CTA Case No. 2781 (Decision)

REPUAt,fC OF THF. PHILIPPINES CUl RT" or TAX APPEALS QUEZON CITY COMPANIA GENERAL DE TABACOS DE FILIPINAS , Petitioner , - versus - C. T. A. CASE NOo 2781 COHivliSSIONER OF CUSTOMS, Respondent . X- - - - - - - - - - - - - - X D EC ISION Petitioner Compafiia General de Tabacos de Filipinas , loc al ship agent of the vessel M/S "Sally Maersk, 11 ha s appealed from the decision of respondent Commissioner of .Customs dated : M511qh, 5, 1976, affirming t hat of the Collector of Customs , imp osing a fine of ? 5, 000 . 00 upon the s aid vessel f or violation of Section 1005, in relation to Section 2521 of the Tariff and Customs Code . . The facts , as found by the Commissioner of Customs , are not in dispute . On November 23 , 1974 , the B/S "Sally Maersk" unde r Reg . No . 2007 arrived in the Port of Manila carrying general merchandise f rom New York , U. S. A., including 11 c ar tons of photocopy machinery parts . Said merchan- dise was not declared i n the I nward Foreign Cargo Manifest of the s aid vessel . The Collector of Customs ordered the respondent to file an amended lnward Foreign Cargo Manifest without prejudice to answer

DECISION - C. T. A. CASE NO. 2781 administrative action against the vessel . Subsequently , the vessel was charged for violation of the Tariff and Customs Code . During the proceedings, the parties sub- mitted this case on the following stipula- tion of facts: 1:11 That the Maersk Line is a shipping company that operates vessels to and from the ports of the world to the port of the City of Manila. 2 . That the Philippine agent of the Maersk Line is the Cia. Gra . de Tabacos de Filipinas . 3 . That two of the vessels operated by the Haersk Line are the 1'1/S "CHARLOTTE MAERSK" and lvl/S "SALLY MAERSK . 11 4. That on or about the month of September 1974, the "Charlotte Maersk" and the "Sally Maersk" were l oading side-by- side in the Port of New York . 5. Ey error committed on the part of the stevedores , the cargo destined for the M/S "Charlotte Maersk11 and manifested on the vessel was actually loaded aboard the "A/S "Sally Maersk" where it -was not manifested . 6. That from the foregoing , it is obvious that the respondent company did not act in bad faith . 7. That because of the failure of the vessel "Sally Maersk" to declare the 11 cartons subject of the instant proceedings , an amendment was submitted by the agent company and the same was approved by this Bureau with the condition 111.vi thout prejudice to an administrative action against t he vesse11� �� v In his decision dated Aueust 8, 1975, the Collector of Customs imposed a fine of P500 . 00 upon the vessel H/S "Sally Maersk" for violation of Section 1005, in �relation to Section 2521 of

DECISION - C.T . A. CASE NO . 2781 ... 3 - the Tariff and Cu s toms Code, wh i ch decision, on appeal by petitioner, was modified by the Commis- , sioner of Customs in his decision of .Marc:ht :.~:., / 1976, increasing the amount of the fine to t> 5,000 . 00. The is sue f or det ermination is whether the vessel :ws "Sally Maersk" is liable for the fine of P5, 000 . 00 for violation of Section 1005 taken in rel ation to Section 2 521 of the Tariff and Customs Code, which provisions read a s follows: Sec . 1005.- Manifest Required of ~1 from Foreign P,ort .- Every vessel from a forei gn port must have on board a complete manifest of all he r cargo . All of the cargo intended to be landed a t a port in the Philippines must be described in separate manifest for each port of call therein . Each manifest shall i nclude the port of departure and the port of delivery with the marks, num- bers, quantity and description of the packages and the names of the consignees thereof. Every vessel from a foreign port must have on board complete manife s ts of passengers and their baggage, in the prescribed form , setting forth their des- tination and all particulars required by the immigration laws; and every such vessel shall have prepared for presenta- tion to the proper customs official upon arrival in ports of the Philippines a . complete list of all sea stores then on board . If the ves sel does not carry cargo or pas sengers t he manifest must show th at no c a rgo or passen�ger , a s the case may be, is c arried from the port of departure to the port of destination in the P h i l i pp i n e s . A cargo manifest shall in no c ase be changed or altered after entry of the ves- s el, except by means of an amendment by the

DECISION - C. T. A. CASE NO . 2781 , .. 4 - master , consignee or agent thereof , under oath, and attached to the original manifest; Provided , b,ovJever , That after the invoice and/or entry covering an importation have been received and recorded in the office of the appraiser , no amendment of the manifest shall be allowed , except when it is obvious that a: clerical error or any other discre- pancy has been committed in the preparation of the manifest , without any fraudulent in- tent , discovery of which �could not have been made until afte r examination of the importation has been complet.ed . Sec . 2521 . Failure to Supply ReQ;Ui sttf: Manifests . - If any vessel or aircraft enters or departs from a port of entry without submjj.tting the plloper manifests to the customs authorities , or shall enter or depart convey- ing unmanifested cargo other than as stated in the next preceeding section hereof, such vessel or aircraft shall be fined in a sum not exceeding ten� thousand pesos . The same fine shall be imposed upon any arriving or departing vessel or aircraft if the master or pilot in command shall fail to deliver or mail t o the Auditor General a true copy of the manifest of the incoming or outgoing cargo , as required by� law . Petitioner contends that the vessel M/S "Sally Maersk" should not be held liable for the fine because the f ailure to manifest its c a r go vm s the result of crossloading and that there i s good faith in the commissicn thereof . Furthermore , it contends that even if a fine is imposable , the amount of ~ 5,000 . 00 is unfair and unreasonable . Citing, in its memorandum , a minute resolution of the Supreme Court in G. R. No . L-44243 which reads : L-44243 (Compafiia General de Tabacos Qe Filipinas vs. Court of Tax Appeals , et al . )-

DECISION - C.T.A. CASE NO . 2781 ' 5- Considering the allegati ons, �issues and argu- ments adduced in the petition for review on certiorari of the decision of the Court of Tax Appeals , the Court resolved to DENY the petition for lack of merit, it appearing that the justif ication of crossloading of allegedly manifested cargo was not raised in the ori- ginal petitiop for review in the respondent court nor in the proceedings before the Cus- toms Commissioner but is being raised for the first time in this Court. �� petitioner avers that crossloading is a justification for the vessel's failure or omission to manifest its cargo: Please note that the petition was denied merely because the "justification of cross- loading of allegedly manifested cargo was not raised in the original petition for review in the respondent court nor in the proceedings before the Customs Commissioner but is being raised for the first time in this Court ." The Supreme Court, in its own words, denied the "justification of crossloading" merely because it was raised for the first time before it but otherwise the Supreme Court , as may be no- ted from its very st.atement~ found .that cross... loading was a justification . Since crossload- ing is a justif ic ation in the words of the Supreme Court and since crossloading has been admitted, it follows that the present contro- versy being based on an admitted case of cross- loading should be resolved in favor of the vessel . We disagree with the view advanced by the peti- tioner . The Supreme Court in its aforesaid resolu- tion did not categorically rule that under the law crossloading is a valid defense or justification for failure of the vessel to manifest its cargo. The .said resolution simply means that since the ground of crossloading was raised by petitioner only for

DECISION - C. T. A. CASE NO . 2781 , 6 - 7 - the first time before the Supreme Court in its petition on :-certiorari , said petition can,not be given due course . Indeed , said resolution does not imply that had the defense or ground of c�ross- loading been properly and timely raised in said case (G . R. L- 44242) , it would be a valid and legal justification for non- compliance with the statutory requirement that every vessel from a foreign port must have a complete and proper manifest of all her cargo, and thus absolve the vessel from liability . The said resolution cannot be so construed as the legality of the defense of crosslo ading was not squarely p a ssed upon by the Supreme Court . In previous cases involving similar issues , the settled doctrine, consistently repeated by this Court, is the imperative requirement that every vessel coming from a foreign port must have a proper and complete manifest of all her cargo , and the law does not provide for any exception . Under Section 1005 of the Tariff and Customs Code, it is an imperative obligation of every vessel from a forei gn port to have on board a complete manifest of all her cargo . No exception is mentioned in the statute . Neither is there ment~on of any exception in Section 2521 of said Code providing for a fine � for vessels without proper manifest nor in Section 2 530 thereof providing the confis - cation of unmanifested goods . The recogni- pition by the Court any exception , such as misshipment of goods , WQUld be contrary to the pervasive spirit as well as the clear language of the af~resai d Drovision . (Smith \?

DECISION - C. T. A. CASE NO . 2781 - 7 ... Bell &_Co . (Phil . ) Inc . vs . Comm . of Customs , CTA Cases Nos . 1728 & 1921 , July 22 1969 ; Macondray & Co ., Inc . vs . Comm . of Customs , CTA Case No . 1930 , Dec . 27 , 1969 ; Certiorari denied in G. R. No . 1- 31v5s9. 9C1omFmeb. . 10 , 1970 ; Macondray & Co ., I n , c. of Customs CTA Case No . 1911 , April 20 , 1970; Compafiia General de Tabacos de Fil ipinas vs . Comm . of Customs , CTA Case No . 1939 , Feb . 26, 1971 ; Sompafiia General de Tabacos de Filipinas vs . Comm . of Customs , CTA Case No . 214-3 , June 30 , 1972; Maco ndray & Co ., Inc . vs . Cown . of Customs , CTA Case No . 2079 , Sept . 29 , 1972 ; Macondray & Co ., Inc . vs . Comm . of Customs , CTA Case No . 2067 , Oct . 6 , 1972; Nacondray & Co . ,_ Inc . vs . Comm . of Customs , CTA Case No . 20b2 , Sept . 17 , 1974-; Macondray & Co ., Inc . vs. Commo of Customs , CTA Case No . 2484 , Jan .l~, 1976 ; Compafiia General de Tabacos de Filipinas vs . Comm . of Customs , CTA Case No. 2144 , Jan. 5, 1976 . ) (Under- lining supplied . ) Consequ.e!1tly , applying the foregoing doctrine , it is of no consequence that the failure or omission of the vesseL to manifest its cargo in this case was caused by crossloading and/or that there is good faith on the part of the vessel , or its agent Compafiia General de Tabacos de Filipinas . (Compafiia General de Tabacos de Filipinas vs . Comm . of Customs, CTA Case No . 274-2 , Sept . 16 , 1977 . ) Anent the amount of the fine , the Commissioner of Customs found it necessary to increase the fine imposed by the Collector to 5, 000 . 00 . This is an amount still within the limitation allowed as im- posable fine under Section 2521 of the Tariff and Customs Code, and we can see no valid rea son to nullify and disturb the imposition made by respondent

DECISION C. T. A. CASE NOo 2781 , - 8- � Commissioner of Customs . WHEREFORE , the decision of the Commissioner of Customs appealed from is hereby AFFIRMED , with costs against petitioner. SO ORDERED . Quezon City , September 30, 1977 . c~iJflAQUIN Asso ciate Judge � I CONCUR : " AMANTE Acting Pre