CTA Case No. 4380 (Decision)

- - lU:l'UBl.lC OF TJH.: PHll.lPl'lNES COURT OF TAX APPEALS QUf~ZON Cl'I'Y JAMES A. TlUSECO, ll e L i L i o 11 e 1' , - versus - C.'l'.A GAS~ NO. 4380 VICF:N'n; .J A l M�~ � ill hi H capacity Finance, as Secretary ul Misou, as Lhe CltLd Salvado1� Customr,ol in his capacity {Jummiss iunet� ul HespundeHt. X- - - - - - - - - - - - - - DEC.ISJ..:.ON This is a t-'elitiuH lot bags ol polyetheJette resinK t:tcquited by the i'etition~r trom tile Hureau ot Cust:oms. Petitioner is ol legal age, married aud eugaged in the bus il.).b;;s ul. Among the raw ;:: ; Ue is 4uesll~il who "liuaucetl the the a~~:dguee ui Lhe guutls iu ,� acquisition ~nut purchase ol the ~torementiotted resins !rom the But'�eaH ul. C u s L om s a 11 d de i 1� !i y all the expenses (Ueed o1 lot� iLs . !'"'�::- UTA ,' � '. t:xh. Recon.ls, '' 639

-- JJEGlSlON - C.T.A Gase No. 4380 - 2- 'J' he 1 a c l s o 1 t he c a s e a 1 e ll a t'l' a l e J by Ute P e t i t ion e r in his Petition for Review, thus: 4. ou ur al.Juut Ucluuet� lu, .LY86, a shipment uf vulyprophe1ene and po1yethe1ene resins in !Jags arriveu in the Philippines which were consigned to a customs bonded warehouse in Cainla, Rizal. Ev en a i t e t� d u e no t i c e au ti p u lJ 1 i c a L i u u , no uue c a 111 e 1 u t' wa 1: d Lu t: 1 a i Ill the i llllJ u t� t e J a t� t i c l e s . Thus , a Nu t i c e au d Dec 1a r a t ion o 1 Abtt tl tlonme ll t doc ke L ~~ d H 81 A uaHdotUIIe ll t 1' l'UC eed i ug No. 8'7-l69 was issued by the actifl~ Law Divil:?ioiL chief of the Pol'L oi Hauila (POM). S, flle guu!lt5 we t�e the rea i te t' �ti uj ec ted p roc e e ui 11 g s c u v e red by to s e i z u t� f! Se i zur e ltlentificat:i.on Nu. Hb-2530 (t) aild (i), purtJuant to Sec!'!. 3, 4 and 5 ul the Tar i 1 t and Oustoms Gode. 6. After hearing, then !Jepuly u y t: u IIIII! i s s i u u e 1� au c u 11 c u t� r e H L 1 .1:' u M Co 1 1 e c l u t' , CBMHr Dario, reudere!l a tleciHlou iut�ieiting 3 l 6 'H) bags o 1 p u 1 y the 1 e 11 e res ius iu favor of the Government on August 6, 1987. 1. As eat�ly as Harch .l2, .lYH/, the J�:.L. Rey~s General Het�chaudi!'Je attd Contractors ( " E , L . He y e s " l o r IJ t� e v i Ly ) ma tl e a f o r rn a 1 o t f e r to tHtrchase the article~ through f1egotiated !!!ale in a letter addressed tu theH Commissioner Alexaudet' Padilla. (A photocopy of the letter is hereto attached as Auuex "C'~). The oller wac; rei.Lerateu ou Nay 1.5, .lYHI t h t' o ugh l he 1 a w t i 1' 111 o 1_ u ow 1{ e p res e. n t a t i v e ( A ph u Loco p y o 1 the 2 n u l-' r au c i s c u �, �ti !l mu 1 u 11 g . lellet� is hereto attached as Auuex "D"). H. Uuder dale of September .to, IYH7, Commissintlel� Padilla issued an in~prsement approviug the saJe, at the same time instructing the l'HO District Go 1.1ector to relPaS� he u�sius lo JLJ.. ht��es, tbe a utiaLed sale, iu ol 640

-- DECISION - G.T.A Case No. 4380 -] - P4UU,~5U.UU lor PS.UU pet kilo). lA pi10Locupy ol Lhe iuclorHemeuL is he t�e Lo a llaclted as Annex "E") � Y. ~everal clays later, Commissioner ~alvador Hison was appuiuteo Lo Lake Lhe place oi Commissioner Padilla HILer the taller's resig11ation ~vas accepted. IU. E. L. }{eyes h) II olved-np re J ease ol the shipment with the ditleu~11t oJliciaJs ol the Bureau ol Customs I.Jul the l'elease could not haLl. be Ll. uu June lJ, EIBLJ, Lhe iLL. Heyes wrote collector Ampil lor th1, POH reqttef=iliug that: fl recomputation ol the duties, taxes and other� char�ges uue Oil the suuject sJiipmellt be made as sug-gested by r�espo11sible uti icials ot the HttrPall ol CtJst:oms. (A phoLIH'opy ol the request is hereto attached r-ts Annex "~'"). 1.'2. Accurdiugly, Lite tecunls ol tltf' i 11 I_ o nu a L i u u we l' e 1� e 1 e 1.� t' e d Lu l.lt e Sp e c i a l Ap l-' r a i s e t s G r� u u p l S AG ) b y A l l y � J i me u e ~ , c h i e I ol the J:{uliug aud Hesean:ll lJivisiuu, lor the desired cumput:atio11 t'f�lat ive to the "relJttesL lor implemeuLatiun ul Lite uegotiated sale a p p 1_' 0 V f~ d a II d :�d g ll t~ d IJ y L h f' II l~ 0 Ill nt i :,;:.; j () II e l_' Padi I Ia." tA photocopy of the iudot�setnt->111 is here Lo at t_ ached as f\._!111 e2_<.__ .~_y_::__J ll. Acting uu !.Itt> reJ,~JTal, the SA<i as:::;esseu the amou11L ul 1'5lLS,Y':JI.Ol r�epr�e:::;enli.ug JuLies, taxes aud ulhet: chatges 1111 Lhe subjt~cl article::>. (A (JituLucopy ol Lhe memut�auduru ul Lhe SAG is hereto attached as Atlllex "H" " It e 1� eo I ) . 14. Neanwhi.le, auothet� iudot�sement signed tJ y Al t_ y � Wo n d t: 11 w Htt f'!~ o i,; , c h i P l o I t h t-> C u s t om s Leg a 1 Service,. dated sep tenib~ r <Hi, I 988 was {:uJdn~ssed to the Distri~:t i:ol Jector ol Ma11i Ia '' l n t� a.f) p r o p t: i a t e a c t if-Hl i. 11 v i t itu~ L he a L L e n t i o n uJ Lltal oil ice Lu the coiUJIULI:Itiotl ol Lite duLie:::; and Laxe:::; JltHde hy the nAtl ol the ol t ice ol the ( A p h o t o co )J y of �L h e i II d u l' s e 111 e n L e 1.., o IIIIII i S t!i i u U 1' � " is her e{;o ll t t ac hell as ~-tl_!_l_~-~ �--~~J_: , 1 641

-- DECISION - G.T.A Case No. 4380 - 4- 1 5 � When Hr. Rolando Ha.nuel, Chief of the ACUD, received the indorsement, he conferred with his immediate supervisor, Collector Ampil, regarding the matter. The latter decided to make the E.L. Reyes Merchandise pay for the goods. TlJus, Hr. Hauuel wrote a Memorandum dated tieptemuer 1~, 1YHU to the Chief ui the Cash D i v i s i u n u r de r i n g the 1a t t e r t u 1� e c e i v e from E.L. Heyes Geuetal Netcltaudise the sum oi 1'503,457.01 representing the price of 59,2~5 kgs. low density polyethelene r�e~;in and 20,825 kgs of polypropylene te::>in. A photocopy oi the Hemorandum, is hereto attached as Annex "J". 16. Payment was thereafter made on September 12, 19H8 under BCOR No. 2158312. Gate .l:'ass Nus. 5YUO and 5Y81 were also issued ou the same dale. Photocopies of the HCOR and the gate passes are hereto attached as AnuexeB "K" and "L", A storage lee in the amount of Pl5U,UOU.UU was also paid prior to the issuance of the gale passes. 17. Meanwhile, in a Memorandum dated August 02, 1988 addressed to Commissioner Mison, Atty. Edgardo Lopez of the Legal Service o p i ned t it a t E x e c u t i v e Ur de r No . 1 0 7 3 i nq.Jl i e u 1 y amended Section 2610 ol Lhe Tariff and Customs Code o t t he Ph i 1 i p p in e s ('l' CCP ) wh i c h p 1� o v ides tor the holding ot public auctions before goods cau be sold via negotiated sale. The same E.O. also di::;peused with the reyuirements of s e c u 1� i n g Lh e p r i o t' a p p 1� u v a l h y I. h e S e c r e t A r y o f Finance as a condition tor a valid negotiated sale. In order to further justify thE' sale, ~tty;��~. i.oiJeZ. ~~piued that Whi f~ q1ere is llO show,ing LhaV lL L. Heyes General Nen.:hauuise aiul Cunlractut� is a local pl'tH.lucer oi polyetheleue resin, t.her�e .will. ue uo�,� ha.un Lu Lhe local market it. the resins wel.�e so1Q to E.L. Reyes General . Merchandise (A photocopy of the Memo r au d u Ill .� i s here to a L Lache d ~ s Auu ex "H'' ) . IlL.: (Jespite all these, huwPver, the said articles' WAre not released for J:he reason that the Commissioner himself inter�veqed and objecteu to the 1�elease thet�eoi. He �insisted that the negotiated sale should iirsL ue approved by the Secretary ui Finance. 642

- DEClSlON - C.T.A Case No. 4JUO - 5- 19. Realizing that the Commissioner could not be convinced t-o change his view on the matter, the petitioner, thru E.L. Reyes General Merchandise, wrote a letter-request to the Ho u o r a l>l e Uu Ll e r s e c 1� e t a r y o i F i u a n c e �-'1 a 1� c e 1 o Fernando lor the 1�e lease o1 the subject goods ( A ph o to copy o 1 the 1 e t t e r 1� e 4 u e s L i s he r e to a t t a clte d a s Annex " N" ) . 20. Several follow-up letters were thereafter sent to the Department. 2 1 � T he Hon o r a b 1e U11 de r sec r e t a t' y i n do r sed the request t.o the legAl division oJ the Department tor Comment (The indot�sement i.s hereto attacheu as Auuex "Q"). ll. Actiug oll the iudorsement, the legal Ll i v is i o u , Lltr� o ugh E � Ce s is t a , sent a Memorandum to the Undersecretary recommending the immediate release of the goods in tavur of E.L. RByes General Herchaw.lise Cl'lte Hemul'alldUm lo het�eto attached as Annex "P"). 23. On May 22, 1989, the Honorable Undersecretary ol Finance, in his first lnuorsement, returned lor appropriate action the reyuesl ol E.L. Reyes General Merchandise, "attention being invited to the provisions of Sec. 9 ot Executive Order No. 1073 x x x" (A photocopy oi the indorsement is hereto attached as Annex "Q"). 24. ln a letter dated June 01, 1989, the legal Counsel of the Petitioner, the under~tgned law firm of Ongkiko Bucoy and :Assuc.iates, �t'equested the Commissioner of .Customs to release the ' t.lu�ee thousand two ' ltun'dt�er.J two ( 3, 202); liags ol � low density 'tt~e� .' ,bat:~ is � polye the 1ene 011 ot the UnderAecret~ry'e indorsement (The lettei� is hereto attached as Annex ''R"). 2 5 . . .1- fl t' e p 1 y , t lt e Co Ill nd. Iii s i u n e r s e u t a letter q�ated June 07, 1989 to the undersigned law firnt and attached thereto' a copy ot the 2nd indorsemen�~ Llated June ua' 1989. ~ll ~ds haste t o i u 1 o nu t he u u de r s .i. g u e Ll u 1 lt i. s i n Le n t i o u u u t to release the goods, the Commissioner tailed 643

DECISION - C.T.A Case No. 4380 - 6- to note the disl}arity in the dates aforementioned. (Photocopy ot the June 07, 1989 letter are attached as Annex "S"). 26. Neanwhile, while all this events were taking place, another party in the name of Alvino Tan has filed a request for the release of subject goods in his favor. 27. ln a letter dated July 05, 1989 and received by the undersigned on July 14, 1989, the Houoralde Uude1�sec1�etary i"larcelo Fernando stated that the Department concurs with the findings ui the Customs Commissioner. (Annex ~ hereof). (Petition for Review, pp. 3-9) Hence, this appeal. On November 28, 1989, Petitioner filed a Motion for Re 1ease Uude 1� Hond saying that: 4. The con t inuuus de tent ion of said bags of Polypruphelene and Polyetheleue resins since March 1988 has caused them to deteriorate due to exposure to elements and will become yellowish. ln tact, the continuous deterioration ol the aforementioned bags of Polyprophelene and Polyethelene resins may render the same virtually worthless and valueless to the damage and prejudice of herein P e t i t i o u e 1� � 5. indubitably, unless said imported bags o i 1' u 1y p r o he 1en e au d Po 1 y e the 1e u e 1� e s i us are released lrom customs custody upon posting ol a bond, PeLitiouet� will coutinue to suffer g rea L au d i r rep a r a b 1 e i n j u 1' i e s . b. Petitioner is willing and able to post. a bond in such amount to be fixed by this Hounrnble Court t;or the release ot the said ;~,lOl ~Hgs'i:~t Polyprqpheleue and Polyethelene t: e s i HH Jh~ u d til g a i.J j u 4 i c t1 t i o u u l t h i s case . The lJOlld wi 11 cqtswer it.n� Lite Httl.>j~cL imporlatiuu a H d t h e J t� . ; c o 1� u~ H p u 1l d i ll g L a X~ !=1 , li 11 t i e s a uli 644

---- ..... Ut:ClSlON - C.T.A Case No. 4]80 - I- charges in the event that the decision ill Lhi1:1 case would be advPrse to the Petitioner. (CTA Records, pp. 7Y-HU) ou Janua~�y 8, lYYU, Resruudent, instead of cllsputing the above-narrated facts, filed a Hotiou To Dismi~H'i And Opposition To The Motion For Release Under Bond on the following gt�uutHls: 1. Petitioner is not the ~�eal pat_�ty itt inlen~st and/or he ha!!! uu legal pen;ona 1 i Ly Lu lile Lhe petition; 2. P e L i t i o t te t' u o 1:: be i u g t. h e r e a 1 p lt t� l: y i u i a L r:n� e s t i s u o t e tt t i t.l f~ d to the r e 1 e a i'5 ~ o f the goods in quealion; :J. The alleged negotiated coutntct of lc'IE:de ovrc>r the subje{�t mnl ter of the PetlL:Ion hs IIlli L aud void. ( C'l'A HPcnrds p. 40) Opposition and Reply tu Motion to and uvpoi:l i t.lon Lo the Notion lor Release llttth~ L' HUtHI was !iittbmitLed by PeLiLiunet� on FelHUat�y 5, lYYU llliilHLtiluiug, ou Lhe o the t haud, Uta L: a. PeLit.iouet�, being lhe assignee of the guuds iu quesl.iotl is the real party i11 inleresl <:t u Ll h a s I e g a 1 p e ~- s u u a 1 i L y lu i i 1e L he p e l J. L i u n i b. Jlet.itiouer is eulilled Lu the teleur:;e oi the goods being Lhe assignee and real party ill interest; c. The negotiated cnnt.ract ot sale of L h c' a t: L i c 1 e s i n L h i s case i s [H~ r I e c t 1 y 1ega 1 , valid and bint.liug. ti.lf\ Heo.�uLds, pp. ll/-l.IBJ 645

DEGISlON - G.T.A Gase No. 4300 - u- la their Hejoinder liled on February lt,J, 1990, Hespontleuts reite1.�atetl their atorementioned position and ela!Jot:ating that the provisions oJ: law applicable to the case at !Jar should be ::lections �bUl to 2610 o1 the J'l,lriff and Customs Code and not Executive O!'der No. 1013 as e r ron eo us l y v i ewe d by t he P e 1- u- i on P r . On ,ftJHP :!.6, 1992, t:his Court in resolving the above- said issues ruleu, thns: uu the 4uestiou ol the legal pen~HJualit.Y Ui petitionet� to Jile the _IJeliLion anu/ut� llir4 nut: being the real pFlrty iu interest, the !Jeed oi Assi~nment suiJnlitted by petitiotlet' as evidence and su!JsetjUt:HLLly admitted by thi('� Court apvears to work in petitioner's favor. 1 t may be no ted that t�esponden ts fa i 1ed to put any objection to the admission of the Deed of Assignment as evidence. {..Je deem that the failure ui vetitiouer to include said Ueed in its petition was mere inauvertence on its part, !Jut cureu by the subseqUeiLL admission ol the Deed as eviuence. The same Deed of A~signment cou t a ins Lhe ans wet' to res pouuen t s' contention that petitioner did uot play any rule in the negotiAtions, nor that his name was never meutioued as an interested or affected party, a~ it is indicated in the Deed that: the assignee (petitioner) "has J:iuanceu Lhe acquisitjou and purchase ol the aloremeutioned re!,;ins Lt�um the Hureau of Customs". 111 acconlauce with law, Llterelore, Lhe JJeed and Assigument effected to tt�ansmit all the rights, u lJ j e c L o 1 l h e c o n Lr a c L , o t t~h e a s s i g no t� l. o l h e Hsoiguee, petitiuue1.� iu the case. Hence, the pPtition Lo n.>.l ease under bond the subject 3,l.Ul bags Polyethelene resins and PolypropheleHP p~sins was thPrehy GRANTED. rn l:lct, th 1.r; 646

DECISION - G.T.A Case No. L�::HW - <) - Cutnl UJ-W.EH.J::U ol said guuds under boud but was nul actually released to the .Petitioner for the alleged reason that the same can tto longer be found. The only issue left tn be resolved therefore i S I Whether or nut .Petitioner is entitled to the final release ul the goods in 4uesLiuu. ln denyiug the release ol the suuject good, the Respondent Commissioner of Customs ruled that: XXX XXX XXX Executive Order No. 1073 was issued Lo prescribe saieguards tor domestic ittdustries upon the lifting ul import licensing tot.� certain products. It: did not Hmend the provisions nt the Tat.�i ff and Customs Code ot the Phil i{JJJines un Lite mauuer ul dispusiug !Jl'upet�ty in custody uuder Sections 2601 Lo 2612 ::iecLiutt Y ul E � U � Nu. 1013 is hereunder 4uuted lor clarity and to lacilit:ate veriiicat:ion: "Sec. y. Any {JroducL suuj ect to import licensittg UUt iiii{JU1'l:ed Without prior clearauce of the designated import regulating or monitoring agency, as provided tor it1 SPction l 1H1 d 2 of t h is Exec tJ t i v P 0 nl e r , s h a I 1 be seized by the Hu1�eau ul Customs, which shctll then exvurl. such !Jruduct d i r e c t 1 y u 1� L h r o u g h t h e a lJ lJ r u !J r i a l e guveuuneut ageucy ur sell the product with {Jrele1�ence to an injured party (local vroducer) at a negotiated price taking intu consideration op Leu L i a l t: eve u u e s Lu Lhe g u v e nun e u l aiHl ~he damage due t:o lost: lll'(H.fuc ~ i Ull ~" 647

DECISION - C.T.A Case No. 4380 - 10 - The provision oi fLU. 1073 auout negotiated price must: be reconciled with Section 2610 ol the TCCP where the approval of the Secretary of Finance must be obtained by Ute Customs Commissioner before a negotiated private sale can be under~aken tu the best interest uf the guvenuueut. Thet�e is uu such approval. The price offered uy E.L. REYES GENERAL MERCHANDISE was initially P400,250,0U, but later unilaterally increased to J:l50J,Y57.Ul. These r:esiuo can ue sold al a much hi.gher price. Jn fact, the Bureau received several of[ers to purchase the resin~ for at least ONE Mti.LION PESOS. For this reason, the ofter of E.L. REYES was not favorably iudorseu by the uudet�sigued to the S e c r e t a 1� y u1 F i lH:lll c e u e cause i t wa B disadvantageous to guvet�umeul iutet�eot. The provisiou ol E.O. lOlJ wahl tw.L complied with since lL L. REYES GENEHAL M~HCUANDlSE tailed to establish i t s e l l a!!fJ au injured party, thereby havi.ug preference ov~r the other domestic ltLduslt�les. Fot� this reasotl alone, E.L. REYES cannot avail of E.O. No. 1073 lo acquire the resins. Finally, it is auumitted that the requirement ol two (:l) lailed puulic auctioH~ mus t i i 1' s L. be com p 1 i e d w i L h u e 1 u t� e the t� e s i us can be sold iu a private negotiated oale, The r�esins were never sold at public auction. We agree. 'l'u Out� mind, the applicable law iu the case at bat� is Section lblU oi the T<:~ri1t and Customs Code which provides, thus: Sec. 2610. Ui.sposition of Unsold Articles tor Want oi Bidders. - XXX XXX XXX l l the Article ollered lor sale is tJ.oL suitaule ~:~ither lot� ullicial use or charity, then the SftlliP may be re-exported a::; guvertuneuL 648

DECISION - C.T.A Case No. 4300 - 1L - prnperty through the Ninistry of Trade or any other government. entity through barter: or sale. lf t-he article cannot l>e disposed ol as provided above, the Collector shall t�eport the u y ma L t e t' i 111111 e i a t e 1 to t he Corum i s s i o u e r who 1~ subject to the approval of the Minister ol Finance, dispose of the article to the best advantage of the sovernment in a negotiated private sale which shall be consummated in the presence oL a representative of the Commissioner ou Audit, in the manner provided for by this Code. (Underscoring supplied) Note should be taken on the underscored phrase "the collector shall report the matter immediately to the _C_o_n_t_m_i_s_�_s_i_o_t_l_e_t_�__w_l_t_u_n_t~2. sub j e c t to the approval ul the Minister oi Finance, Llispose uL the article to the best advant:aJ1e ot the govenunent in a negotiated private sale .. " particularly 011 the word "may" which gave ample discretiuu Lo the Commissioner uu whether or uot he would d i s pose Llt e a 1' l i. c l1~ S i II a uegoLiaLed s a l e . And it he would Lhus submit them ill a uegoLiated sale, there should be prior approval ther~~._!~�._ the Minister (now Secretary) of Finance. the case HL bat�, such uegutiated sale lell short. uJ i Ls legality. Hence, _null and void. Executive Order 1073 is tiOL applicable to the instant case as the Petitiouer l<:~i led Lu establish that the articleA in queHt_iCIIt are r:;ubjPct "t.u import liceTtsing !Jut JmpotLed � wi LII!JuL p 1� i o l' c 1e a n-t 11 c e u_l Lh1~ designated 649

---...._...-- DECISION - C.T.A Case No. 4380 - 12 - Section 1 and '1. of this Executive Order. .. " (Sec. 9 ' thereof) Let it be recalled that E.O. 1073 was promulgated to protect particular industries in the Philippines lor a period ol oue (1) year (Sec. 1, E.O. 1073). Thus, where the articles are brought into the country without prior clearance from the monitoring agency whet:e such clearance is needed the articles in question may be disposed oi pursuant to fLO. 1073 particularly No. Vll, Sections 8 aud Y thereof which provided, thus: Vll UlSPOSAL Of AUANUONEU ANU SElZEU PROUU~TS Sec. 8 Where an importer abaudous a shipment of the product which is the subject o.f anti-dumping protest, the Bureau of Customs shall export such product directly or through the appropriate govenunent agency or sell the product with pt.�eierence to an iujured party (local producer) at a negotiated {..ll'ice, takiug i n t o cons i de 1' a t i on p o t: e n t i a 1 r e v e n u e t o t he governmeuL aud the damages due to lost production. Sec. Y. Auy product subject to import licensing but imported \vithout prior clearance cJ f t he des i g 11 a ted i mp o r t regu 1a t ing o r o[ fllonitoring agency, as provided lor ln Section 1 and 2 this Executive Order, studl be seized by' the Bureau ui ~ustomH, which shall then eX p 0 r L such p l' 0 d u c L d .i r e c L 1 y 0 r L"lll' 0 ugh Lhe app rop 1� i ate go v e rumen t agency o 1� se 11 Lhe p~�qtJu,:.::L wi~h preference to an injured party (local prollubel") at a uegotiatetf price taking into cuur:;ideratiou potential J:eveuues to the governmeut and the damage due to lust product.iuu. 650

D~ClSlON - G.T.A Case No. 4380 - 13 - b u t wh i c h i s u o L s u in L h i s p a 1� L i c u 1a r case . Bence, E.O. 1073 should nut apply. Noreover, Petitioner also failed to establish that E.L. Reyes was "an inj_ured party" much less having any --------~--------------------~� preference over other domestic industries pursuant to above Section Y, lL 0. 1U7:J. lu iacl, Petitioner in effect admitted that E.L. f:{eyes was not "an injured party" wheu he stated, thus: 33.3. On the allegation that E.:.L. Reyes General Nerchandise tailed t.o establish itself as an injured party (local producer), sulJ::ice it. to mention that there are no local p rod u c e r s of l he a r t i c 1e s s u b j e c t ma l t e 1� o f the case. Were these grouud cousidered, there woulu be uo local entity which may be allowed. to acquire the said goods (Petition, CTA Records p. 15) Such being the case, ~.U. 1U7J is again inapplicable. Hence, uispositiou thereol nuder said provisiou is null and void. Lastly, the f:inal bJow that will put Petitioner's a rgumenl to J"PSt comes 1 rom Sect ion I 0 oJ t.hP same E.O. 1073 which pr:oviues, thus: s~c. LU. Suppletory Provisiou. The provisions ol Sections H and 9 notwithstanding, the Hureau ol Customs �may apply Section 2603 aud relevant provisions ol the 'farill and Customs Code on the disposal ol abandoned and se .i zed produc; ts when it deems it H more appropriate procedure under the circumstances. (Emphasis suppJi.ed) 651

UEt;lSlON - <.;.T.A t;ase Nu. 4JUO 14 - This is, precisely, what the l<espondents did. They, thus, applied "Section :l603 and relevant provisions (namely, Section :l610) of the Tariff and Customs on the disvosal ol abandoned aud seized products when it deems i t a 111 o 1� e a vprop r i a l e v 1' o c e d u r e u u de r l he c i r c u 111 s Lances " . Accordingly, in the light ot the above expJanations, it can now Le safely concluded that: where the goods e u t e t� i u g the c u u n t 1� y are nuL those subject to regulation by the monitoring agency as contemplated by Sections ~ and 2 of E.O. 1073, such importation is nothing more than ord inar�y importation, and thP disposition thereof is uy gu v e nt e d Sec L i u u l b 1 0 u i L he Ta r i i i au d <.; us L o 111 s Cud e - i.e, a negotiated private saJe can only Le valid subject to the approval ol the Minister ot Finance. HeconJs oi the case, however�, reveal that .herein Petitioner, through E. L. Heyes General ~tds. all(J Contractor vaid the l<espoudent the sum o.t 1:'50':1,457.01 as evidenced by Ollic-ial ReePipt No. SEH-:ll'iH3l:l dated September LJ, 1988, the refund ol tile same amount is !Jut propet� and is in accoL�dauce with jnslice and equity. WHEREFORE, iu all the loteguiug, the llecisiou ul the Re s p on d e n t H u o L t o l' e 1e H s e L h e p o 1y e L h e I e u e t es i ti.H tu Ute Petitioner is hereby Ai"t'LRMJo:U. 1< e s p u 11 de u l s , h o we v e r , a t� e hereby ORJH:HIW Lo l<J�:FlJNU lu l'eL i l. j Ullt.-'1 Llle SUIII oi 652

DJ::ClS.LON - C.T.A CaHe No. 4)00 - 15 - P5UJ,Y57.0J which the latter� previously paid to and accepted by the tonner�. The surety bond posted by the Pet.iliouer is herei.Jy ordered CANCELLED, the same having I.Jeen unulilized. SU ORDJ::REU. ~10.- C2...-.cA ERNJ::STU U. ACOSTA Presiding .JucJge WE CUNCUl\: (Uu leave) MAN EL K. GHUUA A;~~~~,'"1fle RMIUN 0. JH! VEYJ Assuciale .Judg" C .f:i.: . H T J .F J _ C A '.L' _L U N he 1-' e by c e r 1: i 1 y l tw t this decision was reached alter cine consultation amuug the members oi the Court of in accurdauce with Secliuu 13, Atlicle Vlli ul Lhe CuusLiLuliun. -~-\O~c~ ERNJ::STO U. AGOSTA l'resiuiug Juuge CuurL ui ~ax Appeals 653