CTA Case No. 3061 (Decision)

Kt~u_..:UC OV i !U �"gi'L~Pr1Nt...~ CO .H:'�:T OF ''FAX. ./'i!.,_'"'J?'f::.' '~JL9 Of 'lf ('(VJ C'iT"lt EVERI:'I"l' S'TEI\lv'lSHIP CORP. r Pe Li. t ioner, --� ve :c s �1s - C.T . A. CASE NO. 3061 COi.\UviiSSIOl\d::R OF CUST0~�1S v P.es~lonc!.<~ n t . X - - ��- - - - -� - �� - - :X: DE C I S I 0 N Appeal by petitioner. Ev erett Stean.sbip Corpo - ration from the decision of respondent Commissioner of Cust o ms dated Deceillber 28, 1979 i n Customs Cas~ No. 79-191, affirming the decision of the Collector of Customs of Davao dated December llr 1978, irnposing an adrninist!..:ative fine of ?10;000 .. 00 against the vcssc:.:. \,1j:; "C:-Il\LHEVERf'IT" for. allcgE>clly conveying an unmanifested article consisting of one (1 ) .transistorized v;all clock: in violatinn of Section 1005, in relation to S0ction 2571, of the Tariff and Customs Code, ~s amended by Pres- idential Decree No. 34 2nd Pr esidential Decree The facts are not in dispute. It appears that on June 14, 1978, the v~~sel M/S "CFAU�lE\7EEET'I'" 1 of \�lh ich ;'G L:i t i.onet i.s tb

.. DBCISION - CTA CASE NO. 061 - 2- found to have on board an article, c~nsisling of one (l) transistorized wall clock, which was not listed in its cargo manifest no� entered in the baggage declaration or entry forms required by the Bureau of Customs . Consequently, customs administrative proceeding w~a instituted 2gainst the said vessel for violation of Sect i on 1005, in relation to Section 2521, of the Tariff and Customs Code, as amended. On July 7, 1978, the Collector of Customs of Davao issued an Order impositg an administrative fine of PlO,OOO.OO against the said vessel. And on December llr 1978, after further proceedings~ said Collecto~ rendered a decision reiterating his order of July 7, 197B holding the vessel liable for a fine of ?10,000.08. On ,January J.., 1979 1 petitioner appe'-'lled to the Commissiorer of Cus~oms who, on December 28, 1979, rendered a decision affirming ~.D. !9.-t:.:?. the decision of the Collector of Customs of Davao. Hence the present appeal. Tho sole issue for resoluti0n is whctner or not tbc~ vessc�l r�-1/S "CE'\Li:IE\i'EIU::'l'T" :i.n J.}.able foi: the adrninist:r.ative fine of ~10,()00.00 for 'Jio- 278

DEC IS ION �� CTi\ Ci'.E>E NO. 3 G }L 2521, of the Tariff and Customs Code, as amended, the pertinent pto isio~s of which, provide; "So:~ction 1005 - ~~~nifesE__H~~.:.Lr.�.0.: of Ve;;-~1:_ fr'2!.il...F<?_rQ i<Jn ~P.E..!:� - Gver:y vessel (rom a foreign port must have on board a complete manifest of all her ca:cgo. All the cargo intended to be landed at:. a por.: t in the� Phi1 ippines must. be desctibed in separate manifests for each port of call tlH::xcin. Each manifest shall include the port of departure and the port of del:vcry w~th the marks, numhers, quantity and description of the packages and the names of the consignees thereof. Every vessel from a foreign port must have on board a complete manifest of passengers and their baggage, in the prescribed form, setting forth their destination and all particulars required by th(~ immigration laws, a.nd every such vessel shall have prepared for presentation to the proper custo~s officia~ upon arrival in ports of the Philippines a complete l.ist of all sea stores then on boord. If the vessel dqes not carry cargo or passengers tho manifests must show ~hat no cargo or ~assenger, as the ca0e may be, is carried fro:n dw port of departure to ~he port of destination in the Philip- .pines.11 XXX X~-;;}{ �r "Sectjon 2521. Failure to Supply ..'::::.0 _R:~.3. .~-l.. ~C"~' L-'::t .~- 1\.1 .r!..�~!;:~:.:e::, C�~' :.'.1... ~c~ � y \ .. _, (. .. fr�,-�:c~~:~I ~l-�r'"';{;-~-:~~~�::;;1'~��--~u~'�l:~ aircraft er:t:.crs o:t 'if.:;9arU:; frorn 2 po:::t of. entry without: f,;u.bmittinq the pruper 1nar1ifests r:.c) ~:l1e ~;~J.stotiiG autllt)}.. i ti -~), c,r. sha1.l c~nt er or dep��rt conve 'i.n':J unmani.feb��� ted cargo other th2n as staled in the next pt:0.C8ding ;3\;::ct }.on he:rc�:':l~, sc..cb vN,scl. o,: 279

.. c' ~: c. Is IC)J.~ ..... r~ ,- .. ;j ;j I) .c. C'l'A Cl'.:3E !.1U, aircraft. shall be finec1 an .:::nou :1t not less than ten thousand (~!0,000.00) pesos but not exceeding thirty thou~and (F30 l000.00) f>C:;JcJ:S., (i\s ar--~ct1tJ<~d l:!y 1 P.D. No, l2SS-A) Petitioner contenas that the vessel M/S r~lation to Section 2521, of th0 Ta~iff ~nd Customs Code, bc>causc: (a) The value of said wall cloc k is insig- brought it on board tie vessel has no intention of defrauding the gove~nment of taxes ; (b) Said w2ll clock partakes of the nature of: "rer~;onal. effects" and the.\:efou? it is not rc~Ulted to bo listed ln the manifest as 1t w~~ violation of this nat0re , and being the first offense, she merits a lighter p~nalty, poseibly fully submitted, suftlcc. ~s o

CI'A Cli.S':~ NO. 30 6 l ~10,000.00 is out of proportion to the cffenE~ because the value i. s min i.r::al and there is no fraudulent in~ent to defraud the '!'��i'~l.nment of taxes. Hence, the said penalty is harsh and e xc essive. (Par . 3, Pe t it i on For Revie w, November 25, 1980 hearing.) On the other hand, respondent maintains tha~ the carrying by the vessel of the unmanifestcd article is a vic1.ation of Section lOGS of the Tariff and Customs Cede because said law imposes foreign port to have on board a complete, true and accurate manifest of all her cargo and a complete manifest of passengers and their baggage in the ;;>rescr ibed form [.-;ct ti!i9 f:or U.1 tlw ir dc:s'cind t:i.on and all particulars requiled by immigration laws. And for such violation, t~e vessel is nu: relieved frLm the penalty of finG im9ose6 under 2St

r;t~ClSIC)i'1 .... Cqf.f\. C'!~SE T\~0~ 3 0 6.1 - 6- in ques t ion is c J_;:u.;sifi ab l e i:--\S "basy:jagE:~" .:.nd, citing _he c:ase of Col! mi ~.:;s ioner of Cu:;; to s vs . Francisco Gc.~o n imo , L-3 1 612, Octoher 28 , 197 7, 80 ~RA 74 , the same should have bee n e ntered in the baggage declaration and entry forms prescribsd by the Bureau of Customs to Datisfy the requireme~ts o f t h~~ l cnv. The Cour t agrees with the view of respondent and hereby sustains the same. From the provisions of Sect i on 1005 of the Tariff and Customs Code, as amended, which state that: "Every vessel from a fo~eign port must have and " Every 'Jesscd. i:i:om a foreign port must b;:we on their destination and all particulars required by the immigration laws, x x x'' (unde c scor i ng supplied), i t i s quite clear tha~ a separate manifest for its cargo and ;;:;e;p.::1r.~i re man ifcs t for it~> p.:u:;:c;;c�;;']Cr s and their baggag8 are tequircdd the incoming for. c. ign ve ;;sc l, Doth l be ve ~~, sc~ l ' s c a.>::go and the lis r. ecJ .. 1f ( '. 2.8 2

'. I,, /' l I ,-~ _, ' T ...... 7 while baggage must be ente~ed in the baggage man- ifest or ilt least in the b~ggage declaration and en�ry forms prescribed by the Bureau of Cu2toms. The reason for the distinction can be gleaned from the decision enunciated by the Supreme Court in the case of Commissioner of Customs vs. Francisco Geronimo, L~31642, October 28 ~ 1977; 80 SCRA 74. Thus: It is easy to see that inward manifests are required by the State principally for the purpose of informr ing itself what dutiable goods are n board an incoming foreign vessel . As , a general practice, -oods of commercial quantity or value, usuallr covered by the corresponding bil s of lading, are entered by the carrying vessel in an inward cargo man:Lf:est. which is suhri.tted t the port authorities and scrutinized by them. Upon the other ha d~ baggage belonging to arriving passengers i~ normally entered in baggage d:3Glar -. t.ion Qnd er �:ry forms prescribed by the i3uJ:eau of Customs. (80 SCRA 7 ., 78) XXX xx:x: ' The law itse_f recognizes a dis- tinction between "cargo 11 and ab2.�393<Je 11 when it treats them separately. Se~tion 1005 of the TariZf and Customs Code (R.A. 1937, as amended) adfeccrleairqens that (a) ":Svery vesssl from port musi have on board a comnlstc manifest of all he.r carqon v and (iJ) ."Every vessel. from a foreign pbrt must have or- board ~ompletc manifests cf passengers and the:r baggage, in the pres~ribcd form, setting forth their destination and all particulard_ required by the immig- rat~on laws; � � � " The distinction 283

DEC .f;ION - CTA CASE NO. 3061 - 8- is by no means ~n idle one because the customs processing of passengers; baggage, unlike that of general cargo, must be done with dispatch, first, in order to avoid unnecessa~y inconvenience to tbc passengers accompanying them ~.ndr second, because their contents are generally considered to be of little or no taxable importance. All too o ften the priv i lege of "passenger baggage" i s abused by unscru- pulou f:; "tr ave le r s ." ., The word "mg age" 1 as �He under;;;ta:1d it, refers to "such articles of epparel, orna~ent, etc . , as are in daily use by travelers, for con- venience according to the habits or wants of the particular ~lass~ which he belongs, either wi th reference to the immediate necessicies ox ultimate purpose of the journey �.. only such articles of necessity or convenience aa are generally carried by passengers for their personal use". As such, when entered in the baggage declaration and entry forms prescribed by the Bureau of Customs, passengers' baggage is deemed manifested in accordance with law. Dutiable goods of commercial quantity or value cannot be sure, be considered pa~sengers 1 baggage which can pass under the same manifest forms. They fall within th~ category of general cargo and are required by law to be declared in the inward cargo manifest of the carrying vessel X X x. (80 SCRA 74, 79) an obligation of the vessel comj.ng from a foreign port .o have on board not only a complete manifest of all its CClrgo but. also a complete mani:l:>st of its passengers and their baggage h~s obviously rcndererl in~onsequential and u~necessary the tactual

DECISION ~ CTA CASE NO. 3061 sistorize6 1all clock) is cargo or bagg~ge because, in whichever classific~tion said article slouJd fall, the same will have to be manifested in accord- a.1cE~ wi -.h l e~ w. And the f o.ilu.r:c of th _, veSf:",(;~J. to comply with such legal obligation in rega~d to the l~sting in the m2nifests of her cargo and passengers and their ba7gage is pun i shable by a fine under Section 2521 of the Code . As a matter of fact, it would neither ~ake any difference if said article should~ conformably t o petitioner 1 s assert:.ionf br:: t~eab~d as 11 person'-'1l effects " . In tbe la�tteJ.: cate9oryv when viewed w.:.th reference to the traveler or pass~nqere the article can ba similar to, or synonymous with, !!baggage". ~1'hc teJ:::r:l ;!personal effects" r efers t. ( .) �-o C..l. � "r.t )rOpe~'- "t.vJ. e.". .'...,~.. pe'"\_'; l.~�-"-l.lJi.J' Caor.L.~e'."I "t;_:..:,l'C,>..,-~'i-.�,��.��.lC.t~ ~ O"'l1 0 1 ,C..,:. """ per::;on and a c:Locc relationship tb~~r2to >~ x x"! ( b) ."sue:~ property as is usually OiC no.r.:ma.lly ca1~dcd by a b:aveler for his use and comfort . ,. � " (Webster's Third International Dictionary, p. 1686.) The wor:d "baggage" meanf~ " r:n:tic:lec� of nec(~Sf-Ji.ty and personal convenience, usually carried by passengers for their rersonul use, and what they are depends upon the habits, taste, and resources of the passenger". 2S5

'�� DECISi:ON ... CTA CASE NO. 3061 Or v as s;tnted in the cc:::se of C..:�ron:\.rnor r cfcr i3 to such articles of apparel, ornament, etc., as are in to the habi~s or wants of the p~rticular class to which he i)t~ l ongsp c: i t.her with r-2f:e:rence to the immcd i utc necess i t i es or ultima te purpose of the journey � � only such articles of necessity or convenience a s are generally carried by pas~engers In other words, the include his ba0gage or, vice versa, his baggage may include his personal effects. Hence, the require- baggage manifest or baggage declaration and entry fo1:ms , etc. , can be made to appl}:' l:.o "pcrs~..;nal effects". The .requi.rcm�'~nt. of f!ectJon 1005 of t:.h'2 T<.l.ri�f and Customs Code as regards the vessel ' s cargo manifest and the manifest for its passengers and their baggage seems to be imperative and absolut~. ;:o cxcep wi.on J.s prcvdcd thcrr:'in nur: L: Sect.i.:..Jn 2SG

D::;CISION CTA CASE NO. 3061 .. 11 - ( f~J.0 1 000.00) .PCS �:::s but not (C:XC8(.;C!ln.g t :1irty tbous.-:;.nd (t<30,000.00) [X':So;:. upon any vesscd. t.hat c.ubmitting the ?:coper mim:Lfcst:s to t.:.~: e cusu_,m~:; au~ho~it i es ~ or shall enter or depart conveying unmani.feE:tcd cargo. Consequent.ly, IX;!titioner l s postulation that the value of the unmanifested article here involved i s minimal; tha t there is no intention tu c\cfriO'LJ.d t:he gJve.rnmen t of reve n uei a valid and 0v~Llpatory defense which would justly reJ.ieve the vc;;;";; ..:l fr� ~., the �..;rio.lat.ion of the law and the penalty imposcL therein. ~~ere the pro- that there is n0 occasion for the court 1 S sec,<': ..Lng leg is la t i ve intent, the la\v must be ~:a ken a;:o i \:: is, devo id of j ud ic ial adcJ.i ti<:)P or subtr ~~c t ion. (Acting Commissioner of Customs vs. Manil~ Electric Company , L-23623, JJnc 30, 1977, 77 SCR~ 473~ Insular Lumber Company vs. Court of Tax Appeals E.; C~ ~) :a1rn i f..~ s i <-J n Q 1: CJ f I 11 t: () j~ !1 a 1 J? ~2 ~.,r Q n: 1(~ , .L- 31 0 ;~1 7 & 31137 , May 29r 1981.) 287 -

DECISION �- CTA CASE NO. 3061 of E"lO, 000.00 �.mposed upon the 'JE!SSel, i.Li'Wmuch cl.S under the explicit provisions of Section 2521 of the T~riff and Customs Code, as amended, such penalty is already the minimum for the offense. Nothing there speaks of a first offense which would merit a lighter penalty. Where the law has already specifically i mposed a minimum fine for an offense, a lighte~ penalty should not be read into the law. "he l.aw rnay be ha.rsh 1 but it i s still the lavJ. "Dura Lex Sed Le:.~. " (Gonzal~z v. Gonzales, 58 Phil. 67; WHEREFOF'E, the decision ap:ea1ec1 from is affirmed, and petitio e~ heYein EvLrett Steamsh i p Corporation and/or: the vc:st::.el i:-1/S "CIIZ\L~D:::VERE'I'T" are l end:.'y orde-ed to pay a fine of ~10,000.00 to respondent Commissioner of Cust~ s. With costs. SO ORDEHED. Quezon Cit.y~ Metro Manila, June 25, 1981. 288 \