CTA Case No. 4402 (Decision)

.. REPUBLIC OF THE PHI L IPPIN ES COURT OF TAX APPEALS QUE ZO N CI TY CARL ' S MARITIME CORPORATI ON Peti tionet- ~ C.T.A. CASE NO. 4402 THE BUREAU OF CUSTOMS AND HONORABLE SALVADOR M. MI S ON, Respon dent. X- - - - - - - - - - - - - X DEC I I DN Petitioner a ppeal s the deci s ion o f the Commissioner o f Customs order ing t he forfeiture of t he ve sse l 1"1/ V " Oce a n Na v igatot- " for having been found to have been used un l awf u l l y in smuggling electrode wires into the Phi l i ppi n es. ) A peru sa l of the case s hows t hat it call s upon the Court ' s eye f or p l~ obative a nd com p etent evidence and to s ift t hroug h the Court 's scre en the fine gra ins of e v ide nce fr o m t he coars e. I n this res p ect ~ the Commi ssi on er of Custo ms appreciation o f the f ac ts of thi s case n e e d be l aid for purposes The following are t he high l ig hts of the Comm iss ioner ' s deci s ion: "B t- ie �fly a n d c hrono l ogica l l y s tated~ t he fac t s of t he case a re a s fo l lows : 1. T h at on 20 Marc h 1 985 ~ th e v e ss e l 1"1/V " Oce a n Na v igator" ' m�med and op e rated b y Carl 's Maritime C o r p.~ of P h ilippine registr y ~ arrive d at the Po rt r'>.- 6 1(-1

DECISION CTA CASE NO. 4402 - 2- of Dadiangas fr-om Hongkong via the Por-t of San Fer-nando. At 6:25 P.M. of that same day~ the Inwar-d For-eign Manifest was submitted to the Customs boar-ding team~ declar-ing the car-goes ther-eat as 50 MT of calcium phosphate and 1:'�0 MT of peanut m ea l~ both co signed to Bibiana Far-ms and Mill Cor-por-ation of Gener-al Santos City. That a 1so on the said day~ a r-epr-esentative of the vessel's oper-ator-~ one Ar-lene Fer-nandez~ made a wr-itten r-equest t o the Por-t Col lector- to unload its supposed tr-ansit car-goes to per-mit the doing of r-epair-s at the tank top of the vesse 1 ~ befor-e it cou 1d set sai 1 to the alleged final de stination~ Br-unei. The r-epair- supposedly necessitated the tempor-ar-y off - loading of the said thr-u car-goes as the said car-goes vJer-e placed on top of the site v1her-e the r-epair- vJas supposedly to be under-taken. 2. That on the following day~ 2 1 Mar-ch~ a s0pp lem e ntal car-go manif es t~ was submitte d~ declar-ing the following as tr-ansit car-goes consigned to Seguin Tr-ading of Br-unei~ to wit: 207 MT Cer-eal Gl~ai ns ~ 207 1'1T Oi 1 1'1ea 1 by.-pt-oduc ts ~ 80 MT E l ectr-ode Wir-es an d 150 NT Calcium Phosphate. That also on even date~ a 1et ter- of the oper-a tor- 's t-epr-esen ta ti ve ~ was r-equesting that the adver-ted tr-an si t car-goes be tr-ansfer-r-ed to the v.Jar-e h ouses of Car-con Dev ' t Cor-p. and Bibiana Swine F ar- ms~ in Katanqqawan. Gener-al Santos~ supposed l y in view of the unavai lability of stor-age space at the PPA bodega at 1'1akar- Whar-f. 3. That the r-equests r-el a ti v e to the tr-ansit car-goes vJer-e appr-oved on 29 !"lar-ch~ subject to the f i l i n g of Special Per-mit to Tr- a n s fer- ( SPT) ~ conduction guar-ding and under-guar-ding and posting of r-e - e >: pet-t bond w.i th r-espect to the r-equest for- tempor-ar-y off - load ing. 4. That the tr-ansfer- of the car-goes was effected fr-om 1'1ar-ch 22 up to Mar-ch 28;

DECISION CTA CASE NO. 4402 3 5. That on 28 Mar-ch~ the assigned Customs Examiner-~ Bienvenido Lepar-to r-ender-ed a fepor-t that ther-e wer-e no electr-ode wir-es found dur-ing the fin a l examination he con ducted~ which findings II�Jas confir-med by Raymundo Sasuman ~ the assig n e d under-guar-d~ in a r-epor-t r-ender-ed on even date; 6. That on 29 1'1ar-ch~ Ro sa Cuevas~ the oper-ator-'s r-epr-esentative infor-med customs author-ities b y lettet-~ that one of the i terns in the thr-ough car-go manifest~ the 4~000 boxes of e lectr-ode 1-'Ji r-es~ was not in f ac t car-r-ied b y the vessel as it was allegedly "shut off" in Hongkong due to schedule pr-oblems of the vessel. 7. That o n or- aoout 3 Apr-il~ b y r-eason of der-ogator-y infor-mation received by the Distr-ict Collector of Cus toms o f Da vao ~ Customs author-ities conducted investigations on alleged que stionabl~ sales and deliver-ies of electr-ode wires in different har-dwar-e stor-es in Davao City which repor-tedly or-iginated fr-om one of the two (2) war-ehouses wher-e the tr-ansit cargoes wer-e s tored. 8. On 4 Apr- i 1 ~ due to the adver.. se r-epor-ts~ the Pot- t Co llector of Dadiangas cr-eated an inventor-y team to conduct a physica l count and inventory of the s tor-e d transit car-goes. The team subsequently submitted a repor-t without any mention of the existence of the welding rods. 9. That a Wat-r- an t of Seizur-e . and Detention dated 15 Apr-il 1985~ was issued ) for- alleged violation of the per-tinent pr-ovisions of the Customs Code as ear-lier- adver-ted. Af ter- due notice and h eari ng~ a deci s ion was r-ender-ed forfeit ing the vessel and its tr-ansit thi s ap pea l. car-goes~ hen ce~ 2 6 ._j

DECISION CTA CASE NO. 4402 - 4- The f o rfeiture decision was arr i ved at on the basis of the following findings and conclusions: That the supposed Consignee of the transit cargoes~ Siguen Trading was fictitious; that the necessity of unloading the transit cargoes in order to carry out the repair was not sufficiently established; and that the existence of the 80 MT of electrode vJires~ vJas substantially established. After a careful and judicious review of the records of � the case~ this Off ice finds no reversible error in the Collector ' s evaluation of the facts and evidence obtaining. Although Appellant has impt-essi ve 1 y and e>: tensi ve 1 y argued i t s defense~ i t has fai 1 ed to turn th e tide of the sate of evidence/ ine:-:onabl y (SIC) warranting the decree of forfeiture. Taken in iso 1a tion or ind e pendent 1y viewed~ Appellant' s refutation o f the arguments in the appealed deci sion ~ ma y be credible and creditable. Howe v er , the conf 1uence of the events and situations as can be g 1e a ned in the evidence submit ted by both parties, ran g ing from the declaration or inclusion of the questioned shipment in the pertinent maritime and customs documents~ the failure to seasonably correct the same (if indeed the e 1ec trade wires were not carried by the vessel) albeit the foreknowledge of its fatability, the weak excuses of oversight and inadvertence of the said failure~ the lack of spontaneity in the presentation of the supplemental thru cargo manifest, the confirmation by Customs authorities of the Port of Loading~ Hongkong, that the electrode wires were indeed s hipped consigned to Care on Dev" t Corp. , F'hi 1 i ppines, the unsubstantiated need for repair of the vesse l~ which ~-.Jas not duly t- eport e d to the pt- opet- au thor i ties~ and the equa 11 y unj usti f iabl e of f - 1oad ing of the transit 27 0

DECISION CTA CASE NO. 4402 - 5- cargoes to the aforenamed - named warehouses~ conve n iently owned by the vessel's operator when in f act~ the unavailability of the PPA bodega was not ve rified~ th e hazy consignee in Brunei~ capped by the incredible synchronism of the presence of electrode wires in a nearby place~ Dava o City~ which were identified as coming from one of the depo s itor y warehouses~ and the arrival of the ve ssel ~ initially reported as carryi ng the sa me imported artie 1es . do not yield to an in noc ent conclusion. In fact~ i t brought to fore the existence of a s killful maneuvering by various yet coordinated hands managed by a single mind~ to carry out a sinister design- smuggling . Appellant particularly elaborated on the discontinued investigation t-egarding the apprehended electrodes and the s ub se quent release of the same ~ which he distinguished as the "most decisive cir-cumstance against the contention tha t a cargo of electrode wires was smuggled into the country." This is however downright illogical because the said acts did not rationally establish the l egitimate character of the electrode wires. Although it is conceded that the investigation was stopped an d the r e lease of the questioned electrode(s) were effected~ yet there was no clear findings or declaratibn of absolution of the accusation ma de. In fact~ as the recat- ds of the case will bear out~ the said acts ha ve the calor of illega lity which may have been due to the inordinate fear and ignorance of those who effected the same. Yet t he caveat t- emains--- the Government is not estopped by the incorrect and/ot- illegal acts of its agents . What could al so be the evidence of the highest order justifying the forfeiture o f the vesse l and the que s tioned cat- goes~ is the unadulterated tes timonies of Customs employees Jose 271

I i DECISION CTA CASE NO. 4402 - 6- Di 1 ig and Sergio Bautista~ a member of the initial inventory team created. If not for the itch to tell the truth~ what motivation can be imputed to them for declaring that they in deed s.:1w the e 1ec trade v-Jires v-1i th their naked eyes. The ru 1e of t he tyranny of the minor.i ty gripped this instance the testimonies of only tvm (2) people v-1ere pitted against the testimonies of many~ that of the other members of the inventory team~ the under-guard and the Examiner and that of their superior~ then Collector- Jose Santos~ and many others~ who all claimed not to have seen the electrode wires - - so little voices~ yet so deafening. �Appellant tried h ard to discredit the testimony of Sergio Bautista~ courtesy of the testim ony of Collector Santos that the former was not officially a member of the inventory team and he was absent on the date the inventory v-1as undertaken. Yet~ the more appellant � tried to impeach the credibility of Mr. Bautista's testimony~ the more it became apparent that this smugg 1 ing i nc ident 1r-1as the handiv-mrk of many a conspiracy of people in and outside of Customs those from the inside~ through indispensable cooperation." The Commissionet- points to the confluence of events and situations as bringing to the fot-e "the existence of a skillfu l maneuvering by various yet coordinated hands managed by a single mind~ to carry out a sinister design-smuggling". Still~ when i t was petitioner's turn~ i t was ready with a logi cally detailed version of its case. The Co 11 ectm- ~ Sub-Pot-t of Dad iangas ~ in his decision noted that prosecution evidence tended to

DECISION CTA CASE NO. 4402 - 7- shovJ that the company Siguen Trading is not registered in Brunei and that claimant~ petitioner herein~ did not present any evidence to the contrary. But there are countervai 1ing evidence from the petitioner on this _question. Petitioner was able to corroborate with real evidence the testimony of Carlita Lim~ President and General Manager of Car 1 's Maritime Corporation that there is a company by the name of "Sin Guen � Trading Company"~ the actual consignee whose name was misspelled as "Siguen Trading" even by the Manila Office of the Bureau of Customs in their inquiries vd th Brunei. Through a subsequent written communication contained in "Sin Guen Trading Company" stationery vdth letterhead (E>:hibit 23-A~ Folder I) which letter was furnished the Bureau of Customs, the existence of said company vJas confirmed. On the observation in the decision of the Collector, that a genuine consignee should have shown more interest in the cargoes than the making of a routine inquiry which was never repeated, petitioner returns in argument that: "First, this assertion rests on an implied admission, that there is a real and e>:istent firm "Sin Guen Tt- ading ) Company" in Bt- unei. Second, it simplistically

DECISION - CTA CASE NO. 4402 -8- assumes that Sin Guen had paid in advance for the cargoes, or had neglected to insure them, or had acquired them under conditions or circumstances whereby it stood to suffer irrevocable damage by reason of their loss. Since neither of these contingencies has been alleged, much less proven, there is no reason to assign to said consignee any greater interest about the fate of the cargoes than it is in fact shown to have manifested." Petitioner was also able to establish the fact that there was a necessity to make repairs on the subject vessel which caused for the temporary offloading of the cargoes in the Sub-Port of Dadiangas. The Testi mony of Chief Engineer', Bernardino Manaba <Exhibit 3, Folder !-Exhibits> states that it was at his suggestion that a stop- over be made in San Fernando, La Union for the reason that the vessel's bunker fuel had frozen and could not be used for engine consumption. Thus: Q. On your way to Dadiangas from Hongkong, and according to Captain JOSE D. LU, you recommended that the vessel should call at the Port of La Union. Is this true? A. Yes, sir. Q. What was your reason for making the suggestion? 274

DECISION CTA CASE NO. 4402 - 9- A. Because our bunker fuel was frozen and we could not use it for main engine consumption~ we only had to resort (to) diesel fuel and could only last us until our neares~ port, which is San Fernando, La Union. That is why I suggested that we refuel at La Union for additional diesel fuel." The statement of Bernardino Manaba shows that even on the ~-<Jay to San Fernando, La~ Union, the vessel was already encountering problems. Additional declarations of Bernardino Manaba further clear the question on the necessity for repairs in the vesse 1 . Authority to repair the economizer was sought which required the offloading of the vessel's . cargoes to facil.itate the repair, to ~o-Ji t : Q. Can you inform this investigator whether or not M/V "Ocean Navigatot-" needed some repairs while the vessel was docked at Dadiangas? A. Yes~ sir. The steam economizer boiler has a puncture on its heating coil. In fact I have made a request from the port Authorities to grant us to repair said economizer, but it was turned down because of the time element needed. Second repair is to trace up the cause of our bunker being frozen. Q. In your opinion, was the unloading of the entire cargoes necessary to undertake the repairs that you suggested? A. As I said~ the Port Authm-ities of Dadiangas disapproved of my request to undertake some repairs of the economizer. So I suggested that it must be done on the dry dock. Anyway, we are due for dry docking this coming May. Q. Will it not be practica l and

DECISION CTA CASE NO. 4402 - 10 - economical to just clear a way up to the place or part of the vessel to be repaired? A. As far as the economizer is concerned~ i t is not necessary to c 1ear the way~ but in tracing the fuel lin e coming from the tank which has cargoes on its top~ I needed a c 1earance to give access to the tank top. Q. Can you inform this investigator why it is necessary that the economizer should be repaired~ when you were able to reach Dadiangas without using the economizer? A. The economizer is a device to save diesel fuel. It takes the place of the boiler when the ship is at full speed and the boiler is shut off~ and the economizer will be the one to give heating to the fuel. Q. While at the Port of Dadiangas~ was the needed repairs done? A. Only the fuel line and the heating pipe to the tank was repaired. The economizer was not repaired because I needed the approval of PPA authorities before I can undertake the necessary repairs. Q. After the repair of the fuel line and the heating pipe~ can you inform this investigator if the vessel can sail for the next port~ which is Brunei? A. Yes~ s i r . But at a great e>:pense of diesel fuel." rhe necessity of repairs is confirmed by evidence therefore~ and i t was that the repair of the economizer was put on hold only because of lack of approval from the authorities. The 'r>... 7� b'='

DECISION - CTA CASE NO. 4402 - 11 - Commissioner's decision for that matter failed to �' counteract the facts in Manaba 's sworn statements and chose not to elaborate therein on this issue. Nonetheless, the unloading of the cargoes was approved by the Customs Authorities in Dadiangas subject to underguarding of the cargoes pending their reloading back to the vessel. Request for transfer of the cargoes was also approved by Acting Deputy Collector of Customs of Dadiangas, Mauro Monjardin subject to a) filing of a Special Permit to Transfer <SPT ) ; b) appointment of a Conduction Guard; c ) continuous underguarding of the cargoes while at the port, and; d) posting of a re-export bond equivalent to 150~ of the estimated duties and taxes. It appears that the foregoing requirements were complied with, for as borne by evidence and as found by the Collector of Dadiangas, these events took place: 1. On March 22 , 1985 Carl's Maritime Corporation through its representative, Rosa B. Cuevas, filed SPT application under B. C. Form No. 43 and was numbere d as Special Pe r mi t No. 2093-85 with 80 metric tons of Electrode Wires in boxes being included as part of the cargoes being transferred. 2 . ..,... {( .I

DECISION CTA CASE NO. 4402 - 12 - 2. Sgt. Claro Morales was assigned as the Conduction Guard, whi le Raymundo Sasuman was assigned to under-guard the shipments in the ~<-Jarehouses. 3. A surety bond for P1~734~179.00 representing 150% of the estimated duties and ta xes due~ was filed to gua ran tee re-exportation of the through cargoes within six months therefrom. 4 . The cargoes were transferred to the warehouses of Bibiana Farms and Mills . Corporation and Careen Development Corporation. At this point petitioner can be observed to have follo~..,ed the regular course in the unloading and transfer of the cargoes. But the collector's ) decision has adverse findings on yet another part of M/V "Ocean Navigator's" arrival in Dadiangas. The Collector takes it against the vessel � in failing to submit a complete Inward Foreign Manifest (E:�:hibit "2") which should include cargoes destined for Dadiangas and those for Brunei right upon arrival. In this case, petitioner was able to complete the manifest for the vessel only the following morning~ in the form of a "S\.Ipplemental Thru Inward Foreign Manifest" which contained the list of cargoes bound for Brunei (E:�:hibit "2-a"). This supplemental manifest~ contains~ among others~ 2?8

DECISION CTA CASE NO. 4402 - 13 - the 80 MT of Electrode Wires in its list. According to the Collector "This lack (of) readiness . or spontaneity on the part of the Master of the vessel to comply with a clean and simple mandate of law is viewed by this Office not just as a case of mere forgetfulness or human lapse, but more as a part of the plan or scheme to land the said through cargoes along with those declared for Dadiangas". The testimony of Cecilia Tugonon, Boarding Officer, however shows that he has been informed of the presence of other cargoes aside from those 1isted in the Inward Foreign Manifest, and that Tugonon had acquiesced to the submission later of the relevant documents for other cargoes not included in the Inward Foreign Manifest. Thus: Q. Is it not that you were informed when you boarded that there were other cargoes? A. No, it was on land when we were on the way home. Q. But you were informed? A. Yes, sir. Q. On the same day you were informed? A. Yes, sir. Q. You -informed them of what they have to submit to you?

DECISION CTA CASE NO. 4402 - 14 - A. Yes~ s i r . Q. And that is the one appearing in the Supplemental Thru Inward Manifest? A. Yes~ sir." The evidence so far leads to the finding that the Bureau of Customs was not without foreknowledge of things to inspect and guard against the M/V "Ocean Navigator"~ since the vessel appears not to have hidden any information about its cargoes and its intention to make repairs in Dadiangas. The information includes its supposed cargo of electrode wires~ which according to the Commissioner was~ through "skillful maneuvering" designed to be smuggled into the country. The question that remains is whether the electrode wires listed in the "Supplemental Tht- u Foreign Manifest" actually e>:isted as part of the cargo of M/V "Ocean Navigator" and were surreptitiously smuggled into Dadiangas~ General Santos City. The testimonies of Sergio Bautista and Jose Dilig of the Bureau of Customs, were the primary basis of the case of respondent. Sergio Bautista is a 11 eged to be a member of the inventory team composed of Atty. Sanchez~ Manuel Bulle~ Ase r- Quin 1an tang, Benjamin Pante arid Al aman za Binasing 280

DECISION CTA CASE NO. 4402 -- 15 - which conducte d an inventory of cargoes a t the r.a rcon Development Corporation warehouse in the presence of Collector Jos e Santos. He tes tified having seen welding rods in boxes among other things stored in said warehouse and that he executed a sworn statement about this before Jose Dilig. He allegedly retained one piece of electrode wire taken from Carcon Development Corporation which he submitted to Captain Datumana Dilangalen, Davao ESS District Commander. Jose Dilig was then Chief Investigator of the Davao Se c tor Command when he was dis patched on April 3, 1985 to go to downtown Davao City to verify the information that some que stionable cargoes were being de l i vered in the hardware stores there. According to his testimony (T.S . N., pp. 3 35- 349, Folder II, T.S.N., pp. 312-334~ Folder I), the informa tion referred to a shipment of welding rods in the process of being unloaded at Sisa Hardware in Davao City. Welding rods were actuall y found by Jose Dilig being unloaded in that place at that time. He inquired from the driver, Ernesto Mata, and was told that the welding rods came from one of the warehouses at Bibiana Farms at General Santos City. Further verification led to the supposition that the we lding rods must have

I DECISION CTA CASE NO. 4402 - 16 - originated from the alleged shipment of welding rods believed to have arrived with the M/V "Ocean Navigator". Subsequently, a war~ant of seizure and detention was issued against Carlita Lim which was attempted to be served on April 16, 1985, but the warrant failed to be served as Collector Jose Santos had in the meantime already served a similar warrant on Carli to Lim. (T .S.N., p. 334, Folder I). It happened, ho\.<1ever, that the welding rods seized in Davao City were released soon after or on Apri 1 7, 1985 since it \.<las feared by the seizing authorities that they may have held the artie les for more than the "prescribed period" and be subjected to "formal charges" (T.S.N., p. 322, Folder I). It seems to us that the testimony of Jose Dilig is inconclusive. The welding rods initially seized in Davao City were released before inventory of these welding t-ods can be made. The supposed 1 ink between the welding rods found in Davao City and the presumed cargo of welding rods by the M/V "Ocean Navigator" appears to have been established by Jose Di 1 ig without supplementary investigation of the Customs personnel of Dadiangas (T.S.N., pp. 314-315, Folder I). This added to the fact that Jose Dilig and company were not able to participate 282

DECISION CTA CASE NO. 4402 - 17 - in the search of the Bibiana and Car~on warehouses, for as said~ they failed to serve their warrant of seizure and detention. In contrast to the testimonies of Jose Di 1ig and Sergio Bautista�~ the following real evidence and testimonies of several people are offered by petitioner for its case: 1. Carlita Lim - That he signed in blank the application of re-export bond and covering check on March 22~ 1985 unaware that the cargo of electrode wires had been "shut-off" in Hongkong. 2. Jose Lu - Master of the subject vessel~ who declared that having informed the s hip 's agent of the "shut-off" � by letter- dated March 15~ 1985 dispatched from San Fernando~ La Union~ he no longer deemed it necessary to delete from the Through Cargo Manifest the 1ist per-taining to the welding rods� 3. Rosa B. Cuevas - Who declared that when the fact of "shut-off" was discovered in Dadiangas~ she ~�n-ote letter of March 29~ 1985 (Exhibit "15") to inform the Dadiangas Collector of Customs of such fact. 4. The subsequent telegram dated July 12~ 1985 of David Tong of Hongkong Customs making no 283

DECISION CTA CASE NO. 4402 - 18 - mention of welding rods as forming part of the cargo of M/V "Ocean Navigator" - (T.S.N., p. 1 79 , Folder I). 5. Sworn statement of Douglas M. Dokor that owing to bad weather in Hongkong during loading time and the consequent delay in the loading, they decided to "shut-off" the cargo of electt-ode wires. This statement corroborates the testimony of Jose Lu. 6. Sworn statement of T. Calucin, Jr. of Bonnacord, Ltd., Hongkong, agents of the M/V "Ocean Navigator" that the cargo of electrode wires was not loaded in said vessel. 7. Loreta L. Sevilla, Customs Administrati ve Assistant and Acting Customs Examiner, who was assigned to check the vessel, and testified that she did not find electrode wires as part of the cargoes discharged from the vessel. (T.S.N., pp. 367-369, Folder II). B. Claro Morales, assigned as conduction guard, who affixed his signature on the Boat Note and the Special Per mit to Transfer whi c h reflected the finding of Bienvenido Leparto and Raymundo Sasuman that no electrode wires were found at the bodegas. He tes tified that he only saw the bags where he should have also seen boxes if there were electrode wires with the cargoes.

DECISION CTA CASE NO. 4402 - 19 - 9. Bienvenido Leparto~ Customs Examiner~ who inspected the warehouses where the cargoes were transferred and stated that the cargoes did not� include electrode wires. 10. Raymundo Sasuman~ Customs Assessor assigned as underguard~ who declared that the cargoes . he received from -Claro Morales did not include electrode wires. 11. Exhibits "34" and "35" containi':g the reports of Atty. Aniceto Q. Sanchez Jr., Benjamin R. Pante, Aser Quilantang, members of the inventory team assigned by Collector Santos, showing that electrode wires were not part of the cargoes from M/V "Ocean Navigator" stored at the Bibiana Farms and Careen Development Corporation warehouses. 12. Rolando Balbon; employee of South Cotabato Integrated Port Se rvices~ who declared that he was present throughout the off loading of the cargoes of M/V "Ocean Navigator" and sa~~oJ no items contained in boxes unloaded from the vessel. An appreciation of Sergio Baut~sta's testimony leaves it also to be unreliable. A single piece of welding rod allegedly retrieved by Sergio Bautista from the bodega is so easily available that it can be taken from anywhere else. On cross - examination ') 8 (. .-

DECISION CTA CASE NO. 4402 - 20 - Sergio Bautista, admitted that he was not a member of the April 10 inventory team for the warehouses. Thus: "Q. x>n:, please tell the Honorable Hearing Officer who were the members of the Team organized by Collector Jose Santos for that April 10, 1985 inventory? A. Atty. Sanchez, Aser Quinlantang, Benjamin Pante and Alamanza Binasing. The direct examination o~ Sergio Bautista states that he was part of an original inventory team formed before April 10, 1985 but this team was not able to enter the Bibiana Farm warehouse. Said initial testimony of Sergio Bautista also alleges that he was part of the second inventory team (of April 10, 1985) that went to the Careen Development Corporation warehouse but as it had turned out Sergio Bautista wavered subsequently on this fact. We quote the additional proceedings on this point in the cross- examination of Sergio Bautista: "Q. You also testified on direct examination as found on page 21 TSN which I quote: A. It was like this, Sir, afte r we were told that the owner was not there on our first visit at the Bibiana Farms we went bac k to the office and Collector Santos withd r ew our assignment as members

DECISION CTA CASE NO. 4402 - 21 - of the inventory team, however, later on he constituted another team and he instructed me to come along and we proceeded to the Bibiana Farms to conduct an inventory although at the Bibiana Farms he instructed me to stay in the office while the . other members of the inventory team conducted an inventory in the Bodega. From there, we proceeded to Careen Development Corporation to conduct our inventory and it was there where I participated in the inventory at the Bodega: You admit that there was another team formed by Collector Jose Santos for the Apri 1 10, 1985 Inventory? Do you admit that? Please tell the truth. A. Yes sir, the re were already many. At first we were only few. Q. Who were the members of the second te~m organized as you said there are many? ATTY. CRIADOR That is already answered. Q. In your answer you mentioned Sanchez, Faura, Gull e and Benasing, do you remember that? A. Yes, sir. Q. And those were the persons forming the second team to conduct inventory on April 10, 1985? ATTY. CRIADOR That was answered before, th~ record will show that the witness mentioned Quinlantang and Pante, as we consult the records my statement will be confirmed." '>{...., 8 '"(''

DECISION CTA CASE NO. 4402 22 Added to the above record, the testimony of Collector Jose Santos exposes inconsistencies in the declarations of Sergio Bautista by revealing that since Sergio Bautista was already assigned as warehouseman at the Sarangani Agricultural Company warehouse, he was excluded as member even of the first team that was planned to be formed through an initial memorandum dated April 4, 1985 by Collector Santos. According to Collector Santos this initial memorandum was replaced on the same day by ~nether memorandum also dated April 4, 1985 and which served as the basis for the inventories of the two Bodegas concerned. The inventories gave rise to the Inventory Reports both dated April 13, 1985, showing only Atty. Aniceto Q. Sanchez, Mr. Benjamin R. Pante and Mr. Aser Quilantang as having made the reports (E}:hibits "34" and "35") Collector Jose Santos also presented in his testimony a copy of his office's Personnel Attendance Record Control showing that Sergio Bautista could not have been part of the inventory team that conducted the inventory at the Careen Warehouse on April 10, 1985 since said record reveals that he did not report for work on that day (T.S.N., p. 138, Folder!). We .think, therefore, that in the face of consistent evidence for petitioner, the evidence 286

��. DECISION CTA CASE NO. 4402 - 23 - for respondent are but surmises that cannot possibly hold the case against petiti oner created out of the decisions of the Collector and the Commissioner of Customs. It may reasonably be inferred that if the skillful maneuvering attributed to petitioner is to be believ~d, we find it unchara cteristic of the petitioner, for that matter to have declared the electrode wires in the "Supplemental Thru Inward Foreign Manifest" if the intention to smuggle was there from the very start. A c onfluence of events may attract attention on a possible materializing illegality but it is another matter to prove the illegal act by hard facts. For~ the confluence will merely be seen as an unsupported cone lusion if proof and the concourse of events do not concur. WHEREFORE, the decision of the Commissioner of Customs ordering the forfeiture of the vessel 1'1/V "Ocean Navigator" is REVERSED. The 1'1/V "Ocean Navigator" is hereby ordered permanent!y released. The surety bond filed by petitioner should be as it is hereby ordered WITHDRAWN AND CANCELLED. No pronouncement as to costs. SO ORDERED. Quezon City~ Metro Manila,

.. ' DECISION CTA CASE NO. 4402 - 24 - WE CONCUR: . ~~Q,~ ERNESTO D. ACOSTA , .. Presiding Judge CERT::IF::ICAT::ION I hereby certify that this decision was reached after du�e consultation among the members of the Court of Tax Appeals in accordance with Section 13 , Article VIII of the Constitution. Q...,. ... J;:Q,~ ERNESTO D. ACOSTA Presiding Judge Court of Tax Appeals