CTA Case No. 980 (Decision)

.. . , l'~ "Jf' ,.H~ t l-H �. ~vr I wu.ur 0 �;L."~ AP!-'UU UAC>i.U.~ . �'' J'UANA T � DE IA CRUZ, C.T.A. CASES NOS. ~ Petitioner, 980 & 1150 T - versus - COMHISSIONER CF CUS TOHS , Respondent a X- - - - - - - - - - - X DE C I S I 0 N These are appeals from the decisions of the CoilJ!!lissioner of Customs ordering pe�titioner and her surety, Alto Surety and Insurance Co., Inc ., to pay , jointly and severally, the amounts of �158,219 . 00 (CTA Case No. 980 ) and :plJ-9,411 . 00 (CTA_Case No. 1150) representing the value of articles allegedly imported by petitioner in violation of Central Bank Circulrs Nos . 44 and 45 . In vi evl of the identity of the parties and the issues raised, the above-entitled cases were t ried jointly. The facts are not disputed . The contending parties adopted the stipulation of facts appear- ing in the decisions of respondent which read as follows: 1 CTA CASE NO . 980 "1. That the mer chandise covered by Seizure Identification Nos. 2589 and 2590 arrived in Manila from Hongkong, on Feb- ruary 15, 1955, on board the s/s ' HAIMENG', and were declared in Entries Nos . 13614 (Exh. "Au) and 13615 (Exh. " B11 ) , both series of 1955; � 2 . That the shipment covered by Seizure Identification No . 2616 arrived in 11anila from Hongkong on Fei>r uary 18, 1955, aboard the s/s ' Tsimengteng', and was declared in Entry No .. 14653 (Exh . "Cu), series of 1955;

\ DECISION :- CTA Cases Nos . 980 & 1150 . ' \' - 2- 3. That the importation covered by Seizure Identification No. 2691 arrived in Hanila from Hongkong on Harch lt, 1955, on board the s/s 'STRAAT MOZAMBIQUE ', and \ITas declared in Entry No. 18688 (Exh. "D"), series of 1955; lt. That the goods covered by Sei- zure Identification No. 2736 arrived in Manila from Hongkong on Harch 17, 1955, via the s/s ' PRE~OR~A ' and were declared in Entries Nos. 23285 and 23286 (Exh. 1tE"), both series of 1955 ; 5. That the s hipment covered by Seizure Identification No . 28lt2 arrived in Manila from Hongkong on April 5, 1955, via the s /s ' SILVERASH ' and was declared in Entry No. 30048 (Exh. "F"), series of 1955; 6. That the importation covered by Seizure Identification No. 2868 arrived in Manila from IIongkong on April 13, 1955, ex s/s 'TEGELBERG ', and was declared in Entry No . 31754 (Exh . 11 G"), series of 1955; 7. That the shipment covered by Sei- zure Identification No. 2882 arrived in Manila from Hongkong on April 16, 1955 , on board the s/s 'LEVERKUSEN', and was declared in Entry No. 31t122 (Exhibit. "Wr), series of 1955 ; 8. That the subject shipments are duly supported by proper shipping docu- ments except consular invoices and bank release certificates, for which reason they were ordered seized for alleged vio- lations of Central Bank Circular Nos . lt4 and lt5 in relation to Sections 1363(f) and 1250 of the Revised Administrative Code. 9. That the subject importations involved no dollar remittances or the sale of foreign exchange; and 10. That the shipments in question were released to claimant under surety bonds pending the outcome of the seiaure proceedings ... (Customs rec. pp. 6-8) r

DECISION :- CTA , Cases Nos . 980 & 1150. - 3- CTA CASE NO , 1150 n1 . That 381 packages of various foodstuff were consigned to Juana T. de 1a Cruz, which arrived in the port of Manila on June 23, 1955 from Hong- kong on board the S/S " ' Bencleuch ' " Reg . No . 731 , and which were declared under Entry No . 56410 , series of 1955 , (Exh. "A") , together with the bill of lading, (Exh . "B"), the commercial in- voice (Exh. "C"), the official receipt evidencing payment of duties and taxes (Exh . "D") and an official receipt evidencing the deposit of additional sales tax; 2 . That no Central Bank Release Certificate was submitted; 3 . That the merchandise was found to tally with the declaration in the entry and all duties and taxes thereon were paid. However, the Appraisers ' Division reported the merchandise for seizure for alleged violation of Cen- tral Bank Circulars Nos . 44 and 45 in relation to Sections 1363(f) and 1250 of the Revised Administrative Code, because one of the requirements for re- lease is the presentation of Central Bank release certificate; and 4. That the merchandise was re- leased under surety bond pending sei- zure proceedings . n After the seizure proceedings, the Collector of Customs, in two separate decisions , ordered pe- titioner and her surety, Alto Surety and Insurance Co . , Inc ., to pay, jointly and severally, the full amounts of the bonds filed by them for the release / of the importations in question, for the reason I that the said portations were effected in viola- tion of Central Bank Circulars Nos . 44 and 45 , in relation to Section 1363(f) of the Revised

. ) DECISION:- CTA Cases Nos . 980 & 1150 . 4- Administrative Code. From these decisions, peti- tioner appealed to respondent Commissioner of Cus- toms, who affirmed the same. Hence these appealso In her supplemental petition, petitioner al- leges that on January 21, 1962 the Nonetary Board of the Central Bank of the, Philippines promulgated Circular No. 133, repealing Circular No . 20 and all its implementing Circulars particularly Circulalfrs Nos. 44 and 45o Consequently, it is contended that the penalty of forfeiture incurred under the two latter circulars was abatedo The issues involved in these two cases are as follows : lo Whether or not the seizure and forfei- ture of the goods in question for failure to present a release certificate in violation of Central Bank Circulars Nos . 44 and 45, in rela- 'tion to Se ction 1363(f) of the Revis ed Adminis- trative Code, is valid; and 2. Whether or not the promulgation of Cen- tral Bank Circular No. 133 abated the penalty of forfeiture incurred under Central Bank Circulars Nos o 44 and 45o On the first issue, petitioner maintains that inasmuch as the importations in question were made prior to the effectivity of the No- Dollar Import Law (Republic Act No . 1410) and did not involve ~DY dollar remittance or sale -

DECISION :- CTA Cases . Nos . 980 & 1150 - 5- of foreign exchange, the same are beyond the pale of Central Bar~ Circulars Nos. 44 and 45 . Accord- ingly , the release certificate required by paragraph 14 of Circular No . 44 is not necessary. This conten- tion is without merit . Tpe importations in question arrived in the Philippines on different dates between February 14 and June 23, 1955 and prior to the ef- fectivity of Republic Act No . 1410 , but after Cir- cul~rs No o 44 and 45 took effect o ~~eing importa- I tions not involving dollar remittance , the same come within the purview of Circular No . 45 which requires a license from the Monetar y Boar d for such importa - t i on. There is no sho'\lling tha t the importations in question are covered by the necessary license o Furthermore , the fact that the said importa- tions do not involve dollar remittanc~ d oes not necessarily place them beyond the operation and purview of Circular No. 44, for although there \vas no immediate sale of foreign exchange, they ultimate- ly require the sale of such exchange. The currency of one country is not legal tender in another. To pay for imports , traders have to avail themselves of foreign exchange , which is the conversion of an amount of money or currency of one country into an equivalent amount of money or currency of another . Every importation of goods and merchandi$e requires an immediate or futt~e demand for foreign exchange

DECISION:- CTA Cases ' Nos . 980 & 1150. 6 - I' - (Pascual vs. Commissioner of Customs ,G . Ro L-10979, June 30, 1959) . The importations in question having been made without the necessary import license required by Circular No. l+5 and a release certificate from the Central Bank or any o~ its a uthorized agent ba1iks pursuant to Circular No . 44, they.fall within the class of umerchandise of prohibited importationn or merchandise 11 the importation x x x of which is affected x x x contrary to law" that the Commis- sioner of Customs may seize and order f~feited (Pascual vs . Commissioner of Customs, supr~ L ) pur- suant to the provision of Section 1363(f) of the Revised gdministrative Code. We come now to the second issue . Petitioner avers that the repeal of Central Bank Circulars Nos . 44 and 45 by Central Bank Circular .No. 133 extinguished the penalty of forfeiture incurred under the former two circulars. Again, petitioner ' s contention is erroneous. Insofar as the require- ment of a release certificate issued by the Central Bank or its agent bank is concerned, Circular No . 133 (Section 6) adopted the provision of Section 14 of Circular No . 44 by requiring the presenta- tion of a release certificate. Moreover, section 8 of Circular No . 133 made as integral parts thereof existing circulars�, rules, regulations and condi- tions governing transactions in foreign exchange ,\ / - I~� I

DECISION:- CTA Cases Nos o 980 & 1150 - 7- not inconsistent with the provisions thereof, such as the req uirement of a release certificate in section 14 of Circular No. 44 (Andres E. Lazaro vs . Commissioner of Customs, CTA Cases Nos . 833 & 834, June 14, 1963 ) � Assuming, for purposes of argument, that Cen- tral Bank Circ ular No. 44 was repealed by Circular No . 133, the validity of the forfeiture under the old circular would not be affected by the repeal, the merchandise in question having been imported illegally while Circular No. 44 was still in force. The expiration of said circular did not have the effect of legalizing an importation of goods which was illegal at the time of importation (Golay Buchel and Cie. vs. Commissioner of Customs, G. R. Nos . L-10994, 11012, December 29, 1959; Leonora Roxas vs . Sayed , G.R . Noo L-6502, November 29, 1956) . Relative to the respondent's counterclaim for additional damages amounting to �50o . oo, we observe that the same is based upon a provision of the bonds filed by petitioner and her surety to the effect "that if within thirty (30) days from demand for payment of the liability x x x the said liability is not paid, and it should be found necessary to file an action in court to effect the collection thereof, a penalty of FIVE HU1IDRED PESOS (~500.00) in addition shall

\ DECISION:- CTA Cases Nos . 980 & 1150. - 8- be imposed x x x x. u Obvi ou.S.ly, a demand for payment of t he amount covered by the bonds can- not legally be made until there is a final judg- ment ordering forfeiture and there being as yet no such final judgment, no liability for damages attaches as yet on the part of the petitioner (See Que Hua Shirt Factory 'vs. Commissioner of Customs, C. T.A.. Cases Nos. 739 and 753, January 11, 1962; Arturo Mendoza vs. Timoteo Y. Aseron, CTA Case No. 852, June 17, 1963) . WHEREFORE, in view of all the foregoing con- siderations, the decisions appealed from are here- by affirmed, with costs against petitioner. SO CRDERED . Manila, August 27, 1963. I CONCUR: ROMAN M. UMALI Associate Judge 7