search and seizure without a
search warrant since it exercised police authority under the customs law.
Salva'or vs. Peo$le" G.R. No. 1*6')6" #$%& 1!" ())!" *63 SCRA *+.
B. ADMINISTRATIVE PROCEEDINGS
Se. *98*. Con'itions Affetin1 Forfeiture of
Artile. 7 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. Enforement of Lien" A'ministrative
Fines" an' Forfeitures. 7 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
/arts @ and B, Title A, ?oo% , of this 3ode. :or
14
the purpose of enforcing the lien for customs
duties, fees and other charges on any seized or
confiscated article in the custody of the ?ureau of
nternal <evenue, the ?ureau of nternal <evenue
is hereby authorized to impose and enforce the
said lien.
Se. *98,. Sei?ure of +essel or Airraft for
Delin@uen% of O#ner or Offier. 7 (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 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 4JKJ (A5 and its cargoes were declared forfeited
by the 3ommissioner of 3ustoms whose Decision was affirmed by both the
3TA and 3A. 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 2upreme 3ourt 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.5
4xxx 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 indicted importer or possessor and both %inds of penalties may be
imposed. xxx the decision of the 3ollector of 3ustoms, as in other seizure
proceedings, concerns the res rather than the persona.5 Fee'er
International Line" Pte." Lt'. vs. Court of A$$eals" su$ra. 0.3.<; Peo$le vs.
Court of First Instane of Ri?al" et." et al." 1)1 SCRA 6.
xxx forfeiture retroacts to the date of the commission of the offense;
Thus, when the vessel and its cargo are ordered forfeited, the effect will
retroact to the moment the vessel entered /hilippine waters. Commissioner
of Customs vs. Court of A$$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
3TA modified the Decision of petitioner 3ommissioner of 3ustoms
by ordering only the payment of a fine in lieu of the forfeiture of the vessel
*D? "*aria Aictoria-/" used in the illegal importation. The 3TA anchored its
Decision on the ownerFs lac% of %nowledge of the vesselFs involvement in
illegal importation. The 2upreme 3ourt set aside the assailed Decision and
held that 4forfeiture proceedings are in the nature of proceedings in rem
$Aierneza vs. 3ommissioner of 3ustoms, @+ 23<A B0+& and are directed
against the res. The fact that private respondent has allegedly no actual
%nowledge that *D? "*aria Aictoria-/" 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. /rivate
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.5 Commissioner of Customs vs. Court of Ta) A$$eals" No. L6
31'33" S2,32452- ()" 1+!" 13 SCRA !1.
15
At bears stressing that the forfeiture of seized goods in the ?ureau of
3ustoms is a proceeding against the goods and not against the owner. t is
in the nature of a proceeding in rem, i.e., directed against the res or
imported articles and entails a determination of the legality of their
importation. n this proceeding, it is, in legal contemplation, the property
itself which commits the violation and is treated as the offender, without
reference whatsoever to the character or conduct of the owner. Asian
Terminals" In. vs. Bautista=Riafort" su$ra.
1+. ENFORCEMENT OF A TAX LIEN
Aessel *DA 4;A<J'AF with declared dutiable value of /C,8,8,90@
and estimated customs duty of /8,@0C,,89 was allowed to be released tax
and duty-free to =lory 2hipping Kines $=2K& upon posting of a bond and
conditioned on re-exportation upon termination of --year bareboat charter.
After the expiration of the bond, =2K failed to pay the duties and taxes. t
instead sold the vessel to )ro *aura 2hipping Kines who applied for
Authority to mport, based on ac"uisition cost of /8,899,999 with assesses
duties and taxes of /8+0,0.0. At this point, bad faith already intervened.
)ro *aura 2hipping Kines !oined =2K in attempt to evade payment of
customs duties N charges demanded by *actan 3ollector by pushing
through with purchase without notification to *actan 3ollector. *actan
3ollector subse"uently instituted seizure proceedings. Jndervaluation
resulting in decrease of .91 $more than B91& pursuant to 2ection @-9B
T33/. (ithout the renewal of the vesselEs re-export bond, the obligation to
pay customs duties, taxes and other charges on the importation in the
amount of /8,@0C,,89.99 arose and attached to the vessel. The obligation is
a tax lien that attaches to imported goods, regardless of ownership. )ro
*aura was ordered to pay the duties and taxes without considering
depreciation in determining dutiable value. Seretar% of Finane vs. Oro
3aura S!i$$in1 Lines" su$ra.
C. COMPROMISE AGREEMENT
Se. *86:. Aut!orit% of Commissioner to
ma4e Com$romise. L 2ub!ect to the approval
of the 2ecretary of :inance, the 3ommissioner
of 3ustoms may compromise any case arising
under this 3ode or other laws or part of laws
enforced by the ?ureau of 3ustoms involving
the imposition of fines, surcharges and
forfeitures unless otherwise specified by law.
(). WHO CAN COMPROMISE TAX CASES; COMPROMISE
ENTERED INTO BY DEPUTY COMMISSIONER WITHOUT
PROPER AUTHORITY IS WITHOUT EFFECT
>eputy 3ommissioner Aalera filed in the <T3 of *anila, for an on behalf
of the ?ureau of 3ustoms a collection case for the collection of
/B,,80-,.-0.99 in unpaid duties and taxes against 2teel Asia
*anufacturing 3orporation $2A*3&. Aalera and 2A*3 entered into a
compromise agreement wherein the latter offered to pay on a staggered
basis through thirty $B9& monthly e"ual installments the /B,,80-,.-0.99
duties and taxes sought to be collected in the civil case. The 2upreme 3ourt
ruled that there is no conflict between 2ection @B8C $-uthority of
Commissioner to ma!e Compromise& and 2ection @+98 $(upervision and
Control over Criminal and Civil Proceedings& of the T33/. 2ection @+98
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 3ommissioner if
filed for the recovery of duties or the enforcement of any fine, penalty or
forfeiture under the 3ode. t does not cover the compromise of such civil or
criminal actions, while 2ection @B8C 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
4an% ase arisin1 un'er t!is o'e or ot!er la#s or $art of la#s enfore' &%
t!e Bureau of Customs involvin1 t!e im$osition of fines" sur!ar1es an'
forfeitures unless ot!er#ise s$eifie' &% la#.5 xxx #.). 'o. 8-C, as
amended by #.). 'o. B., is clear in its re"uirement that in ases involvin1
ta) re'it sams t!e favora&le reommen'ation for a$$roval &% t!e
S$eial Tas4 Fore an' t!e a$$roval &% t!e Presi'ent of t!e Re$u&li are
&ot! re@uire'. The approval by the 3hairmen of the 2pecial Tas% :orce is
still sub!ect to approval of the /resident. /rior presidential approval is the
16
highest form of chec% and balance within the #xecutive branch of
government and cannot be satisfied by mere failure of the /resident to
reverse or reprobate the acts of subordinates. +alera vs. Offie of t!e
Om&u'sman" G.R. No. 16'('" F25-$/-& ('" ())" !*' SCRA *(.
D. #UDICIAL ACTION AGAINST THE TAXPAYER
S20. (*)1. Su$ervision an' Control Over
Criminal an' Civil Proee'in1s. . 3ivil and
criminal actions and proceedings instituted in
behalf of the government under the authority of
this 3ode or other law enforced by the ?ureau
shall be brought in the name of the government
of the /hilippines 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 3ode shall
be filed in court without the approval of the
3ommissioner.
Se. *,<*. Revie# &% Court of Ta) A$$eals. 7
The party aggrieved by the ruling of the
3ommissioner in any matter brought before
him upon protest or by his action or ruling in
any case of seizure may appeal to the 3ourt of
Tax Appeals, in the manner and within the
period prescribed by law and regulations.
Jnless an appeal is made to the 3ourt of Tax
Appeals in the manner and within the period
prescribed by laws and regulations, the action
or ruling of the 3ommissioner shall be final and
conclusive.
(1. COLLECTION OF OUTSTANDING CUSTOMS DUTIES AND
TAXES MAY PROCEED WITHOUT AWAITING THE
RESOLUTION OF PETITION WITH THE CTA
/ilipinas 2hell /etroleum 3orporationFs $2hell& tax debit memos $T>*s&
and tax credit certificates $T33s& were cancelled due to fraud. The
3ommissioner of 3ustoms demanded immediate payment of unpaid
customs duties and taxes. 2hell protested, however, the ?)3 did not act on
the protest. t then filed a petition for review in the 3TA "uestioning the
legality of the cancellation of the T33s. /ending petition, ?)3 filed a
complaint for collection in <T3 *anila. 2hell moved for the dismissal of the
collection case but <T3 denied the motion. The 2upreme 3ourt upheld the
<T3 and ruled that 4(e are not unmindful of petitionerEs pending petition for
review in the 3TA where it is "uestioning the validity of the cancellation of
the T33s. ;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 3TA case turns out to be favorable
to petitioner, the law affords it the ade"uate remedy of see%ing a refund.5
Pili$inas S!ell Petroleum Cor$oration vs. Re$u&li" G.R. No. 161+!3"
M/-01 6" ())" !*' SCRA ')1.
((. GOVERNMENT NEED NOT AWAIT THE RESULT OF THE
CRIMINAL PROCEEDINGS BEFORE IT CAN COLLECT THE
TAXES; INVALID PAYMENT
The ?)3 instituted a 3omplaint for 3ollection of *oney with
>amages against /roton /ilipinas 3orporation $/roton& see%ing the
payment of customs duties and taxes which remain unpaid by reason of
cancellation of the Tax 3redit 3ertificates $T33s& for being spurious. /rior to
the collection case, a criminal case against the officers of /roton was
pending with the 2andiganbayan. /roton 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 2andiganbayan, hence, it is
deemed instituted in the latter, and; the determination of the validity of the
17
T33s was a pre!udicial issue. The 2upreme 3ourt sustained the
governmentFs right to collect unpaid customs duties and taxes, T33s being
found to be fa%e and spurious notwithstanding validation by the >epartment
of :inance. t held6
4The payment of taxes is a duty which the law re"uires to be paid.
2aid 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 T33s cannot be regarded as a pre!udicial
issue that must first be resolved with finality in the 3riminal 3ases filed
before the 2andiganbayan. The =overnment should not and must not await
the result of the criminal proceedings in the 2andiganbayan 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.5 Proton Pili$inas Cor$oration vs. Re$u&li" G.R. No. 16!)('"
O03o52- 16" ())6" !)* SCRA !(.
(3. 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 ?)3 filed a criminal complaint before the >epartment of Gustice
against the officers of *ar% 2ensing /hilippines, nc. $*2/& for unlawful
importation. An nformation was filed with the 3TA after determination of
probable cause. (hile the case was pending, the 2ecretary of Gustice
reversed the 2tate /rosecutorFs <esolution and accordingly directed the
withdrawal of the nformation. 3TA granted the motion to withdraw. ?)3
assailed the 3TAFs resolution. The 2upreme 3ourt dismissed ?)3Fs
petition. t ruled that public prosecutor has control and supervision over the
cases. The participation in the case of a private complainant, li%e ?)3, is
limited to that of a witness, both in the criminal and civil aspect of the case.
Also, the 2upreme 3ourt noticed that ?)3 was not represented by
the )ffice of the 2olicitor =eneral $)2=& in instituting the petition, which
contravenes established doctrine that 4the )2= shall represent the
=overnment of the /hilippines, its agencies and instrumentalities and its
officials and agents in any litigation, proceeding, investigation, or matter
re"uiring the services of lawyers.5 Bureau of Customs vs. Peter S!erman"
et. al." G.R. No. 1+)*'" A,-.% 13" ()11.
?y the 2olicitor =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 Fator%, =<
8++0+@, Gune @., @998
?y the 2ecretary of Gustice, through the 3hief 2tate /rosecutor N
/rovincialD3ity /rosecutors 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'. 7 Jpon ma%ing any seizure, the
3ollector 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 3ollector shall, with the
approval of the 3ommissioner of 3ustoms,
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 case6 Provided,
That such importation shall not be released
under any bond when there is a prima facie
evidence of fraud in the importation of article6
Provided, further, That articles the importation
18
of which is prohibited by law shall not be
released under any circumstance whatsoever6
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. 7 (hen a ruling or decision
of the 3ollector 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
3ollector at the time when payment of the
amount claimed to be due the =overnment is
made, or within fifteen $8-& 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 2ection BB98.
Se. *8<B. Protest E)lusive Reme'% in
Protesta&le Case. 7 n all cases sub!ect to
protest, the interested party who desires to
have the action of the 3ollector reviewed, shall
ma%e a protest, otherwise, the action of the
3ollector 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*. Deision or Ation &% Colletor in
Protest an' Sei?ure Cases. 7 (hen a protest
in proper form is presented in a case where
protest is re"uired, the 3ollector shall issue an
order for hearing within fifteen $8-& days from
receipt of the protest and hear the matter thus
presented. Jpon termination of the hearing, the
3ollector shall render a decision within thirty
$B9& 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 3ollector, 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. 7 The
person aggrieved by the decision or action of the
3ollector in any matter presented upon protest or
by his action in any case of seizure may, within
fifteen $8-& days after notification in writing by the
3ollector of his action or decision, file a written
notice to the 3ollector with a copy furnished to the
3ommissioner of his intention to appeal the
action or decision of the 3ollector to the
3ommissioner. Thereupon the 3ollector shall
forthwith transmit all the records of the
proceedings to the 3ommissioner, who shall
approve, modify or reverse the action or decision
of the 3ollector and ta%e such steps and ma%e
such orders as may be necessary to give effect to
his decision6 Provided, That when an appeal is
filed beyond the period herein prescribed, the
same shall be deemed dismissed.
19
f in any seizure proceedings, the 3ollector
renders a decision adverse to the =overnment,
such decision shall be automatically reviewed by
the 3ommissioner and the records of the case
elevated within five $-& days from the
promulgation of the decision of the 3ollector. The
3ommissioner shall render a decision of the
automatic appeal within thirty $B9& days from
receipt of the records of the case. f the
3ollectorEs decision is reversed by the
3ommissioner, the decision of the 3ommissioner
shall be final and executory. ;owever, if the
3ollectorEs decision is affirmed, or if within thirty
$B9& days from receipt of the records of the case
by the 3ommissioner no decision is rendered or
the decision involves imported articles whose
published value is :ive million pesos
$/-,999,999& or more, such decision shall be
deemed automatically appealed to the 2ecretary
of :inance and the records of the proceedings
shall be elevated within five $-& days from the
promulgation of the decision of the 3ommissioner
or of the 3ollector under appeal, as the case may
be6 /rovided, further, That if the decision of the
3ommissioner or of the 3ollector under appeal,
as the case may be, is affirmed by the 2ecretary
of :inance, or if within thirty $B9& days from
receipt of the records of the proceedings by the
2ecretary of :inance, no decision is rendered, the
decision of the 2ecretary of :inance, or of the
3ommissioner, or of the 3ollector 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 3ollector has been
confirmed in writing by the 3ommissioner of
3ustoms.
(*. 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 3ommissioner of 3ustoms affirmed the decision of the
3ollector of 3ustoms which ordered the forfeiture of the imported refined
sugar for failure of its importer to secure the re"uired import allocation from
the 2ugar <egulatory Administration $2<A&. (hile on appeal to the 3TA, the
importer filed a motion to release cargo for exportation upon filing of a surety
bond. The 3TA granted the motion and ordered the release of the shipment
sub!ect to the filing of a continuing surety bond. The 2upreme 3ourt
reversed the 3TAFs resolution and ruled that 4seized articles may not be
released under bond if there is prima facie evidence of fraud in their
importation. xxx5 2ection @B98 of the Tariff and 3ustoms 3ode of the
/hilippines $T33/& 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 T33s, the
?)3 thru its >eputy 3ommissioner for <evenue 3ollections *onitoring
=roup sent collection letters demanding payment from /ilipinas 2hell
/etroleum 3orporation $2hell& of the amount covered by the cancelled T33s
it paid in 800, and 800.. Three collection cases against 2hell were filed
before <T3 *anila. 2hell then filed with the 3TA a /etition for <eview
"uestioning the ?)3 collection efforts. The parties argue over which act
serves as the decision of the 3ommissioner that, under the law, can be the
sub!ect of an appeal before the 3TA, and from which act the B9-day period
to appeal shall be rec%oned.
20
The 2upreme 3ourt denied 2hellFs petition. The 3TA has no
!urisdiction, the case did not involve a tax protest case, but payment and
collection issues. The decisions of the 3ommissioner which is appealable to
the 3TA involving customs duties specifically refer to his decisions on
administrative tax protest cases in relation to 2ection @+9@ of the T33/.
A tax protest case, under the T33/, involves a protest of the
li"uidation of import entries. A li"uidation is the final computation and
ascertainment by the collector of the duties on imported merchandise,
based on official reports as to the "uantity, character, and value thereof, and
the collectorEs own finding as to the applicable rate of duty; it is a%in to an
assessment of internal revenue taxes under the 'ational nternal <evenue
3ode where the tax liability of the taxpayer is definitely determined.
Pili$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 3ustoms-(oci/t/ %/n/rale de
(urveillance $2=2& mports Aaluation and 3lassification 3ommittee
resulting in higher valuation leading to petitionerFs liability for additional
duties and taxes is protestable. Accordingly, failure to protest the demand of
the 3ollector adopting valuation is fatal. :or failure of petitioner to pay under
protest, the action of the 3ollector to collect additional duties became final
and conclusive. GST P!ili$$ines" In. vs. Commissioner of Customs C Se.
of Finane, 3TA #? 'o. ++0, Gune 8-, @990, 2upreme 3ourt denied with
finality petitionerFs /etition for <eview and *otion for <econsideration in
<esolutions dated )ctober @C, @990 and Ganuary @,, @989. #ntry of
Gudgment dated :ebruary @+, @989.
('. BOC HAS EXCLUSIVE ORIGINAL #URISDICTION ON
SEICURE AND FORFEITURE OF GOODS; THE RULE
THAT THE RTC MUST DEFER TO BOC9S #URIDICTION IS
ABSOLUTE
<T3 of )longapo 3ity issued an )rder rendering 2eaport
>epartment =eneral *anager 3anlas and two other lawyers guilty of
indirect contempt for refusing to honor the T<) issued by the <T3 which
restrained them to interfere on the withdrawal and release of the imported
rice consigned to (<A nternational Trading, nc.
The 2upreme 3ourt declared the )rder void. 4t is well settled that
the 3ollector of 3ustoms 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 3ollector of 3ustoms 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
?)3 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 3ustoms authorities, even if no warrant for seizure or
detention had previously been issued by the 3ollector of 3ustoms in
connection with the seizure and forfeiture proceedings, the ?)3 ac"uires
exclusive !urisdiction over such imported goods for the purpose of enforcing
the customs laws, sub!ect to appeal to the 3ourt of Tax Appeals whose
decisions are appealable to this 3ourt. 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 <T3 of
/araOa"ue 3ity for replevin with prayer for the issuance of a writ of
preliminary and mandatory in!unction and damages. The <T3 granted the
application for a writ of replevin. n a subse"uent order issued by the <T3, 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.
21
The 2upreme 3ourt sustained the dismissal. t held that <T3s are
devoid of any competence to pass upon the validity or regularity of seizure
and forfeiture proceedings conducted by the ?ureau of 3ustoms and to
en!oin or otherwise interfere with these proceedings. t is the 3ollector of
3ustoms, 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 <T3s are precluded from assuming
cognizance over such matters even through petitions of certiorari,
prohibition or mandamus. xxx actions of the 3ollector of 3ustoms are
appealable to the 3ommissioner of 3ustoms, whose decision, in turn, is
sub!ect to the exclusive appellate !urisdiction of the 3ourt of Tax Appeals
xxx Asian Terminals" In. vs. Bautista=Riafort" 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!" *(.
<T3 has no !urisdiction to entertain a replevin suit involving an article
sub!ect of customs seizure and forfeiture proceeding. ?)3 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. Pone Enrile vs. +inu%a" No. L6(+)*3" #/<$/-& 3)" 1+'1" 3'
SCRA 31.
(+. DETERMINATION OF PROBABLE CAUSE IN SEICURE
CASE IS NOT FOR THE RTC TO DETERMINE
A (arrant of 2eizure and >etention of @-,999 bags of rice was issued by
the >istrict 3ollector of 3ustoms of 3ebu. The consignee of the sac%s of rice
and his buyer filed a complaint for in!unction in the <T3 of 3ebu 3ity. The
<T3 ruled that the (arrant of 2eizure and >etention issued by the ?ureau
of 3ustoms 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. 3A affirmed the <T3. 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 3ustoms !urisdiction through seizureDforfeiture proceedings."
The 2upreme 3ourt reversed both the <T3 and 3A. t was held that 4the
"uestion of whether probable cause exists for the seizure of the sub!ect
sac%s of rice is not for the <egional Trial 3ourt 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 ?ureau of 3ustoms
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 3ollector may appeal to
the 3ommissioner of 3ustoms, whose decision is appealable to the 3ourt of
Tax Appeals in the manner and within the period prescribed by law and
regulations. The decision of the 3ourt of Tax Appeals may be elevated to
the 2upreme 3ourt for review. C!ia vs. Atin1 Colletor of Customs" G.R.
No. L6*31)" 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 3ollector of 3ustoms when adverse to the
government shall be automatically reviewed by the 3ommissioner of
3ustoms. The 3ommissioner shall render a decision on the automatic
appeal within thirty $B9& days from receipt of the records of the case. n case
the ?)3 3ommissioner fails to decide on the automatic appeal of the
3ollectorEs >ecision within B9 days from receipt of the records thereof, the
case shall again be deemed automatically appealed to the 2ecretary of
:inance. (S203.o< (313" TCCP)" El Greo S!i$ 3annin1 an' 3ana1ement
22
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 3ollector of 3ustoms initiated Abandonment
/roceedings on overstaying cargoes located at the customs-bonded
warehouse. ?efore 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. /rivate respondent filed a complaint for
damages before the <T3 of /asig 3ity claiming the value of the shipment.
The <T3 ruled ineffective the ?)3Fs declaration of abandonment. The
2upreme 3ourt reversed the decision of the <T3. The resolution of the
issue of abandonment and ownership of the shipment $2ections8.98 N
8.9@ T33& is within the exclusive competence of the >istrict 3ollector of
3ustoms, the 3ommissioner of 3ustoms and within the appellate !urisdiction
of the 3TA. The >istrict 3ollector of 3ustoms 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. <T3 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; NON6LIABILITY 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 ?ureau of
3ustoms 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$$ines" Re$resente' &% t!e Commissioner of
Customs v. 5nime) 3iro=Eletronis .G3B2/" G.R. No. 1663)+61)"
M/-01 +" ())'" !1 SCRA 1+" /7 0.32= .< 312 -202<3 0/72 o? Commissioner
of Customs vs. A1f!a Inor$orate'" G.R. No. 1'*(!" M/-01 (" ()11.
n addition to the value of the shipment lost while in the
custody of ?)3, respondent J'*#P was awarded legal interest of C1 p.a.
from 2eptember -, @998 $date of !udicial demand by filing the petition for
revival of the Gune 8-, 800@& until the finality of the *arch 0, @99, 23
decision. Thereafter, the rate of legal interest shall be 8@1 p.a. until the
?)3 fully pays its obligation. Re$u&li of t!e P!ili$$ines" Re$resente' &%
t!e Commissioner of Customs v. 5nime) 3iro=Eletronis .G3B2/" G.R.
No. 1663)+61)" Resolution =/32= D202452- 1)" ())'.
C. CLAIM FOR REFUND
Se. 6E<-. Claim for Refun' of Duties an'
Ta)es an' 3o'e of Pa%ment. 7 All claims for
refund of duties shall be made in writing and
forwarded to the 3ollector to whom such duties
are paid, who upon receipt of such claim shall
verify the same by the records of his )ffice,
and if found to be correct and in accordance
with law, shall certify the same to the
3ommissioner with his recommendation
together with all necessary papers and
documents. Jpon receipt by the 3ommissioner
of such certified claim he shall cause the same
to be paid if found correct.
f as a result of the refund of customs duties
there would necessarily result a corresponding
refund of internal revenue taxes on the same
importation, the 3ollector shall li%ewise certify
the same to the 3ommissioner who shall cause
the said taxes to be paid, refunded, or tax
credited in favor of the importer, with advice to
the 3ommissioner of nternal <evenue.
23
Se. *8<-. Protest an' Pa%ment u$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 2ection 8,9. of the Tariff and 3ustoms 3ode which provides
that in all claims for refund of customs duties, the 3ollector 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 3ollector shall certify the same to the
3ommissioner 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, 2ections @B9. and @B90 finds application in all cases
sub2ect to protest, the claim for refund of customs duties shall be preceded
by a protest before the 3ollector of 3ustoms either at the time when
payment of the amount claimed to be due the government is made or within
fifteen $8-& days thereafter a written protest shall be made. n con!unction
with this right of the claimant is the duty of the 3ollector of 3ustoms to hear
and decide such protest within thirty $B9& days upon termination of the
hearing. $2ection @B8@, T33/&
Appeal to 3TA on protest cases was allowed even without decision
of the 3ollector as well as 3ommissioner of 3ustoms due to inaction by
3ollector 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 !'!.
3TA ac"uires !urisdiction in a refund of customs duties even in the
absence of the decision of the 3ommissioner of 3ustoms; tax officialFs
silence is a denial of its claim; the two $@&-year prescriptive period under
2ection @B9 $now 2ection @@0& of the '<3 was applied. Commissioner of
Customs an' Commissioner of Internal Revenue vs. T!e 2onora&le Court
of Ta) A$$eals an' Planters Pro'uts" In." G.R. No. (61" M/-01 16"
1++.
A duly registered enterprise under the #/QA $now /#QA& Kaw was
allowed refund of erroneously or mista%enly paid customs duties applying
the provision of the 3ivil 3ode on solutio indebiti $within C years from date of
payment&. Commissioner of Customs vs. P!ili$$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 ?)3
is fatal to a claim for tax refund of advance deposit for customs duties and
taxes arising from unused Ketter of 3redit $K3s& for the supposed
importation which did not materialize. 3ustoms Administrative )rder $3A)&
'o. --0@, period to file claim for refund. Gran'te@ In'ustrial Steel
Pro'uts" In. !erein re$resente' &% its Presi'ent" A&elar'o Gon?ale? vs.
2on. Seretar% of t!e De$artment of Finane, 3TA 3ase 'o. .@98.
PART IV. CTA9S #URISDICTION OVER CUSTOM CASES
A. CTA9S #URISDICTION @SPECIAL AND LIMITED
TCCP
S20. (*)1. Su$ervision an' Control Over
Criminal
an' Civil Proee'in1s. 2ee Gudicial
Action
against the taxpayer.
Se. *,<*. Revie# &% Court of Ta) A$$eals.
2ee
Gudicial Action against the taxpayer.
24
AN ACT CREATING THE COURT OF TAX APPEALS" RA 11(! AS
AMENDED BY RA +((
SEC. E. Duris'ition. 7 The 3TA shall
exercise6
$a& #xclusive appellate !urisdiction to
review by appeal, as herein provided6
xxx xxx
xxx
$+& >ecisions of the 3ommissioner of
3ustoms in cases involving liability for
customs duties, fees or other money
charges, seizure, detention or release
of property affected, fines, forfeitures or
other penalties in relation thereto, or
other matters arising under the
3ustoms Kaw or other laws
administered by the ?ureau of
3ustoms;
xxx xxx
xxx
$C& >ecisions of the 2ecretary of :inance on
customs cases elevated to him
automatically for review from decisions of
the 3ommissioner of 3ustoms which are
adverse to the =overnment under 2ec.
@B8- of the Tariff and 3ustoms 3ode;
$,& >ecisions of the 2ecretary of Trade and
ndustry, in the case of nonagricultural
product, commodity or article, and the
2ecretary of Agriculture in the case of
agricultural product, commodity or article,
involving dumping and countervailing
duties under 2ections B98 and B9@,
respectively, of the Tariff and 3ustoms
3ode, and safeguard measures under
<epublic Act no. ..99, where either party
may appeal the decision to impose or not
to impose duties.
xxx xxx
xxx
Se. 66. ;!o 3a% A$$ealF 3o'e of A$$ealF
Effet of A$$eal. 7 Any party adversely
affected by a decision, ruling or inaction of the
3ommissioner of nternal <evenue, the
3ommissioner of 3ustoms, the 2ecretary of
:inance, the 2ecretary of Trade and ndustry or
the 2ecretary of Agriculture or the 3entral
?oard of Assessment Appeals or the <egional
Trial 3ourts may file an appeal with the 3TA
within thirty $B9& days after the receipt of such
decision or ruling or after the expiry of the
period fixed by law for action as referred to in
2ection ,$a&$@& herein.
Appeal shall be made by filing a petition for
review under a procedure analogous to that
provided for under <ule +@ of the 800, <ules of
3ivil /rocedure with the 3TA within thirty $B9&
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 3TA shall hear
the appeal6 xxx xxx xxx
All other cases involving rulings, orders, or
decisions filed with the 3TA as provided for in
2ection , shall be raffled to its >ivisions. A
25
party adversely affected by a ruling, order or
decision of a >ivision of the 3TA may file a
motion for reconsideration or new trial before
the same >ivision of the 3TA within fifteen $8-&
days from notice thereof6 Provided, however,
That in criminal cases, the general rule
applicable in regular 3ourts on matters of
prosecution and appeal shall li%ewise apply.
'o appeal ta%en to the 3TA from the decision
of the 3ommissioner of nternal <evenue or the
3ommissioner of 3ustoms xxx or the 2ecretary
of :inance, the 2ecretary of Trade and ndustry
or the 2ecretary 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 law6 Provided, however,
That when in the opinion of the 3ourt the
collection by the aforementioned government
agencies may !eopardize the interest of the
=overnment andDor the taxpayer the 3ourt 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 3ourt.
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
3ode, the Tariff and 3ustoms 3ode or the
Kocal =overnment 3ode shall be maintained,
except as here in provided, until and unless an
appeal has been previously filed with the 3TA
and disposed of in accordance with the
provisions of this Act.
A party adversely affected by a resolution of a
>ivision of the 3TA on a motion for
reconsideration or new trial, may file a petition
for review with the 3TA en banc.
Se. 6B. Revie# &% Certiorari. 7 A party
adversely affected by a decision or ruling of the
3TA en banc may file with the 2upreme 3ourt
a verified petition for review on certiorari
pursuant to <ule +- of the 800, <ules of 3ivil
/rocedure.
36. CTA@LIMITED #URISDICTION
The 3ourt 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. ?y the very nature of its
function, the 3TA 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 3TA 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 implication. The acts of other bodies that were
granted some powers by the 2afeguard *easures Act, such as the Tariff
3ommission, are not sub!ect to direct review by the 3TA. #ven prior to <.A.
0@.@, the 3TA, not the 3A, 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 3anufaturers Cor$oration"
su$ra.
The )ne 2top 2hop nter-Agency Tax 3redit and >uty >rawbac%
3enter $the 3enter&- cancelled the Tax 3redit 3ertificates assigned to
/ilipinas 2hell. 3TA has no !urisdiction over decisions of the 3enter.
Pili$inas S!ell Petroleum Cor$oration vs. Commissioner of Customs" G.R.
No. 1'63)" #$<2 1" ())+" !+ SCRA !'*.
26
3'. DECISION>ORDER OF THE COLLECTOR OF CUSTOMS IS NOT
APPEALABLE TO THE CTA
An )rder issued by the >istrict 3ollector of the /ort 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
3TA. To properly invo%e the !urisdiction of the 3TA, the "decisions"
mentioned in 2ection , $a& $+& of <A 88@-, as amended by <A 0@.@ pertain
to decisions of the 3ommissioner of 3ustoms 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 3ustoms Kaw or other laws administered by
the ?ureau of 3ustoms. The decision or order of the 3ollector of 3ustoms,
as such in this case, is not the decision being contemplated by the provision
of law. 3TA 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 3TA 3ourt in >ivision has exclusive appellate !urisdiction to
review by appeal the decisions of the 3ommissioner of 3ustoms. 2ettled is
the rule that the decision or order which is appealable to the 3TA, 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 3ommissioner of
3ustoms, as the case has been decided on the merits. A mere referral letter
issued by the 3ommissioner of 3ustoms referring the case to the )3-
>istrict 3ollector for appropriate action is not a decision appealable to the
3TA. 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 IS NOT A TAX COLLECTION CASE BUT A
SIMPLE ENFORCEMENT OF CONTRACTUAL LIABILITY
The <epublic of the /hilippines represented by the ?ureau of
3ustoms $?)3& filed a 3ollection of *oney with >amages before the
<egional Trial 3ourt $<T3& against /hilippine ?ritish Assurance 3ompany,
nc. $/?A3& for the outstanding unli"uidated customs bonds issued by the
latter to its clients to secure the release of imported goods with the ?)3.
The <T3 ruled in favor of the <epublic. /?A3 appealed the decision to the
3ourt of Appeals $3A&. Thereafter, 3A dismissed the appeal for lac% of
!urisdiction. According to 3A, the case is rooted on the payment of taxes
and duties, one which involves a collection of taxes where the !urisdiction is
with the 3TA. The 23 reversed the 3A and ruled that 4an 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.5 P!ili$$ine Britis!
Assurane Co. In. vs. Re$u&li of t!e P!ili$$ines re$resente' &% t!e
Bureau of Customs" =.<. 'o. 8.--.., :ebruary @, @989.
*). #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 <T3 and the 3A raising, among others, the issue of ownership over the
sub!ect of seizure. The 3A en!oined the 3TA from exercising !urisdiction
over the case. This was reversed by the 2upreme 3ourt. 4(hile the party
contended that the 3ommissioner of 3ustomEs custody was illegal, such
fact, even if true, does not deprive the 3ommissioner of 3ustoms of
!urisdiction thereon. This is a "uestion that ought to be resolved in the
seizure and forfeiture cases, which are now pending with the 3TA, and not
by the regular courts as a collateral matter to enforce his lien. xxx 4the 3A
was clearly in error when it issued an in!unction against it from deciding the
27
forfeiture case on the basis that it interfered with the sub!ect of ownership
over the vessel which was, according to the 3A, beyond the !urisdiction of
the 3TA. xxx allegations of ownership neither divest the 3ollector of
3ustoms 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 3ollectors of
3ustoms are appealable to the 3ommissioner of 3ustoms, whose decision,
in turn, is sub!ect to the exclusive appellate !urisdiction of the 3TA. 3learly,
issues of ownership over goods in the custody of custom officials are within
the power of the 3TA to determine.5 Commissioner of Customs vs. Court of
A$$eals" su$ra.
B. APPEAL
*1. PERIOD TO APPEAL; PERFECTION OF AN APPEAL IN THE CTA
EN BANC IS NOT ONLY MANDATORY BUT ALSO
#URISDICTIONAL
The assailed <esolution dated Ganuary -, @989 issued by the 3TA :irst
>ivision dismissing the criminal case for failure to prosecute was received
by the >epartment of Gustice and ?ureau of 3ustoms $?)3& on Ganuary 8-,
@989. /etitioner ?)3 filed the /etition for <eview in the 3TA )n 3anc on
:ebruary @, @989. An appeal to the 3ourt #n ?anc in criminal cases shall be
ta%en by filing a petition for review within fifteen $8-& days from receipt of a
copy of the decision or resolution appealed from. ;owever, for good cause,
the time for filing the petition may be extended for an additional period not
exceeding fifteen days. H2ection 0 $b&, <ule 0 of the @99- <evised <ules of
the 3ourt of Tax Appeals $<<3TA&I /etition was filed out of time. The period
for filing is mandatory unless good cause is shown. /erfection of an appeal
in the manner and within the period laid down by law is not only mandatory
but also !urisdictional. Peo$le of t!e P!ili$$ines vs. Allan Franiso" et. al."
CTA EB C-.4 C/72 No. ))' (CTA C-.4 C/72 No. O6)+)" F25-$/-& 1!" ()11
0.3.<; Commissioner of Internal Revenue vs. Fort Bonifaio Develo$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
RENDER THE DECISION OF THE CTA DIVISION FINAL AND
EXECUTORY
The 3ommissioner of 3ustoms $3)3& assailed the >ecision of 3TA
:irst >ivision, reversing the formerFs decree of forfeiture, lifting the (arrants
of 2eizure and >etention $(2>&, and ordering the release to =elmart
ndustries /hilippines, nc. of its imported fabrics. As found by the 2upreme
3ourt, 3)3 committed procedural missteps when if failed to observe
2ections 0 and 88 of <A 0@.@ as well as the <evised <ules of the 3ourt of
Tax Appeals. A party adversely affected by a ruling, order or decision of a
>ivision of the 3TA may file a motion for reconsideration or new trial before
the same >ivision of the 3TA within fifteen $8-& from thereof. $2ec. 0 of <.A.
'o. 0@.@&
2ec. 88 of the same law provides that, ". . . A party adversely
affected by a resolution of a >ivision of the 3TA on a motion for
reconsideration or new trial may file a petition for review with the 3TA en
banc." n turn, "A party adversely affected by a decision or ruling of the 3TA
en banc may file with the 2upreme 3ourt a verified petition for review on
certiorari pursuant to <ule +- of the 800, <ules of 3ivil /rocedure." $2ec. 8@
of <.A. 'o. 0@.@&
2ec. @, <ule + of the <evised <ules of the 3ourt of Tax Appeals
$<<3TA& reiterates the exclusive appellate !urisdiction of the 3TA 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 administrative agencies such as the ?ureau of 3ustoms. xxx
/etitionerEs failure to file a motion for reconsideration of the assailed
decision of the 3TA :irst >ivision, or at least a petition for review with the
3TA en banc, invo%ing the latterEs exclusive appellate !urisdiction to review
decisions of the 3TA 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 /etition for <eview )n 3anc filed by the 3ommissioner of
3ustoms before the 3TA )n 3anc was dismissed for failure to file a *otion
28
for <econsideration before the 3TA >ivision. The 2upreme 3ourt agrees
with the 3TA )n 3anc that the 3ommissioner failed to comply with the
mandatory provisions of <ule ., 2ection 8 of <<3TA re"uiring that "the
petition for review of a decision or resolution of the 3ourt 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 7 not merely
directory 7 nature of a re"uirement." Commissioner of Customs vs. 3arina
Sales" In." G.R. No. 136" NoD2452- ((" ()1).
C. SUSPENSION OF COLLECTION OF TAXES
*3. SUSPENSION OF COLLECTION OF TAXES; FILING OF
PETITION DOES NOT SUSPEND THE COLLECTION OF TAXES
'o appeal ta%en to the 3TA from the decision of the 3ommissioner
of nternal <evenue or the 3ommissioner of 3ustoms or the <egional Trial
3ourt, provincial, city or municipal treasurer or the 2ecretary of :inance, the
2ecretary of Trade and ndustry or the 2ecretary 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 law6 Provi'e'" !o#ever, That when in the opinion of the 3ourt the
collection by the aforementioned government agencies may !eopardize the
interest of the =overnment andDor the taxpayer the 3ourt 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 3ourt. .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. 8C.+C8 N 8C.+CB, <esolution, Guly 8, @99-, issuing T<9 on
enforcement and implementation of <A 0BB,, #xpanded AAT Act of @99-
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. 8C.9-C N -;uilino <. Pimentel, et al. vs.
)xecutive (ecretary )duardo ,. )rmita, et al., =.<. 'o. 8C.@9,, >ecision
2eptember 8, @99- upholding constitutionality and lifting T<) upon finality;
Fili$ino 3etals Cor$. vs. Seretar% of t!e De$artment of Tra'e an'
In'ustr%, =.<. 'o. 8-,+0., Guly 8-, @99-, writ of in!unction issued by <T3
sustainedG EH02,3.o<" .Se. *8<6" TCCP/ Commissioner of Customs v.
CTA" Las Islas Fili$inas Foo' Cor$oration an' Pat=Pro Overseas Co." Lt'."
GR 1'1!1661'" R27. F25-$/-& 13" ())+.
2ection @0 of <A 'o. ..99 $the 42afeguard *easure Act5& provides
that6 4Any interested party who is adversely affected by the ruling of the
2ecretary in connection with the imposition of a safeguard measure may file
with the 3ourt of Tax Appeals, a petition for review of such ruling within
thirty $B9& days from receipt thereof6 /rovided, 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.5 /etitionerFs
prayer for a Temporary <estraining )rder andDor /reliminary n!unction was
denied for failure to prove that the collection of safeguard duties shall
!eopardize their interest. Com1laso A1uila Cor$oration" San Franiso
3irror Cor$oration" All Plus Cor$oration" An' G!ani Float Glass" Limite'
vs. Seretar% 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.
/etitionerFs 4*otion to 2uspend 3ollection of >isputed Tax Kiability,5
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!armaeutials In.
vs. Commissioner Lillian 2efti in !er a$ait% 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
:A3T26 A certiorari case was filed against 3TA for alleged grave
abuse of discretion in granting the *otion to <elease =oods
Jnder ?ond. The goods sub!ect of seizure for alleged
29
violation of 2ection @-B9 of the T33/ consisted of bags of
rice loaded in container vans.
<JK'=6 (hile this case was pending before the 23, the 3TA
decided the main case which rendered this petition moot
and academic. At any rate, the 23 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 4regulated5 and not 4prohibited5
commodities. 4An 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 4grave,5 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.5 Seretar% of T!e De$artment of
Finane v. CTA .*
n'
Div./ an' >utan1&ato Conventional
Tra'in1 3ulti=Pur$ose Coo$erative, =.<. 'o. 8C.8B,,
Aug. ,, @98B.
*!. MERE SUBSTANTIAL EVIDENCE IS NECESSARY TO #USTIFY
FORFEITURE IN CUSTOMS CASES; VESSELS MAY BE
CONSIDERED DUTIABLE ARTICLES
The sub!ect vessel *DA 3oco #xplorer @, a.%.a. ,89, slands 3ruise
entered the /hilippines allegedly for purposes of repair. ;owever, what was
proven was its sale prior to repair. 2ection 89- of the T33/ allows as
4conditionally free importations5 articles brought into the /hilippines 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. 0+@C@, *ay B8, 8008. E6<E Islan's S!i$$in1 Cor$. vs. Se. of
Finane, 3TA 3ase 'o. ,0--, *ar. C, @98@. (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.
2hips, boats and floating structures such as the sub!ect vessels are dutiable
articles under ;eading .0.9+-.9- of 3hapter .0 of the T33/. Aessels may
be considered articles sub!ect of importation. Cornelio G. Casi'o vs. RP" et
al., 3TA 3ase 'o. .9.,, :eb. ., @98@.
*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 ?)3 filed a criminal complaint before the >epartment of Gustice
against the officers of *ar% 2ensing /hilippines, nc. $*2/& for unlawful
importation. An nformation was filed with the 3TA after determination of
probable cause. (hile the case was pending, the 2ecretary of Gustice
reversed the 2tate /rosecutorFs <esolution and accordingly directed the
withdrawal of the nformation. 3TA granted the motion to withdraw. ?)3
assailed the 3TAFs resolution. The 2upreme 3ourt dismissed ?)3Fs
petition. t ruled that public prosecutor has control and supervision over the
cases. The participation in the case of a private complainant, li%e ?)3, is
limited to that of a witness, both in the criminal and civil aspect of the case.
Also, the 2upreme 3ourt noticed that ?)3 was not represented by
the )ffice of the 2olicitor =eneral $)2=& in instituting the petition, which
contravenes established doctrine that 4the )2= shall represent the
=overnment of the /hilippines, its agencies and instrumentalities and its
officials and agents in any litigation, proceeding, investigation, or matter
re"uiring the services of lawyers.5 Bureau of Customs vs. Peter S!erman"
et. al." G.R. No. 1+)*'" A,-.% 13" ()11.
?y the 2olicitor =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 Fator%, =<
8++0+@, Gune @., @998
30
?y the 2ecretary of Gustice, through the 3hief 2tate /rosecutor N
/rovincialD3ity /rosecutors 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
23 sustained the <T3 when the latter struc% down 3ustoms
*emorandum )rder $3*)& 'o. @,-@99B on the tariff classification of wheat
issued by 3ommissioner of 3ustoms $3)3& for being invalid and of no
force and effect. 23 sustained the ruling upon finding that 3)3 violated
taxpayerFs right to due process in the issuance of 3*) @,-@99B when they
failed to observe the re"uirements of notice and hearing under the <evised
Administrative 3ode. 3)3 li%ewise violated respondentFs right to e"ual
protection of laws when they provided for an unreasonable classification in
the application of the regulation. :inally, 3)3 went beyond his powers of
delegated authority when the regulation limited the powers of the customs
officer to examine and assess imported articles. COC an' t!e Distrit
Colletor of t!e Port of Su&i vs. 2%$ermi) Fee's Cor$., =.<. 'o. 8,0-,0,
:eb. 8, @98@.
t is not within the !urisdiction of the 3TA to determine the validity of
3ustoms Administrative )rder 'o. ,-0@ $,ules and ,egulations %overning
the 9vertime Pay and 9ther Compensations ,elated Thereto Due to
Customs Personnel at the 0-I-&. The !urisdiction over the validity and
constitutionality of rules and regulations issued by the 3)3 by virtue of its
rule ma%ing power under 2ection C9., T33/ lies before the regular courts.
Ser1io I. Car&onilla" et al vs. Boar' of Airlines Re$resentative .BAR/" et al"
=.<. 'o. 80B@+,, OP" re$resente' &% 2on. Pa@uito N. O!oa" et al vs.
BAR" et al, =.<. 'o. 80+@,C, 2ept. 8+, @988. 3TAFs !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!
Amerian To&ao vs. Dose Isi'ro Cama!o, et al, =.<. 'o. 8CB-.B, Aug.
@9, @99..
31