CTA Case No. 4307 (Decision)

--I REPUBLIC OF THI PHILIPPIRE8 COURT OF TAX APPEALS QUEZON CITY ROBERT WARREN NIELSON, C.T.A. CASE NO. 4307 Petitioner, f.:J-)If~~ b - versus - COMMISSIONER OF CUSTOMS, Respondent. X- - - - - - - - - - - X DECI S I 0 N This is an appeal fr�om the Commissioner of Customs' decision ordering the forfeiture of Fifty- three Thousand ($53~000) US Dollars as violative o f Central Bank Circular No. 960 taken in relation with Section 2530(f) of the Tariff and Customs Code. Petitioner~ an American citizen, is a Directo r of the China Pacific Exploration Ltd., a Hongkong- based company undertaking jointly with the Worldwide First Co. and the Philippine National Museum underwater research, e>:ploraticm, and excavation of sunken ships and vessels in � the Philippines. His work requires him to bring in funds from his Hongkong office for use in the project which needs substantial capital to acquire

DECISION CTA CASE NO. 4 307 - 2- needed equipment~ devices~ gadgets~ machineri e s, vessels, and highly skilled and trained personnel . On October 31, 1986, petitioner came fr om I 1 Hongkong and accomplished Central Bank Form 6-22- .J 42~ otherwise known as currency dec 1 ara ti <".m (Currency Declaration No. 09398). He declared therein that he was bringing in with him fore ign �- currencies, namely: (1) $120,000 US Dollars~ ( 2 ) 50 Deutsc he Marks~ ( 3 ) 30 Pound Sterling, (4) 5,000 Swiss Francs, ( 5) 50 Belgian Francs and 200 Philippine Pesos. On November 8~ 1986, petitioner left the Phil i ppines for Hong kong wi thout surrenderi ng Currency Declaration No. 09398, �but declared when asked by the customs authorit i es that he was n<."Jt carrying any foreign currency. He was cleared f or boarding but only after a body search. On November 14 , 1986, petitioner came back to the Philippines. Since he � brought in with hi m $9,000 US Dollars he declared it under CLin��en c y Declaration No. 9784. On November 24, 1986, petitioner again departed for Hongkong without surrendering Currency Declaration No. 9784 as he was not carrying then

DECISION CTA CASE NO. 4307 - 3- any foreign currency. He was bodily searched before allowed to board the plane. He came bac: ~~ the same day bringing in $4,000 US Dollars, which he declared under Currency Declaration No. 10140. On December 17, 1986, for the third time 8 petitioner was booked for Hongkong. He advised the customs personnel that he carried with him $56,000 US Dollars and presented Currency Declaration No . 09398~ accomplished on October 31, 1986 when he first arrived in the Philippines. The currency declaration was duly verified and confirmed by the Central Bank Office (Airport) that the same was indeed authentic and the petitioner was accordingly cleared. Later� the petitioner was to be accosted by government authorities at the passenger terminal who informed him that he "violated the foreign exchange rules of the Central Bank by departing the Philippines twice before, on November 8, 1986 and November 24~ 1986, without surrendering his currency declaration dated October 31~ 1986". Thereupon the District Collector of Customs (Airport) confiscated his foreign CLtrrency amounting to $53,000 US Dollars, leaving petitioner $3,000 US Dollars~ the maximum allowed by the

DECISION CTA CASE NO. 4307 - 4- Central Bank to be brought in without the need o �f any currency declaration. Seizure proceeding was accordingly instituted against the conf isc:ated foreign currency pursuant to Section 2530(f) of the Tariff and Customs Code, which provides: SEC. 2530. Property Subject to Forfeiture Under Tariff and Customs Law.- >t >t >t >t f. Any artie le the importation or exportation of which is effected or at tempted contrary to law, or any article of prohibited importation or exportation, and all other artie: les which, in the opinion of the Collector, have been used, are or were entered to be used as instruments in the importation or exportation of the former. >:>01 X>IX After due hearing the Collector of Customs decreed the forfeiture of US$53,000 on February 5J 1987. A motion for reconsideration proved to no avai 1 and on appeal, the Commissioner of Customs affirmed the Collector's decision on July 28, 1988, a c:opy of which was secured through the efforts of petitioner's counsel on September 29, 1988. Hence, the instant petition. The case before Us presents no dispute as to the relatively simple material facts but the

DECISION CTA CASE NO. 4307 - 5- parties seem trying to get the better of each other over by a quibble as to proper import and scope of the "Notice" of instructions in CB Form 6-22-42 or currency declaration, stating: (1) Keep your copy of this currency declaration and surrender the same to the representative of either the Bureau of Customs or Central Bank at the departure area, and (2) This declaration is valid for this particular trip only. The respondent Commissioner of Customs holds on to the proposition that the petitioner breached the "injunction" of said notice, starvelingly agitating in effect that when petitioner left� for Hongkong on November 8, 1986, the authority granted by the Central Bank to bring out the foreign exchange declared under CB Currency Declaration No. 09398 issued on his arrival in Manila on October 31, 1986 is deemed to have ex pi red. Hence, the said currency declaration was inefficacious when it was presented on his subsequent trip to Hongkong on December 17, 1986. Otherwise stated, the CB Currency Declaration No. 09398 could no longer serve as petitioner's authority to bring out the confiscated currency for the said trip. All told the apparent misfortune of the

DECISION CTA CASE NO. 4307 - 6- petitioner was his failure to surrender the foreign currency declaration on a trip immediately following his arrival in the Philippines regardless of whether he was bringing out any foreign e>~change. In assai 1ing the forfeiture order, petitioner lays stress on the plain language of Section 39 of the Central Bank Circular No. 960, which reads: - SEC. 39. .l:li.�..9.~LgJ:LR.QrtC;\tj..of.l_/...:tr"a.o~ m.!J;.J;.�tL_Q.f__f.Q.r.::.g_.tg.o..___~l.L<;;..bP.ill..9..~. - No person , firm, association or corporation shall take or transmit or attempt to take or transmit foreign exchange, in any form, in any manner, out of the Philippines directly or through other person, through the mai 1s, or thr�oug h internationa 1 carriers unless specifically authorized by the Central Bank or allowed under existing international agr~ements or Central Bank regulations: E'..r::pv.;!...�1..�9..-.... _The_j:;_ .t..ttt?... ..._..Q.C9.b_.;i. b.;l:~_J,.g_o____. ?...h.e.l..l__f! oj::___S\J2.P-1.Y_._.1Q. .t9.!:!.r.A.?...t..?......______~o_c;t_______....O..QD.=n~.?.-.!.9..?n t____j::_~...ffi.Q.9...!:E.IXY. '.!.. i ~.J,j:._q.r.:.�...--~-t"_l Q.___E.~..r.:g__!;_E!!~_!_o_g__o r .....�J�?DA.!D.iL o~1 t _ 9 f . t...h~----�-P h !J.1.I~.f.t!.!J_tg_�..._____.f or ~J,_gn_.__~1.�...0E!.D.9.~----�� i 11 t.?... -.. a fl}O '-:\D... n q...t..___..ID.!.�.!1?...~-gj....o_g___?,Lt.!;:_h_..E!.ffiQ.\-1 1"1. t ?.-��� o f_ fru::.�IJ..9J:L_J?.::.u;;..b_@...l}g_g_____t? r .Q..l:.\.9.tLt..J..!l..-~.!J.9_d ~..�J.E...rf:?...Q. Q.y__J;_o_~.m. f.g.r.:._____Qbtr..P._Q..?...~.�_______g_f.______. ~�...t.a q]._;i,_E?..b.J:.o.g_____t tl.~?.. ~I!.Q.\.:.\.O..t._.._.Q.f..........f..9..L..!?._i..9D..........!?..~L<;;;..b.~JJ..9.~---�..Q..r.:.Q.\J..Qb_:t_.....PY.. .t...~.f!-l ....A:.o_:\;..Q. ___t;_. b..!?.._..E:.bJ. l.J.J2.Il:!.D_~?-~--���-.t..Qh\.L!..!?...t..?.__..E!.f.l...f.l_ 0.9.o. =.r.!?..?...!fl_t;t n ..L .__t..!?..ffi.P.QC\I..Y......-Y.!..?..!. t..9.r:.EL...9.L.:t.o _gj,JJ_g. rJ!_t.b_____t.b.~.fr.L__m.9X.!?._____1b.e.rL.__w_g_~ ~_,_Q~lf.l ._oQ___g_r.____).,._t..?.. !?._9 .\:!.4:..Y.~J.J:?_IJ..t.._______;!_. Q._______g_t.b..!?..C __f.o r:- e .!.9 n _____c q.r_r e _ru;::_y_,_ !J_Q_t~.!?...s._____�.tJ_g_�!L~...s-�---~.ruL____Q.j; h~ r ~-�:.~t r ~n s t~r: !.8 ~.t.DJ.H:l!?..f.t"t.!?.__. _ . _._q_eiJ.Ql!.l i n.E..t...!?_Q._____j...f.l_______f r~g..!...Y.. �..QD..V ~r_t_;j,_gj_~---�-�:f.Q.r_g_j,_g_IJ.._____.f;..h\.! r.~D..!;_Y....s..-�-��--~-b..@.t!. �!.~!;-~.-~.!?..-..J ;,.b..!?.--i.r._ ..f.9J:.I?_.:i:..9JL_.!?.X <.;JJ.E.Il9.?.___~_t-���-.PO i..nt?. Rf...__. _.~n.t.cJ,.~.?... --��--��'"'"-' P..Q.o....______su:.r..!Y_~. L. ____..l.n____t.b_t;. Eh.:!:..~.A.Q.P..!_rl!?..?.____!n.... .-~. __tg.r..m_.Q..r_~_p_c;_r .:!:..Q!?._Q___p_y___:Lh.~ !;:;g_f]._t._r_.:_\l....Jl~O.k� (Underscoring supp 1ied)

DECISION CTA CASE NO. 4307 - 7- Hewed close to the said context, ' petitioner avers that it appears clear and explicit that tourists and non-resident temporary visitors may bring out foreign exchange provided they comply with the two requirements, namely: (1) the tourist or non-resident temporary visitor must declare at the time of arrival the foreign currency brought in by him, and 2) the foreign currency that the ..__ tourist or non-resident temporary visitor desires to bring out must not exceed the amount of foreign currency brought in and declared by him. Rational i:zing f1..1rther, "Thus, had petitioner surrendered to the Bureau of Customs or the Central Bank the currency declaration in t:Juestion when he departed the Philippines on November B, 1986 even if he was not carrying any foreign CLtrrency with him, then he would have parted with the possession of the only document that serves as his authorization to bring out later on the foreign currency or part of it he brought in. A surrender of the currency declaration everytime he departs� . ( '. ~ the Philippines even though he does not bring out any foreign cLtrrency is tantamount to a sLtrrenc:ler of his right to bring out what he has brought in. This could not have been the intent of the CB 393

DECISION CTA CASE NO. 4307 - 8- Circula r . There i s n e ithe r r hy me nor reason behin d the interpretations that the district collector o f c ustoms and respondent Co mm i ssioner would want to make of the instructions pri n ted at the back of the CL\rrency declaration." Just so and aptly enough We agree with the petitioner. The apparent patina o f c ogency neverth ele~Ss impressed, We find illog ic the sprouting impression precipitately broached by t he respondent that 1 ) failure to surrender the c urrency declaration when the declarant first departed the Phi 1 i pp i n e~s rendered the currency declaration invalid, and 2) the CLirrency declaration is valid only from the time of arrival up to the time of departure o f the declarant from the Philippines. Respondent has overplayed his understanding of the simple "notice" in the currency declaration , which constitutes neither law nor regulations, and could not have been intended to supplant the purpose in Sec. 39, ~4.../l.r.i!� He has fumbled into - a reversible error. Petitioner must have stated the obvious that,! "the purpose of the currency declaration (as' provided in the Circular) is to establish the amount of foreign exchange brought in by th ~

f' ' DECISION CTA CASE NO. 4307 - 9- declaran t and, t hereby , estab l ishing in� turn the amount of foreign exchange t hat the declarant will be allowed to bring out when he departs the Philippines. The currenc y dec laration, therefore , is meaningful only when the declarant carries with him foreign e>tchange when he departs the Philippines. If he does not carry with him foreig n exchange when he departs the Philippines, there logically is no need to present the same when the dec larant departs the Philippines. As a matter of fact, this was what a representative of the Centra l Bank told the petitione r when the latter accomplished the currency dec laration upon his arr i val from Hongkong on Oc tober 31, 1986." This sets in place the legal moorings of the basic purpose of Sec tion 39 o f CB Circular No. 960~ The currency declaration wh i ch respondent himself had occasioned should not serve narrow purpose in construing the rights and obligations of the party declarant. It wi 11 therefore be an absurdity on the part of the respondent in repudiating the petitioner's currency declaration. We find n o justification in stultifying the import and scope of said Section 39, suprf!, that 11 Tourist and non- resident visitors may take out or send out from the

DECISION CTA CASE NO. 4307 - 10 - Philippines foreign e>: cha n g e in amounts not exceeding such amounts of for e ign exchange brought in by them." (Sec, 6, CB Circular No. 960.) We therefore view with ease petitioner' s righteous indignation in prying loose from an apparent legal constraint posed by the respondent that �the currency declaration must be surrendered when the declarant lea ves the Philippines regardless of whether or not the declarant takes out with him foreign exchange; and that the currency declaration is valid only for the particular trip on the occasion of which it is executed. This is stretching too far the effective range of expediency. WHEREFORE, finding the petitiQn well taken, the same is granted and the order of forfeiture against the confiscated currency is hereby set aside and cancelled. No costs. SO ORDERED. Que z on City, Metro Manila, December 14, 1990. I CONCUR: "--- ROAGUIN Judge

l DECISION CTA CASE NO. 4307 - 11 - CERTIFICATION I hereby certify tha t this decision wa ~ reached after due . consultation between the members of the Court of Tax Appeals in accordance with Section 13, Article VIII of the Cons titution. Court �~. ... . \ I .~