CTA Case No. 3830 (Decision)

~UU 'LlC 0 F fHE PHILli'PI~'t COUFT OF TAX AP!' ULS Ql.JEZO:'~ C t1C JM MARKETING CENTER & (HK) CO. , I NC . AND CHITEX TRAD I NG CD. , Petitioners, - ve r su"' - C.T.A. CASE NO. 3830 THE COMMISS IO NER OF CUSTOMS, Respondents. X- ----------X D E C i. S I 0 N This is i n connection with the o r der of this Co ur t during the hearing on Se ptember 6, 1985 requiring th e parties herein to file their respective memorandum f o r the purpose of thresing out jur i sdictional issues. It a ppears that on August 17, 19 84 , couns el for petit i oners filed 3 petitio n for r e view with this Cour t a l legi ng among others: that petitioners are suin g upon a s i nyula r and isolated transacti on; that petitioners a re own e rs of two thousand six hundred sixty-three (2 ,663) bales and four (4) rolls of textile mate r ials a nd fabrics mad e subject of a Seizure and Fo ~ feiture Pro ceedi ng in the Port of Batangas, under Seizure Identi- fica t io n No. lC - 83, seeking the review and the setting aside of responde nt's Order dated March 9, 1984 considering the ar ~e al barred f o r fail u re of cl a imants to comply with the requ ireme nts presc~ibed by Customs laws and regulati o ns 20 ~1

DECISION - CTA CASE NO. 3830 - 2- and the Or'der dated June 20 , 1984 denyi ng petitio ner s' mo tion for reconside ation. On October 11, 19 84, an answer was filed b y re s pondent setting forth a s spe cial and affirmative defenses, the following: (1) that petiti one rs have no legal capacity nor j ur idica l personality to maintain the present suit in this ju ;: isdi ctio n; and (2) tha t this Court cannot assume j urisdict i on ov e r t hn pers o ns of petitioners not - withstanding the filing of the unve ri fied petition. The pertinent fa c ts and background that ga ve rise to the incident are set forth in t he decision of the Di s t rict Collector of Batangas and pleadings of the pa rties t o wit: 1. The s ub ject matte r of the above-seizure proceeding are 2,663 bales and 4 roll s of imported texti le and fabric materials on board a sea-going foreign vessel tW "WITTY ANNE" o f Panamanian � registry (EXH. "8 ", "B-:-1" to "8-3" EXH. "F" and E;< H. "P") ; 2. The entire shipment was man ifested, as follows: a. 115 Pckgs. c ot ton fabric an d textile piece goods, with Kgs . 104,650~ M3563 , shipper Chitex Trading Company of Hongkong, Consignee P.T. Hari Amad C/0 PN PCLNI Sarong, Iri an , Jaya, In dones.:a; b . 97 Pkgs. cotton piece goods TW textile piece goods, k~s. 88,370, M3-31 8 .4 5, shipper JM Ma ke ting Centre (HK) Company, Con s ignee same as c;bo v e; c. Total num ber of Pkgs. -212, total kgs - 193,020 and total M3 - 881.95 � (EXH. "D"), ~'.i).. l., u� ( I~,

------- -----~-- DECISION - CTA CASE NO. 3830 - 3- 3. That vessel MV "~liTTY ANNE" was alleg e dly bound for Sarong, Indonesia from Hongkong, laden with more unmanifested cargoes than manifested (EXH. "D" and "B"); 4. However, in Char t s 1 & 2 of said vessel the route indicated the r ei n we re: From Aongko ng to Balintang ChRnnel to Casiguran Sound to Polilio Strait down to Alimonan, Quez~n, all in Philippi n e waters, there was no stres s of weather at that time,� the wea th er conditions were cuite normal and vesse.l MV "WITTY ANNE" was s~a worthy (See EX HS. "U", " V" and TSN De c. 14, 1983, pp. 8 to 9); 5. ih erea fter , said foreign vessel an c hored and berthed on Septe mber 25, 1983 at the ~-IIDC ~'Jha r f/pier located within the compo u nd of Coco Chemicals Philippines, Inc., alleged le a see of s a id wharf, at Barangay Caridad, I b aba, Atimonan, Quezon, wi thin the � jurisdiction of this District (EXHS. "A", "1{ 11 , _ "P", "A A11 , "AA-1", and "A /\ -2"); 6. Aforesaid duti able mer chandise w were then unloaded or discharged from said vessel and direc t ly loaded to ten (1 0 )- wheeler truck s pa rk ed alongside said pier or wharf ~n the night of September 25 ) 1983 with out having o ~t a ined a permit for unloading imp o rted article s at a port other than a port of entry, i~ violation of cu stcrfl s regulations, hence, 11 c o ntrary to la11", under paragraph 17 of Section 351Lf of the Cu s to ms c o de (S e e E;(HS. "A", "K", " }( " 11 AA" , "A A-1 " and 11 AA- 2 11 ) ; 7 . The unloading o r disch a rging of cargo by ~1V 11 \l.fiTTY ANNE i1 on September 25, 1983 a t t h e NIDC wh a rf or pier whi ch is not a port of e ntry is a violution of Section 1201 of the Tariff a nd Customs Code, hence , 11 c o n t r a r y t o 1 a It! " ; 8 . On or about 9:30 P.M. 25 Se pte mb er 1983 said vessel, illegal shipments, s ev eral persons suspected with fin a ncing, protecting and/oE e s~orting in the smuggling activities 2l.i ('

DECISION - CTA CASE NO. 3830 and the whole crew members of the vessel were caught red-handed, that �is, while unloading from the vessel and loading to the WJiting truc~s said dutiable merchandise (See EXHS. "A"~ "AA", "AA 1", "AA-2" and EXH. "BB"); 9. On October 4, 1983 Seizure proceed- i ncs were i nsti ~ uted by the District Collector, Port of Batangas under Seizure I dentification No. lC-8 3 (EXH. "EE 11 ) ; 10. Gn De ce mber 1 , 1983, vessel MV "~i i TT Y ANNE " after several hearings duly held, under Seizure Identification No. 1-83 was ordered and decla r :: d f orfeited in favor of th e Gov e r ~ ment, the same has already become final and exe cu tory (See� EXH. "Y"); 11. On J an uary 23, 198 4 , examination and appraisal of the 2,663 bales of assorted textile materials were complet e d; with a total ya rd age of 1,4B5,966 and a total value duty and S/ta . f145,092,508.62 (EXHS. "FF 11 t o "II-2"). On the other hand, claimants JM Marketi ng Centre (HK) Company and Chitex Trading Company do . , not deny any of the foregoing facts. As a mattei of fact, in spite service of notice s, their retained counsel appeared only but once during the� entire hearing of the above-entitled case which was heard and tried for over four months, that was on November 15, 1983. During said hearing Atty . Armando S. Padilla appeared as counsel for claimants, JM Ma r keti ng Centre (HK) Company and Chitex Trading Company , both Hongkong based firms claiming to own the merc h andise on boa r d ~1V "WITTY ANNE". � As retained counsel he exhibited a cablegram from s aid firms as his author i t y. But for the Government and the Military four (4) ob j ections were raised, namely: a. I mpugning the � authenticity o f the �cablegram designating Atty. Paddila as retained counsel of said Ho ngkong based firms. And even if the same is authentic the names of the officers of said firms and their a uthority to act for and in behalf of �said company in designating Atty. Padilla as their counsel, remains to be another question; 21~

DECISION - CTA CASE NO. 3830 - 5- b. The legal existence and/or the juridical personality of JM Marketing Centre (HK) Company and Chitex Tr a ding Company must be properly shown and proved by a certification and/or proper veri - fication fr om t he P�h i 1 i p pine Cons u1 ate in Hong kong ; c. That, Atty. Padilla being a� member of the Bo ard of Examiners for Customs Broker (PRC) and being co nnected with the Government as a Presidential appointe e, his appearance in the forfeiture pro - ceeding would be in conflict with the inter est of the Government an d therefore, violates t he provis io ns of R.A. No. 3019 otherwise known as the Anti-Graft and Corrupt Practices Law (TSN Nove mber 15, 1983, p p . 1 to 10 and TSN February 9, 19 84, p. � 5); d . tJ o formal claim of ownership has ever been filed by said Hongkong bas ed firms and/or their represent ati ve without which they may not have the legal personal i ty to appear before this proceeding . It must b e e mp hasiz ed that during the subsequent hearings conducted of the above-enti~led ca3e , despite due serv i ce of notices of hearing, t he her ein claimants nor their retained counsel failed to appear before this Office and th us , failed to present evid e nc e on th e ir side, the reco r d is bare of even a single relev a~ t evidence in t heir behalf. Furthermore, their failure to appear shall be construed as a waiver of their r ig ht to be heard. D it February 14, 1984, th e District Collector of Batan gas rendered the decision forfeiting the goo ds. On February 21, 1984, Atty. Padilla received a copy of said decision, after which h e se nt a Notice ~f Appeal admitte d ly with out documentary stamp attached to the Col le c ~ or of Custo ms of Batan gas bu t a copy wi th stamp paid a t the Port of Manila was f u rnished the Commissioner of Customs. On March 9, 1984, respondent issued an Order dismissing the appeal for fa i lure of the claimants to comply with �- l �- - - �. - -

DECISION CT A CASE NO. 3830 6- the requirements prescribed by Cu s to ms l a ws and reg ulations. A mo ti on for reconsideration was subsequently denied. Hence, t he present app eal. The issue raised for our consideration in this inc i dent may be stated thus - Whethe r or not the petitioners have the legal standing and personality to maintain the present suit in this jurisdict t on and as a corollary Whether or not this Court can take c ognizance of the appeal. On the first question, the answer i s in t he negati ve. Jurisdiction of this Court over a case and the parties can- not be presumed. Se cLion 2 of Rule 5 of the Rule s of the Court of Tax Ap p eals clearly provides that the Pet ition For Review sha ll contain allegations showing jurisdiction in the Court x x x. In the present case, petitioners did not Dllege in their petition, the factu a l allegations showing their legal capacity to maintain 1 resent suit. They could have affirm- atively pleaded their compliance with our laws or could have averr e d t heir exemption as the case maybe,- to pursue t h eir appeal to this Court. Th e me re allegations that petitioners a re duly org anized foreign corporations and summons as well as court proce s ses may be s e nt to their counsel and that they are suing upon a singular and isolated transaction, to our mind, do not establish their legal capacity or personality to sue or be sued. As prescribed by Se c tion 4, Rule 8 of the Rules of Court, "Facts showing 2 1t! -t

DECISION - CTA CASE NO. 3830 - 7- the capacity of a p a rty to sue or b e su ed x x x mu st be averred. Moreover, the Supreme Court has ru l ed that in case s where the law denies a foreign corporati on the right to maintain a uuit un les s it has previously complied with a certain requirement, then such compliance, or t he fact t hat the suing corpor a tion is exempt therefrom, becomes a necessa r y averment in th e cc mplaint (Atlantic Mutual Inc. Co. v. C ~ bu St e vedoring Co. Inc. No. L-18961, Aug. 31, 1966 , 17 SCRA 1037.) We b e lieve that failure of peti- tioner to alleg e such jurisdictional facts in their petition is fatal to their a p0e al. But even assuming that petitioners have the legal capacity to mai nt a i n this suit, i~ resolving the corollary question also in the negative, we wish to poi nt out briefly, that under the law, oppeal by an importer or person aggrieved by the decision or action of any collector of customs may be done under Section 2313 of t he Tariff a nd Customs Code of 1978, where such party is giv e ~ 15 days after notifi ca tion in writing by the Collector of his action or de ci s ion, to give written notice to the Collecto r and one copy furnished to the Commissioner oF his desire to have the matter reviewed by the Commissioner. Under P:, ragraph VII 6f Customs Administ r ative Ord e r No . 266, such notice �of appeal sh a ll be subject to a filing fee, and shall 2 1~ /

DECISION - CTA CASE NO. 3030 - 8- together with the records of the case be forthwith trans- mit t ed, by the Collector of Customs to th e Commissio ner of Customs. If still dissatisfied, his appeal could be projected to the Court of Tax Appeals pursuant to Section 7 of Republic Act No. 1125 by filing with said tribunal a petition within 30 d a ys from notice of the decision or ruling sought to be revie vJ ed ( Sa rnpaguita S11o ,�, & Slipper Facto :c y v . Cornrn. of Customs , e t ctl., 102 Phil. 850.) In the case at bar, counsel for peti t ioner wa s able to file written notice of appeal to the Collector of Customs of the Por t of Batangas within the reglementary r e r iod of 15 days. Ho we ver, he failed to affix thereto the n e cessary documentary stamps which eviden ced payment of the filing fee. This failure to comply fully with Para gr aph VII of Customs Ad ministrati v e Order No. 226 is fatal in the sense tha t there could be no valid appeal. It seems already well- settle d that payment of the fee i s a n indispensable ste p in the pe r f ection of an appeal (Lazaro v. End c ncia 57 Phil. 5~2.) The law on th a matter is clear that a fee of e10.00 ( no \'1 B5 3 � 50 ) i n c u s t oms s t a mps s ~ o u 1 d b e p a i d f o r e a c l1 a n d e very seizu re case (C.B. Ant olin Enterprizes et al. v. Comm. of Customs, LTA Case No. 1435, January 14, 1965.) Th e refore, no valid appeal to the Commissioner of Customs having been _taken fr o m the decision of the Collector of 21l> I /

.., DECISIO N - CTA CA SE NO. 3830 - 9- Customs, neither can one be ~ rojected to this Court. PREM ISES CONSIDERED, the present ap pe al is hereby dismissed. SO OR DE RED. Quezon City, Metro Manila, November 15, ]98 5. WE CONCUR: a~~f:;J/ M�1ANT . ILLER Pre ~�ng Judg e -~o/ t. CO STANTE ROAQUIN /Ass uciate Jud ge /