ARLYN SOLITA A. BRIONES, owner and proprietor of ELJ1 Medical Shop, v. COMMISSIONER OF CUSTOMS

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY SPECIAL SECOND DIVISION ARLYN SOLITA A. CTA CASE NO. 10355 BRIONES, owner and proprietor ofELJ1 Medical Members: Shop, BACORRO-VILLENA, Acting Chairperson, Petitioner, and CUI-DAVID, fl. -versus- COMMISSIONER OF Promulgated: CUSTOMS, JAN 0 3 2024 Respondent. � -f.:'! - - - - - - ~ f! X - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -~ X DECISION BACORRO-VILLENA, L: Before this Court is a "Petition for Review (With Motion to Suspend the Sale/ Disposition of the Goods Subject of this Petition)"! filed by petitioner Arlyn Solita A. Briones, owner and proprietor of EL]1 Medical Shop (petitioner/Briones) against respondent Commissioner of Customs (respondent/ CDC), under Section 3(a)\ Rule 8 in relation to Section 3(a)(4)3, Rule 4 of the Revised Rules of the Court of Tax Appeals (RRCTA)~ Filed on 17 September2020, Division Docket, Volumes I and II, pp. 7-791, with annexes. 2 SEC. 3. Who may appeal; period to file petition. - (a) A party adversely affected by a decision, ... or ruling of the Commissioner of Customs ... may appeal to the Court by petition fo r review filed within thirty days after receipt of a copy of suc h decision or ruling ... [.] SEC. 3. Cases within the jurisdiction of the Court in Divisions. - The Court in Division shall exercise: (a) Exclusive origina l over or appe llate jurisdiction to review by appeal the following :

CTA Case No. 10355 Arlyn Solita A. Briones, owner and proprietor of ELJ1 Medical Shop v. Commissioner of Customs DECISION x--------------------------------------------------------------------x Petitioner seeks the nullification, reversal, and setting aside of respondent's Order dated 03 August 20204 (assailed Order), which affirmed the 21 May 2020 Decisions of then Acting District Collector of the Manila International Container Port (MICP), Guillermo Pedro A. Francia (Acting District Collector Francia). Petitioner essentially argues that she has fully discharged the burden of proof, demonstrating that the subject seized goods were validly purchased from local suppliers and carried the necessary registrations. Consequently, she asserts that respondent has no legal basis to effect the seizure and forfeiture of the subject goods. PARTIES OF THE CASE Petitioner is a Filipino citizen, of legal age and a resident of 8-M RD 4, 1'1 West Barangay, West Crame, 1500 San Juan City, Metro Manila. She is the owner of a sole proprietorship doing business under the name of EL]1 Medical Shop. It is a duly registered enterprise, as evidenced by its Certificate of Business Name Registration6 and its Business Permit7 issued by the City of Manila. She is also the owner of the goods subject of the seizure and forfeiture proceedings in this case.8 Respondent, on the other hand, is being sued in his or her official capacity as the head of the Bureau of Customs (BOC), a government instrumentality which, among others, exercises original jurisdiction over seizure and forfeiture cases under Republic Act (RA) No. 10863 or the Customs Modernization and Tariff Act of 2016 (CMTA). He or she may be served with summons and other court processes through his or ohfefricceoaudndsreelssofarte1c3o4rAd,mtohresoOloffiSctereoeft,thLeegSaozpliicVitoilrlaGgee,nMeraalka(tOi SCGi),twy.i~th (4) Decisions of the Commissioner of Customs in cases involving liability for customs duties, fees or other money charges, seizure, detention or release of property affected, fines, forfeitures or other penalties in relation thereto, or other matters arising under the Customs Law or other laws administered by the Bureau of Customs[.] 4 Exhibit "P-2"/"R-6", Division Docket, Volume II, pp. 896-925. Exhibit "P-1", id., Volume lll, pp. 1260-1290. 6 Exhibit "P-4", id., Volume I, p. 104. Exhibit "P-5", id., p. I05. Paragraphs I and 10, I. Summary of Admitted Facts, Joint Stipulation of Facts and Issues (JSFI), id., Volume lll, pp. 1079 and 1081, respectively. 9 Par. 2, id., pp. I 079-1 080.

CTA Case No. 10355 Arlyn Solita A. Briones, owner and proprietor of ELJ1 Medical Shop v. Commissioner of Customs DECISION x--------------------------------------------------------------------x FACTS OF THE CASE On 22 May 2020, petitioner, through counsel, received via email a copy of then MICP Acting District Collector Francia's Decision dated 21 May 202010 in Seizure Identification (SI) No. 074-2020, which ordered the forfeiture of the seized goods for having been imported in violation of Section m3(f) and (l)(s)" of the CMTA. On os June 2020, petitioner filed her Notice of Appeal"' with Memorandum of AppeaP3, wherein she prayed that respondent reverse and set aside then MICP Acting District Collector Francia's Decision'4 and recall the subject Warrant of Seizure and Detention (WSD) dated 17 April2o2o (re: SINo. 074-2020).'5 On 18 August 2020, petitioner received a copy of respondent's assailed Order'6 in SI No. 074-2020, wherein the latter affirmed the ruling of then MICP Acting District Collector Francia and thereby, denied petitioner's Memorandum on Appeal. The assailed seizure and forfeiture proceedings initiated by respondent refers to petitioner's goods that were seized on 31 March 2020 during the implementation of the Letter of Authority (LOA) No. 03-31-16-2020'7 and Mission Order (MO) No. 03-31-2020-031'8 (which authorized a composite team ofBOC and Philippine Coast Guard [PCG) personnel, led by Intelligence Officer III Alvin Y. Enciso [I0 Enciso) as ' the group's team leader). The seized goods were covered by a WS(J" 10 Exhibit "P-1", supra at note 5. 11 SEC. 1113. Property Subject to Seizure and Forfeiture.- Property that shall be subject to seizure and forfeiture include: (f) Goods, the importation or exportation of which are effected or attempted contrary to law, or any goods of prohibited importation or exportation, and all other goods which, in the opinion of the District Collector, have been used, are or were entered to be used as instruments in the importation or the exportation of the former; (I) Goods sought to be imported or exported: (5) Through any other practice or device contrary to law by means of which such goods entered through a customs office to the prejudice of the government. 12 Exhibit "P-11 ", Division Docket, Volume Ill, pp. 1313-1328. 13 Exhibit "P-12", id., Volume II, pp. 727-784. 14 Exhibit "P-1", supra at note 5. " Exhibit "R-5", Division Docket, Volume II, pp. 962-975. 16 Exhibit "P-2"/"R-6", supra at note 4. 17 Exhibit "P-6"/"R-1", Division Docket, Volume II, pp. 938-939. 18 Exhibit "R-2", id., pp. 940-941.

CTA Case No. 10355 Arlyn Solita A Briones, owner and proprietor of ELJ1 Medical Shop v. Commissioner of Customs DECISION X-------------------------------------------------------------------- X dated 17 April 2020 that MICP Acting District Collector Francia issued previously. In the assailed Order'9, respondent informed petitioner that, following a review, he or she is upholding MICP Acting District Collector Francia's Decision.20 According to respondent, petitioner's documents do not prove her payment of duties and taxes; therefore, the seized goods in question should be forfeited in favor of the government and disposed of in a manner provided by law. PROCEEDINGS BEFORE THE COURT On 17 September 2020, petitioner filed the present Petition for Review21 within thirty (3o) days from her alleged receipt of respondent's assailed Order.22 The same was raffled to the Third Division23 and docketed as CTA Case No. 10355. In the Resolution dated 29 September 202o24, the Third Division directed petitioner to submit a compliant Verification within ten (10) days from notice. Petitioner filed her Compliance (with attached Verification)2s on 13 October 2020. Then, in the Resolution dated 30 October 202026, the Third Division noted petitioner's Compliance, directed the issuance of summons to respondent and ordered respondent to file an Opposition to petitioner's "Motion to Suspend the Sale/Disposition of the Goods Subject of thi~ Petition"27 (Motion to Suspend) within five (5) days from notice($' 19 Exhibit "P-2"/"R-6", supra at note 4. 20 Exhibit "P-1", supra at note 5. 21 Supra at note I. 22 Exhibit "P-2"/"R-6", supra at note 4. 23 The Third Division is composed of Associate Justice Erlinda P. Uy (Ret.), as Chairperson, and Associate Justice Ma. Belen M. Ringpis-Belen and Associate Justice Maria Rowena Modesto-San Pedro, as Members. 24 Division Docket, Volume II, pp. 793-794. 25 ld., pp. 795-798. 26 Jd., pp. 801-802. 27 Embodied in the Petition for Review, supra at note I, pp. 19-20.

CTA Case No. 10355 Arlyn Solita A. Briones, owner and proprietor of ELJ1 Medical Shop v. Commissioner of Customs DECISION X-------------------------------------------------------------------- X On o6 November 2020, the Third Division issued Summons28 to respondent. On 26 November 2020, respondent filed his or her "Manifestation with Motion (To Admit Attached Opposition)"29 (Manifestation with Motion to Admit). The Third Division noted respondent's Manifestation, granted the accompanying Motion, thereby admitting the attached Opposition3� as part of the case records, and set the hearing on petitioner's Motion to Suspend on 02 February 2021.J' After the Third Division granted an extension of time32 , respondent filed his or her "Verified Answer (to the Petition for Review dated September 16, 202o)"33 (Answer) on 13 January 2021. There, respondent cited the following special and affirmative defenses: (1) there was probable cause to justify the forfeiture of petitioner's goods in favor of the government; and, (2) petitioner failed to discharge her burden of proving that the subject goods were locally purchased and that the duties and taxes thereon were paid. On 26 January 2021, the Court issued a Notice of Pre-Trial Conference34 and set the case for pre-trial conference on 25 May 2021. In compliance with the Court's order therein, respondent filed via registered mail his or her Pre-Trial Brie�35 on 19 May 2021, while petitioner filed its Pre-Trial Brie�36 on 20 May 2021. During the 02 February 2021 hearing on petitioner's Motion to Suspend37, petitioner's counsel manifested that he will not present a witness and, upon motion, the Third Division granted the parties' counsels a period of fifteen (15) days, or until17 February 2021, to file their respective memoranda.3~ 28 Jd., p. 803. 29 Jd., pp. 806-808. 30 Id., pp. 809-815. 31 See Resolution dated 04 January 2021, id., p. 820. 32 See Resolution dated 15 January 2021, id., pp. 829-830. 33 Jd., pp. 831-847. 34 Jd., pp. 977-978. 3S Jd., pp. 1058-1066. 36 ld., pp. 1041-1050. 37 Supra at note 27. 38 Referred to in the case records to be "Position Paper[s]" in the Order dated 02 February 2021, Division Docket, Volume II, pp. 980-981.

CTA Case No. 10355 Arlyn Solita A. Briones, owner and proprietor of ELJ1 Medical Shop v. Commissioner of Customs DECISION Page 6 of 35 -- - - -- - - -- - --- - -- - - -- - --- - -- - - -- - - -- - --- - -- - - -- - --- - -- - - -- - - x x---- ---- In compliance with the Court's directive, petitioner filed her "Memorandum (In Support of Petitioner's Motion to Suspend the Sale/Disposition of the Subject Goods)"39 on 17 February 2021, while respondent filed via registered mail his or her Memorandum4� on 16 February 2021. Subsequently, in the Resolution dated 17 March 20214' (assailed Resolution), the Third Division denied petitioner's Motion to Suspend for lack of merit. It ruled that petitioner failed to provide proof that the disposition of the subject goods will jeopardize her business operations. Since the proceeds of the sale of the seized goods shall be held in escrow, subject to the final determination of petitioner's liability, it further held that both the government and petitioner's interests are protected. In other words, it found that petitioner failed to raise any compelling reason to justify the suspension of the sale or disposition of the subject seized goods. On 25 May 2021, the Pre-Trial Conference proceeded via videoconference, during which the Third Division granted the parties a period of 30 days, or until 24 June 2021, to file their Joint Stipulation of Facts and Issues (JSFI) and set the initial presentation of petitioner's evidence on 14 July 2021 also via videoconferenceY In compliance therewith, on 24 June 2021, the parties submitted their JSFI43. The Third Division approved the same in its Resolution dated 12 July 202144 and deemed the pre-trial terminated. Later, on 14 July 2021, the Third Division issued the corresponding Pre-Trial Order.45 On 09 June 2021, petitioner filed a Motion for Reconsideration46 (MR) of the assailed Resolution. She argued that the seizure of the subject goods was arbitrary and without valid justification. According to her, this unwarranted seizure hampered the conduct of her business, � causing financial injury, and any premature disposition of the subjecB 39 !d., pp. 982-1003, with Annex "A" (copy of DOH Department Memorandum No. 2020-0345). 40 Captioned "Position Paper", id., Volume lll, pp. 1017-1026. 41 !d., pp. 1034-1040. 42 See Minutes of the Hearing and Order, both dated 25 May 2021, id., pp. 1055 and 1056-1057, respectively. 43 !d., pp. 1079-1088. 44 !d., p. 1105. 45 !d., pp. 1114-1122. 46 ld.,pp.l07!-1075.

CTA Case No. 10355 Arlyn Solita A Briones, owner and proprietor of ELJ1 Medical Shop v. Commissioner of Customs DECISION X-------------------------------------------------------------------- X goods would further risk her ability to continue business operations in the future. On os July 2021, respondent filed his or her Comment47 on petitioner's MR on the assailed Resolution. Respondent reiterated that petitioner's interest is amply protected under the provisions of the Joint DOH-DTI-DA-DOJ-DILG-BOC Circular No. om (S2o2o).48 The proceeds of the sale of the subject seized medical supplies shall be held in escrow, without prejudice to the final determination of petitioner's liability after trial. However, in the Resolution dated 23 November 2o2149, the Third Division still denied petitioner's MR for lack of merit. The Court noted that petitioner's bare allegations-that the seizure of the subject goods has already wreaked havoc on her operations, effectively impairing her ability to conduct her business normally-have no leg to stand on. Meanwhile, on os July 2021, respondent transmitted to the Third Division the complete BOC Records of the case, which was noted in its Minute Resolution dated 12 July 2021.so In the trial that ensued on 14 July 2021, petitioner presented her testimonial and documentary evidence. She offered her lone testimony, as the owner and proprietor of ELJ1 Medical Shop. However, upon motion of both counsels at the said hearing that they be given the opportunity to file Amended Judicial Affidavits of their respective witnesses, the Third Division reset the hearing to 12 August 2021 via videoconferencing, set a Commissioner's Hearing's to mark petitioner's evidence on 27 July 2021 and directed the parties to $Ubmit the Amended Judicial Affidavits no later than os August 20212:)' 47 ld., pp. 1124-1127. 48 IMPLEMENTATION OF SEIZURE AND RELATED PROCEEDINGS FOR GOODS NECESSARY TO ADDRESS THE COVID-19 PUBLIC HEALTH EMERGENCY PURSUANT TO REPUBLIC ACT (RA) 7581, AS AMENDED BY RA 10623, OTHERWISE KNOWN AS THE PRICE ACT AND RA 10863, OTHERWISE KNOWN AS THE CUSTOMS MODERNIZATION AND TARIFF ACT, IN RELATION TO RA 11469, OTHERWISE KNOWN AS THE BAYANIHAN TO HEAL AS ONE ACT. 49 Division Docket, Volume III, pp. I I73-1177. so Id.� p. I098. " See Minutes of the Hearing and Order, both dated 14 July 2021. id., pp. 1108 and IIII-I 112, respectively.

CTA Case No. 10355 Arlyn Solita A. Briones, owner and proprietor of ELJ1 Medical Shop v. Commissioner of Customs DECISION x--------------------------------------------------------------------x After again resetting the videoconference hearing initially reset to 12 August 20215>, the presentation of petitioner's evidence continued on 24 November 2021- On the witness stand, petitioner identified her Amended Judicial Affidavit dated 19 November 202153' in which she declared that: (1) She owns "ELJ1 Medical Shop", a sole proprietorship that sells medical supplies and is registered with the Department of Trade and Industry (DTI) and the City of Manila; (2) She actively oversees the business, working with several employees and managers; (3) The inventory is sourced exclusively from domestic suppliers, wholesalers, and retailers within the Philippines, with no importations involved; (4) On or about 31 March 2020, after showing her employees copies of the LQA54 and the Moss, the BOC raided her store and seized the goods found therein when they failed to show proof that the goods were not illegally imported; (s) Subsequently, the BOC closed the store and inventoried the items found therein; (6} The subject seized medical supplies were purchased from local businesses; (7) She provided the BOC with sales invoices (Sis}, official receipts (ORs), and other documents, including affidavits from local suppliers and Certificates of Product Registration, to support that the seized medical supplies were sourced from local suppliers; (8} Following the seizure of the subject goods, she filed a Notice of Claim with Motion to Quash56 and a Manifestations?, with attached supporting documents3 52 See Notice of Resetting dated 22 November 2021, id., p. 1153. 53 Exhibit "P-13", Amended Judicial Affidavit of Ms. Arlyn Solita A. Briones, id., pp. 1159-1170. 54 Exhibit "P-6"/"R-1 ",supra at note 17. 55 Exhibit "R-2", supra at note 18. 56 BOC Records, pp. 280-299. " Division Docket, Volumes I and II, pp. 393-500 and 501-710, respectively.

CTA Case No. 10355 Arlyn Solita A Briones, owner and proprietor of ELJ1 Medical Shop v. Commissioner of Customs DECISION x--------------------------------------------------------------------x (9) On 18 May 2020, she received a copy ofthen MICP Acting District Collector Francia's Decision58, forfeiting her goods; (w) In response, she filed a Notice of AppeaJ59 and a Memorandum on Appeal60; (u) On 18 August 2020, she received a copy of respondent's assailed Order6'; and, (12) She estimates the value of the seized goods at 1"3 million, based on her valuation.62 During cross-examination, petitioner stated that she began her medical supplies business only in 2020. She also confirmed that some products in her inventory were manufactured outside the Philippines, indicating that they were imported. While she declared that she purchased her inventory from local suppliers, she conceded that some items might have been imported. Furthermore, she acknowledged the LOA's63 specific requirement for her to provide proof of payment for the import duties on such products.64 On redirect examination, petitioner clarified that she exclusively sources supplies from local suppliers, wholesalers, and retailers, and does not personally handle any imports. Upon further questioning about the documents submitted to prove the nature of the seized goods, she indicated that she had provided relevant ORs and Sis, Certificates of Product Registration, and affidavits from her local suppliers.65 Respondent did not conduct any re-cross examination.66 In response to the Court's clarificatory question, petitioner confirmed that her store had already reopened. However, due to financial constraints, she relocated to a smaller space because the rent at the original location was unaffordable. Addressing the challenge of ' matching ORs or vouchers to the seized items, she explained that the)' " Exhibit "P-I", supra at note 5. 59 Exhibit "P-11", supra at note 12. 60 Exhibit "P-12", supra at note 13. 61 Exhibit "P�2"/"R-6", supra at note 4. 62 Exhibit "P-3", Division Docket, Volume l, pp. 88-103. 63 Exhibit "P-6"/"R-1 ", supra at note 17. 64 TSN dated 24 November 2021, pp. 8-16. 6S ld., pp. 16-17. 66 ld., p. 17.

CTA Case No. 10355 Arlyn Solita A Briones, owner and proprietor of ELJ1 Medical Shop v. Commissioner of Customs DECISION X-------------------------------------------------------------------- X SOC's inventory enumerates the items individually, while the ORs or vouchers categorize them by box. She also noted that, as a retailer, her store's inventory is updated daily, leading to frequent adjustments in item quantities. However, she did confirm that the seized goods were sourced from local suppliers. Nevertheless, when asked for proof of tax payment on these goods, she admitted her inability to provide such documentation, despite requests from her local suppliers.67 Upon the Court's further questioning, petitioner revised her earlier statement about the start of her medical supplies retail business, changing the year from 2020 to 2019. Following the seizure ofthe subject medical supplies, she has persisted in selling the leftover inventory in her store, especially the items that the BOC did not seize.68 On 21 December 2021, petitioner filed a "Motion to Set Additional Commissioner's Hearing (With Prayer to Defer Filing of Formal Offer of Evidence)".69 The Third Division granted the motion, setting the requested Commissioner's Hearing for 23 December 2021 to mark petitioner's remaining exhibits. It also granted petitioner a period of fifteen (15) days from that date, or until 07 January 2022, to file her Formal Offer of Evidence (FOE).7� However, on 23 December 2021, respondent filed via emaiJ7' a "Manifestation and Urgent Motion to Reset"72, requesting a resetting of the Commissioner's Hearing. The reason cited was that his or her counsel was unable to attend physically due to intense adverse effects from a COVID-19 vaccine booster. The Third Division thus reset the said Commissioner's Hearing to 24 February 2022.13 On 23 February 2022, petitioner similarly filed a "Manifestation and Urgent Motion to Reset"74, informing the Third Division that the 24 February 2022 setting for the Commissioner's Hearing is in conflict with a previously scheduled hearing for another case being handled by ' her counsel and that she could not find a substitute counsel. Hence, t~ " !d., pp. 17-19. 68 Id., pp. 19~21. 69 Division Docket, Volume III, pp. I 197-1199. 70 See Order dated 22 December 2021, id., p. I20 I. 71 See Commissioner's Report dated 23 December 2021, id., p. 1202. 72 Id., pp. 1203-1205. 73 See Resolution dated 15 February 2022, id., p. 121 I. 74 Id., pp. 1212-1214.

CTA Case No. 10355 Arlyn Solita A. Briones, owner and proprietor of ELJ1 Medical Shop v. Commissioner of Customs DECISION X�----�----�----�----�--------------��----�----------�----�---------- X Third Division yet again reset the Commissioner's Hearing to w March 2022.7s Due to the voluminous number of Sis and ORs, petitioner requested two (2) additional Commissioner's Hearings for her to finish marking her remaining documentary exhibits.76 ln the Resolution dated 22 March 2022n, the Third Division granted the motion, setting the requested Commissioner's Hearings on 31 March 2022 and on 05 April 2022. It also granted petitioner a period often (w) days from that date, or until15 April 2022, to file her FOE, and likewise granted respondent the same period to file his or her Comment/Opposition thereto. Further, it reset the initial presentation of respondent's evidence previously scheduled on 07 April 2022 to 03 August 2022. On 18 April 2022, petitioner filed her FOE78 consisting of Exhibits "P-1" to "P-13-A", inclusive of sub-markings. On 05 May 2022, respondent filed his or her "Comment (to Petitioner's Formal Offer of Documentary Evidence)"79 thereto. In a Resolution dated 20 June 202280, the Third Division admitted petitioner's documentary exhibits except for: (1) Exhibits "P-w-6-1" to "P-w-6-25" and "P-w-6-62" to "P-w-6-66"8', for failure to present the originals for comparison; and, (2) Exhibits "P-w-6-wo" and "P-w-6- � 153"8>, for not being found in the case records. In the same Resolutio~ 75 See Resolution dated 28 February 2022, id., p. 1219. 76 See Motion to Set Additional Commissioner's Hearing (With Prayer to Defer Filing of Formal Offer of Evidence), id., pp. 1223-1225. 77 !d., pp. 1228-1229. 78 !d., pp. 1245-1258. 79 Id., pp. 1330-1333. 80 Id., pp. 1339-1341. 81 Exhibit No. Description "P-10-6-1" to "P-10-6-25" Certificates of Product Registration for the Seized "P-I 0-6-62" to "P-I 0-6-66" Goods. (Found in Court Docket, Volume !1, pp. 538-562) Certificates of Product Registration for the Seized Goods. (Found in Court Docket, Volume II, pp. 599-603) 82 Exhibit No. Descriotion "P-1 0-6-1 00" Certificates of Product Registration for the Seized "P-I 0-6-153" Goods.

CTA Case No. 10355 Arlyn Solita A. Briones, owner and proprietor of ELJ 1 Medical Shop v. Commissioner of Customs DECISION x--------------------------------------------------------------------x the Third Division set the initial presentation of respondent's evidence on OJ August 2022. Subsequently, in view of the reorganization of the Court's Second and Third Divisions, the present case was transferred to the Second Division.83 Thus, per Notice of Hearing dated 14 July 202284, the initial presentation of respondent's evidence was set before the Second Division on OJ August 2022. During the OJ August 2022 hearing, respondent presented his or her lone witness, Special Agent I Manfred Rosete (SA Rosete), who, through his Amended Judicial Affidavit dated JO July 20218s, stated that: (1) He was assigned as SA I at the Investigation Division of the BOC's Customs Intelligence and Investigation Service (CIIS) and has been with the BOC since 24 July 2018; (2) His duties and responsibilities include (a) gathering, collecting, compiling and collating information on acts in violation of the CMTA and related laws, rules and regulations, (b) undertaking surveillance of persons and companies suspected ofviolating the CMTA and related laws, rules and regulations, (c) conducting searches, seizing illicit cargoes and/or baggage and other contraband, and executing arrests, (d) acting as process servers, (e) conducting inspections for purposes of enforcing the visitorial power of respondent pursuant to Section 22486 of the CMTA, and (f) assisting other law enforcement agencies in the investigation, preparation and prosec1.1.tion of customs-related cases, among other related function3' 83 The Second Division is composed of Associate Justice Erlinda P. Uy (Ret.), as Chairperson, and Associate Justice Jean Marie A. Bacorro-Villena and Associate Justice Lanee S. Cui-David, as Members. " Division Docket, Volume III, p. 1353. 85 Exhibit "R-7", Division Docket, Volume III, pp. 1140-1147. 86 SEC. 224. Power to Inspect and Visit. - The Commissioner or any customs officer who is authorized in writing by the Commissioner, may demand evidence of payment of duties and taxes on imported goods openly for sale or kept in storage. In the event that the interested party fails to produce such evidence within fifteen (15) days, the goods may be seized and subjected to forfeiture proceedings: Provided, That during the proceedings, the interested party shall be given the opportunity to prove or show the source of the goods and the payment of duties and taxes thereon: Provided, further, That when the warrant of seizure has been issued but subsequent documents presented evidencing proper payment are found to be authentic and in order, the District Collector shall, within fifteen (15) days from the receipt of the motion to quash or recall the warrant, cause the immediate release of the goods seized, subject to clearance by the Commissioner: Provided, finally, That the release thereof shall not be contrary to law.

CTA Case No. 10355 Arlyn Solita A Briones, owner and proprietor of ELJ1 Medical Shop v. Commissioner of Customs DECISION X-------------------------------------------------------------------- X (3) He was a member of the team that conducted an inspection of the warehouse belonging to 'EL}I Medical Shop' where the subject seized goods were stored; (4) On 3I March 2020, a team composed of operatives from various divisions of the BOC and the PCG proceeded to inspect the goods inside the aforesaid warehouse, which is located at I6oo E. Remegio Street, Rizal Avenue, Santa Cruz, Manila; (5) His team was authorized to conduct such inspection by virtue of LOA No. 03-3I-016-2o2o87 and MO No. 03-3I-2o2o-o3I88, both of which were issued by respondent on 30 March 202o; (6) During the inspection, his team prepared an inventory of the various medical supplies stored inside the warehouse, i.e., Memorandum dated oi April 202o89, and made a demand on petitioner, as the warehouse owner and sole proprietor of 'EL}I Medical Shop', through her authorized representative, to submit proof of payment of duties and taxes over such goods within IS days from 3I March 2020, or until IS April 2020; (7) After further examination of the documents submitted by petitioner, his team determined that the same do not suffice to prove that the subject seized goods were locally purchased and that the duties and taxes thereon were paid; (8) Despite a thorough cross-matching of the ORs/Sls presented and the list of inventoried goods, his team determined that a considerable number of goods have no corresponding ORs/Sls and that there are entries in the ORs/Sls that do not tally with the goods set out in the inventory; thus, petitioner failed to prove that all such goods were locally purchased and that the duties and taxes thereon were paid; (9) His team reported the said findings to their team leader, 10 Enciso, who, in turn, issued Memorandum dated IS April 202o9o to then MICP Acting District Collector Francia, recommending that a WSD be issued against the goods; (Io) Then MICP Acting District Collector Francia issued a, WSD (Sl No. 074-2020)9', which was served upon petitione(:J' 87 Exhibit "P-6"/"R-1 ", supra at note 17. " Exhibit "R-2", supra at note 18. 89 Exhibit "R-3", Division Docket, Volume II, pp. 942-95 I. 90 Exhibit "R-4", id., pp. 952-961. 91 Exhibit "R-5", supra at note 15.

CTA Case No. 10355 Arlyn Solita A. Briones, owner and proprietor of ELJ1 Medical Shop v. Commissioner of Customs DECISION X-------------------------------------------------------------------- X (n) Thereafter, the forfeiture proceedings against the seized medical supplies continued, during which petitioner submitted documents to prove that such items were locally purchased and that the duties and taxes thereon were paid; and, (12) Finding petitioner's submitted documents insufficient to prove that such medical supplies were indeed locally purchased and that the duties and taxes thereon were paid, respondent affirmed the findings outlined in then MICP Acting District Collector Francia's Decision9> in his or her assailed Order.93 On cross-examination, SA Rosete admitted that he did not attach any evidence in his Amended Judicial Affidavit with which to establish the scope of his duties and responsibilities as SA. He also clarified that his group conducted an inspection pursuant to the LOA94 and the M095 issued by respondent.96 Regarding his statement that he has been with the BOC since 24 July 2018, SA Rosete clarified that this date marks the beginning of his tenure as an SA. He further added that he actually began working at the BOC in April2oo2, initially starting his career there as a Clerk.97 SA Rosete further confirmed that he was not among the examiners who prepared the inventory of the various medical supplies stored in petitioner's warehouse, as detailed in the Memorandum dated 01 April 2020.98 He was also not involved in the cross-matching of the ORs/Sis presented and the list of inventoried goods, a task conducted by Customs Operations Officers (COO) III John Christopher Coquilla (Coquilla), COO III Datu Ahmad Timhar Kiram (Kiram), COO III Kimberly Labay (Labay) and COO III Nica Macaraig (Macaraig). Additionally, he admitted his lack of knowledge on whether examiners Coquilla, Kiram, Labay, and Macaraig possessed expertise in identifying medical supplies at the time of the inspection. He also stated that IO Enciso's Memorandum dated 15 April2o2o99 does not provide a detaYed account of the results from the aforementioned cross-matching.'~� 92 Exhibit "P-1", supra at note 5. 93 Exhibit "P-2"/"R-6", supra at note 4. 94 Exhibit "P-6"/"R-1 ", supra at note 17. 95 Exhibit "R-2", supra at note 18. 96 TSN dated 03 August 2022, pp. I 1-15. 97 1d., pp. 16-17. 98 Exhibit "R-3", supra at note 89. 99 Exhibit "R-4", supra at note 90. 100 TSN dated 03 August 2022, pp. 17-23.

CTA Case No. 10355 Arlyn Solita A. Briones, owner and proprietor of ELJ1 Medical Shop v. Commissioner of Customs DECISION X-------------------------------------------------------------------- X When asked whether his team or the examiners had prepared a reconciliation in regard to the alleged discrepancies identified during the cross-matching of the ORs/Sis presented and the list of inventoried goods, SA Rosete stated that he was not aware if such reconciliation had been conducted. He explained that his division or unit does not typically handle such tasks and suggested that it might be the responsibility of the BOC's Law Division. Regarding his statement that a considerable number of goods have no corresponding ORs/Sis, he clarified that he really did not know the exact number of these goods in question since it was the examiners who reported this matter or finding.'01 Lastly, when questioned about why his team recommended the forfeiture of all the goods listed in the inventory (although only a considerable number showed discrepancies based on the aforementioned cross-matching), SA Rosete explained that the decision to forfeit all the goods was prompted by petitioner's failure to submit proof of payment for the duties and taxes.'02 On redirect examination, SA Rosete clarified that while he was not among the examiners who prepared the inventory ofthe various medical supplies stored in petitioner's warehouse, as detailed in the Memorandum dated 01 April 2020103, he nonetheless signed the said document as a witness (which signifies that he was present during the inspection and the preparation ofthe inventory). He also confirmed that the results of the aforesaid cross-matching are detailed in the 'Table of Comparison' embodied in respondent's assailed Order.104 Furthermore, SA Rosete noted that respondent usually issues an MO for goods that are either imported or regulated. He emphasized that the primary reason for the confiscation of the subject medical supplies was petitioner's failure to provide proof of billing for duties and taxes, which is required for imported goods.105 During the re-cross examination, SA Rosete confirmed that, in his , cthaepaecnittyireasinavwenittnoerysscorautnhte.rHthe aenxpalnaienxeadmthinaetr,hehewwasasonnloytpprreesseenntthfoar ~ 101 !d., pp. 24-28. 102 ld., p. 28. 103 Exhibit "R-3'', supra at note 89. 104 TSN dated 03 August 2022, pp. 29-32. 105 ld., pp. 33-34.

CTA Case No. 10355 Arlyn Solita A. Briones, owner and proprietor of ELJ1 Medical Shop v. Commissioner of Customs DECISION x--------------------------------------------------------------------x of the time because he had to step out at times for meals and snack breaks. Later, he clarified that the task of tallying the inventoried items is assigned to the examiners, whereas his involvement was restricted to receiving information about the total count. As previously noted, he did not participate in cross-matching the ORs/Sis presented with the list of inventoried goods.106 When inquired about the existence of any document that could verify whether the items in petitioner's warehouse are imported or regulated, SA Rosete responded negatively. However, he noted that such information is typically indicated on the box containing the items, as in the case of a 'Made in China' label. Moreover, he verified that petitioner's store does, in fact, have an 'imported items' sign.107 Responding to the Court's clarificatory questions, SA Rosete confirmed his presence during the inventory count. From his personal observation, he noted that some items in the inventory were imported, while others were locally sourced. He explained that his team requested proof of tax payments for the imported goods; however, petitioner was only able to present receipts for purchases made locally. However, when queried whether the receipts could confirm the imported nature of the goods, he expressed uncertainty about whether this information was indicated on them. Finally, he affirmed that the seized medical supplies in question were imported, yet petitioner had acquired them from local suppliers.108 On 15 August 2022, respondent filed his or her FOE109 consisting of Exhibits "R-1" to "R-7-A". On 25 August 2022, petitioner filed her Comment/Opposition"0 thereto. In the Resolution dated 05 September 2022m, the Second Division admitted all of respondent's exhibits. In the same Resolution, the Court likewise granted the partie,s a period of 30 days within which to file their respective memoranda.3'� 106 Id., pp. 35-38. 107 Id., pp. 39-41. 108 !d., pp. 41-46. 109 Division Docket, Volume III, pp. 1357-1363. 110 !d., pp. 1368-1370. Ill ld., pp. 1373-1374.

CTA Case No. 10355 Arlyn Solita A. Briones, owner and proprietor of ELJ 1 Medical Shop v. Commissioner of Customs DECISION x--------------------------------------------------------------------x Thereafter, on 24 October 2022, petltwner filed her Memorandum,112 while respondent filed his or her Memorandum113 on 18 November 2022 (after being granted an extension of time by the Second Division114). Accordingly, on 04 January 2023, the Second Division considered the case submitted for decision.us ISSUE As the parties so stipulated116, the mam tssue for this Court's determination is - WHETHER THE SEIZED MEDICAL SUPPLIES FROM PETITIONER ARLYN SOLITA A. BRIONES, OWNER AND PROPRIETOR OF ELJ1 MEDICAL SHOP, SHOULD BE FORFEITED IN FAVOR OF THE GOVERNMENT. ARGUMENTS In support of the above issue, petitioner essentially argues that respondent erred in ordering the forfeiture ofthe subject seized medical supplies. She insists that there is insufficient probable cause for the issuance of a WSD against her goods. She adds that she is a 'buyer in due course' and asserts that the seized goods were locally purchased. Likewise, she asserts that respondent has failed to substantiate the alleged discrepancies. Petitioner expounds that she is a legitimate 'buyer in due course,' having sourced the medical supplies from local suppliers. According to her, respondent presented no evidence that the seized medical supplies were imported in violation of the CMTA or that she was aware of any illegal importation. On this note, petitioner emphasizes that, as a retailer, she only purchases goods from licensed local suppliers, and that such goods are not illegal or contraband. She claims to have purchase,d these goods in good faith and without knowledge of any legal issu(J' 112 See Annex "A" to Petitioner's "Motion to Admit Attached Memorandum for Petitioner'', id., pp. 1379-1411, with annex. 113 1d., pp. 1420-1432; Received by the Court on 29 November 2022. 114 See Resolution dated 22 November 2022, id., p. 1419. 115 See Resolution dated 04 January 2023, id., p. 1436. 116 II. lSSUE/S TO BE RESOLVED, JSFI, Division Docket, Volume III, p. 1082.

CTA Case No. 10355 Arlyn Solita A. Briones, owner and proprietor of ELJ1 Medical Shop v. Commissioner of Customs DECISION x--------------------------------------------------------------------x Petitioner further argues that to warrant forfeiture, respondent must prove the fraud employed by the consignee/importer to evade the duty pay duties and taxes. She asserts that respondent has failed to demonstrate any intentional fraud or deception on her part under the circumstances. Accordingly, petitioner highlights the lack of probable cause for the seizure of the subject medical supplies stored in her shop's warehouse and questions the methodology used to determine alleged discrepancies. She also points out that respondent's reliance on Section 1123"1 of the CMTA is unfounded due to a lack of evidence proving that the subject goods were contraband or smuggled. On the other hand, respondent insists on the legality of the forfeiture (of the subject seized medical supplies) claiming that petitioner failed to prove payment of duties and taxes on these goods. According to petitioner, the seizure and forfeiture of medical supplies in this case stemmed from the exercise of his or her 'visitorial power' under Section 224118 of the CMTA. Under this provision, he or she is authorized to effect seizure when the interested party, i.e., petitioner herein, cannot provide evidence of duty and tax payments on imported goods openly for sale or kept in storage within 15 days from demand. Respondent further notes that, under Section 1123119 of the CMTA, once forfeiture proceedings begin, it is incumbent upon petitioner (as the claimant), to prove (a) the source of the goods and (b) the payment of duties and taxes thereon. Respondent thus asserts that petitioner has failed to demonstrate the concurrence of these twin elements. Additionally, respondent contends that petitioner's ORs and Sis do not constitute proof of payment of applicable duties and taxes. Petitioner allegedly failed to present any document originating from the BIR or the BOC to substantiate such payments. Since forfeiture proceedings are in rem or against the goods, petitioner, as the person possessing the goods, must prove that the applicable duties and taxes ~ were paid. Respondent thus argues that petitioner failed in this regart!J' 117 SEC. 1123. Burden of Proof in Forfeiture Proceedings.- In all proceedings for the forfeiture of any vehicle, vessel, aircraft, or goods under this Act, the burden of proof shall be borne by the claimant. 118 Supra at note 86. 1!9 Supra at note 117.

CTA Case No. 10355 Arlyn Solita A. Briones, owner and proprietor of ELJ1 Medical Shop v. Commissioner of Customs DECISION X-------------------------------------------------------------------- X Respondent maintains that petitioner's pieces of evidence do not satisfy the requirements of proving that the seized medical supplies were locally purchased and that the duties and taxes thereon were paid. The fact that the composite inspection team noted discrepancies, such as a lack of corresponding ORs/Sls for some medical supplies and mismatches between the nature/quantity of goods and the documents provided, purportedly shows that petitioner failed to discharge the burden of proof in forfeiture proceedings. Respondent submits that specifying each circumstance of fraud is not necessary for seizure under the CMTA, as fraud in importations is often clandestine. Respondent likewise draws parallels with an earlier case, BS] Fishing and Trading, Inc. v. Han. Napoleon Morales, in his capacity as Commissioner of the Bureau ofCustomS120, where the Court in Division held that the documents presented by therein petitioner were not sufficient to prove the local source of the seized diesel fuel as well as the payment of duties and taxes thereon. Similar to the said case, respondent contends that herein petitioner failed to sufficiently prove the local source of the subject seized medical supplies and the payment of the duties and taxes thereon. RULING OF THE COURT Before the Court proceeds to address the above-stated issue, it deems propitious to first determine the timeliness of petitioner's appeal as this is determinative of this Court's jurisdiction. THE PRESENT PETITION FOR REVIEW WAS TIMELY FILED. Section 7(a)(4) of RA 1125121 , as amended by RA 9282 12 providecr \ 120 CTA Case No. 8026.03 February 2015. 121 AN ACT CREATING THE COURT OF TAX APPEALS. 122 AN ACT EXPANDTNG THE .HIRISDTCTION Of TilE COURT OF TAX APPEALS (CTA). ELEVATING ITS RANK TO THE LEVEL OF A COLLEGIATE COURT WITH SPECIAL JURISDICTION AND ENLARGING ITS MEMBERSHIP. AMENDING FOR THE PURPOSE CERTAIN SECTIONS OR REPUBLIC ACT NO. 1125. AS AMENDED. OTHERWISE KNOWN AS THE LAW CREATING THE COURT OF TAX APPEALS. AND FOR OTHER PURPOSES.

CTA Case No. 10355 Arlyn Solita A. Briones, owner and proprietor of ELJ1 Medical Shop v. Commissioner of Customs DECISION x--------------------------------------------------------------------x SEC. 7� Jurisdiction.- The CTA shall exercise: (a) Exclusive appellate jurisdiction to review by appeal, as herein provided: (4) Decisions of the Commissioner of Customs in cases involving liability for customs duties, fees or other money charges, seizure, detention or release of property affected, fines, forfeitures or other penalties in relation thereto, or other matters arising under the Customs Law or other laws administered by the Bureau of Customs[.]�J In relation thereto is Section 1136 of the CMTA and Section 11 of RA 1125, as amended by RA 9282, which are quoted hereunder for ready reference: SEC. 1136. Review by the CTA.- Unless otherwise provided in this Act or by any other law, the party aggrieved by the ruling or decisions of the Commissioner may appeal to the CTA, in the manner and within the period prescribed by law and regulations. Decisions of the Secretary of Finance when required by this Act, may likewise be appealed to the CTA. Unless an appeal is made to the CTA in the manner and within the period prescribed by law and regulations, the ruling or decision of the Commissioner or the Secretary of Finance shall be final and executory. SEC. u. Who May Appeal; Mode of Appeal; Effect of Appeal.- Any party adversely affected by a decision, ruling or inaction of the Commissioner of Internal Revenue, the Commissioner of Customs, the Secretary of Finance, the Secretary of Trade and Industry or the Secretary of Agriculture or the Central Board of Assessment Appeals or the Regional Trial Courts may file an appeal with the CTA within 8 thirty (3o) days after the receipt ofsuch decision or ruling or after the expiration of the periq.d fixed by law for action as referred to in Section 7(a)(2) herein. 123 Italics in the original text and emphasis supplied.

CTA Case No. 10355 Arlyn Solita A. Briones, owner and proprietor of ELJ1 Medical Shop v. Commissioner of Customs DECISION X-------------------------------------------------------------------- X Appeal shall be made by filing a petition for review under a procedure analogous to that provided for under Rule 42 of the 1997 Rules of Civil Procedure with the CTA within thirty (30) days from the receipt of the decision or ruling or in the case of inaction as herein provided, from the expiration of the period fixed by law to act thereon....12� Likewise, Section 3(a), Rule 8 of the RRCTA states: SEC. 3� Who may appeal; period to file petition. - (a) A party adversely affected by a decision, ruling or the inaction of the Commissioner of Internal Revenue on disputed assessments or claims for refund of internal revenue taxes, or by a decision or ruling of the Commissioner of Customs, the Secretary of Finance, the Secretary of Trade and Industry, the Secretary of Agriculture, or a Regional Trial Court in the exercise of its original jurisdiction may appeal to the Court by petition for review filed within thirty days after receipt of a copy of such decision or ruling, or expiration ofthe period fixed by law for the Commissioner of Internal Revenue to act on the disputed assessments. In case of inaction ofthe Commissioner oflnternal Revenue on claims for refund of internal revenue taxes erroneously or illegally collected, the taxpayer must file a petition for review within the two-year period prescribed by law from payment or collection oftaxes.125 Based on the foregoing provlSlons, the party aggrieved by a decision or ruling of the COC may appeal to this Court within 30 days from receipt of the said adverse decision or ruling. The records of the case reveal that, on 03 August 2020, respondent rendered herein assailed Order126, denying petitioner's appeal and affirming then MICP Acting District Collector Francia's Decision.127 Considering that petitioner received a copy of the assailed Order on 18 August 202o128, petitioner thus had 30 days therefrpm, or until 17 September 2020, to file an appeal before this Cour~ 124 Emphasis supplied. 125 Emphasis supplied. 126 Exhibit "P-2"/"R-6", supra at note 4. 127 Exhibit "P-I", supra at note 5. 128 Par. 5, I. Summary of Admitted Facts, JSFI, supra at note 43, p. 1080.

CTA Case No. 10355 Arlyn Solita A. Briones, owner and proprietor of ELJ1 Medical Shop v. Commissioner of Customs DECISION X-------------------------------------------------------------------- X Given that the present Petition for Review'29 was timely filed on 17 September 2020, this Court has jurisdiction over the case. We will now proceed to discuss the merits of the case. After an assiduous review of the case records and the parties' arguments, this Court finds the present petition bereft of merit. THE SEIZURE OF IMPORTED GOODS WAS VALID UNDER RESPONDENT'S VISITORIAL POWER. The instant case stemmed from respondent's exercise of his 'visitorial power' granted under Section 224 of the CMTA, to wit: SEC. 224. Power to Inspect and Visit. - The Commissioner or any customs officer who is authorized in writing by the Commissioner, may demand evidence of payment of duties and taxes on imported goods openly for sale or kept in storage. In the event that the interested party fails to produce such evidence within fifteen (15) days, the goods may be seized and subjected to forfeiture proceedings: Provided, That during the proceedings, the interested party shall be given the opportunity to prove or show the source of the goods and the payment of duties and taxes thereon: Provided, further, That when the warrant of seizure has been issued but subsequent documents presented evidencing proper payment are found to be authentic and in order, the District Collector shall, within fifteen (15) days from the receipt of the motion to quash or recall the warrant, cause the immediate release of the goods seized, subject to clearance by the Commissioner: Provided, finally, That the release thereof shall not be contrary to law.'3� Clearly from the foregoing, there is a valid seizure or forfeiture pursuant to respondent's 'visitorial power' when the following conditions are satisfied: (1) the seizure was conducted by personnel duly t!J authorized by respondent; (2) there are imported goods; (3) that are 1 openly for sale or kept in storage; (4) the interested party fails 129 Supra at note I. 130 Emphasis and underscoring supplied.

CTA Case No. 10355 Arlyn Solita A. Briones, owner and proprietor of ELJ1 Medical Shop v. Commissioner of Customs DECISION x--------------------------------------------------------------------x produce proof of payment of duties and taxes within 15 days from demand; and, (s) during the forfeiture proceedings, the interested party is given an opportunity to produce proof of payment of duties and taxes. Anent the .first condition, there was prior written authorization from the COC to carry out such 'visitorial power', as evidenced by the LQA'3' and the MQ'32 issued and signed by respondent, then Customs Commissioner Rey Leonardo B. Guerrero (Commissioner Guerrero), on 30 March 2020. Accordingly, duly authorized BOC and PCG officials named therein conducted an inspection or examination at the business premises of petitioner's 'ELJ1 Medical Shop' located at 16oo E. Remegio St., Brgy. 316 Zone 32, Sta. Cruz, Manila. This inspection was aimed at investigating suspected storage of smuggled medical supplies. Given that medical supplies were indeed discovered thereat, in compliance with the third and fourth conditions, respondent demanded evidence of payment of the duties and taxes on these suspected imported goods, which were openly for sale and kept in storage. However, petitioner was unable to provide the necessary proof of payment, leading to the seizure and initiation of forfeiture proceedings for the medical supplies. Furthermore, when BOC personnel requested such evidence, petitioner failed to sufficiently demonstrate the origin or source of the medical supplies and the payment of duties and taxes on them. Therefore, respondent had valid grounds to seize the medical supplies and initiate forfeiture proceedings. As regards the second condition, there must be preponderant evidence to establish that the subject seized medical supplies in question were imported or obtained from outside the Philippines. Section 224 of the CMTA clearly states that only imported goods fall under respondent's visitorial power. The prior determination that the seized medical supplies are imported or foreign-manufact'Ved could be discerned from the cross-examination'33 of SA Rosete, v~ 131 Exhibit "P-6"/"R-1"". supra at note 17. 132 Exhibit "R-2'". supra at note 18. 133 TSN dated 03 August 2022, pp. 39-43; Emphasis supplied.

CTA Case No. 10355 Arlyn Solita A. Briones, owner and proprietor of ELJ1 Medical Shop v. Commissioner of Customs DECISION X-------------------------------------------------------------------- X ATTY.LI: Maraming salamat. Mr. Witness, binanggit mo rin na sa iyong Letter of Authority or Mission Order ay mayroon kasing imported items or regulated items. Tama po ba? WITNESS: Yong regulated items na sinabi ko po eh usually. ATTY. LI: Ulitin ko po, Mr. Witness. Tama or mali lang po. Tama or mali bang sabihin na noong sinabi mo kanina na usually nagkakaroon ng Letter of Authority or Mission Order may kinalaman ito sa imported items or regulated items. Tama? WITNESS: Tama. ATTY.LI: Para sa particular na sitwasyon na ito sa kasong ito dito kay Ms. Arlyn Solita A. Briones, sa personal mong pagkakaalam, mayroon ka bang nakitang dokumento na nagsasabing imported or regulated items yong n[a]kalagay or matatagpuan sa nasabing tindahan? WITNESS: Wala pong dokumento... (interrupted) ATTY.LI: Maraming salamat, Mr. Witness. WITNESS: Pero nakalagay po sa karton. Nakalagay po sa karton. ATTY.LI: Mr. Witness, binanggit mo din na may nakalagay na imported items sa tindahan ni Ms. Briones, tama po ba? WITNESS: Opo. ATTY. LI: Mr. Witness, maaari ko po ba kayong tanungin kung pamilya[r] ba kayo sa iba't ibang medical products? WITNESS: � Hindi ko po linya yan.r!!)

CTA Case No. 10355 Arlyn Solita A. Briones, owner and proprietor of ELJ1 Medical Shop v. Commissioner of Customs DECISION x--------------------------------------------------------------------x ATIY.LI: So, tama rin po bang sabihin na hindi kayo familiar sa mga manufacturers ng medical products? WITNESS: Mayroon lang akong idea dyan. ATIY.LI: So tama rin po bang sabihin na mayroon kayong alam or masasabi mo sa isang tingin mo ang manufacturer ay domestic or imported? WITNESS: Opo. ATIY.LI: Ano ang basehan ng iyong kaalaman, Mr. Witness? WITNESS: Pag yong karton po ay nakita kong made in China, alam kong imported. ATIY.LI: Pero dito sa nasabing para sa specific na kaso na ito ni Arlyn Solita A. Briones, wala kayong inattached sa Affidavit mo nitong sinasabi mong may nakita kayong nakasulat na made in China. Tama po ba? ASSOC. SOL. MANABAT: Objection, Your Honors. Article speaks for itself, Your Honors. JUSTICE UY: All right. ATIY. LI: We submit, Your Honors. JUSTICE UY: Mr. Witness, just a few questions, so yong paggawa ng inventaryo nakita ninyo? WITNESS: Opo, opo. JUSTICE UY: t So nakita ninyoB

CTA Case No. 10355 Arlyn Solita A. Briones, owner and proprietor of ELJ1 Medical Shop v. Commissioner of Customs DECISION X-------------------------------------------------------------------- X WITNESS: Opo, Your Honors. JUSTICE UY: And noong nag inventaryo tiningnan mo ba yong nga produkto? WITNESS: Opo. Tinitingnan ko po. Store po sya kaya kita mo po kung ano ang binibilang. JUSTICE UY: Nakita mo ba kung local o imported? WITNESS: Opo, opo. JUSTICE UY: So anong nakita mo? WITNESS: May mga imported po at may local. JUSTICE UY: Hiningian ba ng resibo si Ms. Solita? WITNESS: Opo. Ang hining[i] ay proof of payment po. JUSTICE UY: Payment of taxes for the imported goods? WITNESS: Yes po. Moreover, petitioner herself admitted'34 that some of the medical supplies in question were imported goods, as follows: Sol. Manabat: Your Honor, my question will be anchored on or necessitates if prior showing of the exhibits, Your Honor. Perhaps, Your Honor, if the witness has a copy of the exhibit~, I will just -------d-ir_e_c_t_h_e_r_to read and confirm some matter2J" 134 TSN dated 24 November 2021, pp. 12-14; Emphasis supplied.

CTA Case No. 10355 Arlyn Solita A. Briones, owner and proprietor of ELJ1 Medical Shop v. Commissioner of Customs DECISION X-------------------------------------------------------------------- X Atty. Li: opIfrfettphhaeerweg,iotsnooedIsscc.aonunastelle,asAttptyr.ovMidaentahbeatcocpaynosfptheceifayttasochImceannt Sol. Manabat: Actually, [it is] P-8-25-27, it is a CPR with item Silkam Braided Natural Silk. Atty. Li: Your Honor, we will be providing Ms. Briones a copy, I think she is already holding a copy by the good Solicitor. We will of the attachment being cited also be sharing our screen for reference of the Honorable Court. Justices as well as the Honorable JUSTICE LJBAN: Alright. Sol. Manabat: Madam Witness, kindly refer to that document and can you read to us the nature of the are holding. product in this exhibit that you Witness: Certificate of Product Registration. Sol. Manabat: Yung product po. Witness: Silkam Braided Natural Silk non-absorbable suture. Q: Madam Witness, can you also read to the Honorable Court the manufacturer? A: Manufacturer po is malabo na po. Q: Malabo, pero sa dulo po nung manufacturer we can see Barcelona Spain. A: Barcelona Spain. Q: And sasang-ayon po ba kayo sa akin, Madam Witness, na ibig sabihin itong mga prq.duktong ito ay na-manufacture sa Spain? tama po ba~

CTA Case No. 10355 Arlyn Solita A Briones, owner and proprietor of ELJ1 Medical Shop v. Commissioner of Customs DECISION x--------------------------------------------------------------------x A: Opo. Q: Punta po tayo sa Exhibit P-8-5-31, Atty. Li. JUSTICE LIBAN: MtlAihsteattenodPranbhieainylti,ptthhpcaaianttneipssyr?yoouodI uutjrchutqisnutrkeesgsttitihsipotaurntalsatiits[oesniwct]hah,araiettsnnsy'ootomtiut?mewaoanfnuptfratocodtuu-rceAtdsttyion.r Sol. Manabat: Yes, Your Honor. JUSTICE LIBAN: mlSiosa,tnecudafnaacryteouurneojdutsitnmsoatitnphuueflraatcceot?uurnTethdraietisns. otmhee of the products Philippines but Atty. Li: Yes, Your Honor. JUSTICE SAN PEDRO: That is the stipulation that numerous items were manufactured outside th e Philippines. Atty. Li: Yes, Your Honors, we would like to clarify on [sic] that. Sol. Manabat: pikMboaaya?nodganmbaaWndsaiath,nielmsasa,nywgiomiuillpadnoygrotpupraoogdrsueikelattohdeiartyeofnosarae-m-Psiaalnnipgu-ifnaaycatosu,nrtehadombsaaa A: Opo. au th o Furth ermore, it is w ort h noting th at some affidavits'35 that the rized representatives of p etitione r's local suppliers exec uted an~ 135 Biotech~ (pPAEphf.xfaih4rdmi9ab0vai-ti4t"Cs9Po1e-rx)1pea0.cn-u5d(tE-e2Mxd"h,sbi.BbyKiOtMaCy"re.PR-MAeIcq0icou-hr5idan-seoI,l", ,pGt.h.Be2LOIau7uCi;.thDtRohireevicziasoeuirdotdhnrsoe,Drpirpzoepecs.dkeenr2tet,2ap0Vtri-evo2sel2eunoImt;faNetDieIv,iwevpil.osii4ffoe9Cn4Ph)haD. amorpmcikoaecnte, uVticoalulsm, eIncI.,

CTA Case No. 10355 Arlyn Solita A Briones, owner and proprietor of ELJ1 Medical Shop v. Commissioner of Customs DECISION X-------------------------------------------------------------------- X attached to petitioner's Manifestation dated 07 May 2o2o'36 (which was filed with the BOC during the course of the forfeiture proceedings), include the following statement: 2. I am executing this affidavit to confirm that [name of supplier] imports the following items with the corresponding brand/s[.]'37 As can be gleaned from the foregoing, respondent has sufficiently established the second condition for a valid seizure or forfeiture under Section 224 of the CMTA, i.e., that the subject seized medical supplies were imported goods. It is settled that forfeiture proceedings are proceedings in rem and are directed against the res. The pronouncement in Commissioner of Customs v. Manila Star Ferry, Inc., et a/.'38, is most enlightening, viz: Forfeiture proceedings are proceedings in rem (Commissioner of Customs v. Court of Tax Appeals, 138 SCRA 581 [1985] citing Vierneza v. Commissioner of Customs, 24 SCRA 394 [1968]) and are directed against the res. It is no defense that the owner of the vessel sought to be forfeited had no actual knowledge that his property was used illegally. The absence or lack of actual knowledge of such use is a defense personal to the owner himself which cannot in any way absolve the vessel from the liability of forfeiture (Commissioner of Customs v. Court ofAppeals, supra; U.S. v. Steamship "Rubi," 32 Phil. 228, 239 [1915]). Respondent's assailed Order'39 in this case, as in other seizure proceedings, concerns the res or object itself rather than the persona or person. The proceeding is a probe on illegally imported goods. These goods are deemed to have violated the country's revenue law, and as such, are prevented from being assimilated in lawful commerce until the � corresponding duties thereon are paid and the penalties imposed antJ- 136 Exhibit "P-10", Division Docket, Volume I, pp. 393-411. 137 Emphasis supplied. 138 G.R. Nos. L-31776-78, 21 October 1993; Italics in the original text and emphasis supplied. 139 Exhibit "P-2"/"R-6", supra at note 4.

CTA Case No. 10355 Arlyn Solita A. Briones, owner and proprietor of ELJ1 Medical Shop v. Commissioner of Customs DECISION x--------------------------------------------------------------------x satisfied either in the form of fines or of forfeiture in favor of the government, which then disposes them according to the law.140 Analogously applying the foregoing pronouncements, the absence of knowledge or consent of petitioner on any irregularities or illegalities which attended the imported goods found in her possession cannot absolve such goods from the liability of forfeiture. Therefore, petitioner's defense of purchasing them from local suppliers deserves scant consideration. Once the goods are sufficiently determined to be imported or sourced from outside the Philippines, Section 224141 of the CMTA mandates the possessor to show proof of payment of the duties and taxes; otherwise, the goods may be seized.142 This requirement supports the State's policy of combating smuggling and other customs fraud, ensuring that all imported goods are properly declared and appropriate duties and taxes are paid. It is a crucial tool for enforcing customs regulations, safeguarding revenue collection, and protecting the local economy from illegal imports.143 The essence of Section 224144 of the CMTA is to reinforce the implementation of customs laws, particularly in ensuring that all imported goods have undergone proper customs clearance and that applicable taxes and duties are paid. It aims to prevent the circulation , of smuggled or improperly imported goods in the market. By requiri~ 140 See People of the Philippines v. Court of First Instance of Rizal, Branch IX, Quezon City, et a/., 141 G.R. No. L-41686, 17 November 1980. Supra at pp. 22-23. 142 PISmheemil.i,BgIronaact.riodvn. oCDfoeCmteomnmtiismosniiosCsnieeornntoeerfrsCv.uosYftuotahmnes,WBGeu.nrRtee.a,NuGo.o.Rf1. 2INm9o6m.82i0g4,r2Oa9Jti5oS7ne,p2at8enmFdebbtehrreuIa9Jry9a9i2l,0c2Wi3tai;nrCgdea2nr1,raABrmaurMJeuaarurb2ldoe,f 143 Customs Duties and Import Regulations �125 (1965). Republic Act (RA) No. 10863 or the Customs Modernization and Tariff Act (CMTA) wiSelnElielhClga.aenlf1cf0aeic1cig.teson,DvtaleeyncrdlnfaammrcaieotlniidotteanrtrenoeizivfneePtnecoruunesla,titociimonynss.ta-ialtunItttrdeaidstfaeahr,iierfprferaaebndvydmedtnirnetacinsaltsanrpradaetrdicoeunnthrt.et.ac.uip.lso(talEoincmmyyspfohoaafnrsmdtihsetosaufrSpictfpaufltsmieteoadtmno.)aspgefrrmoateuencdtt and that and SEC. 202. Functions ofthe Bureau.- The Bureau shall exercise the following duties and functions: (d) Prevention and suppression of smuggling and other customs fraud; (k) Enforcement of (the CMTA( and all other laws, rules and regulations related to customs administration. (Emphasis supplied.) 144 Supra at pp. 22-23.

CTA Case No. 10355 Arlyn Solita A. Briones, owner and proprietor of ELJ1 Medical Shop v. Commissioner of Customs DECISION x--------------------------------------------------------------------x proof of payment of duties and taxes, the BOC can verify that the goods were legally imported and the appropriate taxes have been paid. Again, this aids in safeguarding the local economy, protecting legitimate businesses, and ensuring that the government collects the correct amount of revenue from imports.'45 Even if this Court were to consider the 0Rs/Sis'46 submitted by petitioner, these documents only prove her purchases from specific local suppliers within the given period. However, they still fail to confirm that the supplies listed therein are identical to the medical supplies seized from petitioner. This distinction is crucial as not all of petitioner's inventory was seized during the inspection - only the items identified as imported or foreign-manufactured.'47 As regards the discrepancies identified during the cross-matching of the ORs/Sis presented and the list of inventoried goods, petitioner could have presented a schedule of inventory or the general ledger of her inventory to show the movement of her inventory, i.e., local purchases, importations and disposals. Notably, the ORs/Sis provided by petitioner lack serial identification numbers for cross-referencing, which would have aided in correlating them with the confiscated items. Lastly, respondent has also fulfilled the fifth condition. During the forfeiture proceedings, petitioner was afforded the opportunity to demonstrate the origin of the seized medical supplies and the payment of relevant duties and taxes. Despite this, petitioner again failed to provide sufficient evidence for both the source of such articles and the payment of duties and taxes thereon. In her "Notice of Claim with Motion to Quash"'48, petitioner merely stated that she had requested import documents from her local tJ suppliers to substantiate the payment of duties and taxes. However, she ' cited the enhanced community quarantine (ECQ) in 2020 as 145 esC0Smf6eofe.iuOcLgiNcegttandloirtnbcotgeihsfreEoa!nnc90dog9.ll5aloeJn,tchadcteoi,iortGinanfr.gnRoaduC.fdNBiosmemorup.mnpo7aori9strn3sdai0onco7udnMs,e2etrox9mopEAofsmurC, tpgbudeuusyusttnottiaame1lds9ssoo8dv,9u.v,ae.JnruetCdh:doetgmhueseorttRargetaooem.vifmeAorppnnopmPret.aealnnMstt,l'asyek,datrtasoii/va.er,rennGaodn.tRedor. nTeNlhfyfeoet.ocDt1iipsv0rte4eilv6laee0nrn4dst, 146 Exhibits "P-10-4-1" to "P-10-4-45", BOC Records, pp. 225-270. 147 See Clariticatory Questions Propounded dated 24 November 2021, p. 21. by the Court on Petitioner Arlyn Solita A. Briones, TSN 148 Exhibit "P-1 0-1 ", BOC Records, p. 280-299.

CTA Case No. 10355 Arlyn Solita A. Briones, owner and proprietor of ELJ1 Medical Shop v. Commissioner of Customs DECISION x--------------------------------------------------------------------x hindrance, making it difficult for suppliers to provide the documents due to the variety and volume of items involved.'49 Nevertheless, despite the eventual lifting of the ECQ restrictions and throughout the trial proceedings before this Court, petitioner failed to present any evidence or demonstrate her efforts to obtain the necessary documentation to prove the payment of duties and taxes on the imported goods in question. With the foregoing disquisition, the evidence presented by petitioner was not sufficient to convince this Court that the seized medical supplies were locally purchased, nor that the duties and taxes due thereon had been paid. THE BASIS FOR THE SEIZURE OF PETITIONER'S MEDICAL SUPPLIES IS SECTION 224, NOT SECTION m3, OF THE CUSTOMS MODERNIZATION AND TARIFF ACT (CMTA). Petitioner further contends that respondent erred in finding that the subject seized medical supplies are liable to forfeiture in favor of the government since respondent failed to show that fraud has been committed by the consignee or importer thereof to evade the payment of duties and taxes due thereon, citing Section m3(f) and (l)(s) of the CMTA, which provide: SEC. m3. Property Subject to Seizure and Forfeiture. - Property that shall be subject to seizure and forfeiture include: (f) Goods, the importation or exportation of which are effected or attempted contrary to law, or any goods of prohibited importation or exportation, and all other goods which, in the opinion of the District Collector, have been used, are or were entered to be used as instruments in the importation or the exportation of the ... forme5'. 149 !d., p. 284.

CTA Case No. 10355 Arlyn Solita A. Briones, owner and proprietor of ELJ1 Medical Shop v. Commissioner of Customs DECISION Page 33 of 35 -- -- - - - - - - - - - -- -- -- -- -- -- -- -- -- -- -- -- - - - - - - - -- -- -- -- -- -- -- X X-- -------- (I) Goods sought to be imported or exported: (s) Through any other practice or device contrary to law by means ofwhich such goods entered through a customs office to the prejudice of the government.'so On the contrary, respondent, through the OSG, points out that a finding of fraud is not a condition under Section 224'S' of the CMTA before an imported good may be seized. Respondent thus maintains that he acted within the bounds of his visitorial power under Section 224 of the CMTA. We rule for respondent. At the outset, it should be noted that there is no indication that the list of properties subject to seizure and forfeiture under Section 1113 of the CMTA is exclusive. This means that the said provision is not a complete or closed list, and other properties not specifically mentioned might still fall under the scope of seizure and forfeiture under the CMTA. That being said, insisting on a finding of fraud, when such a requirement is not stipulated under Section 224 of the CMTA, would effectively set at naught the said provision and restrict respondent's visitorial power. A cardinal rule in statutory construction is that when the law is clear and free from any doubt or ambiguity, there is no room for construction or interpretation. There is only room for application. As the statute is clear, plain, and free from ambiguity, it must be given its literal meaning and applied without attempted interpretation. This is what is known as the plain-meaning rule or verba legis. It is expressed in the maxim, index animi sermo, or "speech is the index of intention". �'8 Furthermore, there is the maxim verba legis non est recede{ldum, or "from the words of a statute there should be no departure" \50 Emphasis supplied. 151 Supra at pp. 22-23. \52 Romeo Tumabini v. People ofthe Philippines, G.R. No. 224495, 19 February 2020, citing Cynthia S. Bolos v. Danilo T. Bolos, G.R. No. 186400, 20 October 2010.

CTA Case No. 10355 Arlyn Solita A. Briones, owner and proprietor of ELJ1 Medical Shop v. Commissioner of Customs DECISION x--------------------------------------------------------------------x In this case, applying the principle of verba legis in statutory construction, as earlier discussed, respondent has fully adhered to all the conditions specified in Section 224153 of the CMTA to effectuate a valid seizure or forfeiture. Moreover, the foregoing interpretation aligns with Customs Administrative Order (CAO) No. ow-2o154, which was issued on n May 2020 (subsequent to the inspection conducted in this case). The enumeration of properties subject to seizure and forfeiture under Section 4.1 thereof explicitly includes "[i]mported goods offered openly for sale or kept in storage, which were discovered in the exercise of the Commissioner's power to inspect and visit pursuant to Section 224 of CMTA, when proof of payment of duties and taxes cannot be presented after the lapse of fifteen (15) days". In sum, this Court finds no compelling reason to annul or reverse respondent's assailed Order155 dated 03 August 2020, affirming then MICP Acting District Collector Francia's Decision156 dated 21 May 2020, which order caused the forfeiture of petitioner's imported medical supplies in favor of the government (to be disposed in accordance with the law). WHEREFORE, in view of the foregoing considerations, the instant Petition for Review filed by petitioner Arlyn Solita A. Briones, owner and proprietor of ELJ1 Medical Shop on 17 September 2020 is hereby DENIED for lack of merit. Accordingly, respondent Commissioner of Customs' assailed Order dated 03 August 2020 is hereby AFFIRMED. SO ORDERED. I 153 Supra at pp. 22-23. 154 Seizure and Forfeiture Proceedings and Appeals Process. 155 Exhibit "P-2"/"R-6". supra at note 4. 156 Exhibit "P-I". supra at note 5.

CTA Case No. 10355 Arlyn Solita A Briones, owner and proprietor of ELJ1 Medical Shop v. Commissioner of Customs DECISION x--------------------------------------------------------------------x I CONCUR: LAN~VID Associate Justice ATTESTATION I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. ( A sociate Justice Special 2� ivision Acting Chairperson CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, and the Special 2nd Division Acting Chairperson's Attestation, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. ~. ~ ..., '- MA. BELEN M. RINGPIS-LIBAN Acting Presiding Justice