CTA Case No. 2090 (Decision)

1\EPUBLIC OJ' "TilE PIIILIPPINEI COURT OF TAX APPEALI QtiEZON CITY co., & �~CONDRAY INC.~ r in its capacity as agent of the SS "FERNLAKE" , Petitioner, - versus - C.T.A. CASE No. 2090 COMMISSIONER OF CUSTOMS, , Respondent. X- - - - - - - - - - - - X DECISION This is an appeal from the decision of re- spondent dated February 20, 1970, affirming that of the Collector of Custom$ of Manila which imposed an administrative fine of ~2,000.00 on .the vessel SS 11 Fernlake" for carrying unmanifested cargo in vio- lation of Section 1005 of the Tariff and Customs Code, in relation to Section 2521 of the same Code. The facts are not in dispute, the same having been stipulated by the parties, as follows: n1. That Macondray & Co. is the ' shiP- ping agent of the ' vessel SS " Fernlake" which arrived at Manila on April 1, 1965 under Registry No. 434; � "2. That among the cargoes conveyed and discharged by said vessel at this port particularly under Bill of Lading No. 18 consisted of 200 cartons thiovanic acid; "3� That the 200 cartons. were not in- cluded in the Inward Foreign Manifest of said vessel for which reason an amendment was submitted by the respondent company on April 8, 1965 and was approved by t~e Bureau , of Customs with the notation which reads as follows: 'without prejudice to an adminis- trative action against the vessel'; � "4. Said cargo of 200 cartons thio- vanic acid were however properly mani- fested in the Inward Cargo Manifest of the MS "Fernland", Voy. No. 2-A which arrived

I DECISION CTA CASE No . 2090 2 at Manila on April, , 1965 under Registry No. 434. Macondray & Co., Inc. was also the local agent of the MS "Fernland"; 11 5. That the respondent company in its letter dated April 8 , 196? to the ~ureau of Customs stated among others that . subject shipment would have been loaded on the vessel SS nFernlandn but due to con- fusion, i.e., overstowage and piling up of export cargoes in New York occasioned by longshoreman's strike, in good faith ' and without fraudulent intent said cargo was loaded on board the MS nFernlake" instead of the ViS nFernland11 ; "6. That on April 23, 1965, the Bu- reau of Customs in answer to the above- stated letter of the respondent company requested for the submission of evidence in support of its explanation contained in said letter for which reason and in compliance therewith, the respondent ship- ping agent submitted on May 12, 1965, a copy of the manifest of the vessel S/S "Fernland" Reg~ 481-65 showing that the 200 cartons of .thiovanic acid were duly manifested therein; "7� That on July 13, 1965, the Bu- reau of Customs informed respondent com- pany that its explanation was found not satisfactory; hence, the hearing of the instant case.� (Stiplllation ot Facts, PP� 21-22, CTA rec.) The sole issue to be resolved in this case is whether or not the administrative fine of ~2 , 000.00 imposed on the vessel SS "?ernlake" is in accordance with law. The issue herein involved is not new. In t P,e case of Compafi:t.a General de Tabacos de Filipinas v. C�ommissioner of Customs, CTA Case No . 1939, Februa-, ry 26, 1971, involving a similar question, it was held:

DECISION CTA CASE No . 2090 3 SEC . 1005 . Manifest Required of Vessel from Foreign Port.--Every vessel from a foreign port must have on board a complete manifest of all her cargo. � All of the cargo intended to be landed at a port in the Philippines must be described in separate mani- ~Efeacshts for each port of call therein. manifest shall include the port of departure and the port of delivery with the marks , numbers, quantity and des- cription of the packages and the names of the c~nsignees thereof. ~very vessel from a foreign port must have on board complete manifests of passengers and their baggage , in the prescribed form , setting forth their destination and all particulars required by the immigration laws; and every such vessel shall have prepared for presentation to the proper c ustoms official upon arrival in ports of the Philippines a complete list of all sea stores then on board . If the vessel does not carry cargo or passen- gers the manifest must show that no ca~go or passenger , as the case may be , . is car- ried from the port of departure to t~e port of destination in the Philippines . . A cargo � manifest shall in no case be changed or altered after entry of the v~ssel, except by means of an amendment by the master , consignee or. agent thereof , under oath, and attached to the original manifest: Provided, however , That after the invoice and/or entry covering an importation have been received and re- corded in the office �of the appraiser , no amendment of the manifest shall be allowed , except when it is obvious that a clerical error or any other discre- pancy has been committed in the prepara- tion of the manifest , without any frau- dulent intent, discovery of which could not have been made until after examina- tion of the importation,has been completed. SEC . 25'21. Failure to Supply Re- quisite ~anifests . --If any vessel or aircraft enters or departs from a port of entry without submitting the proper manifests to the customs authorities, or shall enter or depart conveying un- _

DECISION - CTA CASE No. 2090 manifested cargo other than as stated in the next preceding section hereof, such vessel or aircraft shall be fined in a sum not exceeding ten thousand pesos . The same fine shall be imposed upon any arriving or departing vessel or air- craft if the master or pilot in command shall fail to deliver or mail to the Auditor General a true copy of the ~mani fest of the incoming or outgoing cargo, as required by law. "Petitioner assails the legality of the imposi- tion of the administrative fine . It is argued that a clerical error was committed in good faith in the pre- paration of the manifest and when respondent allowed and approved the amendment, the same had the effect of curing the defects or faults appearing in the original manifest . In other words, it is the contention of peti- tioner that the liability of the vessel for carrying � unmanifested cargo was cured or obliterated by the amend- ment of the manifest which was allowed and approved by the proper Customs authorities. "The issue is not new. In the case of IVIacondray and Company, Inc . v . Commissioner of Customs, C. T. A. Case No. 1930, December 27 , 1969, which involved a similar issue, this Court held: � .There is no dispute that the four (~) cartons of electrical parts were not cov- ered by the inward foreign manifest of M/S "Fernview", as required by Section 1005 of t~e Tariff and Customs Code . To enable petitioner to take delivery of the entire shipment of six (6) cartons, Mr . De Asis, ~anifest Clerk, Marine Entry Processing Division, Bureau of Customs, r~quir ed the amendment to the inwa?d foreign manifest upon discovering that the number of cartons of electrical parts declared in the entry . cover i ng t he disputed shipment was four (4) cartons more than what were declared in the � original in\vard forei gn manifest of the sub- ject vessel. Although this amendment was allowed and approved by customs authorities, the same did no t have the effect of obliter- ating the liability of the vessel incurred previous to t he amendment. Section 1005 of the Tarif f and Customs Code, supra, is so clear � and explicit when it commands every vessel f~om a �foreign port to have on board a complete manif est of all her cargo. Non-observance of this imperative obligation SLl. bjects a vessel to the adminis-

DECISION - CTA CASE No. 2090 5 trative penalty under Section 2521 of the same Code. T~e . law makes no exception and any attempt to read one into the statute would be contrary to the spirit as well as the clear language of the aforesaid provi- sions. (See Smith Bell & Co., Inc. v. Comm. of Customs, C.T.A. Cases Nos. 1728 & 1921, July 22, 1969.) "The evident int~nt and ob- ject of these requirements for � the submission of manifests by all vessels from foreign ports is to impose upon the owners and officers of such vessels an ~perative obligation to submit lists of the entire lading of the ship in the pre- scribed form, in order to fa- cilitate the labors of the Cus toms and i~igration of- ficers, and to defeat any at- tempt to make use ' of such ves- sels to secure the unlawful entry of persons or things in- to the Islands. , No !except�ion is made in the statute, and the recognition of any attempt to read an~ exception into the statute could hardly fail to defeat the p(uur.pso. sve of its en- nactment.J� . Steamship 1Rubi', 32 P~il . 228; under- lining supplied.)" Another strong reason for not adopt- ing the interpretation advocated by peti- tioner is found in the pernicious conse- quence which would flow from such con- struction. If we are to exempt the ves- sel from liability for conveying� unmani- fested cargo by the simple expedient of amending its manifest after discovery of the offense, it would embolden and en- courage other vessels to deliberately load cargo without listing them in their manif~sts. If the unmanifested cargo is discovered, as in the present case, the manifest could simply be amended and thus free the vessel from any liability what- soever; but if the unmanifested cargo is not discovered, the same would enter the country free of duties and taxes to the detriment of the Government. In both instances, the owner or master of

\ DECISION - CTA CASE No . 2090 the vesse~ has� nothing to lose but every- thing to gain. On the other hand, the Government is always the loser. Such a result . would not be in keeping with the evident purpose of the law in providing effective means for the collection of customs revenue. For this reason, we are not inclined to accept the interpre- tation of petitioner. I "Petitioner further asserts that 'the provi- sion of the law on amendment is designed to protect the master, agent or consignee from the error, mis- take or discrepancy 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 case, that the right to amend the manifest is for tne principal purpose of protecting innocent im- porters. 1_ Whether the purpose of the law in permit- ting amendment of a vessel's manifest / is to protect the master, agent or consignee of the vessel, �or the i mporter of the goods , is to our mind of slight signi- ficance. Under Section 2521 of the Tariff and Customs Code', no relief from lia~ili ty for the fine is granted where an amendment of the manifest is allowed." We find no compelling reason to deviate from .the fore- going pronouncement. However , considering the circumstances which brought about the failure to include the goods in question in the manifest of the SS uFernlake 11 , the .fine imposed by the Col- lector of Customs of Manila and affirmed by respondent ap- pears to us excessive. We are of the opinion that, upon the facts o~ record, a fine of il , OOO would be an adequate penalty -for the said offense. WHEREFOBE, . the decision appealed from is hereby J� modified by reducing ~he .fine from ~2 ,000 to ~1,000 , /' which respondent is hereby ordered to pay to the Bureau of Customs, Manila, within thirty (30) days from the

DECISION - CTA CASE No . 2090 1 7 date this decision becomes final . SO ORDERED . Quezon City, December 16, 1971. ~ Presiding Judge WE CONCUR: ,~~EST/A.NIS4LA/O(R). ?ALlV-~tfr Associate Ju_dge ~ 1~ 1- ~ . RAMON L. AVANCENA Associate Judge ' -'