CTA Case No. 762 (Decision)

I 6PUIJLlC OP TfJE an.~PJ'IN URT' OF TAX APPEALs ' lj...~ . � FELICIDAD VI ERNEZA, Petitioner / versus I C. T. A. CASE NO . 762 THE COMMISSIONER OF CUSTONS, Respondent . x---- - -- -- x ~ DE CI S I 0 N This is an appeal from the decision of the Commissioner of Customs which affirmed that of the Collector of Customs of Cebu ordering the for- feiture of ~50 cartons of Chesterfield cigarettes and 110 �cartons of Camel cigare t tes belonging to the petitioner . The undisputed facts of the case are stated in the decision a ppealed from, viz . : , At about 2:00a . m. on September 16, 1957 , the M/V ntegaspi 11 a coast- wise vessel coming from Jolo docked at the port of Cebu on her .v1ay to I'~Ianila . Acting upon a confidential telegraphic report from an informer in Jolo that the said vesse~ was carrying a substantial quantity of smuggled foreign cigarettes , the Cus- toms authorities of the port of Cebu conducted a search of the vessel which eventually led to the discovery of eight cases containing SIX HUNDRED FIFTY (650) CARTONS of Chesterfield cigarettes and 0:�1J"'E HUNDI'illD TEN ( 110 ) CARTONS of Camel cigarettes without the required Internal avenue strip stamps . Upon investigation it was also discovered that the subject merchandise was covered by Bill of Lading No. 2'+-A (Exh . B) with "per- sonal belongings" as its declaration and correspondingly entered into the manifest of the vessel likewise with upersonal belongings11 as the noted

DECISION - ~TA CASE NO . 762 . 2 description , and with Sultan Pula of Jolo as the consignor and a certain Carlos Valdez .as the consignee in Manila . Upon further investigation , however , it was found that a woman passenger was accompanying the sub- ject merchandise appearing later to be Mrs . Felicidad Vierneza , the pre- sent claimant , who all t he while holds the bill of lading . It should be noted that when Nrs . Vierneza was questioned during the course of the search she disclaimed under oath (Exh. 11Hn) ownership of the merchan- dise . Believing ,that there is a strong _ evidence of violations of Customs lav1s, the Collector of Customs of Cebu seized t he merchandise and instituted the for- f eiture proceedings for violation of Section 2530 (f) , (g) and (m)-~ of the Tariff and Customs Code of the Philippines and Section 174 of the Internal Revenue Code . After complying with the procedural requirements of the law , the Collector of Customs of Cebu conducted a hearing of the case on January 6 , 1958 wherein the claimant, through counsel, inter- posed as part of her defense the issues which are now raised on appeal. Sub- sequently , or on February 5, 1958 , the Collector of Customs of Cebu r endered his decision forfeiting the subject merchandise in f avor of the Government for violation of Section 2530 (f) , (g) and (m) -~- of the Tariff and Customs Code of the Philippines and Section 174 of the Internal Revenue Code . ( P� 42- 43, Customs recor ds.) The claimant of the merchandise , petitioner herein, appealed in due time from the decision of the Collector of Customs of Cebu to the Comw~s- sioner of Cust oms who affirmed the decision of the Collector , with the modification that the forfeiture was sust ained , among others , under

1 l I DECISION - CTA CASE NO . 762 3 paragraph (m-1 ) of Section 2530 of the �rariff and Customs Code instead of under paragraph (m-~) of the same section. Hence , this appeal . Petitioner questions the correctness and legality of the decision ordering the forfeiture of the cigarettes in question on the following grounds : 1 . That the Collector of Customs for the ort of Cebu acted without jurisdiction when he seized the mer- chandise involved; 2. That Section 2530 of the Tariff and �Gustoms Code has not been violated by the transportation of the articles involved from Jolo with Man- ila as the intended destination; 3. That the present case does not fall witbin the scope of Section 2531 of the Tariff and Customs Code; arid 4. That articles seized for alleged violation of a particular provision of law cannot be legally forfeited for violation of any other provisions of law��* In support of the contention that the Collector of Customs of Cebu has no jurisdiction to order the seizure and forfeiture of said merchandise , it is alleged - (a) That Section 602(b) of the Tariff and Customs Code merely de- fines the jurisdiction of the Bureau of Customs in general , which is not

II DECISION - CTA CASE NO . 762 4 synonimous to the limited juris- diction of the collector of customs of Cebu over merchandise imported from foreign countries into his collection district ; (b) That Section 603 of the same Code i-n turn defines the territorial jurisdiction of the entire Bureau of Customs v1hich is not synonimous to the limited jur- isdiction of the Collector of Cus- toms of Ctehbua1t as shown further by the fact Section 703 of the said Code states that: 11The Col- lector shall have the jurisdiction over all matters arising from the enforcement of tariff and customs laws within his collection district; 11 (c) The said collector -of cus- tom~ has no jurisdiction to pro- ceed against any merchandise smuggled through any other port like Jolo; (d) That �section 2203 of the Tarif�' and Customs Code merely con- fers authority to the collector of ~customs of Cebu to exercise the functions of the Bureau over cases developing in his own district; (e) Th~t this ~uthority can be exercised by the collector of cus- toms of Cebu whenever the merchandise that enter within his collection dis- trict is the subject of hot pursuit and only for the purpose of turning the same over to the collector of the district where the introduction took place, which is not the c~se of the merchandise herein involved; (f) That Sections 2203, 2205, 2207 , 2208 and 2210 of the same Code have no bearing on, or appli- cation to, the question of exclusive jurisdiction of collector of customs of Cebu over merchandise imported within his collection district , whether legally or othe.pwise; and

DECISION - CTA CASE NO. 762 5 (g) The cases relied upon on page 7 of the said decision are not applicable, considering the fact that herein petitioner is not the import- er , original owner , consignee, or agent of any of them; and there is no al- legation and/or eviden~e to prove that said petitioner had knowledge that the said articles were imported con- trary to law. There is no question that the Collector of Customs of the ort of Cebu has jurisdiction over all cases arising within his collection district, and this includes the pm.o~er ,.to inspect, search and examine said vessel or aircraft and any trunk , package , box or envelope on board , and to search any person on board the said vessel or aircraft and to this end to hail and stop such vessel or aircraft if under way , to us e all necessary force to compel com- pliance; and if it shall appear that any breach or violation of the customs and tariff laws of the hilippines has been committed , whereby or in conse- quence of which such vessels or aircrafts, or the article, or any part thereof , on board of or imported by such vessel or aircraft, i s liable to forfeiture, to make seizure of the same or any part thereof . " ( Sec . 2210 , Tariff and Customs Code . ) The authority of a collector of a port of entry to order the seizure and forfeiture of merchandise is not limited to mer- chandise destined for that port . The language of the law is broad enough to cover merchandise imported (I

r I ,I DECISION - CTA CASE NO . 762 6 or attempted to be imported contrary to law while in transit and destined for another port~ In the case at bar , while it may be true that the cigarettes in question were introduced into the hilippines through Jolo , the said cigarettes were not imported in Jolo . Importation begins when the carrying vessel or aircraft enters the jurisdiction of the Philippines with intention to unlade therein and is terminated only upon payment of the duties, taxes and other charges due upon the articles , or secured to be paid, at a port of entry and the legal permit for withdrawal shall have been granted, or in case said articles are free of duties, taxes and other charges , until they have legally left the jurisdiction of the customs. (See See&. 1202 and 2202 , Tariff and Customs Code . ) At the time that said merchandise was at the Port of Cebu , the speci- fic tax thereon had not been paid , or secured to be paid, so that the cigarettes had not yet left the jurisdiction of the Bureau of Customs and the Col- lector of said port was authorized to have the same seized and forfeited while they were \<Ji thin the jur- isdiction of that port . The theory of petitioner that only goods destined for the Port of Cebu, or goods in hot pursuit within the jurisdiction of said port, are subject to seizure and forfeiture by the cus- toms autho.ri ties in Cebu would place the Customs

DECISI ON - CTA CASE N � 762 7 Laws at the mercy of unscrupulous and scheming im- porters and their cohorts . The second ground relied upon by petitioner is that Section 253 (f) of the ariff and Customs Code has not been violated because cigarettes are not articles of prohibited importation , hence , not sub- ject to forfeiture under said section. It is enough to state that Section 2530 (f) refers not only to articles of prohibited importation but also to articles which are authorized to be imported but which are imported or attempted to be imported in violation of Customs Laws . (See Venancio Carreon Tong Tek v . Comm. of Customs , G. R. No . L-11947 , June 30 , 1959.) It is alleged that mere absence of internal revenue strip stamps affixed to the cigarette packages is not a sufficient evidence that the cigarettes were smuggled into the hilippines . This fact, to our mind , is a strong , if not conclusive, evidence that the cigarettes were brought to the hilippines 'for consumption vli thout any intention of paying the corresponding specific tax; in other words, it is sufficient evidence of an attempt to import the cigarettes in violation of the law, and , therefore, subject to forfeiture under section 2530 (f) of the Tariff and Customs Code .

I I \. DECISION - CTA CASE NO. 762 8 / I Finding that the Collector of Customs of Cebu had ju~isdiction to order the seizure and forfeiture of said, cigarettes and that the forfeiture of the same is in accordance with Section 2530 (f) of the Tariff and Customs Code , we deem it unnecessary to pass upon the other questions raised by petitioner . The decision appealed f r om being in order, the I same is hereby affirmed , with costs against peti- tioner . SO ORDERED. Quezon City , December 26 , t96lf � . ROMAN M. ill! Associate Judge I CONCUR :