CTA Case No. 3762 (Decision)

~UI?J: ,U:: OF il-l� ��~tt.WI"l!'>ll"-. .;OURI OF TAX ~H'Pk.:.Al_.' QU.ttto~ c~ rw '. THE EAST ASIATIC .OMPANY, LTD. , C.T.A. CASE NO. 3762 in its capacity as agent of the S/S "SI ENA DAN", Petitiont:r, �- versus - COMMISSIONER OF CUSTOMS, Respondent. X- - - - - - - - - - - - - - - X DEC I S I 0 N This is an appeal fro. the deci s i on of the. Commissioner of Customs dated February 17, 1984 , affirming th at of the Collector of Customs in Administrat i ve Case No. V-16-81, imposing an administrative fine of P30,000.00 against the vessel, the S/S "SIENA DAN", :Eor alleged violation of Section 1005, in relation to Se ction 2521 of the Ta ri ff and Customs Code, as amended. On November 12, 1980 , said vessel arrived at the Port of Manila and among the cargoes ' t unloaded were 100 Bags Borax and 240 Bags of Boric Acid. These goods we r e covered by a Bill of Lading showing the quantity, kind of packaging and description o � goods as such 100 �, I

.. DECISION - CTA CASE NO. 3762 2 bags of Borax with gross weight in kilo~ ~s 5,057 kgs. and 240 Boric Acid as 12,137 kgs., respectively tExh. A, p. J9, CTA rec ) and the corresponding computerized manifest was received by petitioner, th~ East Asiatic Co. r Ltd. r on October 30, 1980. (Exh . B, p. 40, CTA rec.) The Inward Foreign Manifest, which was subsequently prepared by the manifest clerk of the petitioner, the East Asiatic Company, Ltd., as cgent of the S/S "Siena Dan" (Exh. C, p. 40 , CTA rec.), there appeared under cbl1mn 5 thereof entitled "CONTENTS'' in the said Manifest (Exh. C-1, p. 42, CTA r ec.) 1 the fol lowing: BORAX BORIC ACID 12 M/TONS BORIC ACID GRANULAR 'J'ECHNICAL EP52L. . 2~-005/M/TONS DEHYBOR AN HYDROUS BORI-X EP-~2328�-00 20 CONTAINER UNDER PIER TO PIER BASIS On November lH, 1~80, the consignee, Mariwasa Manufacturing, Inc., through its customs brokers, re- quested the petitioner the East Asiatic Co. Ltd., (Exh. D, p. '! 3, CTA rec.) F. to cor 1:ect t.he Inward F'ore ign Manifest which shows: 100 BAG BORAX 240 BAG BORIC ACID \ 39v

'� DfCISJON - CTA CASE NO. 3762 3 and which " SHOULD BE' corrected as follov~s: 100 BAG BORAX 5,057 Kgs. 240 BAG BORIC ACID 12 1 137 kgs. 1v7v~v1v9v4vvk~sv.v t, in or der to effect delivery in its favor of the aforesaid cargoes at the earliest possible time. Pursuant to the request, the said Inward Foreign Manifest was amended by petitioner on November 18, 1980 . (Exh. E, p. 44 CTA rec . ) Based on the above circumstances, the Collector of Cus to ms o f Manila , filed an Administrative Case against the vessel , the S/S "Siena Dan " , for carrying cargo con- sis t ing of the aforesaid 100 Bag of Borax and 240 Bags of Boric Acid without proper and accurate manifest , allegedly in violation of Section 1005, in relatio n to Section 2521 of t he Tariff and Customs Code, as amended. During the administ r ati v e hearing before the Bur eau of Customs, petiti on er , the said East Asiatic Co. Lt d. , pre s ented its Man i fest Cl erk, Celia Posadas, to testify in its favor . Said Celia Posadas testified t hat she had prepared the said Inward Foreign Manifest right af t er "A l l Saints Day" ; that in vievJ of her work which at the ti me had increased tremendously, she inadvertently failed to copy the actual weights of the cargoes found in the \ 400

DECI S ION - CTA CA~E NO. 376 2 4 I' bill of lading; that she overlooked copying the "5,057 kgso" weight found in the said bill of lading and was able to copy only t he 12,137 kgs. weight found therein . Another corroborating wi tness, Moise s Fratejas, �� Documentation Manager of the same Company, was presented by petitioner and testified that his function was to super- vise a ll clerks in the department where said Manifest Cl erk, Celia Posadas, belongs and that he was the one who signed and approved the manifest in question; that he had inadvertently failed to notice the discrepancy between the "Contents" column and the "\'Ieight" column of said Manifest; that it is a standard accepted practice in trade that the weights of goods in one shipment are usually consolidated and stated in one single figure, such as the placement of 12,137 kgs . in column "Weights" in the manifest in this case; hence, he had therefore the impression that everything in the manifest was in order; that he learned only o f the discrepancy from the broker of consignor who aforesaid presented a request for amendment in the Inward Foreign Manifest; and that petitioner never received a notice of discrepancy from the Bureau of Customs and which would have required, under traditional due process, to explain this '� 401

DECISION - CTA CASE NO. 3762 5 '. discrepancy before the f ilin g by the Collector of Customs of an administrative case against petitioner. The ecision of the Collector of Customs who imposed a fine of e3o,ooo.oo against the veus l having been affirmed by respondent Commiss ioner of Customs, petitioner appealed to this Court. The only lssue 1s whether or no t, based upon the afo:reci t ed facts of this case 1, the vessel S/S "SIENA DAN", throu gh its l ocnl age 1�1t, the [ast Asiatic Comp any l. Ld., . ,,,, liable under Se ction 1005 , i n relation to Sactlon 2521 .l of the same Code, to a fine of e3o,ooo.oo. Sections 1005 and 2521 o f t e �ra ri ff and Cu stoms Code, aR a mend ed , involved in this instant case, respectively provides as follows~ SEC� 1 0 0 5 � .1'1 ~~s t;. Re q ~~ i r ej_ g,E ..V P; s ~ e 1 F r~ _For-eigr~ Port . - Every vessel fror~ a fore1w1 p~rt must have on board a complete man:t f' est of all her caryo . All of the cargo intended to be l anded at a po rt in th~ PhilippinAs must be described in . separate man:ifests for each port of call there1n, Each manifest shall include the port of departure an d the port of delivery wilh the marks, numbers, quantity and descriptlon of the pockageP and the names of the consignees thereof. Every vessel from a foreign po t must have EH'l onrd complete mani f,, sts of passenqers and their baggage, in the prescribed form, sett:ng forth their destination and a]_ par- ti culars required by the immigratjon laws; and every such vessel shnll have prepared for prescn- tatjon to the proper customs off icial upon arrival \ \ 40~ J

DlCISION - CTA CAS� NO. J762 6 � in ports of the Philippjnes a complete list of all sea stores then on board. If the vessel does not carry cargo or passengers the manifest must show that no cargo or .' passenger, as the case may be, is carried from the rort of departure to th e port of destination in the Philippines. A cargo manifest shall in no case be changed or altered after entry of the vessel, except by means of an amendment by the master , consignee or agent thereof, under oath, and attached to the original manifest: Provided, however, That after the invoice and/or entry co ve r i n g a n i mp o r t at i o n h a v e b e e n r e r' e i ve d a n d recorded in the office of the appraiser , no amendment of the manifest shall be allowed, except when it is obvious that a clerical error or any other discrepancy has been committed in the preparation of the manifests without any fraudulent intent, discovery offwhich could not have been made until after examination of the importation has been completed. SCC. 2521. - Failure~ Supply Requisite Manifests . If any vessel or aircraft enters or departs form a port of entry without submitting t he proper manifests to the customs authorities, or shall enter or depart conveying unmanifested cargo other than as stated in the next preceding section hereof, such vessel o r aircraft shal J be fined an amount not less than ten thousand pesos (elO,OOO.OO) but not exceeding thirty thousand (e3o,ooo.oo) pesos. The same fine shall be imposed upon any arriving or departing vessel or aircraft if the master or pilot in command shall fail to deliver or mail to the Commission on Audit a true copy of the manifest of the incoming or o:1tgoing cargo, as required by law. (As amended by P.D. No. 1258-A.) \ ' 403

DECISION - CTA CASE NO. 3762 7 Section 1005 lays down the indispensable require- ment that every vessel com1ng from a foreign port must have on board a complete manifest of all her cargo; and that it further provides the required contents of each manifest intended to be submitted to the customs authorities such as the "xxx .!!:..�rks, numbers, quantity and description E.!:, the packages and the names of the consign e r thereof � x xx � 11 It also provides as a rule, that no amendment of the manife c t shall be allowed, except only where there is a (1) clerical error, or (2) discrepancy of any kind is committed in the prepa- ration of the manifest, and in both cases, the clerical error or discrepancy is not tainted with fraudulent intent and the discovery thereof could not have been made until after the examination of the importation has been complet~"d. Under said Section 2521, fine is imposed in an amount not less than eio,ooo.oo but not exceeding e30,000.00 upon any vessel or aircraft that enters or departs from a port of entry without submitting the proper or pomplete manifest to the customs authorities or shall otherwise convey unmanifested cargo. A complete manifest of a cargo under Section 1005 \

�- IECISION - l'T/\ CASl NO. n62 8 is the sa me asI the proper monifest of a cargo to be su b mi tt ed to the c ustoms authority. Where the re is a manifest filed declaring the weight of the cargo, but it ap pe ars that the weight was underdec~ared, or even t. if is not decl ared at all, this circumstance cannot be considered a violation of Section 2521 and that, f or all legal purposes, this will still be a ca se where a proper manifest has been filed covering the cargo. In thi s wise, the Su preme Court, in the cas e of Commissi oner of Customs vs. Court of Tax Appeals, et. al. G.R. No. 41861, promulgated on March 26, 1987, held that - 11 xxx The proper manifest as provided in Section 2521 should be interpreted to mean a complete manifest as provided in Section 1005 aforecited, lhe pertinent portion of which provides: 'Each manifest shall include the port of departure and the port of de- livery with the marks, numbers, quant~ ~ description ~ the packages and the names of the cons ignors thereof. (Underscoring supplied.) The law (Section 1005) does not even require the weight of the cargo to be specified , Thus, the inclusion of the weight of the cargo in the manifest in a lesser am ount than its actual gross weight does not thereby reGder the manifest incom- plete. There is under the circumstances of this case no breach of Section 2521 aforesaid. In this instant case of East Asiatic Co., Ltd., the weight of the 100 bags of Borax as reflected in I \ 405

DFCISION - CTA CA6E NO. 3762 9 I the hill of ladino (Exh. A, p. 39 TSN.) which is 1/M/TONS, was recorded in the Inward Foreign Manifest (Exh. C-1, .9..E.�ci t. ) but was not in accordance with its true and actual weight which should have been s,qs7 kgs. Specifically, the Boric Acid and Borax had equi- valent weights indicated in the Inward Foreign Manifest (Exh. C & C-1, ~.) As show n in said Inward Foreign Manifest, the weight of bot h 240 Baqs of Boric Acid and 100 Bags of Borax is "12/M/TONS Boric Acid Granular Technical and 5/M/TONS Dehybor Anhydrous Borax", res- pectively (See column 5, "CONT ENTS" of Inward Foreign Manifest; Exh. C-1, ~.) Although there was non-dis- closure of the actual weight, there was disclosure of the weight nevertheless and that under t hes e circumstances , it cannot be said that there is a non-filing of a complete or proper manifest by the simple non-inclusion of the weight of a rargo under the column "W eight" in the said manifest. Moreover, the wejght as indicated in the bill of lading, was reflected in the inward foreign manifest by Celia Posadas, petitioner's employee (See Exh. C-1, ibid.), but that a more specific disclosure of its actual weight was not made by her due to a clerica l mistake or error committed by her in the preraration of the said \ 40

- - - - - -----,==--=""""'�"--'--�---'"-���- .; DECIS10N - CTA CASE NO. 3762 10 manifest or documentBtion and nut on account of her neg- ligence, or that of her supervisor, Documentation Manager Moises Fratejas, wh ic h error or mistake committed can truly be the proper subject o f an amendment which peti- '� tioner did, on the strength of the last paragraph of Section 1005 of the Tariff and Customs Corle, as amended. fhe ~foresa id testimonies of the two (2) witnesses of petiti oner, not having been contradict~d and /or the truth t here of destroyed by cross-examination, or by coun- tervailin g evidence, the non-inclusion of the actual weight of the 100 bags of Borax in the manifest was, t~erefore, concl usively shown to be due to clerical error or mistake a nd not attended with fraudulent intent, which commission of a clerical error or mistake, excuses the vesse 1. S/S "Siena Dan " , from the imposition of f ine. How e v er , res pondent counters that he found PVery- thing (in the vessel's Inward Foreign Manifest) had been f i lled up, with exception of column B, wh er e the cargos' total gross weig ht in kilos should llave been indicated, and it was only t he actual weight of the 240 bngs of Boric Acid of 12,137 kgs. that was ind1cated therein , and the actual weight of 5,057 kgs. of th e 100 bags of Bo r ax was left out. Hence, he concluded that thPre was \

DECISION - CTA CASE NO. 3762 ll .�� 3 v i o 1 a t i o n o f S e c t i o n 1 G0 5 o f L11 e nt~ v l f> e d Ta r :i f f a n d Cu s t. oms Co d e vi h i c h g :i v e s r i s e t n t h e 1 e q a 1 i t y o r t h e imposition of the fine of e3o,uoo.on ngainst lh vesGel. The evidence of petitioner, both ~locumentary ''~ nd testimonial, ha ve shovm t 'uthfu lly circ:unn:;tances which fully evidenced the lack of intent of petitioner, actinq for the ves�3el , the S/S "~:liena Dn n", to commit fraud by its failure to place in the ve sf3e l 1 s in �nrd ForP-ign Manifest, the act ual weight of t he 100 bags of Borax since thin fni lure Ln the part of peti t ioner 's employee to type the we i g ht in tho manifest wo s du e t a cci d ent and/or clerical ov ersiq ht brought about by pressure of too much work of the sa id manifest clerk , Celia osadas, �/ho testified under oath t 1at she 'tJorked on the said mani fest only after. "All Saints Ga)� ", or the holid~� ys. Wher sh e typed the weight of t h e Boric Acid wh ic h wAs 12 , 137 kgs.~ s e believed then that was the tolal we igh! . of the \�Jhole C<H~JO .i.ncludin~J the 1veigh t of the B-;rax. Indeed, Uis must have be .n Hil urdnt enti.onal error ond which ha ve cause d a very little or inf3iqnificant deviatio n from the truth. Arty �1,1ay , til e l�:;~~~ ~-lectio1 l UO <i of the Tariff and Custom s Code, as amended, does no require the weights to b e placed in the manifest and I which, upon failu:r�e to pl,ce such 1~eiq ht ~ r<:w be a \ 40o

� " DECISION - CTA C.� SE NO. 3762 12 ground for th " impos.iU.on of f.ine under Section 2'121 of the Tarif f and Custom s Code. ( Co n1 m� o V Cu s torn s v s � Court of Tax Appeals 9 E.P..� c it. ) lh ere being no improper, or incomplete manifest filed by petitioner in this c ase unde r the provisi on :> of Sec ti on 1005, i n r elation to Sec tio n 2521 of the Tarif f and Cu stoms Code , as amended, we are of the opinion and so hold that t ho vessel, S/S "S iena Oa n" i s not Jiab.le for t he impoEit ion of an ad mini strative fine . WHE REFORE, th e decision of the Commissioner of Customs a pp eal ed from , imposing n fine of 8:SO,OOO.OO on the S/ S "SIE NA DA N" ~ repr esented by petitioner, its locol nqent , The East Asiatic Co.t Ltd., is hereby reversed. No oronou nc ement as to cos t s . SO OHDEHED . Quezon City, i-1etro Manila, Juyl5, 1987. /1 I ( r;\N�T"t~+:'{�~~";;AQU IN CUN II i vJE CONCUR: ~~J II AMA NTE I ILLEH \residing Judge ~~ Ast~ociate Judge 405