CTA Case No. 3407 (Decision)

~E?UftLlC O'f Til~ Pl!ITI..l?l'IllJ!:J COURT OF TAX APPE/�,LI 'lU~N CJT1' / LEE CO LIONG HA , Petiti oner, - .versus - C.T.A . CASE NO . 340 7 COMMISSIONER OF CUSTOMS , Respondent . X- - - - -----X DE C I S I 0 N This appea l involv~s t he fo rfeitur e of f oreig n exchange , which amoun t of a l o f ty ONE MILLION TWENTY- FIVE THOUSAND F IFTY-~IX AND FORTY CENTS (US$1, 025, - 056 , 43 ) _us dollars , l ends special eloqu ence to the case at bar , as follows : 1. FOREIGN CURRENCIES Kind of Box No . 1 Box No. 2 Tot al US Dollar currency Equivalent US Dollar US $423,655 , 00 $457, 010 .00 $885,665 . 00 $885,665.00 Australian $ A$ 6 976 .00 12 ,842.00 19,818 . 00 22 ,289 .30 Canad i an $ C$ 137 . 00 1, 221. 00 1, 358.00 1, 087.79 Deutsche Mark DM 2,200.00 12,2 70.00 14 , 47 0.00 5,779.32 English Pound L 8, 388 . 00 2, 963.00 11,351 . 00 20,608 . 88 French Franc FF 7 , 000.00 7,000 . 00 1 , 177 . 40 Hongkong $ HK$ 6,260 . 00 57 , 270.00 63 ,530 . 00 10 , 857 . 28 Japanese Yen Y288,000.00 88 ,000 . 00 376 , 000.00 1, 545 .74 Singapore $ S$ 350.00 2,450 . 00 2,800.00 1, 283 .24 I Swiss Franc 500. 00 500.00 229.60 f Saud i Rial R 5,480.00 14,515 .oo 10 ,995. 00 3,225.93 Scotland Pound 1. 00 1.00 $953 ' 749.48 or J?7 ,544 ,158 .39

DECISION - CTA CASE NO . 3407 - .2 - I I . CHECKS FOUND IN SUITCASE NO. 1 US Dollar 23 , 65 9.7 1 plus 7,4 80.00 D $31, 139 . 71 or P246 , 315 . 11 Canadian $ Aus t ralian $ 950 .00 761. 05 6, 019. 91 Swi s s Franc Deuts che Mark 10 ,090.00 11, 348 . 22 89,7 64.42 English Pound 600 . 00 27 5 . 5 2 2, 179.36 1 ,098.00 438.54 3,4 68 .85 . . 4, 269 . 15 7, 751.07 61 , 310 . 96 Sub-Total A $51,714;11 ~4 09,058 .6 1 III . CHECKS FOUND IN SUITCAS E NO . 2 US Dollar 10.00 10.00 79 . 1 0 Deutsche Mark 4 , 630.00 1 , 857. 21 14,690 .5 3 9,661 . 17 76 , 419.85 Aus t r a lian $ 8,590 .00 1,181. 62 Canad i an $ 1 ,475 . 00 5, 711.88 9e3 4 6 . 6 1 English Pound 1!170 . 96 45,180 . 97 Swiss Fr anc 3 , 146 .oo US$19 , 592 . 84 9 ,262 .29 2,5 30 . 00 P154 ,979 . 35 Sub-Tot al B � � � P564 , 037.96 GRAND TOTAL � � � US$71,306 .95 The afo rementioned f o reign currencies i n c a sh and check s we re tu rne d o ve r t o the Central B~ n k o f the Philippines f o r sa~ekeeping pendin g t ermin a tion of t he seizur e and f o rf e i ture proceeding therefor. The Central Bank , on the other hand, e ncashe d t he var i ous checks to the corresponding drawee banks o r fi nancial institutions t o avoid t he ir becoming sta le. (pp . 55- 57, Record ; pp. 1 6 0- 161, CTA Record) It appea rs tha t petitioner , a r es i dent of Hongkong car r ying British Passport No. 258338 , and an o utbound passenger on Phi l ipp in e Ai r l ine s Fl i gh t 3 06 for Hongkon g on August 3, 1981 , whi le ~t th SG ...

DEC IS I ON CTA CASE O. 34 07 - 3- p re-boa:din g area o f the Man ila I nte r na tion a l Air p or t wa s t agge d owner of t h e two (2) _s uitca ses un amb ig uousl y singled out on a c ue f o llowed by t he operatives of t he Fin ance Mi n i str y I ntel ligence Bure a u and Bu reau o f Customs pe rsonnel fr om a mon g t he baggage s a t the check-in loadi ng zone , which upon veri fic a tion fo und as suspected to conta in f o reign cur r encies in cash and checks ( above i nventory r eport ) _wi th ou t t he nec es - sary s upporting papers r equired nde r ex i s ting r egu- l at i ons , as foll ows : CB CIRCULAR NO. 265 dat e d November 20e 1 96 8 "No per son s hal l take o ut or e xport f rom the Philippines fore ign currenc y or any other f orei gn exchange except as othe r wise authorized by the Centr al Bank." (Pa r . 3 ) CB CIRCULAR NO. 534 dated J uly 1 9 , 1 976 "Unless speci fi cally autho ri zed by the Central Bank or allowed unde r existing inter - nati o nal agreemen ts o r Ce nt r al Bank regulations, no person sha ll tak e or t ransmi t or atte mp t t o take or tr a nsmit fo r e ign excha nge , i n any f orm , out of t he Philippines directly, t hrough other per sons , t hrough mails o r throug h interna tional carriers . 'The p rovisions o f t h is section shall not apply . to t ourists and non-resident temporary vi si~or s who are t aking or sending out of t h e Philippines the ir o wn fo r eign exchange brou gh t by t hem ." (Section 3) Th e Distri c t Collector of Cust o ms, Manil a Int e r- na tion a l Airport Cus tomshous e, in stituted sei zure pr oc e edings gainst t he s ubject f or eign exchange

DECISION - CTA CASE NO. 3 40 7 - 4- "the expo tation o f which i s e ffecte d or attempted contrar y to law" pu r suant to Sect ion 2530(f) ?f the Tariff and Cus toms Co de and acc or dingly decreed t he f or feitu re t hereof i n f avor o f t he gove r nme nt on September 17 , 1 981 (S eizu re I dent ification No . 44 71 - 81) ~ which on appeal by t he p et iti o ner - clai ma n t, was affir me d by t he respondent Commiss i one r of Custom s on November 18, 198 1 (C usto ms Case No . 81-35) ~ Pe- ti tioner had this r ecourse . Petitioner disputes the l egality of the f or - fe i ture . She holds herself as a t our i st and i nvokes t he exc eptive proviso of the 2nd par~graph of Sect ion 3 o f CB Ci r cular No . 5 34, _�Upra, provi ding t ha t " The prov i sions of t his section shall not apply to tour i sts and non-resident temporary vi s itors who are ta king or sending out of the Ph ilippines t heir o wn f o r ei gn exc han ge brought by the m." She claims t ha t t he con fisca ted foreig n cu r rencies wer e all along with her upo n arri va l from Hongkong on Au gu st 1, 1 98 1 . She opted no t to dec l are the same, there being no r equirement to do so. She had this amount for a spree at t he Phil ipp ine Village Hotel casino . He r plans fi zz l ed and abandoned a ltogethe r upon sight of a bl ack butterfly wand e r ing a bit too f ~r over her mothe r's t o mb buried some t ime in 1979) on he r 58

DECISION - CTA CASE NO. 34 0 7 - 5- visit at the Manil a Chi ne se ce mete ry, the day a fter arr ival. Immerse d somehow in Chinese super s tition, such a kind of close encoun ter augurs not so well for a comfortable b in ge at gambling. Th u s her dec is ion to return to Hongkong after a two-day st int bring i ng along t he foreign exchange s he brought, including some 64 4 for eign checks with an amount equivalent to US$ 71, 3 06.95, wh ich sh e exchanged with c ash US dol lar s a t the casi no when she droppe d by a n yway on the eve of her d e parture for Ho n g kong. Respon dent poses the r u b wrapped up th is wise: "In the cas e at bar, probable cause was establ ished even prio r to the i ns titution of the forfeitu re proceeding, on t he basis of the undisputed fact that petitione r wa s app rehensive and evasive when her two ( 2 ) _suitc a ses repo r ted to contain big amoun ts of forei gn currencies were rec a lled f or verif ica tion f r om among t he l uggages to be loaded in a van for l oading in the p l ane; that at f i r st she disclaimed owne r ship thereof ; that she even tried to p revent the open ing of said suitcases by first claim ing that she d id not have t he keys thereto when all along she had these keys; that she refused to give t he cor rec t n um bers for the combination locks thereof; t hot her t wo (2) suitcase s contai ned different kinds o f for e ign 5U

- DECISION - CTA CASE NO. 3407 - 6- currencies (cash a nd c hec ks) totalling the huge amount o f US$1,025,0 5 6 .4 3 conve r ted at the prevailing ratesi t ha t wh e n c on fronte d , she c o u ld no t explain where t he sa id fore ig n c u rrenc i es came fro m; and that she could no t p rese nt a ny Central Ban k a uthority to take said foreign currencies out of the country. In- d u bitab ly, t he for e goi ng f a cts l e ad to t he inescap able conclus i on t hat the f o reign currencie s in question we re bei ng s mug g l ed ou t o f the c o un t ry when p e t i tioner wa s apprehended ." The preci se issue is nothing more than whether or not t he forfeit ure of the subject foreign c urrenc ies i s in a cco r d wi t h law a nd evidence. What we have in the case at bar is a virtual Pa ndora's box of inc riminating evidence. The suit- cases i n q ues t i on, after a de manding wringer at veri- fication , yielde d forei gn currencies in cash and checks of a n a mount equivalent to some US $1,025,05 6 .43 at the preva i ling ra t es, which as earlier sta t ed were traced to the peti t ioner as the owner thereof. Mu r p hy's law must have taken over because everything that c o uld go wrong has, so to spe a k. The inter- ception could but be a fitting fi nale for a seeming reckless insatiety and altogether needless frus- tration. We view with ease therefore respondent's 60

' DECISION - CTA CASE NO. 34 9 7 - 7- ' righteous indignation that the subject foreign currencies ~ the necessary authority from the Central Bank incurred the liability of forfe i ture under Section 25 30 (f) of t he Tariff and Customs Code , as amended, sup ra . The actual findings are not short of tractable data laid open and fully disclosed, such are: First, the denial a nd dis- claime r then grudging admission of ownership of the , s uitcases and con tents thereof seem eerily irre- levant to the ebullient stance that the same have been brought by petitione r from Hongkong . We dis- trust the logic of such kind of intriguing colloquy. Second, petitioner's definite refusal to surrender the keys and reluctance to reveal the correct combi- nation numbers to the locks of the suitcases im- placably demonstrate a defensive clumsiness at further decepti o n. We find these sciamachies un- acceptable and indeed unthinkable. Third, the exchange of the cash US dollars with quite a number various instru me nts of foreign drawee banks and financial institutions nego t iated with loca l paye es and/or endorsees come s as a random quirk which cannot be easily reconciled with the evident needs nor advantage of the petitioner. At th i s point i t seems appropriate to pose the question, why? The 61 J

DECISION - CTA CAS E NO. 3407 - a- stark and st ari ng evide,nc:e however remains that the fo r eign exchang,e checks we're proc:ure�d locally. Fourth, the prospect of a substanti al financial stakes re- presente�d of a family gros:s income over a period of more th a n two years (U S $~25,056.00) ~ loan obli- gation (US $400, 00 0.00) .and inheritance (US$100,0 00.00) ~ solely and pr ecise l y thrust on a derring-do of a gambling novice, as petitioner in the case at bar, seems more o f a comedy of errors unless for du bio us mo t ive s as s urmised. Suc:h particu l ar malarky is inc ompr ehen s i ble. We are not prepa red to attach i m- por tance to such a conundrum. Petitioner must come to terms wi th the facts obt a ining, nothing more. Her claim of having brought the foreign currencies cannot remain nestled on the e xceptive p roviso of second par agraph of Section 3 o f CB Circular No. ~34, su p ra, which is not of such a b r oad s pectrum with open ended featu~es as would s i re the proposi t ion that every foreign exchange being taken out by a tourist had been brought by him . The attenda nt circumstances in the case at bar do not necessarily equ a te. The privilege, ge- nerously tolerated, must find confinement to the "foreign exchange brought by them". But, "Con- trary to petitioner's assertion, the foreign S2

DECISION - CTA CASE NO . 3407 - 9- curre ncie s seized were obtained in the Philippines, Proof of this a re the und isputed facts heretofor e me ntioned , as well as t he unc o ntrov e rtible fact tha t the payees and endorsees of the foreign c ur- r e ncy che~cks were ei t h e:r Filipinos or residents of the Philipp ine s (pls. s.ee Exh s . "I", "I-1" to "I-84 "1 "J", "J-1" to "J-323"; "K", "K-1" to "K 32"; "L", "L-1" t o "L-23"; "M", "M-1 11 to " 1- 1.2" I� "N" I "N-1" to "N-r3 .. , Record)~" (CTA Records, p. 1 65 )~ Just so and a p t ly enough, we sha re such findings. Accor d i ng ly, t he caveat that "No person shall take out or export from the Philippines foreign cu r rency o r any othe r f or eign exchange except as o the r wise a u t horized by the Central Bank 11 (CB Cir- c ular No. 265�) .i ns ofar as the same is brought to bear upon t he circumstance s of the petitioner r e tains. its po t ency. Petitioner must bear the burde n of pr oof requ ir e d unde r Section 2535 of t he Ta riff and Customs Code, as amended, thus, 11 Sec. 2515. Burden of Pr oof in Seizure and/or Forfeiture. - In all pr oceedings taken for t he sei zure and/or fo r feiture of any vessel, vehicle, aircraft, beast or articles unde r t he prov isions of tariff and customs laws, t he burden of proof shall lie upon the cla i mant : Provi ded: T h at~b able c au se shall fir s t be shown for t he institution of such proceedings a nd that seizure anc1 /o r forf~itur c was made under the circ umstances anJ i n the manner described in the pr eceding sections of this Code ." (Underscoring supplied) 63

... DECI SI ON - CTA CASE NO. 3407 - 10 - And petition e r has not pried hersel f loose from the grip of t he narrative implausibilities and internal contradictions as would prove her entitlements to a favorable determination as a matter of law and evidence. This Court can do little in leading petitioner out of what could be a l egal cul de ~ � WHEREFORE, t he petition for rev1ew is hereby dismissed wi t h costs against pe ti t ioner. SO ORDERED. Quezon City, M~tro Manila, February 28, 1983. ~ ,Tudge WE CONCUR: 64