PEOPLE OF THE PHILIPPINES v. ANTONIO M. TALAUE (74-EAST MAYA ST., PHILAM HOMES, QUEZON CITY) , LEANDRO ANTONIO M. TALAUE (74-EAST MAYA ST., PHILAM HOMES, QUEZON CITY), HANNAH AILEEN LIM FERNANDEZ (1166 M.H. DEL PILAR ST. COR. ARUIZA STREET, ERMITA, MANILA), ANALYN G. FERNANDEZ (32 BLK. 14, LOT 18, PH-3-C, KAUNLARAN VILLAGE, CALOOCAN CITY), ANGEL T. DERAY, JR. (EAST MAYA DRIVE, PHILAM HOMES QUEZON CITY AND/OR RM. 603, S&I BULIDING, 1500 ROXAS BOULEVARD, ERMITA, MANILA), AND MEYNARDO B. BANAYO (G/F LA CORONA HOTEL, 1166 M.H. DEL PILAR ST., ERMITA, MANILA)

Republic of the Philippines COURT OF TAX APPEALS Quezon City SECOND DIVISION PEOPLE OF THE PHILIPPINES, CTA Crim. Case No. 0-274 Plaintiff, For: Violation of Section 3602 in relation to Sections 2503 and 2530 paragraphs -versus - (f), (i) and (I) subparagraphs 3, 4 and 5 of the Tariff and Customs Code of the Philippines (TCCP) as amended. Members: CASTANEDA, JR., Chairperson CASANOVA, and MINDARO-GRULLA/ JJ. ANTONIO M. TALAUE, Promulgated: LEANDRO ANTONIO M. TALAUE, HANNAH AILEEN LIM FERNANDEZ, JUN 05 2012 / / ANALYN G. FERNANDEZ, ANGEL T. DERAY, JR., and ' / 2!2-S p- ra . MEYNARDO B. BANAYO. (ALL AT LARGE) Accused . x--------------------------------------------------------------------------------------------------------x RESOLUTION Antonio M. Talaue, Leandro Antonio M. Talaue, Hannah Aileen Lim Fernandez, Analyn G. Fernandez, Angel T. Deray, Jr. and Meynardo B. Banayo, are charged before this Court with the violation of Section 3602 in relation to Sections 2503 and 2530 paragraphs (f), (i) and (I) subparagraphs 3, 4 & 5 of the Tariff and Customs Code of the Philippines (TCCP), as amended, in an Information alleging the following:

CTA Crim. Case No. 0-274 RESOLUTION "That on or about April 1, 2008 and within the jurisdiction of this Honorable Court, the above-named accused, with intent to defraud the government, in conspiracy with one another did then and there, willfully, unlawfully and feloniously, misrepresented the subject shipments of 32x20 container vans of wheat flour valued approximately at Nine Million Two Hundred Ninety-Five Thousand Seven Hundred Eighty-Four Pesos & 80/100 (P9,295,784.80) consigned to Rubills International Inc. (Rubills), for the account of Fil Haus Enterprises (Fil Haus) with corresponding duties and taxes of One Million Seventy Seven Thousand Two Hundred Ninety- Two Pesos & 45/100 (P1,077,292.45), by misdeclaring and undervaluing the same in the Warehousing Entry Nos. W- 8720, W-8696, W-8707, W-8693, W-8725, and W-8731 covering the subject shipments, considering that it was declared at $220 per metric tons (sic) instead of the VRIS value of $297 per metric tons (sic), per report of the VRIS- OCOM, Bureau of Customs (BOC) and the subject shipments of flour were likewise under-weight per bag considering that the subject shipments were declared at less than 25 kgs. per bags (sic), per report of VRIS-OCOM, Bureau of Customs (BOC), to the damage and prejudice of the Philippine government. " After a careful and thorough evaluation and consideration of the records of the case, this Court finds that it has no jurisdiction over the instant case . The Court of Tax Appeals, being a court of special jurisdiction can only take cognizance of such matters as are clearly within its jurisdiction. Section 7 (b) (1) of Republic Act No. 9282, which took effect on April 23, 2004, amending Republic Act No. 1125 provides: " Sec.7. Jurisdiction.- The CTA shall exercise: (a) xxx (b) Jurisdiction over cases involving criminal offenses as herein provided:

CfA Crim. Case No. 0-274 RESOLUTION "1. Exclusive original jurisdiction over all criminal offenses arising from violations of the National Internal Revenue Code or Tariff and Customs Code and other laws administered by the Bureau of Internal Revenue and the Bureau of Customs: Provided, however, That offenses or felonies mentioned in this paragraph where the principal amount of taxes and fees, exclusive of charges and penalties, claimed is less than One million pesos (Pl,OOO,OOO.OO) or where there is no specified amount claimed shall be tried by the regular Courts and the jurisdiction of the CTA shall be appellate. Any provision of law or the Rules of Court to the contrary notwithstanding, the criminal action and the corresponding civil action for the recovery of civil liability for taxes and penalties shall at all times be simultaneously instituted with, and jointly determined in the same proceeding by the CTA, the filing of the criminal action being deemed to necessarily carry with it the filing of the civil action, and no right to reserve the filling of such civil action separately from the criminal action will be recognized. Corollary thereto, the 2005 Revised Rules of the Court of Tax Appeals, as amended, specifically enumerated the cases that fall within the jurisdiction of the CTA Division and En Bane. Section 3 of Rule 4 of the said revised rules enumerates the cases within the jurisdiction of the Court in Division, to wit: "SEC. 3. Cases within the jurisdiction of the Court in Divisions.- The Court in Division shall exercise: (a) XXX XXX XXX (b) Exclusive jurisdiction over cases involving criminal offenses, to wit: (1) Original jurisdiction over all criminal offenses ans1ng from violations of the National Internal Revenue Code or Tariff and Customs Code and other laws administered by the Bureau of Internal Revenue or the Bureau of Customs, where the principal amount of taxes and fees, exclusive of charges and penalties, claimed is one million pesos or more; and

ITA Crim. Case No. 0-274 RESOLUTION XXX XXX XXX. " Based on the foregoing, the Court in Division shall exercise original jurisdiction over all criminal offenses arising from violations of the Tariff and Customs Code and other laws administered by the Bureau of Customs, where the principal amount of taxes and fees, exclusive of charges and penalties, claimed is one million pesos or more. In the case at bench, the Information alleges that the above-named accused misrepresented the subject shipments of 32x20 container vans of wheat flour valued approximately at Nine Million Two Hundred Ninety-Five Thousand Seven Hundred Eighty-Four Pesos & 80/100 (P9,295,784.80) consigned to Rubills International Inc., for the account of Fil Haus Enterprises with corresponding duties and taxes of One Million Seventy Seven Thousand Two Hundred Ninety-Two Pesos & 45/100 (P1,077,292.45), by misdeclaring and undervaluing the same; it was declared at $220 per metric ton instead of the VRIS value of $297 per metric ton; and the subject shipments of flour were likewise under- weight per bag considering that the subject shipments were declared at less than 25 kilograms (kgs.) per bag. Atty. Tristan Armando III F. Langcay, member of the Run After The Smugglers (RATS) Program of the Bureau of Customs, showed in his Complaint-Affidavit, attached to the Bureau of Customs' Referral for Preliminary Investigation, the RAT's findings on the alleged unlawful importation of 32x20 container vans of wheat flour by the accused, which is herein reproduced for easy reference: "8. On 09 April 2008 the subject shipments were spot-checked by the officers-on-case who found that: 8.1 The shipments yielded absolutely unmarked sacks of flour;

CTA Crim. Case No. 0-274 RESOLUTION 8.2 The entries were not properly endorsed by the PCCI Secretariat considering that the ICE reports attached to the entries were not issued by the PCCI Secretariat; 8.3 The subject shipments are not covered by certificate of a product registration from BFAD; 9. On 14 April 2008 a Warrant of Seizure and Detention (WSD) was issued by Horacia Suansing, District Collector of POM against the subject shipments upon recommendation of the officers on case for violation of Section 101(K) of the Tariff and Customs Code of the Philippines; 10. Further verification revealed the fol lowing: 10.1 The subject shipments of wheat flour were undervalued considering that it was declared at $220 per metric tons instead of the VRIS value of $297 per metric tons, per report of the VRIS-OCOM; 10.2 The subject shipments of flour were likewise under-weight per bag considering that the subject shipments were declared at less than 25 kgs. per bags (sic), per report of VRIS-OCOM; 10.3 The foregoing discrepancies are clearly shown below: 10.3.1 Entry No. W8725- 08 Entry No . Value Per Number Net Total Dutiable Duties and W8725 - 08 Metric of Bags Weight Weight Value (Php.) Taxes Ton Per Bag (Kg.) (Php .) (Kg.) $220 8,040 19 .02 153,000 1,532,949.75 107,705.00 instead of: Entry No. Value Per Number Net Total Dutiable Duties and Metric of Bags Weight Weight Value (Php.) Taxes Ton Per Bag (Kg.) (Php .) (Kg.) W8725-08 $297 8,040 25 201,000 2,660,741.37 320,298

CTA Crim. Case No. 0-274 RESOLUTION 10.3.2 Entry No. W8731-08 Entry No. Value Per Number Net Total Dutiable Duties and W8731-08 Metric of Bags Weight Weight Value (Php.) Taxes Ton Per Bag (Kg.) (Php.) (Kg.) 102 000 $220 5 280 1 021 966.50 71,788.00 19.31 Total Weight Instead of: (Kg.) 132,000 Entry No. Value Per Number Net Dutiable Duties and Metric of Bags Weight Total Value Taxese Ton Per Bag Weight (sic) (Php.) (Kg.) (Kg .) W8731-08 $297 5 280 25 34 000 1 748/098.49 210 772 10.3.3 Entry No. W8696-08 Total Weight Entry No. Value Per Number Net (Kg.) Dutiable Duties and W8696-08 Metric of Bags Weight 44 375 Value Taxese (sic) Ton Per Bag (Php .) (Kg.) Total 340 655.50 $220 1 775 19.15 Weight 24 096.00 (Kg.) Instead of: 102 000 Entry No. Value Per Number Net Dutiable Duties and Metric of Bags Weight Value Taxese (sic) Ton Per Bag (Php.) (Kg.) 587 523.92 W8696-08 $297 1 775 25 71 253 .00 10.3.4 Entry No. W8720-08 Entry No. Value Per Number Net Dutiable Duties and W8720-08 Metric of Bags Weight Value Taxes Ton Per Bag (Php.) (Kg.) $220 5 160 19.76 1 021 966.50 71,788.00 Instead of: Entry No. Value Per Dutiable Duties and Metric Value Taxes

CTA Crim. Case No. 0-274 RESOLUTION W8720-08 Ton 5 160 Per Bag (Kg.) (Php .) $297 (Kg.) 129,000 1 709 504.86 206 141.00 25 10.3.5 Entrv No. W8693-08 Entry No. Value Per Number Net Total Dutiable Duties and Metric of Bags Weight Weight Value Taxes Ton Per Bag (Kg.) (Php.) (Php.) (Kg .) W8693-08 $220 2,640 19.31 51,000 510,983 .25 37,018.83 Instead of: Entry No. Value Per Number Net Total Dutiable Duties and Metric of Bags Weight Weight Valu e Taxes Ton Per Bag (Kg .) (Php .) (Kg.) W8693-08 $297 2 640 25 66 000 61 933.45 10.3.6 Entry No. W8707- 08 Entry No. Value Per Number Net Total Dutiable Duties and Metric of Bags Weight Weight Value Taxes Ton Per Bag (Kg .) (Php.) (Kg.) W8707-08 $220 5 160 22 .09 114 000 1 021 966.00 71 788 .00 Instead of: Entry No. Value Per Number Net Tota l Dutiable Duties and Metric of Bags Weight We ig h t Value Taxes Ton Per Bag (Kg.) (Php.) (Kg .) W8707-08 $297 5,160 25 129,000 1,715,866.92 206,904.00 A close scrutiny of the above-quoted findings would show that the complainant presented both the "actual amount of duties and taxes paid" (actual amount paid) and the "amount of the duties and taxes that should have been paid" (should be amount), were it not for the said misdeclaration and undervaluation committed by the accused.

ITA Crim . Case No. 0-274 RESOLUTION Thus, to determine whether this Court has jurisdiction, We deem it proper to deduct first the "actual amount paid" by the accused from the " should be amount" of the taxes and duties per Warehouse Entry Number. Then, add altogether the resulting difference per Warehouse Entry Number. And in doing so, We find that t he principal amount of the deficiency duties and taxes being claimed only amounts to P693,117.62, wh ich is obviously way below the minimum jurisdictional amount prescribed by t he law and rules in order to confer jurisdiction to the Court of Tax Appeals, as shown below : Entry Entry Entry Entry Entry Entry Summation Number Number Number Number Number Number of the W8725-08 W8731-08 W8696-08 W8720-08 W8693-08 W8707-08 resulting difference "Should be 320 ,298 .00 210,772.00 71 ,253.00 206,141 .00 61 ,933.45 206,904 .00 between the Amount" 107 ,705 .00 71 ,788.00 24 ,096 .00 71 ,788.00 37 ,018 .83 71 ,788.00 "Should be ""Actual 212 ,593.00 138,984 .00 47,157.00 134 ,353 .00 24 ,914 .62 135,116.00 Amount" and Amount Paid" the "Actual Difference Amount between the Paid " two amounts 693,117.62 To recapitulate, the duties and taxes stated in the Information which amount to Pl,077,292.45, actually pertains to the entire subject shipments of wheat flour valued approximately at P9,295,784.80. Thus, it can be inferred that the Information failed to state the actual principal amount of deficiency duties and taxes claimed, when plaintiff failed to deduct from Pl,077,292.45 the actual duties and taxes already paid at the t ime of the withdrawal of the subject shipments. After taking into consideration the Information and the supporting documents attached thereto, We find that the Information fa iled to meet the minimum j urisdictional amount prescribed by the law and rules in order to confer jurisdiction to

CTA Crim. Case No. 0-274 RESOLUTION this Court. Consequently, this Court is left with no recourse but to dismiss without prejudice the instant criminal case. WHEREFORE, premises considered, the above-captioned case is hereby DISMISSED, WITHOUT PREJUDICE for lack of jurisdiction. SO ORDERED. a~c.~~ . fUANITO C. CASTANEDJ(, JR. Associate Justice CAESA~ANOVA fl~~~� � N. M ~. C~ Associate Justice OELITo N. MINDARO GRULLA Associate Justice