CTA Case No. 4166 (Decision)

REPU BLIC OF TH E PHILIPPINES COURT OF TAX APPEAL S QUEZO N C ITY FEEDER INTERNATIONAL LINE PTE, LTD. by its Ag ent FEEDER INTERNATIONAL (PHILS.), INC ., Petition er ~ C.T.A. CASE NO. 4166 THE HONORABLE COMMISSIONER ;J_/~ 1ltr OF CUSTOMS, Res pondent . X- - - - - ------ X DE C I s I 0 N Th is is a pe tition fil e d by petit ioner Feeder In ter-n a tiona 1 Line F'TE ~. Ltd. , see king a review a nd r e ver sa l of the deci s ion of res po nd ent Comm issioner of Cu~toms d ate d May 1 3 , 1 7'87 ~ a ffinning the~ deci sio n renc: �::? r��ed by the Di st r��ict Coll ector of Custo ms , Port of Iloilo, on Mar c h 19, 1987, finding the ve ss~~ l. M/ T "ULU l.tJA I" gui 1 ty of violating Section 2530 ( c:~ ) of the Tar if �f a nd Customs Code of t he Philippin es (PO 1464), as a mende d, and its cargo of 1, 100 metric tons of Gas Oi 1 a nd 1, 000 metric tons of Fuel Oil guilty of viol a ting Section

DECISION CTA CASE NO. 4166 2530(a) ~ ( f ) and (1) - 1 o~ the sa me Code and ordering the forfeiture of the said vessel and its cargo. There is no substantial dispute on the facts as stated in the decision of the District Collector of Customs 01 Iloilo and as adopted in the decision of respondent Commissioner of Customs, to wit: The M/T "ULU WAI" enter��ed Phi 1 ipp.ine t:err-itor...i .�~l Wc!.'l.te r-�s and on May .14~ .1986 anchored at the vicinity of Guiuanon I s land which is under the t err itorial Jurisdic tio n of the Port of Iloilo~ without notifying the Iloilo Cus toms au thor i ties. The prese ncn of the vesse 1 only came to the knowl e dge of the Iloilo Customs authorities by information �fLll~nished by ci vilian infot'� mer-f:; in the ar-ea. Act i.n~1 on the s aid in fnr ma 'I: .ion~ Co 1 1 e c: to r� Gi 1 [I � Ar-ma cl <~ , Ac t. i. n q Di s t r.. .i c t:. Collector� of Iloilo, di s patc hed ~ Customc Team on May 19, 1986 to vrri fy the r-l'~ por"l: � The CLls'toms Te a m confirme d ttl�~ presence of the vessel a nd found out that she was loaded with 1, 1 00 metri c tons of g as oi J. and 1, 000 metr-ic t:cm!::; o'f' fuc J. oi 1 . A �{�. ug hoa t 1~/T "C a thP,'>.d" a11d a bar-� ~1e "Semi rar a No. 8104�" we r-e a 1ong s ide the vessel. Likewise, the Customs Team found out that the vessel did not have on board the r-�equi red ship' !:i and shipping documents, except for a clearance from the port authorities of Singapore clearing the VE?Sse 1 for "Zamboan" .

DECISION CTA CASE NO. ~166 ::::: --� In v i e w thereof, the . vessel a nd i t s car go wa s h e ld and a l.Ja r-r ,':\nt of Sei zure and Det en t icm over�� th e same was after due investigation. issued~ Lik e wi se , in thF..? co ur�se of th E.~ hearing, the pl ai ntiff <:md d ef e nd a n t. s thru c oun se l s agreed on a s t.i pu.l ,':\ t.ion of f acts wh ic h ~-.!ere duly approv ed b y th e hea r i ng o f ficer. The facts stipulate d a r e as f ollows: 1. That the existence and i dentity o f M/T "ULLJ WAI", sub ject of S I - 2- 86, here in identified as E:d1. -" A " ,. is-, a dmitt e d ~ ~ ' 2. That t he exi stenc e and i dent i ty o f 1,100 metric to n s of gas oi l, subjec t of SJ - 2 -8 6 -�� A, h erei n ide nti fied as E:.: h. "B ", is admitted ; 3 . That t he existence anrl i d enti t y o �f 1~000 metr� ic to1 �1:; o f fu e l oi l, s ub ject o f Fi I -- 2�- !36 �- A h er�� ei n idenl::ifi ed <l.S E::h . "B -- 1", i s .:~ clm it t E� d; 4. Tha t M/ T "ULU ~\l('tJ ." lef t Sin g a por-e Mi:l.y 6, l9 8t:> a n d '"as c l eared by Si ng a po re cu s to ms au thorities f or lam boanga , Philippines ; 5. Tha t s ubjec t vesse 1 ar-r ived at Guiuanon Isl a nd, Mu nic ip a lity o �f Nueva Va 1erJF- ia, Sub - provin ce of Guimaras, Province of Iloilo, Philippines, about 1120HRS, May 14, 1986; 6. That subject vess el was boarded by Customs and Immigration authorities for the f irst time

DECISION CTA CASE NO. 4166 -- 4 - in the afternoon of May 19, 1986, a t about 1600HRS; 7 . That an appre he nsion r eport dated May 21., 1986, s ub mitted by the Team Leader of the Cus tom s a nd I mmi gration Tea m, Roberto Intrepido, marked and identified as E:�:h. "C" i s adm itte d; 8. That at the. time of boa r ding , the Mas t e r of subject v esse l cou ld not produce a ny s hi p and /o r s h ipping doc uments regard .i ng h er Ci:H"QD .~~::ce p t the F'or� t C l eara n ce Cc~r-t.i f i.e a te No. 179999 issued by the Port. of Si ngapore Au thority dated ' May 4, 1986, mar-:.1-: ed as E:.: h. "D" which is hereby admitted; 9. That on May 26, .1 98 6, thE~ Master of th e MIT "ULU WAI" Capt. Rom eo E. Deposa f i led a Marine Protest d ated same date, which Marine Protest, mar k ed and identif ie d as E:<h. "E", i s hereby admitted; 10. That the sworn statPmen t of sai d Capt. Romeo E. Deposa, marked and identified as E::h . "F", given o n May 2 6, 1986 before Atty. Hernando Hinoj<3.les, Customs Legal Offic:t?r, is ad mi t.tE:~d; 11. That the s worn statement of Mr. Antonio Tor~e s, Own e r 's representative of M/T "ULU WA I", marked and identified as E:�:h. "G" given bef ore Atty. Her-nando Hinoj ales o n May 2 8, 1986, is admitted;

DECISION CTA CASE NO. 4166 _.,. 5 - 12 . That the swo rn state ment of Wilfreda Lumagpas, Master of MIT "Cathead" given be �fo re L.t. Dennis Az arraga on June 4, 1986 mar�ked a nd identifi e d i:\ S E:-: h . "H", i s adrnitt~~d; 1 :::, That the e:-: i ste n ce of F i:-:ture Note No. FN - M- 86 - 05 - 41 entered into by and between the National Stevedo ri ng & L.ighter�age Cor-poration and t h e Far East S y nergy Cor poration , marked and ide n tifi e d a s E:-: h. "I", i s admitted; and 14 . That the P re 1 imina ry Repor-t of S urve y Sounding Repor t dated ,J une 17, l. 986, s ign ed b y ,J.P. F'iad, Surveynr of I nterpnr�t S urve ying Services, I n c. and duly atteste d by E r nPstn Cu tay, C hi e f Offic e r� of thP M/ T " UL. U WA I", mar� k ed and .i..d Pn ti f .ied a s E:-:h. " ,J" .is a l so ,,, d mit:tecl. l....i. k e ~'li SF], in the co n sn lidat e d seiz u re pro cP e d .i n gs ( Sei zure Identifi c:~:lti.on No. 2-86 fo 1~ th F! v essP l a nd Se :i.zure Identificati o n No. 2'" - 86- A were instituted on May 30, .1986 ;:md jointly hea rd initially on July 7, 1986, pe tit ioner Feeder International Line PTE, Ltd., owner/claimant of the vessel "ULU WAI" c:md its car go, fil e d a "Mot io n To Dismiss and To Quash War rant s nf Seizure and 7:.6

DEC I S I 01\1 -�� CTA CASE NO . 41 6 6 - 6 -- Detention" CHl December 5 ~ 19B6 o n t he ground that the government fai l ed to e stabli s h t he exi s t e n c e of probable c ause on the ba s i s of th e e v i d e n ce presented, but said motion ~~~ .:~ s de n ie~ d b y th e District Collector of Customs of Il oil o on De c e mber 1.2' 1986. Co n seq u fmtly, on January 1 3 a nd 20 , .1987, petitioner pres ented its e vi d e n ce con s i stin g of the -. testimon ies o f Mr. Wi l s on L im, Pre s i .d ent of Feeder Inte,~ national (F'hil s . ) , Inc. a nd Captain Ro meo Deposa, Maste r of t h e ve ssel M/T "LILU WAI" and EH h .i.b its ''1.'', 1' :-2' ' , ' ' 3' '~ '' :3 ��- A' ' , '' 3��-� E~ ''!' '' ~~:. -~ C'' , ''4'' ~ "4 �--A", "4 - B", "4 �- C", "5" , "6", " 7 " , " B " a nd " Cf " t:. o est<:~.bl ish th e de �fen s e th a t t h e v e s se l 1"1 / T "UUJ WAI" dr�i�fte:-- d to Guiu <.u. 1 o n I s l a nd , Gu im <'H ' iF>, JJ o i.l o, "in distr...e s s" and that ht-? 1~ c ar.. go o �f g <"- ':; o i l a n c:l f uel were cove ,~� ed by the ne c e s s ar-y s h i r1 pi. ng d oc urn r. nt s , namely : 1.. Loca 1 P ure h ;;~.se 0!'- de r-� dated Apr i J. 28, 1986 i-~sued by PogLm Construe tion SDN BHD with off i ces at. Pogun House, Tuanon Roa d, Kota Kinabalu, Sabah, East Malaysia. (E:�:h. 2) 2. Bill of Lading issued o n May 5, 1986 by Feeder Inter-n a t i ona 1 Line PTE, Ltd., with address at 10 An s on Road,

DECI S ION CTA CASE NO. 4 166 �- 7 �- In te r-r-1 at i o n '" l F' 1 <3. z a ~ S i. n g '" pore ~ co v er in g the s hipm e nt in bulk 2 ~10 0 t o n s; o �f g t\~"3 o i l a n d �f u e 1 o i 1 ~ I'll i t h F a 1r� E as t S y n E.~ r� ~~ y Corpo r at i on~ Zamboanga~ Phil ippine s~ as th e c: ons i gn c~~e ~ � i�'\lld S a b c.":\ h ,:o~s th E? r �or t. o f Di sc h a r��g e i:":\nd Sing a po1'�e as th t: por� t o�f lot:":\ding. ( E:-: h s . 3~ ~.)�-� A ~~ 3-��C ) :3 . �rh e A'l <.-:\-nife~s t r--:Jnl:ai n .i.tlg th e d et ail s o �f the s hipm e n t a nd th <�:d : Fee d e r�� Inte n1at.:i o nal Line PTE , Ltd. is the s hipper a nd Far Eas t Synergy Co rpo ra t ion is the c:t"Jnsi~1nee. (E ~< h ., 4� ) On Mar�ch .19 ~ 19B7, the D.i. s b i ct. Coll ec t.o1�� of Customs of Iloilo r�end e r e d hi s d ecis ion in s,'":l id sei z un;) proc: E:' f.~ c:lings (S. I . No s. ::-:~ �-� 136 ;:md 2 - t36 - �A), � the dispos itive portion of which s t a t es : "~.oJHEREFORE ~ p rem i !'5e s c: em s id e r�'e d ~ the M/T 'LJUJ WAI' i s hereby found gui 1 ty of violating Section 2530( a ) of th e Tari �ff ,cmd Cu ~; tom s CodE.~ of the Phil i pp'i nes (PO 1464� ), a s amended, whil e ca r� go..: of 1, .100 MT Ga s CJi 1 and 1 ~ 000 t1T Fue 1 Oil ar e hereby found guilty of violatin g Section 25 3 0(a), ("f) and (1) - .1 und e r th e ~ arn e Cqd e a nd a r e h e r e b y "f orf ~i t e d in fa vo r o f th E~ ~~ epub l i e of the:? Ph i J. i pp i nr:? s." which de c ision, on appeal, 1'1/ as a�f"f i nn ed LD. ...t..<?.t .<'.l.. by the Commi ss ion e r of Cus~om s in hi s d ecis ion dat e d May .13~ .19F.37. 1..-fence-? , t.t� , pr� esent petiti.em fr.Jt- r"E? view. The issue for res olution is whethe r or not the ve ss el. t1/T "l.JL.U WAI" and i t s c:a r.. go a r� e li. c.'' lble to

DECISIOf\1 - CTA CASE NO. 4166 �-� 0 forfeiturr e for� violation of Sc::>cti o n 25 :2:0(a)~ (f) and (1) ��- 1 o �f the Tarif �f a nd Cu~;t.o rns Code, v1hich pertinently provides as follows: 11 Sec t i. on 2 530 � F=~r9PE? r.:t:Y � :~>u I::>.Jf~ c t . .:t. o f.:qcf.f=.!:i,_:!;qr:~... _!,_\_nder :t:.IJJ::?. T.<3.r),t_f .. :~n d__ Cu 2 tgm s l,.9.!'.J. . ~ .. Any vehicle, v essel or� air-c raft~ car-go :{ :�: :�: shall~ und er- t.h F.! following conditions be subject !o forfeiture: 11 a . Any vehicle, vessel or aircr-aft~ in c luding car- go, which shall be u sed unla1�dully in the importation or- exportation of articles or the conveying and/or transpo rt ing contra band or smuggled artic les ir c ommet-�cial qu a ntitie s to or� f r . 111 any Phi 1 i ppine pcwt or p 1 i:\C E? ,, :< ~{ ; "f. Any articl P. th E~ .imr1ortation or.. t:!:�:pot-� tat- :i.un o f wh ic h is effected or attrnmpterl corltr-a r�y to law~ or�� .,.,ny a r'�t.i.clP of pr �ohibi ted impnr �t,:\ticm ot.. exrnrtatinn x x x; 11 1. Any ar-tie le souqht to be imported or exporte d. (1) Without going th rough a customs house, whether the act was consummated, frustrated or attempted; ,,.,,.,,.,..,'.", The facts and circumstances borne by the evidence adduc e d _ -in th e sr:-? i z t.t re

DECI S ION CTA CASE NO. 416 6 �- 9 -- suffi c i e ntly estab l is h t h at a n i l l eg a l i mport a tion, or at l e a s t a n a t te mpt th e reof , h a s be e n c o mmi tt e d in thi s c a s �=~ with th e u se of t h e v e sse l M/T "UL.U ~JAI", thu s wa r-r a nt i ng t h e fo r-�f ei t u n~ o f s .:~id v esse l a nd its ca r go und er t he fo r egoin g p rov i s ion s o f the Tariff a nd Cus t o ms Cod e. Adrn.i t t e' d l y, t h e ves s el t1 / T " ULU WAI", o f Hunduran Regis t r y, ca rne f ro m Singa p or e loa d ed wi t h a ca r go of 1 ,1 0 0 me tric to n s o f Gas Oi l a n d 1 ,0 00 metr ic t o n s of Fu e l Oil a n d a n c l1 on? d o n M,"' Y 1 4, 1986 at Gu iu a n o n I s l a nd , Gu:i.rnar� as, Il o il o , v1h.i c: h was wi t h i n t h f? t e r-r-.i t cwi a l j ur i s dic t i on of t h e Philipp i n es. I t did n o t n o t i f y t ll o I 1 o i. l o po ,,- t o r c u stoms bo a r-d e d by c: u c:; t o rn <.:.; a nd irnrni.gr<\t.Lon p ff i.ce r �,-, rll l l"l<1y th e ca p tai n or� rna ste t- of th e vE~ 5SF' 1., Ro meo D �- po sa , c: ould n o t s u b mi t a ny s hip pin !J d o cu me n t s e:-:ce pt a Port Cl ea ran c e Ce r t i f ic a t e issue d ~ y the Si n ga po re Port author i ty among others, that its cargo wa s "bunk e r oi 1" and its des tination wa s "Zambo a n" (or as adm i tted, Zamboanga) � Furthermore~ at t he ti me the ve sse 1

DECI S I ON -�� CTA CA S E 1\10 . 1 166 �-- 1 0 -- was appr- e h e n d E> d by s ,:d .d cu ~::; t .om s t.P c-un ~ a tu q b oe.'\ t. n <::\ med MIT " Cat. h e a d" a nd a b a r9 e , 81 04 11 ~ c o ntr a c ted by th e co n s i g n ee o f U H? C0\r- gn, were alongsi d e the ve sse l t. h E1 pur- p o sP n �f tr�ansfer-r-ing i t s c argo to th e b a l~ g e a nd tw inqi n~1 i t to 1'1 a n i 1 a. S a id tugboat and b arg e a ctu all y a r-riv ed a nd we n t al o ng si d e M/T II ULU l.J (.) I II a t Uui.U iO\ non I s l a n d, I l o i l o , o n l"lay 1.8, .1 9 B6 b u t. t h e un l o t~ di ng t he oi l could n o t e f f e c t.P cl .i mrm�?d i. a t.e 1 y becau s e of th e p r ese n ce of wa t e r- in t h e b arg e a nd it s til l n eed e d c l eaning. The intent t o un l o a d or t r a n s f p r- t h e o i l f rom t he vesse 1 MIT "ULU ~<J r-'1 I" to t h e b a 1� CV'. a n d to br �.i.ng t h e s am e to l"l a. ni l a i s evi.d e n cP d by: Sta t.�.:~ m e n t o f vJ i.l f n :: d n Lun~<:'l q P<'~'"i, 1'1<\'i. i r>r- o f t l l P MI T " Cat h ea d 11 (E:�: h . "H 11 ~ pp. :.?8 l ��<~ n :;:~ ~ r:u s t o m~; n::�c . ); ( 2 ) Fi x ture Note o r Char ter Contract ( No ~ F N- M 8 6 - 05 --41) b e twe en the Nation e.'\ 1 S te v edo r-in g L i gh te r-ag e Cor- por a tion ~ o wn e r��I op er �.:~ tor- of t .h e t ugb oat MIT 11 Cat hea d" a nd barg e Semi.r-a r a 8 1 04 a n d the F ar E a s t Syn e rg y Cor po ra ti o n , cons ign ee of the car go a n d c h , � terer ; ( E :-: hs. "I" a n d "I-1", p. 2 7 9, Cu stoms ,~ ec .) a nd; ( 3 ) testi mo ny of Mr . Salv a d o r 73

DEC I ~; I !JJ\1 CTA CASE NO . ~166 �- 11 A se n cio~ - .. Cor-p or� .. ,"' tio n . And a u thor- i. t.i.es t.l l f'�' c:: l eaninq i::\ nd i t might co11t.arrl'l.n ; \'I P ( or- ~;poi.l.) th e f.)a l V cJ.dDI'. .J ,... . ( t . <;;. n �� ,ru l y .1.91:36 Cu s t oms r F~C � ) l!J.i l fr�ec.lo t . s . rl � ~ .Jul y :?8 ~ 11. :::c1n. ( ' t t<; torn ~; 2 82~ Cu s to ms re c . ) . Und F..' r- Sect .i em .1202 of th e T 2 r f f ,"'\n d C t.\<:; torn s: CodE:?: "Im por- tation bc~qins \Jhf'! n Uw c a t"TY i.n '.J vessc:;> J. or.. '"' .i. r�c.: r �A. f t r� tl'l:.e t c; l: h r:� j ur�-� isd . . t.ion cl'f t h e 1=- hiJ..i.r1pi.11c-:>s 1-J .i.t lt in te n t:i. .. 1n to un 1 oad th e r �ei n. :: :: :-:" c:md Sect i o n 2530 of thE:? ~;a rn e Code, as h er-eto for e c ited, see k s to penalize by forfei tu re even a n attempt to s mugg 1 e or- i mport contrar y to law ar-ticles into the Philippines. The law does not conte mplate to p en a 1 i z e on 1y th e impor-tation in to the country of con t1r� abands or- a r- tie 1 es abso 1 u t.e 1 y . �._~ 7 ,_, '--

DECI SI!JN CTA CASE NO . 4166 -- 1 �;;: .... pr ohibited but also ar�t i cle~. n=-lat.i v e l y p!'"ohi bi t e t1 or those the impor t ation of cornp l.i a n ce with t.hr2 requ.i re men ts; of 1 a1-.1 . Indeed~ oil is not p er se p ro h ib i t e d but its i mportation .is regulat e d und er Cen~ral Bank Cir cu lar No . 1029~ requiring a ~. a pr-e r equ i site then::~o "f a pennit or� c 1 ear�a n c: e f r �o m the ag en cy of the Philipp i n e governme nt. Petition er co n te nd s , however� , t: ha t. th E? ca rgo of oi 1 was not in tend ed to be .i.mpPr t ed i n tn the Philippines b u t to Sa bah ~ Ma l aysia . It c: 1 <-1: irns t h at. t h e oi l was mere l y to be in spected by the con s ig n ee in Zamboang t\ bro �fon'~ .1. t s fin <~ l d P. J i v e J�- y to S,:"bah, pr oceeded t u Guiuan a n Island, G1 .I .i rn .::1r a �::; , Jlnilo, whi c h w<~s n c:~ <:.u�� Ilo i lo Ci ty a nc1 1�11lr-r--e thE~ r1c-~e d e d ~:; p a r�e p ar� t s c ou 1 d be pu r��c: lla s~?d ; the Port Cl earance cer tif i c ate fr om S i ngapore Port Authority ( E:�:hs. "D" 81. "5") ~ th E? s hipping d ocume nt s covering th E~ s hipm ent o�f o i l , n c�:Hn e ly: (1) Loca l Pw- c hase Ord e r� by Pogun Cons tr� u c: tion SON BHD with

DECI SION ��-� CTA CASE NO. 41 6 6 -- 1. ~) -�� office at F'o q un House~ f::: ot a l< inab alu, S ,'-\ba l l~ Eas t t1alaysi.a; ( 2) B i l l of l ading co v pr �.i iHJ th F~ shipme n t dated 11 ay 5 ~ 1986 .issued by p et .i t i on er r~eder In tern a tiona 1 ( E:-: h. 3 ) ; a nd (::'::) i"i alli fest ( E ::h. 4) ~ \'ll e r e n ot tur�n <? d over� by thE? captain to the cus \".o ms team wh e n t hey boarded the vesse l on May 19, 1986 because said documents t ,':l ke n by Ant Dn .i. o till~ ] Cl C i':ll re presen tative/agent, 15~ .1.986; A cr.itic ~ l a nd_circum spect �C?:.:,,miJ lai"..i on of thE? r�� ejec:t pe t . i t i nrler �' s: po ~; tul,:'ll�io n. T lle :::; h .i. f.1 p j l"lf] do c l .t.rnen 1: s p r� r ~"'"�'::�n �i:r'd a c:; PV i. rl f' nC: f? hy p r.~ti t i o n er � i. t ~-. do ubtful c: r-ed.ibi lit.y a nd ca nn ot ~ a l~ gue s , be g i. ven ev idt~n t.i.ar�� y we .i.q 11 1� ~ c:on s idP-r i n g the foll owi ng factors: ( 1) Said do c ument s were pn~sen ted o n 1 y more than eight (8) mo nths after the customs authorities boarded th e v esse 1 MIT ' ULLJ WA I " . The Tar� i f f a nd Customs Code requi ,~es that _th e s h i pp.i ng do cume nts

DEC I S I Dl\1 - CTA CASE NO . ~166 -��� .1 '1 the~ master upon arT.i va l i n t:. ~ 1 c�~ ( ' lli_l ippi ru� c; . T.f the ve ss c~ 1 M/T "ULU WA I' I s land, an d the y were just taken b y th e s h ipagent, An ton io Tor-r es ~ \IJh o bo a r-d e d th E> Vf"3Se 1 o n I'"IAy 1 ~j, 1986 o r�� 4 d ays pr- ior- to th e an�-� iv<�"?.l o f tt�H? e11s toms not S i'�\i. d docc1rnen t.s to t h e c u stom ~; au t. h u 1 .i. �l: .i e ~; ;:~ t. lea ~, t within .::\ r- e e:\so rh:~blE~ tim e cu n s i. cl er�.i.rlq t h at t.h Py ~<Jer� e v i t a l l y r �~-:: q u.ir �F' d by law to br~ 1'1 f'Se n t.f,: d hy thE~ from a foreign port? Con s tr-u e tion f:3DN BI-ID o f !:ia bah ~ by thP ca p tajn of the ' t�1al aysia, w a~:; t u r nc:? d OVE~r vesse l to t , .�~ s h.ip i::l gent, Mr. A n tonj.n T orres~ w h e n he b oa r dc?d th e vesse l on May 1 5 ~ 198 6~ that in h is sworn s ta tement to the c u s toms au thor�i ties on May 2 8, .1 986 a t the Iloilo c u s tomshouse ( E:-:h. "G" ) ' Antonio Torres bluntly stated that h e did not kn o w � who was the buye r of

DEC I ~; I UN CTA CASE NO. 4166 - J5 the oil? would kno~-J who the buyer- .ic.; . the s h.i. pp.inq docurnen t s su e h C"\f'; t � t 1r' b.i l l u �f 1 i":1d inq and c: a ,,- go manife s t , ~"l hy t"'a::; .it l.l ~.-d: in t.l H" s am e? s worn sta t 0 rn e nt, Mr. Antoni o I :nnt'l 1 e dq c~ about the cargo and p o r t of dE~st i .n,-,. ti o n C: c?\ fllr' 'fr-om in f o t~ ma t i o n gi v e n on 1 y b y th e ypo�;sr~ l ';:; O'"l l lr>r� and not �fr.. om th E� ve t-�y ~; h ipp i n q do c: um <?.n t�'::; wl 1:i.ch .i t Hiica t e s uch d ata? ( S r:? e p. ll�, swor--r1 �:, t. FI t r me n t o 1� (11 1tc:m i.o TorT es [E:�: h . "G" ] , pp. 28~5 I!~ :? 8 7 , C t t "", tom ~; n ::�c:. ) (3) M u t -e ovE.~r� , the c a pt1�:1in of th E'~ vr:?c::.~; c-? '1. MIT "ULU l.tJAI" F\ornc~u De~posa, in h .i.~::; s t�lf'n- n s ti'3. t. e mc:' nt t o thE.~ cu s to ms a ut.hot'- .i t ies o 1�1 Ma y ? 6 ~ l "1f:l h ~ c~ nt .t mr.r- at c'd t h e do c:: umen t. r:.; h E~ a 1 1 e q ed 1. y g 0:1. vr? t n t1r-. t11 It: on i o Local Purch a s e Or-der� of F'cJ!JLlfl Co fl ~~Lr uc:tion f:~ fll ,l and the Bi ll of Lading. Thus: 0. Could you e numerate the doc uments you give to Mr . Torre s ? A. Yes , s i r . They are 1 icense o'f thr:::! a 11 vesse 1 ' 1 icenses of th e:-~ offi ce rs, passp or t s, sea ma n books, crew l ists, coasti n g manif e s t. ( F.:-: h. "F", p. 289 , customs r-ec.) In fa c t , he~ also sa .i.d in t h e ~3 i":Hn e s worn st:,yt.e ment.

DECISION CTA cnsE NO. 4166 1 6 ..... Cer� tain l y ~ i �f hE~ h ad t h e s h .i . pping dur : t1 rne111~.<; s ur . h .:1s the b i ll l a din t.1 CHl Si ng apore, h c0 v~ou ld know ttw~ cn n =.; i qn l'f.~ . (E~< h . "F.. " , p. 290, Cu s t oms rec.) s tatem e n t of Mr. Antonio Tor res~ d.3 m.3 ged flll ' I t:hr. . F'm�t C l e.:.:\r an 1: e Ce1r� t i f i ca t�~ i s~~u r�d I "> l l1 r ~ r�t.J I t. o 1 . " ~)It S ing apnr� ~:~� Au thor� i t y . ( E :�: h s "))" ,1< , P� ::uo ~ o i l " t~ n d 11 ol g .-., ,�: or ' :l i 1 � Wi ly did Like~o.J,i ~; e ~ r; 1' ! pr�ote st only 011 M.3y 26, l !f8 6 ur� 1: ~ day s fnHn thr.~ date it ar1c::hored 7 C ll o:; torn~;. a uth cwit i.es boar��� d ed the vess1~l ~'i l w r1 tilE' Cu �:; tcHn s Code r� equi r� es him to do so within 2 4 hour��s a fter arrival, if indeed the vesse l was tn di stress? VET.i. l y, the qu es tion a bl E~ , cun fl icti llq a n d negating �f a c to r� s a for�esa � d b ~=~ 1 ie p eti ticm e r�� ' s

DEC I ~:; IIJ I\1 C TA CA SE NO . 41 6 6 :u .i mpn r- t. .i J. 1 e c.:.:J,-, J. 1 y t hf.:? c a t..�g o o f <J ,:;~ <.::;. ' "! 11rl f u P 1 1J.i �1 i n t�o t h f::~ F'h.i. l .i. ppi r l E'S. I''' " ,, ...,. ,, t h e pur� por� t pr_i ._;. a nd "4" ) , v~h .ic:: h of f e r e d i I I C' ' :i.t J,�,I l' r:�' b y p etition e r o nly during t h e Cll '"' t:n ms llE?d l 'iiHJ on .Ja nu <::~ t�� y 1 ~~:. c:1nd :.2 (�, .1987 , c o ul d h <:.1 vr~ I:J p r-~ t �l l "l l r� r ><~. r��c:: d only a f b=r- t.h<�:? a ppt'" E" h e n ~:;.im l u �f t. l1 r:~ v es ~::;r-?1 iJn r .l th E~ At i::l n y r�� a l.-. P. , ' '' s d i s c u '"; s E~ cI !1E t r ' L. i"J f o t r?. , ~�J F' f .in d arnplf.:? evi.derH::: e t:h c?.t til t?. c a nJ O of u .i l 'I'Jcl <==; 1.. 0 b r~ ' I s 1 i :lfHi T l u i.l o <':\ lld b r��u L' g 1�1t l: ( "l 1 1.~ n j 1 il " Tl lP f!lc..I St< ~ I" (I 1 t.E:~ s t i. mon y of (.<.) .i. l f r� E! d O L.t .' mi�lqJ ' � \ t:") !T t he t ugbo a t M/T " C .:1t.IH? acl" ~�J 11i.c l 1 I t:~l ~~~ I 1 ,:'\ l Oil iJ c; i.' I r' d l"l d As?nc :i.o, o f f i c i a l. of t h e: N .:;~1 .i.o n a l S tf?VE.'dor-�ing a n d Lighter.. agE~ Coq:>o r �a l i o n , . 1'-l ll :i e ll ovm or Charte r Contr-act ( E:{h. " I " ) b e t ween National Stevedor- ing and th e tonsignee for� t h e use o �f th e tugboat and barge in the u nloading of the oil. f r o m

DECI !::II OI\I -- CTA CAS E NO. 41 6 6 �- J. n �-� the vessel ;:mel ~:;; h.i.ppin q said car �gu s ub sta nt ia l and c:: r-e d .i. b 1 e enough 1.: 0 a c t.u a l l y been un 1 oaded fr-o m t h e V f?.~; c.=t~ 1 t u t l 1 r~ t.:lar-ge is of n o mo rrH:e nt. e n v i s .i.cm s; tlv"'l. t e v e n an att e mpt t o i ll.eg ,:\ l l y .i.rn po1� t. l t. i s not nec ess ar y that. thr.':! act� o f .i. lJ r��� J .-~1 i.rnp lH � I ;�, t i o'l or s muq g l.i.n g b e co n su mm a t ed nr l r�� , �mi ll i \ \ccl. It frJr-c� .i 'J il pnr t jur .i.�sd:ir : l .i.nr\ I] f P h i l ipp i n es wi i h l.rl I l l \ ] l) :� rl i'\t t .i. L :1 1> �::; (If p r-o h i b i t e d .i.mput- t i'\\: i.on (ll'" r \l"t\<:lr � ~::, L\l lli (: il i"\ 1'(:::' t-� e l a t i.VP l y rw ohi b :i.te d, :i.r �., <"1 1 � \j rl_ r-_>~.; l� lll i<: l l fTH.\ <:; t co mp ~ y wit h i. rnpn r�� 1: t- equ i t l~ernF! Il r�; � w e q u 0 t .f-2 \'I i t h a p p I 0 vi:\ 1 t .p ~; p ur l rJ f~ n t ' ��; I )Cl c�; .i t: .i 0 I ., in h.i. -:-;; me rnor��,:uv:1urn on this poi11t: PE-?t.i. t:i oner� co n te1 1ds; th <:l: t �:; i. nc P '' rlol <"\ d r��op of oil wa s unloaded (f r-o rn t-Il E' vesse l) \"he n boar-ded by I lo.i.l.o Custom s Authoritie s ," t h en,~ w as not viol at ion of Section 2530 ( a ) , (f) and (1 ��� .1.) of th E~ Tariff and Custom s Code b~ca use said ~;; e c: t.i.on con t e mplates "at 1�?.<:~.~+ a s how.inq of (an) o v ert act to l o .::1d and or di sc har-ge its cargo in the Ph ilipp ines . 1-1 . I \.., '

DECISI ON -�� CTA CASE NO. 4166 �- 1. 9 --� Re s pondent r esp ~ttfully s u bm i t s that p e ti tion et-' s contention .is '"'" er-ron eous interpretation of Section 2530 ( a), (f) and ( 1 ) -1 in r� elation tcJ SE� c t i ons :35.14 and 1 202 of the Tariff a n d Cus toms CodA. It is no t necessary for a vio l at i on nf said Section 2530(a), (f) ami (1 -- 1) t o exist th at the ca rgo b~ actually unloa �ie d. It i s en o ugh to sho w t h at t:\fl "inte � l. to unloa d " e:-: ist"!:; becat.tf>e " i mpor ta t i on" as so define d in the Tal~ i "f f and Cu s toms Code mere ly contem pl ates a n " intent to unload" .in any po r t or� pl ace withi n the ju risdiction of thA Philipp ines. (pp . 1. 88-�189, CTf.'l r ec. ) As a matter of fa ct., in one c a se dec: icl ed by thi s Court. and a f f i r med by thn Supr-e:>m!~ Cour-t (Asaa l i , e t al., vs. The Commissioner of Customs, G.R. No . L - 2417 0, December 16, 1 960), involving t h e seizure of fiv e:~ sai ling vessPlf:; <lllcl t heir� ct~r �go of for ei gn ma1 1u f ac tured c .i g c:lt-e t te~:; 1-J i_ l: hou t ,, J. "i.C:f�m ~:;e or� pE.�rm.i.t to e ng age .in i mp o r�t at .ic�1�, t1 1r�� fr.11 fr;' itun::~ wa s, ju sti.�f.i.ecl c~lthoug h t h E� i nl.f::�n :e p t i o n lly t.he cu sto ms te a m was made i n t. h f.? high ~:;r� as. T h e f i r s t two erro r�s ~~ s i gned hy p e t.it.i. o n et'� s would im pu gn the'! ju r �i s d.i.ct .inn of th n Bur�e-a d o�f CusbJm!.:; to in s ti tutP se.i ZLWe proceedings and th e t� e a �f ter� to dec l are th~ forfeitu re of the ve sse l s in q uestion a n d thei r� cargo. They would j usti �fy their stand thus: "In the light of the fact t hat the vessel s involved with the articles lad e n the rein were apprehended and seized on the high seas, beyond the territorial waters of th e Philippines , the sa .id v esse l s could not

DECI S I ON CTA CA [3E Nl . '1 166 - 2 0 �-�� h a v e t.ouc !l e d a ny p 1ac e o r�- prt r t. .in t.lt r P h i l i p pines , w h e t he r- a por� t en�� p l ~ cn o f e n t r- y or�� n o t , co n s(~ quent l y~ t h e S <':li d ve ~; s el ~:; co uld not have been et 1g aqed i n t h E~ .im port a t i o n of t h("~ a r��t. .i.r:les ladF.?tt t h e r e i n i nto a ny P h i l ippinR p ort or p 1 c:~ c e , w h e th e r~ a por- t or p 1 acr:! o f E'n tr y o r not , to h a v e in c ur re d t h e l i 0 bi l i t. y of fo r- f e .i t.un=.! und e r Se ction .1 36~!.(.::\ ) cYf Ut P Rev i s e d Ad min is trat i v e Code." S u c h a c ont e nt ion ~~a s .~d � ,.:m c: ed h y p et. i t i onP.r-s b E! f or-e the Colll�� t~ u f T t-\:: A p pea l s . I t met th e n'?pttc1.iat.i �:m that .i \: des er~ v ed. Thus : "l�Jr:_ p e.Tfectlv f:5PI? Ll 1r> po i nt of the p e t i t i o nr'? r-c.:; hut r �c, ns tder- .i. n<J t he c i. t- c um s t a n ces s ui" r �ot.tn <I i n g l: ' ''"' a pp re h F~nsio n o�f t h e \1(:-?~;se:� J. f::; .i n q u <:> c:. t .i.< Hl , we b e l ieve tha t Sc~ c: t.ion l :~: t. : ~.( .:~ ) of t l lF' F\ e v i se d Ad mi n is t ra t i v e CodE! c:: hotlld b P a pplied to th e .c a se at: h c? r �. ) t h ~s h ePn es tab l i s h ed th.i t. tht? fiv�? V:? ~�;~; e l c.; c ~1rnr" �fr o m S c-H1daka n , B r i t i. <; h l'lor- t.h F< o rTl E~ o, ;.:1 fo r-ei gn por t , and wh e n inte r c< ~ pted, .:d.l o f them we r~ e h ea d i ng 1 -rJwi:~ nJ s Tr\'�'' i.-�ta w i ~ ;' d om es t i c port w i. t hin t hf:! flu l L\ c�;p;:~ . l_ adt:~l1 wi t h f or�e .ig n ma nu f .:~ c tu r e el c: i g a n=~ U :Ps ~ t h ey d id not p o sses s thE) :i mpot l. l .i t::E1 11 Sf1 n::~qu.i.r-ed by n ep uhl i c Act ti n. ~~ :.��~6 , n c11~ di r1 t h ey cat�-ry ;.~ p er��mi t: f r nrn U H~' C n,n rn i !"'�':::� i. nnr~r� crf Cust om s t o e ng ar.Je .i.n irnpo r 1:--:~ i: i, cm .i.n t"IJ a n y por- t .i.n th e~ Sul u se a . f i H~i. r-� c our s~> a nn o unc e d 1 o ud 1 y t.h e .i. r in tP.tl +�. io n n o t me re ly t o s k i r- t a l ong t h f? t E! t_ r.. i t n r i a l bounda t-y o f th e Ph.il 1 ppi n e~; LH tt t o com:~ withi n ou r- 1 imi ts a r'ld l a nd somP Wh E�n;~ .i. n T aw .i- ta~'<~i t ow a rd s w h i c h their- pn::~ w s ~'iP.r-f? pointed. A s a matter o �f f act, . t hey we r e a b out to cro s s our aquat ic b au ndar~ y bu t for t h e i n t e r ve nt ion of a c u ~ t o ms pa t rol whi c h , f rom a ll a p p e arances , was more t h an e a ger to <:lccompl ish its mi ss ion." The s ense o f realism a n d the v i g o rou s lan g u a g e e mployed by t h e 1 a t e~ Jud ge L ucian o i n r-ejecting su e h a p l ea 7

DECI SI ON CTA CASE NO . 4lMJ �-� :z l -�� d eserve t o be q uoted . T h u s : "To ent!?r�-� ta in ev e n f or� a 'moment th E' t h oug h t th <':\t these v essels were probably n ot bou nd fo r a Philipp ine p o r t woul d be too mu c h'"' con cessi o n even for a simp l etnn o r� A p e r e nni ' 1 op t im is t. It is qui. tr;� ir-r- a tion , ~l for�� F i l i p in o sa.i. l m�s man n i n g five Ph i l i ppin e v esse l s to snf~ <1.1:: out of the Phi 1 ipp.i.nes and g o t o B r j t i.s h Nor�t h B o rneo, an d c o me a 1 on g way b .:u: k 1 a d en with hi g hly t a:-: abl e g oo d s onl y tcJ t.t.u�n about up o n r �e a c h i n <J t h e br�.i nl �� o f n ur t E"~ r-r- itor� ia J. wat e r s a n d h ead f o1�.. anntl l C? r � fo r e ign port ." WHEREFORE, the dec ision of respond ent Commissioner of Customs d a t e d 1 3, 1987, ordering the for f eiture of t h e vessel M/ T " U L U WAI" for violation of Sec tion 2 5 3 0( a ) o f the T a riff and Customs Codes, as a men ded , and i t s r::i'\ rgo of .t, 100 metric t o n s o f Gas Oi 1 an rl l , 000 ll'F' tr.i c ton s of Fuel Oi l for violation o f SP c tion ( ,1 ) (f ) a n d ( 1 ) -1 of the s ame Code, is hereby f fj r � me ~. I!Ji t h c rJr. l:s. SO ORDERED. ~a:;;t;C-1J AMANTE 0l::LE~ Pr�esi ding Jud ge 7 ') 1';.;

DECI SI CJI\I CTA CASE NO. 4166 WE CONCUR: /~ C. ROAQUIN Judg E' CERT I F I CAT I 0 N I herE '� y th a t t. h .i.c,; d eci~:; .i. o n was reach e d a fter du e c on s ul t.:1tio n amonq t h e mr:> mb c->r �s o f t h e Co u r t of Ta x Appe a l s Se ctio n 1.3 ~ (lr� t .ic l P. '..IIII of t h E! C:Di l s l ..i t u t.icm. a~~.l.'(; ~~~_;_-;;~J AI'1A1'1TE ILLER P n~<:o; .i r l i g ~Juclgf' Court of Ta x A ppea l s :. 7J