CTA Case No. 2791 (Decision)

REPU''l !C: F THE PllTLTPPl~E8 CvL d r (!W TA.' APPEALS Q�, UEZON CITY ; DELGADO SHI.f? PING AGENCI LS , INC. in i ts capacity as a5en t of the SS 11 Eurygenes , 1 Petitioner , - v c-;:rsus - C. 7 . A. CASE NO. 2791 COI\frH S ;3ICNE... 0? GUS pToOnESde' ::"L Res t . X - �- - - - - - - - - -X D E C I S I 0 ~J This is a petition for r evieu o~ the decision of respondent Ccmmissioner of Customs dated March 9 , 1976 , affirming tha t of the Collector of Customs of l'"anila in Cust oms Case 1~o . 75- 48 , imposing a fine of .r:;;7a ' 492 � 00 o- -n +v he vessel S'u-' rn.J.:~Ju.rygenes" and/or its ship agent , petitioner Delgado Shipping Agen cies , Inc o, lor alleged violation of Section � 2523 of the 7ariff and Customs Code . It appears that on or about December 9 , 1969 , the vessel SS "Eurygenes" arrived and ro cked at the Port of Manila , and thereafter discharged , among othe r cargoes , 153 bal e s of assorted textil e rem- nant5 from i~ ew Yorl: , U. S. A. The vessel ' s bj_ll of lading No . 141 shows that the gross weight of sai d cargo was 50 , 178 lbs ., but based upon an examina- tion conducted by a customs examin er and a customs ap praiser , it was fom1d that the gross 'vveight vJa s

DECISION - C. T. H . CASE HO . 2791 , - 2- actually 122 ,397 lbs ., or a difference of 68 , 219 lbs . (slil.ould oe 72 , 219 lbs . ) re.si.' ltin6 in a dis - crepanc y of more than 20% between the actual gros s weight and that weight as declared i n the bill of lading . In the saie Customs Case No . 75- ~-8 (Adminis - trati ve Case No . V- 549/70) , the Collector of Customs , Port of l~ani l a , charged i~he vessel SS 11 Eurygenes 11 with the violation of Section 2523 of the Tariff and Customs Cocl.e , to wit: SEC . 2 523 . fJiscrenanc__y: Bet1veon ActuJal_ >o(,: . ~' ~J. : and Declars;;d ';Je:i.Pht of ..llil.P-ife !L"t.ed A,:cti cle .- ./ .f: Ii' the gross v-ieight of any a ticle or pack- age described in the manifest exceeds by 'I more than twenty per centurn the gross v-:eight as declared in the manifest or bil l of lading / thereof , and the Collector shall be of opinion that such discrepancy wa s due to the car'eless ... ness or incompetency of the master o r pil~t in command , ovmer or employee o:: the vessel . or aircraft , a fine of -not more t han fifteen ner cent11.m of the value of the package o r article in respect to which the d~ficiency e:ldsts , may be imposed upon the impo :'ting vessel or aircraft . On January 2 , 1975 , after he a ring , the Collect,or o f Customs rendered a decision imposing ~p an the vessel and/ o:;.."' petitioner herein a fine of :?59 , 492 .oo' for vio l ation o f Section 2523 of the Tar iff and Customs Cod e o On Narch 9, 1976 , said decision o f the Co!d�ector� was affirmed by the Commissioner of Customs . lienee , the present petition .

D:3CISI01-J - ''' C. T� . CASE HCO 2791 - 3- � The only i ssue j nvolvecl herei n is l.vllether or not sai d vessel SS "E-u yganes '1 violated Section 2 523 of the Tariff and Customs Code , as amended , so as to sub 'ect sai O. vessel anci/o r petitioner , as ship agent of the forHler , to che payment of the adminis trative fine of 1 59 , 492.00 . Petit ioner ' s c ~ntentions are: :'?trstly_, t hat it shoulc! r~o t be hel c li able for violation o ~': SecJcion 2523 o;_� the ':2ariff and Custon:s Cod e for lack of evidence to she ~ that the discre - pancy behre cn the declared a..r1d actLJ.al wei6ht cf the car~o was due tc the carel e ssness or incompetence of th e master , o~ne r, officers and crew of the vessel; that the said of ~ icers of the vessel have relied solGly on the swcr.l1 declaration o: the ship:t---er; and that the shipment 1.1as freighted on a measurement basis . Seccndly , the fine impo sed was excessive , un- just and confisc ato ry for having been based on the value of the total suipment anC not just on the defi ciency .. The issue raised by petitic1er is not a novel ; one. In a successive line of decisi on s, the mos t recent one being the case involving the same peti - tioner and vessel , Delgado Shi pping gencies vs. Customs , C'J:A Case 1;o . 283 7, decided on November 12 , 1977, this Court repudiated oetitioner 1 s first

D:CCISICN - C. T. A. CAS:C NC . 2791 - ,4 - allegation ~hen it held: The only issue is whether or not said vessels , the SS "Arninaka Haru , 11 the SS nnanl:o .Haru , 11 and the SS 11Eurygenes 11 vio l ated Section 2523 o ~: the TariL. and Customs Code , as am8noed , so as to sub jec t said vessels or petitioner , or shipagent of the former , the payment of the total administrative fine of i"67 , 316 . 00 . Petitioner asserts , firstly , that it should not be held liable for the fines impos ed un on the vessels i n question on the ground. that there is no evidence which �,vill shm.v that the excess weights o~ the cargoes were due to the carelessness or i ncompetency o~ the master or pilot in command , owner or emn loyee of the vessels; that the freightage of the cargoes were in fact made on the measur ement basis , that the bills of lading were declared by the shi pp<"r s and the said vessels have reli ed only on the ~ood faith of sai d shippers in declar - inE; the true ~;,�eights of said shi pments . Secondlv , i t contends that the f ine imposed upon each vessel is excessive , unjust and confiscatory in t t.at the fines were imposed upcn the value of the whole shipm ent in ques - tion of each vessel and not just upon the value of the deficiency . This issue in question is not new . In a decision o: th~ Court in the ca se of Iv1acondray & Co . Inc . etc . vs . Commissioner of Customs , CTA Case No . 2575 , promulgated en April 6, 1977 , this Court hel d thus: During the hearing in this Court , instead of presenting its evj_aenc e , petitioner joi.ned respondent in sub- mitting tho case , as aforesaid , based upon the pleadings anQ cus toms records , but stated in i ts. defense that in order to sustain th~ fine , 11 x x x there must be proof th~t the alleged weight discre - pa..'"1cy of more than 20ib must be shown to be due to carelessness or i nc omp etency of the master in command , o�11ner , O l' employee of ~he vessel" and that 11 (t)here is no proof regarding such carelessness or incompetency . " ( Iemorandurn of Peti- tioner , at p . 30 , C~A rec . ) This Court

- D:SCISIO~I C. T. A. CASE NO . 2791 - 5- states with emphasis that ther e was admittedly in this case a 37 . 7% in- cre as e in w~ight of the cargo , or 17 . 7% over the 20fo tolerable limit of discre- pancy allowed by lav.J o Conside ring this . percentage of increase over the good ' s declared weight , there was , to our mind s , a complete disregard of the duty of the master , owne r , or employee of the vessel in exercising that ordinary care and prudence in detecting any misdeclara- tion in �weight of the cargo 1n question ., "1J.e assume that the master , owner or em- ployee of the vessel res nonsible knovls that the cargo in que stion was destined f or discharge to the ?hili pp ines' and knowing as they should of the strict provision of Seccion 2523 of the Tariff a..r1.d Customs Co6e re quiring thc:.t the weight of the cargo should not be more than 20ib of that "~:Ieight reflected in the accompanying bill of lading and i1 the ship �� s manifest , they have not , therefore , taken all ordinary and necessary steps to prevent a violation of said law . :'he fact that the weight was supplicC by the shipper , and that under maritime practice , ships , such as the N/S T.d.OUBADOU::i 11 , at the time of loading goods in the f oreign ports , do not weigh their cargo is not a valid eYcuse in not at all considering the magistracy of our customs laws re- quiring that the cargo destined for Philip pine ports should not be weighed and the discre:lancy shoul(~ not exceed 20;; o ~� vvhat is de:~clared . And -v.re see nothing j_n the record lvhich showed some kind of abnormal condi tion obtaining in the port of loading, which is in Hew York , that coulc. have brought about this rather high percentage of weight discre- pancy . Consequently , this Court is constrained to find that there \<Vas an Uilexcusable negligence or incompetency on the part of either the ~aster , owner, or employee of the vessel in charge of the cargo in preventing the occurrence of over 20~ discr epancy in weight of the 43 bales of assorted textile remnants carried by th.e H/S "TJ.OUBADOUR11 penalized under Section 2523 of the Tarif~ and Customs Code 0

DSCISIGN - C. T. it . CASE NO . 2791 - 6- As regards the c ase s o~ Lines ':c . vs. Customs , C'lA 2365 , Jnne 17 , 1971+ and Smith , Bell &: Co . Inc . vs . Custons , CTA 2469 , Dec . 27 , 1974 , suff ice j_':.. to state tha t th ey are not appli c able to the case a~ bar for having different factual b a cl\g round � Anent , however , the second allegatiorJ. of peti - tioner that the fine i mposed was excess ive , unjust and corJ.fiscatory fo::.~ having been based on .the value of the total shi pment and not just on the deficiency , such point �Has squarely ruled upo1.1. by chis Court in the sa...'TI.e case of Delgado Shipping Agencj.e s, Inc . vs . Customs , whicb 1:re quote heret.mder : Howev er , we are of the opinion that t he fine to be i mposed under Section 2523 of the Tariff and Customs Code , as amended , s hould not be more t~an 1 5% o: the value of the arti - cle or goods in r espec t to which the deficiency of the goods is 24 , 811 lbs ., and based upo n the appraised value of ~~0 . 85 per l b . of dis - crepancy , the total value of the excess weight dis cr epancy is , therefore , ~21 , 089 o 35 , or compu ted a t the r at e of ,. 3 . 94 to a doll ar , the value of the excess we i ght disc r epancy is ?83 , 092 . 04 . ~�'ift een (1 5/b ) per cen t of the total v alue o: tho wei r,ht discrepancy of ?83 , 092 . 04 , which is Pl2 , 463 . 80 , is the ad - minis �c rati ve fine l eg ally imposable under~ Section 2523 of s ai d Code . Applying the aforecited decision to the case at b ar , we a r e ther efore constrained to hold pe titioner liable for violation of Se ct i on 2523 of the Tariff and Customs Code , \vi th a modifi ca tion as to the amount o ~: fine to be imposed . The gross weight a s

DJ.jCISICN - C . ~ . A . CAS: NO . 2791 _, 7 manifested in the bill o7 lading i,~ras 50 , 178 while the actual gross weight upon actual examination by the customs appraiser was 122 , 397 , or a diffe rence of 72 , 219 lbs . representine a discrepancy of more than 20,~ , or more specifically 59 . 48tL Based upon the appraised value of ~~0 o85 per lb . of weight discrepancy, the value of the excess weight dis- crepancy is , therefore , ~61 , 386 . 15 , or comput ed at the rate of ~3 . 91 to a dollar is P240 , 019 . 84 . l,ifteen (15;b) per cent of the value of the weight discrepancy which is :1?36 , 002 . 98 is the maximum fine that can be imposed upon petitioner under the Tari:'f and Customs Code . How- ever , adverting to the ruling laid down in the abcve stBted case of Delgado Shipp~ng Agencies , Inc . vs . Customs, where this Court "finds no compelling reason to impose the maximurl). penalty under said Section 2523 because the negligence or incomp etence - of the master, owner , of ~ icers or employees of the vessel does not , to our m~nd , and upon the cir- cmnstances, amount to will:ul negligence.or gross incompetence , " we are inclined to reduce "She fine to a just and reasonable amount of ?12 , 000 . 00 . WHERRFORE, the decision of the respondent Commissioner of Customs appealed. from is hereby modified . Petitioner, in its capacity as agent r~

D~CISION - CoT�� CASE NO . 2791 - 8- of the ve ssel SS " Euryge.n es" is hereby ordered to pay respondent th e sum of P12 , 000.00 for violation of Sect i on 2 523 of the Ta ri ~ S:' and Gus toms Code of the ?hilipp in e s , as amended ., With costs a~ainst pe titione r . SO ORDERED . Quezon City , January 30, 1978 . I I CO:WUR : ~L:)_.. /7 Al-1lli'JTE ~~ rfiEf:"~ Acting Presiding Judg e