VERTEX INTERNATIONAL PRODUCT AND EXCHANGE CORPORATION, THROUGH ITS PRESIDENT RICARDO LUZ, v. COMMISSIONER OF CUSTOMS, BUREAU OF CUSTOMS

Republic of the Philippines COURT OF TAX APPEALS Quezon City En Bane VERTEX INTERNATIONAL CTA EB Case No. 1160 PRODUCT AND EXCHANGE (CTA Case No. 8193) CORPORATION, THROUGHITS PRESIDENT RICARDO LUZ, Present: Petitioner, DEL ROSARIO, P], CASTANEDA, JR., -versus- BAUTISTA, UY, CASANOVA, FABON-VICTORINO, MINDARO-GRULLA, COTANGCO-MANALASTAS, and RINGPIS-LIBAN,Jl. COMMISSIONER OF CUSTOMS, Promulgated: ,__3,-� BUREAU OF CUSTOMS, Responde nt. MAR 0 ~ 2015 X- - -- -- -- - - - - - - - - - - - - - - - - -- - -- - -- - - - - - - -s:;F/ �-~ �- -- - -X DECISION CASANOVA,L_: This is a n a ppeal, by way of a Pet it ion for Review1, to nullify and set aside th e Decision2 da ted Februa ry 4, 2014, w hich dism issed Vertex Inte rna tional Pro du ct a nd Exch a nge Corp o r ation's petition on jurisdictiona l ground, and subsequ ent Resolution 3 dat ed April 1, 2014, w hich a ffirm ed the said dismissal, b oth promulgated by th e Court of Tax Appeal's (CTA) Thi rd Division in CTA Case No. 8193. Petitioner is a corporation duly registered and existing under laws of the Republic of th e Philippines w ith principal place of business at Uni~ 1 CTA En Bane Rollo, pp. 1- 12 2 Annex "0", Petition for Review, CTA En Bane Rollo, pp. 21-34 3 Annex "E", Ibid., pp. 36-40

DECISION CTA EB Case No. 1160 (CTA Case No. 8193) Page 2 of17 14 568-A Quirino Highway, Barangay Talipapa, Novaliches, Quezon City.4 Respondent, on the other hand, is a government agency attached to the Department of Finance, with principal office at the Office of the Commissioner, Bureau of Customs, South Harbor, Manila. The facts of the case,5 as found by the CTA Third Division, are as follo w s : "Sapang Primary Multi-Purpose Cooperative (SPMC) is a grantee of a grains business license by the National Food Authority (NFA) and/or the Philippine International Trading Corporation (PITC). On January 22, 2008, SPMC executed a Deed of Assignment in favor of petitioner over the sacks of rice subject of this case. In March 2008, a shipment of seventeen thousand eight hundred (17,800) sacks of rice consigned to PITC for the account of SPMC arrived at the Port of Manila. After assessment by respondent, the dutiable value of the shipment was determined at Five Million Two Hundred Seventy-Four Thousand Two Hundred Ninety Pesos and Eight Centavos (P5,274,290.08). PITC paid for SPMC the amount of Two Million One Hundred Ten Thousand Seven Hundred Eighteen Pesos (P2,110,718.00) as duties and taxes with a tariff rate of forty percent (40%). On March 31, 2008, the operatives of the Presidential Anti-Smuggling Group (PASG), by virtue of Mission Order No. 0108-2008 served on Adonis Carmona, entered petitioner's warehouse at No. 10 Manhattan corner Seattle Streets, Cubao, Quezon City where they found 20,000 sacks of rice inside. Parked in front of the warehouse was a 1x20 container van (No. OOLU8235734).~ 4 The Parties, /d. , p. 1 s Annex " D", /d., pp. 22 -27

DECISION CTA EB Case No. 1160 (CTA Case No. 8193) Per the documents submitted by the owner, the warehouse belonged to petitioner Vertex International Product and Exchange Corporation, with Ricardo Luz as its president and the rice found therein were imported by SPMC, to which a Certificate of Accreditation and Import License were respectively issued by the Customs Accreditation-Secretariat (CAS-BOC) and the NFA. The documents also showed that petitioner acquired the sacks of rice by virtue of a Deed of Assignment executed by SPMC in its favor. On April 10, 2008, the District Collector of the Port of Manila issued a Warrant of Seizure and Detention against the subject shipment for alleged violation of Section 2530(f) and (1)(5) of the Tariff and Customs Code of the Philippines (TCCP), as amended, in relation to NFA rules and regulations. On April 16, 2008, petitioner filed a Motion to Quash the Warrant of Seizure and Detention claiming, among others, that the ownership of subject shipment was lawfully transferred by SPMC to petitioner and that PASG has no authority from COC to seize the shipment pursuant to Section 2536 of the TCCP, as amended. On April 22, 2008, the PASG filed its comment on the Motion to Quash raising the legality of the Deed of Assignment as the rights and privileges granted to SPMC cannot be assigned to a third party. Moreover, its authority to seize shipment is backed by Executive Order (E.O.) No. 624 and the deputation of the PASG Head to enforce the provisions of the TCCP, as amended issued by respondent. On May 20, 2008, the District Collector of Port of Manila quashed the Warrant of Seizure and Detention in the Order dated April 10, 2008 and ordered the release of the 20,000 sacks of rice, more or less, found in the warehouse located at No. 10 Manhattan corner Seattle Streets, Cubao, Quezon City, pursuant to Section 2313 of the TCCP, as amended.~

DECISION CTA EB Case No. 1160 (CTA Case No. 8193) Page 11 of17 period herein prescribed, the same shall be deemed dismissed. If in any seizure proceedings . the Collector renders a decision adverse to the Government. such decision shall be automatically reviewed by the Commissioner and the records of the case elevated within five (5) days from the promulgation of the decision of the Collector. The Commissioner shall render a decision of the automatic appeal within thirty (30) days from receipt of the records of the case. If the Collector's decision is reversed by the Commissioner. the decision of the Commissioner shall be final and executory. However, if the Collector's decision is affirmed, or if within thirty (30) days from receipt of the records of the case by the Commissioner no decision is rendered or the decision involves imported articles whose published value is Five million pesos (P5,000,000) or more, such decision shall be deemed automatically appealed to the Secretary of Finance and the records of the proceedings shall be elevated within five (5) days from the promulgation of the decision of the Commissioner or of the Collector under appeal, as the case may be: Provided, further, That if the decision of the Commissioner or of the Collector under appeal, as the case may be, is affirmed by the Secretary of Finance, or if within thirty (30) days from receipt of the records of the proceedings by the Secretary of Finance, no decision is rendered, the decision of the Secretary of Finance, or of the Commissioner, or of the Collector under appeal, as the case may be, shall become final and executory. In any seizure proceeding, the release of imported articles shall not be allowed unless and until a decision of the Collector has been confirmed in writing by the Commissioner of Customs." ~~sec. 2402. Review by Court of Tax Appeals. -The party aggrieved by a ruling of the Commissioner in any matter brought before him upon protest or by his action or ruling in any case of seizure may appeal to the Court of Tax Appeals. in the manner and within the period prescribed by law and regulations:@-'

DECIS IO N CTA EB Case No. 1160 (CTA Case No. 8193) Page 13 of17 Decision is not in accordance with the evidence presented and is contrary to law and procedures; that the subject shipment did not violate Section 2530 (f) and (l) of the Customs Code; that all the requirements for importation were complied with by importer Sapang Palay Multi Purpose Cooperative; that said importer filed the corresponding Import Entry and paid the corresponding duties and taxes thereon; that the transfer of ownership on the said importation to herein claimant is an exercise by Sapang Palay Multi Purpose Cooperative of its right as legitimate owner thereof; that granting without admitting that it is in violation of NFA rules and regulations, the same is not within the jurisdiction of the Bureau of Customs; and that, as such, the said Decision should be reversed and set aside. Hence this Review." (Emphasis and Underscoring Ours) Admittedly, petitioner submitted that it received respondent's January 7, 2010 Decision on January 17, 2010. Clearly, petitioner was then provided sufficient notice of the outcome of the said case. However, thereafter, in its appeal, petitioner assails the authority of its broker, asserting that "no authority to do so was given by petitioner"2s, thus, it was deprived of due process. Again, We are not convinced. The essence of procedural due process is embodied in the basic requirement of notice and a real opportunity to be heard. In administrative proceedings, such as in the case at bar, procedural due process simply means the opportunity to explain one's side or the opportunity to seek a reconsideration of the action or ruling complained of. "To be heard" does not mean only verbal arguments in court; one may be heard also through pleadings. Where opportunity to be heard, either through oral arguments or pleadings, is accorded, there is no denial of procedural due process.~ 25 Par. 8, Petition for Review, Division Docket, p. 5; and Par. 6, Memorandum, Division Docket, p . 307 26 Haydee Casimiro vs. Filipino Tandog, G.R. No. 146137, June 08, 2005

DECISION CTA EB Case No. 1160 (CTA Case No. 8 193) Page 14 of1 7 In the administrative hear ing for S. ION. No. 2008-06 0 27 conducted on April 16, 2008, the hearing office r, Atty. Roberto Bauson, inquired the authority of Mr. Adone s C. Carmona to r e present p etiti oner, thus : "x X X HEARING OFFICER: XXX XXX XXX Before going further, I would like to a sk Mr. Ca rmona if he has an authority to appear in beha lf of Ricky LuzjVe rtex? MR. CARMONA: Yes, Your Honor. HEARING OFFICER: What kind of Authority? MR. CARMONA: Special Power of Attorney. HEARING OFFICER: Atty. Llagas, could you go over said document and te ll us your comment? ATTY. LLAGAS : I have no objection with the SPA submitted w hich states tha t Mr. Adonis Carmona is the representative of Ricky LuzjVe rtex Intern ationa l Product Excha nge Co rp.~ X X X." 27 Exh ibit "1" fo r the respondent

DECISION CTA EB Case No. 1160 (CTA Case No. 8193) Page 15 of17 Evidently, the records of the case reveal that petitioner was aware of the January 7, 2010 Decision rendered by respondent. Therefore, We cannot give credence to petitioner's claim that it was deprived of due process. Suffice it so to say that if petitioner, indeed, was unaware of said proceedings or if the Mr. Adones C. Carmona really has no authority to represent petitioner, it should have presented evidence in addition to those already presented during its administrative appeal considering that the proceedings before the Court a quo was a trial de novo28. Mere allegation is not proof.29 It must be pointed out that in the exercise of its exclusive appellate jurisdiction over the decisions of the Commissioner of Customs in cases involving seizure, detention or release of property affected, the Court in Division must necessarily review and evaluate the pieces of evidence presented at the administrative levePO Moreover, it is worthy to note that there is nothing in Section 2313 of Book II of RA No. 1937, as amended, which would support petitioner's contention that failure of respondent to decide the automatic appeal within thirty (30) days from receipt of records will render his decision thereafter null and void. What is clear from the provision is that in case the Customs Commissioner fails to decide within the prescribed period, the case is deemed automatically appealed to the Secretary of Finance.31 Thus, recalling that the reckoning point of a judicial appeal shall be from the receipt of respondent's Decision, petitioner only has until February 16, 2010 within which to file its judicial appeal. In view of the foregoing, this Court cannot disregard jurisdictional conditions mandated by law; non-compliance with mandatory prescriptive periods bars a taxpayer's claim for tax refund or credit. This Court should not establish the precedent that non-compliance with mandatory and jurisdictional conditions can be excused if the claim is otherwise meritorious, particularly in claims for tax refunds or credit. Such precedent will render meaningless compliance with mandatory and jurisdictional requirements, and will open the flood gates for unscrupulous claims . ~ 28 Kepco Phil. Corp. vs. CIR, G.R. No. 179356, December 14,2 009 29 Ma layan Ins ura nce vs. Philippines Firs t Insura nce, G.R. No. 184300, July 11, 201 2 30 See El Greco Ship Ma nning and Managem ent Corporation, vs. Commissioner of Cus toms, G.R. No. 177188, December 4, 2008 31 Ibid.

DECISION CTA EB Case No. 1160 (CTA Case No. 8193) Page 16 of17 Having thus concluded, the Court En Bane finds it unnecessary to determine the merit of the other issues raised in the instant Petition in view of the finding that respondent's Decision dated January 7, 2010 has already become final and executory. WHEREFORE, the instant Petition for Review is hereby DENIED for lack of merit. Accordingly, the Decision dated February 4, 2014 and Resolution dated Aprill, 2014, both rendered by the CTA Third Division in CTA Case No. 8193, are AFFIRMED. SO ORDERED. CAESAR A. CASANOVA Associate Justice WE CONCUR: Presiding Justice �~fr C.cC.A~ STAN~ EDA,t(9R.~~ ((JAN ITO Associate Justice E~ P.UY ~~~f.-A~ Associate Justice AMELIA R. COTANGCO-MANALASTAS Associate Justice ~ N . M~~ , c;~ CIELITO N. MINDARO-GRULLA Associate Justice ~�A7_l ~ . ~. i-.... MA. BELEN M. RINGPIS-LIBAN Associate Justice

.... �.

DECISION CTA EB Case No. 1160 (CTA Case No. 8 193) Page 17 of17 CERTIFICATION Pursuant to Article VIII, Section 13 of the Constitution, it is hereby certified that the conclusions in the above Decision were reached in consultation with the members of the Court En bane before the case was assigned to the writer of the opinion of the Court. Presiding Justice