CTA Case No. 3798 (Decision)

.. . �tJBLIC OP �rtm PHILlPP!l'U'\ <:OU.R.T OF TAX AFPEAU t~ ~an UNITED STATES LINES, I NC . , Pe t itioner, - versus - C.T.A. CASE NO. 3798 COMMISSIONER OF CUSTOMS, Respo nde nt. X- - - - - - - - ~- - X DECI S I 0 N Appeal ly petitioner United States Lines, Inc. from respondent Commissioner of Cust oms' decision dated April' 5, 1984 affirming that of the Collector of Customs of the Port of Manila in Administra~ive Case No. V-997-77, .which imposed a fine of elO , ODO.OO on the vessel t1/V "AMERICAN VEN TURE" for violation of Section 100 5, in rela t ion to Section 25 21, of the ,. Tariff and Customs Code, as amended. There is no substantial dispute as to the f a .ts. It appears that on October 16, 1976, the M/V "AMERICAN VENTURE", a foreign vessel operated by petitioner United States l ines, Inc. , arrived at the port of Manila from Hongkong and discharged, among other cargoes, one c ontainer (covered by Bill of Lading No. 38 ) containing 34 cases of 100% cotton brushed denim broken twi l l and one container (covered by Bill of Lading No. 39) containing 44 cases of 100% cotton sulphur dyed denim, consigned to the order of 1G0

- - -- - - ---,..--,---=c-_--::;:;-;== DECISION - CTA CASE NO. 3798 - 2- the Cons olidated Ban k and Trust Corporation, Inc., Manila . The inwa r d foreign manifest of said ves sE l, however, listed the container under Bill of Lading No. 38 as containing 38 case s of 100% c otton brushed denim b rok e n twill, and t he container under Bill of Lading No. 39 as contain i ng only 4IT cas es of 100% cotton sulphur dyed denim. The vesse l's cargo ma ni fest and th e bill s of ladi ng afo r esaid rela tiv e to s aid s hipment contain the specific ation: "Sh i ppe r 's Load and Countn. In November~ 1976 , after being informed of the discrepa ncy as to the quanti t y of the articles l i s ted in th e vessel' s ma nif e st, pet i tioner fil ed the corres- pending amendment to ref lect the actual quantity of th ~ cases in e ach of the co nta i ners, wh ich amendment was al1 ow~d by the Bureau of Custo ms . Howev e ~ in August, 1977, custo ~ s administrative pro ce e d ing ( Adm . Ca s e No. V-997-77) was instituted agai nst the \essel . M/V "A MERICAN VENTURE", w1th pe t itioner United States . Li nes, Inc . represent i ng as responde nt , for vio l atio n of Sect i on 1005, i n relation to Section 2521 , of the Ta ri ff and Customs Code, as amended. On December 7 , 1978, fter prope r hearing, the Coll e ctor of Customs rendered a decision fi. ding the � vessel li able for vi olation of said provisi ons of 1Gb

DECISION - CTA CASE NO. 3798 - 3 ��- the Tariff and Customs Code and ordering it to pay a fine of ElO,OOO.OO. On appeal , respondent Commi ssi oner of Customs, in his decision dated April 5, 198~, affirm0d in toto the collectoris decision. Hence the present recourse. . The basic issue at bar is whether the ve~se l or he r master is li able fur ~h e fine for violatio n of Section 1005, jn r~lation to Section 252l, of the Tariff and Customs Code as amended, the pe~ti- nent provisions of which read: SEC � 10 05 � Ma2., i fest Req Li ired o f Ve ,,se l from � foreiq!J.._ PorJ>- Ever; vessel from a foreign port must have on board a com plete manifest of all her cargo. All of the cargo intended to be landed at a port in the Philippines must be described ]n separate m~nifests for each ~ art of call therein. Eech manifest shall include the port of departure and the port of delivery with the mar ks, numbers, quantity and descript'on of the packages and the names of the consignees. th ereof. x x x. xxxx xx xx xxxx SEC . 2521. Failu1'e� to S~el.Y Requisite M~nif~~ts.- If any vessel or aircraft enters or departs from a port of entry without submitting the proper manifests to th e customs autnor- ities, or shall enter or depart con- veying unmanifested cargo other than as stated in the next proceeding section hereof, such vessel or aircraft shall I

DECISION - CTA CASE NO. 3798 - 4- be fined in a sum not less than ten t h ousand (elO,OOO.OO) pesos but not exceeding thirty thousand (e30,000~00) pesos. The arguments ra�sed by petitioner to buttress the proposition that the vess el or her master is not liable for the fine, could be su mmed up to tte f ollow- ing ; l. The ~on tain erized shipment in quest : on is on a "Shipp : 1 ' s Load and Count" bacis which, as d e fined under Section 24 of Custo ms Administrative Order No. 8-75, means that: "a container packed with cargo by one shipper wh e re the q uanti t y, descrip- tion and condition of the cargo is the sole responsibility of the shipper." Under such concept, the carrier cannot have knowledge whatsoeve r of the actual contents of the containerized shipment it recei ~ es from the shipper because it does n o t i n c..: n y ��1 a y p a r t i C' i p a t e i n t h e i n v e n t o r y a n d p 1 a c i n g of Lhe goods into the container. 2. The misstatement or misd eclaration as to the quantity of the & ~ ticles in the manifes t wa ~ a mere cleri LE l error committed in good faith and the same was properly corrected by an am e~ dment al l owed by t he Bureau of Customs. 36 There was no fraud or fraudulent intent on th part of �the vessel or her master. lG o

DECISION - CTA CASE NO. 3798 - 5- 4 . The tota l numbe r of cases found in the two co ntainer s were tha same, i . e . 8 cas e s of co tton denims. On the other hand, respo ndent contends t h at t he law mandatori ly requires that ev ery ve ssel arriving fr om a foreign port muat have on boar d a c omplete an d acc ~ ra te mbnifest of all her carg o and such imperative r q ui _3m ~t allows no except ion. Thus the fact that the shipment in questiGn is con- ta i nerized under a "~hipper's Load and Cou ni: 11 arrangement; that a cor responding amendment to the vessel's manifest was allowed; and t hat t:.,.;r :.~ was no fraudule nt intent on t he pa rt of th e vessel or her mastert would not consti tute a valid defense and absolve th e ves s e l fro m liabi lity. We ag ree with responden t's view. Since the im<~ard foreign lf! anif es t of the vesse l M/V 'iM�1ERIC AN VENTURE" did not. e;ccur ately sta .. e t he quantit y of the articles in e 2ch co tainer, as what were de clared therein a s 40 cases of 100% co ~to n sulp h ur dy Jd denim under Bill of Lading No. 39 and 38 cases of 100% cot ton brushed de nim b roken twill under Bill of Ladi ,j g No. 38 were actua l ly 44 and 34 cases of said materi~ls, r espe ct i vely, the vessel has violated Section 1005 o f the Tariff and Cust om s I

DECISION - CTA CA SE NO . 3798 - 6- Cod e , which mak es it l iable for the fine presc ri bed under Se c~i on 25 21 thereof . Under Section 10 05 of the Te ~i ff and Cu s t oms Code, it is an imperative ob ligation of eve r y veaJ e l from a foreign port to have on board a compl e te manifest of all her cargo~ and to this mandatory requireme nt no exc e ptio n is provided by law. The recogni tion of any attemp ', t , re ad into the statute any exce pti on woul d be cont r ary to the -pe rvasive spirit as well as t he clear language of the� statute. (Smith, Bell & Co. (Phil.) Inc. vs . Comm . cf Customs, CTA Cas es Nos. 17 28 & 1921, July 22, 1 969; Maco Gdray & Co � , I nc � vs � Com m� o f Cus ton, s , CTA Case No � 19 30 , Decem ber 27, 1969 , c e rtiorari denied in G.R. No. L-3 159 9, Feb. 10, 1970 ; Campania General de Tabacos de Filipinas vs. Comm. of Cus tom s, CTA Case No. 2143, June 30, 1972; Maco n dray & Co ., I nc. vs . C o~ m. of Cus toms, CTA Case No. 2079, Sept. 29, 1972; Ma con dray & Co., In c . vs. Comm. of Cust oms, CTA Case No. 2067, Oct. 6, 1972 ; tvlaco ndr ay & Co., Inc. vs. Comm. o f . Customs, CTA Case No. 2073, Nov. 25, 1972; Ma c ondr a y & Co _.l Inc . vs. Comm. of Customs, CTA Case No. 220 3 , June 15, 197 3; Macondray & Co., Inc . 'S . Comm. of Cust o~ s, CTA Case No ~ 2082~ Sept. 17, 1974; Ma con dray & Co.s Inc. vs. Comm. of Customs, CTA Case No. 24 84, Jan . 19, 1976 ; Macondray & Co., I nc. vs. Comm e of I

DECISION - CTA CASE NO. 3798 - 7- Customs, CTA CLse No. 2472, Nov. 28, 1977; Maco ndr ay & Co., Inc. vs. Comm. of Customs, CTA Case No. 2503, July 31, 1978; Campania Gene ral de Tabacos de Filipinas vs. Comm. of Int. Rev., CTA Case No. 2559~ Dec. 28, 1979.) Thus the defenses of cleric al error, 'JOOd faith and lack of fraudulent intent in cases of this nature, as well as the defe nse th~t n amendment to the vessel's ma.Ji fest was allowed by the Bur eau of Customs, are unavailing and futile under said pr visions of Sections 1005 and 2521 of the Tariff and Customs Code, a nd will neither exculpate nor relieve the ofr1rding vessel from the penalty of fin e . (Macondray & Co., Inc. vs. Comm. of Customs, CTA Case No. 1930, Dec. 27, 1969 9 certiorari denied in G.R. No. L-3l 599, Feb. 10, 1970; Eve~ett. Steamship Co~p. vs. Comm. of Customs, CTA Case No. 1968, August 25, 1971; certior ari denied in G.R. No. L-34146, Oct. 7, 1971; Macondray & Coo, Inc. vs. Comm. ~f Customs, CTA Case No. 2079, Sept. 29, 1972; Macond.ray & Co., lnc. vs. Comm. of Customs, CTA Case No. 2Jt:i7, Oct. 6, 1972; Campania Gen eral :de Tabacos de Filipinas vs. Comme of Cu~toms, CTA Case No � 19 39 , f e b � 26 , 19 7 1 ; .c e r t i or a r i de ni e d i n G�R� No$ L-33386, April 14, 1971; Macondray & Co., Inc. vs. Comm � . of CustomE, CTA Case No. 1911, April 20, 1970. 171

DECISI GN - CTA CASE NO. 3798 - 8- The rationale of such doctrine, which has been rep eatedly cited y this Court, was enunciated in U.S. vs. The Steamship "Rubi", .32 PhiL 22C, thus: Th e evident intent and object of these requirements for the submission of manif~sts by all vessels fr om forcig ~ ports is to impose upon the owners and officers of such vessels an imperative obligation to submit lists of the entire lading of the ship in the prescribed fo rm , in order to fac!lttate the labors of the C-.:s t am s and i n. 1i._:;jrati 0.1 officers, and t o ce feat any attempt to make use of such ve sse ls to sec ure the unlawfu l e ntry of persons or things into the co�Jntry. No exemption is rna de in the statute, and the recognition of any attempt to re ad an exception into the law coul d hard lv fail tb defe at th e purpose of t~e ~~actment. (See also American Steamship Agencies, Inc. vs. Comm. - of Customs, CTA Cas~ No . 1851, Mcy 3, 1977; N & E Shipping Agency vs. Comm. of Customs , CTA Case No. 2629, Oct. 30, 19 7 8; Campania Gen~ra1 de Tabacos de Filipinas vs. Comm. of C~st offis, CTA Case No. 2559, Dec. 28, 19 79 ; F � E� Zue 11 i g (ll) Inc � vs � The Co mm � of Cu s toms, CT~ ta s e No. 3542, Oct. 18, 1984 . ) A similar i nt erpretation was enunciated by this Court in the r ecent case of Se a-L~~d Ser vi c e, Inc . vs. Commi ss ioner of 2 ~ stoms, CTA Case No. 3529, Feb. 29, 1984, wher~ a vessel's Inward Foreign Manifest dj. d not correctly and accurately state a containerized cargo. (See also Sea -L and SArvic c , Inc. vs. Comm. of Cust~~~ CTA Case No. 3583, Sep t~ 14, 1984.) 1 P"'1 I f ' l<o~

DECISION - CTA CASE NO. 3798 - 9- x x x. I~ d eed, there can be no fu ~ ther occ a sion to specu lat e u po n h ow the peremptory dem and that "[::very vessel from a foreign port must have on 'board a complete man- ifest of all her cargo" (Section 1005~ ~~ pr a ), wh ich far fro m showing any me re resemblance of an illusion, should be enforced. fl.s, "The man- date of th e law is clear and we cannot s e ttle for less. The l aw i mpose s the abs ol u te o~lig c tion , under penalty for failure, upon e ver y vessel from a f 3r r ign por t to have 'on bo aLd compl ete written or typewr i t te n man if es ts .o f all her cargo signed by the master 1 � Where the l aw requires a manifest to be kept or delivered, it is not c om plied with unless th e manifest is true and accurate ." ( U. S. v. S.S. Isl as Fili- pi nas, 28 Phi l. 291; cite d in Macondray & Co. , Inc. v. Acting Com r:. issio ner of Customs, 62 SCRA 432). x x Xe Petitioner's proffer~d good faith and disclaimer to an y kn owledge of the undeclare d items in the containeri ze d cargo c an no longer be a p ros pect that can eas i ly be rec on ciled with the in- tended impera t ive. Conveyed and dis - charged were tinmanifested c argo es � f al lin g sharply at odds wi th the ~ave at essentially addressed a n d direc tly brought t o bear upo n th~ car ri ers, r e- quiring a manifest o f 2 true and accu- rate description of all the car go . fl. nd: "Doi ng bus i nes s in t he Phil ippi nes , it beh~oves t he ~aster or owner of the vessel to abide by our customs laws and regul at ions and to ignore the ~ is nothing sho r t of careless ne ss and in co mpeten c e. " Delgad9 Shipping Agencies, Inc. v. Com - missio ner of Customs, G.R. L-4626 2, July 6, 1977). In a ruling of sim ilar i mp o r t t h i s Co u r t s a i d "\'! e c 3 n do n o less but ho ld the here iri petitioner accountable �for such deviation from the

DECISION - CT A CASE NO. 3798 . - 10 - peremptory demands of the law~ the proffe r e d good faith as an e~c ap sulating panacea in bashing the delinquency notwithstanding. Th i s specie of irregul~rity was not pro- pitious then, � it cannot, now." (Delgado Shipping Agency, Inc. v. Com miss ion e r of Customs, CTA Case No. 3089, Decem ber 28~ 1981). Petitioner must come to grip with the facts obtaining, nothing more. Having taken th~ responsibi- lity petitioner must assume full accounta bilit y fo r t f1 e undertaking in fesl Ly to the gove~ n ing law Dn~ regulations. Th~ Cu stoms law could not have wished the respondent to merely rLbber-stamp an imprimatur of acquiescence over a "said to con- t ain11 declaration. And vie do not think that by the si ~ ple expediency of containerization the law can be flo uted wilh impunity and its effi- cacy defused in a cui de s ac of impotency. The chips must somehow fall and having fallen t he erring vc8sels must bear the statutory penalty so ordained in s~ttion 2521 a of the Tariff and Customs ~ode, su~ra, which directs the lmposi tion of -fi. e in the sum of ElO, OQO.OO but not more than 830,000.DO. The statute makes no distinct ion nor dcies it establish an exception as rega .ds the ves s el's failure to supply the requisit~ man- ifes t. Subseque nt ame ndm ent adds no insulating rel i ef for "ev_; n granting arguendo, that t he amendment as � approved and th ~ refore valid it does not 1 n any way reliev~ the ves~el from the l 1abil ity which she already in- curred prio r t.o t he amendment ." (Maco n d:ray & Co., .Inc . :v. Actr-~ . Com�- missioner of Customs, 62 SCRA 4 34) . Neith_r the fac t that th e containerized ship- ment in q~cstion is on a "Shipperts Load and Count 11 I

DECISIO N - CTA CASE NO. 3798 - 11 - arrangement, i.e. th at "the quantity, description and condition of the cargo is the sole responsi- bility of the shipper", could take this case out of the operat ive effects of the c ited codal pro - visions as underRto o d and applied. Cus oms Administrative Or der (CAO) No. 8-75 simpl y defines the term "Shipper's Load and Count n wi thout any further 1~:rovL_i o .. or explicit ex- planation as to the scope of its applicability. Wh ile the concept may be relevant in determining r esponsibility in case of injury or damage to the cargo arising from loading, handling or mo . e- ment of the cargo, the same cannot �positivelyJ or even implied ly, be viewed as an exception to the provi sions of Sections 1005 and 2521 of the Tariff and Cust oms Code imposing a mandatory du ty on vessels from foreign ports to have on board true and accura te manifests of the ir cargoes. Bes i des , Cust oms Administrative Order No. 8-15 is merel y an admin~stra t ive order and th e s em9 cannot cer tai nly modify or amend a law or statute like the Tariff and Customs Code. and defeat t he purpose of its enactment. In fact, t o be valid, an ndm inistrative order .or regulation shall not be contrary to l~w. ( See Artic le 7, .Civil Code 170

�. DECISIO N - CTA CAS E NO. 3778 .; - 12 - - of the Philippine"; also D.avid vs. Dancel~ L-21485, : July 26, 1966~ 17 SCRA 696.) WHEREFORE, the decision of ~esp~ndent Com - missioner of Cusloms appealed from is af~irmed .' with cos ts ngninsf petitioner. SO ORDERED. Quezon City, Metro Manila~ Septembe r 27, 19 85. \~E CONCCR'rt, '":of(:A:~ ~IN Associate Judge \,_C7&JLAt~z~-/3~RE~YES~. /q~_ /\ssoc:i.C:tt Judge . #" Lrr. 17 li .'