CTA Case No. 178 (Decision)

I ll"'"nBT.TC nP' LUZ H. COLCJl'" � � 178 Petitioner, - versus - COLLECT01 OF CUSTOJ� and 00 UfSIC.HER OF CU..<m:J~ , apondents. x ..................... _ .. x DEC ISI O This is an appeal fre the d cision of the Commissioner of Customs dated July , 1~5 affir.- ing the decision of the CollectoR of Custo a of itanila dated 1 arch 18, 1955, which decreed the o~. feiture in favor of the Government of 137 case& of various art1clea shipped sometlme in 19~ by tlosa- ka Trading, Ltd. of Yokohama , Japan . conai~ed to the hilippine Army Post Exchange , Ca zphy , ezon City. It appears that on December 1 , 1953, the S � ISAMlS IENTAt�. a unit f the Philippine Navy, left. the Philip inea for Japan c rrying con- tingents of the 14th BCT to Pusan , Korea and Christ- � gifts for our soldiers there. ~ile in Japan, 180 cases containing various dutiable articles were load~ in said vessel. The vess~l arrived in ~nila on eptember 2 , 19~. The said artielea ere cla - sified by Customs authorities into three groups , to witJ �(1) thos supposed to be for the Philippine Army Post Exchang~~ with an ppraised value of 127

D ISIOU � CASE � 178 $26 , 197. 53 , (2) those pertaining to the hilippine avy Officers Daae Com~~~iaaary , Cavite ; with an ap... praised val of tl , 5 � 4 , ~nd (3) tho e 1 n ing te individuals , consisting of nine Philippine Army nd Na y offi era and c ew and two prlv te persona, wlth an nraised value of Sl ,772. � All these articles ere d clared forfeit~ by the Coll ctor of Cu t � of nila for violations of the C ste 1 Law in a deeisi n render on arch 18, 1955, hith aa affirmed by th Co ssion r of Customs on July 30 , 195~. This case relat a sol ly to the first a~:nm of articles c ntained in l 7 cases eonai ned to t � ilippine ost xchan � � The ca$ involvin th s cond reup of articles w s als ealed t this urt in rill C. T�� � 17 � ova be:r 14, 1956. one of the eases involving the third roup which were 11kew1s ppe led to this Court hev already d cide � (S lunia v. isai n r of Cust s, C. T�� � 181 , ov be:r 14, 1956; uval v. C iasioner of Custo a, c.r � . No. 1~, ove ber 14, 19~6; lnt n- gan v. Ca.miaaioner of CUst s, C. T. A. o. S6, November 14, 1956; l ea en v. C.-.tssion r sto s, C. T. A. o. 184. ril 2 , 19~7. ) ln connection with the pr sent case , t � act �� ound by the Collector of CUsto s of nila, an confi ed by reapondent, are as followas vessel It a pears that the Philippine vy � a oia riental' (LST- ) ar- rived at this port frc Japan on S t er 12

D I Irt4 - C. T�� CASE NO. 178 .. 3- 2 , ~ 1th 180 paeka s containing var- ious dutia le article� as ca~ � e Hun z l'b!rty Seven {137) of t � cases are �.rked P , SV � CZB, , , A'.JJ , EA , TT , Ca u y , Quezon C1tyJ x x � � � presence of the$e dutiable goode on board the vessel was discover by t cutt � aut or1ties only after the interc cion by ort Patr 1 o ic an Con- aorci Javier of a truckload of cases leaving the Cust zone f m 'avy bo t, nd thr gh a confid ntial info ati n e- ceived in the Office of t e ort at 1 vlsio of tRis u~au xeg�rding t pr - � nee of c ecial g s on board � S ' �� s Ori ntal� (LST-4 ) fro J�pan. T veriti the truth of t 1$ 1nf zmation, Col~ n � Turin n, t n .eral S rviaor of th� Security Division f t � eau cf Customs , and tty. Salvador acal'do , Chief of the lnveat1gat1on ection of th� Port Patnl Division, ent to Pi r 5 on Sept - ber 6, 19!>4 where the Philippine tiavy boat ntioned ab ve was th n d eked. ar- rival thereat, they ere et by tb CO � mending Offieez of the b ve-n v ss 1, _ho, hen ask d, nfcrm t e that ther were re lly co rc g s on o hi ship. en th m rcha iae w~re b~ougbt t and x uin d at t c at s , th were found to b not cove~ed by the r - q\ll.r d carg ni st , ls o 1 ding, consular invoices, nd Centr 1 nk li- cense and rel�ase e rtificatea. lence. the seizure. X X X' �As re9ards the first ne rs. Luz i . Col a , ppear d uring n earlng nd claimed ownership of the g oda. he alleged that theGe goods w e s' by the Hoaaka Trading. Ltd. , of Yokoha a, Ja- pan, of which she is t authori%ed r re- sentative in the Philippines and that the same were ordered by the Armed Forces of t e bilip~ines Exchange Syst~. In s port of her sec nd alleg ticn l.he p.r s n a letter dated S t..m.r 17, 1~2 . rked xhi- bit � 1. . . ' 1 signed by Captain vel1no ea a � wherein 1t ap ears that the Aned � orces change wyst authorized lZ'S� C - loma to pu chase oods for her account and risk in Ja an to be delivered to tne LST of th� ArMed fcrces of the Philippines hich was to dock at Yo oha a , Ja an , in or around ... 1 2 9

DOCISION - C. T. A. CASE NO. 178 - 4- 130

ECISlaf� C. T. � CA. E � 178 -5- aonnel, with the repr sent t.iv of the Ho- sa Trading , Ltd. s . u~ H. Cole .� � ( � l-4 , D cision of Collector of Cu t~s , MarCh 1St 19!:5, cxh. ; PP� 16 -171, CTA records. 1 t b si of th fore oing fact , the Col- lecto% f Cu o s of anila order the forfeiture of aaid goods on t following ground$t -Evid nt y , it is not very m ter! 1 i in the instant case t d termin� heth r cr not the F Exeh nge yste a etu lly or- dered the goods. lhether th y wer or- der� or n t, such goods 1 subject to f1o~6r3feLit9u7r e as m nifested cargo ( etio e ise d minist% tive Code)& �� i~ortations d �ithout rlor p e it fr t he C ntral Bank or any of its ent ank (Central nk Circ~ r ~o. 4~ in r la- t1on tc Section 13 3 ill cf the evised dministrativ Cod ); and a 1 ort tions de in violation of eutiv Ord r Jo. 328, the oods havin9 co ..e fro J pan. x X X . � ( ag 4, xh. G; P� 171, CTA r � cords.. ) Re pond nt affi th d cision of the 1- lector of Cuetom of I nila ordering the for itur of &aid go s on th gr unds specif1 d r he dec1- l 1on of the latter d en th f urther gr und that aid goOdG re not c v r d by th t ui it eons 1 r invoic � purau t tc S ct1 na 17 and 1 f the Phil- ippin� Tariff Aet of 1 9. e quote f respond t�s �o cislon on p al�s �And this ffic also takes eogn!Eance of t � att t at s .d fro th article clnimed by ppell nts Rub n Sanid d , Vi- c nt Laurel , 1- lb no Collantes. Jo e C ti g E tez eg la, ~hich re ec- tively ao OQt exc ed . 00 i n dutiable alue. ll the rest, ith th exception of th e clai d by Folix � l e en r not cov xed by requisit consular in- voices s qui d by cti n 17 nd 18 of the Philippine ariff Act. end , c nseq ently, are au J ct to f orfeiture under ct1on 1363 (f) of th Revi ed ~ lnist tlv Code in conjunction ith 131

DECI � 17 c. r~ - 6- s, � avin c re fro nd t � rev� 1 of cis1 n of t e Coll ct .- of Cust of �nila , e ne � dt 10 � It y &t t t b f � t c" .r the etiU n filed a tion ki the rele s 0 � g in quest on the filing of a bond ~ 137 .f t �� Code. the pe itic , CTA rec rds; X � ". ) rc 3, 19 � u~�� P � d 1� in .. The tl n f s lut o y 16, ( � �139, CT c rds.) � ll n iss s .... .-t :r peal. The r t i ue inv lves t � � the go n u tion rt nif t ral ( ) f s cti of th ju tify t ei ftf itu r th1 q tlon as n ext� ly di c d in r d ci �- � 1 n1a v. c ner of Cu to , 1 1, ov ber 14, 1 � hich i nvol v 1� n t r- � by .\. n s t 11 ju t uot J: c t1 s of s 13 2

DECISIOO - C. T. A. CASE NO. 179 - 1- X X X P\ lie policy :. alone nd not y ny 1. Public policy i ' t t The po icy in r anifests of i laid down y la 133

cD.ErC.IAS.I ~ � 17 8 -- y c e no. t La � her cy in h t la � *At ntion ha be n dr~ n t Secti n 1234 of th ~dudniatrati Co e i ch r - quir th ~a �~ of a tran!port c~ ply s ip o the t d to re~ nt a manifest and oth~r do th rding !fie r eu to~s t sho�� the nee re uir m nt in r 9 xd t - ply hi of th At11 d ... ip ine$. x x � X X � uming t s ... $ 1& hd X X� Cc. � o.r t.. certid. d to o.~O rd S th f ct t t t riv_d fr " MIS "" IS 0 . _ T

DECISI ... C. T. A. C ~E '0. 176 ... 9 - 9 � were fest the I s mil r cv. a , CT 135

DECISI<l4 � C. T � � CASE � 178 - 10 - The second issue xelates to the question �hether or not th� rchandise in uestion a subject to for- felture f r violaticn of tral ank Circular No. 4~ . this question , the Coll ectoz of Cust s of nil justifies t he forfeiture of said aerchandise on the foll ing provision of said C~rculars X X X the Lfonetary ard , X X X her by re ires any person or entity w intends t i~ort or receive good� fna any foreign ~ountry for hich no foreign txchan t is required or will be required of tbe benka , to pply for a license from the onetary Board to authoztz such iltport. {~ee PP� 4-~ , Decision of Col.. lector of Q.aatoms of anlla � lB, 1~ , xh. G; PP � 171- 172, CT records. ) a th basis for the forfeiture of tl\e rcha ise under Circular o. 45 is tb provision thereof re- qui.ring a license fro. th etary ard ~fore a person or entity may be authorized to i11port or re- ceive goods fro any foreign country fpr whish no a. fgrup axchygt it gguirtpd or J!iJ.l rtAMJrtd of the banka . it would se that tbe Collector f Cut- to s found a a fact that the 1 ortation in ea- tion doea not involve the sale of foreign exchan e. No charge had ever be~n m d during the p roceedings in Seizure I dentification os. 1~ and i~- in the Bureau of Customs that the 1 ort tion i nvolves the sale of foreign exchange and that the iaporter failed to secure the necesaary li�ense fro� the - Central Ban � spondent ap arently concede� that the said t.portation does not involve the sale of foreiqn exchan e , but be nevertheless believes that it is subject to th licensing requir ents of said 136 I.Y/

DEClSICN � C.T . A. CASE N � 178 - 11 - 1rcul r' W� quote frOJ'Jl h1a d�eiliont ith res~ et t the ~~nte tien that Centr al Bank Ci.rc:ulaz:a No&. 44 and 4~ do hot ply t t.portat~on not involving t e urchase �f foreign exchange as as- serted in t 4th e:r:ror. this fie h ~onsistently held in a long lin� of deei- sio at �a d circule:rs ply t all 1 ortat iona not falling under t e ex-.p- tions , whet er such ~~port ticna involved the purchase of foreign exchange oz not. � (Page ll , Decision on ' f>peal of Co � of Custoaa , Exh. lJJ a 297, CTA reeotda; ��� alao ~ill v. om. of Custo s, CTA Jlo. 176, Nov. 14, 1~. ) v/It p earing that the 1aportat ion in question does not involve the sale of foreign exchange , we are of the opinion that the �� is not subject to fozfeiture for violation of Ci~eular No. 4$ of the central B kin relation to Section 1363 (f) of the iniatrative Code. e have h�ld th the Central nk ha� no power to Z'it<JUlate 1~~portat1on of gooda fro. foreign countri. . wbi~h do not involve the 1 le f fore1 exchange~ Consequ-'ltly , C.ntnl Bank Circulars os. 44 end 45, in so far as they seek to regulate no-dollar 1 ortati ns , ar not valid~ (Leuterio v. Com. f Custo s , C.T. A. � 29, r ll 18, 1955: -�~te 1 v. Com. f Cu$toms, C.!. A. No. 96 , Sept. 5 , 19 ~ . �ffim on anoth r groun in Q . R. No. L- 9810 . il 27, 19~7, Pasc al v. David, C. T. f. . ~o. 94 , Sept. 16, 1955; ascual v. Co � of Customs, c. T. ~'\� Noa. 14 148, Feb. 29 , 1956; Pascua v. It w's Gnly af er th enact ent of epublic t No. 1410 on ~ t ~r 10, 95~ th t no-doll2r 1 - p rtations bee subject to regulation , but t h 137

-C SB NO.- 178 - 12 .. authority to regulat� sue importation� has been ve~ted in th ert t o Comme:ree and Ind etry and not in t � Central Bank. ere is nothing in said Act f%o hie any inference ay drawn that th pew ~ ~o regulate n - d llar mportations . prior to ita ffectivity. was vest in the C. tral Bank o:r 1n ny oveznDlantal agency. ( �� ..ueeno v. eo.. of Cus ems , �r . . N � 122, u y 2 , 19..,6; J Commercial v. Co of Custoaa. C. T. � o. 144, ct. 18, 19561 AutonCJ Hian v. anahan, C. T. h� t � 219, Oct. 31 , 1956; Brillo v. Com. f .. t s, ; Santos :v. C of Cust a, J. T. A. N � 23 , 0 e. 22, 1~1 Serre� nvea ment v. . .. st s, c.r.A. t o. 227, Jan. , 1957J ren%ana v. om. of Cu to s, c.t. A. No. 281, arch 25, l957J ~ca en v. c ... of CU toms , C.T. A. o. 184, ril 2 , 19~7. ) The third is ue involves the or not t � aaid ienortttion is subject o f orfeitur under Executive Order o. 32 , sttri o l95t'J . c- . - tion l of which p v d th& 0 1 ortation of ehandise f~ J p n ay be eff cted or ttempte out proper licen , and S et.1on 14 vi � t et chandiae so i orted a all subject t f rfeitur � the agency entru1ted 1th �uthoXity t isau lieen s for the 1~ortation f rchandiae f J aa s the fo .r I ort Con :rol CODI!a ion. owever, t ~he time the rtieles he n aue tion were 1 orted , th� I~ort Cent 1 C 1 n had ,alr eady ce aed t o e I rt Control L ( epublic ct o. 6~1 n J~ly 1, 19~3. Consequent- 138

D lSI - C.T. A. ~~EN � 17 ... 13 - ly , the said importation ay not be forfeited for violation of said Executive O~dlr. *Fr th p visi ns (See. l) f Exe- eut1v� Ord r ~o. 328 � � � it will be seen ~hat the fun~ticn o issuin licenses for 1 ort w given to for er I ort Control Ada! istration (later the I ort Cont.t-ol C ssion) � while th licensing of exports was veated in t e C.entr l an.k. Nothin) a.p ars in the said Ex � cutive Orde~ w ~c auth rites th C@ntral Bank, or any o e ove ntal entity rag ncy, aft r t e i&s lution of lllpOrt Contr ol Co i&S n . ... issue tuh - e s for t e 1 o at on of rchandis � !ther ha th attenti n of thia Court b n dr to n r is it w r f the exi t nc of ny oth r la � execu~ive r- d r or r gulation "Jhich w rs the C r1t-rnl Bank to iatsu licen es m- ports. It follows that the forfeiture of the ship ent of onions c nsi ned to he etitioner finds no sanctien u �~ Executiv Ord J' tto. 32 � ( uteri v. c � of Cut , c.r.A. o. 96, s t . 5, 1955, affi n an th ground 1 G. o. L-9 1r � ril 27, 1 7. ) inally, e~pon ent aff h d CiSl.O of forfeitur of t m :tchandi n qu stion n ground th t n con~ul r invo~ w 6 r uced cov r - ing id er~h n s � in vi la i n of S ctic s 17 and 1 of tn lippin T :ri ct of 1 i9. ( PP� ~ . 1 , p al , xh. �� � 291, 299 , CTA reco ~titioner appa:r tly a its t e absene ot cons 1 :r invo c , or ny uoc ent. n lieu ther of, a � e s not pp led fro that portion of th d cis n a i ang t decree of forfeiture on th t gro n � he s id 1 crtation is, tb refore, s bj ct to f rf iture fo violation of Sections 17 nd 18 of t � Philippine Tariff ct of 1909. in rel ticn to ~ cti n 1363 ( ) of t e mini � 139 /~tf

DECISI � C. � � CA�'!E NO. 178 - 14 - t ra va Cod_!;) (t va l v. C. T. A. No. 1 � t ove . th deci - si on pp 1 ia er e y f 1 1 ly t � gro c nsul r invoic n prfl- .sented cc" in s id , i v ol tlon of Sections 17 and of e Ta f <:t of 1909. it c ats ag~ i n t t1t oner . 0E � n la, � - E CURs C7/f~~1 ;. c.~ J'UII� P.f, t' yt~. .. 1 40