CTA Case No. 852 (Decision)

ARTURO MENDOZA , r;; C. T. A. Petitioner , CASE NO . 852 - versus - TIMOTEO Y. ASERON in his capacity as Acting Commissioner of Customs , Respondent . x - - - - - - - - - ~ - - - - - -x DE C I S I 0 N This is an appeal from a decision of the res- pondent in Customs Case No . 99 , Seizure Identifica- tion No . 1407 , dated June 7, 1960 (Annex B) order- ing the petitioner and his surety , Halayan Insurance Co ., Inc ., to pay, jointly and severally , the amount of Pl6 , ooo. oo. This case was submitted for de cision on the pleadings and the partial �stipulation of facts sub- mitted by the parties o The petitioner is the importer of the merchan- dise in question , consisting of 100 cartons of 11Ches- terfield11 cigarettes , which arrived at the port of Na- nila on January 23 , 1954. The shipment was declared free of duty under Section 311 of the Philippine 1'rade Act of 1946 . It vras not , hmvever , covered by a release certificate of the Central Bank , or any of its agent banks , for which reason the Collector of Customs of Hanila ordered it forfeited for violation of Central Bank Circular No . 45 in relation to Sec- tion 1363(f) of the Administrative Code . During the pendency of the seizure proceed- ings, the Malayan Insurance Co ., Inc . put up its

DECISION - C�� A. CASE NO . 852 - 2- Bond No . 66lt9 , dated Harch 16 , 1954 , in the amormt of Pl6 , ooo. oo for which reason , the merchandise was re- leased. From the decision of the Collector of Customs of Manila dated l~y 31 , 1955 (Seizure Identification No . 1407) , the petitioner appealed to the respondent Commissioner who affirmed the same . Hence , this petition for review to which the respondent filed an answer seeking the payment by the petitioner of the respective sums of Pl6 , ooo. oo , representing the amount of the surety bond , with interest and ~500 . 00 as additional damages . The only issue raised in the present appeal is whether or not the forfeiture of the merchandise in question for lack of a release certificate as required � by Central Bank Circular No o 45 is legal . The authority of the Central Bank to issue through the Monetary Board , Central Barut Circulars Nos . 44 and 45 has long been upheld by the Supreme Court . The Supreme Court in previous cases (Francisco Pascual vs . The Commissioner of Customs , G. R. No . L- 10979 , June 30, 1959 ; The Commissioner of Customs vs . Estanislao Leuterio , G. R. No . L- 9142 , October 17 , 1959) consistently held : ttAs already stated , CircyJ, a,rs Nos . 44 and 45 w~re issued by the Ho~etary BQS~g within th~ scope of it ~ lJ Oiver ~. They were published in the Official Gazette in June 1953 . Appellant failed to present to the Commissioner of Customs release certificates issued by the Central Bank or its duly

DECISION - C. T. A. CASE NO . 852 - '3 - authorized agent , baruts for the importations in question. The Commissioner of Customs may , therefore, seize them and order their forfeiture under the afore- quoted provisions of the Revised Administrative Code . It is true that neither of the Circulars provide for the penalty of forfeiture . But since the importations in question were made with- out the necessary import license issued by - the Monetary Board pursuant to Circular y N0 is~ued b � 45 and the release certificates the Central Barut or its authorized agent banks in the prescribed form pursuant to Circular No . 44 , they fall within the class of ' merchandise of prohibited importation' or merchandi se ' the importation x x x of which is effected x x x contrary to law ' that the Co~nissioner of Customs may seize and order forfeited . To sustain the appellant ' s theory of the case would render nugatory the aim and purpose of the law '~1en it authorized the Central Bank to temporarily suspend or restrict the sale of foreign exchange to licensing during an exchange crisis in order to protect the international reserve and to give the Monetary Board and the Govern- ment time in which to take constructive measures to combat such crisis." (Underscoring supplied.) Consequently , violation of the same subjects the merchandise to forfeiture although said circu- lars do not provide for such penal provision (Cata- lina Reyes vs . Commissioner of Customs , C. T. A. Case No . 132 , January 9, 1956 ; Venancio Tong Tek vs . Commissioner of Customs , G. R. No . 1- 11947 , June 30, 1959) . Relative to the respondent ' s counter- claim for additional damages amounting to P50o. oo , we observe that the same is based upon a provision of the bond filed by the petitioner and his surety to the effect "that if 1vithin thirty (30) days from demand� for pay- ment of the liability x x x the said liability is not paid; and it should be found necessary to file

DECISION - C. T. � CASE NO . 852 . 4- - an action in court to effect the collection thereof , a penalty of FIVE HUNDRED PESOS ( 500. 00) in addition shall be imposed .., x . " Obviously , a demand for payment of the amount covered by the bond cannot legally be made until there is a final judgment order- ing forfeiture and there being as yet no such final judgment , no liability for damages attaches yet on the part of the petitioner (See Que Hua Shirt Factory vs . Commissioner of Customs , C. T. A. Cases Nos . 739 & 753 , J nuary 11 , 1962) . WHEREFORE , the ~ecision appealed from is here- by affirmed 1dth c/osts against petitioner. SO ORDERED. Manila , Philippines , June 17 , 1963 . ROHAN H. ill1ALI Associate Judge I concur :