CTA Case No. 862 (Decision)

' " EPUBUC OF THE PHILIPPJNi:!-1 OOURT OF ,TAX APPEALS QUEZON CIT-Y BIENVENIDO MAPA , Petitioner versus CTA CASE NO . 862 TrlE COMMISSI01~R OF CUSTOMS , Respondent . X- - - - - - - - - - - X DE C I S I 0 N This is an appeal from the decision of the Commissioner of Customs , dated June 1, 1960, affirm- ing the decision of the Collector of Customs for the Port of Manila decreeing the forfeiture of the goods covered by Seizure Identification Nos o 1672 , 1673 , 1674, 1693 , 1694 , 1826 and 1837 , and ordering petitioner and his sureties to pay in cash, jointly and severally , the amounts of ~1 , 550 . 00 , ~363 . 00 , �1 , 621 . 00 , ~423 . 00 , ~810 . 0 0 , !!1 , 872 . 00 and 660.oo , or a total of i'l:7 , 299 . 00 . In 1954, various merchandise were imported by peti- tioner from Hongkong . They consist of 5 pkgs . album , 1 pkg . Chinese pen and holder , 1 pkg . broom (bamboo) , 1 . pkg . sieves, 5 pkgs�. rattan split , 3 pkgs . broom , 2 pkgs . candy, 1 pkg . joss stick, 15 pkgs . salted fish , in bulk , 6 pkgs . dried shrimps, 4 pkgs . salted fish, 5 pkgs . lily root, fresh, and 4 pkgs . waterchestnuts , fresh, which were declared under Import Entry Nos . 52255- D, _52255-G , 52255-C , 57576, 57575, 66929 and 68245 . Upon arrival of the said merchandise, they were seized by the Appraisers' Division of the Bureau of Cus toms for alleged violation

DECISION - CTA CASE NO. 862 2 of Central Bank Circular Nos . 44 and 45 , in relation to Section 1J63(f) of �the Revised Administrative Code . I However , during the pendency of the seizure proceeding, the said merchandise were released to petitioner upon filing surety bonds of the Paramount Surety and Insurance Co ., Inc . Nos . 54/ 4246 , 54/4244 , 54/4245 , 54/4279 and 54/ 4280 in the respective amounts of ~ 1, 550 . 00 , f:363 . 00 , ~ 1, 621 . 00 , ~423. 00 and ~810.00 , and of the Pioneer Insurance and Surety Corp . Nos . 017 and 020 , series of 195t1- , in the tespective amounts of ~ 1 , 872 . 00 and �;660 . 00 , or a total of P-.7 , 299 . 00 , to cover the local appraised I value of the merchandise in question . The bonds uni- formly provide that in the event of the forfeiture of the merchandise covered by the said bonds , the entire amount thereof shall be paid in cash to the Bureau of Customs . Furthermore, a penalty of ~ 500. 00 was sti pulated in each bond which read~ as follows: 11 NOW, THEREFORE , the condj_tions of this obligation are such that in the event that it should be finally decided t hat the merchandise herein mentioned should be f orf eited to the Government , and/or that a fine or surcharge should be i mposed , the entire amount of thi.s bond, in case of forfeiture, or the cor- responding amount of the fine or surcharge, as the case may be, shall be paid in CASH to the Bureau of Customs , PROVIDED, HOW- EVER , that if \vithin thirty (3 0) days from demand for payment of the li.abili ty herein mentioned the said liability is not paid, and it should be f ound necessary to file an action in court to effect the collect- ion t hereof, a penalty of FI~TE HUNDRED PESOS ( ~ 500 . 00) in addition shall be im- posed, otherwise, this obligation shall be void and of no effect . 11

DECISI ON - CTA CASE NO . 862 3 After the hearing of the seizure proceedings, the Collector of Customs for the Port of l~ni la decided on June 28 , 1955 that inasmuch as the merchandise in question have been imported v1i thout import licenses and they were not covered by release certificates in viola tion of Central Bank Circular Nos . 44 and 45 , the same are subject to forfeiture under Section 1363(f) of the Revised Amninistrative Code . But since the merchan- dise were previously released to petitioner under sure- ty bonds , the Collector of Customs ordered petitioner and his sureties to pay in cash, jointly and severally , the total amount of ~7 , 299 . 00 to the Bureau of Customs . From the decision of the Colle c tor of Customs , pe titioner appealed to the Commissioner of Customs who , affirmed the decision of the former on June 1, 1960. Hence , petitioner appealed to this Court . , Subsequently, petitioner filed a motion on January 10 , 1963 to set aside the decision of respond ent and to dismiss the forfeiture proceedings on the ground that with the repeal by Central Bank Circular No. 133 of Central Balli{ Circular No. 20 which was implemented by Central Bank Circular Noso 44 and 45, the liability of the aforesaid merchandise has abated . This Court, in a resolution dated J anuary 31 , 1963 , held in abey- ance the resolution of the motion , the same to be considered in the decision of the case on the merits . Later , petitioner moved to postpone the hearing of this case until the Supreme Court shall have decided

DECISION - CTA CASE NO . 862 '4 the case of Lazaro v. Commissioner of Customs , G. R. Ne& L- 21790 and L- 21794, which involve the same issues as that raised in the case at bar . On December 24 , 1964, the Supreme Court rendered its decision in the Lazaro case . The issues to be resolved in this case are as follows: (1) wbether or not the merchandise involved in this case are subject to forfeiture for not being covered by release certificates and import licenses under Circular Nos . 44 and 45 of the Central Bank , in relation to Section 1363 ( f) of the Revised Administra- I tive Code; (2) vfuether or not petitioner is liable for ~500 . 00 as damages under each of the bonds filed by him for the release of the merchandise in question; and (3) wbether or not petitioner is liable for interest on the total amount of the ' .;surety bonds . The main issue relative to the legality of the seizure and forfeiture of the aforesaid merchandise is not new . In a case involving the same issue (Andres E. Lazaro v . The Commissioner of Customs, G. R. L- 21790 & L-21794 , Dec . 24 , 19~5) , the Supreme Court held as follows: The issue of whether or not the importations in question are Slfbject to forfeiture for lack of a Central Bank re- lease certificate in violation of Central

DECISION - CTA CASE NO . 862 Bank Circulars 4lt and 45 in relation to Section 1363(f) of the Revised Administra- . tive Code has already been answered in the asifmfirilmaratfivaectsin. 1preWve i ous cases involving see no cogent reason to alter our previous rulings . Central Bank Circular 133 did not repeal Circulars 4lt and lf-5 with respect to the necessity of a release certificate. As a matter of fact , paragraph 6 of Cir- cular 133 required imports to be released only upon presentation of a release cer- tificate issued by the Central Banko Not only that , Section 14 of Circular 44 which states: u1l1.. No i tern of import shall be released by the Bureau of Cus- toms without the presentation of a release certificate issued by the Central Bank or any author- ized Agent Bank in a form pre- scribed by the Monetary Board ." was deemed incorporated to Circular 133 by virtue of paragr~ph 8 thereof which we quote hereunder: 118. All existing circulars, rules, regulations , and condi- tions governing transactions in foreign exchange not inconsist- ent with the provisions of this Circular , are deemed incorpora- ted hereto and made integral parts hereof by reference . 11 With respect to the assertion that the enactment of Republic Act 141 0 abated any liability -incurred for violation of Cen- tral Bank Circular lr5, suffice it to say that the importations in question do not come within the operation of said Act , for Section 3 thereof says: 1serree Investment Company v . Commissioner of Customs , L-21217, November 29, 1965 and cases cited therein. 2Bombay Department Store v. Commissioner of CuIstoms, L-20489, June 22, 1965; Bombay Department Store v . Commissioner of Customs, L-20~60, September 30 , 1965.

DECISION - CT:A CASE NO. 862 11SEC . 3� x x x Provided , however , That goods and ~om modities in transit or previous- ly import~d on a no- dollar re- mittance basis at the time of the apnroval this Act shall not be affected by the operation of this A.ct . 11 (Underscoring supplied . ) Said rgeododfsohrafeditaeldreabdyythbeeeCn oimllepcotroterdoarnd decla Customs of Manila when Republic Act 1~10 was enacted on September 10, 1955. (See also the case :- of Capulong v . Aseron, G. R. No. L-229e-9 , May 14-, 1966 . ) Anent the second issue, we held in similar cases that liability for damages does not attach until there is a final judgment ordering forfeiture (Que Hua Shirt Factory v . Comm . of Customs , CTA Case Nos . 739 and 753, Jan . 11 , 1962; Lazatin v . Comm. of Customs , CTA Case No . 782 , Jan . 19 , 1962 ; Mapa v . Comm . of Gus- . toms , CTA Case Nos . 893 and 89~ , Aug o 27, 1963; Mapa v . Comm . of Customs , CTA Case No . 74-9 , June 6, 1966; Mapa v . Comm . of Customs , CTA Case No . 835, July 5, 1966) . Finally, respondent is not entitled to interest on the total amount of the . .surety bonds , the payment of which he seeks from petitioner , for the reason that said bonds do not provide for the payment of interest . ~~REFORE, the petitioner ' s motion to set aside the decision of respondent Commissioner of Customs and to dismiss the forfeiture proceedings filed on January 10, 1963 , is hereby denied and the decision 7/

DECISION - CTA CASE NO. 862 '7 7 appealed fro~ is affirme<Y1n .t.Q.iQ., , with costs against petitioner. SO ORDERED. quezon City, August 15, 1966o \ WE CONCUR: / ROMAN M. illl.tA.LI Presiding Judge '~ -t~< RAMON L. AVANCENA Associate Judge .