CTA Case No. 1968 (Decision)

./ ./ ,.El"UBUC 01" TIE PBILIPPINEt COURT OF TAX APPEALI QUEZON elTY ~T STEAMSHIP CORPORATION, in its- capac!ty as agent . of' the M/V "FERNANDO", Petitioner, - versus - C.T.A. CASE No. 1968 COMMISSIONER OF CUSTOMS, Respondent. x- - - - - - - - - - - - - - - -x DECISION Appeal trom the decision of respondent Commis- sioner of Customs, dated August 28, 1968, affirming that of' the Collector of Customs of' Manila, imposing an administrative fine of' �2,000.00 on tb.e vessel M/V 11Fer- - nando" for carrying WliDanifested cargo -in violation of Section 1005, in relation to Seetion �2521, of the Tariff and Customs Code. Petitioner, a co~poration duly organized and exist- ing under and by virtue of the laws of the Philippines, is the local ship agent of the vessel M/V nFernandon. On June 14, 1961+, M/V UFernaodo", a foreign vessel with Registry No. 851+, Voyage No. 20, arrived at the Port of Manila, from Nab.a, Okinawa, conve:yJl-Dg a ship- meat of ~9 packages consisting of surplus war materials consigned to Vera Enterprises, Manila. Upon examination .. by customs authorities, it was discoverea that out of the shipment of 4o9 packages loaded on board the vessel M/V ttFernandou, only 318 packages were duly manifested.

DECISION - CTA CASE No. 1968 2 Consequently, the Collector of Customs of Manila, on July 30, 196~, imposed an -administrative fine of �2,000.00 on said vessei for carrying un.manif'ested cargo consisting of 91 packages of various surplus war materials, in violation of Section 1005, penalized un- der Section 2521 of the Tariff and Customs Code. The aforesaid amount was paid under protest on October 15, 196lf.. On Oc:tober 28, 19611-, petitioner requested a for- mal hearing, hence, an investigation was conducted by the Bureau of Customs in Customs Case No. ?~ (Manila Protest No. 1688). After due hearing, the Collector or customs rendered his decision on May 28, 1965, holding that petitioner is liable to the fine or .2,0~0.00 already imposed upon it and dismissed its prqtest for lack of' merit. This decision was appealed to respond- ent Commissioner o~ Customs who affirmed it 9n August 28, 1968. Hence, the instant petition for review. In their p�artial stipulation of facts, which was admitted by thi~ Court on March ?, 197Q, the following were admitted by the partiess 1. Bill of Lading No. o-12-M dated Ju.ne 10, 196~ (Annex uAu, customs Record, P� 9, marked as Exh. C). 2. Manifest Correction Advice Per MV "Fer.nando n Voy. No. 20 (Annex nBu, Customs Record, p. 15, marked as _Exh. E). 3. Original of' the Inward Foreign Ma-

DOOISION - CTA CASE No. 1968 3 nif'est or the MV 11Fer.nando 1� Voy. 20 (Annex nett). fn'neus,t 4-. Supplementary Inward Foreign l.fan1- of the MV "Fernandou Voy 20 (Annex Customs Record, p. 14, marked _as Exh&. F, F-1 and F-2}. . 5. That an� amendment of the Inward For- eign Mani!es t of the MV "Fernando �� was filed and duly approved. by the Bureau of Customs and the same was entered a''End", attached to tte original manifest (Annex Customs Record, p. 13). 6. Letter of coru1sel for the MV ttFer- na.ndo", her owners, agents and master to the Collector of Customs dated October 28~ 1964 (Annex ttFtt, customs Record, pp. 29-30J � .. 7. Permit to Deliver Imported Goods (Annex "Gu, Customs Record, p. 8). '� I 8. Receipt of. Adm. Fine of � 2,000.00, paid by the agents gnder protest dated October 15, 1964- (..4.nnex nnu). (See .pp. 19-21, CTA rec.) The sole issue is whether or not the adm1n1stra- . tive fine of �2,000.00 imposed o.n the vessel M/V uFer- nando" is in accordance with l{lW� .� There is no dispute as to the fact t pat the orig- inal inward foreign manifest listed only 318 packages and pieces of war surplus materials but actually lt-09 packages were discharged at the Port of Manila, or a discrepancy of 91 packages. Petitioner assails the validi ty of the imposition of the administrative fine. on the vessel on the grounds thats (a) the discrepancy was due to honest mist~e � and oversight and without any unlawful intent; and (b) the amendment to the in-

DECISION - � CTA CASE No. 1968 ward foreign manifest, which was later approved by the Bureau of customs, cured all d erects found in the original manifest. Petitioner presented both testimonial and documen- tary evidence to show that the failure to include in the original inward foreign manifest 91 packages of surplus war materials was without unlawful intent but done in good faith. As gathered from the testimo~y of Catalino D. Busa, petitioner's Inward Manifest Clerk, the evidence and records of this case show that the shipment in question, when loaded at the port of Naha, Okinawa, consisted of packages, units, pieces of military sur- plus goods 1n loose condition. After the vessel had already left the said port, a comparison of the tally sheets and export declaration revealed a discrepancr of 91 pieces of loose war surplus materials so that a � manifest correction a~viee was sent by mail to peti- tioner, which it received on June 16, 1964. Peti- tioner, after receipt thereof, filed with the Bureau of Customs on June 17, 1964, a Supplemental Inward For- eign Manifest and the corresponding .Ame.ndme.nt Manifest in order to correct the mistake, which was duly approved by respondent. The original manifest and corrected man- ifest show the same we~ght and measurement of the ship- ment and no additional charge for freight was requir�ed

D~ISION - CTA CASE No. 1968 on the correctedmanifest. Mr. Busa also testified that the correction of the \ original manifest could not have been possible within 24 hours from the time the vessel was boarded because the Manifest Correction Advice was received only on the closing sours of June 16, 1964 and he had to work .overtime in order to prep,are the Supplementary Inward Manifest which was filed with the Bureau of customs the ~ following morning, or on June 17, 1964. It is, therefore undisputed from the. evidence and records of this case that M/V "Fernandott arrived at the �Port of Manila with 409 packages and pieces of / military surplus goods while the manifest of the vessel listed only 318 packages and pieces; that 91 packages or pieces were not covered by the vessel's cargo mani- fest or by any other document required to be presented to the boarding officers of the Bureau of customs; and that the correction or amendment of the cargo manifest was submitted and approved by the Bureau of Customs attar the lapse of 24 hours from the time the vessel was boarded by the customs authorities. , That there was good faith in the omission to mani- fest cargo may be admitted. But good faith in the failure to inciude cargo in a ship's manifest does not relieve the vessel from liability under Section 2521 of the Tariff and Customs Code. Thus, 1n Maeondray & Co. ,

� DECISION - CTA CASE No. 1968 6� Inc. v. Commissioner of Customs, CTA Case No. 1930, December 27, 1969 (cart. denied in �G.R. No. L-31599, Feb. 10, 1970), it was helds Petitioner presented before this Court Dominador Bergafio manager of its claims department, who testified that the � failure to have the four (4) cartons of electrical parts included in the cargo ma- nifest of the vessel was due to a clerical error or inadvertence in the typing of the manifest (pp. 19-20, t.s.n.). Apparently, this testimony was presented to show lack of knowledge or consent on the ~ rt. of the owner or master of the vessel to t he omis- sion of the subject cargo from the manifest. Suffice it to say that the lack of know- ledge on consent of the owner or master of the vessel ia respect of sueh an omission is no defense against liability for the statutory penalty. "There is nothing 1n sec- tion 77 of the Act which indicates any intention on .the IB rt of the loergtihselaptorers to limit the imposition cribed penalty to eases vh ere the captain or the ship's officers knowingly or willfully omitted any part of the cargo from the manifests. This section in uneguivoca1 termS prescribes the Imposition of the pena1tY i~ all ~osge�3thoerr wsui ~ so;~t~oi~0~3~Wh~ : ooses penalties or forfeitures qp the master of the yes S�ls in s gcn cases, it cannpt bp doubted that tge intention 0~ tae legislator waS to pro_Jl.ide for the imposition of' the prescriQed penelties, � wnether such omissions oceurred with 2I without the knowle4ge of the gwner or the officers of the vesselg. Seetion 303 is here inserted, be- cause both by its terms and the nature of the penalties prescribed it makes very clear the intention of the legislator to penalize omis~

DEX:ISION - CTA CASE No. 1968 7 sions from the ship's manifest . whether made with or without the knpwledge of ~e Qwners, or ot the sh4�'s officers charged with the preparation of the reqaired manifests. u (U.S. v. Steamship 11Rubitt, 32 .Phil. 228; underlining su.pplied.) I Also, in the ease of Smith Bell & Co. (Phil.") Inc. v. Commissioner of Customs, CTA Cases Nos. 1728 & 1921, July 22, 1969, we held that -- Under Section 1005 of the Tariff and customs Code, it is an imperative obliga- tion of every vessel from a foreign port to have on board a complete manifest of all her ca:go. No exception is mentioned in the statute. Neither is there mention of any exception in Section 2521 of said Code providing for a fine for vessels without proper manifests, nor in Section 2530 there- of providing for the confiscation of unma- nif'ested goods. !ne reeogsition gy tae Court of asY attempt to read intg the statqt� any exception, such as misshipment ot go9ds, would b~ s;.ontta.U to the pervasiye spirit as we~l as the ele~ lasgua.ge or th� atot�- said provts:Lons. ofuus,.s.savid. the Supreme Court 1n he ease Rubi (32 Phil. 235-2lt2) s � "The evident intent and object of these requirements for the sub- mission of manifests by all vessels from foreign ports is to impose upon ,, . the owners and officers of such ves- sels an imperativg obligation tQ submit lis.t; of t~e entire lading of the ship in th� prescribed torm, in order to facilitate the labors of the Customs anq immigration of- ficers, and to defeat any attempt to make use of such vessels to secure the unlawful entry of persons or things into the Islands. No eec~ anr tion is made in the statute, and~he recognition of attempt to read

DEX!ISION - CTA CASE No. 1968 8 an e3ee,ption into the statute cou1d ~rdl~ ia~ t7 defeat the ~urpO�� of ts enaetmen�" (See also Maeondray & Co., Inc. v. Comm. of Customs, CTA Case No. 1911, April 20, 1970.) With regard to petitioner's elaim that the amend- ment of the original manifest cured all its faults and defects, we quote below our opinion on this point in the case also of Maco.ndray, supras Petitioner contends that a clerical error was committed in good faith in the preparation of the manifest, and when re- spondent allowed the amendment to the mani- fest pursuant to Section 1005 of the Tariff and Customs Code, the same had the effect of curing or removing all the defects of ot hfepoert ii tgiionnael rm� sa.nciofnetset sn.t i o nIni ss htohr~tt the kernel thelia- bility of the vessel for carrying unmani- fested cargo was wiped out by the amendment to the manifest. We are not at all impressed with this interpretation of the law by petitioner. There is no dispute that the four (lf.) cartons of electrical parts were not covered by the inward foreign manifest of M/S 11Fern- view", as requ~red by Section 1005 of til:! Tariff and Customs Code. To enable petition- .. er to take delivery of the entire shipment of six (6) cartons, Mr. De Asis, Manifest Clerk, Marine Entry Processing Division, Bu- reau of Customs required the amendment to the inward forelgn manifest upon discovering that the number of cartons of electrical parts declared in the entry covering the disputed shipment was four (~) cartons more than what were declared in the original in- ward foreign manifest of the subject ves sel. Al,th9Ug~ thi� sUnendment was allW!!~g a.pd t ~ ;Q.I'OVed b:v gustoms aqthorities, the same d ngt haye the effegt of obliterating tne lia- bilit!; of tSe vessel :,ncurre<i Pt�Y19US -to the amendment. Section 1005 of the Tariff

DOOISION - CTA .CASE No. 1968 9 and customs Code, cosmumpar.nao2.s is so clear and exp licit whe.n it every vess el from a foreign port to have on board a complete manifest of all her cargo. Non-observance of this imperative obligation subjects a ves- sel to the administrative penalty under Sec- tion 2521 of the same Code. The law makes no exception and any attempt to read one into the statute would be contrary to the spirit as well as the clear language of the aforesaid provisions. (See' Smith Bell & Co., Inc. v. Con;un. of Customi, CTA Cases Nos. 1728 & 1921, July 22, 1969.) . That the bill of lading of M/V 11Fernando11 correctly stated the number of packages loaded on . the vessel is or no moment. On this point, we held that - The fact that the whole shipment was in- dicated in the bill or lading does not excuse compliance from the requirement of a manifest. x x x All these can not be accomplished by the mere U$e of the bill of lading inasmuch as the bill of lading is not �required to be presented to the boarding customs officers. (Macondray & co., Inc. v. Comm. of Customs, CTA Case No. 16~1, Nov. 15, 1965. . WHEREFORE, the decision appealed from is hereby affirmed. SO ORDERED. '. Quezon City, August 25, 19?1 ~- ROMAN M. UMAL . WE c;~~ 4d ~4r~-Presiding ~ISLAO R. ALVAREZ As sociate Jttdge .,, �j. r ~ . !'"-� ' RAMON L. AVANCENA Associate Judge 1See also Compafiia Gral. de Tabacos de Filipinas v. Comm., CTA No. 1939! Feb. 26, 19?1, eert. den. in G.R. No. L-33386, Ap~1 1~, 1971.