CTA Case No. 4387 (Decision)

,. REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY DEMETRIOS ROUMELIOTES, Petitioner~ --versus - C.T.A. CASE NO. 4387 COMMISSIONER OF CUSTOMS, Hon. SALVADOR M. MISON, Respondent. - - X - - - - - - - - - - - - ,-~, 1 DEC I I 0N This is an appeal by way of petition for t-eview from the decision of the Commissioner of Customs affirming the forfeiture of sixty (60) pieces of jewelry worth F'104~934~750.00 by the Collectot- of Customs of Nanila Intet-nat.i.onal Airport (NIA) for violation of the Tariff and Customs Code (TCC) and the Central Bank regulations. It appears from the records of this case that on Narch 1~ 1986~ petitioner~ a Greek born American citizen~ obtained from the Philippine Airlines Inc. (PAL) office in San Francisco~ USA through his travel agent~ PAL tickets for his business trip to Hongkong. His itinerary was set as follows: San Francisco to Nanila on PAL Flight No. 101 on Narch 1~ 1986; 25

DECISION CTA CASE NO. 4387 - 2- Manila to Hong kong (his business destination)~ open dated on board Cathay Pacific; and Hong kong to San Francis co on North We ster n Airlines~ likewise open dated. He arrived in Ma nila on March 3~ 1986 and took the plane for Hongkong t he following day~ March 4~ 1986. On March 7~ 1 986~ he came b ack from Hongkong and pt- esented to the Customs authot-i ties baggage and currency declaration No. CX - 826 842 showing only "pet- sona l effects" . On t'-1arch 9~ 1986~ he \-'lent to the t'-1anila Intet- national Ait- pot-t to boat-d a plane fot- Hongkong ft-om which he \.o.Jould use his Not-th Western Airlines sequence of his ticket back to San Francisco~ California~ USA. However~ in the course of conducting routine examination of the luggage of outgoing passenget- s in the depat- tLn-e lev el of the International Passenget- Termina 1 ~ the Customs E:-: aminet-s discovered from the luggage of peti tionet- ~ si:-: ( 6) big yellow brown envelope containing sL:ty (60) pieces jewelry with appraised va lue of P104~934~750.00. Peti tionet- \>.Ja s appt-ehe nded because he had no wt-itten authm-i ty to e >: port said jewelry ft-om the Central Bank of the Philippines. For which reason the subject jewelry was seized by the Collector of

DECISION CTA CASE NO. 4387 3 Customs of MIA under a Warrant of Seizure and De tention dated March 10~ 1986 for alleged violation o f Central Bank Circular Nos. 808 and 809 in relation to Section 2530(f) of the Tariff and Customs Co d e and Central Bank Circular No . 9 60 in relation to the same s ection of the said code~ more s pec ific all y e x porting o r importing of jewelry, gold a nd s ilve r without prior permit from the Centra l Bank. After due he aring, the Collector of Customs on November- 9~ 1986 promulgated a decision order- ing the forfeiture of the jewelry in favor of the government. On Dec ember 23, 1986, petitioner filed a Notice o f Appeal from the decision of the Collector of Cu s toms. On Se ptember 7, 1989 the Commissioner of Customs affirmed the decision of forfeiture con s ider-i n g the fai 1ure of petitioner to dec 1are th e j e~--Je 1 r-y upon an- iva 1 in violation of Section 2505 and 2 530(1)(2) of the Tariff and Customs Code, and fot- attempted e >:portation of the same jewelry in viol a tion of Se~tion 2530(f) of the same code in relation to Central Bank regulation. Petitioner alleged that the said jewelry was brought by him from Hongkong on March 7, 1986 which

DECISION CTA CASE NO. 4387 - 4- he receive d on consignment from Foo Hang Jewelry, Ltd. of Hongkon g . He further alleged that he dec 1a red his 1u ggage a s personal ef fee ts on 1y and did not inc 1ud e s aid j ewe 1 ry i terns because they v1e r e not d e stin e d f o r the Phi 1 ippines but for the United Sta tes . He reasoned out that he came ba ck to Manil a only to meet his wife who was stay ing at the Mandarin Ho t e l, Makati. He also alleged that he was cleared by the Cus toms Examiner at the time of a rriva l without ins pecting his luggage. Br-ief 1 y, pet i tioner a 11 eged in his memorandum that the jewelry may not be subjected to forfeiture for the followin g reas ons: (1) Petitio ner being a transitory tourist did not import nor even intend to import s ubject j ev1e 1 ry items into the Philippine~ as they were destined for the United S tates ; that the jewelry when it arrived from Hong kong properly documented with a consignment receipt from Fo o Hang Jet,>1elry, Ltd. of Hongkong and the refore covered by the e xemption p r o v id e d under Section 175 of CB Circular No . 960; that to show they were not r� ea 11 y destined for the Phi 1 ippines, the I)Q

,.. DECISION CTA CASE NO. 4 3 8 7 - 5- \l-IaS packed the s a me If-Jay i t a~~i v ed f~om Hongk o ng when i t was seized. To sup po~t his contention~ petitione~ cited t he ca s es of PP o ple v s . De la Ro s a a nd BPrti Hildegard Edery ~ 98 SCRA 191~ J u n e 2 5 , 1980 and U. S . v s. Chu Loy and LPe Kam, 3 7 Phi l s . 511 ; ( 2 ) That p e t i tione~ being an alien should not be e x pec ted to be fully awa~e of the prov i s i o n of the Tari f f and Customs Code a nd th e Cen tt- ~ 1 Bank ~egu 1 a tion in the light of the attendant ci~cumstance s ; ( 3 ) The re was no p~obable cause shown before the institution of the seizur- e proceedings agai n st the jewe l ~y items i n que stio n; (4) Customs a uthorities failed to accord full and c omplete p~otection of h is ~ight to p~ o pert y o v er the j e wel~y in qu e s t i on. F' eti tion e r- a 11 eged t h at he was in good f a ith no t being aware of the Cen t ral Bank regul a tion on the matter and tha t t he Philippine Customs guide d oes not require tour- ists to accomp l ish baggage dec 1 at-a tion for�ms. As the~e was no fraud ~ the~e can b e no forfeiture of the jewelr- y . ')Q

DECISION CTA CASE NO. 4387 - 6- Respondent for his part a lleged that there was probable cause for the institution of seizure proceedings and forfeiture of the subject j e\I'Je 1 ry. Petitioner's failure to produce the required authorization fr om the Central Bank of the Philippines a 11 o\l'ling him to bring out of the country said j evJe 1ry is sufficient basis for the institution of forfeiture proceedings. Furthermore~ petitioner should have at least dec 1 a red the j evJe 1 ry in the Baggage and Currency Declaration Form. Against this backdt-op ~ this Court is called upon to inter-p t-et whethet- or not the acts of the peti tionet- in bt- ing ing in and 1a tet- br-inging out said jewelry are v io 1a ti ve of Sections 2505 and 2530 of the Tar-iff and Customs Code in relation to the pertinent pt- ovisions of the Centt-al Bank regulations on the matter. It is essenti~ l for this purpose to quote the pert.inen t provisions of the 1a~..,s and regu 1a t.ions al l egedly violated : "SEC. 2505. Failure to Declat-e Baggage.- Ll)henever- any dutiable at-tic 1e is found in th~ baggage of any person arr i v .ing ~-.Ji thin the Phi 1 i ppines which is not included in t he baggage declat-ation ~ such article shall be seized and the pet- son in ~..,hose baggage i t is found may obtain re 1eas e of such artie le ~ if not impor-ted contrary to any law upon payment

DECISION CTA CASE NO. 4387 - 7- of t rebl e the a pprais ed value of such a rtie l e pl us all duties, ta xe s and other c ha rges due thereon unles s it sha 11 be e s tablished to the s atisfaction of the Co ll e ctor tha t the failure to mention or decl a re said dut i able article was without fr a ud. No thin g in this s e ction s hall p rec lude the bt- inging of criminal action a gainst the offender." "SEC. 2 5 3 0. Property Subject to Forfei ture Under Tariff and Customs Law.- Any vehicl e ~ vessel or aircraft~ cargo~ artie le and other objects shall~ undet- the foil owing conditions be subject to fot- fei tut- e: f. An y article the impot-tation or e xpo rta tion of which is effected o r attempted c ontrary to law~ or any article of prohibited importation or exportation~ and all other articles which, in the opinion of the Collector, have been used, are or were entered to be used as ins truments in the importation or ex portation of the former. 1. An y artie le sought to be impo rted or e x ported: (2) By failure to mention to a c ustoms official~ articles f o und in the ba ggage of a person arriving from abroad; The following provisions of Centt- al Bank Circular No. 808 is hereby reproduced: 31

DECISION CTA CASE NO. 4 387 - 8- CIRCULAR NO. 808 Set- ies of 1981 Pursuant to Monetary Board Resolution No . .!91:3} dated J. P.D..~... 4_<::-~ . - ~9f::l.,1, ~ the following regulations on importations are he reby promulgated: 1.) All imports valued at more than $1~ 000 .00 must be covered by letters of credit and shall be subject to the release certific ate requirement. Exem pt from this rule are imports by pre- qualified producers and/or importers under documents against acce ptances (D/A) and open account (0/A) arrangements. 2 ) No - dollar imports valued at not more than $1~000.00 and not covere d by CB Circular No. 247 dated July 21~ 1967~ as a mended~ shall . be exempted from the release certificate requit-ement pt-ov ided that suc h imports pertain to commodities which are freely importable. No-dollar imports of UC and NEC J terns valued at not more than $500.00 shall also be exempt from release certificate t-equire ment. All other Central Bank Circulars~ memo t-.:mda ot- t-e gulations inconsistent here~�d. th at- e hereby modified~ amended at- revoked accordingly. This shall take effect immediately. (SGD.) JAIME C. LAVA Govet-nor 32

DECISION CTA CASE NO. 4387 - 9- Section 17~� of the Central Bank Circular No. 960 Series of 1983 provides: SEC. 17 5 Export of gold and silver. a. No person shal l export or bring out~ or attempt to e}:port or bt- ing out~ of the Phi 1 i ppines dire c tly~ through other persons~ through the mai 1 s, tht-ough intet-national carriers or through any other means, gold and/or gold-bearing mate t- i a 1 s ~ :i.IJ<;J.qg :i,n_g__ . j ~.~~~.1.r.Y. ~. :ir:::� . .. . ~O.Y. . .... :;?hC:\P�!!t .......:fPr.::-.fTI_.......... _.<:\D<::I Q.!,l�l[l :\:. ~ tY.... J~1.;\, .1:..hPhl.t.......... P.L.! .9.r:: . . . .-~r.,i., .!:..:t~IJ. �_L.:lthp r.::.! . ~.9 t LQJL.....f.r.qm__..t.b.�!...._G.~.o. :t.r.::."-"J. ~C:\Ot....~.. b. XXX "'-'' ,,,, ,,,, c. The above requirements shall not apply to the bringing out ~f the Philippines of: 1. Gold and/or silver forming an integral or necessary part of ones ' s personal effects ot- of i terns intended as gifts or souvenirs provided that such personal effects or gifts and souvenirs; Provided~ That suc h personal effects Ot- gifts and souvenir items shall not be brought out in commet-cial and value" as u sed het-ein, sha 11 mean a quantity in excess of two (2) for each kind of such personal effect or item~ but in no case shall the aggregate va lue of the gold or silvet- content of all said effects and items exceed P10~000.00.

DECISION CTA CASE NO. 4387 - 10 - 2. Gold and/or silver brought in by toLit-ists and non- residents: Pt-ovided ~ That the en tt-y or importation thereof in the country is properly documented. We ha ve to take the issues based on the chronology of events constituting the alleged violation of the Tat-i ff and Customs Code and the pet- tinent pt-ov i sions of the Central Bank regulations. On the alleged failure to declare the jewelry as pat-t of petitioner 's baggage dec 1at-ation ~ the facts c learly s ho~-1 that upon in the Philippines on f'1arch 7~ 1986 from Hongkong~ petitioner presented to the Customs authorities baggage and currency declaration form No. CX-826842 s howing on 1 y "pet- son a 1 ef fee ts". He alleged that he was cleared by the Customs Examiner at the time of arrival without inspecting his luggage . No apprehension was done at this point for the simple reason that the su bjec t jewelry was not discovered. The violation was discovered only when he was apprehended while going out of the country on March 9~ 1986 having in hi s possession je~-ielt-y which he alleged by way� of defense ot- alibi to have been bro~ght into the Philippines from Hongkong on March 7 ~ 1986. Consequently~ he was not only charged for

DECISION CTA CASE NO. 4387 - 11 - violation of Section 2530 of the Tariff and Customs Code in relation to Central Bank Circular 960 on illegal exportation but was like~,.<lise charged with violation of Section 2505 of the Tariff and Customs Code for failure to declare dutiable article in his baggage. In other words, he was charged by reason of hi s failure to declare the jewelry he brought in from Hongkong to the customs authorities. He alleged by way of alibi that he d id not declare the same because said jewelry was not intended for the Phi 1ippines but for the United States. In short, petitioner citing the cases of US v. Chu Loy and People vs. De La Rosa & Edery alleged there was no intent to "unlade" or intention to defraud the government with l a wful taxes. Section 2505 provides that any dutiable article found in the baggage of any person arriving from abroad which is not included in the baggage declaration, shall be seized. This provision is complemented by another similar provision under Section 2530( 1)( 2) subjecting to forfeiture any article sought to be imported or exported "by failure to mention to a customs official articles found in the baggage of a person arriving from abroad". These provisions of l at,.<~ do not require

DECISION CTA CASE NO. 4 3 87 - 12 - t t-�,a t th e r e mu s t be a n intent to "un 1 oad or import" b e fo re th e s u bjec t article ma�-y be seized and f or f e ite d in f avor of the gov ernment. The c ite d cases are not applicab l e in the .in :; t a n t cas e b ecause the fact =:; of those cases are e n t i r el y differ e nt . In US ~'S . Chu Loy~ the issue tTf inte nt "to un l a d e " becomes material because it i n v ol ves c rim ina l prosecution for il leg a l im por ta t ion of pro hibited drugs. There vJas no a t tempt on the p a rt of the accused to discharge the "Opium" �fr o m th e v esse l. Thi s nece s sarily negated c rimin a l con v i ction. The case of People vs. De la Rosa & Edery is li!::ev-Ji s e not <:!.pp licable because i t al s o in v o l ves c r i min a l pros e c ut i on under Section 3602 of the T CJ. ri ff a nd Cu s toms Code concerning various fr a ud u lent pr actic es aga1� nS .f._.-_ customs 1'-~ ec e ssar i 1 y und e r� s a id Section con �...riction requires proof t ha t the r-e ~t�Jas an "importation or e:-: p cH- t ;.-,tio n" o r a t l ea st "an attempt vJas made to mak e a n y e n tr y o f a n y imported or e:~ ported artie 1 e" thr o ugh 'f t--a udu 1 e n t me a. ns to the prejudice of the Intent to unlade a nd fraud are e:: t e n si ve 1 y di sc u ss ed in th e s a id case v~hich pe t i t io n e r- � s c o u nse l in the in s t a nt ca s e is trying t o shovl a bsen ce o f .

DECISION CTA CASE NO. 4 3 87 - 13 - The proceeding in a c r iminal case is on e in per sona� since it is d i rected against the owner or ho 1det- of the thing. Howevet- ~ the insta n t case involves a a proceeding in rem ~ which is administrative or civi l in character directed against the thing itself and in vo l ving diffe1��e nt pr- ovisions of the Tat-i f f and Customs Code. ( Actina Commissioner of Customs~ petJ" tioner ~~ s. Court of Ta .-:r;� Appeals and Charles An dr u 1 is ~ No. L. -62 636. Apr- i 1 1 984~ 129 SCRA 7 1.) In oLw case~ ~>o~hat ha s. to be pt-oven is th e "omissio n" em the pat- t of th e petitione r- to d ec l at-e dutiable art icl e in hi s bag g age dec l aration . Likewise~ the circums tan ces surrounding the Edery case i s entit-e l "]-' diffet-ent ft-om t he in s t an t case. Edery was a trans i ent touris t bound for Taipeh. She an-i v ed in 1'1ani l a l'lithout a visa to get a connecting flight to Taipeh. Hm>o~e v er- ~ at the time of his arri v a l there was no connecting flight and had to stay overn ight in the Manila Hilton Also~ at that time the Cu sto ms dec 1 a t-a tion and examination was sus pended for tourists pursuan t to E xecuti ve Order No. 408 . In other wor d s~ her stay i n the Phippine s was due to force of circu ms t a nce s . S he ne v .::>t- in ten d od to s tay in the P hil ippines.

DECISION CTA CASE NO. 4387 - 14 - The same circumstances do not obtain in the instant case . Petitioner Roumeliotes really included Ma nila in his itinerary. In fact he voluntarily came to the Philippines not only once but tw ice . Upon his arriva l in Manila he was ab l e to accomp l ish the required Baggage an d Currency declaration. What then is the jurisprudence on the matter? In a similar case involving f orfei tu re of cigarettes under Section 1363(g) of the Revised Admin istrative Code (now Section 2530(g) of the Tariff and Customs Code) ~ quoted hereunder: 11 Section 1363 . Pt-opet- ty subject to f orfeiture under customs law.- Vessels, cargoes~ merc handise an d other ob ject s and things shall under the conditions h e t-ei nb e lm>.~ specifi ed~ be subject to forfei tLwe : (g) Unm a nifested merchandise found in any vesse l~ a manifest therefor being requ .i t-ed . 11 t h e Sup t-e me CoUt-t in the case of Republic of the Philippine s vs. Hanuel Go Co ~ G.R. No. 9543-R~ January 22~ 19 54~ 50 OG No. 4, pp. 1 662-1667~ s tates: "The 1aw clear-ly provides that the ci garettes s hould have been manifested (Sec tions 1211 and 1212 same code) ~ And having found unmanifes ted the said cigarettes are subject to fot-fei ture. There cannot be any other conclusion.

DECISION CTA CASE NO. 4387 - 15 - In the contemplation of the pn)\/ision of Section 1363(g) of the Revised Administrative Cod e~ i t is not necessary to prove by d irect and positive evidence that the cigarettes in question were smuggled into the Philippines in order that t he said cigarettes can be forfeited; neither is it necessary to prove the illegal importation of the c iqat-e t te s a nd 1 oss of t- e v enue thet- eof. It is sufficien t qt-ound for- fot- feitur-e whe n the cigar-ettes wer-e not included in the ships rna ni fest in vio lation of the Cus-.toms l a ~�'-~ afot- equoted." This was also follo~"'ed in the subsequent case of Hacondray & Co. vs. Comaissioner of Cust o �s~ CTA Case No. 2067 ~ Octobet- 6~ 1972~ ~"'het-e this Cout- t stated that "the defense of good fa it h fot- f ai 1Lwe to manifest a cat-go was a 1 r-eady passed upon in the case of Smith Bell & Co. (Phil.) Inc. vs. Co��issioner of Custo~s ~ CTA Case Nos. 172 & 1921, July 22 ~ 1969, wherein i t was held: "Under- Section 1 005 of the Tat- iff and Customs Code~ i t is imperative obligation of evet- y vesse l ft-om a fot- eign pot-t to have on board a complete manifest of all her- cat- go. No excep tion is mentioned in the statute. Neithet- is thet- e mention of any e >:cept ion in Section 2521 of the sa id cod e pr-oviding for- a fine for- vesse ls with o ut proper- manifestos~ nor- in sec tion 2530 thereof providing for- the confiscation o �f unmanifested goods . The t- ecogni tion by this coUt- t of any attempt to t-ead in to the statute any e >: ception ~ suc h as mi s hipment of goods~ would be contr-ary to the per-vasive spir-it as well as the clear l a nguage of the aforequoted pr�o v i sions." This ~>.~as like~"'i s e the old d octt-ine enunciated by

DECISION CTA CASE NO. 4387 - 16 - th e S up re me Co urt in the case of United States vs. Steamship 0 Rubiu ~ G.R. No. 92 3 5 ~ Nov e mb e r 17~ 1915~ 3 2 Phil s . 2 2 9. Similat- to Section 1363 (g) [now Sec. 2 5 30 (g)] i s the pt- o v ision pertaining to indi v idu a l s tr ave lling ~>.~ith theit- b a ggages . The aforequoted pt-�o v i s ion s of Sections 2505 and 2530 ( 1) ( 2 ) the dec 1 at- a tion of a r- tie 1es c ontained in the baggage. The 1aw pr-ovides that under-c 1 a t- ed i t e rn s may be subject to sei zut- e and forf e i t:L.we. Th ~? l a~-.J admits no quali �fication or- e :-:c: e ption a s a co nd i. tion fo1�- for-fei tun:- . The act of " o rni ss Jon" .i. s th e on 1y thing that has to be ~wo ve n. Int e nt to unload ot- impot- t~ ft-audulent intent ~ ot- 1 o ss o �f t- e v enue need not be pt- o ve n to jus tif y for f e itu re . Pur s u a nt to Se ction 2505~ failL.It- e to de c lat- e dutiabl e articl es j u sti fi es the seizure of the The in ~"hose baggage the unde c l .:H- ed i t e ms ~>J e t- e found may obtain t- elea s e of s u c h art ic les upo n pay ment of treb l e the appraised value o f s u c h ar ticle s plus pa y ment of all duties~ \ t c:\ :-:es and o th e t- c hat�-ges due thet- eon pro v ided that the arti c l es have not been imported contrary to law and tha t th e o mi s s ion to d e c l are the dutiab l e a r-ticle s was wi t h o ut �ft- audulent intent. (tfontano Tejam~ ComJI/entar-ies o n the Revised Tariff and 40

DECISION CTA CASE NO. 4 3 87 - 17 - Custom s Code .� \/o 1 ume IV~ 1973 Ed . p. 2422-2 423. ) The matter of fraud~ contrary to the allegations of the petitioner i s not a condition precedent to seizure of an undeclared article but a condition to obtain release of the artic le . Under Section 2505 there are two consequential acts i n volved aftet- failut-e to declat-e . First is the act o �f seizur-e a nd the second is the act of t- e l. easing the at- ticle seized . The phrase " un 1ess it s hall be established to the satisfaction of the co ll. ec to1�- that the f ai 1ut-e to mention ot- dec 1 are sai.d dutiable at-tic l e ~>o~as ~>o~i th out ft-a ud" shou ld qualify only the last act of releasing the article seized in accordance with the doctrin e of the las t antecedent . Under this doct r ine~ relative and qua 1 i fy ing wot-ds ~ pht-ases and c 1 a uses are to be applied to the word or phrase immediate l y preceding a nd no t to othe rs more remote. otherwise would lead to an absurd siiua tion whereby an at- ticle "impcn-ted contt-ary to l a~>o~" ~>o~ill not be seized simply because the prosecutor fails to prove fraud on the part of the importer. Suc h could not have been envi s ioned by the 1awmaket-s because pursuant to Section 2530 (f) of the Tariff and Customs Code~ artic le s imported contrary to l aw are subject to fm- fe.itLu-e without qu a lification as to

DECI S ION CTA CASE NO. 4 3 8 7 - 18 - f r-�aud and under- Section 2:307 for-feited pr-oper-ties the impor- t ation o f ~t-Jhich is absolutely pr-ohibited or- contr-ar- y to l a w cannot even be r-edeemed. t,lever-the 1ess ~ for- pur-poses of ar-gument that Section 2::'�05 r-equir-es fr-aud to be prove n befor-e s ei zur-e of ar-ticle could be effected and for- this pu r pose petitioner- r-aises the defense that he does not know or- he is not awar-e that the j evJe l r-y items ha v e to be inc 1uded in the baggage a s they ar-e not destined for- the Philippines but for the United States. The circumstances s urr-ounding the case negates such alibi. First o �f all~ i t is clearl �-y indicated in the Baggage and Cur-r-ency Declaration Form No. 82684 2 ( E }: h. I)~ that all passengers are vJar-ned that any undeclar-ed dutiable article shall be !SE�ized and ma y be r-e l eased only upon payment of three times the appr-aised value plu s duties~ ta x es and othE!r- charg es ~ vJi thou t pr-ejudice to crimina 1 action a g a inst the offender. An y person with common inte llectua l capability will understand that s i x ty one (61) pi e ces of jewelry worth 104 mi l lion pe ~; o s ar-e highl y dutiable articles vJhich must be declat- ed~ other-vJi s e r-un the risk of being seized . a \l-IE' 11 tr-a v elled businessman~ is expe cted to und e rstand more than a per-son with A f)

DECISION CTA CASE NO. 4387 - 19 - or- d inar-y intell ec t that i t ~t-muld have been bette,~ to declare the same a nd tell the customs officials that thE� jewelr- y 11-1 ~.s not intended for i mpor tation .into the Philippines rather than run the r-isk of b eing conf is cated. The error in judg ment was with the petition er f or which he alone mus t su ffer. Second, the cons ignme nt receipt issued by Foo Ha ng .Je~� 1 el r �-y \1-Jh ic h petitioner presented sho~t-JS that t h ere \IIE?r-e si :-: t -y o n e ( 61) pieces of j e~t~e l ry. But v1hen the piece s o f j evJe 1 r y \!�las in ve ntor-ied, after- i t 1-~ as seized o n t1 a r�c h 9~ 1986, on l y s i xt�-y (60) p iece s acc ounted for . No acceptab le ex plan ation was su bmitted by the petitioner on thi s discr�epancy. Thi s c ourt i s inc l ined to believe in the a llf?gatio n o f the respondent that petitioner may h ave disposed of the missing one p iece of j e1-~e 1 r y . Thi s negates t h e all e gation of p etitio ner that the jewe l ry was not intende d for sale in the Philippines. Th ird, if p eti tioner does n o t really intend to import t h e jewelr y into the Ph i lippin es~ why did he have to br-ing the same ~...,.i t h him on Mat- ch 7, 1986 ~-Jhen hi s i tinet-.=H- ').�' of tt-avel s h ows t hat h e h as to go bar.:: f..:: to Hong ko ng befot- e �fi na lly going back t o San F ra n cisco~ USA. He was in fact bound f or- Hong k o ng ~--lh to.? n he \~as caught with the j e welry. He

DECISION CTA CASE NO. 4 3 87 - 20 - could h av e ea si l y dropped b �-y Foo Hang Jev1elry to pick - up the j evm l r y before proceeding to San Fr a ncis c o~ USP,. An ordinary prudent businessman will not run the risk of bringing with him back and �forth from Hon g kong to t1ani l a and � 1�1ani l a to Hongkonq~ 104 million pesos worth of jewelry if he has no bus iness purpose for doing so. Othervlise ~ he runs the risk not only of con fi scation by authoriti e s but a lso of unduly e xposing the jewelry to robb e r s ~ pilf e r age or s imple lost in transit. Re l a ted t o the issue of qood faith is the argume n t that pe titioner being a foreigner was not awar e of o ur l a ws . Suffice it to say that Article 2 of th e Ne vi Civi l Code pro�.; ide s "Ignorance of the 1 avl e :-:cu s e s n o one from compliance therevJi th" Ignorantia legis non excusat. The wot- d s D.9.... .OIJ.E:!. connote v1id e area of cov erage to inclu de foreigners as \fie 11 . This juri s prudence has never be en questioned a nd in fact is being fol l ovJed by most independent nations of the worl d. Foreigners are s ubject to the 1 a\,JS of the host country the moment they e n ter into its territorial juris dicti o n. The cited cases o f Sy Joe Lieng vs. Syquia and An dong ~~s. Cheong in the memot- andum of peti tione t- c o ncern litig a tions in a Philippine court where the

DECISION CTA CASE NO. 4 3 8 7 - 21 - e xi s t e n ce o f a f ore ign law has to be prov en. Thi s covers a n ent irely different s ituation tha n the presen t c a se . r� re i th e r h o ne s t mi~:; take nor error c ou 1 d a b s o 1 v e t h e:- properties from the consequences o �f �forf e i tu re in �.,rievJ of the time honore d rna }:im th .3 t "n o ma n c an t a ke advantage of h is ovm vJrong". (Agu s tin de Luna~ et al.~ petiti o ner vs. ,Jo s e Linat oc~ r e s p o nd e nt ~ L - 48403~ Octo b e r 28~ 1942 ~ 7 4 PI-Lil s . 1 5 . ) in c i d e ntal issue ~<Jhic h has to be res o l ved i s whe the r or not the jewe l r y and precious tt- a v e 11 er s bagg a ge f or purposes of the requirement of Section 250 5 of t he Cu sto ms Cod e . In t h e ca s e of Virginia de Le o n T o ng s on~ petitioner v s . The Com~i ss ioner of Cu $ t o ms ~ re s p o n d ent ~ CTA Case No . 1609 ~ Ju n e 3 0 ~ 19 69 ~ thi s Co Lwt h as t-u l ed as f ollow s : "J e welt- y a nd pr-ecious stones can- ied b y in c oming pas sengers are n ot baggage ~'lith the co nceptua 1 def i.ni tion of that te nn . H o ~"le'.�' e t- ~ Amet- ic a n jur- i s p t-ude n ce ca tegorizes t he s e artic l es as baggage und e r th e Ame rica n Customs law s (U.S. v. On e P ea rl N eck l ac e~ et al. ~ 105 Fed. 357 ; U. S. v . On e F'e at- 1 N ecklace ~ et al. ~ 111 F e d. 164; On e F'eat- 1 Chain v. U.S. 1 23 F e d. 371 ; U.S. v . 2 18 1 / 2 ca.r-ats Loos e E rn e r�a 1 ds ~ 15 3 Fed. 64 3 . ) An d s ince OLW Ta riff and Cu s toms Code is an a daptation fr o m Am e r i ca n Cus t o ms l a ws~ the i n terp re t at i v e .juri s prudence obtaining in t he United S t a t es on j ewe l ry and prec ious s to nes a s baq g 3 ge is pet- su a si y e in our 45

DECISION CTA CASE NO. 4387 - 22 - j u r .i sd i c t i o n . C:c:m s eq q~n tJy, ... ..it-J~ . tC\ k:_(;? ......tt. th ?..1:: j ~.\1-~e l r y C(nd prec igus . s .tgr::)es.. C:c:\rr).e.,><::l. by . persons arr i\t ing .ir� ... .tt-1.? ..... f..'hi li ppinE?s c:\CE? .. baggage vJhich st:�C?I,.t .lc:! .. be c:J ecJ..:t.r .e .d _ c:\~ enjoine d . tJY Sec:tion .. . 2:5(1::'� of .J::h.E? T.:\r:JJt �:tnd . . Custom s ..... .Co.<:LE?. 11 (Underscori ng s uppl ied) Mo re so ~ considering that petitioner i s a n Am erican citizen~ i t is hard to belie v e that he was not of the pt-ac tice s of declaring jewelr y as part of one's baggage~ further co n side t- .ing that the sa me is 1 ike~"'i se pat- t of the American customs l aws as recited in the above j Lit'" i sp t- ud enc e. H o~-'Je v et- ~ an y doubt s ~ i f any~ i s reso 1 ve d b y Section 2 53 0(1 )( 2 ) which authorizes the forfeiture of a n y article or o bj ec ts~ among other s : 11 1. An y at- ti c l e sought to be imported or e >: p or- ted: ( 2 ) By failure to mention to a customs official~ artic les found i n the bagg age of a pet- son a t- t- ivin g ft- om abr-oad. 11 As in the cases cited inv ol vi ng vesse l s not declared in the ship manife s t~ this pro v ision of the law likewise a dmits no e >:ception m - qualification to th e o mis s ion or failLw e to declan:> at- ticles found in the b aggage . I t does not e v en qualify that the artic l e h as t o be dut::i.able nor" i s t. h e t- e mentio n of ft-a udul e nt intent

DECISION CTA CASE NO. 4 387 - 23 - At this point~ i t i s not amiss to note that Section 2=�0~:0 pertains to the act of se izing the article not properly declared v1hi 1e Section 2::'�:30 ( 1) ( 2) pertains to the �final act of forfeiting the article for the sa me reason. Forfeiture is the lega l act 1t1hich gives the go\te rnment the right to confiscate o r alie nate in �favor of the state properties by reason of some neglect or crime committed while sei zure i s the initial act of taking into possession properties for the purpose o �f deter-mining their liabilities to forfeiture (T ejam ~ op. cit. ~ pp. 2377-2378; Section 2205 of the Tar iff and Cus toms Code). On the second iss ue concerning the alleged vio lation of Section 2530(f) of the TCC in relation to Centt~al Bank Circular No. 808~ series of 1981~ and Circul ar No . 960 , ser ies of 1983~ aforequoted~ this Court find s petitioner to have 1 ikevlise vio late d. Section 2530(f) s ubjects to forfeiture any article~ the imp ort ation or exportation of which is ef fee ted ot- at tempted con tt- at-y to 1 a~>.J. Undet- CB Cit-cular No. 808~ all impot- ts valued at more than $1~00 0.00 must be covered by letters of credit and release cer tifi cates .

DECISION CTA CASE NO. 4 3 8 7 - 24 - Even if vie v1ere to believe the allegation of the petitioner that the jewelry came from Hongkong~ th e fact sti ll remains that he brought along 11-1ith him j e1r-1el ry vmrth more than US$1~000.00 in violation of the sai d section of the Tariff and Customs Code in relation to CB Circular No . 808. The act of importation or attempt ed importation was done contrary to 1 a11-1. The Centra l Bank ci rcular s have the force and effect of l aw (Venancio Carreon Tong et al.~ petitioner ~'S � o f Custom s~ respondent~ No. 11947 ~ June 30~ 1959~ 10~� F'h.ils . 10 7 1; Acting Coaaissioner of Custo11s,. petitioner vs. Court of Ta .>;� Appeals and Charles Andrulis,. respondents ~ No. L -62636 ~ April 27~ 1984~ 129 SCRA~ pp. 70 -7 1.) The second v iolation invo l vi ng the same provision of the law is the act of bringing out or exportation of the subjec t jewelry in contravention of S ection 175 of Central Bank Cit-culat- No. 960 . The act of e~-: pot- ta tion was 1 i ke~--Ji se done contrary t o la~--J. It is on this point that petitioner of the decision of the Commissioner of Customs on the gt-ound of the absence of pt- obable cause. ~>Jhen pet i tionet- ~--Jas ap~n- eh e nded at th e 1'1IA and ~--Jas found to have in his

DECISION CTA CASE NO. 4387 - 25 - bagge,ge j e~r;e l ry in vi ol a tion of said CB Circular, he cou ld not produce the required Central Bank authol~ ization. This constituted prima facie ev idence of infr- ingement of the provisions of CB Circular No. 960 a nd provided s ufficient basis for the se i z ure of the sa id jewelry. Probable cause ha vi ng b een s h otrm, the burden of proof was upon the petitioner to esta blish that he fell within the pur vie i<J of the e:~ ce ption prescribed in paragraph C(2) of the said c ircu lar, tha t he actually brought .i 11to the country the said jewelry a nd that the e n tr�-y or importation thereof in the countr y 11-1as pro pe rly documente d. Such was t he pronouncement of the Supr-eme Cuu r- t in the case of Acting Coma iss i oner of Customs vs. Court of Ta :x: Appeals and Charles Andrulis, loc. cit. invol v ing illegal e:-: pot- t a tion of �for-- e ign curTenc ies in v io 1 a tion of CB Circu l ar No . 5 ~~. The e:: hibi tion by the petitioner of the co n :;ig nm en t t-ecei pt from Foo Hang Je~-Jelt-y Co. of Ho ng kong may h ave pt- o ve n that the j e t�le l t-y indeed was b rought b y p eti tioner f r om a broad bu t does not importat ion t h ereo f in the country is properl y c1 oc um f'.cn ted " � As discussed above , importation of t he i ewe lry cou l d not ha ve been

DECISION CTA CASE NO. 4387 - 26 - properly documented as the petit ione r failed to declare the same to the customs authorities at the time of his ar-r iva 1 in the Phi 1 i ppines. For his failure~ he in fact violated other e>: is ting provision s of l aws and regulations on importations. Had he declared the j el-'le 1 ry to the customs authorities at the time of arriv a l~ pursuant to Section 105(q) of the Tariff and Customs Code~ the Collector of Customs may have allowe d him to import or bring in the jewelry on the strength either of a written commitment or a re-export bond in an amount equal to one and one- half times the ascertained duties~ taxes a nd other charges due upon the articles~ conditioned for their re-e >: porta tion vli thin si>: ( 6) months from the date of acceptance of the import entry in the case of travellers and tourists. Thi s on 1y shov1s that the 1av1maker is a 1so .::Mare of a s i tLia tion v1hereby some tra �.,e 11 ers or tourists vli 11 be carr �-y' ing vJi th them artie les "intended for oth er person or for barter~ sale or hire". As in the instant case~ petitioner was carrying je!-'Jelry a llegedly for sale in the United St.:\tes. The law provided a mechanism or procedure in this kind of situation 1-'Jh.ic h petitioner s hould h c-=1 ve �f o 1 1 ovJed . (1qain ~ �for such f.:1i lure he alone should s uffer the consequences .

DECISION CTA CASE NO. 4 3 87 - 27 - WHEREFORE, in view of a 11 the foregoing, the decision subject of this review is affirmed and the instant petition for review is hereby dismissed with costs against petitioner. SO ORDERED. Quezon Cit y ~ Metro M a nila~ Febru a r y 5~ 1 992. G~a~C~ ERNESTO D. ACOSTA Associate Judge I CONCUR: ~ CONS{:(NTE �j_~QUIN _7socia t e Judoe CE RT I F I CAT I 0 N I tha t this decision was reached after du e consu ltat ion betwe en the mem ber s of the Court of Tax Appeals in accordance with Section 13~ Article VIII of the Con stituti n. - ~~"ti:-RDAoUIN As oci.ate Judge Cou -t of Tax Appea l s 51