CTA Case No. 4512 (Decision)

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY LYNN ROBINS ON, LESTER SEBOLD and MILDRED SEBOLD, Petitione r s, - ve rsus - C.T.A. Case NO. 4512 SALVADOR M. MI SON, i n hi s capacity a s Commi ss ione r of Customs, Respondent. )( - - - - - - - - - - )( This is an appeal from the decision of respondent, Commissioner of Customs, dated March 16, 1990, affirming in toto the order and decree of forfeiture issued by the Acting District Collector of Customs, Airport Customhouse, Ninoy Aquino International Airport <NAIA>, Metro Manila, dated December 21, 1989. As borne by the records, the uncontroverted facts of the case are the following: 1. On 12 May 1'38'3, Lynn Robinson, an American wi th Passport No H- 15 7731 wa s apprehended at the departure area wh i le about to board flight NW - 004 for Na r ita, Japan on her way to the United States. Customs authorities found in an envelope inside her handbag US$8,000.00 of which s he cannot show 14 2

DECISION - C.T.A. Case No. 4512 - 2- Central Bank authority to take out of the country such amount of foreign currency; 2. The US$8,000.00 was seized by Customs authorities allegedly in violation of Section 2530(f) of the Tariff and Customs Code <TCC> in relation to Sections 52 and 53 of Central Bank Circular No. 1028; 3. Seizure Receipt No. 491 was issued to her together with an inventory containing the serial numbers of the currency seized; 4. Petitioner Lynn Robinson was not allowed to leave the country on 12 May 1989; however, she was allowed to leave for the U.S.A. on 13 May 1989 without the US$8,000.00; 5. On 25 May 1989, a Warrant of Seizure and Detention was issued against the US$8,000.00 and seizure proceedings were filed; 5. On 21, December 1989, the Acting District Collector of Customs NA I A, i s s u e d a decision, the dispositive portion of which states: "WHEREFORE, by virtue of the authority vested by law in this Office, it is hereby ordered and decreed that the US$8,000.00 foreign currency covered by Seizure Identification No. 079-89 be FORFEITED in favor of the government, the same to be disposed of in the manner provided by law." Copy of the above decision was received by petitioner on 19 January 1990; 7. On 25 January 1990, petitioner filed a notice of appeal of the decision to the Commissioner of Customs and filed her memorandum in support of said appeal on 14 February 1990; 14:)

DECISION - C.T.A. Case No. 4512 - 3- 8. On 16 March 1990, the res pendent Commissioner of Customs issued his decision, the dispositive portion of which states: "Premises considered, this Office finds no cogent reason to disturb the order and decree of forfeiture dated December 21, 1989 of the US$8,000.00 covered by Seizure I dent if i cation No. 079- 89, Airport Customshouse, NAIA, Metro Manila and hereby affirms the same in toto." Copy of the above decision was received by petitioner on 30 March 1990; 9. On 17 April 1990, petititiner filed a motion for reconsideration of the decision dated 16 March 1990 and to allow petitioner to present Lester Sebold to affirm his affidavit and be cross- examined; 10. On 24 April 1990, petitioner filed an w~gent ex - parte motion to present Lester Sebold to affirm his affidavit and be cross - examined as he was in the Philippines on business; 11. On 07 May 1990, the statement of Lester Sebold was taken by Atty. J.C. Moroket of the Legal Service, Bureau of Customs; 12. On 15 October 1990, respondent Commissioner of Customs issued an order denying petitioner's motion for reconsideration which was received by petitioner on 30 October 1990; 13. The instant petition for review was filed in this Court on 12 November 1990 with claimant Lynn Robinson joined by Lester Sebold and Mildred Sebold as petitioners. It was prayed that the decision of the Commissioner of Customs dated 16 March 1990 and order dated 15 October 1990 be 1 4ft

DECISION - C.T.A. Case No. 4512 - 4- reversed and the US$8,000.00 be ordered r eturned to the petitione r s. Petitioners presented their evidence ex - parte inasmuch as respondent was declared in default for failure to file his answer. The issues presented before Us for resolution are: I. Whether or not petitioners violated Section 2530(f) of the Tariff and Customs Code in relation to Sections 62 and 63 of Central Bank Circular No. 1028. II. Whether or not petitioners are entitled to the return of the US$8,000.00. Quoted hereunder are the pertinent provisions of law subject of contention in the case at bar: "Section 2530. Property SubJect to Forfeiture Under Tariff and Custo�s Law. Any vehicle, vessel or aircraft, cargo, article and other objects shall, under the following condit i on be subject to forfeiture: XX X XXX XXX (f) Any a r t i cle the importation or exportation of which i s effected or attempted contrar y to law, or any article of prohibited impo r tation or exportation, and all other articles which, in the opinion of the Collector, have been used, are or were entered to be used as instruments i n the importation or exportation of the former. " in relation to Sections 62 and 63 of Central Bank Circular No. 10-28: " SEC. 62. E..9..C~j..J1JJ..____l;;__ur...r:..~.!J.f;'Y.. . No p e r s o n shall take out or transmit or attempt to take out fo r eign exchange in any form out of the l 4u

DECISION - C.T.A. Case No. 4512 - 5- Philippines directly, or through international carriers except with specific authority by the Central Bank or when allowed under existing international agreements or by these rules. SEC. 63. a. Tourists and non -resident visitors may take or send out from the Philippines foreign exchange in amount not exceeding such amounts of foreign exchange brought in, tourist and non -resi dents, or temporary visitors bringing with them more than US$3,000.00 or its equivalent in other foreign currencies, shall declare their foreign exchange in the form prescribed by the Central Bank at points of ~ntry upon arrival in the Philippines." In seizure of forfeiture proceedings, the burden of proof is upon the claimant. The applicable law, Section 2535 of the Tariff and Customs Code, is explicit in this regard: "SEC. 2535. Burden of Proof on Seizure and/or Forfeiture. In all proceedings taken for the seizure and/or forfeiture of any vehicle, vessel, aircraft, beast or artic-les under the provisions of the tariff and customs 1 aw s, tb.~. P._\:!r..9.~. 1J.. .9..f RC.9_9..f . ;.;_h.~_U. .Lt.~. .\:!Jl...c:J_IJ.. ~.h_e._ . 9.J~_Lf!l ~n. t : Provided, That probab 1 e ca use sha 11 be fir s t s hown for the institution of such proceedings and that seizure and/or forfeiture was made under the circumstances and in the manner described in the preceding sections of this Code." <Underscoring supplied) Upon the facts of the case, the requirement of the law that the existence of probable cause should first be shown before filing of the forfeiture proceedings, had been fully met. When 1 4G

DECISION - C.T.A. Case No. 4512 - 6- Lynn Robinson was apprehended at the departure area and was found to have in her possession US$8,000.00, she could not produce the required Central Bank authorization allowing her to bring them out of the country. She even denied knowledge thereof in the statement she gave to Investigator D. Aquino on 12 May 1989, viz: "07.Q: You were apprehended at the NAIA while about to depart for TOKYO when apprehended by Customs officials for bringing out US$8,000.00. Can you explain this? A. Last night at the hotel, my employer handed me an envelope which I am to bring along with me on my way back to New York, the contents of which, I do not know. OB.Q: Did you not inquire from your employer what could be the contents of said envelope? A. No. I did not � " !Pages 27-28, Custo1s records I This constituted prima Facie evidence of infringement of Section 2530<f> of the Tariff and Customs Code in relation to Sections 52 and 53 of Central Bank Circular No. 1028. Probable cause having been shown, the burden of proof was upon Lynn Robinson to establish that she did not violate the law. ,.l. 4 'I J

DECISION - C.T.A. Case No. 4512 - 7- Petitioners contend that they did not violate Section 2530(f) of the Tariff and Customs Code in relation to Section 62 and 63 of Central Bank Circular No. 1028 and seek refuge in the defense that the subject US$8,000.00 wa.s brought to the Philippines by petitioners Lynn Robinson and Spouses Lester and Mildred Sebold when they arrived on the same flight, ex 901 of Cathay Pacific, on 07 May 1989 from Hongkong <Exhibit B>. Since there were three <3> of them, they reasoned that there was no necessity to secure Central Bank authority because each of them would be carrying less than US$3, 000.00 each ISS,000.00/3 = S2,666.671. Further, the US$8,000.00 were allegedly their collections rrom people in Hongkong who owed them money. Documentary evidence originating rrom Hongkong were submitted by petitioners in support or the i r c 1 aim !Exhibits C to C-3 and D to D-21. Nonetheless, respondent afrirmed the seizure order. Premises considered, We rind petitioners to have railed to satisractorily discharge the burden placed upon them. We cannot give credence to petitioners' allegation that the US$8,000.00 seized rrom Lynn Robinson belong to the three or them. Most likely, the money belongs only to Mr. 14~

DECISION - C.T.A. Case No. 4512 - 8- and Mrs. Sebold. This was clearly manifested in the statement given by Lynn Robinson to the Customs authorities that she does not know the contents of the envelope entrusted to her by the Sebolds to be brought to New York, U.S. A. Considering likewise, that based on petitioners' own declaration that they have done business with their Philippine suppliers for more than ten <10> years !T.S.N. pp 8-9, Aug. 12, 19911 and they usually come to the Philippines once or twice a year to see for themselves the s o u r c e s o f t h e i r i mport s !T. S. N. p. 17, August 12, 1991l, they would be familiar with the requirements for bringing in and taking out foreign currency in the country. Their lame excuse for having failed to declare and secure Central Bank authorization for the US$8,000.00 cannot therefore be given credence. Citing the case of Acting Co1111issioner of Customs vs. Court of TaK Appeals 129 SCRA 70, 78, petitioners contend that a currency declaration is not the only proof to show legitimate source of currency in possession of a foreign non - resident. The said citation is herein reproduced: "Finally, Andrulis contends that no foreign c urr ency declaration is required of any in c oming or outgoing passenger and that is not 148

DECISION - C.T.A. Case No. 4512 - 9- the intention of the Government to entrap unwary foreigners. True, Resolution No. 594, dated 14 April 1959, of the Monetary Board, provides: "Henceforth, no currency shall be declaration of any kind incoming required from outgoing or passengers." However, tourists are not precluded from submitting proof, other than a currency declaration, to show the legitimate source of the currency in their possession. ~..1?...?_!..9_~_?..., _Bg__?...QJ__~,.~_tt9.il_ ~-.9.- . ~-9 '�. .11!...~-?...t... pg_ g_~_g_~~_g_ .?_~P..~..!:..?....~-Q~_g_ py_ R.E.L?...9...L\:!.:Lt9_D_ N.Q.. 14.L?_, 9 at ~?..9_ .!._�. J.~..lY_ .!~.7..9.., ~ t�Q_ r:.~_q__yJ.r.~-.?- tb_~t pgr._?..Q.D...?._ .t..A.~-~D_Q. _q_r.:_ !;_r.:?._n ?_ITJ..t.t.t.!.n.g_ 9r. . . ~-t.t~ I!'_P_tJ.D..Q. .t._g_ !;_~_kg_ 9J:. .t..x::.~?._I!'_.Lt f o r:-_~.J.YD.. ~�-h.?_D..fl~- .Q._l,l_t .Q_f. .tb_g_ Eb_.!b..P..P...!..!lg__?_ mu ~..t.. bA.Y..~. ? u ib_~ r i _z a_t.!J!D_ .f .!:_9_1!1_ ~-b-~- G._g_1J..~_Cc;i..1 !!~..D..!i. .c;i.. _ U_~_w.j _D__g_ .ttl e__ll! tQ. QQ. .?_Q.. WHEREFORE, the Decision of respondent Court of Tax Appeals, promulgated on 30 June 1982, is hereby reversed and set aside, and the decision of the Acting Commissioner of Customs, dated 15 December 1980, hereby ordered reinstated. No costs. SO ORDERED. " !Underscoring supplied! Based on the f'oregoing, We find the Decision of' the respondent Commissioner of Customs, dated March 16, 1990, af'firming in toto the order and decree of' f'orfeiture by the Acting District Collector of Customs NAIA, dated December 21, 1989, to be in accordance with law and jurisprudence. WHEREFORE, the instant petition for review is hereby dismissed for lack of merit.

DECISION - C.T.A ~ Case No. 4512 - 10 - SO ORDERED. Quezon City, Metro Manila, March 01, 1994. .l!Y I EP.. R N 0. DE VEY Associate Judg WE CONCUR: ~~ \Q.~ ~.. ERNESTO D. ACOSTA Presiding Judge 9.:.~BI.I.E_L9.:.B.I..IQ_~ I hereby certify that the above decision was reached after due consultation among the members of the Court of Tax Appeals in accordance with Section 13 Article VIII of the Constitution. (.~\Q,~ ,ERNESTO D. ACOSTA Presiding Judge Court of Tax Appeals