CTA Case No. 5029 (Decision)

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY TATLE APPAREL MANUFACTURING, C.T.A. Case No. 5029 Claimant/Petitioner, Promulgated: - versus - COMMISSIONER OF CUSTOMS, Respondent. X- - - - - - - - - - - - DECISION This is an appeal from the decision of the Commissioner of Customs dated August 4, 1993, received by petitioner on August 11, 1993 affirming the decision of the District Collector of Customs of Manila dated August 9, 1993, the dispositive portion of which reads: "Wherefore, by virtue of the authority in me vested by law, it is hereby ordered that the warehousing bonds covering the nine(9) Import Entries, Nos: 3903, 3910, 4076, 4246, 4999, 4569, 5140, 5359, and 5389, all series of 1989, in the name of CMBW No. 965-A owned and operated by Red Flower Garments, Inc., considered confiscated, and by virtue hereof, demand for the collection from the Insurance Company concerned be immediately made by this bureau's collection department should Tatle Apparel refuse to pay, and likewise the other four(4) importations under warehousing entries Nos: 5495-89, 5646-89, 5650-89 and 5805-89, which are still in the custody of CMBE 965-A, operated by Red Flower Garments, be FORFEITED 794 .1

DECISION - C.T.A. CRSE NO. 5029 - 2- in favor of the government and to be disposed of "in manner that wi 11 enst..n~e the payment of whatevet~ outstanding obligation Tatle Apparel" has with the government. "It is also p1~ov1ded that Fled Flowet~ Garments CMHW No. Yb5-~ should immed1ate1y transfet~ from the said warehOJ,ISe all the at-t ic1 es under the above-mentioned four(4) entries, to the Bureau of Customs Secur1ty Warehouse, for pt-opet- invento�-y and custody." (Annex l. p. b, CTA ,-ecot~ds, p. 24) the facts obtaining in the records of the case are as follows: The above desct-ibed import entries were filed in connection with the importations consigned to Red Flower Garments, Inc., a common Customs Manufacturing Bonded Warehouse <CMBW No. 9b5-AJ for the account of Tatle Apparel Manufacturing, a duly accred1ted member thereof. The said importations which were on consignment basis arrived at the Port of Manila, viz: l�port l:.ntr:aes Date of Country of Nu�bers Arrival Exportation 1. No. 3909-89 June Ob, 1 ':78'::} Hongkong 2. No. 3'310-8'3 JIJne 05, 1 '3Br:J Hong kong 3. No. 4076-89 May 25, 1'38'3 Hongkong 4. No. '+245-8'3 June 25, 1':78':7 Hongkong 5. No. f-t'39'3-l:l9 July 14, 1':JB':J Hongkong b. No. 4:Sb':J-8':7 July 01, 1'38'3 1. No. 5140-8'3 July 17, 1'38'3 T~iwan B. No. 535'3-8'3 July 13, 198'3 ':J. No. 5.38':3-8'3 July 28, 1'389 Hongkong 10. No. 5495-8'3 Aug. 02, 1'389 Hong kong 11. No. 5650-8'3 July 25, 1'389 Taiwan 12. No. 5805-Br:J Aug. 02, 1':78'3 Taiwan 13. No. 5546-B':J Sept. 15, 1989 Taiwan Hongkong Hong kong 795

DECISION - C.T.A. CASE NO. 5029 - 3- Which altogether consists of the following: 1. 113,<.::J82.8 yards of cotton denims, 2. 18,903.5 yal~ds of canvas <pant matel~ials>, 3. 54,797.1 yards of pocketing materials, 4. Y,Y94 yat~ds of TR Yal~n twill 65" polyester & 35" yarns 5. 18,070.5 yal~ds of 65/35 polydobbi, and b. 12,015.5 yards of 5/25 polyrayon woven. On J anuat~'y' 15, 1990, the Garments and Textile Export <GIE:.B> charged Tatle Apparel Manufacturing (for brev1ty, latle) for~ v1olation of the rules and regulations of the GTEB as follows: 1. Unacc:ount ed cut -piece goods totalling 494 pieces in violation of Section lV-B, Part 11; 2. Physical inventm~y of goods Sl..tb-contt~acted to Lim-san Garment and F. Franco Garments showed that styles were d1tterent from the orders of lite buyet~ and per~ l a t l e ' s del ivet"'Y receipts. Moreover, imported cut yoods were issued to unaccredited subcontractors, in violation of Section 1 I 1, E-9, 10 and 11, Part ll ; and 3 Nist~epr~esentatiun of goods for~ export shipments covered by EP # GPED &71 in that the goods did not cm~t~espond to thf!' p1..1rchase ordE>t~; and as to UtE! fabrics t..l!i>ed in the man1..1f<:tcture of acid wi:!shed denim pants and the swatc�hps allPgedly used in ~uch production of pants where dJsct~Ppanc.l~�~ lln~. bf!en found, :in violation of Section lV, PaJ"'t 111. (~nnex 4, CTA records, p. 34) On 1>1;cn �ch 2, 19'30, t.hiP FT1 C�.t5toms Office inc;tituted sei:zu���e Sf!i:zure and det Pnt i ttn fabrics and by FfJ entry nos. 5359, 5805, ~�385, 796

DECISION - C.T.A. CASE NO. 502Y - 4- 5650, 5495, b54b, 4YYY series of 1989. <Anne>! 5, C. T. A. 35>. In this proceedings, Tatle, thru its counsel, presented documentary evidence as well as oral testimonies of several witnesses to prove that there was in fact e>cportation on its part of finished manufactured out of the subject importations. The Ba..weau of Customs is s t i l l hearing the s e 1 :z �..n~e proceedings when the GI~B rendered a decision on Apri 1 4, 1991 on Tatle's administrative case. It was found guilty of the following charges: 1. Failure to account for .the cut-piece goods totalling 494 pieces which it received from the bonded warehouse of Red Flower Garments with the modification that the total unaccountab1J1ty 1s actually b8,623 piece!:> (inclusive of the said 4'::J4 pleces>, as pt�� oven d lW i n y the t l'' i a 1 � 2. l'h s t~ f.' pl" e !> P n t a t i on of the goods subcontracted to Lim-san Gat~mpnt"' r=tnd F. Franco Garments and that said qoods had styles different from t h E' b �.1 y E' r of ,~e s pondent. 3� S u b j E' c t i mp o ,~ t e d cut. g o o d s "'~"' ~~ e i "'� s '-' e d by t"E' s pond ent t. o ttnacct.. e-dited s �.abel� 'It ,~act Ot" s. 4. 1�1:i St"ept.. esentat ion t�f goods fur�� P. )>( pc.n"t sh1 pmt:?nt. s covel"E'd by EP # l-jPt-. D E.7! r.~nd that the goods d1d not cot"r��~�~,pond to the f1Ut"chase order:; at1d al s<.� mi ;.l�~vr�t:o~:.t?nt.at :ion as t o t he f a bt" i c s used in thE' 1l!anufact. ...u~E' of acid wash!?d d~nim pants Rnd t.he swat.che<.:. rtllet~l?dly U!:-E'd . :in !:��.tel� p,���od�.act ion o f pr.tl�'l~s. <Customs Records, pp. 447-459. 79'?

DECISION - C.T.A. CASE NO. 5029 - 5- The District Collector of Customs, Port of Manila thereafter ruled on August 9, 1991 against Tatle ( Id., pp. 857-862). A reconsideration of said decision was sought by Tatle (Id., pp. 863-867) however, it was denied in an order dated October 31, 1991 (Id., pp. 871-872). On appeal to the Commissioner of Customs, the decision of the District Collector of Customs, Port of Manila was affirmed in a decision dated August 4, 1993 (Id., pp. 883-886). Hence, the instant petition for review was filed with this Court on September 10, 1993 (CTA records, pp. 1-6.) An amended petition for review was subsequently filed on October 12, 1993 (Id., pp. 11-19). The issue in this case is whether or not the order of confiscation and forfeiture issued by the District Collector of Customs, Port of Manila and affirmed by the I Commissioner of Customs is legal and valid. The arguments raised by petitioner in support of its case are the following: 1. The Bureau of Customs has no jurisdiction to rule on the forfeiture of importations under Import Entry Nos. 3909, 3910, 4076, 4246, 4569 and 4999, all series of 1989 because they are not included in the Warrant for Seizure and Detention Order dated March 2, 1990. 2. The Bureau of Customs erred in relying upon the GTEB Decision dated April 4. 1991 as its basis for resolving the instant se{zure and forfeiture proceedings. 798

DECISION - C.I.A. l:Aol:. NU. ~O~Y �) - 3. rhe Bureau of Customs et~l~ed in not allowing the liquidation of :import entries for exportations of 4,150 do:zens ot~ 4Y,~(H) p:i eces. 4. The Bureau of Customs erred in ordering the forfe1ture of fabrics/articles covered by lmport Entry Nos. b4Y~-~Y, ~bb0-~9, 5805-89 and &546-89 because it was pr~ mature. The period fot~ the l~e-expot~tation of the subject fabrics has not certainly exp1 red. Petitioner prayed that the order of confiscation and forfeiture be set aside and that judgment be rendered on the basis of the evidence and arguments presented before o f Cu c. t om s and not be f m~ e t h e Gl E H. ��fl~ �,.. , the seizure pt~ocPedings was instituted. Un othet~ hand, respondent contends that ExPcutive 537. ct"eat :i ng and T e x t i 1 e E x p o .~ t as ame�nded by l:.xecut i ve Order Nos. 823 and g52 ~rp pArts of cu~lums law which the Hav:ing ftH.Iltd by thf? l-1'1EB t.hat the subject importations have and rPgulations, these fa]] w:ith:in the :tiDbit of Sect. ion 2530<f> of the lariff and Customs Code ot t.he Philippines <TCCP>. :i.n the said GTEB decision committed by Tatle are violative of Section 2530(fJ -3 of the same Code. 799

DECISJ UN -- C.T.A. CASE NO. 5029 --� 7 - of Customs p�.n- s uant to Section 1!::108 of the Customs Code is .on.tt hm~ i z E'd to hold the delivery of artJcles to importers with unsettled accounts 1n the Btweau and sell the samE' in 1i ke mannet- as in seizures to cover such account. lhis pt-ov :is 1 on appj 1 e s to by l:.ntt-i es Nos. ~4Y!::I-8Y. 5b50-89 and b54b-89 wh1ch are still in the possession of Hed Flower Garments. t-e s pondent. that the decision by petit1oner's counsel soJP.ly on thP bar.-Js of the! ple.:=tdinqs and customs recot-ds and to 1'/h ich manifestation respond~nt's COUTI'!'E'l concttrTed. U t. h P r� t han t. h e foreqoinq. nu ~ocumentary ot- were formally offered by to thP. An swet�� fllf'd by the re !'� pondent he di?TilP>; the al.leg.:-tl:ions of the pet it i orun- t:he caption "Statemerit o f F;~r.tr.." beinu and incompletp. a!'> WP] .1 al.IE'oat1ons und e �- the "V:isc\lssion" for be:tng devoid of .and leo<.~ I basis. It incumbent pet:it1uner- to pr�ove its case the nO' be1ng ''quest ion of f"'Jcl" BOO

DECISION - C.T.A. CASE NO. 5029 - a- East Marble tPhils.>, Inc., et al. vs. Honorable Court of Appeals and Bank ot the Philippine Islands, 225 SCRA 249 ( 1993) J. rhe Rules ot Court in Rule 132 Section 34 thereof is quile clear� lhat "the court shall considet~ no evidence which has not: been formally offered" <Veran vs. Court o�f Appeals, G.H. No L-41154, Jan. 29, 1988). Under this rule, evidence not formally offered in court will not be> taken into cunsider~tion by the court in disposing of the issues of a case <Martin, Revised Rules of Evidence, p. 589>. It should be noted that the proceedings before the Court of rax 4ppeals i~ a triaJ de novo and if petitioner so <C. F. Sharp., 1968). Corollary to the above, the Collector of Ci.astoms when s:itting proce>Pdings, constitut�>5. a and dt?l:ermine all QUPstions t-ouching thE> fm~fpiture and further disposition of thP ;:.�.tbjPct mattet�� <RPpublic vs. Court uf First Instance of Manila, Bt~anch X.X I 1, 213 SCRA 222>. Judges recognize the PHpertise and eHpPriPnre> of thp bodies :in thE> "'.x cll!l i nation and fo'ntrusted to their jurisdiction 801

DECISION - C.T.A. CASE NO. 5029 - 9- (Martires vs. Court of Appeals, 188 SCRA 306). It is axiomatic that findings of facts of administrative agencies which have acquired expertis~ because their jurisdiction is confined to specific matters are accorded not only respect but at times even finality� (Alejandro vs. Court of Appeals, 191 SCRA 700). A perusal of the records of the case would likewise show that the findings 9f respondent were supported by substantial evidence and bolstered by the GTEB decision which petitioner failed to overthrow. WHEREFORE, the instant petition for review is hereby DISMISSED for lack of merit. The decision of the District Collector of Customs, Port of Manila, dated August 9, 1991 upheld by the Commissioner of Customs on August 4, 1993, is hereby AFFIRMED. SO ORDERED. ~ p.(~!{,_ RAMON 0. DE VE A Associate Jud e 802

DECISION - - 10 - C.T.A. CASE NO. 5029 W~ CUNCUW: ~Q.G'~ ERNESTO D. ACOSTA Pt~e siding Associ CEf~-r I F I C A - r I O N I hereby certify that this decision was reached after due consultation among the members of the Court of lax Hppea!s 1n accordance with Section 13, Article VIII of the Constitution. ~-'2-0~ ERNESTO 0. ACOSTA Presiding Jttdge Court of Tax Appeals 803