CTA Case No. 2546 (Decision)

I llEPUBUC OF TBlt PniLIP!IINltS COURT OF TAX APPEALS DELTA AIR CORPORATION, Petitioner, - versus - C.T.A. CASE NO. 2546 COI'-1MISSIONER OF CUS TOMS 1 Respondent. X- - - - - - - - .X DE C I S I 0 N Petitioner Delta Air Corporation has appealed ... from the decision of respondent Commissioner of Customs dated November 9 , 197 2 declaring its Cessna aircraft PI-Cl706 forfeited in favor of the Government of the Phi l ippines for having all~gedly violated Section 2530(a) of the Tariff and Customs Code. The facts of the case are not in controversy. As alleged by petitioner in its petition for review and admi t ted by respondent in his answer: 1. Petitioner is a corporation organ i~e d and existing under the laws of the Philippines with offices at Manila Domestic Terminal, Pasay City; while respondent, who is being sued in his official capacity, is tne government autho- . rity in c harge of the �enforcement o f the Cus t oms and Tariff Code of the Philippines and may be served with s ummons and other p r ocesses at the Bureau of Customs, Port Ar ea, Man ~ la; 2. On February 20, 1970, a Cessna air- c r aft, PI-Cl7 06 (not PI-Cl707) belonging to petitioner was apprehended and ~etained by the Philippine Constabulary, Bulacan Provincial Command, allegedly for being loaded with impor ted untaxed cigarettes consisting of two (2) cases and 335 loose cartons of Champion brand at Plaridel Airport, Bulacan; 1 ~~ u �-

DECISION - CTA CASE NO. 2546 - 2- 3. Subsequently, the Collector of Customs for the Port of Manila, Bureau of Customs, placed the aircraft before seizure proceedings under Seizure Identification No. 11405 filed by the Bureau of Customs~ the case was later docketed as Customs Case No. 71-26~ 4 . The Anti-Smuggling Action Center {ASAC) acted as prosecutor in said case, and during the proceedings thereof, petitioner established the following: a) At the time of its seizure, the air- craf t was "on charte r from petitioner by certain Mr . and Mrs. Rosales for a flight from Manila to Calbayog where it was supposed to remain over- night and return the next day to Manila, for a consideration of ~1,400.00, ~700.00 of which was paid in advance~ b) Petitioner exercised due dilige nce of a good �father of a family in th a selection and supervision of Capt. Gene r del Rosario who was the pilot of the aircraft , said captain having been hired by petitioner for his good record as a pilot~ c) Petitioner had completely no know- . !edge that its aircraft chartered by above Mr. and Mrs. Rosales was to be used or was actually used in carrying the i mported untaxed cigarettes in question. 5. After the parties rested their cases, the Collector of Customs rendered a Decision on May 28, 1971, the dispositive portion of which reads: "WHEREFORE, by virtue of the autho- rity vested in this office under Sec. 231 2 of the Tariff and Customs Code, it is hereby ordered and decreed that the cigarettes subject of seizure in Seizure Identification No. 11405 be , as they are hereby declared, forfeited~ while the seized plane be, as it is hereby declared, released upon proper identification and after the claimant has paid the fine of TWO THOUSAND PESOS {~2,000.00) which is hereby imposed, within the per1od of fifteen (15} .days from the date of ') n ,) i~ � .�: \.)

DECISION - CTA CASE NO. 2546 - 3- finality of this decision, but should claimant fail to pay the said fine the same shall be imposed against the plane as provided in Sec. 2532 of the Tariff and Customs Code. Claimant is further warned against the repetition of the offense on pain of suffering heavier penalty. Let copies of this decision be furnished all concerned including the office having jurisdiction over air pilots for their information, guidance and appropriate action. SO ORDERED. A copy of such Decision is hereto attached as Aqnex "A" and made an integral part thereof; 6. After receipt of a copy of said Decision, petitioner, desirou :! of terminating the case as i ts legitimate business as an air travel operator was being prejudiced by such case faithfully complied with the Decision by paying on June 11, 1971 the ~2 ,000.00 fine imposed. Xeroxed copies of the Statement of Fine dated June 11, 1971 and Receipt for the payment of fine dated June 11 , 1971 are her eto attached as Annex "B" and "C" aqd made i ntegral parts hereof; 7. On July 2, 1971, the Anti-S.muggling Adtion Center filed a Motion for Reconsideration of Decision of s.r. Nos. 11405 & 11405-~- . Only As To Penalty Imposed On Aircraft PI-Cl708 1 arguing that the Collector of Customs erred in nut imposing on petitioner the penalty of forfeiture of the aircraft, and on July 14, 1971 the Collector of Customs issued an Order denying such Motion for Reconsideration. A copy of said Order is hereto attached as Annex "D" and made an integral part hereof; 8. On July 26, 1972 and July 27, 1972, the Anti-Smuggling Action Center filed with the Collector of Customs a Notice to Review and Notice of Appeal From Collector To Com- . missioner of Customs, respectively, appealing the Decision dated May 28, 1971 of the Colle ctor of Customs as well as the Order dated July 14, 1971 denying the Motion for Reconsideration to respondent as Commissioner of Customs;

DECISION - CTA CASE NO. 2546 - 4- 9 . On November 9, 1972, d eciding the appeal - ~ with no additional evidence adduced- ~ of the Anti-~mug g ling Action Center, respondent promulgated a Decision, the dispositive r~ rtion of which reads: "WHEREFORE, the decis i on appealed fr om is h ..:: r eby modified . The aircraft PI C 1708 (should be PI - Cl706) CESSNA 206, belonging to the Delta Afr Corpo- ra t ion is hereby declared forfeited in favor of the Government for having found to have violated Section 2530-A o f the Tariff and Customs Code of the Philippines. It appearing that the subject a i rcraft had previously been released under Surety Bond CICP Bond No . 14745C(22)-00001 in the amount of One Hundred Thousand Pesos (~100,000.00), the Co llector of Customs of Manila is - he reby directed to order the return of the subject aircraft to the Bureau of Customs. In case of failure to effect the return of said aircraft, then appropriate action should be taken aga i nst the said Surety Bond. "SO ORDERED. 11 A copy of such Deci sion is her eto attached as Annex "E" and ma de an in te gr al part here o f ; 10. Petitioner was served a copy of said Decision on December 19, 1972; 11 . On December 29, 1972, petitioner filed a Mo ti on for Reconside ra tion of the above Dec i sion contending, with authorities, that: a) The Collector of Customs, after due hearing, has the a uthori ty to dete r mine the penal ty or penalties to be imposed in se i zure c ases; and b) The right to appeal from a decision of the Coflector of Customs to the Commissioner of Customs belongs only to movant-claimant (petitioner herein)~ the aggrieved party. A copy of that Motion for Reconsideration is hereto atta ched as Annex "F" and made an �.

DECIS I ON - CTA CASE NO. 2546 - 5- integra l part hereof~ 12 . On July 5, 1973, respondent issued an Order denying such Motion for Reconsideratio n . A copy of said Order is hereto attached as Ann ~ ~ "G" and made an integral part hereof; 13. On August 2, 1973, petitioner was served a copy o f the above Order, hence this Petition for Review before this Honorable Court within the 30-day reglementary period for appeal, ex- cluding the period during the pendency of the Motion for Reconsider a tion and after exhausting administrative ~ emedies~ There seems to be no quarrel between the parties that the subject aircraft had violated Section 2530(a) of the Tariff and Customs Code which provides, insofar as pertinent hereto at the time this case arose, that "Any vessel or aircraft, including cargo, which shal l be used unlawfull y in the i mportation or exportation of articles into or from any Philipp ine por t or place except a port of entry" shall be subject to forfeiture. As ruled by the Supreme Court in C.F. Sharp & Company, Inc. vs. Commissioner of Customs, L-23802, February 26, 1968, 22 SCRA 760: There is no question that M/L Cheton was apprehended carrying untaxed cigarettes of foreign origin wllhout the necessary papers showing that they were entered l a wfully thro~ a por t of entry . There is no question also that said cigarettes were liable for forfeiture pursuant to the Customs and Tariff Code. On the basis of th e afo r ~ stated facts, the con- clusion is inevitable that the M/L Cheton wai used in connection with unlawful importation of said cigarettes . The burden was therefore shifted to the boa t'~ owner to show that the carriage by M/L Cheton of the smuggled cigar- ettes ~as lawful. No such showing was made . ,'..)., i~..l.. 'v)

DECISION - CTA CASE NO. 2546 -6 - Hence , the Court of Tax Appeals committed no error in ordering the for f c~ ~ ure of the launch i n question . By way o f comment on petitioner ' s stand, it would be absurd to require the Government to prove that a vessel was en9aged in smuggling, a f ter it has already been caught red-~anded, that is, loaded with smuggled goods. The collision occurs at the proposition whether the Collector of Customs of Manila has the discretion to waive forfeiture and in lieu t hereof impose a fine. Four-~quare with the instant case on this point, i n view of the exact similarity of the law involved and t he i ssue l it igated, is Francisco D. Balrnocena vs. Corn- missione r o f Cu s toms, CTA Case No . 1 5 85, Ju l y 31, 1966~ I n tha t case , t h e petitione r fuerein, who is engaged i n the fis hi ng industry, io the owner - operator of the v ess e l M/B " Don Gerardo- B", together with seven other f ish i ng boa ts. While the M/B "Don Gerardo-B " was docked at Pi er 4 , North Harbor, Manila, Customs and PCAPE (now ASAC ) _agents duly armed with a s ear ch warrant searched the boat. F ifty-~our cases of "Old Gold" blue seal cigar- ettes and other assorted highly dutiable art i cles, such as playing c a r ds, printed bedsheets and haslenut milk blocks, were discovered inside the front end of Hatch No . 4 of the boat, which were all of fore i gn origin the corresponding taxes and duties of which were not paid. � Seizure proceeding was thus commenced against the fishing boat for violation of Section 2530(a) (b) (c) of

DECISION CTA CASE NO. 2546 - 7- the Tarif f and Cust ~rns Code by the Collector of Customs of Manila. It was shown during the hearing at the Bureau of Customs that t ~e owner-operator of the fishing boat had express instruction requiring the crew memb ersto comply strictly wi th Custows Rules and Regulations, but tiE bl ~ e seal cigarette s and ~ ther untaxed items were loaded o n board the vessel without the knowledge and consent of the captain and other crew members. The Collector of Customs rendered a decision decreeing the forfeiture of the fishing boat which, upon appeal, was affirmed j n toto by the Com- missioner of Customs. Petitioner therein thus appeal ed to this Court arguing, among others, that assuming arguendo that the ve ssel involiad is subject to seizure, the Collector of Customs committed grave abuse ofiliscre t ion in imposing the penaltytt forfeiture instead of a fine considering the mitigating circumstance of lack of know- ledge of the claimant- petitioner . This Court, spe aking through the then Presiding Judge Roman M. uma :.i, ruled that it is discretionar y for the Collector of Customs to waive forfeiture and in lieu thereof, impose a fine . Because of its de ci sive effects on the case at bar, we will quote at length from the decision . At first, th i s Court entertained serious doub t whether or not a fine may be imposed upon an offending vessel or aircraft for violation o f Section 2 5 3 0 of the Ta riff a nd Cu stoms Co de. Fo r this r eason, a n o rde r was issued o n Feb r uary 28 , 1 966, re q ui ri n g both pa r ties to submi t memo r andum on the � question whether or not a fine ma y be

DECISION - CTA CASE NO. 2546 - 8- imposed in lieu of forfeiture in cases arising unde r Section 2530 of said Code. Both counsel for pe titioner and the office of the Solicitor General express the view that there is sufficient authority for the imposition of a fine in lieu of forfeiture, citing Sections 2312, 2532 and 2533 of the Tariff and Customs Code. Under the old Customs Law, it was ex- . pressly provided that a fine could be imposed in lieu of forfei t ure. (Sec. 1365, Adm. Code.) This discretionary power to impose a fine in lieu of forfeiture was recognized in Venancio Carreon Tong Tek v. Com., C.T.A. No. 135, Nov. 21, 1956, affd., in G. R . No. L-~1947, June 30, 1959, 58 O.G. 5444. Notwithstanding the failure of Congress to reenact Section 1365 of the Administrative Code as part of the new Tariff and Customs Code, we agree with the Solicitor General and counsel for petitioner that such discretionary powe r exists. In seizure proceedings against a vessel or air- craft for violation of Section 2530 of the Tariff and Customs Code, it is no defense that the owner or owners had no knowledge of the offense or of the attempt to commit the offense charged. It would, therefore, be patently un- just, not to say highly arbitrary, to order the seizure and forfeiture of an oc( ! . liner or an aircraft engaged in international trade, which cost millions of pesos, for an illegal act of a member of the crew of the vessel or aircraft, or by a mere passenger, without the knowledge or consent of the owner or owners of the vessel or aircraft. In this cas e, it is admitted that the owners of the vessel in question, petitioner and his wife, had no knowledge of the ill egal act of a member of the crew of the vessel in surreptitiously loading and concealing the aforesaid articles in said vessel; that peti- tioner, prior to the apprehension of the vessel, had issued a memorandum instructing the members of the crew of the fi s hing vessel not to load contraband articles in said vessel nor to engage in any activity in connection with blue seal cigarettes; and that the owner of sai4 contraband articles was immediately dismissed by petitioner a nd was subsequently ..'

DECISION - CTA CASE NO. 2546 - 9- prosecuted for violation of the revenue la~ In view of these circumstances, we find that the imposition of a fine of ~lO,OOO.OO,in lieu of forfeiture, would be an adequate penalty. In arriving at this conclusion, we have also taken into account the fact that the f ,-i zure of the vessel and its subsequent impounding by the Bureau of Customs resulted in the deterioration thereof and caused damages to petitioner in the amount of approximately ~50,000.00, according t o an estimate made by appraisers of s aid Bureau. In Ivlai1 i la Star Ferry, Inc. vs. Commissioner of Customs, CTA Cases Nos. 1836, 1837 and 1839, September 30, 1969, where the factual setting is similar to that in the case at bar, t his Court unequivocally reiterated the foregoing rule in the following words: In proceedings for forfeiture of an article f or violation of Customs Law, lack of knowledge or consent of the owner in regard to the violation does not relieve the offending vessel from liability, although such fact may be considered in the deter- mination of the appropriate penalty. (U.S. v. Rubi, 32 Phil. 228). In this case, considering that the said vessels were merely h ired by pe r sons who made use of them illegally without the knowledge or consent of the owners thereof, and in line with the decisions of this Court in previous cases (See Balmocena v. Commissioner, C.T.A. No. 1585, July 31, 1966~ ~ ascual v. Commis- . sioner, C.T.A. No. 1608, Sept. 30, 1969), we have decided to impose, in lieu of for- feiture, a fine of ~5,000.00 each on t h e lighter "ORESTES" and the tugboat "UN-L.- 106." There is no valid r e ason for us not to apply to ~itioner herein the ruling of the Court in Balmocena and Manila Star Ferry, Inc., supra, as well as other cases cited therein, for Delta Air Corporation is

DECISION - CTA CASE NO . 2546 - I .0 - s imilarly situated. Respondent Co mmissioner of Customs admits in his answer that: (a ) At t he time of its se i zu r e , the aircraft was on charter from petitioner by ce r t a in Mr. and Mrs. Rosales for a fli g ht from Manila t o Ca lbayog where it was supposed to remain over-night and retu r n the next day to Manila , for a consideration o f ~1,400.00, ~700.00 of which was paid in advance; (b) Petitioner e x ercised due diligence of a~od father of a family in t he selecti on and supervision of Capt . Gener del Rosario who was the p i lot o f the air- . c r aft , said c a ptain hav i ng been hired by petitioner for his good recor d a s a pilot; (c) Petitioner had comple t ely no knowledge that its aircraft chartered by above Mr. and Mrs. Rosales was to be used or was actually used in car rying the i mported untaxed cigarettes in question. In view of these circumstances and considering that the subject a i rcraft was merely hired by persons who made use of i t illegally without t he knowledge or consent of the owner-petitioner hereof, i n l ine with the afor e- mentioned decisions, it seems clear that the Collector o i Customs may waive the p enalty of forfeiture and in lieu thereof i mpose a fine. In his answer to the petition fo r review, respondent avers however as special and affirmative defenses that:

DECISION - CTA CASE NO. 2546 - 11 - 5. The Commissioner of Customs has the authority to approve, modify, or reverse the action or deasion in this case of the Collector of Customs (Section 2313 of the Tariff and Customs Code of the Philippines) ~ 6. The Tariff and Customs Code grants the party aggrieved by the decision of the Collector of Customs fifteen (15) days within which to appeal to the Commission~r of Customs (Sec. 2313, ibid). Partial performance or execution of the decision by the party favored by said decision is no bar to the right of the party aggrieved to appeal, nor doe s such partial performance render the dec ision of the Collec- tor of Cu stoms final; 7. The Collector of Customs, when presiding over a se izure proceeding, sits as an indepen- . dent judge or tribunal where i n the Governillent and the private party are given equal opportunities to present evidence in their behalf (Gov�t of P.I. and McCoy vs. Gale and McMicking, 24 Phil. 95, Pacis v s . Averia, L-22526, Nov. 29, 1966). When the decision of the ~ollector of Customs � is adverse to the Government, the latter becomes the "person aggrieved'' who is given the right to appeal under said Section 2313. The term "person aggrieved" does not preclude the Govern- ment from appealing, since Section 3514 of the Tariff and Customs Code of the Philippines defines the term "person" as follows: "'Person� .whether singular or plur al refers to an individual, part- nership, association, company or any other kind of organization." Since the Government is a judicial person (Art. 44, Civil Code of the Philippines), the appeal taken by it in this case from the� decision of the Collector of Customs is, therefore, allowed by law. As already stated above, after receipt of a copy of the decision of the Collector of Customs of Manila imposing a fine of :Et2 , 000.00 on petitioner, the latter, desirous of terminating the case as its legitimate

DECISION - CTA CASE NO. 2546 - 12 - business as an air travel operator was being prejudiced by such case faithfully complied with the decision by paying on June 11, 1971 the ~2,000.00 fine imposed. However, on July 26, 1972 and July 27, 1972, the Anti- Smuggling Action Center (ASAC) ~ allegedly on behalf of the Government of the Philippines, filed with the Collec- t or of Customs a notice to review and notice of appeal f rom collector to commissioner of customs, respectively, appealing the decisi o n dated May 28 , 1971 of the Collector of Cus t oms as well as the order dated July 14, 1971 denying the motion for reconsideration to respondent Commissioner of Customs. And on November 9, 1972 res- pondent Commissioner of Customs promulgated a decision modifying the judgment appealed from by declaring for- feited in favor of the Government the Cessna aircraft PI-Cl706 in question. The next issue that presents i tself the refore is: Whether or not the Anti-Smuggling Action Center can still elevate the decision of the Collector of Customs on appeal to respondent Commissioner of Customs after full compliance and satisfaction thereof by petitioner. Section 2307 of the Tariff and Customs Code, at the time this case arose, provides as follows: SEC. 2307. Settlement of Case by Payment of Fine or Redemption of Forfeited Property. - If, in any seizure case, the owner or agent shall~ while the case is yet before the Colle ctor ,. ' 0 ,�_>_IL !

DECISION - CTA CASE NO. 2546 - 13 - of the dist ~ ict of seizure, pay to such Collector the fine imposed by him or, in case of forfeiture, shall pay the appraised value o � the property, or, if after appeal of the case, he shall pay to the Commis- sioner the amount of the fine as finally determined by him, or , in case of forfeiture, shall pay the appraised value of the property, such property shall be forthwith surrendered, and all l iability which may or might attach to the property by virtue of the offense which was the occasion of the seizure and all liability which might have been incurred under any bond given by the owner or agent in respect to such property shall thereupon l, � deemed to be discharged. Redemption of forfeited property shall not be allowed in any case where the impor- tation is absolutely prohibited or where the surrender of the property to the person offering to redeem the same would be contrary to law. Adverting to the terms of the law, it is yuite apparent that the importer .or owner of the goods seized, by making payment and redeeming the property seized under the decision of the Collector of Customs, may terminate the case right there and there. The statute at the time this case arose employs the words - "If, in any seizure case, the owner or age nc shall, while the case is yet before the Collector of the district of seizure, pay to such Collector the fine imposed by him or, in case c � forfeiture, shall pay the appraised value of the property x x x such pioperty shall be forthwith surrendered, and all liability which may or might attach to the property by virtue of the offense which was the occasion of the seizure and all liability which might have been incurred ~1 t

DECISION - CTA CASE NO. 2546 - 14 - under any bond given by the owner or 2gent in respect to s uch proper ty shall thereupon be deemed to be d i s- charged." I f under the above provisions, in a seizure case the owner or a g ent may , whi l e the cause is y et before the collector, pay the f i ne imposed , or in case of forfeiture, pay the appraised value of the property, and thereafter such prope rty shall be s ur rendered a nd all liability which may attach to said property by virtue of the offense c ausing the seizure is to be deemed dis- charged, the conc lusion to be drawn is that it is within the power and right of an importer, owner or a gent to end the case i n the o ffice of the Collector, therepy precluding any interven tion by the Commissioner �in the way of review ing a nd revising the decision of the Collec- tor. (Sy Ma n vs. Jacinto, 93 Phil. 1093.) I t may be argued t hat if the elevation of a seizure case to and review thereof by the Commissioner lies with in the owner 1 s exclusive power and discretion, then in cases where the Collector in his decision commits a blunder prejudicial to the inte r ests of the Government, or renders a decision through fraud or in collusion wi th the importer or owner of the a rticle, the Government cannot protect itself , s pecially in s muggling cases which imper i~ the nation 1 ~ economy and breed co r ruption in the official ~~m . It is true tha t reverence for precedent, simply a s precedent, . should not always be the r ule, specially

DECISION - CTA CASE NO. 2546 - 14 - under any bond given by the owner or ~g ent in respect to such prope rty shall thereupon be deemed to be dis- charged." I f under the above provisions, in a seizure case the owner or a g ent ma y, whi l e the cause is yet before the collector, pay the fine imposed, or in case of forfeiture, pay the appraised value of the property, and thereafter such pro~ erty shall be surrendered and all liability which may attach to said property by virtue of the offense caus i ng the seizure is to be deemed dis- charged, the conclusion to be drawn is that it is within the power and right of an importer, owner or agent to end the case in the office of the Collector, thereby precluding any intervention by the Commissioner �in the way of review i ng and revising the decision of the Collec- tor. (Sy Man vs. Jacinto, 93 Phil. 1093.) It may be argued that if the elevation of a seizure case to and review thereof by the Commissioner lies within the owner's exclusive power and discretion, then in cases where the Collector in his -decision commits a blunder prejudicial to the interests of the Government, or renders a decision through fraud or in collusion wi th the importer or owner of the article, the Government cannot protect itself, s pecially in s muggling cases which imper i: the nation'~ economy and breed corruption in the official t ~m. It is true that reverence for precedent, simply as precedent, � should not always be the rule, specially

.. DECISION - CTA CASE NO. 2546 - 15 - when the case involves smuggling which the law seeks to suppress. But t he law here is specific and mandatory. I t merely calls for application as thus worded and interpreted by the Supreme Court to whic h this Court is bound to follow. And it is well-settled that a statute, free from any constitutional infirmity, must be enforced as written. At any rate, settlement of the case under Section 2307 of the Tariff and Customs Code by payment of t he fine or redemption of the forfe ited property does not extinguish the offender'~ criminal liability under Section 3601 of the same Code. Section 2307 expressly states tha t what are deemed d i scharged thereunder are only "all liability which may or might attach to the property by virtue of the offense which was the occasion of the seizure and all liability which might have been incurred under any bond given by the owner or agent in respect to such property." It limits the effects of the aforesaid settlement to liability that attaches to the property, or to the bond that replaces the prop&r ty. It does not speak of the liability that falls on the person or offender. (People vs. Desiderio, L-20805, November 29, 1965, 15 SCRA 402.) Nevertheless, the Government is not entirely without remedy in cAses of erroneous decisions rendered against its interest by collectors of customs in seizure c ases .

-- DECISION - CTA CASE NO. 2546 - 16 - As pointed out by the Supreme Court in Sy Man vs. Jacinto : The argument is not without merit~ but we must bear in mind that the law is promulgated to oper ~t e on ordinary, common, routine cases. The rule is and the law presumes that in seizure cases Collectors of Customs act honestly and correctly and as Government officials, always with an eye to the protection of the i nterests of the Government employing them. If mistakes are committed at all more often than not they a re in favor of the Government and not against it, and that is the reason why when the impor- ter feels aggrived by their decision, he is given every chance and facility to protest the decision and appeal to the Commissioner. Case s of erroneous decisions against the inte- rest of the Government of decisions rendered in collusion and connivance with importers are the exception. To protect the Government in such exceptional cases, we find that in every seizure case, section 1378 of the Revised Administrative Code (section 2302 of the Tariff and Customs Code) requires the Collector to immediately notify the Commi s sioner and the Auditor General (Chairman o f the Commission on Audit). It may be that this requirement has for its main purpose the recording of and accounting for the articles seized so that in case of confiscation the Commissioner and the Auditor General (Chairman of the Com- mission on Audit) will know what articles have become government property . But the notice will also inform the Commissioner and the Auditor General (Chairman of the Commission on Audit} of the seizure. If the seizure is important or unusual, the Commissioner may, if he so desires, order the Collector as his subordinate to withhold action on the seizure, or hold in abeyance, within a re asonable time, the promulgation of his decision until after he had conferred with the Commissioner or the latter had studied the case and given suggestions. At that stage of the proceedings before definite action is taken by the Collector, and a decision rendered by him, it would seem that any action by him as a subordinate is still subject to the supervisory authority and

DECISION - CTA CASE NO. 2546 - 17 - control of the Commissioner as his Chief, and the latter may still influence and direct the Collector's action if he finds occasion for doing so. / While it is true that the authority of the collec- tor of customs to settle seizure cases under Section 2307 of the Tariff and Customs Code is now subject to the approval of the Commissioner of Customs as provided under the Tariff and Customs Code of 1978, effective June 11, 1978, revenue laws are prospective in operation unless the legislative intent that the statute operates retrospectively is distinctly expressed or necessarily implied . (51 Am. Ju~ 359; Lorenzo vs. Posadas, 64 Phil. 353; Commissioner vs. Filipinas Cia de Seguros, 107 Phil. 1055.) And there is nothing in the new Tariff and Customs Code which provides, expressly or from which it can necessarily be implied, that Section 2307 as amended has retroactive effect. It appearing that petitioner Delta Air Corporation has already paid the fine of P2,000.00 imposed against its Cessna aircraft PI-Cl706 by the Collector of Customs of Manila in accordance with his decision dated May 28, 1971, all liability which might have attached to the said aircraft by virtue of the offense which was the occasion of the seizure and all liability which might have been incurred under any bond given by petitioner in respect to such aircraft are hereby deemed discharged 215

DECISION - CTA CASE NO. 2546 - .18 - pursuant to Section 2307 of the then in force Tariff and Customs Code. Accordingly, the decision of respon- den t Commissioner of Customs dated November 9, 1972 declaring the aircraft PI-Cl706 Cessna 206 belonging to Delta Air Corporation forfeited in favor of the Government for having violated Section 2530(a) of the then in fo rce Tariff and Customs Code cannot be sustained. Surety Bond ICP Bond No. B-~4745C(22)~00001 in the amount of ~100,000.00 filed by petitioner in the Bureau of Customs for the release of the subject aircraft is therefore considered cancelled. WHEREFORE, the judgment appealed from is hereby declared of no effect. Without pronouncement as to costs. SO ORDERED. Quezon City, Metro Manila, June 30, 1980. AMANTE F LER Acting Presiding Judge I CONCUR: ~~ � ROAQUIN Judge