CTA Case No. 2067 (Decision)

'.EPUBLIC OJ' THE PHILIPPINEI COURT. OF TAX APPE.A.LI a n ~UEZQN ;"~' COrJDJ;.AY & CO., HIC., CTt- ...., SE NO . 2067 as ship agent of the 'I�.1 . S . " Fernview", Petition.er, - versus - COMLliSSIOlJER OF CUSTOMS , Respondent o X- - - - - - - - - - - - X DE CI S I 0 N Pctitiocer , in its capacity as agent of the !-1/ S " Fernview", Las appealed from tlic decision of respondent Commissioner of Customs , affirming in toto that of the Collector of Cus�':oms �of j. .anila im- posing on �said vessel an administrative fine of ONE Ti:Oi.;S,-tJD PESCS (Pl , OCO . OO) for carryin g unmc::nif�ested cargo in violation of Sectiorr 1005 of the Tariff and Customs Code , which is penali zed under Section 2521 of the same Code . The records show that th�e f, ;s 11 Fernview" called at the Port of r.ianila , undc r Customs Registry No . 1997 , on December 25 , 1966 , carryin g unmanifested cargo consis~in g of one (1) ca se of fitting� s and steel tubings . It appears that this unmanifested cargo \Vas previously manifested on the I-1/S " Fernbank" , anoth~r vess el of which herein petitionGr is also the agent , which arrived earlier in ~anila on December 10 , 1966 , under Customs ~cgistry No . 1914 . The said cas e oi" pipe fi ttintJS and ste e l tubings was , however , . short - shipped on the i,ljS 11 Fernbank 11 for which reason �

DECISION CT C SE NO . 2CfJ7 (2) it was lo aded instead on the l.~;s 11 Fernview11 which , as ear li er st ated , arrived on a later date , t hat is , on December 25 , 1 966 o The shipment \Vas , howe ver , unman i fested ; but to enable the consignee to take delivery thereof , the Inward Foreign Cargo vanifest of the M/S " Fcrnview" was . amended on� February 21 , 1967 . To give petitioner a c hance to present its evidence in support of its stand , an administrative hearing was conducted before the Coll ector of Cust oms . After due hearing , the Colledtor of Customs found the M/S "Fern - v ie~ l iable for violation of Se ct ion 1005 , in relation to Se c tion 2521 , of the Tariff and Cust oms Code and imposed a fine of 1, 000 . a_:., upon the s aid ve sse l . Pet - itioner , as aJcnt of the ve sse l , appealed the Collect - or ' s dec i sion to the Comraissiont::r of C~stom s., who af- fi r med the same in i..Q.iQ i n his decisi on dated October 15 , 1 969 . On February 24 , 1 970 , the pres en t appea l was institutedo The only is sue pre sented for r e sol ut ion is the l egality of ~he administrative fin~ of Pl, OOO . OO . Petit ioner contends t hat it should not be pen- alized for viola tion of Secti on 1005 of the Tariff & Customs Code because said section i~ not a penal or . prohibitive statute since it i mp oses no penalty ; that the charge should have been for violat ion of Section 252 1 i n r elation t o Section 1005 ; that assuming arc:;;: Q�!19.�. that the charge for violation of Section 1005 is proper, responde nt should ha ve presented proof of

DECISION CTA CASE NO . 2067 (3) fraud on the part of petitioner to warrant the im- positi�on of the penalty considerin g that Section 1005 requires the element of fraud before it c an be applied ; that sine~ petitione r in this ca se is mere - . l y an agent of the owner of the ves.sel 'fll / S Uf ernview", the proper party s hould be the own er of the said ves- sel ; that the ~/5 "Fernview" is not subject to the administrative fine of f'l , OCO . OO be c ause the failure to manifest the cargo .was without any fraudulent in - tent , but , rather , was due to an honest mistake or inadvert en ce; that an a.:nendment to the inward mani - fest was filed by petitioner when it was discovered that a cl ~ri c a l error was committed when the said one case of pip e fittings was no~ inc l uded in the vessel ' s origirral inward manifest so that whatever liability it . may ha ve incurred was cured by the an1endment ; and that although the c argo is unmanifested , t he bills of ladin g , cons ular in voic es and suppliers' invoices con- tain the correct number of car goes ~ Section 1005 of the Tariff and Customs Code in1- poses upon e very vess el the absolute obligation to have on board a complete manifest of her cargo o That the vessel fail ed to comply wi th this imperative cb - li::;0tion is a clea:c violat~on of Section l CX)5 o 1.1h ile said section does not provide for a penalty , it de - fin ~ s the act pun i shable under Section 2521 . In the case of Macondray & Co ., Inc o ~ vs . Commissioner of Customs , C . T . ~ . Case Nc o 1930, Dec o 27 , 1969 , which

Dccrs� ON - /. CT -.;ASE NO . 2067 4) 7 ( invo lv ed a simila r - iss~e , the Court held : 11 x x x Se c tion l CC5 , of the Tariff & Custol!1s Code , supra.L is so clear and exp l icit when it c om~a nds every ves - sel from a foreign port to ha ve on board a c omplete manifest of all her cargo . Non - observan ce of this imperat ive obligation� subjects a vessel to the admi - nistrativ e penalty und er Se c tion 2521 of the same ~ode x x x. " Petitioner ' s contention tha t it should have ~ been char ged for violation of Se c tion 2521 in relat - ion to Section 1005 , i nste ad of vice - v�c rsa , is t o our mind off tangent . It is clear under Section 2521 that the penalty t he rein provided is i mpo s ed when t he re is a failu ~e on the part of a vessel to submit the requi - site manife st . This requirement of vessel from a for - eigh port ~::o rii vr: on ' board a ca;~~letc ;nan :_ f es t of ..,11 her c ar:o ::.s found in Se c tion lC� 5 . VJe do not cri oe to petitioner ' s theory that it should ha ve bee-n C;.arged for vioL:tion of Section 2621 in relation to Section l OC5 . He find , u~ert, fore , til at the c harge 2~ains-t th e ves se l is prope r . Petitioner ' s contention that c.;;cc!...~�lon 1005 r c - quires the elenent 0f fraud before it c an be app l ied is devoid of merit . Vlhi l r fraud is ncntioned tl1 c rein , the sBme r efers to the disallowance of amendment of a car go :nani.f ,_ st . In other wares , at.endment of the ff1anif est raa y be all ow ed only in the absen c e of fraud in �::he preparation of the ma n ifest ; in t r.e pres - en c e of fraud , no amcndaent may be allowed , but it does not nean that Section 10t.5 c an not be app l ied .

DECISIO~,! ~ CIA ~ SE NO . 2067 (5) Stated oth erwise , whether or not an inco~plete mani - ' fest is amended , Section 1005 is violat ed upon fail - ur to submit a comp lete cargo man~ fest o Th& dcfcncJ 'of good faith for failure to manifest a cargo ~ as already p~sicd upon in ~he ca se of Smith Bell & Co ., (Phili ppine s) Inc o vs . Commissioner of c,ustoms , . T. \. asE::S Nos . 1728 & 1921 , July 22 , 1969 , wherein it was held that - 11 Und cr Sec�~ion 1005 of the Tariff and Customs Code , it is an imperative obligation of every vessel from a foreign port to ha ve on Board a complete manifest of all her cargo . No oception is mentioned in the statute . tleithcr is there mention of any exception in Section 2521 of said Code prov~ding for a fine for vessels with - O't proper manifests , nor in Section 2530 " thereof providing for the confisca~ion of unmanifested goods . The recognition by the Court of any attempt to read into Lhe sta - tute any exc ption , such as misshipment of goods , jwould be contrary to the pervasive spirit as well as the clear language of ~he aforesaid prov isions o11 On the mat~cr of anentlmcnt of the cargo manifest , t1e Court , in the ~ ase of Compafiia General de Tabacos dE.~ Filipinas vs . ,__,o:run . of '""'ustoms , C. T. A. Case No . � 1939 , FEbruary 26 , 1971 , held : 11 Petition cr furthtr asserts that ' the provision of the law on amendoent is de - signed co protect the master , agent or consignee from the . error , mistake ,or dis- crepa ncy committed by him in the prepara - tion of the original manifest and that it is unfair and uncalled for to conclude , as the respondent held in this cast , that the right to amend the manifest is for ~he principal purpose of protecting innocent imp orters .' \Jhethe r the purpose of the l9w in permit~ing amendment of a vessels ' man i - fest is to protect tne master , agent or consignee of the vessels , or the importer

DECIS O!.J - CT C -.JE l'J( '� 2067 r ( 6) of the goods , is to our mind of sli~ht sig - nificance . und r Section 2521 of the Tariff and Customs Code , no relief from liability for the fine is gr~nted w1ere an a.1wndment of the man if( st is allQwed o" Hth_respect to pt ti-c ion �r ' s claim tha".: an agent cannot be lc~ally held l iab l e for violation of any law conoitted by its principal , we believe tnat the same is unmerito.r:iDus . perusal of the decision subject of th~s appeal will show th~: the fine is impos d under Section 2521 of '.:he Tariff K Cus-:o:ns Code upon ."':.he off nding vessel. The fine was imposed upon the vessel in a seizure proce ( dine, , w.hich is in f..�.ill , as provided in the T2riff and Customs Code . (See Sees . 2205- 2212 ; Sees . 23Gl - 2307 ; and S cs . 2312 - 2315 , in relation to Sec . 2532 of 1:i1C:: Tariff & vUStoms Coci . ) Petitioner was a l ternately held licbl . for "Che fine for the reason tha: i~ submitted itself to the jurisai c ~ - ! ion of .�:he Bureau o{ Gus".:;oGJs as ag ent of the vessel . 1~.. is well to note , howev r , thc:t :i.t can cho c. se not to ay ~he fine ; in the event tha: it chooses not to pay , the vessel will be subject to seizure under Sec- tion 2532 of ~he Tariff G Customs Code . etitioner ' s argufJtcnt ,::ha"'.: although the cargo is unmanifested , the bills of laaing , consular invoices , anc suppliers ' inv"Oices submitted \Ji th the manifest , reflected the co1.=ect cargo , is of no oo:nent . On this point , th~s Court held : " The foct that the whole shipment was in~icated in the bill of ladin~ docs not

DECISION CT CASE NO . 2C67 (7) excuse compliance from the requitement of a manif~st . x x x. All these can - not be a c com~ l ished by the mere use of the bill of ladi.n g inasmuch as th bill of lading is not required to be present- ed to the boarding CGstoms offi cers o ( ac ondray & ~ o ., ln c . vs . Commissioner of Customs , C. T� � Case No . 1641 , Nov . 15 , 1965 . ) ~ .� / In view of the above , we believe that the im- osition of the fine upon ~ he er ring vesse l is legal . Hovvevcr , considering the cir cumstances of the c ase , we are of the opinion that a fine of �- soo.�cc , instead of i"l , COO . OO , wou l d be an adequate penalty for the offense . FOil THE FCREGOI:J~3 80~:SIDi::i( TIONS , the de cision sppcaled from ~s he~eby modif5cd by reducing the fine of "1 , 000 . 00 to i-'500 . 00.. c cordin~Jly , petitioner is order d to pay the sum of i'I:JOC . O(i within thirty (30) I days fro:n the date this de c ision becomes fina l , other- wi s e , appropriate proceediog shou l d be taken against the vesse l M/ S " Fc..r nvicw , " purs uant to Se c tion 2532 of t:~ Tarif f and Cus-coms Code . uczon ity , Oct ober 6 , 1 972 . ((