CTA Case No. 2712 (Decision)

1r EVERETT ST~HIP CORPO- C . T~ . CASE NO . 2712 RATION ( . s owner of the SS "Fernandoeverett . " ) Petitioner , - versus - COiviMISSIONER OF CUSTOMS , Respondent. X- - - - - - - - - - - X DECISION Petitioner Everett Steamship Cor oration, owner of the vessel SS "Fernandoeverett , " ppealed from the decision of the cting Commissioner of Customs dated May 15 , 1975 , affirming that of the Collector of Customs of Manila dated November 8 , 1974 , imposing a fine of ~22 , 617 . 00 upon the said vessel and/or petitioner for violation of Section 2523 of the Tariff and Customs Code which provides as follows: Sec. 2523 . Discrepancy Between ctual and Declared We ight of Mani- f ested rticle .- If the gross weight of any article or package described in the manifest exceeds by more than twenty per centum the gross weight as declared in the manifest or bill of lading there- of , and the Collector shall be of the o inion that such discrepancy of the master or pilot in command , owner or employee of the vessel or ai rcraf t, fine of not more than fifteen per ~ ~ of the value of the package or article in respect to which the defi- ciency exists , may be imposed upon the importing vessel or aircraft. The case was submitted for decision based on t( 7

DECISION CTA CASE NO . 2712 - 2- the pleadings and the records of the Bureau of Customs wherein it appears that the vessel SS "Fernandoeverett" arrived at the Port of Manila on April 23, 1969 and discharged thereat 50 bales of assorted textile remnants. The gross weight of said merchandise as declared in the vessel ' s manifest and bill of lading was 17 , 500 lbs but , upon examination and appraisal by cus- toms authorities, it was found that the actual gross weight thereof was 62,869 lbs ., or a dis- crepancy of 45,369lbs (should be 44 ,369 lbs .). Consequently, in a letter dated July 9, 1969, the Chief of the Law Division of the Bureau of Customs informed the herein petitioner of the discrepancy of more than 2~6 between the actual weight and declared weight of the subject mer- chandise , and required it to explain in writing within five (5) days from receipt of said letter and to show cause why no administrative fine should be imposed upon the vessel for violation of Sec- tion 2523 of the Tariff and Customs Code . In its reply dated ugust 18, 1969 to the Chief of the Law Division of the Bureau of Customs, peti- tioner asserted that the SS "Fernandoeverett" was not liable for violation of the Tariff and Customs Code , because the articulars of the subject ship- ment, including the weight thereof, . wer e supplied by the shipper. Despite of petitioner' s explanation,

DECISION Ct CASE NO . 2712 - 3- however , anc. dministrative proceeding (Adminis- trative Case No . 493/69 ) was instituted against � the vessel SS "Fernandoeverett" and , upon the termination thereof , the Collector of Customs rendered a decision on November 8 , 1974 finding t he said vessel and/or its owner , petitioner herein,liable for a fine of �22 , 617 . 00 , repre- senting 15% of the total value of the importation , for violation of Section 2523 of the Tariff and Cus toms Code . On appeal , the Cowmissioner of Customs affirmed in ~ the decision of the Collector of Customs . Hence , petitioner appealed to this Court . The only issue in this case is whether or not the vessel SS "Fernandoeverett" and/or peti- tioner herein violated Section 2523 of the Tariff and Customs Code and , therefore , are liable for the f i ne'. Petitioner, in its defense of non-liability, pr esents to this Court the argument that the mere existence of a discrepancy i n the weight of the cargo beyond the 20% limit provided for in Section 2523 of the Tariff and Customs Code does not amount to a violation thereof because the u' nderdeclaration of the weight was not due to the carelessness or negligence of the master , owner or employee of the vessel , and in this case there is no proof or evidence

DECISION CT. CASE NO . 2712 - 4- to this effect . ( etitioner's Memo . pp . 41-42 , CTA records .) We find petitioner ' s contention without merit . The issue in this case and the arguments raised by petitioner are not of first impression. In the case of International Harvester Macleod , Inc . etc . vs. Commissioner of Customs , C.T.A. Case No . 2698 , November 25, 1977, this court ruled: t this junct~r~, it is hardly neces- sary to add that under Section 2523 of the Tariff and Customs Code , the declaration , ascertainment or verification of the cor- rect weight of the cargo at the port of loading is the duty or obligation of the master, pilot, owner , officer or employee of the vessel . If he omits or disregards this duty and a punishable discrepancy between the declared wei ght and actual weight of the cargo exists , the inevitable conclusion is that he is negligent or care- less . (See Delgado Shipping gencies , Inc. vs . Commissioner of Customs, CT. Case No . 2685 , Feb . ~, 1977; N~condray & Co ., Inc. vs . Commissioner of Customs, ~TA Case No. 2741, Feb. 3 ," 1977; Macondray & Co., Inc . vs . Commissioner of Customs, CT. . Case No . 2656 , January 21 , 1977 and cases cited therein .) Similarly, if in the - e~ercise or performance of this duty , he is neg- ligent or careless resulting in the om- mission of excessive discrepancy in the weight of the ship's cargo penalized under tha law, carelessness or incompetency is , nontheless, imputable to him . Thus , in the case of Delgado Shipping gencies , Inc. vs . Commissioner of Customs, CT. Case No. 2685 , February 15, 1977, cer- tiorari denied , G�� L-462G2, July 6 , 1977, this Court ruled: od as to petitioner's insis- tence of proof on the part of res- pondent of the negligence or care- lessness of the master, owner or employee of the vessel , suffice it to say, additionally, that this Court has already unequivocally

DECISION CTA CASE NO o 2712 r -5- ruled that under Section 2523 of the Code , the ascertainment or verification of the weight of the ship ' s cargo at the port of load- i ng is the duty ot obligation of the master , pilot , owner , or emplo- yee of the vessel . Failing thus , the conclusion seems to be inevi- table that there is an unexcusable laxity on the part of the master or owner in exercising the ordina- ry care a nd prudence in the com- mission of excessive discrepancy in the weight of the ship's cargo penalized under the law . Doing business in the Philippines , it behooves the master or owner of a vessel to abide by our Customs laws and regulations and to ig- nore t hem is nothing short of gross carelessness or incompetence . In t he f i nal analysis , however , we find the amount of the fine imposed by the Bureau of Cus- toms ' quite harsh 3ndconreasbhable. roe discre- pancy between the actual weight and declared weight of the cargo in question is 45 , 369 lbs. (should be 44 , 369~ lbs .) and based on the appraised value of 0 . 85 per lb. the total value of the excess weight is therefore $37 , 713 . 65 . Converted into Philip- pine currency at the rate of ~3 . 91 to a dollar , the total peso value of the weight discrepancy is P147 , 460 . 37 , and fifteen (15% ) per cent thereof , which is the maximum fine allowable by law , would amount to ~2 , 119 . 05. However , since it appears \. that this is the first offense committed by the vessel SS "Fernandoeverett" urider Section 2523 of the Tariff and Customs Code , and t aking into con- sideration that the law allows latitude in the

DECISION CTA CASE NO . 2712 - 6- imposition of the fine , we believe that a fine of PS ,ooo.oo would be just and reasonable . CCORDINGLY , the decision appealed from is hereby modified. The vessel SS "Fernandoeverett" and/or petitioner Everett Steamship Corporation , as owner of said vessel , : are hereby ordered to pay to the Bureau of Customs the fine of P5 ,ooo.oo for violation of Section 2523 of the Tariff and Customs Code . With costs. SO ORDERED . I CONCUR: resi