CTA Case No. 184 (Decision)

, nt ll IIlii' ES A '.t"~ t;vuJ:u u M A N U..A FELIX M. ICAIAEN, C. T. A. CASE NO. 184 Petitioner , � - versus - THE COJ.llUSSIONER OF CUSTOMS , Respondent . X- - - - - - DEC I S I 0 N .J Petitioner is the consignee of one (1) elec- tric ranqe \"ith four (4) bur ners a nd en (1) fri- gidaire , vvhich were brought by the RPS "l ~I SAr'-IS ORIENTAL", a un:.t of the Philippine Navy , from Japan on September 2 , 1954. They were ordered forfeited by the Collector 9f Customs of Manila . in a decision rendered on March 1 8 , 1955 , firstly , for being unmanifested merchandise under section 1363 (g) of the 1~vi s ed Administrative Code , and , seccndly , for failure to sec ure a license to im- port the same from the Central Bank pursuant to Cir- cular tJo . 45 of the Central Bank . Upon-appeal to the Commiss i oner of Customs , respondent herein , the decision of the Collect or of Customs was af - firmed . Relative to the first ground upon which the decree of forfeiture by resp ondent is based , pet i- tioner insists on the existence of a shipping mani - fest covering the importation in question. This 14 1 lif .

� DECISION- C.I.A. CASE NO. 184 - 2- is sue has been settled in the companion case of Lt. Col. Leopolda R. Relunia v. Commi ssioner of Cust oms, C.I.A . Case Noo 181, November 14, 19569 wherein it was stated and we quote: "x x x the existence of a manifest in thi s case has been suffi ciently established. On September 17, 1954, the then Acting Commissioner of Cus - toms wrote to the Chief of Staff of the Armed Forces of the Philippines stating that, according to his infor- � mation 'a copy of the ship's manifest covering said cargo has been secured by that Office from the Commanding Officer of the vessel ', and requested that 2 copies of said manifest be fur~ nished the Bureau of Customs. This let- ter was referred to the Philippine Navy. Commodore J . Francisco, flag of- ficer in Command, wrote to the Commis - sioner of Customs transmitting two copies each of the manifests. The let- ter of Commodore Francisco, dated Oc- tober 9, 1954, reads: X X X "Commodore Francisco certified to the fact that the cargo on board the RPS 'MISAMIS ORIENTAL' when it arrived from Japan on September 2, 1954, were manifes- ted, and he furnished the Commissioner of Customs with two copies of said mani- fests . The cargo officer of said ves - � sel testified in Court that he prepared said manifests. No evidence has been presented to contradict his testimony. x x x The manifests were obviously pre- pared in compliance with Standing Opera- ting Procedure No. 12, dated February 12, 1953, of the Philippine Navy.� Petitioner argues that even assuming that there was really no manifest for the cargo, still the RPS "Misamis Oriental", being a navy vessel, is not required to produce any cargo manifest because 142 l;f

' DECISION- C.I.A. CASE NOo 184 - 3- Philippine Navy boats are not engaged in foreign trade. On this is s ue, this Court has ruled in the Relunia Case, supra, as follows: ~sections 1225 and 12?8 of the Administrative Code relied upon by respondent are found under Article Vl of the Customs Law the title of which reads 'Entrance of vessels in foreign trade'. Obviously, the said Article lays down rules governing the e~try of � vessels engaged in foreign trade. In fact, the heading of Section 1221 states: 'Ports open to vessels engaged in for- ~n trade - Duty of vessel to make en- try', and the second paragraph thereof exempts from its operation the master of any war vessel or vessel employed by any foreign government, unless it is engsged in the transpo~~9tion_~f_m~rchand~se in the w~y of trade. Section 1225 also pro- vides that for the purpose of making en- try of a vessel engaged in foreign trade, the matter shall present the documents enumerated therein. X X X "VIas the RPS 'Misamis Oriental' engaged in the transportation of mer- chandise in the way of trade when it ar- rived from Korea and Japan on September 2, 1954? The word 'engaged ' has been defined in Words and Phrases as follows& 'Engaged' means occupied or employed. Household Finance Corp. v. Shaffner, 203 s. w. 2d 734, 739, 356 Mo . 808. The word 'engage ' connotes more than a single act or a single transaction; it involves some con- tinuity of action. Day v. Equita- ble Life Asso. Soc. of United States, c.c.A. Colo., 83 F 2d 147, 148. The phrase 'enga ged in the transportation of freight or passen- gers', in constitutional provision exempting certain vessels so engaged from taxation, except for state pur- poses, means 'engaged in the trans- portation of property or persons 143

\ DECISION - C. I . A. CASE NO. 1 84 -4 - for hire . ' Dragich v. Los Angeles County , 86 P. 2d 669 , 30 Cal. App . 2d 397. That pleasure yacht was car- r ying for crew stolen lobsters tak- en out of season on single occas- sion without hire did not c onsti - tute ' engaging in trade' within forfeiture statute. The Chiquita , C. C. A. Cal ., 44 F. 2d 302 , 303. " It does not appear that the RPS ' Misa - mis Oriental ', when it arrived from Korea and Japan on September 2 , 1954 , or prior thereto , was occupied or employed in the transporta - tion of merchandise in the way of trade; or that it was continuously or habitually trans - porting goods in foreign trade for hire . We take it that respondent's conclusion has been inferred solely from the fact that said ves- sel carried on that one occasion dutiable merchandise. '~e do not believe t hat , under � the circumstances , the said vessel ~ay be c on- sidered as having engaged in foreign trade within the meaning of Sections 1221 and 1225 of the Administrative Code so as to require it to ' report and enter ' on arrival in the Philippines." We now come to the other ground relied upon by respondent in his decree of forfeit ure . It is contended that the merchandise consigned to peti - tioner is subject to forfeiture for the reason that petitioner-consignee failed to secure a license in violation of Central Bank Circular No. 45 . From the te~timonial evidence, it appears that the electric range and frigidaire in question were p urchased by netitioner with dollars received by him in the form of salary and allowances as an offi - cer of the Armed Forces of the Philippines 111hile he was on det ail with the Philippine Lias on Group (UN) I

bECISION - C. T. A. CA~E tO . 1 84 -5- attached to the Philippine Mission in Tokyo. Th:s evidence has not been denied , much less contradic - ted r-y respondent . ~"!e take it , t.1erefore , thnt the importation in question did not involve the sale of foreign exchange. We have held that Central Bank Circulars Nos . 44 and 45 , insofar as they seek to regula t importations of merchandise which do not involve the purchase of foreign exchange , are void. (Leu- terio v . Commissioner of Custorrs , C. I . A. No. 29 , April 18 , 1955 ; tJepomuceno vs . Commissioner of Customs , C. T. A. tJo . 122 , July 26 , 1956; Auyong Hian v . Commissioner of Custors , C. T. A. No. 219 , October 31 , 1956 ; Brillo v . Commissioner of Cus - tors , C. T. A. No . 176 , Nov . 14 , 1956. ) Consequent- ly , the importation in question cannot be v3lidly forfeited under Sect i on 1363 (f) of the ~evised Administrative Code as it does not involve the purchase of foreign exchange . HHEREF0l1E , the decision on apreal of the respondent Commissioner of Custcms wi th respect to the electric range and frigidaire in question is hereby reversed . We decree the release of sa i d art icles to petitioner upon payment of the corres- ponding customs duties , taxes and tother charges . Without pronouncement as to costs . $0 ORDERED . l~nila , April ? , 1 95 7. (Sgd . ) ROI.WJ l~ . Ul\11\LI Associate Judge 145

DECISION - C. I . A. CASE ~0. 184 - 6- I CONCUR: (Sgd . ) HARIANO NABLE Presiding Judge Associate Judge Augusto M. Luci ano did not take part � � ' . 146