KUTANGBATO CONVENTIONAL TRADING MULTI-PURPOSE COOPERATIVE v. COMMISSIONER OF INTERNAL REVENUE

.. ! ,��� .... �� 1 R~PQQLIO Qfl"~ PHIUPP~HES. ... i .COPJl,QI�TIIIA.IIPOIIS ,, .. . QUI~OH. OIT~ . ... . ' .. - II , �. ' '' .I . : '� .I !: -� SIODNDJDIVISIDN i' KUTANGBATQ CONVJ;NTIQNAL j . C.T ~ A� CASE N(), 70g8 T~APING M\JI,.; I PURH0~E l. . I C00PPRATIVE., Petit,ia,ner, � f. - -< Members : ti' ll<t/ r .,- ; I OASTANEDA, JR., Chai �erson � ,l'.� . UY, and ; PALANCA-ENR.IQUt=Z, JJ. . rIr� lj - versw~- ., Tt-IF $t;C.RFTAf Y OF TI-�H;; � Promulgated: DEPARTMENT OF FINANCE, .. .AUG 0 6 2008~ ..� Re'spondent. . ___. - - --rL-:;___ ...' � . � .� (\ / /O :S!> 1'\ . - ,. - I~- .. '\-- X.. - .. - - - - - - - - - -- - - -- 7- - - - - - - - - - - - - .. - - - - - -� - - - --- X -- ----- I DECISION '�' I � .. . . II . � ~efore Us �is a Petition for Review filed on 'Aug'tlst 3', 2004 by petill oner Kutan~bato Co1ventional . Trading Multi ..Purpose Cooperative, a ainst 1 Secr~tary f Act respondent of Finance,' pursuant to Section 7 (a)(6) of Repub .. ., . ,. 9282 relative to 1h e. decisi0n of the latter on customs cases. elevated ~ him ,) . ' . ~; automatically for review from the decisions of the Commissioner of Cu .toms 1i I' . .. which are adverr to the Governme~t und~r Section 2315 :of the Tari ap~ '. �customs Code..~ . ' . �, 1 .. .I I,, ') ,, I I I I � ' I. I ... !l I i I l �L .i I I j. .. � � i. i. ' . I �'' !

.. D E C I S IO N '� C.T.A. CASE NO. 7028- I i ~~ Page 2 of 42 1 Th~ assailed Deci$ion of the respondent pertains to the !9th �i Indorsement dat~d April 1, 20Q4 issued by then _l)ndersecretary of Fina rce, .;, . . '� :; I' t - .: . I I Ma . Gracia .M. Pulido-Tan, which reads : I i~ ' ' .. i . .' "gth ln~on~(:}m~nt .~ 01 April ~004 ''� ' �,, .i . Resp~c;tfully returned to the Commissioner of Customs, Manila, t~e.-jwithin pap~rs t;?earing 011 !?'atangas S.l, No. 02-03 relating to tljle shipm~nt of. 73 C9ntainer Vans of Imported Rice . Loaded on L.Soard MN "No~a . Senhora de Fatima," AGRO FARM, LA$ BUENAS FARM .AND ' FARM/HARBOUR ' LINK TRANSPORT. CLAIMANTS , � AND KUTANG BATO TRAP'N~ GONVENTIPNA!., MUL TI-Pl;JRPQSE .. ' Cf)QPERATIVE; CLAIMANT.-INTERVENOR, with the instruction t~at the Bureau strictly. abide bY and comply with our 41h Indorsement dated 21 November 2003. _. This �pepartm~nt having acted on the case �as e:<pressed .. . �I ' in its 2nd anp 4th lnoorsement of which Movant appear? to have � qeen notifie~ through the 3rd Indorsement of the Commissioner and the 5th Indorsement of sDpeecciisailoansosfistthaentDRisetryicntaCldooll V~ c.tUormhaalis, Movant's all'egation that the become fin$.1 and executory should not b'e taken by the Bulieau at face yalue. Any question of Movant on the matter must be rai~ed by him in the proper court ;;md not to the Bureau nor this . . Department,: It is this to implement our . .Indorsement. ~. Bureau 's �function 4th I' � ' I. For strict compliance. �I I �,MA. GRACI(ASiIgVIn. e. PdU)~IDQ-TAN I � . Undersecretary"1 I 1- ray . I. 1 I �� I � 9� � ' l I .� .subsequently, petrtroner fried Matron for Reconsi,deration dated .. I . 1~� 200~ praying for a reconsi?erati~n , of the_a:oroequotf d decision bu Ithe " .. same.�was denieq in the ~etter dat~d June 16, 2004.: t .. [ 1 Exhibit "EE", D~cket, ~- l064. 2 Annex "W', Petition for Review, Docket, pp. 26c2 ~ . ., '. 1.- �. . '. , �I ' ,,f . ..... ' :�:t� '

I j I 1~ I� 1 II I DECISION ,, C.T.A. CASE NO. 7028 �' Page 3 of 42 '� THE FACTS . Petitioner Kutangba~o' Conventional Tradi~g Mult~ Purpose Coope 1 ;t~ve '(KCTMPC) is a duly . registered cooperative, With tt'le Coope r tlve f . } .. , '� Development Authority _(CDA), 3 with . offices . in the Autonomous " Regi in ., . Muslim Mindanao ,(ARMM) under . Rep~~lic Act (R.A.) No. .9054, othe jse '. ' � _known � ~s the Expanded and Amended p_rg~nic ,t,:ct . ~f t~.e. f-.R,M~. _I � �I �, issued a ' Grains Business License "to engage in retailing, wholes '. ,wareholf~ing and importing, " by the National Food Authority (NFA) on ~ une . I ' i. 'i i !' 27, 20Q2, subject to the issuance otNFA permit per transi;lction4 �I ._,l" On the other hand, �respond~nt i:;; th~ head ofi the . Departm ~ t� of !. : mC~nag ~ent F.inance (DOF) primarily responsible _r_or the sound and ehicient . . GovI.~:~m.ent, � . of, the. financial resources of the 1 its subdiviSions, age..ncle I and " instrumentalities;' and vested with the power 'to review the c;Jecisions f the � �I Commissioner of the Bur~au of Customs (BOC) ,� as provided under S btion . ,. .I 2313 of the Tariff and Customs Code of the Philippines (TCCP) . I ~ . .. . I I .- Qn April 15, 200?, ruly 15,.2002, and. December 26, 2002, peti loner ,. t. ., ~! ' I' ' . Department Of Trade a-~d . lndustry-ARM-. M (CHI -A~I�~M) allegedly wrote to the requestin~ for the issuance of a special, authority/permit, to engafl e in l conventional trading via the Labuan - Malaysia - Singapore - l f lloc, Mc:~guindanao roL!te . Thus, in the Letters dated May 3, 2002; July 31 , 002; I i October 15, 2002:� and Jan,uarY 8, 2003,5 Regional Cabinet Secretary Is r k V~ , ~. 3 Certifi cate of Registrati on No.,RN-1347-KEO issued on March 23, 1994, Exhibit "A", Docke 88 3. . 4 License No. L38LOO H)3-02, CN 1438 -4-03953; Common exhib its: Exhibit ~ "B" for the pe Aione; Docket, p. 884; find Exh ibit " I" fo r the respondent, Docket,- p. I 178. l' 5 Con: n:on�.exl)ibi ts: Exhibits "D", !'f", "F" ancl "G", for peti ti oner, Docket, pp. 886-889, respe fively, ,, I Exht btt.s "2:'; "2-b''; ''2-c"; "2-d", for respondent Docket, pp. 11 79, 1181, 1182, and 1183, respecti vely. �� Ii , "' '�' I o f l ' ,. 'I I~ ,)

.I DECISION II . C.T.A. CASE NO. 7028 Page 4 of42 ll ' I I I I i Mqsturfii of the DTI-ARMM wrote petitioner that the p TI -ARMM ha no I I �' objection for the latter to engage in c9nventio~al trading pf products su ,, i '4 . ' ! gr~ins , u~ed 6 ! cl.othing'. I tires, construction_materials, vehicles, and used It I .Lik~wise , Retitioner allegedly wrote the Department of Agricultur land i I '.' ' i ' Fisheries,ARMM (DAF-ARty1M) on May.; 1,7. 2002 and requested the grantmg I .; M � of authority or permit to� undertake conVentional trading of rice in the AftMM I with n~ighboring .cguntries. �In reply th.ereto, Regional Secr~tary NasJ~f A. I fI . .M~y '" ' I' 201 2002,7 thqt the DAF-ARMM h no I Salmani wrote..the Letter dated fj ~ithin objection for the cooperative to engage in conventional trading of rice �� '4 i' the Autonomous :'Region and with th~ neighboring . countries, subje It to '' coordination with/clearance from the DTI-ARMM .8 fir~t �After the irnportation of .3,640 bags of rice from Labuan , Mal !ysia. '' its.t~am Collec~fr 9 by petitioner, through leaders, on November 10, 200.2, of .,. ' Customs Rudy M. Amistad requested comments/recommendations fro : the ~. ' '� ... , .. I ~ ~ ..... ~rovincial Kadat~lln NFA Maguindariao Provincial Office, Cotabato City, as regards the let er of ~. ~� petitioner. .On November 11, 200.2. , Manager Kitem P. I of 1 ' ', ~ the NFA Maguinclao ProvinCial Office, Cotabato �City�, �replied �to Collec pr of . I Customs Rudy M. Amistad , the pertinent portion is quoted hereunder, to it: "With the above ~or:nmunications, the complete Informal . Import Declaration a~d Entry frorn the Department of Finance ~ .~ ' Bureau of Customs, Port of Parang as well as th~ Official �I ' Receipts of Duties and Taxes paid that has to be presented to NFA, Maguindanao ' Provincial Office, and conside'ring that Kutangbato Conventional Trading Multi-Purpose CooP.erative is an NFA licensed � grains business enterprise with �importing 6 Paragraphs 3.4, 3. 5, 3.6 and ~. 7, Adinissions, J ~i ~t ~tipu l ation of Facts and Issues (JSPD, pp. ~ 6, Docket, pp. 451-45 8, Exhibits " D", "~", "F~' an~ "G", Docket, p. 886-889. � 1 ' 7 Par. 3.8; Ad missions, JSFI, Docket, p. 458. � ' ' ' " � ' �� ' ' ' ' � � 8 Exhibit "H", Docket, p. 890. 9 p aragrap h 1. I, Statement of Fa'cts, JSFJ, Docket, p.153 . ., I >' ' ''! .:�' . '4

~. . f . I ~� i' �� , ... DECI$ION I C.T.A. Ct\SE NO . 7028 ~ Pa,ge 5 of 42 .. license, ~nd for a~ .long El� .~~~ thlf requirements re!~tive i thereto are d4ly sybmitted Spid importation of conventional 'gooos is d~emed in order. 10" I petiti~ner, ~. Subsequently, through its team leaders. again import rice . I from Labuan, Malaysia, 'on th~ following elates: on Decemb:r 15, 2002, f' 233 bags; o~. J.anuary 3, 2003,i. 4,157 bags of rice ; on January 24, 2003, ,, 071 bags; and� on January 26, 2003, 11 ,000, bags, 11 ,... \ ,. � . ~n� January� 30,_2003, the combined .elements ,of th~ .Philippine f oast '1. . . Guarq .(PCG), the Presidential S~curity Group (PSG), the .Customs ~olice (~atangas) anct the Customs Intelligence and lnvestigatiofl $ervice (CIIS) Batang~s 1 intercepted In Bay, a� shipment of 29,796 bags of nee on-boa I MN .:. . I I Nos~a � Senhora de Fatirria, which were declared as earn' .grits. Pe irianer l claimed ownership over the said shipment of rice.12 i . . ,. . I. Consequently, the District Gql!eGtor of Customs of the 4~h Col ~ ction ., I . Distri?t.' B~t~ngas,' . issue~ a Warranto' ~ .S~izur~ .. an�d� D~t~~~i~n (B.a t ngas ~' .II '" Seizure Jdentifiqation Na. 02-03) on January 31 , 2003, 13 against the srenty '~ I .. I( three (73) container vans loaded wit~ . imported rice on board the ves~~l MN �Nossa Senhora De Fatim a for alleged ;violatian of Section 2530 (f), (g 1-1), (1-3) to (1-5) of t,he TCCP, as amenqed . And on f\pril 4, ?003, 1 i~trict Qolle9tor of Customs Edward P. Dela Questa rendered r is Decision o r ering rI ��, ' t.~e release of the 73 containers to p $I ti~ioner. .He oonclu~Ied as follows ; r I .. . . : I . " Eyidenc~ adduced ' show that after the� rice indubitably shipment werf? impor\ecl frorn .L,abuC\n, Malaysia by K~tang Bato Conventr9nal Trading tylulti-Pu'rpose Cooperative, the �same � y.~~re cle13red at Pollee under the Subpart of Parang , Cotabato .. ~. :~ An11e~ "F", Petition for Rewiew, Doc;ket, p: 32, ; . I 1I - . .. ; Paragraphs 1.2; 1,3; 1.4; and 1.5, Statement of filets, JSFI, Docket, pp. 453-454. . ~ ~ .. 2 Paragr!}ph 1.7, Statement of Fact~,' JSFI, Docket, p. 454._ I 13 Exhibit 1'T", Pocket, p. 1024. I 1, � � .1� 1 �� "i; ; .. . . � I ' ' ~I <II .. I[ I~ I :I '! . '' ----- .

I1 I 1� 1~ II 1 I I I QECISION . . C.T.A, CASE NO. 7028 ,,. ' .. wherein import entries were filed, processed and the duties and i taxes coll~cted . Thi'S fact was testified under o,ath by no less iI' .~ . �than Collector Rudy Amistad of the Subpart of Parang, CotC~bato ,, . i.l ' who equivocally declared that the seized cargo of ric~ loaded in . 73 Container Vans, oeing part of t~e entire shipm~nt of the claimant, had �been processed 'through his Office. He identified the authenticity! genuineness� �and affirmed the veracity elf the .; . particulars :indicated , in all� the ...lm.port entries and . Bureau of '. Customs Official Receipts� �pertgining to the payments made in I � the afbrt;lsaid transaction. � � : . . . . 1. . ,) \ I ,. Thl-1~. upon release Qf . the cargo from Cotabatu 1 j' Custom_ho... use, the asp~ct of i.m_.. ortatio. n is _deemed terminated �j P_ ano cea�E1d to exj~t, the goQcj�? having left the jurisdiction of CL,1stom~ ipso facto t;lnte.n;cf:d he regular commerce �of the j' .. country. . L)ndeniably, When ~h~, questionCI!;lle cargo left the local , . Port, .. Polloc, Cq~aqGlto . �P<?,\-1!19... fqr Manilc;i, � there was no . .importation �involveg '{:tnd the .~e icl tran$action wap in the �m~ture .,, 9f � q~bf otyraen~�miepngtrtioonfedI<?PCJ.~rIo- yciosmionrnso?ittyh7aTndCCbPf?,yoansdam.thee;ndaemdb. it of the On the alleged �'misd~cl~rCition~/misde\ssifications' when the seif:e.d cargo_was qeclared .~s 'corn-grits' instead of rice~ the 'misdecla.retipns/misc;lassifications' in the B/Ls and� Coasting Manife$t gp not militate .against the subject shipment. It is elementary that .miscleclaration exist only� in the Import Entry, and before payment of assessable t;:1xes and duties is made which may not holcl true in 'the . ~ ase at bar. Section 2503 of the TGCP, !3S . amended, is veri- preci_?e on the matter, which ... .p. ro. vides that ' 'Sec. .4!?03. Undervaluation, Misclassificqtion anc! Misq(#g{~ra.tion in ~ntrY, VVh~ll the dutiable value of the artl~l~s sh~ll be ~P ~-~clf'r~d and ~ntere.d �that th~ qy~if3~. tlas~~ Pll the �~H~Iaration of the import~r O!l th~ f~Ge ()f the t;NTRY would be less by ten perc~nt (1 0%) than � shoulg be legally c:ollected, or when the imported artic;;les ?h911 be ~o described and entered that the �d!..jties .based on the importer's �description on the 'fac~ of th~ entry would less by ten perc~nt (10%) than should be legally collected pased on the tariff classificatio11: of when the dutiable weight, me~�urement or qua,ntity of imported articles is� found . upon examination to exceed by ten percent (1Q%) or .' ~ more than the entered .weight1 measurement or ... quantity, a suryharge shall be collected from the importf?r in an amoun.t of f)Ot less than the difference ~- . between the full duty. and 'the estimateq duty based ' upon the declaration .of the , irriporter, . nor, more , than~ .~ 'I '

DECISION .., . of C.T.A. CASE NO. 7078 I 'L '1 . Page 7 42 twice of such difference: Provided, That an undervaluation, misdeclara.tior in weight, mea~urement or q!JAntity of rnore . than thirty perce~t (30%) :between the val~e, weight, m~asure'inent ~hall constitute a prima ., faGie evidence of fraud p~n<;!lized under Section 2530 of I I .this Co9e. providec;:l , further. That any misdeclare'd or I undeclared in.lPorte.d articles/items found upon I �I examination shall ipso �facto, be forfeited in favor of the I Government to bt? disposeq pwsuant to the provisic;>n of ! ~ this Cq<;Je. �� i I .. -- -" I f.� . I Wh!?n . the \Jf1derv~J,Iuation, misde$<;ription, . f I ��� � rnisgl~�~ification\ 9r. mi~qe.cl9n~ti'on in the import entry js . I� .�- ~ " � intentignal; the importer .�hC!II pe subject. to penal I� : .. J. provi~i911 uncler s~~ti'on �3qQ? c;>f this �Cocle (R.A. 7651, I . '. I ~une ()4, 19S3)..(~mpha:?i� ~ypplied) I I " I 'J .' . I Verily, th~ . miscjeclar~tion/misclassification' conte.mplc.~ted �' ~ ,. .by the ap9ve cited provisicm ref~rs to thqt made in thE? ~NTRY , I S4ch was outl<:lwed sc;> a~ to prevent th~ commission of fr<:ll)d �against the government, as the ?ssessment of payaple duties I . and tC~xes js based on th~ declaration made in the entry, the entry should contain the correct . and accurate declaration of . items being entered in the 'Philippine taxing jurisdiction . This is not the circumstances prevailing in the instant case as there is no necessity in filing an entry covering the subject shipment, the same being . a local/domestic shipment and does ~not involve importation. 1. �o: On the ~econd issue, it' �has been proven that claimant .. KCTMPQ, . has .. been . granted appropriate authority to � i~portlcle<:lrance by the proper g'overnmerit offices� like the � DTI '' and the Department of Agriculture and Fisheries by virtue of the ': _devolved powers anq functions, mandated by R.A. 9054 and the �I Grains BL!siness License by the NFA from the time they brought f into the country the goods in question, which goes to show the , propriety � and l~gitimacy- .of . their busi11ess in conventional trqding . In addition,' claimant likewise has been granted Grains . Business License. .by the NFA Administrator � in so far as 'retailing, wholesaling, warehousing and importing' o'f rice as a registered cooperative is concerned, 'subject to issuance of NFA . permit p~r transaction' as well as the NFA (Region XII) Certification of Requirement ' Compli<;m<;:e. �Moreover, the Provinci~l .Manager, NFA.. issued to the Collector of Parang, Cotabato a certification tq the ��effect that for as long as the . r~quirements rel.~tive thereto are duly subm itted, said if11portatian of conventional 909ds is deemed iri araer: ' bn 'this score, KCTMPC relied on th~ acts made by the Regional �/� �. Manager of NFA. Being a govt3rnment official, his act could be_ �. ll ., ,I ' /.. . "

�" .I.,. :: 1 '' � D l;:CI S I O N C.T,A. CASE NO . 7028 � Page 8 of 42 t'� I' construed to have peen perfQrmed regularly and properly. T~~ presumption that qffipic;tl duty has been regularly performed h p .. not been, disputec;l. (Rule 131, Sec. 3, par. M) . At this juncture, it' is worthwhile to quote Section 31 R.A. 9054, which strengthens the Organic Act that created t Autonomo.us Region in Muslim Mindanao. J. Section 31 . Barter and Counter-Trade. Subject to �� 1 ~. ��� � existing laws , tre RegionC~I Government shall regulate .... -"' ' ,, . traditional barter trade and � counter-trade with ' ' lndon~sia, Malaysia, Brunei. . The goods .or items �that � ,) . ~. are bartered or counter-traded wfth the said countries .. shall ' riot be sold elsewhere irr the country without payment of appropriate' customs or; import duties. The Department of Finance �shE! II , in �~onsultation with the Regional governmen.t, prpmulgate the rules to govern. barter and counter-tr;:1d~ within six ~6) months from the approval of thi~ Organic Act. (Undarscoring ours) . I Besides tl)e aforecited prov1s1on of law, it is clear th bartered :or counter-traded goods shall not be sold E;J!sewhere i f the country without paym~nt qf duties and taxes . In: the prese case, it is �.evident that tile. .73 conlai'ner vans Ioade.,d wit , imported rice _ has already paid its duties and taxes , an therefore;, said goods can. be sold elsewhere in the country by it owner-cla'imant KCTMPC , � r : It may be ~dded , in passfng, 'that 'in order 'to' ~bviate th I' possible recurrence of 'similt:lf incident in the future, and insure the smooth implementation of parter trade and counte I trade arrangement spelled out in Section 31 of R.A. 9054, it i respectfully submitted that appropriate Rules and . Guideline ! drafted Rlld . prqmufg;:~ted by the concerne ~ and government 'ilgencies the soonest tim �I sDh~opuarldtmebnets� possible. � 1 ��� 'I After a careful and jL,Jdicious evaluation pf the evidenc , presented, this ~ffice finds in() suffic!ent grouncj to engender - .,, well-founded belief that t~e ' 73 Contai.ner Vans containin 11 imported rice � is liable to forfeiture under the afo remen~one ; .. o provisions of law. Accordingly, the release from custom~! j' cu~tody of the sei~eq . cargo ,� \JP?r:l lifti.ng of the Warrant 1 Seizure and Detent1on ISsued aga1nst the goods i$ proper an i1 appropriate unsJer the circumstances . ~i rtu~ . ~f . '0fHEREFORE, by the authority vested in me b I ,,,f:lW, 1t IS hereby prqerecj and (:Jecreed that the 73 Containe I j ~Etns loaqed with rice, sub~ect of. S.l. No. 02 be RELEASED t ., I lj ...

DECISION C.T.A. CASE NO. 7028 Page 9 ~f 42 the claimant Kutang Bato Conventional Trading Multi-Purpos '� Cooperative after proper identification. ,) lj . '�' . Let' a copy of this Decision be furnished all the parties concerned for their informatio.. n �and guidance. � l' . SO ORDERED. ~. Port of Batangas, Batangas City, 04 April 2003. .. � ' � � (Signed') � ' ' � 1� i EDWARD P, OELA ClJESTA I �District Collector of Customs" I I In the Disposition Form dqtecl �.July 4, 2003 for .the Commissi r er of Custqms, Legal Service Director Ill, .Atty. Damian M. Placido, Jr. ,of the Ii !I Burea~:J pf Customs declared : . . ! ., "Our Muslim anbdroatmh~e?,rIsY:, �a(umtheomrizbEe;lrds of (he KCTMPC) I �thE:lrefore, were 9uly _by the government i1 l this transaction to import and trade in various commod-ities ~ 1 including rice , in- line with the ARMM's Organic Act a,nd avail o~ ! the flatiOil!=ll government's program �involving the Brune I lndones.ia Malcwsia Philip. p.ines :-'" �East Asia Growth Area (BIMP 1 pres~:Jmed o~~ EAGA). The intervenor KCTMPC cannot be faulted to hav .' and relied on the �reglJiarity in the rendition Junctions or the government o~fi.Gipls they have dealt with , An ; ., '�� their authority to import pnd -trade in rice and other variou I c�ommo~:HtiE;?s � is bound only l:;>y the ~onpition that paymf?nt o~�j customs duties on these importee! commodities are made ' }her~ _is n? iota of evidenc~ that yvould pointto -any intent on th !'' alread ~ Intervenors part to defrawd .�. the government. As 1' i duties and taxes o . ~ due on the seize .!. I tqhisecuimsspeqd[t,eKd CcToMmmPodCithiC~\?vse..cilneca!rulyqinpgaidthtohsee f' rice shipment. Having done such, the intervenor can now local! \ .. . set forth by law. :� : ! ' .. I I � I . I Thus, as . regards ,the foregoing , We concur with the~ j District Collector's Decision. . �� 1 thi~ s~m-~ criminal~ ~- However:'� case. prese-nts aspects. l 1 .J . w~ia~srep� rcele~eanrltyatioandsmwitteerde . inbtyen~iothnaelly',~.I~ntaedrveeninorthethlaotcal c::;ertai i Bill o i (f 1 . !lq ' :'3" 14 CdllJmon'Exhibit, Exhibit "U~' for-the petitioner, Qo,cke,t;pp. )0.25-JQ43; Exhib)t for.the , responsJent, Docket, pp. 1184-1202. 1 I I '1. '

.. I,,, � DECISION ! C,T,A. CASE NO, 7028 . Page JO of 42 .. ! ., Lading and the .CoSaisntcinegthMean~iafieelst mwaithlfetahseacnocoepeir~~tnioonloonfgHear rtbhm : l-ink and NNC ' .province of the BLirE;au, th~ proper g~vernment ~uthority shoul institute the necessary crimir\!31 action in regard to the foregoing. RECOMMENDATION : APP~OV.. E th~ 9ecisio~ ~nd qrder _the liftin~ of the yvs_q issued. aga1nst the 9~1zeq s.h!pment of nee and 1ts: r~le~se 11 .. ...i~fsauvrowproitosh_ f(e_).,_lu,hQtoeoppin~rreteJ;u:rdlv~te<_iniv_ eeora~Kfqtu~tr~annpygr~\R~Gea~Ptomi?lCernaotlnifvaieccnat1~toiiononna. wl ThT~ircaehdifnomgraeYMgowi�blnti~1'. .. in9titut~g . 9Q.flinst th~ said cpgp ~ rative, Harbor Link and NN 1 _ .' ap~nrdSQra:'nlyle'laictw;lmoilnyiesdtraf.tojyrepoa~c$tiioblne, against the Collector and. othe ,. I violations of applicable Custom J� ; �;. l �� rules an9 regulations . � �I r .ltin accord, attached is-.the indorsement preP,arec;l bY t ' u .- � i' ServiC~? ~lev?~ting tht?. , q~$8 to the P,ep?rtment of Finance for t Honorabl~ Secreta, ry.'s. review qf the same. � � II I. t. ,, I (Signed) ,I 1 ATTY . DAMIAN M. PLAC� IDO, JR. . 1t. . Director Ill 1 Legal Service"15 1� \ .. � I . 2003 16 I '. In the Disposition Form .datecf'August 28, for the Com issioner I of Cu~toms, ��� , �' OIC' ~Legal S~I rvice Atty. Liza .Sebastian-Torres' pf of the� Brteau f� Customs also r~commended the approval of the Decision dated April 2003 : 1~rant . of the District Collector, Port of Satangas and the order lifting the W of , I ' '~ Seizure and Detention (WSD). I I� ~ntonio On October 3, 2003, ' then Commissioner of C, ustoms, I. .. I~ urse..to �I Bernardo, finding the li'ft.ing of the WSD to be meritorious, gave due c . . .. .. . . t the Decision of.the .District Collector, Port of Satang as, and; indorsed ~ e case folder of Batang~s S. I. No. 02-03 by ~ay of 1st lndorsem0nt to the Srreta~ .; . 15 Pa~agraph 23, Exhibi t "V", Docket, w i 050- t051'. ' I '� �~ I' I I I I \' 16 Exhibir"QQ", D ock ~t, pp. 1094-1 095. � � ' ~- '� i' .. '�-

DECISION I C.T.A. CASE NO: 702 8 Page ll of 42 I i' qf Finance for . r~v.iew purs1,.1ant to R.A. . 7651 .17 I '. automatic No . ! '. The case raider ' was by 18 II ��' .. '. received the Department of Finance on October 6, 2003 . .I . In the 2nd lfldorsement dat:ed October 29, ~003 19 I ' Ma . ~ . '� u ; d e r s e c r e t a rr 0~~03 Gracia N1.. Pulido-Tan rrturned the. case folder of Batangas S.l. No. to ., . I - .~ the Bureau of Customs for explanati6n of/cc;>mments on several findi gs of ~�� fact~'. � ' ' Gommi'ssion.e, r .1~ . his' required explar'1ation � to �the '!~ sues _The submitted . .. jl r~ise~ therein by w~y of the 3rd Indorsement dated November 14, 200Jl' and return~d the ca$e folder of Batangas S.l. No. 02-03. The DepartJ$nt of . I Finance receivec;i the 3rd �Indorsement and case folder on Novemb i r 20, 2003. ~ . I . In the 4th Indorsement date9 ~ovember 21, 20~3 , U ~ dersecret 1YM:-. 'il . 'I ' decreta~~ 'Gracia M. Pulido-Tan rendered. hi" decision,' tlie portiDn of r hich 'I reads : I ..; "WHEREFORE, the Dec;:jsion dated 04 April 2003 is I hereby REVERSED; and :the Bureau ordered to expeditionally. i ~. � . det~rtnine the 'possible viola!ions ,of . appl!oab.l~ Cl,.ls,tqr;n~ n,JI~s 1. ~� and . reguli=itions,' and instjtlite such actions, criminal or I " otherwise, against the persons found to be responsible. "21 ~ecis.ion S.aid . 1 was releasecj on, DecemPer 15, 2003 as testifie, uPon by pet1t1oner s w1tness , Ml'l. Carmen Nepac1na, Records Officer V ~f the Central Record� and Management Division of the D~ partment of France r: ! 1 � durin9 the heari~~ held on NovembTr 1'6, 2005.( ,, ' "i 17 Paragraph 1.1 1, Statement of Facts, JSFI,' Docket, p. 455 . i 1 18 TSN, November 16, 2005, }'J. 13, � ! 19 Common Exhibit, Exhibit 1'X" for petitioner, Docket, pp. 850-850-a; Exhibit "4" for re 6ond<:pt, w DExohcikbe\t~, Yp,p.D1o2c0k3e-t,12.p0p4.l � . . ,. , '!' �.. � 053-105/5. petitioner; ,Dqcket, pp . ~.onden't�, 21 Comrr)o!'l �Exhibit, Exhibit "Z" for 1059-1062; Exhib it " 5" for re Docket, pp. 1205-1208 . � � 'j "TSN,Novombcr IP, 2005, p. 27, � 1 i� I I . I' . .~� I . "t I ;. . I fi

I!I DECISION C.T.A. CASE NO. 7028 J' Page 12 of 42 I , \. I' retur~ing Bur~au � Thereafter, Atty. Reynaldo V. Umali, Special Assistant, of Customs, issued the 5th ,Indorsement to the District� Coll+ or of ,) 1 Customs, Port of Batang�as for appropnate act1on, the case folder of B ~angas �j I S.l. ~o . 02-03, .invi~ing .attention to the 4th Indorsement dajed Novem ~er 21, � 2003 of Under~e~retary Grace P~lid~,~an, which is 23 self-explanatory . �11 1' E~ecution ~rel' , On, J,anuary_23, 2004, pebtioner filed its Motion for \. be the . . '' . � , ' Ij I I '' o '1 l1 I I! I I I ' SureC~u' of Cu!)toms , Port of Batangas. This Motion was, in turn, indo f ed by the District Collector of aotangis to the Commissioner of Customs b 'raY of 6th lndorsement. 24 Then SOC C~mw]i�sioner Bernardo. refyrred the ptter to I .1 .. , . the !30C Legal Service O,irectqr, .fpr co111ment ang/or l appr,opriC~te ac Jqn, by �� . , March 8, I 25 i WCIY � of ylh . lncjo.rsernent clafe d 2001- Thereat f r, the ;;C. o~missioner � i I , 1 .ref.erre.~ . P. ,etitioner.'s .Motio~ of Customs for Exec_utioJ. I!to the ~ Office of respqndent'�Secretary of Finance (Attention: USEC Ma . Gr I cia M. I ,_� Puliq~.:Tan), for its infor;atiqn and pisposition, through the 8th Indo temen~ � lndors~ment ~n I ' dated March 17, 2004.26 The .. De.pc;trtment of Finance received the 8th and petitioner's Motion March 19, 2004. I j' Re$ponclent Secretary of .Finqnce, through Unders~cretary Ma. fGr~cia t. M� Puii~()-Tan, respondeQ ,to� the Qommis~ioner of Custo~s by war l"ot 9th �' .. lndon~e.ment . . . I . dqtec:l Ap_nl 1, �2004. .Unqersecretary Pulido-Tan instru Jed the '. SOC to strictly Clbid~ by and comply with the . 4th Indorsemen f dated ' I November 21, ~003 and further directed as follows: I ! . . � II 1 . . . '!Jhis De~artrnent hpving act~d on the case as expresse~i � " . tn rts ~'and 4. Indorsement,~! which Movant appears to havt Annex FF, Docket, p. 2 16. �� � ,, , , , , .i 24 Exhiqjt '~NN", Docket, pp. 1084-1087. 25 Annd'JJ; Docket, p. 222. 26 Annex KK, Docket, p. 223 . �~' . �,�:� ._

f'; ! DECISION C;T.A. CASE NO. 7028 P&ge 13 of 42 .b9.nEd!en.thneo5ti1fhie.Idndthorrosuegmhe�ntht eof3SrdpeI~nidaolrsAesmsiesntatnot fRtheeynCalodmo!Vl)i.sUsimo<n:ellir, ' ., i I .I .Mhi3oSvabnetc'somqlelegfiantaiol n~itnhdatextheecutq9erYcissihoonulodf i the District Collector not be ' aken by the Bureau at face value . �AnY qyestion of Movant an the matter must by pra~pisaerdtmbeynth.im in the proper court and not the Burepu . ~ �' . . ,, -- nor this It is this .swreau's function to implement '' . ,,. our 4\h lndqrsement. � ! '; '" .i I -- .' . For strict c6mpliance."27 ; . I ~�� .. ' i il The 9th ln<;!ors.~ment was relea~i ed on . 23, 28 tly, Consequr Apnl 2004. -..... , petitioner filed a M<;:>tion for Recorisic!eration which was denied by wa1 of ~ ... .~une ~nd ceiv~d Resolt,Jtion d.ated by .petitioner on Ju.�ly 5, 20J�f 16, 2004 re. Thus, on AlJgust 3, ~OQ4, p@tltloner flied the present Pet1t1on . 1 t' �.. I " I' . � In the Corrment!Answer, filed on October 25 , 2004 , respondent a1gues ' that: I ~ 1. the rice shipment is sub.jeGt to seizure and forfeiture for violation of Secti9n 2530 (f) , (g) and (1-3) to (1-5) of the Tariff 1 .: .. and Customs ..Code ofthe Ph'ilippines; r� : �' �i ;2. the seizure and detention of 'the , rice sliipme'nt 'oy' police ,,. authorities was l~wfully conducted ; i I 3, the power to review consists in the thorough evaluation of the records; and I I < notwi~hstanding 4. the decision of the 8atangas Port District Collector, .! I its affirmance by the Commissioner of I. I Customs, has not become final and executory. . . I While the case wa~ pendin: t~ial, pe.titi~n.er file? a "Motion to jfleas,,e .. ~~~ed Goods Under Bond" on October �i 9, 2004 29 , while respondent an sai~ 30 Opposition thereto on December 10, 2004. The Couri; granted 1]. �.1,. 27 Exhibit "EE", D~ck~t, p. 1064. � 28 TSN, Nov,ember 16, 2005, p. 30. 'I I" I~ 1' I I I t 29 Docket, pp. 281 ~2 83 . .� 30 Docket', pp. 300-306. I' ;.

'I DECISION C.T A CASE NO. 7028 P11g~ 14 of 42 i ! ,. I If motion in a Resolutiorl dated Decem be~ 21 , 2004 31 , and subse,tently, ..) ., ' respondent's Motion for Reconsideration � '�l~ said Resolution was del iI;ed by ' 32 ' II this Court in a Resolution dated April 18, 2005. � . Tnal on the merit~ ensued. .The parties presented their res ~Jective . testtm.~nial and docum'entary evtdence .a)ld.ftled. the!r, re~p~y~tv,e tylem,fanda: .' on January 26, 2007 for the respondent, -by way of registered mWI and '�' � I, . � It received �by this Court on February 1, 200733; and on February 13, 2807 for the.p~titioner . 34 J I. Prior thereto . th~ Resolutions dated . 21, 2:0~!4 and '' however, December ~97 � 18, 2005 the befor~ Supreme I April 6urt by were assailed by respondent the . way of a Petition fof Certiorari under Ruie �65 of ttie 1 Rules [I CiVil .. .,. . ,) Procedure, docketed c;~s G.R. No. 168137 entitled Secretary ,I f the .. Department of Finance vs. Court of Tax Appeals, Secoryd Divisio ) et.al.. ~ . I Considering that said petition was given due course by the Highest C,~ in its Cil[ ~onsidenng ~urther ~h~t Resolutio,n dated January 16, 2Q06, ahd the plete .I records. (CTA Ongtnal Oocket-927 pages, Customs Records.-375 pfjges m .~ ~rdered folders, and tran$cripts of stenographic notes) of this case were ~he S~preme elevated to the First Division of Court in its letter dated 1:uly 13, , �� 2006, this Court, in deference to the Highest CoUrt, issued a ResolutJ dated Feb~1..1ary 4, 2008 '. c~se in abeyance un~il the original ~'~�coros holding this . ' l' fo Ij ' the ' tI rese~~vb therepf are returned to this Co.urt ~ the c.omplete repolution of ' , I ~�.- ; case . � ! 31 Docket, pp. 329, 330. I 32 Docket, pp. 481 -484. 33 Docket, pp..1223- 1249. If 34 Docket, pp. 125271264 . ,. I ,i i'

DECISION C.T.A. CASE NO. 7028 In a Letter dated March .�10, 2008,35 this Court, acting through its Executive 'clerk of �court Ill of the Second Division , Atty. 'Jesus� P.�lnocando, Jr., requested for the withdrawal of the original records of this case to render a . decision subject to substitution of certified true copies of the same, if deemed necessary. Subsequently, the Third Division of the Supreme Court issued a 1Y, ' Resolution dated March 2008 granting said request;36 and consequ~ntly, ' this Court received the complete records of this case from the Supreme .Court en May 8, 2008. Hence, this Decision. THE ISSUES � The parties stipulated on the following issues for the Court's consideration : "1. Whether the rice shipment in question is subject to forfeiture �� for violation of paragraphs (f) , (g) (L-3 to L-5) , Section 2530 of the TCCP, as amended . 2. Whether the 9th Indorsement of the Secretary of Finance I' was rendered within the reglementary period allowed by law."37 Petitioner's Arguments: Petitioner maint9ins that the seized goods are not subject to forfeiture because the rice shipment from Cotabato to .Manila no longer falls within the ambit o'" f importation since taxes and duties had already been paid . Misdeclaration and undervaluation can allegedly happen only when goods enter the Philippines for the first time. The proper informal entry declarations ~ere filed and processed in the �Port of P~r~ng where the shipment arrive'11 Docket, p. 1269. � 36 Docket, p. 1270. 37 Issues, JSFI, Docket, p. 457. .:�

..,I � .. DECISION C.T.A. CASE NO. 7028 .� : and the importer was required to submit an import declaration that also f erved goo~s ,wer~ rele~sed �as a .gate pass when the from customs custody. !When .~. �I .. i .. the goods entered the local port of Batangas, no importj declaratij r was required as the goods have allegedly changed 1ts complex1or1 after pay ent of 1 ~nd ~ecom:e ~ait. taxes <1nd duties have 'I . of domestic trade. Hence, thS< t ubjecl �~ . rice s~i~ment is allegedly not supje~t . to. ~ei~ure ..and .f,orf~it~~~ ~nd.er �. ~ctio~ �I ' ' �~--. 2530 of the TCCP. . ��~1 � ';,' ,.. r According to .petitioner, the� subject importation was under the a , spices .,. ,��, of th.e Autonomous Region in ML!s~im rY!indanao (ARMM) whose organ act is . ,'', �,. J' : .� :'1 . enumerated by Republic �.Act No. ~054 ;' otherwise ~ nown as "An Act to '. . ,, I f~r t~e p~rpo�s�e . ;str.engthen arid Expand. the Orgarnic Aci for the Ay,tonomous Rl <r!lion in 1 Muslim Mindanao", Amending .I ' I .. Republic! 6734, entitled.'(An Act ' providing For the Autonomous Region in Muslim Mindanao (ARl ' )" as ... amended. And petitioner c::annot allegedly be fal!lted for relying on the I ' :, �. .I authority �grante<:i by various government agencies in this transa~tion , in " nl pursuit.of the Nptional Goyernment's!.prqgram reI ativO to the Brunei, ! anesia ; - M9laysia - Phils .,., !=ast Asia Grown Area (BIMP-EAGA) implement ~� under , thO ARMM'5 .6rganic Act I" t.... More importantly,, pebti'oner. stre~ses that respondent wa�) no !able to , ,) �� prove fraud in .the a!leged �importatioll of the 'subject �cargo of rice. st r ce this part~~ular !s petition involves forfeiture, fraud allegeQiy n,ever presu led and ' i� �'� failure to prove fraud is a bar t9 forfeiturE; . On the contrary, petitio :e'r was ~.. ��� all~gedi,Y f~ith �I � I. able to show"utmost good in this importation transactio J '' .. ' .. . . . II I 1" o) o, 1 I 1 I � � !! , ,yY~th respect to th ~ second issue, petitioner posits that several ,months . ~ ..,�,. lapsed before respondent rendered a Decision by way of a 9th Indo rmen~ : I ., ,, I�

DECISION I.J � C.T.A . CASE NO. 7028 I Pag~ 17 of42 'f � .I i r The shipments under issue, yvere imported from Labuan , M~laysia b GW.~en ; i' . Noverllb<ir 2002' and January 2003, :Upon its seizure in January 2003. the 'I Port of Batangas the hearing of the warrant of se1zure and detentlo , was "���� �. I i� '. ~as ~utoma..tic ~view 2003 . folder r decided gn April 4, The case elevated for .. to the .Legal Seryice Divi~iqn who reviewed and evaluated the case the Commissioner. The favorable revi~\A( was completed by the Legal S~rv1ce ,, . only qn JL!IY 4! 20Q3 by way of? Qi~po~l ition Form or commonly referre ;to as II � the DF. Again.� the DF was alle.ge~ly Subjected to another review 1~ the Deputy CommiSSioner for H~venue � Momtonng who gave hiS a l 'oval .' ' I sometime Augu~t 2003. .from the moment of seizure on J;;muary 31, ff 03 to �' the approval of the Commissioner on ,October 3, 2003, a to~al ~eriorl of 10 .I months had allegedly lapsed considering that the carQO 1s nee J ~operly ~nder S~ction 2~ ~ classified as a perishable commodity. . � [� Hence, 1 of 'the TCCP, the decisions of the c l llector ,. II and Co~missioner of Customs became final aJ,d.ex~~ul~�rY. ' ' i R~sppndent'$ Counter-argument~: I ''� j i~ported . . Respondent submits that under Section 1202 of the TCCP, as lbng as ,I importation has not been terminated , the gOods remain " 1r er the custody and jurisdiction of the Bureau of Customs . In the present el ise, the Cust~ms wit~draw~l imp~rted unde~ goods remain t,he _custody and jurisdiction of the B teau �' of as petitioner tailed to show that legal permit for tl)e I! of the . .. i ~stoms subject importations .had been granted.. Grilnling that lhe Bureau of f UstomS lost custody and:JUriSdiCtion over the nee shipment, the Bureau of regaine~ .the same after the ricO ."hip~e.nt .was .inte;?epted ,~t. the B~!anga;; ' ~. .~ 'I ' ., ,. '

,. I' DECIS ION C,T,A . CASE NO . 7028 I ~~ Pag!! 18 of 42 .. . .. . I ,) ., Bay by the combined elements of PCG, PSG, Customs Police of BatRngas, .., . II ,. and CIIS. li I �Re~ponde~t further claims that there were clear violations of the ~CCP and ther~fore � I to ' anQ fo~eiture . . First: p~titi~n~r has ~ s4bject seizure nr: �clear license to undertake the 1mportat1on of nee thereby mak1ng the nee s~pment I � � . d I �t contrary.to law. Second.. the rice shipment. was misdeclare as cor gn s. Third, thE?re 15 a strong m1 d1cat1on that pet1t1oner was JUSt be1ng u ed as ~�� dummy or conduit for Ag~o Farm , Las Buenas Farm a.nd sec Farm, Tnlities whi~h ~te had also laid Claim to the rice shipment in question, to facili the i~to F~ ~ ~pme.nt ..:- smugg1ing of the rice Shipment th.e country urth , the rice s was 1mported not by _pet1t1oner l;lut by 1ts members who do not..possr�Iss any � j I . � I ,) . ,, . . ~~ ' authority or license there:ore , and in volumes beyond what :s legally Jllowed . Fifth. the carrying vessel MN Nessa Senhora de Fatima ~ eviated i ~ route ! .I . JJ and docked at the satangas Port. .. . .� ~. As regards the authprity o~ the PCG and PSG to intercept M] j Nessa 1� Senhor~ th~y de'Fatima in search of. illegal cargO: respond ant avers that were 'I acting in close coordination and cooperation with the Customs RJ~ Iice of . . I Satang as who, by the nature of their functions under Sections 2203 a :d 2210 .. I of the TCCP , are authorized to enforce tariff and customs laws. I 'I I Anent the 4th Indorsement of Undersecretary Pulido�Ta Which . assails tor having exp. and ~.d the scope of ; issues 'I under Ireview,. � petitioner .. :. . II .. ! . : I � .,, respondent counters that Undersec�retary Pul ido-Tan , acting for the ecretary e~ercises ~uper.vi~ion "' Jl of Flhance, control and over the �commis si:Cm er of to~ Customs and District COllectors' nationwide. �She, therefore, has the iower ., .: . �, '

,, DECISION . I! I C.T.A. CASE NO. 7028 ., ! ' Page 19 of42 i' i. , I � .�t r ! approve, modify or even �reverse the action oooecision of the Commis :ioner . . . � I ., .' � , �. i of Customs and District Collecto,r 9oncerned. "' 1 . '1 I The Decision of the Batangas Port District Coll8ctor, whic was . '� . . '/ . . affirmed by the Commissioner of Customs, has allegedly not ~ecome f1n I and executory. The thirty (30)-day periqd provided under Section 2313 f the ,.; . TCCP should be cOnsidered,merely as ~irectory. Ample consideration~ must . . ~- .al$0 be -giveri' to the �exigencies and limitations of human effort ,and com .lexity .. of the case. .; THE . '.. COUR.T. ,:;S RULING I � . ..,r... .First . ($sue: l$ the ric~ . $hiprn~nt I impgrt~q by �'P.*Jtifigner :� ${-lbject , t9 ' �I . ' fqrfeiture t,mq~r Se(;tiori ~530. of the TCCP:? : �� 1 I I , In Carrf:'r~ Marble PfJilfppine$, Inc. vs. Commis$ion ~r of,. held\h~t dqslo!Jis,'' the Supreme Court thO Ta;iff and Customs laW st bjects fr~m to forfeiture any article which is remov0d contrary to law any pJt lic or prjvat~. warehol!se under custom~ s~pf?rvision.. or released irregulariM.trom pro~erties Custorrs custody. Section 2530 of !the TCCP enumerates the II subject to sei?ur~ and forfeiture. It reads: � I l ~. T~riff o~ -'~SECTION 2530. �. Property $vbject � to � Forfeitur~ I .' u_nder an? Cvstoms L.,a't:'. __: Any vehicle, vessel I .. a1rcraft, c;argo, art1cle .anq other o_oJects shall, under the followin .. '� conditions be subjected to forfeiture : . .1 .. .. ' � sh~_ll a. ~Asn~yd veunhliec~lwef,~lvleyssinel qr aiimrcpraofrtt,aitniocnludoirngexcpaorgrtoa,tiwonhicoH~ -be the articles or 1n conveymg arH~j/or transporting contraband o ~ � sm_~gg~ed article~ in commercial quantiti~s into or from an~ ~ - � Philippine port or: place. The m~r~ c..~rryi:'g o.r, hol.~i.n~. ~n t?oarq _ pf contrabanq or smuggled article$ in commercial quantitiel l shall subject such ve~sel, vehicle, ait~raft or any other craft t,9. '� 36 G.R. No.. q9680, S\!ptember 1, 1(99. ;, .. : 1, �. �'' �'

,� DECISION C.T,A, CASE NO. 7028 .j P ~ge 20 of 42 .. . I ll! fo.rfeiture,; Provided, That the vessel, or aircraft or any other craft j is not used pS duly .a_uthorit":ed c-ommon carrier .a-�nd as such .. carrier it is not chartered o.r. le~sed; . : : . b. Any ves�s ~l engaging .in the coastwi~e which shal have on board any �article~ of foreign growtli, produce, o ~ manufacture in excess of the amount necessary for sea steres1 �without such article having been properly entered . or legall)1 ,, ,, imported; I ~ �� I �I c. Any vessel or aircraft into which shall be transferre, j ~- cargo unl~qen contrary t_o law Rrior to the arrival of the importin � I II yessel or aircraft at her port of qe,stination; I �. . . . d, .t:ny part of the c.ar~o , stores or .sup~lies of a vessel Of , .. ' befor~ aa1rrricvraalf.t_ata.trhnevmvgessferol'm~ . a foreign port which 1s unladen '' or�. aircraft's P_ ort of destination and withou C}Uthority from .the custorns officials; but such carg~ . ship o C}ircraft ~tor~s ar:ct supp!ie~ shall npt be forfeited if s~ch unladin~ was due to acciqent, st_ress o_f vy~ather or other necessity and i] subsequently approved py the Collector; 1 .' I � ' � .� I remov~d . .e. Any article � which is fraudulently concealed in o contrary to law. from any public or private warehouse1. 1 ��. container yard or container�� freight station under custom r 1 � '" supervision ; . � 1~ Il � I I I 1 � I� I II I ' ' ' f. Any ahicle the impo_rtation or exportation of whici: is effec:;ted or attempted contrary to l~w. or any article o1� ~rohiQitt)d i!llP()rt"tion or exportation, and all other articles which, in the opinion of th~ Collector, have been used, ar I or were ent~re(:i to � P~� us~d as instruments in th importation or exportation of the former; II~ �1 I g. �Unmanifested article found on any vessel o ~. '' ~ircraft if manifest therefore is required; I .. .. I ! h. Sea stores or aircraft stores adjudges by the Collector to be excessive, when the - duties assessed by the CQIIectdt dl' thereon are not paid cir secured forthwith upon assessment II the same: .' �. ~xar:'ini.ingAnqyfficpiaacl kta?gecoonf_tiaminpo.artneyd article which is found by th~ article not spec[fied in t~~ � 1 be . � mcPinorvyonoovt1iaiccdieeneidno,ogr r:eTinmehtrnpaytotryrtot,ethde1nactrChluteidoc1llcleneosgcn��ttos~arin'mlltsiilsaoorthfoettofhr ettphhmaeoicsskedoaepgdcienleasicorlean�dpreupdtrhpaaocintrktaegttdhhi~M~l l ~- . m1Sdeclarat1on was contrary to law:. . , .. . , , , ., i ', ., ., . .i

DECISION .' C,T.A..CASf: NO. 7028 Pa~e 2 1 of 42 '. j. Boxes, case$ , trunks, envelopes and other containers coof nwcheaatl eavr~tirciechwqhriacchteir~ I' U$ed a!:? receptacles or . as. device to itself subject to forfeiture under the tariff i' and custqms laws or: which is so designed as to conceal the .. .character of such articles; � ,I k. AhY conveyance, actu~lly being .use9, for..t~~ .tr~n~p9rt �' I � ~ ' .�l of articles subject to forfe,itu're under the tariff and customs laws, .. with its e,q~,.tipage or trappings , c,1pd any vehicle similarly used, to!;jether with it~" e,qyipag~ flllq pppurtenances including the 1' b~~st, st~~ rn or other � motive power draV{ing or propelling the ?ame. The mere conveyange, ofcontraoand or sml!ggled articles .I by such beast or veHicle shall b.e sufficient cause for the outright s~iziJre �gn<;J confiscation of. S\,lch peast or vehicle , but the 1� , ~I forfeiture, ~hall not oe effected if it is established that the owner of the means of conveyance .1.,1sed as aforesaid , is engaged as common carrier and not chartered or. leased, 1or his agent in � charge thereof at the time, , has no J<nowledge � of the unlawful ac~ � �' � � ' I. � Any article. ~OJ.Hlht t9 be hnported or exported. (1) �Without going through a customhouse, whether the act was consummated, frustrated or attempted ; �(2) By failure to mention to a customs official, article~ found in the baggage of a person ar.riv.ing from abroad; �. ' (3) on the streng'h of a false declaration or affidavit exe~ute~ �. py ' t~e� own'er, ' importe'r,' exporter or cons!gnee concerning the importation of such artjch~; (4) On the strength of a false invoice or ., other document execl!t~9 by the owner, importer, exporter or consigne e. qoncerning the importation " or exportation�of such article; �and � .. ~hrough .any other practice or device (5) contrary to law by m$ans o{ which s(Jcn articles ... was entered througb 'a customhouse : to the pre,judice?f the gov~rnrnent . " (Emph asis O urs)/' .' �" ' -':"'� ' ; '' I' . l' i,

,, III DECISION C.T.A. CASE NO . 7028 �For the above-quoted Section to apply, there must be an u]~wful po~sessio~ .importe~ go~ds. importation or deliberate "' of illegally lt�is thejefor; � 'I necess.ary that this Court. determines whether or not, the importation �f the , ,I subject shipment ofrice has been te~minated upon its entfy at the ~frt of : Polloc, Cotabato; prior to the time tMat it was loaded on board MN "~ossa Senhora de Fatim~a", an int~r-island vessel destined to another local ort 1n � the Philippines. �I �I ., ) 1� I II I ' . ~� The pertinent provision of the Tariff and Customs Code . �Philippines (TCQP) is Section 1202, WQi,ch reads: . ': . ~~~E;OTION 129~� When Importation .f3egins anc! . P~~mecl' T~rminflt~rl � - lmpQrt,C!tion begins whe.n the ,c13rrying , ye$sel or aircraft ent~rs the jurisdiction of the Ppilippines with � � intention to unlade. therein . Importation is deemed terminated upon payment of the duties, taxes .and other charges due upon the articles, or secured to be .paid , at a port of lentry and the �.rl legal permit for withdrawal sti'all.�have be'eri granted, or in �~ase . SC!id articles are- f~~e of duties, �taxes and other charges, until .. they have legally left the jurisdiction of the �customs ." ,, (Underscoring Ours) Based on the foregoing legal provision, importation begins upo entry � I' I of the .vessel or aircraft carryjng .�the imported articles into Ph lippine ~~ ~ion jurisdiction and � the unloading the Same therein; while import is deemed terniinated, eit~er �0Pon payment of. appropiiate duties, tax~~;� and rrd other charges Imposed upon the Imported articles at a port of entry the ,) su~ject legal permit to withdraw the same haying been granted f9r goods to charg.~s; I duties. taxes ano other or. upon legally leaving the jurisdictio of the es. cust~ms in cas~ of articles that are fr~e of duties, taxes and other char'I'''' , Respondent contends that even assu~i~g �~rgu�~~d~ that the proper rt. customs duties and taxes had been paid' on the subject shipm I ,, I I I 'I t I I I

,. II'' DECISION I I� CT .A. CASE NO . 70:28 Page ~ 3 of 42 .petitioner .failed to. show that .the legal permit for the withd. raw.al of the sI�am, e . h~Q been granted. And assuming , further that the l~gal permit fq~1 the wit~draWal of subject &hipment had ~e~n grant~d and the same had lt~en I .~ Burea~ cUsto~~ prought...out of the customs area therej)y rendering the of to have lost custody and jUrisdiction over it, nevertheless, when th I :rice .. . .� I shipment was intercepted at the Bqtan~a.~ Bay by the combined eleme ~ ~�s of r� the Philippine CqastGuard (PCG), th~ f;re~idential Secwrity Group (PS the �j C~riody cwstoms Police ((3atangas), and� the Qustoms Intelligence and lnvesti ~ ation $ervice (CIIS); the 13ur;au of _custOms ;, allegedly effectively regained �. .) 39 \. > and jurisc;iiction qver the same citin(;l th(;.l case of Papa v. Mago. 1. .,. ,;, ..>,;�_. ' 't The Co1,..1rt does not agree with respondent's position. r A carefuLsprutiny of the evic;lence presented in this~ case revea that . II the tniportation was validly termmate~ � The five (5) shipments of ricf lwere shipped and imported ffom Labuan, Mal,aysia QY. Pe~itior:)~r ., .a~d thes ~~ were ~ .' ll cleared by the Bureau of Customs when these were unloaded at PolloR Port, in Cotab~to. i~port wej~ Petitioner's .., .. .entries and pertinent documents filed coH~cted; and processed; duties and taxes were accordingly assessed and ~I c~tody. and the rice shipments 'were duly released from the Customs' Thereafter, the Bureau of Customs lost jurisdiction over them. I1 As the Supreme Court explained , �importation refers to brin Iling of . I .. . ' "' ~he goods .from abroad into .' country. It begins when the .carrying ve Isel or ~nlade aircraft enters the jurisdiction ofthe Philippines with the in)ention to . ! I therein and is deemed terminated upon payment of the duties, ta,~, and � '' article~ ~r.secured l1 . : ther charges duO upon the to be paid at a port entry} , 22SCRJ; 857, (196 8). '' ' ' .. ' . ,, ' I' ' . ' I '. ''t ...-' ,. l 'I ' l .1 I i . �i!

. DECISION j I~ 42 CPa,T~~.A:2.4CcAifSE NO. 702�8� �' I I ~ !.. and the legal permit for withcjr~wa� l , shall have b~en granted, or until they h I ve le~t 1 legally the jurisdiction of the Bureau of 40 I custor:ns. '' Contrary to respondent's contenlion thal'petitioner faile!f to show th :!'it l~gal ' ' was wanted a ' pe.rmit for . ;he .withdrawal .of rice shipments, fne ~ �. petition~r's subj~c\ 'ric~ ~niPm~~t. , , uncontrover.te.d faGt js that the ~ppropriate .offic;er of the Bureau of Cust ;rns ., allowed Petitioner to withdra"Y the 'Th;'S WaS tes ,hed ~�� witness, Collector Pedro Quinones of the Burea i. of 1.1 � . upon by ., , Cu.stoms, Sub-port of Parang, Cptabato City, by way of Judicial Affi r vit, . ,� durin~ the hearin~ held on $,eptemb~r 19, 41 to 2 ' 2005, wie '. .~~ �"Q: Do you know j\utangbato Conventional Trading Multi:- .~~ . A: WPKuhCErTp;)M6nsPeICCwioamosppoesrrttiaelltdivthesee,vter~ Dre~8P1P.\eiJttetiYtmiosCn.oe�lrTleihnce�ttohprirsef9yvairoswOe~?p.Ge�roaltlieocntso,r 'I Mr. Rudy Amfstad and I would discuss and coordinate the status and processing the qocuments of their iroport~tion . Ithh~aBveurep.aeurs�oonf aCluk�ntoomwsle.dIgeknoawbotuhtatthKeCirTtMraPnCsaicst.ioenngsagweit.hd in conventional trading under the auspices of the .., . Aut'onomou? Region .Of Mus.lim Mindana.o operating with.in � I. I� tGhreowBtrhvnAeireIini d(o8nHeysliPa~�EMAOaAla}y,si�a TPhheiylip� �piilnlelpsort-e~E. aiiisstsoArtseiad 1 artiQI~~ such ~;~s rice , noodles, jars, coffee, towels and 1 other items from Labuari, Malaysia. �I ,,� Q: WThheern~ qid KCTMPC irnportthese articles? 2002 were five importations made from November .I ' A: up to January 2003 . I, Q: . ' A: ., II '. How manY bags of rice qid they import? Fo,r the first :shipment, they brought in 3,640 bags. For I the �econd shipment, th ~y prought in 5,233 pags. For the third shipment,� they prought in 4,157 bags. For the fourth shipmel')t, they tJr oLight in 9,bT1 bags. For the last shipment they brought in 11,000 bags for a grand total of 33,100 bags. ,(1 40 Gener~l tra~el Service, Ltd. vs. David, et a}., No. L-19259, September 23 1966� Lla �'ado vs. Cornwissioner of Customs, No. L-28809, May 16, i 983 . ' ' 1 4: Minutes of hearjng )leld on Septt;:mber 19, 2005,:Docket, p. 803 . � � 4 Exhibits ~'PP" to 1'PP-5-A", Dock~t, pp.�l 088-Hl93 . � ' ~� >,.� ., � ~.. .. I

DECISION 1' , C.T.A. CASE NO. 7028 Q: What documents did you require . KCTMPC to subm it , ! A: WupeonreaqrruiviraeldoIft.htheeiirmimpoprotretratitoons~?ubmit � ve~sel . iow.ard ,) the j j foreign manifest, btll of ladtng, commerctal tnvotce, 1 ;l , packing list, Certificate of Registration , N~A Grains ! Business License , the NFA letter dated Nov~ mber 11, 1 ,) I 1 .. 2002, �. � DTI Importation Commodity Clearance, 1: ,, Department c;>f Agriculture and Fisheries Cl~arance, 1� payment of Customs t~xes and duty. The most importan 1 �~ . document is the lnforma�r Import Declaration and Entr1 1 ' .. (II DE) I� . ' . I, . . ' " .� " . I ' ' � � XXX XX~ XXX I''I� ,.. .�~� Q: Why is the lnfc;mnal Import Declaration and Entr~ l I� . /. important? A: For reasons of adm�iriistratiye facility anq because thEj : cooper~tive . has many rn~mbers. vye . required thEj : Coc;>perativ~ Team Leaders to rill out this; C ustom~ forrry ��� ibnedliovnidgueadllytosow.thhoat~i�t wi!l � be easier to ide i~Jotrify wll a~t uitreemas~ . 1 It will be easier the bpheyc~aiucasle the same !IQI= serves as -!3 gate pass ctunng the . in orde r that the taxes and dutie$1 release . 'Aisc{ can be assessed correctly against the cooperative .. � 1 � - . ! consig~ees Why did the .team leaders appear as Q: in thr.! A: II IIDE? When the ��. trade wa s. still . around the 80's, th ~ barter a'ctive de~~� Bureau. used the same. ; system where the te. am lea appe~red . .The purpo~~- is that the small entreprene ~ . can join the busill~~s without their going to LabLJa j l'y'lal~ysia. So we m~ rel~ folloVJed the old system becp~s~ ; 'I we found ttrhaensa~ptrio1c1e9swstitnhgthfeasmteermabnedrs minodriveiducoanllyve. me1. I1:~� ,, ..instead of .. Q: Did the Cooper~tive ~omply with ~II the req.uirement~ . set by tjle ~T?riff 9ode for a valid irnpc;>rtation? '. .A. . 11� The Po~t persopnel ?t the Bureau of Cu~tom ~ � G<>.tAPato w~re ~atisfied that all th~ requirement~ : Jl . wCCoqemrllemeicsrtnisoeintonaserr�~~inpoqrff.atficscte Tthhb~ � we allowed the release. were forwarded to in Manila. th~. releflS~ CooperativI~I Q: Was t~e t.eorfmi:tnh~etigonooodfsthetoimthpeortation? � equiya!ent to � A: �ecticm 1~02 � o.f the T~tiff qode expla'ins' that.�upon . f~r with~~aw~l bee~r�. payment of.dutle~. taxes at the port of entry, and thl~ ' 'legal permif� of.the shipment have Thf~ grf,lnted , the 1mportijt1on IS deemed terminated. . . I II ! I.. I I

,.. \j . DECISION �C.T.A. CASE NO. 7028 ,. IIDE serves as the aate pass while the payment of the , .. . oods:� a taxes and duties ' serves as a permit to ;withdraw thd 'After . ment the articles are now inte . rated into the local' commer.ce:. .i ' . ! ,� .. Are you eware that th;' 20 bags of rice per membe~ allqc~tion w~re exqeeded? ' . No sir. I know that there are 53 Team ~~aders anq ever team can �have 29 members or even more. The . ,, cooperative hC\s at least a th()u.~and members . I. ;. .. Q: 011e of the documents you identified is E;xhibit B, the NF'} .. G,.ra.ins 1-icen�e. I.s the" importation of rice one of thr.� ! � allovyed activity? � � . '� A: Yes sir. Importation is C!llowed . � �; , . .. . ~� . . .� ' ' .� . . .� Q: Ancj what was� the . qasis in allowing the Cooperative t �.. import rice? . ' .'J A : Th!;!se are the Department of Agriculture and Fisheries n ~ ol?jection letter:.dated May 20, 2002, Department of Trad ~ an~ . lndustry importatiori clearances as well 1as the lett]~' . fro.m the National Fo. od Authority dated November 1 ,I 2002. (Exhibits C, D, E, F, G, H) ,/ . . .' .' Q: How much taxes an.d d~ties were paid by the Cooperativ/Fr for the to~~~ shipment? . , . . . . , .. . , , . / . , A : The Bureau of Customs Official Receipts tor a � totf~ amount of P9,147,174.00 were_paid . These can be seeml ... in Exhibits J, lL, N,_P and R a: You also identified a �document pre-marked as Exhibit $1, ., the .Hold Order. 005-2003 from the Bureau of Custo1r � North Harbor. What is this document all about. . A: The Cooperative shipped out 10 co. ntai'ner loads of rig~ that were held at Manila. They complained to us why t~e $hipment was being h~ld when taxes hpd been paid s ~ /I �~ ' ; called up Collector De La Cuesta to explain that the ril e came from our P.Or;t., � � : . � / . "' I Q: Have the co~tainers been released? y' . / .) A: I do not know what happened to the cargo after the hole. � order was issued becqu~e it is� outside our jurisdictio !"' ., ' . (Emphasis and underscoring Ours) .; �I/ ; During .c~oss-examinatio: , wit~~ss Quinones clarified~ ! \� . 43 . . ' ' f" ') 1� I II I TS N, September 19, 2005, pp. 22-26. . ,, .�1 . .,. ' II

,' I l.i; ..: . 1 '' DECISION l. C,T.A. CA$E NO;�7028 lj Page 27 of 42 � I � ''Q; So, jt is not tr4e th&t th~ IIDE is the gate pass for the ,) '' .A; phy~jcal tnh~ilseajsse�alo~fothte~~gfpoormd,$?that they will : ~se for the ,. .I Q; . Ye�, $ir, .. . �� A: r~l~~$f;) qf th~ � gqo(is if tt'ley PC\Y already: the d4ties .. . ~. Q; � and taxes. This� will coincide with the OR. �- .��� �� "' ~� A; ' ,, Q: SQ, ygu a.~r~~� wit.h' . rn~: when 1 say that it is the legal per.mit for the with~riiW~.I pf ~he g<?o~~? ... . , . . . A: I i~ pr~ctice ob~erved In ol)r Port, sir; we.usu,a!IY do !his. Q: Byt this being in the othi>r Ports oj l ~.~rt_.~l,.� lS yo~ ~ . toms t.h. r.oughc. w...t....the Philippines or jus.t in A: Yg~ know, sir, becai,Jse our Port is very different fro oth~r ports, be?G9US~ .Wf? , are under .the awtonomou , Q: region , w~ proc~ss thet�91e as it tisEh~nbterdy,uf,otitn1bfsenWa,nhwdeentapxtreh9~scy~, sfw.isl~f'I A: ' Q: twheei,ra�Insfeosrsm.alAInmdpoafrtet ?Dr!3thq~laYrapteiown A: . iss!Je OR; then , we release the goods. 1 � . 'I � ' .. ., ' Is that practice, allo�y� J~d under the Tariff anc;l Custom Code of the Philippines? . Yes , sir. .That is what we. have been doing sinc!e before . ' But why is it not being observed in the other Ports in th JJ BB~utre: ayouuofkCnouwst,omsisr?,� ., . � doing this , we submit all th ~ . aft!3[ 1 .~ . documents, We copy fu'rnish to our DistriGt and to th Gonimissioner of Customs.. We are,givir;1g cqp,i~~ � , .I XXX . XXX XXX ~. I 1 Ycwo~\Jtoamlsso' md!3untiteiosne~dn�, dMr),p,Yx'e/itsnessse.rvtheat. the payrn!gnt of th ~ � as �the permit witrdrqw the shipment. Am I correct? II � . .t Yep, sir. . I g~t~ t~E? t~~ In other wqrds, the, p;;tss which is II DE and � per-~lt par;;~tytm:v{eQntdiof.ff.ec.ruesnttot�r.,nhisn'g.q~u?t,.i.E�?$. and . taxe. s sery! ing as a .� I Ttrhehelie$qgsoeIon'dftobsrem~fagtloero� Iqpms~pywomrietthn'tE~hnoitsfrytdh, oecyduoumutrieensHt aoonnndloyr.t'axvwevsee.wrceita1henant t 'e~ official recr ip/' .� . I ,, !~ '� . .. 'i I I, r .. i I t 'f ,� .I I 11 I;

, ' DECISION c :T.A. CASE NO. 7028 .' '' , Page 2'8 of 42 JUSTICE CASTANEDA � � ,) 'I . I May.I ask this clarificatQry question? ~�� . i ,) What you �are sewing js that, the Import Entry together with. t~e pe~yrnent of the .c1uties and taxes wiH serve as the gate pass for the r~le.~se of the goods? � ., . COLLECTO.R QUINONES . .~ . I� I o o~ 1' I II I , Yes, your Honors." �� (Emphasis Ours) � .� � I' . ~gree ~ureau The Court.does not v;ith .respondent's argument that the Cu~toms regaine~.jurisdiqtion.~nd b~ .of ,I Rustody of the imported goods Piling .. ��f sf~reme Papa ys. Ma!JP� et a/.1' as Junsprudence. In the sa1<j case, the war as �coUrt' found that the importatioA not validly terminf ted as there I no ~ay~ent of duties and taxes. �The s b.preme Court ruled :� " "xxx. As long �as the irnport~tion has not been t~rminate ...the imported goo~� re~ain_l.lnder the jurisdi~tion of the Bureay qf Customs. J!n.portatiQn 1s dee,med term111ated only upo~ aplreatQyi~cmIl~espn�et.9rforllfistethcfeourreqw,ydittit~~odsr.ab'9tW~,xpaeal,isc,;L~ahanalgt! the other c:;h.arges, upofl l � tlw the thheavpeorbteoefpengrtrayntaenpd~ 1'he .pa. ym~n. t of the dutl~s. : ta~eS,a fees and ottwr charge I : must be ir full. . . � .l . , . XXX XXX XXX .�� a~~ Even if it t;>e �granted , ar}J(lfJndo, thi:it after the goods it[l qouf eCsutisotnq~has.d.hbaedenlgsb. trojlu!rgih~td.iocutitoonf .the ctuhsetosmasmaer.e.anetvhee.~.hSeulrees �I . .. , over goods w~re mtercepted ~ '; when sa!d 4 , � 1966 � by members at the Agnf1na Circle tioc~ . Novemper.. of the Mpnila Po , O~partment, acting under directions and orders of their Chie11 � 9� � Ricard? , P~pa, who had � been formally deputi~ed by th ~ . . 9f � Cro~m~.~n1'nlel~~sJ~Uop~~edr1.q~~1fon Customs, .. the tBheurgeoaoudso. fSeCcutis9t'n?m1s~06ha~ � 1;1nq cust9dy of the T~nff ~nd Customs Cod~ Jrnposes .upon the Collector ~f � ,. Customf? the dqty � tQ hold poss~ssion of all import~ ~nrotitcib~eS.~nuppoanid w�ohriy~ehcud~rteide~t.o t;3xes, and other charges heW .. be paid, and to dispose of th ij\ 44 No. L-27360, February 28, 1968. . Il � I !~ . ' ! .' .. ;' I . ,, ' ~.� ' '

i. '~ . I ' ~ �. DECISION C.TA CASE NO, 7028 Page29 of 42 .,. sam~ ' to I~W� The go9d? in ' were (1Gq9rding question , th,erefore, under th~ qustoc;ly ahq at the -djsposal of the Burea:u of Customs . at the time the petition �for mq;ndqmus, �9ocketed as Civil. Cas.e ... No. 67499. was ��filed in the Coqrt of First Instance of Manila�on '' Novemb~?r 9. 1~66 . The Court of First lm~tance o~ fyle:)nila , ... therefor~. gpl!ld not exercise juri~djqtion over said goocts even if the' warrant of seif:L!re .9nd . o ~tention of the goods for the : . ' '. purposes of the seizure i)nd forfeiture proceedings had not .yet ". ~. t:?een issl!e<;l by the Collector of Q ~stoms . " (Emphasis Ours) �� ., . I .I In 'the inst~mt case , the Court finds that the suoject importation 'i ' ��r' appropriately .tE;rminated upon paymftnt PY�. petitioner .of the corresp T �ping , .. . I ly cwstoms I .. �.,. di.Jtie~ . and taxes, a~d , .the subsequent release of thy go<;>ds the lj (lure~u of Customs. ThOQourt t~kes note of the irnport~nce of the r ious Inform~! Import Decl~ratiorl ,an<j Entry or � IIDE, � identifi~d by petit m er's witne~s , Collector'.Pedro OLJinones.' who also said that the same served r~ the gate p(l�S dur:in9 the �p~ysical releas~ of the imported articles . Furt1r� he said th.:t'the payment of the taxes an~ , dyti~s.. ~viq~nc~~ py , th~ ~?ur~au of Custom$. .Official Receipts \(which he also identified in his Judicial Afffili�1avit) as 45 ... . served the permit to withdraw the subject imported articles . ,: t~b The Court. likewise, do$s not. agree with respondent that ~muggled lac~ I Shipments were rice �. for of proof that petitioner had "NFA per :i\ per tran~a~Uon". Secreta~ Ma~ Enlightening is the.' testimony of Ishak V.. rl ca on , this point during the hearing held on January 3.0, .2006 . '~6 We quote: . ., ,) l: . -; �' .#If "0 : What is the 'ARMM? ., I A: Cgngre;5s passed Republic Act No. 9054 entitjed 'An ac I tq $tr~ngthen and Expand th~ Organic A9t for th 1 Awtonomous Region_ in Muslim Mindanao, Am.enqing tor - t_ he_ purpose Rep.ubl icA. ~;t No. . 6734, entitl ~d An AQf �.. ,d' PfoViding for . the' Autonomous Region in M~sli ~ . ~- �~M\ '~M") 45 lnform!ll Import p~<;: laration and Entry or IIDEs marked' as EX:hibits' " I ", " l- 1 to' 1~24~'; "K I ''K- 1 to K~e-c30ei''p,t~ to M-23", "0'', !!O" l to 0-30", "Q", " Q-1 to Q- l S";Bureau of C\lstom l Official Exhibits "J", f'L", 'IN"�."P", '!R''. �. ' marked as Mi nuti!S of the hearing held on January 30,2006, and Exhibit "SS" Docket, p. 841. If . ., .! I u

��..�-~.~ . �.� ' ; DECISiON �-� ' p, C.T .A.. CASE NO . 762& ,. I '' . Page 30 of42 . ~- ., Mindqnao (ARMM), as Amended . Rep. Act ~054 advqnces the � constitutional grant Of � autdnomy by .. I' detailing the power$ of the Autonomous Regional Gev~'rnment (ARG) .and a plebiscite was conducted on Augu�t of 2001 wherein tHe Province of Basilan and City � of M�arawi voted to be -include�d in the other four provinces compo?ing .the ARMM nam'ely, 'Magu'indanao, 'L'anao 'del Sur, $ulu and Tawi-Tawi. f'Jo amendments may be m9de to th~ Organic ACt without condt.J.cting a plebiscite hence ... it js $1.Jperior tg all other lqWS with regard to the grant of autonomy and its powers. Q: What is R~gional A1,1tonomy? -.1~-- I A: Region?! autonomy retofetrhsetopethoeplg~raonf tiangpaorftibcauslaicr internal governme�nt powers area or central of the I: rgeogvie9rnnmwiethnt.leasTt hceont_orbojleactn!dv~suopfertvhiseionauf~roomnotmhye 1� autonomy system is tQ permit determined� groups, with a common tr~ditipf") � and � shared social-cuUural characteristics, to develop freely their ways ~! life and heritage, e:xercise their rights , and be in charge of their ~hilippine own -business. - !� In the setting, �regional autonomy iroplies the. j I cultivation of more positive means for national integration . If would remove the sense of alienation among the Muslims, incre?se their tru~t in the government and pave the way for the � unhampered implementation of qevelopment progr~ms in the .region .through a pr.ocess of devolution . A necessary prer~quisite of awtonomy is de~entralization . ~- � I " Q: Could Y<?U plea?e enlighten the Honorable Court on the ' cDoencceenptrtaolifzDateiocnenitsraal.izdaetcioi~ni?on by the central government A: authorizing it9 suborqinates to exercise. quthority in certain areas. It inyolves decision making by sub-national ., units. It is ~ypically ll delegqted power, wherein a larger governm.ent -chooses t9 delegate certain aythority to local ! . governments. _ ,, -. l ,_ . . Decentraliza.tion comes in two forms - deconcentration and devolution . Deconcentration is administrativ-e i nature: it involves - th~ . transfer of functions or th delegation of authority and responsibility from the nationa office to the regional.office? . I r Devolution, on the 6ther hand, � connotes politica, ,1._ dec~ntralization , � or the transfer of powers ' ,) .i I t �'

l , , DECISION iI ' c .�T.A . CASE NO. 7028 Pag~ 3'1 of 42 .. . . ' performan~e responsibilities, ahd re.s.ources for � the of '" . 'I � certain functions from the central government to the local government . units. This is a more liberal, form of decentralization since there is an actual transfer of powers an�d responsibilities. It aims to graf)t greater autonoriw to local government units in cognizance of their right. to self government; to make them self reliant , and to" .~ . improve their .administrative and teQhnical capabilities . . The �ARMM g'overnmen.t 'has been in some aspects " .�particularly in it;; al.Jtonollly. been lwmpecJ together with � other � local government .units . and that is why the ��cqn~titutional �m~ndate �fqr the ARMM �is found in the chapter on loc<;tl autonomy in the Constitution. 'I Q� H~s tshire,reEbxeeecnut<iv:JeevOorluqt~igrn);0~fop. o4w8e1rsdaintethdeSDeTpIt-eAmRbfVelMr 2?4. -~ Ye� -- -; I 19~1 ma.n i f e s . t-a,� n tJnmista~able c. ase . .;. �� A -� ~ . ! XX~ XXX' XXX : .� ! Q: In wha~ . areas. ' r~spons.ibili.ty of l has the ! other ofi ARMM i. .... devolution been effecte~l? � �� ' A: In the . DeRartment of Agriculture PY way of Executive '�. I' Orc;:J$r No. 460 date<;! M~Y' 17, 1-991 . In the Department of . . ... . Labor and Fmployment . Local Government, Tourism . Environrne.nt e1nd Natural Resources, Social Welfare and � .~~ Developm.ent, Scien~e an~ ~echnology (E.O. No. 425), 1� Fqr Pt,~pllc Works anq Highways (E.O. No. 426) ; r I. �I 4D5e~p)a. rtment of Education, .Culture and Sports (E .O . No . I.� .' .I Q ; Wh?t are your duties a!ld ~sponsibilities as Regional �1�. Secretary of the DTI?� . .�~ .. � �1 A : Exf?cutiye Orcler !'Jo, 4~ 1 enumerates the powers and � � .t fWnc,tions of , the PTI ynger the original E.O. N<;>. 133 '� .) �' ' seri~rs of 1~87 that h~ve t?~en tre:msferred to the ARG . Bri~fly , Votf/ plan, imple;lment and coordinate activities of th~ ~overnment.related to trade, industry and ir vestments 1 within .the ARfy1M; formulat~ and implement program~ to j� stre;lngthen ingu::;tries adver~ely affected by the economic i. 'crjsis, particularly those that have a good probability .of j� � att~ining financial � viaoility; promote domestic trade, !� marketing .,qnd dif?trjbutiqns to ensure the economic and . steady flow of cornmo(Jitle.s from � produci n�1 � and/or . � marketing centers to areas in short supply, among others. ... I . Q ; Do yo~ know Kut~ngbato Conventional Trading Multi .., . Pwpqse Cy;oerative (KCTMPC~~or short) , the Petitioner in this case? . �. ~ . ' ,. , I )' .. ' io . '-1 �. ' .~

DECISION I� . C.T.A. CASE NO . 7028 ' P;:t&e ~2 of 42 ' A: Ye� sir. The Ghairman Mr. Orlando Badoy. wrote a letter 1 to me on April �15, 2002 requesting Jar a special al!thgrity/permit for the cooperative t? eng;;:~ge in conventional trading ~iq � the Brunei-lndor esia-Malt:lysia ,, Philippines (BIMP) rout.e. I � Q�. .; Qid .yOl,J act on the letter H:lqu~st? ~I A Ye~ sir. I issued � i ,< n();oobjection letter allowing .the �cppper1=1tive.to engage ill <:;onventional trading of prod~:~cts . � sUch � as � grains, tirt;,�, construction materials, useq clothings pnd u~ed vehicle:;; . r ! XXX .. XXX X>O< Q: What w~s y9ur .t:lwth<;:>rity behind the issuance of the letter . � p~rrnit to K4t~ngp~to?' � . � r11~ . R~p~rtrn~nt pf ; Agrj~ylt4re of .th~ AtJtonPmgus : � I. A: . R~gion . h1 IVIH~IinriMin~.fln~9 h~P alr~~c!y gr~nt~cJ tile �: j, i' . � \j ,,. . r~qy~�t of .KTM~G t9 aiiQW �. them to cqnd~~t ~~ . ~pnv~ntipn~l --tr~qing and. importation ot ri{:~ from J3!MP,t;AGA;.As the regulatory t:>ody in the 1\I,Jtonomo\.!s � ; .I I. '. . � R~gional Government �:� tasked with setting and li . impl~menting r~gionf!l policie~ on conventional .trading, t .� Particulqrly the tragition?l 'barter trading' with neighboring .. Bi'MR~ EAGA qQuntri~s 9s authorized under �thle Organi . . Act. we granted permit to the :KTMPC to engt:lge i!l ~ corwentional trading not only fn . rice but also othe 1 cornmoditie$. and tr!3cte goods coming from BIMP-f=AGA 1� Th~ p91icy of the ARfy1M witl}i ~regt:lrd to the traditiona � ... ~ ba.rt~r trading' , vyhic;h ~~ aGtually conventional trading wit . tnoeip~ehpl.oerniinegn. ~c.!o3unndtr<i;~~l$lo.v.~y.. i~� ,, uch. . as. Malaysia.. a.nd Indonesia, o � such trading because this type � tr?ding has been in existence for centuries and part o � � Mo�ro �cl!ltwre of the region , As long as � the traders pa~ �~ � customs and dutie~ tg the appropri?te governmen~ agencies $.UGh as the B.~reau .of Customs, we encourag5 � tbry~d. geor1~ntgo e. xi~ten� c� ~ ftohrrmouag.lihz. ethtl.leeirA.tR.raMdMing.� g�aonvdert.nhmeier.nle.tgaa. gl encie..s. 1 :.� order to defeat the�bane.qf smuggling . If we do not C;lllo . them to engage in conventional trading with neighporin i. qountries � t,hey tend to go underground an~ continu~ �~1 sm.�l:J.ggling . . By facilita.tin. g. th.e trad.ing formally ~hrough th . � ARMM government a,gencies we are actually able t I ~ged th~ .co.llectio~�.: .ornfprneiv.t.oern..ut. heosseb.yetnhge.. Bur.e. ainutroafd.Cin.ugstaonmd.s,alal�o�pwortion of vyhic � r~v~?n~es goes tq the � ARMM government throug . appropri1=1tion ; by .. the ��pepartment of Budget an 1� 'i1 :� Ma11agernent (DBM). The more revenues the Bureau or . Customs collects the more ' th~~ARMM g'ets as 'itsl shc;tre . l .. ., I ., i !! l'i

DECISION . C.T.A. CA.SE NO. 70:28 its appropriation from th\3 . DBM. With regard to most impgrtation of goo<;i~. th,e Bureau of Cwstoms in the �ARMM usually.r~spect our autonomy but once~ the !;)Oods i' enter the Philippine territory they become domestic goods so !3\Jre~u of Customs is in charge of reconciling ... natiq,nal government policy with regional government .. policy, If the .Bureau of Cu~toms does not allow the go99.~ to enter we don't hav�~ 6ontr'ol.over the Bureau bf ~f Customs actions in � thi� � regard since the Bureau 4 Cu�to.ms has not yet beeh devolved to the ARMM, '' (Emphasis OursJ � ln ��dispensing with t.he requirement of NFA permit to impor ;r;ice, ' ,, Secretary Ishak V. Mastura of the DTI-ARMM, on cross-examinatio ! :said , thus :~8 I ��. .' I .I "Q: But you will agree wjth �me that. rice betng a regul;;:~ted commodity, there is a ne~d for the importer to seCl,lfe an import p~rmit or clearance from the NFA being the regylatory agency? � � ,, . ' . .. A: The Department of Agricwlture ARMM stands in;the place of the NFI\ in the Autonomous Region in Muslim ' ~' Mindanao as� to whether. or not the assertiop will be. recognized by the National Government thru the Bureau .. of Gu.stoms. That is the outlook of Customs. But we talk to them and tell them that yolj have to respect our 1. autor,10my but if in .some way, the Customs become \. stricter, they don't ~~cognize the context of the situation .' ow .or they don't.rec::,ognit:e authority, then , we might even file a case against them, for' exam~He, td re'cogr\ite the authority of the ARMM because we want to enrich jurisprudence, precisely, that is one of our advocacies. That we have to enrich 'the jurispr4dence so that we will know what kind of autc,mqmy we really have whether or nqLthat extends to �sit!Jations like where we e~re now. That is why, I r~ally mak~ it a point to come also to this. h~aring because it will cqntribute� a lot to determining .,. what our autonomy�is. \ 1 : I Q: ~ I. In other words, it is IYQUr opinion that !whenever an i !mporter imports rice in,tq �ARMM, permit 1from the NFA rs no longen necess.ary as long a$ they get a permit from 1 :,,. the Department of Ag riqulturef . I ------~----------- II 47 Exhibits ''SS" to "S. S-1 ", Docket,, p. p. 1107- Ill 0' 48 .I TSN, January 30, 2006, pp. 46-4 8. � I I� I ., ... .. I I III' i!

II I DECISION I� C.T.A, CASE NO. 7028 I Page ~ 4 of 42 I ., . � A: In the eyes of.the ARMM, _yes, we will assert,that. there �� � ,.; . . no i~ need for them � to obtain ~ny Perm if fron;~ .the . .. ;. NFA, altho~gh, � ~�~ . you know, NFA is a corpqr~te I' at,Jthority, So, we assert that OAF ARMM ti~~ control I' anQ. hctS powers with r~garQ. to agricultural; prpd~cts ', in �the Autopompus Re,gion in Muslim fV1indane}o." !� . I. (f;mphasis Ours) l �� .. i I There is no i.ota of evidence that will show customs .duties an taxes �p~id th~ were not fully ... and that rice �,�hiprnents were irregl,llarly rei 113sed. ,' ,�. ,. ' . ' ' "� . . .� �. ' . ' ' " ., . " ' '' ' ' ' '!; . � Even lh@ apprqpri~te governmen.t a~encies , such as the Bure�u of Cu~ioms, �� .! ~. the DThARMM. the DAFc:ARMM ,.fol.jnd petitioner's documents in ord . r and 'I ,, the cu~toms d\dties and t9-xes d bJ~ from the .- importations . .- . . 1� �- ��. ; � Acco.rdingly, thi~ Court sh~ll not depart frorn such finding~ . (' ' - � - - �f - 1 I . It is . " well -established. . principle that findin' gs of fc;~ct an .. �lnding!, - ' . . i ~dministratiye board or age~cy or ;official, fpll~~ing a !hearing, are Jpon t.~e. court~ an~ Will ,not be di;tUCbed except where lh_" board, [~ency and/or Qfficial(s) have ._gone beyond their statutory authority, ex~ wised � ., act~d. ~~ 'their ; . r unconstitutional pqwers or clearly arbitrarily and without regard . duty or with grav~ abuse of discretion . ~9- 1 . I !~e. ~ . One � Moreover\.this Court recognizes the peculiarities attending the ir..l)ta.nt case. Involved herein is autonomous cha racter of MusUm Mindana ~ b~~ic . structur~ ~overnment If of the purposes y.thy ARMM W<?S e9tablished is to provide .the Auton mous Region of within the framework the Gonstitution . and national ~ov~reignty and the territorial integrity !f th.e~v\ . -~� t1' . . ,, ' '' ' �I!' . . .. . . I; 49 Lianga.B!ly .Logging, Co., lqc. vs . H~n , Manuel L~pez Enage, In His Capacity As Presiding it;tdge of L-306 r>] BrafJch ll of the Court of First ln?tance of Agusaq and Ago Timber Corporati on No. 16, 1987. ' , . �� Jul y . .. . : . . . . . :. . '. I I' I: I I I I i l!

li DECISION I C.T .A. CASE NO . 7028 II ,I Ii p,go35 of 42 R~public �of the Philippines,~o The Regional Government has the pof :e; to regulate traditional barter trade and c;unter-trade w1th lnj ones1a, Molay~la,, or B~unel; �and goods or items parterep . ~r co_un.ter.,trc;~cled. wtth sa1~ co~rt~1~s ,, sh~;ill JlQt. be sold elsewhffre in the co:ntry without paymen.t of apprl Jnate . .. ' cu&tom$ or import duties.~1 � I As testified to by Secreta~y l~h~k V. Mastura and Collector FF;edro I1r OL!inon~s. tht} R~gional �Gov~?rnrn~.nt encourages the people i � i � the .. collecting customs duties, and toxes and defeat the rampa.nt smugg ir g of ... governiT)~nt ~gencies ~~~ goods into ARMM. There wr;1s, and still is, a cooperative a[ld collectiv ~ ~ffort between and among the in the.ARMM to facilit the . ' pr()ce$sing of pgp~rs , to colle~t the correct amount of duties and taxes ; * md to i' I, . , 1 , �. . II J imm.ediatl=liY r~lease goods. Clearly, th~se purposes have been served . As this Court finGis that the.impo~~ti~ns ~fth~ 'su~J~c~ 'ship~~nt~ were . . I validly terminated, Section 2530 of the TCCP cannot be applied . \ For (1-rr '" ' I, I imported goods or articles to be fort:eited under Section 2530 (f) and to (1 - 5) of the TCCP, the follo,wing elements must be present: (a) the w~?ngful ~aking by the owner; importer, exporter or consigne~ of any declara~� ;i�on or affidavit, or the wrongful making or, delivery by the; same person 'f any invoice, letter or paper - all. touching on the ifnportation or eXport,\i~n of merchandise: (b) the falsity of such declaration, affidavit:: invoice, l1lter ; ; ., . . .. .. j �II Aut~fnomous 50 Section 2, ArtiCle Il R.A. No. 6734 (An Act .Prpviding For An Organic Act For T he R eg io n I3n1M, Alr!tsileim! ~MindaRn.aA,o.)~. o. h91ev0l~Atn4du(atoA.nna�noomA, coAtumTs ~eRneSdgtirnioegnngFItnohreMnTuahsneldimPEuMxrppianondsdeanTRalo'e)e'p',uO' ~brslgiacA,nAiincceAthccNll~.jf(.:ol).6r7T�3h4�e,� Secti o n XII, 51 Aut_fm_omoiJIS �Regton Ln Mushm Entitled ;'An Act Providing For T �; I , I I f .,Ill'

.. DECISION .,I , '. C.T.A. CASE NO . 7028.. paper; an.d (c) an intention on the part of the importer/consi~nee to eva4~:. : the I' payment of the duties due. 52 I! irhay . II ' . I� As ~~ld � fI ~rolan, ' vs. � . TaxAppe.a~.s a.nd . ~agong in Jr. Coqrt o: Trading.~ 53 fraud. rnust be comrn1~ted py an 1mporter/cons1gnee to f ade. p;;tym~nt of the d~ties due. lhe .frawd must be actual, consisti ~ of ' ;.�, .. I . another t'o give LlP som~ rigl\lt. In the case at pench, �petitioner did not c rinmit ~�� no frawd. C.\� there w~s �� intention to eva9e payment of customs duties due . .For being irrelevant and im')laterial (<>� this cas:, this Court sh �1!.no~ delve upon the truthful~ess of the declaration made on the docum~nts r ll=lting . .I ~rading th~ .s~bject to the coastwiseof rice shipment, nor shall it look i1{o the ' ,. .... , I liability of petitioner, if any, in the alleged untruthful; $tatemeJj~ or ... in~olves co~fwise f~f misrepresentations in the local bill ..of lading and cargo n?anifesto the . . ~ shipment of rice to �ather local port because this matter trading , not .i.mporta' tion . J ', I . Secqnft ��issue; � Was .. the . f!th � 1' t I I t i� j ' lnc;lorset.n~nf S~c.retflrY of the of ~� Finane~ qater;! April 1, ~OQ4 reru:fere(J within . the r~glement~ry periqd . 1: allowed py law. � �. ., II. .. Upon perusC,\1 of the cont.e�nts of the gth Indorsement, this CouF\ finds contemplate~ ~f that the same is not ,t,he Decision . unde( Section 2313 j: the bo) :rccP, which is required t_o be rende'red within the thirty day regie ~ntary ~eriod "."because l.- 1 I it merely orde"rs thk . i.tnplementation the 1 l~dor of f ment 4h !n~orsement !which j dated 1 November 21, 2003. �.j,Thus, it is aptually the 4 h � I� ~ iepres~nted ~ . of :;2Republic of the Philippines, .� by the Commissioner of Customs vs. The Cou Tax .� Janu~:~ry �~.� � A.ppeals 1111d Agfha, lncorporated, G.R. No, l39P50, October 2, 2001. ~i� � 53 G.R, 'No. 42204, 21, 1993. � .� . . ', ' ,. .. ' I .l! r If I I

1: I ''' DEC IS ION li C.T,A~ CASE N O. 702 ~ ' Page 37 of 42 II � ' ,. li-l reversed the Decision of the Commissioner of Customs favorable .to petitioner !I .. i pertaining to the $Ubject rice shipments in this case . i .With this clarification , the Court shall determine the timeliness ~f the t.,, . 11� .,� . . . . . I . I .. I Decision renderes:J by the Secretary 9f Fmance, through unp ersecreta � Ma. �, ' Gracia M. Pulipo-Tan , denominated as the 41h Indorsement. ., .- The,f~cai pCovision i& Section 2313 of the TCCP, quoted as folio 'W "SJ;GTION . 2~13 . Re.v;~W' '()f..Co(fJmission~r: �~ 1 ,� ~Y � . .� ~ - The � -I poaenfry!s)eomina?t:Wta_. ~ger_..g" rpr_.i.nfr?~ev_w�se,�e.d.�rw\eitdh_it.nuhpeofin9fteepcerin$g1t_9e_(n1s5t o)orrd�aba-cyytsioh_nis?foatefcrttihonenotiCinfioclalaentciyto<n?c._. ar soinen l ,. .� !� .. � writing PY ttw C9llect9r qf his a,<?tions Qr decisions. file .;;t written 1: -- notjce to the. .CQI!e.c;:tqr� ,Witt) a copy �furnished to the . C.qrnmis�iq n~r of hi~ . inten.tio~ :t? appeal the action or dec,ision o 1 � ;. ' : the Collf?qtgr to the Qqmmi~SIQnt;!r. Thereupon � th~ C.ollecto � ,. � ' shall fo'1hwith tn:~n~mit all th ~ Jyyords of the pro9eeqings to th � � i' . Cqmmis~ioner, who $hall aPRrdye, modify or revw se the actio :. '� f!r8. .or decision of the Collector tRke _sl!ch steps ~md mi'-\ke SL!C ,.orders 95 mf\Y pe necesS,~ry ' to give .effect te his clecision '� Provided, That whi:m an appee1Hs filed be.yond the period h~rei I prescrioect, the s�ame shall be .deemed oismissed. I Col!~otor. -The Commis~ioner r~nc!er ~~: qathueetc<1;.>scm.1~ocSI;nlf�ti,GiaSn~d\l!IveYavenarrytesev~dsiee.twoiwzi~tudhtrhieneby�pfGi.rvthqeoevc(~~(5e{r)pdnmdimnaegmysn,sits,sftrihsooeumncehCrtohaldenleedcpc1r.ttsoh~1mreonLrr!eeIgsncahodtareiodlrlnss 1! . b1 1� or_. ofi. the decision of the shall qrreeecvceeiisrp~iot_~~nq9o.fntbh-yetheretHcaueo.~r<.q;>srOnaPb,ftfilst);hmaeir~1scpiaeo?n9ee1.rw,IfitthhitenheCthoirlldteyecct(oi3sr0i'os)nddeaGyosifs,.iofnrtohnirfrkl~.;,- ,;, G~oolmlmeicSt~oIr<')s.ldleercissihoanll oe ' final. and fro ~ executory. However, )f th ~ .. is affirmec;!, or if�within thirty (30) clays receipt of .the record of the case by the Commissioner n ~ � decisipn _is .renqerect .or t_he ~ecisi?~ - involves imported articleR. .. whose put?llshed value . 1s .� f1ye m1lllon pesos (P5,QOO ,OOO) 9~ � more, �s~ch qeci?io~ shall be r;leerned automatically appea,l e_d te� q.r. the S1;3cr~tary of F1n13nce and the records of the proceec11ngr, , shall be_� ~levated within f)ve_(~) ,day.s fr~.m ~~e pr<?t;l~l.gat_ion , the deQIS!on of the .Corrmi$Sioner or of the Collector und1f � qapepc~iS~lIQ, n9.softhteti_ecaQs9emrnmH~~ys1o~ne.:e.rP.roov~i.doedf , iufndth~~~~t; . further, Thflt. ttle Co!lectpr � � ~~Fepipcneoa~nrle~,~s�,~osQt.Jrthhtie>fCpwr~ic�tjheci� nerp~dat_iytn1g~iqSey,~� (1y3sQ� ta)hff~dlra$myee~cdrefrbtoaymrythoerefcSFeehicpiartentcoaefry, tnhdr~f:_:r. .~, . I~ , I I 1: II: 'I I!

I lj li i DECISION i .I C.T,A. CASE NO . 7028 '' � � . Page,38 of 42 . j� r~nd~reo, ~he o~1 - .' , I decision is � decision .of the . Secretary Fina11ce, -Qr of the (;ornmissioner, or of the C.oUector unde[i ' appeal, as the case may be, ~hall becotne final an~~ executory. . proc.1ee~i.ng, - . :I! ~f . imp_?rte~III,~l. ��� . In any seizure the fel_ease 1 articles shall nQt bE,l allow~q L,Jnles~ and unt11 a dec1s1on of thr r � Collector has peen confirmeq in writing by the Commissioner ~~� Customs.'' (Emphasis Ours) . .. ' i~verse . The above.quoted .section ot the TCCP provides that the. �' . Decisio~. 1 under review bY the SecreWTY of Finance shall -become f�J r l aod execut9ry if, within thirty (~0) 'd~ys from receipt of the record of the ~~e. _no .. I ,. �I I l I' qecision is rendered or.the ~dverse Deci~ion is affirmed. I' . i.~ Relevant I Ph l l1~: ppipe ~hereto the Supreme Court rul~ng in I' A~sociation .o~ Free Labor Un~on$1 . ~tal. vs . Secretary qf 4 t~ l:it: Labor, 5 ' . "W,hen a statute ~pecifies the time at or within which a ~ . 9ct �is t~ pe done bY a p!Jblic o~ic:er. or b:o~Y�. i_t is , g~~~~ally ~el f . )o be dm3,ctory only as to 'the t1me, and not mandatory, unles~ l time is of the essence �of the things to be done, or th~f' langua9e e>f the st~tute_ con!ailll? negative words, or show~~ .. t~hfa:totwheerd,ea~uitghno~rtiito~lle.>or fritghhet.t'i;rn(�e3wmapstrais1i1steOnudresc)t . as a limitatio � . 1� Clearly, the general' rule is t!lat when a Ia"':' provides for a perio within whi.ch an act m~st be done, compliance with said period is merely ~� in dir,Jlory T: nature. However, compliance to .s~ch pe~io~ ~eco~e.s mandatory ~ ca~~s . ;, when . the law considers th~ pen ad . as matenal : ~r 1ts .language 1f ~tams negat1ve words, or such ~enGd � was. mtended to llm1t the P,ower, aut1fnty or .. ,; � . right <;>f the person or entity to act thereof. ,) II� �. i ~ inst:~~ Applying the foregoing provision and jurisprudence the �ca.l'e� this Court ruIest~at the Decision date~ No~.,mber 21 , 200~ (41h Indor~fm~e~ �. t . .-~ 54 G.R�. No. L' -"22228, Feb' ruary 27, 1969. o 1� 1~ II I II I .I ' ., i I'

DECISION II. C.T.A. CASE NO. 7028 ' �'' Page 39 of 42 . I' i ' '. ~ i&sued by the Secretary of Finance, acting through Undersecretary Pljllido- . . ! Ta.n, w.a~ ren~~r~d beyond the t~irty (30)-da~. reglementary period, whir h is . .. ~� COJ!Si.d_ere~ � as m~~d~to~ in natu~e being a: limitation on the ~~wer ,~d/or c;l\.Jthorit~ - of the Secr~'tary of Finance' tb review , the ' ~eGIS IOn . or!i the Commissioner of t.he Bureau of Customs pursuant to Sect1on 2313 (J)If>. the . i' I .,1; � TCCP. '" . ' . . 1. . . . .. A~ can be glepned from the fecords, the case folder was receiv ~ by '� ' the Pepc;1rtment of Finance on October 6, 2003. Hence, the Secretlry of 1. ~~vemb. deJ'i~!on~ �Finance had until e.r . 5, 2003 within which to: render his dtherwise. the dec1s1on under automatic rev1ew shall becorna f1na1, and tru~ \Jnd~rsecreta executory. While it is. " that ry P uIido�Tah made her[' 2nd ,) �� Indorsement dated October 29, 2003 requiring explanation ~f/comme~j~ on some matters by th~ Commissioner of Customs, and the case folde1jiwas B~C, ~;ember De~\s returned to the' I' it was only on 1'1 21 , 2003 when the ion 1. (4th In~..~. r.S~fl)ent) was issued...wa'{bey�o.n~ ~h~ thir~�~� (3?~-d~~ . p.~ri~d ~e~1.,f� ned be~~me from October 6, 2003. Thus, the Decision of the BOC Commissioner ~~ted ' ~� October 3,2003 under automatic review by the Secretary of Finance, final ~nd executory py operation of .law. In effect, it is as if no decisio1j1was ~y . timely rendered the Secretary of Finance within the pe:iod '!'andated r,i 1 n,der SEt<;tio!'l 2313 of the TCCP. �, ' .I 1 I � . l 9t.h.l.ndorse~ient ~pr_J.I j . ~rde lIf the 'i .; 0.. ons~quentIy, the dat:c:l 1, '' 2004 '-Vhlch . ~. ~. 1mplemen.tat1on of the Decl?lon dat~d November 21, 2003 (4:h lndorse 11~nt) , and all other supsequent acts/indorsements made by the Secreta of E;� Finance, through its authorized officers, .including the Resolution dated Jlune�' . lfl : " acls � ~ad�e . ~ � 16, 2004, are hereby consi<;lered as .. beyond respondent's aut lprity .' . ~ . ,G !�� ,; I ,. ! ~ ''

il II' DECISION i' C.T.'A, CASE NO, 7028 [I 'i l1 1: lawfull~ pr~miseJi on and therefore cannot be implemented, Again , this�is the ~oo, i, fact that the Decision Of tHe BOG Commissioner dated October 3, which ,) . �/ ~oile~t~r, ~fcision affirmed the findings of the District ., �, Port of Batangl s, in the ~. dated April 4, 2003, and ordered the llftmg of the WSD , became fl al and .I ' . I '. executory by op~ration of law. . . { I . . This � Co!,!rt �cannot .a!'surne tpat p,ection ~.~1q " eVI;lQ .~e.c~ion . r ~Q. ()f intend~d the TQCP was deliperate.ly to become meaningless an .1�to be . .. I: treated as a Qqad letter. Sound p~;lic p~Ucy demands that, al th1 l'rnsk of occa.s!Qhal e.rron~ , � JUQgments of � court~ as ...well as admm1strqt1ve t' l!Pwnals �, ~ hould become final at some .definit~ date fixed by 1iaw.li5 Public i;Hterest,�;! II �� � . requires that l?Y the very natwre of things there mustli be an end to c;i. legal . . . I . I !I contrQversy.56 �� I' ., . ' .. . I .. " � WHERJ:FQRt=,-the instant .petition for Review is h~reby GR~tJTED . " lndor~ement Accordingly, the 9th dated April 1, 2004 and the ReMPiution . 41h Indorse men1~.1.of the dated Jwne 16, 2004, which m.erely ;implements the . . . . . . . I. respon<;lent Secretary of Finane~. . having been issl!ed beyo 1d the reglementary p~riod alloyved.by law, iiire hereby ANNULLED and $!=T 'SIDE. 1 �� The� Decisio,n. ~. . of the . .' and Commissioner .of the I au of Distrjct Collector But Customs llft!nQ the Warrant of Se!;wre and Detention aga1nst the ..�UbJect jmpqrtation are hereby decl9red final and executory~ I i ,I.!, I. i I� I� ,. ;;: ~~� ~a :: Antlque Sawmill, Jnc, yeo, G.R, No. L-2005\, May 30, 1966. I Goverru11ent of ~he Phl11ppme Islands v.s. Del Rosario "and Tiangco, G.R. No. 30874, Dec ~. 'ber 26 1929. 1� � . 1 ' . I: , " :-~ . I' . ....... I� ~~�� !' .I , I I~ ,hII I! ' 1 I 'I .�: ' . 1:

k I. i: ,. DECISION C.T.A. CASE NO. 7028 P~g~ 4l of 42 ., I. SO ORPJ:RED . .. . .~ WE CONCUR: . !; I� ... i.. ,' . ~c~o~~~ 1 Associqte Jw~tice ' t. �, I, .�~ . ~ r� I. ATTESTATION l I attest that the conclusi~ns in the apove Decision were reaclh~~�d in con$ult~iion before the �c~s~ waS assigned to the writer of the Opinion t~ the Court's Division. ... I I I I'. ~ (] 0~C.GC,AS~ TJ\NE~ D~, iJR?\U''_ . Associate Justice II: I� Chaitperson '� . . 'I . .� I I I .i \. . I~ I . 1 . .-~ . I �' '' ., 1.�

.. DECISION .. . C,T.A. CASE NO . 702 8 .) ~-. P!!-gy 42 of 42 ! ! i. ' l I' CERTIFICATION . I: Di~~ ~ Pursuan.t tp Article VIII, Se.ction 13 of the Constitution, and the ision .� �-. Chairperson's Att~~tation, it is h~reby .c7rt~fieti ,t.hat. ,the ..~o~.cl_usio~s j~ the' ' abov. e Decision .were re~ched in consulta.� tion bt!fore.the case wa. s assig ~r'~- d . . .. f� ' to I i. the writer of the opinion of the Co ~ rt. I 9: L L -=-... . E~NES.~~ ��� � I, ., . ; Pres1dmg ,. AC ~!~~e HA Ju s I i� I I .. I � 'I .~ f ,) l ! I �� ;,. , I I ! . '. ~. t" '~ 1 t t II I l .' I .~ .. ' ., .,. ,, I I ' .. i I' I'' t f ' !I. I I .. . :; ' I I !

i, I �, '. : ! .. I� .. [I REPUBLIC OF THE PHILIPPINES I' Court ofTax Appeals r: QUEZON CITY i! .~ I! II� .,,. . SECOND.:1J1VISION �1i '. - ~ ... : -� .I I: I ,� �� '' ' .,.. .' ' "' ''' : ' l.I' . ~UTANG~ATO CONVENTIONAL C.T.A. CASE NQ, 70~8 I. . ~� �. TRADING MULTI PURPOSE . .I. i .��� . ~EDA,JR., l~pson Members: QOOPERATIVE, t' P.etitiOf!er, .. �: CAST Chai UY, and ;� 1 ,, PALANCA""~NRlQUEZ, { � -versus,.. ;. I. i [ j 1: .. Promulg~ted! : I 1 . I' TBE SECRETARY OF THE . li AUG {) 6 2008 II ~ � DEPARTMENT OF FINANCE, \C� -~ /1o.. ...-~... ~� / Respondent. . . ~ - 1rr:,� ; ti ){ ~-~~---~-~--------~-~----~-----------~~-~~---~~c-----------------------------------n' >C I .lliSSENTJNG OPINION I I~ I"' i I i if ,I . '�t Ii . j' i � ! With all due respect, I find it difficult��to agree witi1 the majof~W that thniceimpo~ations of petitlone<�are not s4bject to forfeiture un~er . '� Section . ~530 of the Tpriff and C?Jst'cxms ., Coc/e' 'for� 'the . folio i:ng - -' i " � � ratiocinations: !,. ..�, \ it Ie �..'Q I � ' . .~

I �.., . .rI ., I ' . . DCi,sTs,~An.tiCnagseONpion.io7n028 ! I i� ~�~~. 2 ~ . II .. Contrary to Petitioner's Importations of t Rio~ are Lqw ' I j; .' ' ,. h~ t.s~. ~.eco. ih~~. A.�t t. ou.. �.i. rd.�.s� how.s .Pe. titio.n.er's importations of rl�tr e ' ... w~rtt mA9~ on th~ Q.f:l~ls ofth~ folh.lwtn~ ~ll.thonties/penmts; � ., . ,; �~ . 1. Gra.ips.ijl,lsiness : ;L'jg~ns~ >i~~4~d by the N~tional Foq{l ., ' �' .I .. .i � il . ,'�" Auth9rity (~'NFA'D on'Jl.lP~ 77~ 2002. Saiq. a4thority 4 j' ,. � ~How~ . petitiop~r � � to ,, engage , m I. ~'RetfliUng!Whol~~~ling/Wflrehovsing!Importing xxx ,) 'SupJ.~9t .t() Issua,nce of.NFA PeqnitPer Transaction'~' I . (Exhibit ''B "); i ,I I . ,' j: 2.� Lett~r ' qat~g May �70?� goo~~issued by. the Department �r I l 'of Agriqulture an9 Fisheri~s,;, Autonomolls Region ill � ' . Muslim . Min~anao ("OAF ~ARMM"), granting petition~r authority/penpit to ungertake conyention~l I trading of rice jn the ARMM (Exhibit ''H"). In said i �� Letter 9at~d M~y 20, 2002, the Department of I 'Agrfcl.llfitre however stat~q , that as long as petitioner's I gooqs flf~..on a litnited S<tale and in order.to address ~ the apl.lte e~onomic distr~~s of the ipha~itants. of the I I �region, and pursuant t<;> the general welfarct powers of i the 'AR,MM and .the equita,bfe' preferential right~ of its lj inhab!tflnts, as provided � in the . Organic � A~t, tht( It � Departmeqthas .no ,opjec;tion to petitioner's engagiqg li .I in conventional trading of rice within the autonomous '1. 1I II ~I . ' region with th~ nvighboriqg countries ~ However, the .I Departmenthas also proviqed that all trading activities rl should be subject to coordination withlclearanc~ from � II the D~p~n1ment of Trade a.nq Industry~ARMM; I I 3. Lett~t. dated May 3, 2002 is.sued by the Department of I Trade . and Jnqustcy (f'DTI")~ARMM gnmting ' petitioner sp~cifll ~~thoritY/p~rmit ' 'to �)engage' I in:,. ..I!..'� II [ .\ I � I' I r! i

... i " '' . I ' c.r .A. c~se No. 7028. �. ., Dissenting Opinion ,, . Conventional. Trading via the Labuan-Malaysia.- �,. Singapore-Polloc.,.Maguin(ianao route (Exhibit "D'') ; 4. �� Lettyr dated July 31, .2002 issued by the DTI-ARMM . �granting petitioner import.at\on co.JUmodity cle.a.rance for ARMM us~, within l ~O ~ays from date of isstJe (. (Exhibit "E ''); 5. � Letter 9ated Octpber 15, ~002 issued by l)TI-ARMM I. granting petitioner importation �com111odity clearanpe ,, .. ~~ . for ARMM use, with.in 120 days from the date of I' 1: issue (Exhibit "F''); ann I' I ,r,: 6. � Letter � dated 'January 8~ 7003 issqed by thy DTI- " II' ARMM granting petitioner importation commodity � J. 1 cleanmce� for compliance, �within 120 days from date It I ., ' of . issue (Exhibit ."G") . . Petitioner's importation 1i clearance was~ however, c,onditioned on petitioner's I . \. limited nature of trading, such as 20 bags of rice, per '1. 'c~op~rative mC.mber. ' . ' ' 0 ' I �' 0 j� '� ' I ' Fro~ the foregoing,. it is clear that the NFA license g. rante IIto . I petitio:er to engage in th.e im.port~tion '.of rice is subject to the Hissua~ce ofNFA permit per transacti<;m". . . ., ' ' .. d~ ' ; 1 Examination of the records; how~ver, shows thj t petitioner fa tl ed !he . to pb~i~.. NFA permits for �. it~ subSeqUent �importations of ric~ on 1 foUowmg dates: D~ceqlber 15, 2002 for a total of 5,233 bags; Janua �3, o\1 � l � ~ 2003 for a total of 4, 157' bags; Ja.q~ary ~4, 2~03 for a total of 9,071 bl~s; ., I i �I .. arid Jan4ary 26, 2003 for a total of 11,000 bags. l (JLt{ .. I I� .:- I I' 1l " 1� i

I i .I 1! II II , I'I. :I , �) ' C,T,f\.. C::&se No. 7028. ) 1. 4 ll ll,, .Dissenting Opinion I I. Bu~ petiti~n~r asserts~ to .':"pic~, the majority concurs, that {pe ., ' r~q4irem~nt ,~i the NFA _permit..�w~~ ,4.i~p~nse~ ..w~t?, ~~. ~~i~w .of f~e ,authority tiranteq by the DAF-ARMM, allowing petitioner to engage!:in j' p cqnv~"tion~l tr&~ing of .rice within th~ �a\Jtonomous reglon with ~'he .' I I neighbor!ng countries. I � ;� ' � [ ' ., . 'Yith d'qe respect to the majqrity~ I do .not J that the D I'; agrye .If,. � P~flllil di~pens~s ~ith the n~9~ssity',;,fsecurink NFA permit ror ' eve~ importation of petitioner. .. "! I li: ,I; , . First, the Letter l!ated May 20, 2002 issued by the DAF-A .. prpvicj~ petition~f's invoke4 by petitioner as the .authority/permit to undertake conventiiD~al . tra4ing ofrice in \he .f\RMM, that ''xxx as long as '. ,' ' goo9s are 011 .~ . H~ite9 s~ale p:~ ih~ Department has no objectio ,Jtto . ~e petitiom;r's engaging. in conve11tioval trading of riCe, within ~ I I j' autonomous region with theneighborin,g countries~' (Exhibit ''IT'). Furt!}er, . ' .: .. ', Jl� the letter ~tates: . !~However, the �Deparpnent has also provided tha 'liall .the Department of Tra,de and I~dustry~~" (Exhibit ''H"). I. I . . I Thus, �in a Letter datdd December 2~)}002, petitioner wrote to ~ht? ~. � L. .. ,, �~ �� DTJ.:.ARMM, r~questing for a special authority/permit to engagl t~~ '. � I. ~ jl. II f: ~~ ' J

It I �. .II ., III' , Ii!! I: !1 5 C.T.A. Case. No~ 7028{.' II I Diss~nting 'Opinion I !: conventional tr(\qing v~a the Lfibuan-Malaysia-Sing&pore-Pol~f,c, : J, t ' . Magt,lin41:nao ro\lte1 In a Letter .d&tr9� J&n.Uary 8, 2003, DTt-~ i,ss~~<! to <p~tj~o~~r bnpo!'lation:~\>m' mo\lity . conditi~ned I� !, , . !Ill clearance, .. �; pettttmv~~r' s hmtted n&;ture� of tra~hng, �such as "20 . bags � of nee .I ;e,r I. I I' II ~ �. � cpoper~tive member", '. From the. � f~mi~goif1K. gr~nts of a\lthority/p((rmit to petitioner ~o . . eng~!!~ ~n ~onven' t,'ioJlaltraQing/i'mportati~n: issued b.y tile ~Af-~1: ang DTl-ARMM, it is clear that petitioner's importation mt;~st be o l:a limited sc~l~, and subject''to 20 bags of ~ce, per cooperative member. 1. However, examinatiop of �the. Informal Import Declarations !#d ~�,, i~portations �.Entri<;s (''!iDEs") of petitioner's !.1 of riel: shows that 1l�e importations exceeded the limitation provided: on a limited scale an 20 II ... . . o ' bags of rice, per cooperative memb.er: � .. 1! JanJ~ On successiVe dates: ';'ecember 15, 2002, January 3,.2003, 2003~ petition~r ilpo~ation.fl,of 24, 2003' and January 26, ,) '� . ,,.. ma_de unlimited . . for 5,233 bags, 4;157 bags, 9,071 �'bag~,�_:,a.,nd 11,000 i respect� i~~I l� � �, nee bags, ; '� . 11 (Exhibits 11K" to ;1K-3.0", "M" to.., -:"M-23'', .. to �. ~..~ 110-30", and 11Q" :~o:: ;t~. Q-1~:;:r ., .. . .j ' i' .'�,1 Th~ freqq~ncy' impo~i~lt:.ion~, .month, �.. I;f;{H~. .�. of said �..) whicii.lfthree .times in a :., �~ �huge volume/quantity canpot be consid~~, ~~.a limited scale. . : I:' / . . . . . '.:' ~ . IYJJ~ ' I'. ' , ifV~ � � ' �j ,. .I I' � ! [� I i. ,, I�

li .:; I. ! I II 1: li t� I I!,.i 1: ' I':.;6 C.T.A. Case No, 7028 1:. " I> Dissenting Qpinion ll IId'' I .. '� Ia Furthermore,-. the Informal Import ,Decl~rations Entries reveal II't r~� petition~r import~d more thdn 20.bag~ ()f rice, per cooperative mem ~~ ~� �: 'as shown below: ,II;, ' � Date Entry No�. of QU!ll)tlty Allowed . Excess ExhitI� No. memb~rs of ' per. . ~I Rice/Bags Permit "K~2f on.,o+ Deq. 1~, 20Q~ . 0~ 0~92 10 ~0~ 200 5 S1}C~ Dec. 15, 2002 10 210 200 10 s~c~ "K�2 �!T Dec. l ~~ 2002 053-02 10. 215 200 15 sacks "K-2~1'r ,:� ''K-2 j'( '� . 'I ! Dec. 151 ~002 054-02 10 205 200 5 sack: lj "K-49? Dec. }5, 2002 055.-02 10 210 200 10 s~clfs '"'MK'--~@,,,,Pt Dec. 15, 2002 056-02 10 208, 200 8sac~ Jan, 2, 200~ 021-03 1 190 ' . 20 170 sac~ 20 ~'M- P 20 600 '~o-2 j�>� � Jan.2,20()3 02~-03 1 .150 "M-~i� 130 sacks I,86 Jan.2,20()3 024,.03 I 7.00 166 sacJG ' 'I .100 sacks \; . J~n.24,2003 048:.,-03' 30 Jan, 24, 2003 ' 049-03 30 750 600 95 , ~::g:~ i+ 150 sacks "0-2~~ .Jah. 24, 2003 O~Q,03 30 : ' 6�oo s~cks I 1' o I I Jan, :f4, ~oo3 051-03 30 695 ' I�� 'Jan.24,2003 052,.03 30 750 . 600 150 s~clG 650 '-600 50 sacks "o-2 �r� 1 Jan.24,2.003 . 05J,Q3 30 700 600 100sacks "0-2~':1 ' J~n. 24,2003 054-:0~ 30 690 600 90 sacks 640 600 40 sacks ""00,-32~11'!�" '�' � t "Q" �� 1J: . ~ ;, Jan. ~4, 2003. 055:-0~ 30 . ' ��; Jan 2.6, ~0()3 056-03 30 680 66�0000 80, sa~l~ 700 J~n .f 6,2Q03 057-0~ . 30 10.0 s~cks ''Q-I n �� � . so:sacks ~'Q::21'! .. Ja,n,f.6,2.QQ~ 058,-03 30 650 600 Jan. 46, 2003 059, 03 30 680 600 80,sacks ''Q-3)1 - "Q-4I,1I:' Jan. :?6,2QQ3 060,.03 30 680 600 80' sacks .. j ~. Ja,~. :f6! 7003 061,,03 30 700 600 . 10'0 sacks "Q-51'1 � Jan. ~P. 2003 � 062~03 30 I 650 . �., 600 50 sacks ~Q-6j'l �. .. 100 sa~ks ''Q-~~�r� Jan. 261 200~ 066,.03 30 700 600 Jan. 26, 2003 067~03 30 680 600 80 sacks ".Q-I FII Jan~ fP, f90~ 068~0~ 30 680 600 80 sa~IG ''Q-1:21'?. 750 I J) :� ~ Jan :~ 6,f.003 069-,03 30 "Q-1[' 150 s~cks , "Q"" I ~'IIi' 780 600 '' Ja~ . 2(), 200;3 070,.,03 30 180 ��cks �720 600 . J\lf}. 26, 2003 07l-03 30 ' 600 120 sa.ck.s "Q-1 I" ~ :. .� ~ I. [. I' I .� � ' ... . I �r ,; ! ~ ' ' .. " I' '

I i' I I: .J I l C.T.A. C!ise No. 7028 . 17 I � Dissenting Opinion I: . ii Frpm the : foregoing,. cle~rly, ..peti~ioner violated . the v~~ . 1. '. . � IJi '1: auth.ori'cy/p'e~it gra' nted t.o it by the ab'ove gbvemment agertcie&, WhI~I~ih .I ; I� ' .. ilC�ording to petitioner, said ~uthorities/permits were in lieu of the .. ,, '.' : n . �r .: p~imit per tralls~ction", requir~d \>y the .Grains Business License issue, lto \ ;~ ... b:r . .!\ tho; NFA on J \li)O ;?002 !Jxhibit "B 'J.. flavjr g i11fringed �' �.opd.itioQs. proviQed. in s~.i(l authorI.itie�s/permi.ts. gra~Ited1 1 petition]� �b.s impprtati?,ns of dee were made�in cont~i:!;'venti~n oflaw. . .. I� ,. S�C<>I\d, notwiths\iltlding sai(.! ~uthc>rities/permits isSued by I me � DAF~ARMM and DTI-ARMM1 petitioner is required to obtain N~\A � . l l � permit for its every importation ��of rice, specifically, on December ~ ~ ' .� .200f, J~nUllry 3, 2,003, J~vary , 24, 2003, and January 26, 2003, ~e � . sam~ is mandated by the. Gr~ins ]3usiness License dated Jttne 27,. 2~~[2 issued by the NFA to petitioner, to wit; "Subject to iss~ance of Nt . Permit ~er Transaction". P[J. 1770 provides that NFA shall have f~e . . . :. . �, j!, power , .t~ . ~'im~~rt/export or .� ,9ause �. the . i~p?rt~tio~. . of . f~~d pro!'l\lc~/commodtltes and/or .raw , Dlateqa)s, equtpme~t . and facth11r' I ' needed m .the ~anufacture/~rocessmg of food commodtttes, as may ~e Qetermined �by the Council,' and as approved by the President of tr e .'P�ht'lt'ppm. es" (. Section 7 (c) thereof). Sm. ce NFAhas the ~ower to cause ~ I'I . I' . .. r I' !: I- I: '1 , 1: � � c!'

I:l�Il�I .) ii: 1 l, �' I; r Ii ' ~ase ~o .. 7028 " I! j 8 1 j� C:T.A. 1: Dtssentmg Ojmuon � n~c~ssarily � t~-o irnpor(~tion pro~u~ts, s11~h 1 c~, o f foo<i a.<; it ha s the powe l. . f! . i. . 1- , ,. ~~ . nqtljor(~/:ermit t~ � import ' � ric~ and to impose e ' .. is � rice �not � a prohibjted ~ommo9ity? � it is � nevertheless � a . '1� t' ft commo<lity und~r Sectiaf! 7 of Circular 1389 of the Bangko Se11(ral 1rg i ... . ~ Pi/ipinas;. Accqr~ingly, its importation requires clearance/permit fr~~ I i f' l;lpproprtA-tc;? � ~ovemm~pt agel1�ies; ._wh,i~\1 in thjs. .<;ase, , ~s. .the N I . pursuant to PD 1770. � ,. II L ~~~ot It l:>e argued by .petitioner that 'tinder RA .9054, otherwljrl:_e 14 I '' I .. - ., known as ''An Ac( To Strengthen aridExpqmJ The Organic Act For Tl: 'e "' , , I1 ,) .:Auto11omous Re[fion In .Mus/im Mindpf!ao, �Amending:For the P~Jrp~ ~ ,. ReJ?ubliC Act No. 6724, Entitled 'A~ Act Providing For the Aut~nomjr � . ~- ., Region ln. Muslim Mindc:mao ', . A$ Amended", petitioner ._is no lpn~Fr ,, . ,� :. required to obtain NFA per~it for its every importation of rice.. i ..ll ,, . ' I"i' ~r:I Section 31 ofR4 9054 provides:. li 'I ., . "SE<:;, 31. B~rter and Counter Trade. Subjept to I existipg -lcrwsf the R~gion!;l~ Govemmynt should regulate . I 'I tra~itional bartyr trade , and 99l.l11t~r.-t~ade . "'ith 111-P.OP.e$ia,. I M~la,Ysia, or J3runei. The goods�Qr Hem~ that are bartered or ! count~r-tri:lded with the said c9untri~ shall not be sold I I. elsewhere in the col,lptry with()ut payment of appropriate 11� ' t ,' ./ ._ : cQstoms or import d11ties. The D~partment of Finance shall, !1 ~ li . �,. ., . �ii' . .~ 'I II 1: I:! II I' 1': .. ..': '~' �'� -~ I.

.) .' .. \. II .. i I i:. lo I II I 'i' 9 C,T.J\, (::~se No. 7028 jf Dissenting Opinion j. li li in cgnsultati<m with the Rc~iopa,l Government, promulgate jl; . ~he rules to goyem barter �anq yOUnter~trade within six (6) ~1. months from the approv~l of this Organic Act." . j; '1 the Regjonal Governmept (ARMJv!) trad~ cOt~nter,tra.fe ~05;, sli~ll l'tlfS\Iant to iU . . regUlate ):he traditional barter and with Indone Iia, " .� '. .. t/' �. j Malaysia and B11Jnei, Sl.lhject to ~~isting laws. ,J.j : I. Secti~n ~t Considering that ' -J. � .~ 31 ofRA, 905_4 categorically 'provides th~ trad~ fa the Regional Government regulation .of :traditional bJ er ' counter-barter tra9e:wtth the ~etghborm~ countnes ts "subJect to extst~g .. 1' ~ �. law~", tl!en t~~ Regiqnal Government lJlUSt regulate the traditional bart�r 0 0 0 0 00 ' ' 11f� ' � " ' � � " , 'I '� I � I. tho~e Regio~rl trade, .taking into consideration the existing laws. Said "existing laW;s:" .j �. l)aving no qualifiqa(ionllimitation to pertaining only to the ~idstin~ ~aws i~ there�. ~, . Government, the iule in statutory construction dictates that they pertai~l to enforced theRepubli: ofthe Philippinesj This, �; ' ' ::::~:ennit inclyd::: a::vet:e::d issued t~ p~titio;er, ~s import~tiop of q<;e is _'-~subject to � NFA permit per transactio j ' i' petitioner's every importation _of ffCe is, therefore, subject to ra separate/specific NFA penni!, Thus, petitiorier is duty bound to ~om~f r~e with sai<;l condi.tiop by obtaining NFA licens'e, not necessarily with . ' ' /h/1/J II I '' ~ �' l ' uux__ li \ . �. \ .� Ir) ! I I . ~ ' �� 'I 1� I II I

~� I , ll .. i., I. 1',,,! J�Ii .I I:1I 0 . C.T.A. C&se No. 7028 .�, ' Dissenting Opinion I I '. National Go~e~eP~ but with the Regi~~al Go~~m~en~~ ~. ~anda~ 9 ... ~ ,_' .I � for its iJ:oportation of rice . on Decem~er 15, 2002, January 3, 20~ ,, .,; .�.��1.. Jtmu~ry ~. 4; 2003~ and J~. umary. 26., . 2003, therefore, contraven~d e �I . .� . conqition provideg in its NFA' p~rmit df;lt~d June 27, 200~. I' . I . . ' I .I A~cordingly, while , importe1 � ~ice . m~y ' not be conside �~~ ,, 1 fail within Ie ,, ,, "merchandise of proljibited!importatiOn'', they themselves .' . oth~r cat~gory of merchandise imported "contrary to law'?' becafl e .� ' regulations issued pursUant to ''custom !aw" forms part thereof. The te l � . ,. pro~iSions .��Custom law" inclqdesnot orily the ofsaid law proper, but<> : b .. w ' .. an~ regulationsml(de purs11~ni ihereto, like the Central Bank circul w wh1ch also have the force apd effeyt of law (Santiago, Ta~iff an(i c..,t , i. ~e Corle 4nnatated. 2000 ed, pp. 178-179). (::opsequently, violations of th l r� circulars .come within the purview of the Tariff and Customs Col . t. .. : I ' � .. � Section Z.S3�o� (f), which authoriz.es .the� forfeiture. of ''any � articles �~I�r e ' importati~n ,�. . . . . or exportation of w. hic.h. is .e~ ffect.e.d or a.ttempte.d contrary 'I�o . ~ iaw" (GonzqJo .sy Trading vs. Ceftra/J!cmk, 70 seRA' 588). . I On those b~s~s alone,,petitioner's importation of rice is subjec !p � �fo.rf(!itute under Section 2530 (f) ofthe Tariffand Customs Code. ~ ,I .. .I 1 1/

li I .,. "l [I II ~ .1 ,, II C,T,A! Ca$~ No. 7028 - I, .., li , ,, ! il " .I Diss()pting Opinion ' �i I !,l I' cammiiieJ in There .are Badges at Fraud � �bi/'Ije!i!laner �. Conn~ctio';z : with . the I � j ��. Imiio.rtation:ofRic~� .� �. � . . .. . ., . . 1I Fir~t, ~xarqin~tiqp. oft\1~- :SiU~ ofL~~i~g Nos, COTT-.6~Z~ 14.95 ' it�.�' ' .� . . .. .. . �I . '. COTT-.60Z.. J499507, COTT~ 60Z~ IA99503, COTT.-60Z~~499504, ~ � t' . II ~ .. me COTT, iiOZ-1499505 (Exhibit:, ''FF'' tO ''FF-4'') shows that there a!lmitle~ p~tilion~r d~cla~ed ~ice ~s mis\leclayati~ns 06he rice shipments, its comgrits. Petitioner's witn+ , � . Orhmdo . 1'!a<)oy, t!>at indeed . 'the rr com~its: . ~e, however, expl,~ained that. said scheme .was resort~d to fF pettttone:r because of the prevwus �exp~nence of 1ts shtpment havmg b 'sei~d ~~the North Jiar~~r, despite the coJ,Tect declaration in the shippl�~ do~llments. Hence~ pettttoner dectded .to us~ comgnts :as the descnpt~f� : .~uffe~ ~~ of the cargo, so as not to ih.e same Prdblem as their o1 r .' .; . shtpments (Exhibit ''IT") , S~td. reasonmg, however, of petitioner, ts bu~ a ,) tr~ns~orti~.~ ~u~ject ~~{~r shallow excuse. Notwithstanding petitioner's explanati9n, the 'I . . i ". femains that in it,sbiils of lading in the rice fr.om . �� port of Cotabato to the p::.�o(/f Manila, p~ti~IOn~r ~I~de.cl":"~d Its ~r � shipment~ as comgrits. (Yif-A- I �., .' ,, ... !i ! I1': 1'

;I I' I : .. [IIll. ' j '" '~ C:T,A. Ca~Y- No. 7028 2 �. Dis~enting Opinion � S~cond, p~titiqn~r Qn<l~rd~e.l~~d th~ numb~r of contai~~r vans [n . th~ bills of lading !lfld coastmg m!lfltfest. Commander Tranq~th.no Pat 'i n �, �� .' (''ConuilanQer Pl\it9~"), fonn~r Si~40P . C~mman\ler: : Phthppme Co~ t � '' ' � r Guard Balangas, (\:slified tlu!t only 54.gontamer vans, mstea4 of ?3, wme ,, listed in the ~oastjng manirest' Of the inter-island vessel,� MV No 'I Senhora de Fatima. � � � . .. I! .� 1. �� Thin;l, the qesign~tion of entiti~s, ~uch as Agro Farrri, Beri Fa ,I ,, t. 1. I COlll'i~~!)S ~~ihit~� r Las Buenas Farm, :SCC Fann, 'andiH~rpour Link Transport, Inc. ��s . �� .iti ihe bills of lading ''FF" ta "FF' 4"); has not b '! sufficiently explained by petitioner. Instead, the testimonies f � t - � ' . . pe.t�itiqnrr's witnesses ~re 90P.tradi.ctory~ p'etitioner's witness) Orl�l, .1 o ~i ��i Bagqy, .te~tifie4 that p~titionyr u~~q the�names Las Bue,nas .Farm/HL-1 1:& . . � �.� . i I SC~. Farm/HLTI, l3~r~ .far:rnJHLTI, ~nd. Agro Farrp/Hr TI, because lie . 'l ' . ,, was 1info~ed by Alex ~a~quial, Gene_fal Manager of HLTI, tb,!lt si i4 entjti~s r~gularly shtp corngrits from Cotabato to Manila "111 .I . � (Exhi{Jit 1 � �I 1 ~ ' �I e : . ~ � On the otP.er hanq~ petitioner's witness. Alex Bacquial, testifie4 that '' ' ~. 'I � I ' .names of those consignees �. were .mer�ly supplied � by the chairman 1 f .. - . . I r petitioner (I'SN, dated 13 Feb. 2003, p . ~U) . 1 In thos;e bills of lading, petition � .' .' ' (UJ� . ' 1 ,. t' . :� ' �''� �, '' � ., t) 1, I I I I ' ,'

~~ I 1: , - .- :j I' ,) II 'I �! !I li 3 � C.T.A. Case No. 7028. Dissenting Opinion. I ,,I �- , ,' .. -�~ ''III -. -- w~s not n.amed�as importer~cQnsigtl~e, bllt mefely. inte,cyened,, a~ the re,.\- _ . I - party~in7interest.. _, . ! i i I. .F:llrth, Comm~nd~r Paitont~~t~:fi7d that there wa~ violation of fl e 1 _ ro"tr o~ the vess�l ~t~t~q in :~he ~aster.~s Oath of Safety. D~partllfC!� :~ I y~I ~s_:~. l V~!l.le. � ,~_.�,~li. ned ' J Ilatanr .. tro.m llPllO�� c;otaha,t.O. to Manila, ,not to �_ . S\IC: . .. Wit? ,route, tlw vessel' will not p~s by, B~lll!lgas Bay Area: unl~r . t]wre is \yP.!Jpon, W!Jic)l a! tl>at time th~re W'IS JlOQe, Said deviation ip rre ,I : � rout~ of�~ Cart'Yillg vesseLancj llnloa(\ing of the shipment in the Po~ ~f ~; I ' � , Batangas, was ma.dtf without prior not\.c.e of entry or clearance from :e C1Jstmns al.lthoritlys~ I� Thtf foregpipg circwll~tfl' n~'es� are. inqicative of badg~s of fra.uc;l 1,, lll h ~.' the part ofpetitioneF..Thougb, this Court is aware that frau~ contemplaf II .- t.'.- I' by la\j' is actual apr) riot constructive, this Court is also cognizant of 1 e do~triqetha~ fraUd; b~iuga state of m~d: need ~ot ~e pro~~~ .by i t evJden<;e, but may be tpf~~T~d from the ctrcu{Ilstances of the case (Repu?~ic . - ill Ii th~t circumstan~ vs. Gpma/es, 13 SCM 641). �. . The 'inlyority, howvvet, opined the enumerated 's .fire pot: relevant f.tpd material to the forfyitu;e proceeding provicl~d I h 1 I. ��Section' ~5~0 of the Tariff and Customs Code, m as much. as b1 ~� �' !#! 'I ,) ., :

'1!1�;� I' . III' � Ill .. . . : .. .. II '� ' lII � DCi.sTs.~A~.tiCpagseONpion.io7n028. . � [4 abo1[ ill]porta\ion. )V3S @)ready wminat~<l iq.'the .instant ~ase when the l j. \. Jnention~d cir\:umstan~es wer�� ~ommitted. With due respect, ! do w t !,. '�. . . I' tf ' I ;, . ' '( � ., ofCustQrn~, ,313 S(::M 462-4p$, tht:? Sl!pryme Court ruled: ; j' ", "' � . ''Cont~~ry to ~e QT~'s : mti9n~1~ for san~:;tioning th~ '; fqrf~itur~, Jmporta,ti()p .� ..W!lS. t�rmine1tY4 after Policarpio I' { :.~ sigrt~d� G'lt~ �p{lS~ No, .5l3(); on� l.O, APril . J9~7 eyi.d~p<?ing . .. withdrawal of Lot No, � 15 . from cqstoms cu~tody. ~' hnport~Jion is de~me4 terminat~d: l.lpon payp1ent of duties, ta~~::i arid 9Ih~r 9parge~ ,dqe or s~curyd to be paid upon the . I t. artic,ltfs at the. pqrt of entry~ ang upon the grant of legal I j �' ' permit ' for withdrawal1; or in case said articles are free �of duti~s~ taxe~ anct other charge�s, tlQtil they have legally left I: the jurisdi9tion of the 'ctlstoms. The forfeimre or'the subject maghineries howeyer? is not dependent on whether or not the I I importation was tyrrpinated,; 1rather it is premised on the I illegal withdrawal of goods fr~m . custom~ ~ustody. I. I Th4s, .regardless of Jhe t~nnination� of importation, II . Customs authorities may valic:lly ~eize goods which, :for all ll� int~nts anq purposes, still belong to the government. This is I. I,i' II ~o because �~forfeiture take~ effe.pt immediately up~m the cop1rpi~sioq of the offense, T4e forfeiture of the ~ubjyct "I!I . m~c;hineries~� therefore, retroact2d (sic) to the date they were I: ., . illegally � withqr~wn � from Custorps custody. The I gov~rnment~s ~righ.t to r~cpvet the machineries proceeds from its .right as lawfu~ '.owner.' an~ � P?S~esso~�. t~ere.?~ .~P.on , I''fI. abaJ}gonment py Flhpinas Marble. Sqch right may � be I� as~erted no m~tter into whose hand$ the property �may have come, and ~.the conqernnation . when obtained avoids all inte.nne4iat~ ilH~mltions. To sang,!pn petitioner's possession �of tlw property woul<;l .be .tq . gJose our eyes to acts of ~eftal)(,lation practiced ~pon .the gpvemment.'~ '( l I l I I ! I ;.ol I I I !i 'I 1ii

.. ' : I . '. i ;' . ., � . . C..T,A. Cas~ No. 7028 . Disst,mting Qpinion .. . ~�� fo~egoing , . P4rsuant to the � ruling, forfeiture of the. subjtrt 1f maclun~ry 1s not dependent on whether or not the . lmportatwn frrr te~inated; rather it is premi,sed on ~e. illeg~l ~ithdra,fal of goods Cu~toms custody. .Thus, reg~r~l~ss of the. tem1ination o~. imp(ntati iP' .. . I ~� purposes, still belong to the �government, This is so becayse forfei ;'e Jt".I. .I, � takes effect inune~i~tely np~n ~e c9~ission of the offense. 1 '. forfetwr~ of~h~ subJe.ct machtnen~s~ therefore~ retroacted ~?. t~.e .date t 'f~ .. . were iJ!egafly withdn~wn from Customs custody. I \. I . I�, 1" I . . .. In th<? prese~t ~FlSe, the subject rive were imported contrary to I. , ~ai<l ~mporta!ipns ~ , �Thus, forfeiture of (he ta.kes effect irediately u, ! . 1 ~owmissjon of the offe~se, th~t is, u;on entering of thi subject rice ~ 1 terri;rial . jurisdiction of the Pijilippines. . Thus, !notwiths~dk~ ,, .I petitioner's payment of the duties and taxes of the subjec.t rice at j~ I' e~r Bweau of Customs, F.ol.loc.Po.rt:, the same may still. be validly .seized ... '' , if said imported riye was already ehrpute~ in a coastwise trading. AI~: ., ;. ' petitioner failed to show proof that said rice was removed from ~I .' . . �� �. . . , � � � � . � . fkd- Bl.lreau of Cl}stoms on the basis'of a legal permit for withdrawal. . .. �: ' �I 1� I I I I > 1 .\ ~ II ,-: I '

'; 1 ' I ,., !1 !I . , :1 ill C,T.A: CAS~ No. 7028 J ~16 .. . I Dissentipg Opinion � I � �, Second IssUe . .. i1 .. , ... ., . . " , . ~� . ., . . � ;~~ secomk issy~ is whether tl!� De.;isipu d~te\1 Nove!l)\)er ~f' ! .zoo~ is~\l~d bythe Secretary of Fliw19~, ~qtiugthry U~.dersecretary ~~�~� .Ill'' Grqqia �~'� P� ulido,'.T~, was Irendered _p~yo. nd the l ' . 30-qay reglementar ; - I perit <l- . .. ... ! �I '~ ' R.e~9n:ls shqw thaL on 09toher 6, 2003, the date relied upon :}' '' '. ~s r~ci\:Qning ~~ 3~,d~y peri~ petitioner,:.. the 1 eri o\l of coljnting of the , ~. p ill � w~s the ~~~te when the Oepi!fl!!leqt of l[mwwe, Revenye Office, Custom~ IJ .� ~nd Tru:iff Divisi~q, re<;eivec.\ the c~se .folder of B~tang~s S.I. No. .02l i~ .' - t (Exhibit "W'J. ltiS 1101 the ~~te. wh~n theSecretary of Fm~nce, or m li s j :. ~ftse, Un<!yrsecretfi!Y Puli<jo,T&n herself re,ceive<l said � case. fol .,.. ~ Cod~ pr~vides 1 Sec{ian Z3 3 oftlw Tariff and Cy�tams,. specifically. -~ '' ) ,� \ r the r.eckom.ng d~te:, of the 39~4flY_ ~eno� � d shall be from the ttme o.f :t "receipr of , r.ecords. of proceedings .by .the Secretary of Finane~ '. .. . . . . ' ' ' ' .. ', " ' ' ' ' ' ' l'i� . , . . Petitiooerfailed io establish ti)at on !I)e.same date, October 6, 2003, ~~ Secretary. ofFin~ce, or in this case, Unde.rsec.retary.Pulido-T. an .recei~l~d o.J . , the recor9s of tht~ cas~. Hence, October 6, 2003 cannot be considered s ' 1 ' I .the reGkoning period for the counting ofthe 30-day perio~ I I. �t ., .~ �� 'I � ,' � .I I I I

., .' !I �' .,, .. i! 11o 1 1 ,, ' C.T.A,, Cl\je No. 7028 j1 1 7 Dissentjn~ Opinion . , 1 II :.. I .. . . rr Mor~qyer, rc;cords sho~ t4flt ~fter the receipt on Octob~r 6, ~003 r'�f . . the cas~ folder of~~tangas ~.I ; No: 07"03 by the Depai-tme11t of Fin&n .) l .,, .. Rew11ue Office, Customs �at!d TMiff�Division, on October 29, 2003, ~mtl . . :t . ... . I WT ' . . C&Se folder was ag~in remmed to t!le Commissioner of Customs, !l , . � .,: the l~tter was reqU.ired to .9Pmm.ent :.on Undersecretary P11lido"T1l ~ ~. t! � findings .~on,tained ip the 2nd lnc!orsemeni (Exhibit .''X ') .. Hence, during ~ whe~ r '; : ' time ,! .. '~ i~ r Undersecn;!aiy Pulido.Tan, 1a~d the comment of the Cominissioner the case fold:r of this case was _not within the custody '' , , Customs has not y~t beep received, Unc;lersecretary Pulido-Tan cannot e I1 I ' jl' .' � -.expected and is not obliged by law to render a decisiofl, as the case s submitte~� ~em1 not.yet been considered I' 1 is tor: decision. . Due process .' , . that the other party qmst be given an opportunity to explain ~side bef,!e ;. .tw the case is deeme<l submitted for decision an<! a decision isjrendered the matter under review. Techpically, .,ilJ:the present case, it was only November 14, 2003-, when the CommtssiOner of Customs returned t~e t; ... caSe folder t!le DepJtrtm~nt ofFinan>e, t~g~the~ wilh hi~ e~p~;m~tio,; $ . .I (3rcf Indorsement) (E.xhibit "Y'), to Undersecretary Pulido-Tan's fmdings � ; I� her 211ct Indorsement that the 307qay period.to d~cid~ under Section 23 ' . .. , ' I , .. of th~ Tariff and Customs Cb(ie commenced to run. rr wa,~~ therefo I~ .� . ! .... . '�' ,.

I. ... �� l� ~:\ '' ' I I ' �� C.T.I\. Case No~ 702~ 8 Dissenting O.pi~ion ,, ~�� pnly on N~wempyr l4~ 200~, that the case was deemed submitted r f' ., . '; .,� qecisipri. Hence, Undersecretary Pulido-Tan bas ttnFil J:)ecember II �� . . fit � �. , , 200~ with,in whi9h to de~ide the case.. The Dec"ision dated NoveJPber 2002 (4th Indorse~ent) having be~n renderejl before Dece~ber 14, 2]11!l '� . is, therefore, well within the 30.,da.y reglementacy period. Ii 1~� ' ,.. .I ' �. . � F\ll'lher, it is mY humble view that Section 2313 of the Tariff l't~ C~toms Code, which requires tl)~ Secretary of Finance to render � J e . '. r~ceipt �, .�' ' j I t '. ~' I; . decision 'within 30 days from the; .: of the recor'os of I 'e .. I. l. . proce~dings, is merely directory. j!I . i �, It" .� Strictly spe~19Pg, the review b;v �the Secret&ry of Fin<mce of . 1'\eci~ion0 f tjte Comission~r of CustO!llS Is nota judi~ial review. sinre . .. � Finan~e ~ ~xec\llive oJ~~;e i(hSeou~Seercnfet~!rllo'Yss oCef m~nl hol<!s Je~ent ~anUjdcturer; and not Ia ju(licial ~.e '' Corporation Associatiqn r �.. . vs. of -i Philippine$, fl65 SCR4 579). The Collector of Customs, Cominis~ioner i .f '" ,� CQstom,s flllQ Secr~tary of Finance are ~11 part of the executive branch 1f � . I�� . II .the Co!l~ctor of Cll~to. ms roles i the government, the execut1te again�t pa~ol ve.r.y we~I bfiq~ S\lil in COU\'ISw~~i~st itsdf. On the 0\her h<md, i~.a I. ppv~te person ts ~ggneved 'by the dectston of the Collector .of Custo* , I�' ....~ he can h&ve propyr r~course before the courts, which npw would :b ~ \. .. 11 I jI I �,,

'I I' ., . ., . .� II .' n .I C.T,A. Cas~ No! 7028 I I ,, 9 '� Diss~ptipg Opiq.i<?n I '� ' " ' I' ' : . called.� upon t.o exer-ci-se ju<\iyial review, over the action of the. execut'l' e -j ' e ' bran9h. . Sjnce the atltomatic review 1?)1;�the Secret&ry qf Fin~nce of i1 ' . tf . , � <le~ision of the aoc Commi~sion~r ady~rse to the governm~nt is not�-��� j - , . �. . I j~di~ial ~ ,. ' revic;w contemplat<;d by lawi tjle f\lle that the f eriod prescri l~w decis~~~ mand~>;tory Wi~ re ' by to"appeal a is caliliot be applied. m reason that' the p~riod to render a �decision over said appeql cannot r �e " .; :.~ ~nforceq strictly &~~linst tpe reviewing 9ody, Thus, the majority view t t ... , ~.' I lt\ : .'. ' � .~' : � the Dec:sion ~al\ld October 3, 7003 Of the BOC .Commissioner un 'I'r .automatte revu~w . b,y the Secre~a~y of Fmance had already be9ome fi I ~; 1 .. I , 1 and executory �for f&il\lr~ of the �Secr~tary of Finance to render f,e l I i. Decision within the ~O.,day reglementary period cannot be s~staiped. . I ' Finally, the gener&l rule is, when a &tatute specifies the time at, r ., ' I .. ... within .':"hi~h . an act is to be done by a public officer or body, it is 1 '.' ') '' I II I o .. generally held to be dire<;. tory only�as to time, and not mandatory, unl~III s t time is of the essence of the things to be .done, or the language of e ,,. . i . I= statute contains negative words, Of shows that the designation of the ti I :e . ,4ss~ciat;O?J ~I ~s. Secret~ry ~ ~: ' ' Was intended as a limitati,on of power, authority or right {PhilipJ :, of Free Labor Unions, et., of Lqbor, 27 SCRA \ ,, .. Consistent with the general rule and taking .into consideration e .) �� � 1. '�

.,,. l1.' .. : '~ . � .I " .,_ ... :1: �C.T.A, Case No; 7028 ! ~O . P!~~~;1tln~ 9hinio~ �. ... 'f ;I .90.1Jijl!~0if�t the;,\SS11"S. ~l]~Qfy~d;"1};~9 ,instant.~0~' t!1e:2Q,~~y-peli<\ �� . � for. -~4~ �: St~Qr~t~ry �of ftnfilnce .to :: 4.~~nP.~ :. the. mstant cas~, :.- ts . me i' .'/ ��' .- . ..;_-' ' '' -. ~ ::-:"<; ., : .' .~ . . ~ . ... ' ... ' -~ . . ;�. ' ....'.- . :. ;. . ' ': �. ' . .. � ' - r�../: - . . � 4ir.~w.t(,)l.y;. :�w~.u.r~.~~.Ieo..is .tn~.��:;tv..l~1,~�.ti.1~t>~w. h�.~.P...J�he..nr.~J.w.r:�c.9iisiq~rfltio � j4~ii9e~o �q~manq~; : W9hnig~Lru!ys�:_pl~)r;.be relaxy<h �This ' id�!if� P~99 .. . . �.� . .��.. ' . ' ' :' �.' �:: . . . . . ... ' 1! .an .th~ :rnqr~- }mp~~5ttivt:: wh~n: gon~co~t,lplhuwe is .not,intended.for d ~ !y ; (~((~ ys)�C.o~~i:~f;Jpp~gls, 4~~ SC.{U ~97):'.. Col1seque11tly~ 'the"9~h Wc:lo~�:>~rr )ht '� . .. 'I' : .' ' - . �. -- ~ . . ' . ; .�. .c..l..~tid.-A:�.k>~i�:_l:�. �;'l:;�.�4Q.�Q�.,4-.,� wHi'c}i:;.grd~r$.: th~ �. implernent~Hion . of....t�l1e�'..b. �� 9'is ~,j~ .'.�; � � .� , .. ~�� �. ~��. �.� .���' .' . � ; ~003 r(411\ ~qqorsy1TI~nt) . and � all' �other�. sqp~eq .. �ht I: � ! o, ' . � ~�yt.�li�n�9�qr~er�rH;,pt~. . .- � tlw;-:'o:S ~g.�_. rct~-r.y ofFiiJancc, . �� �� ~ k �-l , - �- . ,rendered ,by &s �w e p as . ... . . . ... - �' ' r~solHtioit- dated :-~~.me .16, 2004; cappot .be .~onside~ed acts.' �rende.!:d ' .�. . .. ;, .� . . . .. ..: '' . ! . ,. :i:: .;, � P9yqn(j \PY TfWQlls\~Qt's ;authQri!)', 'an.cJ are, therefore, val:;d qnliJeg I!Y ..' /. .� enfgr9~able. �� � ._ I: .t 1 .!' .... DISMISS .-1'i: e j' r� � � WIJltRE~QJ,l.E, I premises.- con,sidered, vote .to ' .� .....-: .. � �instant Petition for .Review <and to�- :AFFIRM the Dedsions .of .' <� ',. � / ;,:'' ,~ � ' , ', � �: ." ~, �' " , � �' ' �, I . I ; :' � � 0 �� .. .:~ 7;:: . . :" .. '. . . . . .. . . .. i. .�L:'.i����f�Un_q~rs~�r~tary� gfJ~~iuuwe d&tyq Npvember 2l, 2003 �~no April :1 ,�zoo. J� . . .� ,� ..;y�.�.�J :.;. '. . : .� -.- . �. :_ : '. ~: .. ' '. ' I . ,. �:.. ' �' .: - I I� � �: '� ' .I �:�.". I : > � .~ . �:-"': :'(:�," .. �... .. )t .?::. , . ~H~- - �~. '?Df . . .:QLflA :PAL~CAdTINlUOU j :� ~ : AssociateJustic;e� � �. � .�.. ~. ,� : ~- 'i 'I ~ ,I . i. ;. I ;, ,::_ .. . I ..�. . 1. ,�.� ; . .... ,'

.. J . REPUBLIC OF' THE PHILIPPINES �/ ' I i' ,) 'I Court of.Tax Appeals ! QUEZON CIT Y li !1 ji: I t~� ,, . , SECOND.DIVISION II j: ii . . . " ~ '� 1 I1 I .:1. ' it � KUTANGOATO CONVENTIONAL C.T.A. CASE NO. 70l8 [; TRADING MULTI . PURPOSE II qOOPERATIVE, Members: i1 -versus,. Petitioner, CASTANEDA,JR., Ch'tirp,1~!:~son '' I!: , UY, and ;� . PALANCA.,;ENRlQUEZ, Jl ; II' Pr:omulg~tedIl: li I. � I.I f THE . . . S. E. C R E T A. ; R Y OF . . THE AUG~ 6 2008 II .� . _. ., ~. !I'!. DEPARTMENT OF FINANCE, . / . .~ �.Respondent. ~L/ to: f!l -t- I:~'. ! lj \ l 'i' . X , -- ---- -- ~ ---~-- - - ,. -~ - ~~-- - ---- ----- -~ --~~ ---~~~ - --- ----- ------ - - --~ -~------- --- ---1n!.; X . !r lj j .DISSENTING OPINION !,I,it�I~ '' ' ' � ' l, l ' ,I!..!,' . . 1: With all due ' . fjn.d it difficult to� C\gree with the majoH,I, ~y� . . ' respect, I '. II th~t thtrrice importatiOilS of petitioner are not Stlbject to forfeiture tJn~er li� �� Section 2)30 of the Tpriff and Customs Code for the followr;ng II mt}ocinations: I!II i '�' !: .. � ,) # !.

. ------------------------------~-------- ......li .......... !I '' II , .. .' ~ i ., '' No. C..T',.A. -.� C. a- s-:�e. ,. 7. 028.,' �I' 2 �� .' Oiss~nting Opinion' ; .. ~ ' ~ OrlilJn~ ,.~usinY.~~ J.-rig,~n~~ i.~�P~d PY. �th~ Nation~l f,qg~ � Autbqr~ty f-7~ S~i4 ~mthority ("NFA 11 on Jm}y 2002. ) al19W~ , petHicm~r: � . to yng~g~ in ~~R~tf:liUng/Wlwl~~.lling/Wf!rehowiing!Impqi-ting xxx 'S4pj~gi tp Issu~nge . ofNFA Permit Per. Transaction))? . (Exh;bit ''8 ''); Lett9r gateq May 20,. f-004 issued by_ the Dep'lrtment qf A,griqultyre 'ln9 Fisheri~lh Autonomous Region in Mt~slim . Ming~nao (''DAF~ARMM"), gi�anting petitioner authority/permit to undertake conventional ���. ;trac;ling of rjce �in the ARMM (Exhibit Hff"). ln said ,, �: Let;tyr gflted May 20, 2002, the Department of ~� 'AgriclJltlJre however stated that as long as petitioner's goods ~rt?. on a limited scale and in order to address the a~llte eponomic qistress of the inhabitants of the regio.n, and Plll'Sllant to the general welfare powers of the MMM and the equitable preferential rights of its ,i: inhab~tf\nts, as proviqed in the Organic Act, the Department has no .opjection to petiiioner?s epgagiqg in conventionai trading of rice within the autonomous .I region with th~ neighboring countries. However, the II Dep~rtinent has also provided that all trading acfivities !I should be s1,.1bject to coordination with/clearanc~ from I the.Dep~rtment of Trade and Industry-ARMM; 3. Lettet dated May 3, 2002 issued by the Department of l. � Trade . and Jn:dustry (!'DTP')-ARMM ��granting � I.' '' , petitioper special authority/petmit � 'to� 'eng~ge' �in.� � 1: I 699 i II~'l' .� ,. �T .. ~ .' i �I i I I .I i'

i:, '' .,. I li li i] I' :I II ii I c.r.A. I - ' c~~e No; 70~8 I3 1, I I I I r Di:;s~nting <::)pinion Conventional Trading vi a the. ~abuan.,Malaysia" . Singapore!"Polloc, .Maguim:lanao route (Exhi~it f'D'); 4 ��� Letter dated Jqly 31, 2002 issued by the DTI-ARMM ' gr~nting petitioner irnport&tion commodity cle&rance for ARMM l}Se, within l 20 days from df1te of issue j: (Exhibit "E''); . i! 5. Letter q&ted October 15, ~002 isstled by DTI-,ARMM 'I: granting petitioner importation �commodity cfc;anuwe /I� � for MMM use, withiq 120 d&ys from the date of I issue (Exhibit ''F"); ano I� � I !:' �.j,.j~ Lett~r dated January 8;� 2 003 i~sqed by thy DTI- II: 6. � 1 !1',.� ARMM . granting petitioqer importation com~modity clearance�for compliance, within 120 days frdm date � 1 l'l oclfea. ri&~nscuee ...; ~ . {J!x. hibit � ."G") . � Petitioner1S � importatio11 I1 was, however, c,onditioned on petitioner's ,lip1it~d 1;1ature of trading, ~uchas 20 bags of rice, per 1: 1 cooperative member. � .. � ' � � 1' :,� grante~ lto ,t 1 1: '~ From the foregoing, it is clear that the NFA license . I ItL' petitioner to engage in the import~tion ,of rice is subject to the H issua~ce . ofNFA perrnit per trans.flcti<:m''. ~f t 'f I ) I . . ; i " . : P:x.~mination of the .~�ecords; however; shows th1t petitioner failed 1 to pbtain NFA permits for its sub~e.g.uent Importations of rice� on iIhe '' - I follgwi!lll Qates: Q~cember 1~, 2002 for a total of 5,233 bags; Jan11a~ :3, : ~003 for a total of 4~157 ba,gs; Jan~1ar~ ~4, 2003 for a total of9,071 b'~s; . ~nq JaniJafY 26, ~00;3 for a total of 11,000 bags. ~I w I!/ l� l l 1' 7UO I i� i i� "' '

.) �~ ,i ,: ;;, I I " I I� ' C,T,f\., Case No. 7028. �' � Dissc::nti11g Opinion i4 j"; l~ i But petiti~n~r asse~ts, 'to ':"hicl~ the majority conqJrs., that fhe 1 .. ,) reqyireinent ,of th~ NFA permit �was ,dispensed with, in view of the ~- . ' ,1 o 1� I II I ' ' (.� .~uthority granted by the DAF~ARMM, allowing petitioner to engagyl:in i cqnv(?ntionf!.l trag~n.g of rice within . ~he autonomous regwn with ~be neighboring countri~s. I. ' ' ' ' . ' ' .. ' ' ' ' ' ~:: ~ . agr~e D~ ' W;th due respect to ;he majority,, I do not that the � ARMM,p~nnit di~penses With the ll~C\'ssity of securiril NFA pennitl ~or : . ~I every impprtat!on. of petitio~1er. L I,, . First, the. ~et!er dated May40, :2002 issued Qy:the DAF-~, . ~11Y9ke4 by peHttoner as the authontY:~pemut �to undertake con;entlj~al traqing gf'rice in ~he .ARMM, provide� that "xxx as long�as petitio~~~'s &90\!s ar~ PII .a.limit~\! scale lflP> thl) pepartment has no o!Jj~ctio~(to . �petitiQner'~ eng~~ing in conventiqnal trading of riGe, withiq '1!bl' auton9ffi9l�s re&ion With the neigqporing countries'' (Exhibit "fl"J. F4rtm.'-r? .the l~tt~r st~tes: J~However, t.h~ I)epartJTien~ has also provjded th~l0[!'all tnu.ting ~qtjyities �hollld be s~lbjeciect tq c�oordin~t.ion witP/~lea~~n9e 4�~rn �,, Ii i .. . :. . theDt!~artmentof'f~aqe and Ind\Jstry~AJ{Mlvt (Exhibit "H''). I J! .T!!liS, 'ip a L~tt~r datetl De(;emb~r 26, 2002, petitioner wrote tq~ ~~~e ,, �. OThARMM, .reguestil}g for a specjal authority/permit to engagl ~ !� ,I ,f, ,, ,70 l I'I,: if! i!

) ~~~: : ! ,' I . ii '1. il,I ,: �~~ ll I ' I ,,i!.� C.T.A~ No. 7028 . - ' . ,: . ~ - IIi' 5 Case �� �.. .... . ,.� ~- ;�I ' ' ' .. Piss~ptjng Opinion ... ! !~ i 1 cqrw~ntiqpal trading � vt~ the Lpbuan.,Malaysia-Singapore,pou~fc, :' 1: Magll.inqijnao fl;l\ll~l ln a Letter �datrd� Jcmuary 8, 2003, DTbA~~ 1 . . !. . . j, is~Jl~A to p~tjtioner an importation.'commoc!ity cleararwe, condition~d Wn . I. l i- ~e~ition~r's: lh~its;d .nature of trfl~ing, such as "20 .bags of rice ~~tr � �. yQOf)erativtt memb,ern. � �� � .I . fmm fue f<lregoin& grarts of ~11thotity/p~rmit to petitioper~ [~o enll~ll~ O!l 90!)Vent,lon~l �tr~<ling/importation, .issued by the DAf,A~M /I ang ])TJ~I\.R.MM. ,itis glear tbat p~ti~jpner's .importation~ mu.st by o~1 ;[. a ~c_. ~le. limit_liQ ancl subject. to 2o�bags ofJ;"ice. per cooperative member. 1� .. ~x' am.inatiop .. ~f d Inf9n11~l Impo~t IJec.l~r.ations However, of .the Entrie~ (~:HDEs") of petitioner's i~portations of rice shows that 1~pe I' , importations exceeded the limita~ion provided: on a limited scale an~ lf.O bags ofric~, per ~opp~;rativ~ member. . . .. jl .. . �. Qn ~ucces~iVe dat<;s: Decemb~r 15, 2002, Janua? 3" 2003, Jan~r �' 24: ZOO~l and January 26, 2003, pet1~10ner mad~ lmhm1ted Hfportattonfiiof . .. . I .. II ri9e for s,;m bag~, 4;157 bags: 9,071 bags, and 11,000 bag$, respecti~,'tly (E~hibits K 11 " to ".](aO. ", "M" to. ''M-23", '�',0" to "0-30", and "Q. " to "Q-J"Eli:") . _Th~ fi:~q4~n<W of~aid importation~. w_.hich :is three.times ina.~onth,.,.~_[�_'!h -~. . , . I ' hvg~ voh.lme/quantity. cannot be con� sidered on.a limited sc~.lem, 111' � ',/I. ifv- 1,'1 . j: . [: ! : i Ir-' �t I I I' i i:

l�: lI !.. I; II C. .T. .A. Ca'se No. 7028 Pissenting Opinion li I' . I.I Furtherm01;e, the Informal Import Deol~rations Entries reveal t ~ ~t . . � I . petitioner i~port~<i more th~n 20 ba~s p f ri~e, per cooperative mem ~c ., ;: ~s shown b~low; i' I � Pate Entry No. of Quantity Allowed . Excess Exhiri. ;� � No. memb~rs of per I' ~ ' .. Rice/Bags Pet'mit lo: ' Pee. 15,2002 050~0~ 10 '205 200 . . 5 s~cl~ "K.,.z4i'1: � Dec. 15, 2002 052, 02 10 - ~10 200 10 S~4,':~~ "K,2f' :�� .�~. D~G. 15, 2002 053-02 10 215 200 15 sacks "K-2 ' (r ,) ~ :� �.:' Dye : 15, 4002 054"02 10 205 200 5 sack) " K-2?' 1 "K-2~'~ ' Dec. 15, 2002 055~02 10 210 200 10 sa. ckl s 208 200 8 sacl<~ "K-3 I,( Dec. 15, 2002 056~ 02 10 I. �- Jan, 2, 200~ . 021-03 1 190 20 170 saCl<S I' M~ ~r1: 150 20 130 sacl<S " Jan. 2, 2003 02~-03 1 186 20 166 sacl<S ""MM--~31f,' Jan. 2., 2003 024.-.03 1 II ' I 100 s~cl<S ::g~;~:~� 7,00 600 J<m. 24, 2003 048-03' 30 Jan, 24, 2003 I 049-03 30 750 6.00 150 sacl<S . .I. .695 6'oo "0-2f '' .�.Jail. 24, 2003 050, 03 30 '9s sadci I I I' Jan. 24, 2003 051 -03 30 750 600 150 saci<S "0-2~':' � 'Jan. 24, 2003 052-03 30 650 600 50 sacl<S "0-2~'f "0-2 �r \. J~n. 24, 2003 053 ~0~ 30 700 600 100 saci<S j; J11n. f4, 2003 054-03 30 I 690 600 90 saci<S "0-2~';" .~ Jan. 44, f003 055-03 30 . 640 600 40 sacks "0-3 ';'' 680 II� 80, sacl~ Jan f6, 2003 056-03 30 700 600 600 100 sacks : J~n. :f(), 2.003 057-03 30 . "Q" i'l ' .,. "Q-1 �~ J~q. 26, 2003 058-03 30 650 600 SO, s~tl<S ' 'Q::21'! - Jiin,. f6, 2003 059;,03 30 680 , 600 80.sacks I'Q-3 j'i. Jan.. 26, 2093 060~03 30 600 80I' s.aci<,S, "Q-41'J : . 680 ; 600 . 10'0 saci<S ''Q-51'! � :�' Jilll, 26! 2003 061 -03 30 700 \ ...~. Jan~ ~6, .2003 , ,062-03 , 30 650 600 50 sacks "''QQ--6t qj'�':~. 700 '600 ' � ' too � sa~lcs' . -.(� ~- J~n. f 6, 2003 066.,.03 30 680 600 ".Q- 1~I~''~' 80 s~cl<S .: ~;,~,,_ :J~n, 4.9, 2003 067,.03 30 . ' J~tn , ~tl, ~Q03 068~03 30 680 600 80 S~C::l<S ''Q-1 i ') : 1~11: 49, 2903 750 600 150 Sf}~l\S 069-0;3 30 HQ-!BI l��' .. ?O .,, . J~q. f6, ~ 003 070, 03 780 600 180 sacl~ "Q-l k � .no ... J~n . 4(), ~003 Q7h03 30 600 120 S~CI\S "Q-1 ,':' ~ .I !\� n I� I I� I H .. lj . J ' . I. 1 I~ ) . I. I I ii "

,j' i; I. 'I I� to I I I I I''I, I! I'� I !. .) 'I ' !! I, C.T.A. Gase No, 7028 \ II 7 I!!ii: � , Dissenting Opinion ~- th~ v~~ ' ' � � frol!l � foregoing,, clearly, ..petitioner vi:olated the fll.lthoritYip~~it gr~nted to it by the above gbveinmel1t agencie~; Wh1l'~h ' . � ,I itcqording to petitiorwr, ~aid authoritiei;/permit~ were in lieu oftlle ''Nr~ pen11il p~r tran~Act!on", required Py the Grains Busines~.Lic~nse.i~sue1!1o !\ by th~ .NFA O!J June 77, , 7002 ~hibil ' ''B'~. Bavr g rnfrmgeq ~~e ~opqitions provicl~.d ip said atlthof.� ities/pennit& gnmted, petition~ks 1 II - . impbrtati~ns ofrice were made �in ~onhl:a.venti"~n . . � I! ,., : oflaw. ;: Second, - ~micJ authorities/permits issved by ~I ~e nptwit4standhlg DA_f..A,RMM and DTL-ARMM~ petitio~er i~ required to obtain N~II'~ , . I permit �for _its every importation :of rice,. specifically, on December �1 ~ ' ~00~, J~Hl~-tary 3, 20031 .. January 24, ~003, and January 26~ 2003 . ~~\e j:,, -. zqq. .. [; . �. . ' . �!llll,~ iS JP~~qa,t~4 by tlW ~ra,ins ~usin~ss License pateclltme ~7! [2 is~~~q by the NFA to petitioner, .to wit; ''Subject to issvcmce of N~II ~ "� . . �. .. /1: . . . re~it ~yr 'J;'rans~ction'1, PD 1770 provides that NFA sh~ll h~ve itJe � � ppw~w .tq ~'impqrt/efCpQrt or � ,CflUSe the importation of fol~iq �- proguct~/commoditi~s ~n~or r~w .mate~ials, equipme~t. and facili1~~~s peeded m the m~nufflcture/processmg of food commodlttes, as may ~e . . ��� I�, . Ij'�' d~t~nni11~<1 hy th~ Council, and as approved by the Pr9sident of we . ~�� ~� PhHippin~s.'1 (Sect;pn 7 (c) thereofJ, . Since NFA has the power to cau~e ~ ~! ;e , I' � I. . �.� j, 1: '' ' ,, ' I ' ' I' I,, .) II IlIj

I ;�� ' ilii'i;' l ;i -. !: C.T.A' . Case No. 7028 I' Dt�ss~ntJ�ns. 0. pu� u�on l i: !I;l,~ 8 At III!i ~ .mwprt~t~O. l10f.L0QA4 prod, u.~t.~? $UCh.� as q'c~~ 0 neC((SSan' }_y h AS t'he ppwe1l~[ilp It , ��' . ". - .!� . I. I: r ��:: gr~nt imthority/permit to import :. ' dee aiid ' > to '' ' hnpo&e , eII ,... ;� r!.c;e js n~t � ~ prohibited comm.odity1 it is nevertheless �a regula I('d � i lj ~ommoQity und~r $~~tio11 Z.of Circular 1389 �of the Bongko S�ntral ~~g l'ilipin~. fr~~~n Accon!ingly; its impof(atiop requires clearance/permit f' ' ' 0 II approprt~tQ g<;>verm1:wnt Ageiwi((s; �which �in � this case, is th,e N purS\lflntto PD 1770, " ,. II .. ' It c~~not be armed b,Y.petitioner that 'tinPer RA 9054, other,~.~e - "ill: [rfe ' ;,; lqtown as ."An A~! To Strengthen and ExpantJ The Organic Act For 1 ,: Purpf.~._e . Autonomm-1s Reg. ion In _Muslim Mindqnqo, Amen-din.g For the I~I . . � Repu/>lic .Act No. 6774, Entitled 'An Act Providing For theAutonomt ts R..~,gim1 In Muslim Minc/anCIO ', . 4-s Am. enc/ed", peti.tioner is no lon~I1Ie.'.'r _. r~quin~q to obtain NF~ peqnit for its ev~ry inwortation of riT' e. I� 1. Section 31 ofRA 9054 provides: !~ li:. �111 l !i "SEC, � 31 . . B~rt;er and Gounter Trade, - Subject to I'~ existing l(lWS, the Regionl:ll Govemment _should regqlate j tra':iitional bfirt~r trf!de . and GO~lnt~rr-t~oade . :yvith Inq,op,e$ia,_ !1 Mfll~ysif!? or!3runyL !The goods or item~ that are bartered or II counter.,tr~~ed with the sai~ countries shall not be ~old 1 ~lsewhere . m the ~ountry Without payment of appropnate II!. . .. . ' .. . Ofldil . � customs or import duties. )'he Dyp~uiment of Finance shall, Iil '' ' . /i 1,,1,1, .,, ., r/!.' I1I 1':

) ) i:, j', 1-- ii �j ! il ![: ,:,Ij��.�� ti ~; li 9 C,T11\, C~�e Np, 7028 II; J)isseotiog bpinion I[ l� i'i in ~gn,sulta.:t.ign with the Region&l Governrnent, promtdg&te 1 the rules to goyern b~rter aug counter,trade withi!l six (6) 1 1 1 . months from the approval of this Organic Act." !! M. . - :1 .i: . . i'lI Pqrsl)ant to RA 9054~ t~~ Regto11al Govemment (ARMM) s~~ll , . .. reg.11Me the traditi~nal batter trade. and counter-trade with Indonei~~' , � '"l! M~l aysta and Brunyt1 subJect to ~~1stmg laws. � �. ..� . Considering th~t Secti~n 31 ofRA 905_4 catego;icall; ~roVides t~t .... the Region~! G~vemment regulation iif th9 :traditio.~al baJ~r. trade trrd , ; : counter-b!lrter trade ,with the ~eighborin~ countries is "subject to exist~~g laws", tQe~ tile !l-egiqnal.Governrni:nt rnqst r~&l!late th~ tr~dib.o?alba~i'r �'. k~. tho~e Regi~~f~lla~s" .trade1 taking intp c;o11sideration the existing laws. Said "existing �hayingno Qualifica(ioWlimitation to pettaining only to the .:_ .;; Government, the rule tn statutory constructwn dtctates th~t they perta1d!to , ~aws enfor~ed ~f� the � � . 111 eifsting ii:t the Republ.i9 Pl;ilippipes; This, thereforf�, jnqlfd:s .. . I� 1' II \ the above-mentioped PD 1710. , I' , . . � !.J . tnc~ 111 th~ NFA liq:~nse/pennit isst1ed to pe.tttwner1 � lfs importl:ltipp of qc;e ~s . ~'~ubject to � NFA permit per transactio :Ib', ~\'p~rat~i~PI'Pifi~ NfA p>rmit, Tlm~. Mli(ioner is duty bo!lnd to gomff!y .. � with said condi.tion ]>y obtaining NFA license, not necess~th fl ~�b II.1:,'::!i� !i !1 !~.: ,I��:

I~ ' �' ,.i1~1 II'I . C.T.A,. C&$~ No. 7028 II 0 � Pis~epting Opinion 'I . )'l~tioq!ll G\l~e~m~Pt, but with tbO Rcgi~:"l. Govern~ent~ .".s.~<'nd&lrd $~c;ti~n p.en~.~ ~t :_y . . Rl o�f�f0 905.4, Petitioner's f!lilure to.secure the NFA :! for lt~ nvpprtatlPJl of pee on December 15~ 2002) Jam.lary 3, 20 . 11 . 1I ~ )flntH\ry .74, 2003, � and January 2.6, 2003, � therefore, contraveneq e gonclition provided in its NFA perrr* clat~d June� 27, 200?. I 1 ��� II ! considefMd not be I � ; A~cordingly, � while , importe4 . rice m<'y ,, ''meich. and.ise. imp. ortati.6.n1-~, .. Ill "of p1~�ohibited �they thetn' selves f.all wit.hin' tIIl e. otlwr ~"t~gory of mer<;h<'ndi~e . imported "contmry to l<'w", beca~. e .) re.gtJlations. issue. dpursu.ant .to ''custp.m )&w" forms part thereof. The tfr �. ~'custorp hnv?' irwludesnot only the provii~ions of said law proper, but a~j b ~nyregulations ma(!e pursuant thereto: like the Central BaiJk circu)f~� .� whigh ~!so )lave t\1~ force and effect of Ia>: (Santiag~, Tarif( a.nd C!i$11~ ' . th~~e . C()dt! Ann9/qted, JO()Q (!d., pp. 178-179). Consequently, violations of . . IJ �. _circlllars. ~orne within tlw purview of the Tariff and Custorns Co �' . S?9(fon 'ZSJO (f), which authori~es the forfeiture of '1any articles ~e �. ~.lmport~tion or export~tion ~f w)lich i~ effected. or atte:"pted contrary ~o .� l~Wl? (GonzqJq .Sy 'J'rar:/ing vs. �ceftra/ Bank. 70 SCRi ~88). . j On thO&e base~ alone, petitio;er's impdrtation of ric~ is s~bjec~ l o !ture qnder Sgc(ipn 2S30 (f) ofthe Tariffand Customs Code. I &/4 ,., tl 7 i' I '� i. .) It II i

'.1 ,, � C,T.A. Cas~ No, 7028 {)issentin~ Opinion ., , ...:. ;. There are Badges of Fraud � by � ; . ;:�} .Cm~miit~d 'Petitioner~ in .. . . . . . . . . . �� -....... � <, ,. ', '. .. �� �. ;';\ __ Co.n....n.e..c. t' i"on��.�-�. � with � the ' . ' �. �, ('' " ' :( ~- Importqtion o(Ric~ . � �I � �� . �������' �. . . l:f" Fir~t, ~xamin~tjon of the !3i11~ ofL~<ting Nos. GOTT~60Zdi195 f\� . . . �� o COTT�60Z�I49950~. COTT-60Zd499503, COTT.60Z-1499S04, ~ ~~ . � :!;;G'�C,� CQIT. 60Z"l499505 (Exhibil$ "FF '' 1o :'FF-4") shows that there ~~ rnis4eclarations of the rice shiprne~ts~ a.s corngrits. Petitioner' s witn 1~s~ a!lmitte~ 1~s . OrianQO fla<!oy, that in(!ee\1 petitioner declared the rice . ~ .. . � ~~� . s~id ~. . �. COf!1Wits. however: expiained that scheme was reso*d to 1 petitioner beca\.lse of the previous experience of its shipment having bdf[' ' .' . I . . . ,seized at th~ North f!arbor, despite the correct declaration in thv shippltr .� . �.: . . Q09t.Jment$. Hence~ petitioner decided to use corngrits as the descripti/f�[. . . I , :� of the cargo, so a~ not to suf~e~ the same problem as in their otf l r . . .shipnwnt$ (Exhibit "1T"J. Said reasoning, however, of petiti~ner, is bu~ a . . . 11 shallow excuse. Notwit~standing petitioner's explanati?n, the ~1t ~ .�:.. � remains tl~at in it~ bills.oflading in transportil1g the subject rice ffom 1l~:1b, ~ I ', .' . . ' I port of Cotabato to .the port of Manila:� p~ti"~ioner misde.Cla;~d its r�r~ .; � ~.� �shipments as comgrits. ~ .: ! ,. . I Ii . i 'lOB� " �"

�ri , C,T!A. G~~e No. 7028 � I i2 ,, � I o ' Piss~ptiog C3pioioo .. I . I � . Sesond, petitioner under!lecl~red the n~mber of contai~er vans ~n . 1 ~h~ bi-Us -Q-f-l~dmg ~!-p-q coast_-�~ng-. mamfest. Comm-an-d-er Tranqm_l-mo Pat~,n . .. ..("Conunander PaitP!l"), fotmer SMion Cpm111ander: .Philippine Col1 t �������. ~~~rd B~tangas, t<;S,t!tled t)l~t ~nl~ 5~ contamer. vans, 1pstea9 of :3, w~ e ��;� .,� :.: � 1Jsted m the coastmg rnamfest of the mter-tsland vessel); MV Nof a i.' -::- -- 1 :. oc enhora de Fatt.ma. � .� � I' II � Third~ the dysignation of entities, such as Agro Fatni) Beri Fa" I , < I,as Byenas f"flll, :SCC Farm, and/BI)fbour Link Transport, Inc. ,1 s ,_ ~onsi~~~s _h-i ..the bills of lading (Exhibit~ � ''FF" to' . ('FF~4")~� h~s �not bl n ��~uf:fi<;;iently explain~d by petitioner, .Instead) the testimonies : f , . ,� II pe:itjqn:.r's witn~sses _are . contrac\i,<;:tort.. -Petitioner's witness) Orla~ ; o _ ' -, .a.fldgy_,_t~ij-tified tha-t petitipp~;r usy\! tlw na111es Las _Btli_nas-.Fann!BLfr :o _ "'''"'�'"''''-'"'' sec.~ FarmJHLTI) Ben FarrniHLTI, Glnd Agro FarmiHLTl, because I~ e ..., - I- ,.t'ii. -J:.~~Hi;r,,�~-=~_,-n1_.u_,-c~. r~gularly ~hip comgrits from Cqtabato to Manil~ (E~hibit " . �i :. -, I( . . 'Pfi~~~ of those GPP~lgpees �were merelpu~ph~d by the. cha1r~~n p~t\tu:m~r (f$N, datf!d 13 Feb, 2003, p. 34). In thds;e btlls of ladmg, petttwn r .. ' ' '' . ' (UX ,. ! ~ ,., () 9 ('

... !'[� li:i i �' 1 11 I'� �il � C.T.A. C~se No. 7028 �� � � ~ I':i13 Dissenting Opinion IJ : ' . ' .. �. . III ~� ' WflS not n.amed as importer.:consignee, bl.lt \Tierely .inte,ryened,,as the rel 1- � I1 � party-in-interest. ' Ii t~~tifi~d wa~ ~e Fourth, Comman<ler Paiton that there v'iolation of r~p\~ .. �. the . .Oath of sa.~eT D~p~rtpre. I. f4 m ortlw vess~l st~t~d Mast~t�~ ll ' y~ss;e) came J1cmll I!gjloc, Cotahato. j estmed to Mamla,,not to Batan1 9� .Wil\' spch route, tl1e. ve~s~J will not p~s by B~tangas Bay An:a: unl[~~s . then~ i& typhoon, which at that tim~ th~re was none. Said clyviation inJMe ,rf fQ\..lt~ of the carryipg vessel :~md unloa~i~g of the shipment in the Por 1 B..atang. ~~? was ma.cie witho4t prior -~wd.c_e of entry or .clearance from ~[:e . . . ... . I C\l~tmns f.lllthoriti~Ys ~ �. . �' �� � .. I . I Th~ fqregping cjrv4mstf:mces� ar~ indicative of badg~s of fr.l:\l.ld I l 'h . ' II.. � .. th<t p~rt ofpetitiQner. Tho4gh, this Co\Jrt iS, aware that ihmd gontenwt~1 : ~ .. . I. by lt,\W �i~ actuAl am! qot constmct~ve, 'this Court is also cogniz1mt of...:e ~VlQ(?O~e? bl.lt may be. tnfe.~T~d fron1 the ~1rcumstances of the case (Repuf~ic v~, Qp~qles, JJ SCR,A Ml). /i I! '!Jw �~ajorio/, howevd-r O.pine~ that the enumerated circumstant:�s ~f~ not rel~vant ~n9 material to 'the forfei ~u;e proceeding providect-1/ h '" ji Sec(jpp .?5~0 of ;he Tariff and. Customs Code, in as much as ie ! !)d tl ,(., .l 0 I II! !

..~ 1'1/ , ' l�iil ,, ., II / ' ~ �� I '� ., 1!1 Ill C.T,A, Qasy No~ 7048 1~4 Di~~<;mtipg Opinion li , M iliJPQrtation "'as a)rea.!ly�t~rminat~<l in instant 10ase when :tlw the. abotrr- .circuws!llnces \'\ere co~OJitted, With due respect, I do ~~ Jn the case of Cqrrarq Marble Rhiltpptnes, Inc. vs, Comrnissio1 r of 9Wf9m~, ,3 J3 S<;:RA 162-4~3, th~ Sl!:pr~me Court ruled: i1 ' . ., fprf~H:~:nth~~o~~at~~~ c~~ls t1~~;~~~~~Jora~~~ct~~~~~r:J~ 1/. sigm~9 Qat~. p~ey� No, 5136; on .10 �April ~987 eviden<?ing .I withd.r(:l.wat of Lot' No, � l5 . from customs custo<iyr ImpQrt~tign . js de~med. t~rrninated upon payment of duties, ta~~s . apq othe~; <;;harges .due or secured to be paid upon t}le artigl~~ at the _port of entry, and upon the grant ~f legal permit �for withdraw;;tf; or in case said articles are free of d4tieS,; tax.ys, and, other charges, 11ntil they have legally left the jurisdjgtH:m qf the q1storns . The forfejmre of the svbJect m@ghinerieshoweyer1 is not qepend~nt on whetl)er .or not the . .1 . importati<m wa,s terminated; rather it is premised on the 1 illegal withdrawal ofgoods from Customs custody. 1� T}lvs.~ .r~garctl~ss of .the t~nnination of importation, I Qu_s,tgms authqriti(!s m~y valictly seize goods which, lfor all I in,t~nts an4 purposys,_still belong to the governm~nt. Jhis is so be?a~se � forfeitur~ takes effect imr~wdiately up?n .the ! comrm~swq of tJw offense. .The forfeiture of the ~UbJeCt ,I machineries~ th~refore~ retroa~ted . (sic) to the date they were I( li II 'may ill~gallY � �withdrawn .from .Customs. . custody. The II II gqyemment~s. :rtght to r~covet the �machineries proceeds from its r~ght as lawful owner.� and possessor thereof upon lj II abangonment by Filipinas Marble. I 'such" right 'be . /1 � asserted no .matter into whose hands. the property�may have II c;ome~ an~L.t4� conqemnation .when obtctined avoids aU . 1I � intermediat~ . aHen~tions.. To satwt!on ~ytitionerl!3 possession � �of the prop,~rty w<mlP. be .tQ �.c)ose ,.Ql1r eyes to acts of Jl 9efravc;lationpractice(! ~pon the -povert)ment."I:JJ AI.! II . . ~� I l' 1�1i. !i . I II ., I I! ii

!) I< "' /I j� II �I s G~T�A� Ca~~ No. 7028 :pj~st.mting Opinion I l Punru~nt �to . the foregoing � ruling, forfeiture of . the subj ~~t � ~ �� m~chin~ry ~1s .. is not c:lependent on wheth,r or not the importatioll . ~� t~riDinat~4i pr~mi~!'d frtr ratlwr it is 0!1 the illegal withdrawal ofgoods ��.. �,, Custom~ custo{ly: Thus, re~~rct,kss of the terminatmn of: tmportattrw ijd Customs .authont~ys m~y ~ahdly ~eiz~ goods which, for a~l mtents 1t" purposes~still so beca~lse belong.to the government, � This is forfeit#li/'e . takes eff~ct imme<liately ~pon the co~miSsion of the offense. forfeitur~ of~h~ subje,ct machinerie.s~ ther~f?r~, ret.r~a~t~d ~?. t~.e .da~e .t~fY : '>I� IJ ., � wer~ HJygf\flY withdr&wl1 from Customs custody. IIlI;i . In tlw preselll qtse, the sttbject rice were imported contr!lfY to Thus,fprfejture of the said irnp9riatio~s ta"e,s effect ir,n.mediately up~ h. , ,. I , : I .I � I , I :~' ?'o~iss}on of tho off~qse, thM is 1 upon entering of th? subject rice ~ :e 1 tern~rial, juris<Jiction of the P~ilippines. . Thus, J~qtwiths~andng . p~tJtloner s p~yment of the d~Jttes and taxes of the subJe~t nee at ~i�e �� � .. II �" .��� !lme.nu:of,C\1.~tom. �s.�f'olloc Pmt, the sa~\' m.ay still be ~aliQl~ .sdzed elih ' . At$, .�.�. If ~atd nnpprted .n~~ was already ~nrouted m a �coastwtse trad~g. I' I . , �petiHon~r f!liled, l(l show proof tllat ~aid ripe was removed from ~~ . . . . . . (#1! ���� �� Burtf~4 gf Cpstoms. on. th~ hA~is of~ )ygal permit for withdrawal. :' ..� �.' '' ~ 'l ,.' . �~ "' �1 .:. .' ;' i '

!:,. �I I i,! .. ... ~� ' . . . f!l \ I' I. j! 'I C;T.J\.. Ca~~ No. 7028 /1 6 Dissentirg Opinion ', II '� t I I I ' ' ~~ ' II . Second.I ssu' e �� :II1 � - �� "t/', ��� II 1 ' ~'icong. j~sqe . . th~. . . Th~ Decisjon November is whether. dated ~003 is~y~q Py th~ Secretary of FiUanc~, acting thro U11der~ecre;ary ~~I . . , , . I,. Om~ia M. Pulido.T~n, was rend~red beyond the 30-ry regle!ll<'!l~jr� �. peri9d. . �� � .l /f I 1 � Re~ords show th~L on October 6? . 2003, the date relied � iI y. upon petiticmer, fl~ the n~ck;qnipg period Of th~ COllntiqg of the 30.,.day peri~ :, . : � II . was ttw date wh~n the pepartment of l.inance, Revenue Office, Custom~ � � � � . II � ~net Tariff Division? r~ceive4 the CAse .fol{ler o( Batangas S,I. No. 02-1:3 ~hil>i� ." W'J, It i~ ngt the date when the Secn:tary of Finance, or in ] s C&~~\ Unclersecret~ry Puhqq.,T~n her~~lf �receivecl said case foldj: �'� . I . lj . I Sf:cfion. ~.3. J3 � Tariff a~q CH~tams Cod_e: specifically provides t t ~I I : of thf1 1 � ~:~ rec!>qiiing dat~ ,of the 30-(!ay period shall be from the time of ~ � t: 1recetpt of records of .proceedmgs by the Secretary of FmancfJ 1. 1" ' Petitioner.failed to establish that on the same date, October 6, 2003, . �. Secre!ll!Y ofFin7(;e, or in this case, Undersecretary Pulido-Tan .receivt .� t4e recorqs of th1s cas~. Hence, October 6, 2003 cannot be constdered s �'".':. . w . �:~t;\)he r(lckon~ng period for the counting ofthe 30-day period. /'> ' _,;, ~ . .. . . . . .� �I 'li J 1, I II I

!I� .,, I' '' I C.T.A, CA~e No. 7028 lj7 . I)iss~ntin~ Opinion . . II . . . Mo,ryoyer,r~,"\lrlls show tlJ~t ~frqr(he receipt on October 6, ~003 ~f . (h~ g~s~ f911Jer of ].IA(iffig!IS S,I, No. Of,Q~ by the Dep~fW]ent. of Fm&n~ , Qffi~e, \;I!~Wms ~ncl Tartff DIV!S ton~ 011 October 29, 2003, s~ 4 l~tt~v r~q4jr~~ yonnh.~nt Und~rsecretary fol".~r was a!lamretQmed to ttJe Comm�ss1oner of Customs, wj�n .was . �to on. Pvlidp,.Ta]lS t . .. . I fjn.dings containeP .jn t}(e l11clors~ment (E. >;hibit "X '.) , Hence, <!\Iring 1~~ P time whrn the ca~~ folder of this cas.e was. -~ot withfn the (;ustody ~~ f lJp.ders~cr~'tacy Pulido-c1)n, ~nd the, comment of the Commissfoper -~ f ..:"' ' . . . I .: ' . Gustoms has not y~t been received, Undersecretary Pulido~Tan cannot ie . . . I a . I .e~.peP.t. e\1 ~!!d .js QP( Q.bljge(:! by Jaw torender dt;cision, astl.Je case Jijs ._,_.,..._..,.,.. not yyt b~~n considered submitted.for decision, .Due proc~ss . dema9 !s give~ ~n t)W the ather partymJist lle opportt1nicy to explain itsside bef4 e I~~- w th~; case is .. submit~lj for decision and a decision isl rendered deeme!l the matter under revieW. Technically, iq the present case, it was only ~ ..,. . ,,_,_.,",~ 1~, . ' .20q~�, when the . of Customs returned tlwf ~ Co,mmissioner . .. .. ' ' . . ' ' ' .. ' ' '. ' ' ' ' . ' .�it f~~c. foldyr to tlw Department of Finance, together with his explan~tio ~ (~;~'~lnoor~~m~nt) (Axhibi("Y'~, to Undersecret~ry Pulido-Tan's iindings i: '� ~n~ Iqqpr,~em~nt th~t tlw)Q.,.day perl~d to-decide unqer Section 23 � ' �� .i . l I �I j I

I. I ' .,. '. � ;: CT.f\., C~s~ No~ 7028 8 Dissentin~ Opipion ,, ~~ only on N~vember 14) 2003, that the case was deemed submitted r ... ,,�� f ,,I1 , ! ~ -. � decision. Hence, Unqersecretary Pulido-Tan pas l.lntil December . ". ;200~ with~n whi~h to d~cide th~ ~ase. The . dated November tI !l' , Decision . 11; 2002. (4th Indorsem~nt) having be~n r~ndered before Decerr\ber 14, 2~ : B .! ' . � II .' I is, therefore; well within the 30~day reglementary'period. Ii � . tie Fqrth~r, vi~w ~t~ itis,rni' hllrnble th.at Section 2313 of Tariff C~torns ~a~e~ Whkh requires the SeCI�~ta~y of Fin~c-~ t?: .~en<ler j,�t l: , d�cision �w.ithin ~0 days from the receipt of the records of .'e progey(iin~s~ is merely directory. l! . . I . Strictly spe~king, the. review l>y �the ~~cretary of Finance of t e 9~~cut1ve i" .:<: .~-~i~iol}. of the Commissioner of Customs is not a j udijial revi~w, sinre the Secrell\ry of Fmance bol<ls an and not JUdtmal o, fe 'Je~ent As~ociatiM r~e ..(�o,;fh<rn Cross Cement Corporation vs. Ma?Uftict"rer; ?I of Pqf/ippin~~. 465 SCRA 579). The Collectgr of Customs, Comh1is~ioner : f ����'�'�'"������.� GY&tQms Anc.l Secr~t~ry of Fin~nce ~re. fll~ part of the executiv~ branch~! f_;f ' .' . -.; . !�! : :: tJw OoU~c,tor of Customs rules against the government, the ex~cutl�ye . ~f\pnpt v~ry. well bving ~4itin court.s agaiqst itself..-".On the other hand,. i � ~'II. �.� � ' a 1 1~ ��.�. privf\t~ p~r�on is ~ggri~v<td by th~ d~qi�ion of th~ Collector ;of Cu$to �., .� . '- ',, . . . �, .. SAP hflYe .prqp~r fyCQurse b~fore the cow;ts1 which POW would (1M_ ..'I ._ ;-J~ I I IJ 1,,

't I li C.T.i\. , Ca~e N9, 7028 ' ., il Dissep~ing Qpiryj~n I I i '1 !9 ... ... II callt:d.. upon t.o Y. x��.Yfcise )ll<licial .rev.iew over the �.ction of the execut !;e hr'lngp.. Since th~ atltom~ti<~ revi~.w b;': the Secreta,ry qf Fiqance of �Ie . ::, . . . I: ;::;::~:::::: ::~y:::::~::~:~:d::�::: :::T~:;tp::~:: J~ b,~ i.~w ~ ;~nda~ory .~~ to'appea\ pecisiou is ' .. t .' � . ' cannot. be apJiie!,l, WitQ~ m if: � ' I'll �� r~a~on that the p~rio4 to- render 1l veci~jon over s"id appeql c&nnot �,:e l'nfor~eO th~ tj � s'.tric'tl.y. ag,...a�� iJ' lst neview. j.p. g b!'ody, Thus,' the ma'jority' view :t ,. ~: "/-�.����.-,..,.. th!) Pec.isi9n dated October ~~ 2003 /,:the BOC Commissioner un~ 'r F . ~nHollmtlc revu~w qy th� Secretary of Fmance had. alrea~y be~ome fi 1 .) anci ~~c;~utory �for failure of the �Seprytary of Finance to render e1 l . ' P~c.isi.on within the ;?Q,day re~Iementary period cannot be sustained. Finally, the general rule is, �wlwn a $tatute specifie& the time at, r �� Withil1 ~hic.h an A9t i~ to be dot?e by' a Pllhlic ' officer' 'or '_body,' it is I � � i; genemHy held to be (.tjregtory only as to time, and not mandatory, unl ; s �' i� . !; tim~ is of the ~~sence of the thiqgs to be done, or the language of e ..� . i . Matqte contains neg~tive words, or shows that the designation of the ti 'e . �was int~nded as ~ - limitation of power, authority or right (Philip~re . . . I. '. !lssQp{ation of Free Labor Unio~s. et.. 4l - ~s.� Secretary of Labor, 27 SCRA 4 9~ '� with the general fllle and taking into considerf\tion e (HL .) � 'i 16 I. I,, i.!

'! C,T.f'\. C~s~ l'fo, 70f8 Disseqting Opinion ~omp!~J>i\Y 9( til~ i~&\le&II\vplv~c,Lin :.~~ instam case, the ~0-day pe1 :d . for th~ _ Segr~tary of fman~e to qeclde the tnstant case, ts me11 y 1 I I ., ' ' gir~c,tory, We�ll"~iettle~ is the J.Vle th~t .wl1en t.he higher considemtio11f f j4Mi~e ~o 9em~nqs, teghniy~l.nl}es may be relaxed. This ideal peco . ;~s I Oj clJrI~ all the mgr~ imp\'~@tiv~ wlwn 11on,comptiance is not intended for (Lee vs, Cow! ofJl.pfeq/s, 4~6 SCJU 69f) . Consequently,. the 9'" IndorseJ~tt 1, 2Q04, wlitch o.rde.rs the ImplementatiOn of the Dects'tI.)1 � q~t~.ct Noy.~l)'lber 2L ~003 th - ;md all other Sl.lhseq I� 4 1( Indorsemen-t) 1pt . ~ct~/indon>eme�1t~ rendered, by the Se9retary of Finan<;e~ as well as ::e. I . . ii ; .( r.� e.&o,l.ytion. d. ated. Ju. ne ,16, 2004,. cannot be c. onsidered acts ren. de �I 'd . . I. . b.eyond the respondent's authority, and are, therefore, valid and lega,Jy . .� II i. enfon;eable, ! I. I. I: WffEREFORE, premises considered, I vote to DISMISS e �r,. :. I I; '�' inst(lnt Petition for Review and to AFFIRM the DeciIsions of ~''�e Npve~?er. Underse9retary ofF:inance dated 21, 2003 and April I' 20o, IJ ' . . I . ,. , ' ~ - 1~ � �~ �~ � 1 :: '. OLGA PA~ANCA~ENRIQUE � : Associate Justice � ,' , l' .~ l "l I I ("' ' .. I .:--� I1-1I