CTA Case No. 343 (Decision)

�' t., � ver&u� - s - . - - . X � - .. ._ .. - o..; c I s ! T i s n p al fro n decision of he r spon- :>n r f (;' stom at d cember 27, 19~6 , in �It r Id n ' 1c t!on Ca s os . 18 1, 1 2, 186 � 189 and 1 02 su t ning h d c sion of th Collector of C o s of an!la, h r 1n the lat er ordered and d cr d t h ae ~ur and forf tur of h &ubject portations consist ng of fr sh ~~r11c 8nd onions from . on kong and Jap n f r ck of t a rv r le�s� e rt ffca � from the C n�r ank Cl d 11- cense fro he on o rd as llage 1� � under Central an~ ire 1 rs os . 44 nd 4 i rela- t on to ;:)ect!on 1 6~ (f) of t. l v s~d A i 1istrat!ve c C s s os. 10~6 and 1902 involving n!on fxo Ja ~ o h :3 d t onal round that said importa i >ns w re ode in �Jiolatlon of ,;;)ections 1 nd 14 of .. x cut tv Crda:r . o. 328 c..atud June 22, 19 of th resident of the rh111pp1nea . Here are t h the partless 30G

E �o. 343 - 2- 307 31

DEC I � - .- C, . T. A. CAS O. 343 6. That t.he garl1e 1 nt ntio ed 1n paragrepha 3 and 4 w re like 1se covered b th on&u lar Invo1cea 1 sued 1n rJon kon on August ?~ . 1954 and pte r 1, 19~ . r sp et1vely (pp. 129, 166. 147, and 1~2. usto a ecord) J 7. hat the o 1on ship ta ntion d in paragraphs 2 and ~ ere not covered bv ny consular invoices; a. That n11 the a ove- entioned hip- ents were not covered b any Central ank elea erti 1c t~ issued b the Central Bank of ~h f 111p 1n s or any of its a~ent an IJ 9. Th t the abo~e-mer.t one ger c shipments were seized by th Appraia�rs' Division of the ureau of ~usto s on the basi s of ect1on 1 63 (f) of th ev1 ed dm1ni&tr t v CoGo in relat on to Centr l ank Circulars Nos. 44 and 4~. aa shown by the izur d ntiticat.ons Nos. 1 6 � 16 �2, 1863, and 18 (pp. ll , 134. 153, and 17~. Custo .s ecord); 10. "i'h t the abov .. onion shipments were 11 ew!se the p- pralser ' D v ion of t ureau ot custo on th� baa1s of ection 136 (f) of the evis a Administr iv ~oa 1n l ion t Central ank Circulars o � 44 and 45, ana Executive rder o. 326, AS 5ho n y S i� zure laent1f1eationa oa. 1856 and 1 2 ( pp. 92 ano ' � Cu t s .etor ) J 11. hat t aid � i nts re re� 1���� to the petition r-cons1gnee astern Sea Tr din � un ur �y on Jos . ~- 5 � G�9~ , G-9~9, - 590, G� 591, 9593, and -959~ filed , th tern !>el r~ ~a principal, and Alto uretv and Inaurance o., lne., s urety (pp. 1~~ . !97, l7 � l74e 116, 9, and l~l. Cuato s Recor ). bv virtu of t o sep r�te order o t ~our of f 1rat In tanc of an11a issued n C1v11 Cases oa. 2 2 n '2, oth entitl d, Lim Hu , et al., va. d!lberto David, et al., (pp. 17 nd ~- ~ . uato ecox ); 12. That on epte r � 195 � t e Collector of uato s �nderad a d�e1s1on forfeiting the above- ontionod erchandiso, a copy of which wae received y petitioner on epte er 6. 1956 (pp. 8� 13, usto s ecord)J 308

' E O. 343 , -4- 13. nat on epte er 6� 1956, the pet itioner herein appe led aid decision of the ollector of Cuato to the res- pondent Co ~i s1oner o ust~ s who . on Oec er 27, 19~6 , aff1r ed th d c ! on of the C~ll cto.,. of Cust o.. s. cop of tho said d ci iol nownaJ~rnucrevivead, � pet.L- couns tione~ � s 19~7 (pp. 2- 6, Custo .s cord}; 14, Th t from the s id d c1s1on of the Com 1&G1on r of Cust &, the tl- tloner h r in app led to th1$ I onor ble Court on Jor.u rv 19 , l 7; ( tlpul t1on of Fact � pp. 42~ � Ct rec . J In addition, � ot tionor pr ented xh1b1ts � C , D, i , F , an (pp. �94, C A rcc.) hich are respectively the Trade nd F1nanc1 1 re 7.ents o t- w�en the G v�rn ant of tho epublic of the Fh1l1pp1nes and th upt' nd r for th ll e.rs in Jap n ot d t d 18, 1 50; c rt!f c Pv of xecutlve der o. ~81 a cert1ftcatl on ot t ere- tar of t e 1llpp1ne enat dated are s. 19~8 , stating a ong oth r t hings that there ar no papers or ocwaenta a owin that tM erter r e A e nt et en t � hll ppin i n J 'throu nor J.ts extens ions re ev r at1f ed o r en te; a l tte cretarv of or 1gn ~ fa lr$ to tty. Valentin~ . ut1errez d�ted pr 1 2 , 1 7, stating among ot er t 1n � t a � nd ftnancial ree- enta 1n ques tion ere � en d �;.;:.......,.:.aw --..z.;;.;.;:.;;.;;::.;;;. eighteen time and that hile the or1 1nal a r enta ere concurred 1n v the PhUippJ.ne en t und r eso- lut1o oa . 61 and 62, oth adopted on Mav 1~ . 19 1, the extension of the � � since pril 28, 1952 w re 309

a without &nate eoncurrenc 4 a c ograph cupv of the reaty of P aco b t � t e Allied 'O ers nd Japan an a l.tter of th~ Ex cutiv~ Cffic r of ~ � / defu~t Import Control Co ls~ton to tho om.'ll1ss1on�r of Cuato dat~d April 1!� , 19!)3 , utho.r1tin tbe latter to �release ll sh!pm nt of goods com1n un er o Dollar � 1tt�nce Import Llt ns o. 12390 � 1& uod on ve r 1�. 19 2 in the amount of 400, 000. � o the petLt1on r . ast rn ea Tra in � prov1d&d all th it s fill within the 11c ns �" - The .respondent on his part pr�sented s additional ev1 enee, xhibit 1 (p. 9~ . C. T. A. r . ) consi tiny of a certified cop of Circular Lette o. 14 � of t e Acting Commissioner of u to en ointng his su ord1� nates to gu ded by Circul r o. ;;~2 of 2 � 54. of the Actin Deputy Gov rnor of the Central Bank of the 111pp1nea regar 1n2 th ext rs1on of the rrade nd Fin ncial A re ment now l que t1on. This c s narro s do to two &t1ons o 1 ~' � h the~ ~r not th eu ject 1m orta� t ons hich adm1tte ly re imp rted on a no-dol 4r rornJ.ttane� basis eoul be elze , and forfeited u er Cir.cul Nos . 44 nd 45 of the Centr 1 a in relation to c.: , tin 1363 ( f) of the ts d dmL~1 tr t1ve c de?1 2. h ther r n � th spect to the ' sh nt f onion fro Japan covered bv ~ e1zurt ldtnt1f1eat1on a es f o6. 1856 and 1902, th aa. could as dd1t1on 1 round ~ t1z d and forfeited nder authority of eet1ons 1 and !4 of Exe~utive der o. 20. le �nting the tr e and inane! 1 wre - nt$ betw en the h111pp1n s and Japan. , al&o 1n relat1o to ectlon 1363 (f ) of th ev1 ed 1ntatrat1ve Code? 310

...... - ----- C.T. A. C E t � 34 In ita e r~n<.iu. , t h� e 1 1-)nar conte .ds th t the seizu � forf ii:u.:e e ov .,... nts rity of entr 1 an vircu ars , o � ly uut o� lation to c~ on l~ ( J 0 t. a...d 4- - va Code. r done o n~u t n y 1 :-eiore should se :1 ~ 81 C1r I sued vond t co f ,J ntral ank uadar t c r t r . ... ..s ank under c. h.r l' .~!l 0 v x -:o re ulate lcporta ion lnv l as the pr $ nt ne � pro ulgat 1n ~ cu to the on on tion Cases bv the u .r ri v of n 1r- cular oa. 4 0 w X CU t \f !I' ar o . "' Of he e&l ent rel .. ion o c 1 n 1 63 (f) of the ""oo � t. p 1t n r argues that sa d effect 1t h v � n p.r � _ent t er s of extens~ona to u rt nt 1th n which xtens n neve.r ati 1� y t h111pp1ne ~ n t 1u � The .respon an e o r h n (l tha~ Central an Circ lars os. n re r;rom' l g t pursuant to epu~lie ct o. 26 � d t er fore h ve the force and affect of law; (2) that since the herein ship- 311 I

. . "'�D JS.I � 1- nts re por e 1thout obt 1nln t neceasarv un er s 1 ctrculara , t e a coul be sei% \1 t r- f eiteo un er ct1on 1363 (f ) of h ev1se 1n1s- trat1v Co �J and ( } that wit rea ct to t porta� tiona of nion fro Japan. t e re iiiPort d without t e r quir port l c naea � 1n con� traventi of t ov 1o s o oec't1o x�cut1ve d r � � U 1n ull force an a e aa1 Execut v� ~rtat1on arrived into t e ort .anila on u s ept �1 � e val 1t r f e elzur c ul be us a1ne u r ut or1tv o aa1 or r. �� T is Court OCC&Si 1n evtoua cases in� t ces to ~1� volvln alo ou f t� a � St1 ot la r � ex s 1 elv t v� usto � � � � t �� lei t oll011in � ut :ri vs. "' a e o. 29, pr1 � 1 !>, w .� 31 2

- DEC ~� 4 c. ' .� I' - 8- po �r or uthority to 15& e re la ion gov� erning tmports which o not involve the 6 le of fore1 n exchange � � note of ct use of n t � �� - ,. 313 ~II

� - 9- �1�n�

cD.Cr. . � 343 -1 - � � no r a on to depart fro. h f ore9oin vte whiCh !s er bv re1ter ted. as v. oreover , even Actin Deputv ov nor Castillo of the entr al ank, who ~~ one of t 05e called upon to J.nter et and ex cute the oY! 101\a of the c � ter of said institution as � od1od 1n epubl!c ct o. 2 ~. it of the opinion that �t � C ntr an does ot h ve an r to con rol ports �~�pt. insofar �� forelg e h n 1 1nvolv d. � as uld gl a .~urts fro his lett r {p. , Custo rec . ) to the c so r of Cust t date t r 29. 19� 111 d should respect t c nte rane s cona upo th ex cut1ve off1c rs. w o � y t 1s to nfore it. unle such terpre at on i clearl �rroneous 111 o d1nar1lv e controll d h r (Molina vs. af ert � 7 PhU. ~ ) � On ag 8 of H t pon nta ' mor�ndu � efer c 11 ade to the argu nt nt counsel in th an�logous ca e' of Serre Inves n Co. vs . C 18 lon r o Cuato s, c ��A. a e � cas f u� � vs. Von Cle � 136 f' (2nd) 968 as cited 1n tup ort o the proposition that port !on of goo a no- llar re 1ttance basis are covered y ect1on 7 o the e z�l 315

I� � C E � 343 - 11 - ank ct. ev r , a cu.rao1'V re 1n of t Von Cle ca e 111 s t at it 1� not 1n poi.nt . t facts of t pres ntlr 1 d1ff r nt f s 1d case . t cas � there waa ctuall a 1on 1th t e � of f n � h n an �v- t ported �� ode ad 1n ollars v the rr It C for ere t t exp rter. In t ca e n be � er, no 0 t � rin oll s s of t �c l � to rein �a Kt , t ev!- d 67 Cusoo rec. ) � 1 tacl � ( 1 pp. ~2. r~ ti n n th pre of t ale of t t1 n t d to � ad nag r of t e t1 1 for 0 0 � � ur dp 1 hin co ct on r t1 n of factor!e& . Altho h t. e � 0 citlz n t e, t l!eve s 1ns auch c1t1z ns are n t coul c vered v t p aae �t ansactlona 1n gold o elgn exchange� �� . the pl\l'ale COD 8 lates cllrect business tr nsac- to s in gold or 1n fo 1gn exc~ e. rhe tr sact1on1 ln t � pres nt app al fin ttl not 1nvol ol fore l exc n and, t ore , s ctton 74 of 110 ct � 26~ ot p llc le. t e s cond u � t t1tlon r on- en s d r No. of the eaid nt of h 11 n ple ntln 1 t of th r n 1n nclal �� nts n th h111p� 316

- 12- P �� a dt ancial actin 1n A f r ra � tr c in part1ea, eci on a l � l ( an � pp. rec. ), la � onlv during t 11fet :t e;:;,u re 0 111. era ( ). t ext a n of t ef e..ct1Y �� a �� nte �not l'et1f1ed 11 pine ~ena � a � u xtena1ona are therefo � 1 � of no ef ct. Conse entl � pet1t1oner � tt r o. ta as a I 1 or.t ort t 1 n r co er �--�-��t1 �1 2, v d f r f 1lure ot t 1 xt n 1 � u 1' l �n i c ��� t � en t 111PP.1n� d Ja n or a te.r t procl at1on reatv 1 ed. P rs c nt into e c � 9al. it that xeeutlv r � � cea to 8$ 0 at t � ~� pon .t ot � h t t t 0 0 , ap n n t tr at � prev1ousl nt � 1n o oe nd c o at lt~t� no l on 10.. - t onl �Ex e 1 � Agre 0 317

j)~., .L - C.T.A. C I! � 343 - 13 - v1s1cnal char ct r without t e need for c nf~atlon b the 111pp1ne nate. It is not d puted t t th r1g1nal r de d financ ial agr e nts 1n h en rat1f1 d b t he Philippine Sen t on 15, 19 1 (Ex !b t � , p. 81, CTA rec.). I t 1s not lso es ion t on arch 19, 19 2, s vid nc d xhib1t � t r ht , o 11 at1' ons and interest of AP n r 1d r nt ere . or l lv transferred to J p n. nd ith r s t extenaio � of t hese a r April 28, 19 2 to pril , 1957, such ext nstons re admittedly ade nat c n� currene 6 vt need , � X 1 Dd ( Pt>� tc CTA rec. ). u na ity a.n ( e 1ss r 1 d, ch 1 of the extenstons (not t e 1.nanc1a1 ntG t e nt d Jap n, 1� far-re ach- � _r e s to r of goods nd se~vlc fr m th illpp and v!te-ver ln t e e :xerc e lie t state. 1 h h th 1n nc1al gr 1d tr treaties bv th hil1pp1n ~ Court (Co 1s i on r of Cu I� nc1a, � � c r in fav r o. L�747o, oct. 31, 19~6) lch 1 of tlt.loner, ould frt r r.tn r s ln upon t const1tut1 n lit �f th ucc x ns -� 31

cDEC.r.AI . c- o. 343 - 14 - to these agree enta a ittedly ade without the con- currence of the Phil iPpine enot� and inc identally the al1d1tv of Exec�Jtive Ordor tlo . 328 i:nple ent tng said a r e nts nd i t s txt cns10t1S . finding as te do nothar ground for not susteining th order of seizur e of res pon- dent with respec t to the 1 portat1ons o onions from Japnn covered v eizur Identifica t ions Case& os . 1856 and 1902. I't i s a funda;..ent al rule that if the Cour t po .. �e���� the power t� decl re tr atv void, as wa elieve we do, it will r frain froo ex�rc i 1ng it except in a ver clear case t pe� 1a~ly o ~f the,c ~ st ~ou ld be dis - 756.v pgted of on other azoynds. ( e.re vs. H�,lton I � Ed. ~68; ' 11e vs, lou sv!ll. and t�� l, Co. e3 L. d, 7!'>3, of Cust. .. .tn Color.ta v... . Co. issi...ne!' of v sto and C?llector. .,.. s o. 178 , Marc h 10. 19~8 . whic h ~,. ~ 1s analogous t o the P= aent cas in&of a~ as th� s bj ct import ation& of onions fro~ Japen are concer ned , e held the followings �rh~ t.ird !~sua !nvGlv&s the quest on w~ther or not t said importation i sub� ject to forfeit tr. nder Ex cutive dcr o. 328, er1es of 1950. Section 1 of hich pro- Vi de s that 10 ~.po4tation of erch~~disa ro Jap�n ay e e ffected or atte ted 1thout proper license . t~nd '.J ction 14 wh-ch provide!! that erchand1s� so imported & all subjec t to f orfeitui�e . !h a enc v entrustc with authoritv to tssue licen$eS for the importa- tion of merchandis fxo J apan ~as the forQer Import Control Commission. However, at t h t~e the �~ tic C $ here 1n que stion wor e im� ported. the Import Control Co i aaion had al- ready ceased to exi st with the expiration of the lwport Control Law (Republ i c Act �o. 6 ) on Julv 1, 19!> � C u eq...ten lv. tna said im- portation may not be for felt~d for violation of said Executive Or er. 319

D � 343 . T. A. - 15 - � �Fro. the provisions ( e~ l) of Ex- ecutive der o. 3 � � � 1t wil n that t e funct1 n of is u1n') l!cen s for porte w s given to t e f r r p r t ~ n- trol Ad in1s..rat1on (later th Import Con- trol o ss1~ ) . 1h!le the lic�nsin o exPc>rts was v&sted it the Centr 1 a nk, or an ther overnmontal ontitv or a � c , after t d!ssol t!on of the Import Control C !asion, to issue lie ns s for t portation of rc andis�. lther ha e attention of t. 1s ourt been dra �n to n r 1s it w o~ the exist nee of any t er 1 , ex eutive or er or re ulation wh1ch e power the Central an to iss e llcen'e on import$. It foll s t at the forfeiture of the sh1 ~n~ of �nions e n31gne1 to ~h petitioner f!ndi no &ancti~n under c x. cutt e Order o. ~"3 .' ( e elso L�uterlo v9. C 1sa1oner of usto s , c . r.A. Cac.e o .. 9 6. Sept. ~ . lJ~~ . aff1r n not h r ~rou~d in G. R. No. L- 810, pr11 27. 19~7.}~ It will be observed that t ~portat1 ns o onions fro Japan 1n t his ca wer a atwe n u UDt 2, . d eptember 7. 1954. At t at t the po.rt C ntro Co. - mission, hich s then the gov enc� eut ized to isau import 1 tenses Lnv lvtng no oll ttons from Japan . was _ o longer exist~g he m .av~ n dissolved on J 1� 1. 1~~3. � bel1 ve t c it tloner to produce port licenses for nis importations at a tim wh n it v.aa possibl to do so consid r1ng that there was n governmental ~gencv autnorlzed to issue lic enses of r.ucn natur � It shoul a o served that the h&re!n ! port t1ons ro lluC.~ "v r on after the dissolution of th port Control 1SS10n and one ar before the approval of epu l1e Aet to. 141 on September 10, 19551 which now emp ere the 320

, c A1. C -EN � 3 C.T. � � 16 - Depar ent of o~aorce and Ildu~tr to 1J ue �~port 11� eanaes f or no-dol!il.t' importatio 1s . ) e ther fore f d an o hol t and forfeitures de tho �u j ct port tions l l od y for v1ol ti ll f k Circulars os . 44 nd 0 d ~J( cu v oth 1n r 1 t1on to Soctlon l 6 ( } of A 1n1str t1ve d it ut nv 1 al d therefor� hould � t id � F E, th d ci ion of t n ~o s- &1 ner of Custo G appeal it is ere , versed and uretv onds - 5 .;). � - ~9. � 9 9 � th petitloner , t rn a r 1n � dt � lto uretv ns r~nc o., nc . , v, in t total ount for the r lea c od1t �� 1n q-.~ st � r rebv or er dn Wlt � 1thout pr no nc nt to o � 0 anil , Julv !6, l oa. 321