CTA Case No. 2798 (Decision)

R ,PP t tC 6F THF. PHILlP1;'1NE8 ( < l RT .OF TA~~ APPEALS ~ut..zo,' CJ rv ' AMERICAN STEAMSHIP AGENCIES� INC., in its capacity as age nt of the MS "KYOSHIN MARU 11 ,. Peti tioner.e - versus - C.T.A. CASE NO. 2798 COMMISSIONER OF CUSTOMS, Respondent. X- - - - - - - - - - - - - - X DECI S I 0 N Petitioner. the American Steamship Agencies� Inc.. as agent of the MS "KYOSHIN MARU" appealed from the decision of the Commissioner of Customs dated March 9, 1976, affirming that of the Collector of customs of Manila dated November 15, 1974� decreeing the imposi~ion of a fine of P42.364.00 for violation of Section 2523 of the Tariff and Customs Code, which provides as follows: Seco 2523. Discrepancy Between Actual and Declared Weight of Manifested Article.- If the gross weight of any article or pack- age described in the manifest exceeds by more than twenty per centum the gross weight as declared in the manifest or bill of lading thereof1 and the Collector shall be of the opinion that such discrepancy was due to ~he carelessness or incompetency of the master or pilot in command� owner or employee of the vessel or aircraft* a fine of not more than fifteen per centum of the value of the package or article in respect to which the deficiency exists, may be imposed upon the importing vessel or aircraft. This case was submitted by the parties for de- cision based upon the pleadings and the records of

DECISION - C . T . A. CASE NO . 2798 - 2- the Bureau of Customs. As shown from the records and the pleadings, the MS 11 KYOSHIN MARU 11 discharged and un- loaded at the Port of Manila on April 16, 1969, 48 bales of assorted textile remnants from the u . s . A. under Bill of Lading No; KM-24 and Manifest which reflected a gross receipt of 15, 380 lbs . Upon examination# however, the gross weight of the 48 bales of remnants was found by Customs Appraiser Magno Clemente in a report dated April 29 1969 to be 64,888 lbs . The difference between the weight of the cargo declared in the bill of lading and the actual weight as found by the appraiser is 49,508 lbs. The discrepancy between the gross weight declared in the bill of lading and the actual gross wei ght as found is more than 20% . This discrepancy was attributed to the carelessness or incompetence of the master or pilot in command or employee concerned . However, wit~ res- pect to the discrepancy, difference in value, between what was declared (P256.494 . 33) and the value of the remnants as found by the examiner in the course of his reappraisal �- (P282,429 . 24), is P25.934 . 91 . These findings were then made the basis for which the deficiency or additional duties, special import taxes and sales taxes were assessed against petitioner. (p . 2, Customs rec . ) Against these findings by the customs officials, petitioner defended itself in the administrative case

:. I DECISION - C.T.A. CASE NO. 2798 by asserting that the MS "Kyoshin Maru",. with respect to the weights of its cargoes, had depended solely upon the declaration of the exporter or shipper. Despite this defense.., and based upon the a.foreci ted facts~ � the Collector of Customs. in a decision dated November 15� 1974.,. held the MS "Kyoshin Maru" or its agent� peti- tioner herein, liable to pay a fine of P421 364.00 pur- suant to the provision of Section 2523 of the Tariff and Customs Code,. as amended. On appeal. the Commissioner of Customs affirmed - - the decision of the Collector of customs in toto. Hence, petitioner appealed to this Court. The only issue in this case is whether or not the vessel MS "Kyoshin Maru" violated Section 2523 of the Tariff . and Customs Code., as amended, for which said vessel or its agent.., petitioner American Steamship Agencies,. Inc. is liable for a fine of ~42,364.00. Petitioner,. in its defense of non-liability of the fine submits the arguments that the mere existence of a discrepancy in the weight of the cargo beyond the 20% limit provided in Section 2523 of the Tariff and Customs Code� as amended, does not amount to a viola- v' tion thereof� that it will not be liabd.e to a fine in the absence of any evidence presented; that the under declaration of the weight was due to the carelessness or negligence of the master, owner or employee of the vessel,. or the MS "Kyoshin Maru",. which must be established by independent positive proof. {pp. 2-3, Memorandum for

DECISION """ C.T.A. CASE NO. 2798 4- Petitioner); that the MS "Kyoshin Maru"� based upon established customs and usages of the trade, had re- lied only on data., weight� content, measurement, qua- lity or nature of the cargo which were supplied by the shipper; and that the vessel in question was not under the law required to check the weight of its cargoes. The issue raised is not of first impression. In the case of Macondray & Co., Inc. vs. Commissioner of Customs# c.T.A. Case No. 2575, promulgated on April 6~ 1977 by this Court, it was held: During the hearing in this court� instead of presenting its evidence, peti- tioner joined respondent in submitting the case� as aforesaid, based upon the pleadings and customs records, but stated in its de- fense that in order to sustain the fine;;' "x x x there mustbe proof that the alleged weight discrepancy of more than 20% must be� shown to be due to carelessness or incompe... tency of the master ~n command, owner, or employee of the vessel" and that "(t)here is no proof regarding such carelessness or incom~ petency." (Memorandum of Petitioner., at p. 30., CTA rec.) This Court state~ with emphasis that there was admittedly in this case a 37.5% in- crease in weight of the cargo, or 17.7% over the 20% tolerable limit of discrepancy allowed by lawo Considering this percentage of increase over the good's declared weight� there was� to � our minds, � a compiete disregard of the duty of the master, owner,. or employee of the vessel x x x in detecting any misdeclaration in weight of ' the cargo in question., we a s sume that the master,. owner or employee of the vessel responsible knows that the cargo in question was destined for dis- charge in the Philippines, and knowing as they should of the strict provision of Section 2523 of the Tariff and Customs Code requiring that the weight of the cargo should not be more than 20% of that weight reflected in the accompanying

DECISION - C.T.A. CASE NO. 2798 5 .., bill of lading and in the ship 1 a manifest. they have not. therefore� taken all ordinary and necessary steps to prevent a violation of said law. The fact that the weight was aupplied by the shipper� . and that under ari- time practice. ships. such as the M/S "TROUBADOUR"� at the time of loading goods in the foreign ports. do not weigh their cargo is not a valid e.xcuse in not at all considering the magistracy of our customs laws requiring that the ca.rgo destined for Philippine ports should be weighed and the discrepancy should not exceed 20% of what is declared. And we see nothinq in the record which showed some kind o~ abnormal con- dition obtaining in the port of load~ng� which is New York� that could have brought about this rather high percentage of weight dis� crepancy . Consequently� fhis Court is cons~ trained to find that there was an unexcusabl negligence or incompetency on the part of either the master. owner. or employee of the vessel in charge of the cargo in preventing the oc- curence of over 20% discrepancy in weight of the 43 bales of assorted textile remnants carried by the M/S "~ROUBADOUR" pehalized under Section 2523 of the Tariff and Customs Code. However. considering that the discrepancy in weight of the cargo of textile remnants upon which the deficiency existed is only P25.934.91 aforesaid 15% thereof or P3.890.23 is reasonably and lega;t.iy imposable as fine against the MS "Kyoshin Maru"~ or its agent the ~ herein petitioner� under Section 2523 of the Tariff and Customs Oode. as amended. . WHEREFORE� the decision of the respondent Commissioner of Customs is hereby modifiedo Peti- tioner� in its . capacity as agent of the vessel MS "Kyoshin Maru"� is hereby ordered to pay respondent

DECISION - C . T . A. CASE NO . 2798 - 6- the sum of P3.890 . 23 for violation of Section 2523 of the Tariff and Customs Code of the Phili-ppines� as amendedo With costs against petitionero 1977.2 SO ORDERED. Quezon City� October 261 '~~ - C9MSTANTE � ROAQUIN ( Associate Judge I CONCUR : AMANTE Acting Pres