CTA Case No. 3052 (Decision)

t AU'UDLIC 0 f HE f> HILlPr'� .��i;" t,;OU.RT 0 TAX PPEAL:s4 QUUO em ASTRO AIR TRA NSP ORT, I NC., C.T.A. CASE NO. 3052 Petitioner, - versus - THE COMM ISSIO NE R OF CUSTOMS, Res pond ent. X- - - - - - - - - - - - - X D ECISI N .. This is an appeal interposed by petitioner from t h e decision of r espon de nt Commiss inner of Customs dated Oc ober 30 , 1979, forfeit ing pe t ition er's Aircraft CV-440, Registry No. N- 90907, Identifi ca tion No. 2930-78, for loading vari ou s u nm anifest e d carg o es in commercial quantity in violation o f th e pr ovis ions of Section 2530(a), the Ta r iff and Customs Co de , in re la tion to Central Bank Circular 247 , as amended. The Court , in its resolution da ted July 20, 1984, had subm itt ed the above - entit l ed case for decision based on the pleadings ' and Cust oms re c ord . P~titione r is a corporation organized an d existinq under the law s f the Philippin es with office a dd ress at r� West Maintenance Area, Domestic Airport, Pasay City, Metro Ma n i 1 a ( Pa r a g r a p h I Pe t i t i o n 1 , CTA r e c � ) I t i s the own er of a n air cr aft Con va ir 440, with Registry No. N 90907 , and has a value of El75,000 . 00 or $50,000.00 in 1

DECISION - CTA CASE NO. 3052 - 2- the ye ar 1977. (pp. 17, 25 and 96, CTA. rec. ) On September 2 3 , 1978, pe titione r herein ~ntered into a "Charter Agreement" wit h At hens (M) SDN. BHD . , ~tlith a ddress at lst floor Terminal Building Senae Airport , Johore, Bahru, Malaysia, whereby the petition er was to provide and deli ver the subject aircraft at Sele tar Airport in Singa~ore at the disposal of the chu rt erer for several mon t hs . In the t an a ction of the a for e - me ntioned charter agreement, petition er wos represented by on e Atty. Victor Tantoco, as its attorney in fact, a d authorized to sign in its behalf in the said contract. ( s e e Ch a r t e r Ag r e e me n t , p p � C- 7 pp � 6 7 -- 6 8 , Cus t o ms r c c � ; see also Heading III par. 1, Pet"tion, admitted ln pat. 3 Answer pp. 2 and 35 , CTA. r ec .) Sometime on Se ptemb er 30, 1978 , the aforesaid aircraft left Manila for Singapore piloted by on e Captain Osias Mission and co-pilot Fredelito Juane, with Atty. Victor Tantoco as attorney-in-fact representing the petitioner for the purpo se of receiving the down-payment from the charterer pursuant to the char ter agreem~nt. Howeve r~ upon arrival of the subject aircraft in Singapore, the char te rer asked for the cancella t i on of the agreement for the reason that it would not be "financially feasible to continue with the charter agreement. (see Heading III, Par . 2, Peti ti on, admitted in par. 3, 2

DE CISION - CTA CASE NO. 3052 - 3- Answer p p . 2 a nd 35, CTA r ec.; see also af f idavits executed by Paul Marinas, pp. 1-3 and Jed Juane pp. 4-5, and 69, Cust o ms rec . ) Having failed to receive the down pay me nt in view of cancellation of the charter c ontract, At ty. Vic t or Tantoco, the petitioner' s representative, immediately returned to Man ila on October 4, 1978, after informing the c r~w that the charterer is l iab le for dRmDges . Thereafter, the pilot and co -pilot took upon t hemselv es to negotiate i n ~h eir own initiative with the charterer, Jamal Jamuladdin, an d as a r esu l t of the said ne got iation, they received goods in commerci al quonlity as payment fo r dama ges a r ising from the cancel l ation of the aforesaid charter c o ntract. (see Test imony of co-pilot Fred el ito Juan e, pp . 124-125; and pp. 118-119, Cus toms rec.) At about 4:00 P . M. of October 7, 1978, the subje ct ~ircraft left Singapo~e bound to Manila. (see Affidavit of Paul Marinas pp. l-3 Customs rec.) However , the said aircraft made a stop over at Kota Kinab u lu when the pilot noticed the plane's low fuel supply at about 4 :00 P.M. of October 8, 1978. The subject aircra ft thereaf te r left Kota Kinabalu for Manila. In the me a ntime, infor med of the scheduled arrival o f the subject aircra ft from Singapore by Atty. Victor Tantoco, Mrs. Paz Capistrano , As sista nt Admini st rative Offi cer of Aero Service Corporat i on, on October 7 1 1970, verbally notified customs and immigra t ion au t hori ties 3

DEC I SION - CTA CASE NO . 3052 - 4- ab out the ex pected arrival of the subject aircraft at 10:00 P . M. of the same date. (See affidavit of Mrs . Pa z Capistrano, p p. 70-71 , Customs reE . ; and her testi- mo ny , p . 140, Customs rec.) Acting on the con f ide ntial info r mation re ce ived by tea m membe r s unde r Mission Or de r No. 016-78 dated October 5 , 19 78 , t h e Nati onal Cust om s Police im mediately conducted s urv e ill a nc e of th e l a n d i ng p remises lt<hile waiting for th e a rr iva l of subjact air craft. (:ee Report of National Customs Po l ice p p . 92- 94, Customs rec.) In the evening of October B, 19 78, at about 8 : 1 5 P.M., the subjec - air- cr a ft arriv ed and landed directly and proceeded to the Do mestic Ai r port , wh e r e cu s toms po l ice , wi th two c~stoms examine r s , a customs inspector and an immigration officer were on hand to meet it . (See Testimony of Bienvenido �Buma n lag, p. 193 , see also pp. 92 - 94 Customs rec.) After thB crew and passengers alighted f rom the aircraft, Mrs. Paz Capistrano ha nde d a manifest to the Customs Inspector, Resurrec io n Rcgala , r eflecting ther ei n (Manifesl) the word " Ni 1 11 un de r 't h e c o1 umn c o n t e n t s f o r c a r go ( Se e m<lll i f e s t , p . 91, C~stoms rec . ) which me ans that no cargo ~as loaded on boar d the subject air c raft. Thereaft er , the hand carried ba ggages o f the crew and passengers were examined and the same were cleare d a nd subsequently released to them. (Testimony o f Sg t . Fed er ico Vin uya, p. 226, Cu~toms rec.) 4

DEC I SION - CTA CASE NO. 3052 - 5- However, they foun d the su b ject aircraft loaded with cargoes contr a ry to the "Nil 11 recording in the manifest, and considering that it was already midnight, the Customs and Mil i tary Authorities decided to seal the plane. (Tes- timony of Resurrecion Reg ala, p. 174, Customs rec.) On November 10, 1978, on instructi ons or orders by the Chief of the' Aircraft Op e r ation Division, Bayani Fernandez, Cu stoms In s pec to r [l sc :r Letim went to lhe Aero Service Hangar to assist and coordinate with the Military Authorities unde r Col. Jo se Zumel regarding the transfer of the se a led air cr aft from the Aero Hangar to the Manila Inter national Ai r p ort for the very purpo se of e xan i.r .ing and unloading the cargoes. (See r eport of investigatbrs, date d Nov. 3, 1978, p. 56, Customs rec.) Customs In specto Oscar Letim (See also pp. 205-207, of the Customs rec.) testified that whe n he alighted from the aircraft, t h e co-pilot of the s ubject aircraft presented to him a cargo manifest for his si gn ature but he refused to accept and sign the same , (see subsequent manifest p. 99 Customs rec.), and his second and subs eque nt mahifest was received by Col. Zumel on tho same date, October 10, 1978. (Testimony of Oscar L tim, pp. 203 - 2n4, Custom s rec . ) In the course of their search, it was disco vered that beneath the flooring of the aft Belly Section of said 5

. . ( DECISION - CTA CASE NO . 3052 - 6- aircraft , we e c ommercial q uantity of goods , such as, 167 uni ts of 3 band Radio Cassettes a nd boxes of grar e s, valued in th e amount of Bl,454,388.83. (See p. 101, Customs rec.; p. 59, Report o f I nvestigators, and I nven - tory reports pp. 20 -2 3, Customs re c . ) Consequently , the aforesaid cargo es i n co mmercial quantity, having oppear e d to b e unm a ni fested, a warr an t of seizure and dete n tion was i ss u e d ag ai nst these c argoes by Agustin A r~ angel, Officer -In-Ch a r �e , Customs District No. III on October 9, 1 978 , for violat io n of Section 25 30 (a) of the Tariff and Customs Cod e , as amended and C~ntr al Bank Circular No. 247 a s amended, in rela ti on to Section 2530(f) of the sa me Code. ( See Seizure Identif i cation No . 2930 -A -78, p. 107, . Customs rec .) Considering also that the said unmanifested cargoes i n commercial q u antity wer e load ed ~nd brou ght in by the s ubject ai r craft CV 440, with Registry No. 90907, a warra nt of s ei z ur e and detention wa s also iss ued on October 9, 1978 against the aforementio ne d aircraft. (S e i zure Identification No. 2930, p . 109, Customs r ec.) Administrati ve h~arings l1ave been condu c ted at the Legal Divisi o n at t h e Ai r port Customs Hou s e, and af t er the aforesaid form al hearing, the District Collecto r of Cu s t oms of Manila , on January 26, 1979, rendered a dec i si on forfei tin g t h e subject goods in commercial qua ntity as we ll as the aircra f t which loaded and hroug h t the g o o ds 6

DECISION - CTA CASE NO. 3052 - 7- in the country. (See pp. 264-270, Customs rec.) Th is decision was appea led to the Commissione r of Cus toms and on Decemb e r 30, 1979, the latter affirme d ~-toto, th e decision of the former (pp. 276 - 281 Customs rec.) and on January 10 , 1980 , petitioner interpos ed its appeal to this Court with r es pec t only t o the forfeiture of the aircraft. The sole i~sue submitted for decision is wheth er or not petition er 's airsraft, C l n\ �� ir 440, vlith Registry No . 90907 , could be forfeited for loading and bringing in this country goods in commercial q~antity in violation of Section 2530(a) of the Tariff and Customs Code. The provision of the law relied upon by res ~~ o ;i dent, in justifying the forfeiture of the subjec t aircraft, is hereby quoted as follow s : SfC. 2530. Property Subject to Fqrfeiture Under Tariff and Cust o ms La w. - Any ve hi cle, vessel or aircraft, cargo, arti cle and other obj ects shall, under the foll owing conditions be s ub ject forfeiture: a. Any vehicle, veesel or aircraft, in cl uding cargo, which shall be used unlawfully in the im- portat1 on or exportation of ar~ic les o r conveying and/or trans por tin g contr~band or s muggled articl es in commerc i al qua ntities into or from any Philippine port or place. The mere carrying or holding on board of cont r aban d or smuggled article in com mercia l quantit ies shall subject s uch vessel, vehic l e , air- craft or any other craft to forfeitur e; Prcvided. That the vessel, aircraft o r any other craft is not us ed as du l y au thorized collirnon carrier and as su ch a carrier it i s not chartered or leased; 7

DECISION - CTA CASE NO. 3052 - 8- Petitioner contends that the forfeiture of its sub- j e c t a i r c r a f t h a s n o b as i s b e c at.: s e t h e_r e ex i s t s no a t t P mp t to smuggle cargoes since the said cargoes are covered by manifest�, and if there was any violation, it was only a failure to supply the requisite manifests to the official concerned. Besides, petitioner has nothing to do and had absolutely no knowledge that the aircraft was transporting the said cargo es, and when ti�~ , ilot and co-pilot were nego tiati rJ for the payment in kind of the damages due to the unilateral cancellation of the charter agre eme nt by the charterer, they were only acting by themselves without the consent and authority from the petitioner. ( [ p , 7-B,- CTA rec.) Respondent, on the other hand contends that forfeiture of the subject aircraft is justified because the caruoes loaded thereto were unmanifested and, furthermore, it belongs to the category of articles the importation of which is contrary to Central Bank Regulation 247, rendering the said cargoes forfeitable together wilh the Jrcraft which .transported the sarnt.�, since seizure proceeding is �directed a g a i T .d t he 11 res" ( thin ~J) and the know 1 edge , consent, nnd good or bad faith of the petitione � is immaterial. (p. 40, CTA rec.) As regards the contention of petitioner to the effec t that the cargoes at the ti me of its arrival were manifesled \ and therefore forfeiture of aircraft is unjustified is 8

DECISION - CTA CASE NO . 3052 - 9- without merit. To begin with it is to be noted that there is no dispute to the fa ct that upon arrival of the s ubj ec t aircraft, the pilo t pre sented to Mrs. Paz Capistra no the manifest which, in turn~ handed it to the Customs Insp ector Resurrecion Regala wherein the word "nil" ap pears unde r the c ol umn cargo was indicated, meaning , that no cargo was loaded in the aforesaid aircraft. This aforesaid a ircraft upon its o r jval immediately proceeded to its ha nga r at the domestic airport. (See Testimony of Sgt. Federico Venuya, p. 228 Customs rec . ; See also af f idavit of Resurrecion Rega la, pp. 89-90, Customs rec.) PeUtioner insisted that the aforesaid commercial c. ' rrJoes in q u a nti t y were act Gally manifested, but said manifest was only lef t in the personal belongings of th e co - pilot, Captain Juane, wh ich manifest was pu rportedly inside the plane when the said a irc raft was sealed by Customs police, and said manifest was presented to Col . Zumel in d~ time i~e. , on Oc tober 10, 19 78, wh �n the authoritieH decided to unsea l the aircraft and unloaded the cargces i n qu e stion . ( See Affidav i t of co-pilot Capt&in Juane pp. 79-81, Customs rec.; al so testimony of said cu-pilot p. 132, Customs rec.) We a re not convinced that the subject cargoes were then manifested b e fore their a rri val . Th e fact is that th e fir st manifest pr esente,- sho~~s that wnrd "nil" appe �: rc, u n de r the colu mn cargo, which mean that no cargo at all 9

DECISION - CTA CASE NO. 305 2 - 10 - was lo aded 1n th~ said aircraft. IF ~t is tru e that the goods were manifested, then the word "NIL" should not have been pl~ced under the column cargoes in the first manifest. It is also noted that the petitioner has not controver t e d the original manifest and if there r eallj e xis ted a sub- sequent mani fest at the time of the arrival of the said cargoes, the pilot should hav~ ~.nmediately presented i t to the proper authority together with the original manifes t considering that the manifest -is a vital document required by every vessel o aircraft coming from foreig countries, and considering that the pilot in command has the ~ rimar. - obligation to have the necessary pap rs p resented to the proper authority upon landing of its aircraft in the country, and having failed to present the cargo manifest upon its arrival of the said aircraft, we are of the belief �that t he law was clearly violated in this cas e and, theref o re, forfeiture of the said cargoes ~re justified. Furthermore, it appears that when the cargoes were discovered Ly tte authoritie s in commercial quantities beneath the floo ring of the aforesa i J ai rcraft, this clearly indicates that the cargoes were s muggled and hidden from the prope r authorities. We ta e note that when tne afor esa id cargoes wer e brought into the country, the pilot 10

DECISION - CTA CASE NO. 3052 - ll - and co-pilot we r e so evasive that they could not pi . -point wh o the owner is o f the � Aforesaid cargoes, which is indeed very un usual, co nside r ing that the loading were conducted under the direct supervision of the said pilot& (pp. 79-81, and 74 - 76 , Customs rec.) Abo ve all, as can be gathered from the very adm inistra tive he2ring, there exists no claimant over U1e afor e s aid goods, nor did anyone enter its appearance to def end the le _;ality of tt e importation despite due notice o f the aforesaid heJr.iny before the Legal Division at the Airport _Customs ilouse This shows that the subsequent mani fest was merely prepared and pre sented to the proper authority after the disccv r r:y of the smuggled goods in commercial quantity . ~lith all these circumstances, we are convinced that the subject .cargoes were un man'fested, a nd, therefore, forfeiture is justified pu rsuant to the provision of the said law of th e Tariff and Customs Code . We agree wlth petitioner that the records of the instant case� \'J i 11 reveal that no evidence V.J hats oever h s been established b y respo .de nt to show that the peti- t ion e r h as r e <' 11 y k n ov-1 l e d g e o r h as c on sent e d t. hat t h e af ore said cargoes should be loaded in its subject air c ra f t , Duri ng the hearing before the Court, petitio tlPI' ��tas able to establish thru the testimony of the President of petitioner's corporation, Mr. Roque Ablan, to the effect 11

DECISION - CTA CASE NO. 3052 - 12 - that th e l oading of the cargoes were ex lusi 'ely done by the pilot and co-pilot without the blessing of the petition~r herein, and that petitioner wn s expecting that the aircraft will be manned by its regular pilot, Captain Valerio , and not Captain Mission and co �-pilot, Captain Juane. Jhe substitute pilots have never been authorized by petit ion er herein The su stitution of pilots was effec : sd apparently by petitioner's lawyer Victor Ta ntoco, due to the absence of the regular pilot Captai n Valerio and in good faith. Mrs Ro g ue Ablan declared under oath : Q. Now, pursuant to this contract, do you know what was done with that airc raft Convair 440 bearing Seri al No. N-90907? A. Ye s , sir, I was informed because I was out of the country. I make periodical calls to my off i ce when I a m out o f the cou n try, and I was told that based on the charter agreement, it wsnt t o Singapore to f! Ifil l a contract th at was signed by my representative. Q. And you are referring l o thjs contract Exhibit H? A~ Yes, however, I Q. Was it able to leave for Singapore? Do you know if it was able to leave for Singapore? A. Yes, sir, but a s I was trying to cl"rify my answer - -- Q. Okay, go ahea d. 12

DECISION - CTA CASE NO. 3 52 - 13 - A. --- I was so mad because the pilot that was supposed to fly was, at the last hour, changed a n d Ca p t a i n Mi s s i o n a n d Ca t_a i n J u a n n e \'I c r e the ones who flew the aircraft to Singapore. Q. Who was the pilot that was supposed to fly this aircraft to 5 � ngapore, if you rernemberr' A. I authorized only Captain Valer~o to fly the ai rc raft. Q. Now, when did you come to know that instead of Ca~t. Valerio, the pilots that flew thB aircraft were Capt. Mission and Cap . Juanne? A. At t:H day it flew. Q. After it has flown? A. I would not be able �to ascertain at that time because when I called Jp my off5ce, my law office, they told me that it was Capt. Mission and Capt ain Juane that was going to man i ile aircraft or was flying the aircraft , and ] do not know it at that time that I talked to"them the aircraft has already flown. Q. I see. Now, Mr. Ablan, I mean, you said that you con tantly get in touch with your office, where were you at that time, that was t1e time when this aircraft flew to Singapore? A� I t wa s s o fa s t I do no t k n o1-1 wh e t h e r I i'l a s sti ll in Moscow or I was still in New York. Q. But yo~ were in one of those two places? A� Ye s , i n t h a t wc e k I vi a s i n t "' o p l a c e s � Q. Now, did you ~now while you were in one of thosa two pl aces what happened to this a i I c r a f t a f t e r i t h as f 1 ow n t o Si n ga p o 1� e ? A. The next time I called up my office, I was i n f o r me d t h a t t h e c h a r t e r e r 1�1 e r e n o t c on: p 1 y i n g with the agreement, so, I told the m; If thal is the case, send the aircraft home. .../ 13

.. DECISION - CTA CASE NO. 3052 - 14 - Q. Now, do you know if the aircraft, �this parti- cular aircraft was brou ght back from Singapore a ft. e r failure of the chart e r_e r to com p1 y wit. h its commitment? A. Yes, I found out later on that it went home, bu t I do no t know when it was supposed to leave, I do not know who was going to be riJing in it except that I ins� r ucted t he n that. the captain and his co- p ilot and my representative --- no, and the two bring the aircraft home immediately~ because I said, If they could not meet or comply ~ they ~hould send back the aircraft. [J � ~~ o vi , cl i d y o u a u t h o ' i z a n y b.~ , p 8 r t i-~~0.:.~l..Y_ U~_r:.E .~~'I o f t h i s a i r c e8 f t , l�_1 o a d . a n y r a r g_o o_n i L s vi a y b a c k f r o_~ S i r1..9..�.!2_? .r e t o M8 n i 1 o. ? A. No, as a matter _of fact, ~s _!__~_o 1 d_y o ~, _I do not even \!~ant these t':IO ' p iJqts tQ_ fJy this airc_roft~, E:~re r_E_ason I do no t wa11t them to do an~th_~. Q � D i d you come to k no 'rJ b c fore the de p 8 r t u ,. c o f this aircraft from Singapore to Manila that it.. was carrying any cargo. A. No. Q. When did you for the first time come to know if you did that this aircraft arrived in Manila vii t h c a r g o e s ? A. Well, the next thing I knew was when I called up Manila they told me that it has been apprehended for a l legedly carrying narcotics. So I have to fly home immediately anrl I r equ2sted my. laiv office to sencl people to the constabuJ'C)ry anti-narcotics to make a thorough examination of the aircraft and t~ld my lawyer to have all t h e g o o d s t h at \'I e r e b r o u g h t i n to b e c o n f i s c o t e d � " ( P p � 8- 1 3 , He a r i n g o f No v � 2 3 , 1 9 8 2. ~L!_1 d o r l ~L~Sl ~�lied.) The same VJ�l Lt..ness Mr. Roque Ablan further testified as follovvs: Q. Yc,s, 'ut scmebody in your company '-j_d approve the appointment of these two pilots to fly them to Singapore? 14

DECI ION - CTA CA SE NO. 3052 - ]5 - A. They were not, I would say, appointed but they were only taken as substitute, the prac tice in the airport is, when there are pilots that on stand by, an& even in commercial airlines the y have stand by pilots, and they put them in j 1st so they would nol pay any penalties for a contr~ct that is existing. But as far as I know, these two pilots were taken in as substltu e but I have not approved of their substitution. Q. You, as an officer of the company, did not appro~e the designation of these two pilots to fly the aircra t to Sinqaporn but somebody j n your comp<:wy must have approved the d e cd l1 n a l i o n o f t h c :..; ,; ,_ 't! o p .i 1 n Ls � A. Yes, I would supposed so. Q � Do y o u k n o ,.1 wh o i n yo u r ~~_!21__ a p p r o y e d t h e desionation of th~se two pilots to fly the aircraft to Sin qapo re? A. I believe it ~;as Mr. Tantoco. l ie was aJr,o the one authorized to look into the contract. Q. � /.nd Mr. Tantoco was al~;o author ized to designate in the absence of Mr. Valerio whoever was available to fly the aircraft? A. No. Q. So would you like this Court now to believe that Mr. Tan t oco took it upon himself to designate somebody else to fly that Ai~craft? A. Yes. Q. Not san ctio ned by the-company? A. No, be cause he never even asked ~y legaJ officer or two of my directors who were at that time in Manila. Q. So now you want this Court to believe that it was a personal act of Mr. Tantoco in desig- nating those two pilots in place of Caot. Valerio? 15

DECISION - CTA CASE NO. 3052 - 16 - .. A. It was a personal act in good faith in order that we will not be paying damages for the non-oper Rtion of the fl i ght from Manila to Singapo.e. (T.S.N . pp . 21-23, Hearing df November 23, 1983. Underlining supplied.) Definitely, petitioner had no knowledge nor consenterl to the c omm i ssion of the acts by the substitute pilots whe n the subject aircraft were loaded with commercial quantity of goods . These acts were considered personal acts o f the substitute pilots wf l ch petitioner had nothing to do with. No evidence whatsoever was established by respondent linking petitioner of having knowledge and/ur consented to the illegal act committed by the substitute p i l ots by loading and bringing in the commercial ~uunt ity of cargoes thru the said airplane. Furthermore, it is noted that the owne r of the subject aircraft, petitioner Me r ein, defended himself that he came to know only of the illegal act of loading the commercial quantity of cargoes by the substi t ute pilots after the subject a ircrAft was apprehended hy the proper authority. (T.S . N" pp. ]2 - 13, Hearing of N~vember 23, 1982.) The most recent juris- p ruden'ce on this subject of forfeiture however is t.lle prin- c iple that: The fact that petitioner has no knovded:Je of the ill eg al act of t h e pilot of an airc_ aft does noL make the aircraft immune from forfeiture because this action of forf e iture against the aircraft is a proceedlnt.:J ~ ~; hence , it is-directed against the~ � This is the 16

----------- ~----- ._......._ DECISION - CTA CASE NO. 3052 - 17 - h~lding of the Supreme Court ~n its decision in Lhe caso of Commissioner of Customs vs. Court o_f Tax 1\ppeals, et. al., G.R. No. L-31733, promulgated on.September 2, 1985, and we quote: The imperative question presented to Us i n this appeal is whether or not the motor boat M/8 "Maria Victoria-P" is subject to forfeiture under the Tariff and Customs Code, particularly paragraphs (a) nnd (b) of Section 2530. XX XXX XXX ~1 I B " t�1a r l a Vi c t o r i a - P 11 v-1 a s a v e s s e l d u 1 y authorized to engage j~ coastwise trade. It is undisputed and, in fac\, established that it was used in the illegal i~port~tion of blue seal cigarettes. Thus, the law applicable is paragraphs (a) and (b), Sectior 2530 of the Tariff and Customs Code which states: "5 EC � 25 30 � r roper t y Sub j ~! c t to Forfeiture Under Tariff and Custo ms Law. -- Any vehicle, vessel or airc raft, cargo, article and other objects shall, under the following conditions be subject to forfeiture: " a � An y v e h i c le , v e s s e 1 or aircraft, including cargo, which shall be used unlawfully in the importa- tion or exportation of articles or in co.nveyi r;g and or transporting contra- band, or smuggled article in commercial quantities into or from any Philippine port or place , and any vessel which, being of less than thir t:' tons capacity . shall be used in the impor- tation of articles i ~ to any Philippine Port or place. The mere carrying or holding on board of contraband or smuggled articles in commer- cia] quantities shalJ subject such vessel, vehicle, 17

.-.. DECISION - CT A CASE NO. 3052 - 18 -� "' aircrart or any other craft to fo.rfe iture: Provided, That the ves~el, vehicle, aircraft or any other craft is not used as a du ly authorized common carrier and as such a carrier it is not chartered or leased; "b. Any vesseJ engagi.1g in the coastwise trade which ~hall ha\e on board any arti- cle of foreign growth, pro- duce, or manuracrure j n excesB of L1 �1 e amount r.eceBsary for sea stores, without such article having been properly entered or i, ega 11 y l.mporL~ e1 d � It Pursuant to the aforesaid provision, the vessel is clearly subj ect to forfeiture in f t\rn of the Government. Forfeiture proceedings ar in t h e n a t u r e o f p r o c e e d i n g s i n r e m ( Vi e r n e z o vs � Co rn- mi P s i o n e r o f Cu s t o rn s , 2 4 SCRA~Lr ) an d a r e d i r e c t e d a g a iris t t h e ! e s � The fa c t t h a �-� p r i v ate res 2_0 n_<j ::: n t has allegedly no .actuaJ knm'i.ledoe tha~ H/B "Mad_~ Victo .ia-P" was used i1leg�.1.lL_does not render the n essel immune from forfeiture. This is so because t h e f 0 r f e ~ t u r e p r 0 c e e di n 92.._l n t h i ~ c .a s e wa s i s t _i t u t e ~ ~ainst the vessel itself. Pr:i_vate re spondent 1 s defense that e h as no actual knov.Jledg e that the vessel ~~as use~ illeqally is personal to h in; but can~ot _�_bsolve thP- ve s s eJJ. from 1 i �a---b i-1-i-�t� '.r of forfeiture � -(�Under 1 in in g .Q. u r s Moreover, the afore1uoted provision prescribes )nan unegu�vo cal term t~le imposition of the_~alty ~f forf eiture in cases of unlawful importation of JJ foreign ~E._ti_c 1 es reg:ndless of v:_!lether such impo rtn- _t i o n o c ~ u r r e d wi t h o r wi t: h o u t t h e k n o'.'d e e o f t h e _o v-m e r o f t h e v_e s s e 1 � ( Un d e r s c o r i n g__Q. u r s In United States vs. Steam__,hip "Rubi" (32 PhiJ . 23 9); this Court, in resolving the quesL.on o f ~'1heU er or not the innocence of the owner in the illegal importation of foreign a rtic l es can withdraw the sh ip 18 I

.. DEC I SION - CTA CASE I D. 3052 - 19 - from the penalty of confiscation, said: 11 Th e v e s s e l vi h i c h co mrrd. t s l h e aggression is treated as the offender, without any reference whatsoever to the character or conJuct of the owner. x x tl 1is j s done from the necessity of the case, as the only adequate means of suppressing the offense or wrong. xx xx The doctrine also is familiarly applied to cases 'of smu�gling and other wis- conduct under our rPvenue laws �; und x x x embar s 0 nd non- inte ;'t o urse acts. xx xx The same thing applies to pro- ceeding ~ rem or seizures in admiralty. xx xx the acts nf th e master an d crew,' 1. n case s o f this sort, bind the interest of the cwner of the ship, whether he be innocent or guilty. 11 WHEREFORE, the decision of the Commissioner of Custom s a p pea led f rom i s l1 ere by AFF I RME D, vii t h c o s Ls n q a i n s t petitioner. SO LJRDERED. Quezon City, Metro Mani a, .........__ ROJHHJIN Associate JucJge \vE CONCUR: AMi\NTE F Presidin 19