TAXATION A. FUNDAMENTAL POWERS OF THE STATE; POWER TO TAX 1. POWER OF TAXATION IS AN INHERENT ATTRIBUTE OF SOVEREIGNTY; LIFEBLOOD DOCTRINE; NECESSITY THEORY The power of taxation is an inherent attribute of sovereignty; the government chiefly relies on taxation to obtain the means to carry on its operations. Taxes are essential to its very existence; hence, the dictum that "taxes are the lifeblood of the government." Commissioner of Internal Revenue vs. Eastern Teleommuniations P!ils." In." G.R. No. 1633!" #$%& '" ()1)" 6(* SCRA 3*). Taxes are the lifeblood of the government, for without taxes, the government can neither exist nor endure. A principal attribute of sovereignty, the exercise of taxing power derives its source from the very existence of the state whose social contract with its citizens obliges it to promote public interest and common good. The theory behind the exercise of the power to tax emanates from necessity; without taxes, government cannot fulfill its mandate of promoting the general welfare and well-being of the people. n recent years, the increasing social challenges of the times expanded the scope of state activity, and taxation has become a tool to realize social !ustice and the e"uitable distribution of wealth, economic progress and the protection of local industries as well as public welfare and similar ob!ectives. National Po#er Cor$oration vs. Cit% of Ca&anatuan" G.R. No. 1*+11)" A,-.% +" ())3" *)1 SCRA (!+. (. TAXATION IS ESSENTIALLY LEGISLATIVE t is a power that is purely legislative. #ssentially, this means that in the legislature primarily lies the discretion to determine the nature $%ind&, ob!ect $purpose&, extent $rate&, coverage $sub!ects& and situs $place& of taxation. t has the authority to prescribe a certain tax at a specific rate for a particular public purpose on persons or things within its !urisdiction. n other words, the legislature wields the power to define what tax shall be imposed, why it should be imposed, how much tax shall be imposed, against whom $or what& it shall be imposed and where it shall be imposed. As a general rule, the power to tax is plenary and unlimited in its range, ac%nowledging in its very nature no limits, so that the principal chec% against its abuse is to be found only in the responsibility of the legislature $which imposes the tax& to its constituency who are to pay it. 'evertheless, it is circumscribed by constitutional limitations. C!am&er of Real Estate an' Buil'ers( Assoiation" In. vs. Al&erto Romulo" et al. GR. No. 16)'!6" M/-01 +" ()1)" 61* SCRA 6)!. 3. PRIMARY PURPOSE OF TAXATION IS REVENUE GENERATION (hile it is true that the power of taxation can be used as an implement of police power, the primary purpose of the levy is revenue generation. f the purpose is primarily revenue, or if revenue is, at least, one of the real and substantial purposes, then the exaction is properly called a tax. Planters Pro'uts" In. vs. Ferti$!il Cor$." GR No. 166))6" M/-01 1*" ())" !* SCRA *!. n distinguishing tax and regulation as a form of police power, the determining factor is the purpose of the implemented measure. f the purpose is primarily to raise revenue, then it will be deemed a tax even though the measure results in some form of regulation. )n the other hand, if the purpose is primarily to regulate, then it is deemed a regulation and an exercise of the police power of the state, even though incidentally, revenue is generated. C!evron P!il." In. vs. Bases Conversion Develo$ment Aut!orit%" et. al." G.R. No. 1'363" S2,32452- 1!" ()1)" 63) SCRA !1+. *eanwhile, in the case of Garia vs. E)eutive Seretar%" G.R. No. 1)1('3" #$%& 3" 1++(" (11 SCRA (1+" the #xecutive )rder 'os. +,- and +,. issued by the /resident which imposed additional duty of 01 ad valorem and special duty to crude oil and other imported oil products were held by the 2upreme 3ourt to be substantially moved by the desire to generate additional public revenues and at the same time have some 4protective5 impact upon indigenous oil production6 xxx customs duties which are assessed at the prescribed tariff rates are very much li%e taxes which are fre"uently imposed for both revenue-raising and for regulatory purposes. Thus, it has been held that "customs duties" is "the name given to taxes on the importation and exportation of commodities, the tariff or tax assessed upon merchandise imported from, or exported to, a foreign country." The levying of customs duties on imported goods may have in some measure the effect of protecting local industries 7 where such local industries actually exist and are producing comparable goods. 2imultaneously, however, the very same customs duties inevitably have the effect of producing governmental revenues. 3ustoms duties li%e internal revenue taxes are rarely, if ever, designed to achieve one policy ob!ective only. *ost commonly, customs duties, which constitute taxes in the sense of exactions the proceeds of which become public funds 7 have either or both the generation of revenue and the regulation of economic or social activity as their moving purposes and fre"uently, it is very difficult to say which, in a particular instance, is the dominant or principal ob!ective. n the instant case, since the /hilippines in fact produces ten $89& to fifteen percent $8-1& of the crude oil consumed here, the imposition of increased tariff rates and a special duty on imported crude oil and imported oil products may be seen to have some "protective" impact upon indigenous oil production. :or the effective price of imported crude oil and oil products is increased. At the same time, it cannot be gainsaid that substantial revenues for the government are raised by the imposition of such increased tariff rates or special duty. B. LIMITATIONS OF THE TAXING POWER (CONSTITUTIONAL AND INHERENT) Artile II. Setion *. The /hilippines renounces war as an instrument of national policy, adopts the generally accepted principles of international law as part of the law of the land and adheres to the policy of peace, e"uality, !ustice, freedom, cooperation, and amity with all nations. Artile +I. Setion *,. All appropriation, revenue or tariff bills, bills authorizing increase of the public debt, bills of local application, and private bills, shall originate exclusively in the ;ouse of <epresentatives, but the 2enate may propose or concur with amendments. Artile +I. Setion *-.$8& The rule of taxation shall be uniform and e"uitable. The 3ongress shall evolve a progressive system of taxation. Setion *-.*/. The 3ongress may, by law, authorize the /resident to fix within specified limits, and sub!ect to such limitations and restrictions as it may impose, tariff rates, import and export "uotas, tonnage and wharfage dues, and other duties or imposts within the framewor% of the national development program of the =overnment. 2 *. SOVEREIGNTY LIMITED BY INTERNATIONAL LAW AND TREATIES The 80., 3onstitution in its >eclaration of /rinciples and 2tate /olicies "adopts the generally accepted principles of international law as part of the law of the land, and adheres to the policy of peace, e"uality, !ustice, freedom, cooperation and amity, with all nations." ?y the doctrine of incorporation, the country is bound by generally accepted principles of international law, which are considered to be automatically part of our own laws. )ne of the oldest and most fundamental rules in international law is pacta sunt servanda 7 international agreements must be performed in good faith. (ith the treaties entered into by the /hilippines, it has effectively agreed to limit the exercise of its sovereign powers of taxation, eminent domain and police power. Ta0a'a vs. An1ara" G.R. No.11(+!" M/& (" 1++'" ('( SCRA 1. !. NON6DELEGATION OF THE POWER TO TAX; EXCEPTION TO THE RULE As a general rule, the power of taxation being essentially legislative in nature, cannot be exercised by anyone. An exception to this is the delegation of legislative powers to the /resident under 2ection @.$@& of Article A of the 3onstitution. )ne of the relevant statutes to execute this provision is The Tariff and 3ustoms 3ode particularly the flexible tariff clause. n the case of E)eutive Seretar% vs. Sout!#in1 2eav% In'ustries" In." G.R. No7. 16*1'1" 16*1'( 8 16'*1" F25-$/-& ()" ())6" *( SCRA 6'3" the consolidated petitions see% to annul and set aside the >ecisions of the <T3 of )longapo 3ity which declared Article @, 2ection B.8 of #xecutive )rder 'o. 8-C issued by then /resident =*A unconstitutional. The said #) prohibited the importation into the country, inclusive of the :reeport, of all types of used motor vehicles with some exceptions. )n appeal, the 3A affirmed the decision of the <T3 and invalidated #) 8-C for lac% of statutory basis for the /resident to issue the same. (ith respect to the basis for the /resident to issue #) 8-C, the 2upreme 3ourt ruled that the 3onstitution explicitly authorizes the /resident to issue the same. t held6 3ontrary to the conclusion of the 3ourt of Appeals, #) 8-C actually satisfied the first re"uisite of a valid administrative order. t has both constitutional and statutory bases. >elegation of legislative powers to the /resident is permitted in 2ection @.$@& of Article A of the 3onstitution. t provides6 $@& The 3ongress may, by law, authorize the /resident to fix within specified limits, and sub!ect to such limitations and restrictions as it may impose, tariff rates, import and export "uotas, tonnage and wharfage dues, and other duties or imposts within the framewor% of the national development program of the =overnment. 80 $#mphasis supplied& The relevant statutes to execute this provision are6 8& The Tariff and 3ustoms 3ode which authorizes the /resident, in the interest of national economy, general welfare andDor national security, to, inter alia, prohibit the importation of any commodity. 2ection +98 thereof, reads6 2ec. +98. :lexible 3lause. 7 a. n the interest of national economy, general welfare andDor national security, and sub!ect to the limitations herein prescribed, the /resident, upon recommendation of the 'ational #conomic and >evelopment Authority $hereinafter referred to as '#>A&, is hereby empowered6 . . . $@& to establish import "uota or to ban imports of any commodity, as may be necessary; . . . /rovided, That upon periodic investigations by the Tariff 3ommission and 3 recommendation of the '#>A, the /resident may cause a gradual reduction of protection levels granted in 2ection )ne hundred and four of this 3ode, including those subse"uently granted pursuant to this section. $#mphasis supplied& 6. LIMITATIONS ON THE PRESIDENT9S DELEGATED LEGISLATIVE POWER TO IMPOSE TARIFFS AND IMPOSTS /hilcemcor, an association of domestic cement manufacturers filed with the >T a petition, see%ing the imposition of safeguard measures on imported gray /ortland cement, in accordance with <epublic Act 'o. ..99, the 2afeguard *easures Act $"2*A"&. The case was referred to the Tariff 3ommission which subse"uently issued a negative finding. >T promulgated its Decision with an expressed disagreement with the conclusions of the Tariff 3ommission, but at the same time, ultimately denying /hilcemcorEs application for safeguard measures. /hilcemcor appealed the said decision with the 3ourt of Appeals which partially granted the petition. The 3A held that the >T 2ecretary was not bound by the factual findings of the Tariff 3ommission since such findings are merely recommendatory and they fall within the ambit of the 2ecretaryEs discretionary review. ?ased on the 3AFs decision, >T reversed itself and issued another Decision imposing safeguard measures on the importation of /ortland cement. The 2upreme 3ourt ruled otherwise and accordingly set aside the 3A and >TFs decision. t held that 2ection - of the 2*A, which re"uires that there should first be a positive final determination of the Tariff Commission before the >T can impose safeguard measures, is restriction on the executive power to impose safeguard measures. 42ection - plainly evinces legislative intent to restrict the >T 2ecretaryEs power to impose a general safeguard measure by preconditioning such imposition on a positive determination by the Tariff 3ommission. 2uch legislative intent should be given full force and effect, as the executive power to impose definitive safeguard measures is but a delegated power 7 the power of taxation, by nature and by command of the fundamental law, being a preserve of the legislature. 2ection @.$@&, Article A of the 80., 3onstitution confirms the delegation of legislative power, yet ensures that the prerogative of 3ongress to impose limitations and restrictions on the executive exercise of this power. Sout!ern Cross Cement Cor$oration vs. P!ili$$ine Cement 3anufaturers Cor$oration" =.<. 'o. 8-.-+9, Guly ., @99+, +B+ 23<A C-. xxx The 2*A provides an exceptional instance wherein it is the >T or Agriculture 2ecretary who is tas%ed by 3ongress, in their capacities as alter egos of the /resident, to impose such measures. 3ertainly, the >T 2ecretary has no inherent power, even as alter ego of the /resident, to levy tariffs and imports. 3oncurrently, the tas%ing of the Tariff 3ommission under the 2*A should be li%ewise construed within the same context as part and parcel of the legislative delegation of its inherent power to impose tariffs and imposts to the executive branch, sub!ect to limitations and restrictions. n that regard, both the Tariff 3ommission and the >T 2ecretary may be regarded as agents of 3ongress within their limited respective spheres, as ordained in the 2*A, in the implementation of the said law which significantly draws its strength from the plenary legislative power of taxation. Indeed, even the President may be considered as an agent of Congress for the purpose of imposing safeguard measures. It is Congress, not the President, which possesses inherent powers to impose tariffs and imposts. Without legislative authoriation through statute, the President has no power, authority or right to impose such safeguard measures because taxation is inherently legislative, not executive. When Congress tas!s the President or his"her alter egos to impose safeguard measures under the delineated conditions, the President or the alter egos may be properly deemed as agents of Congress to perform an act that inherently belongs as a matter of right to the legislature. t is basic agency law that the agent may not act beyond the specifically delegated powers or disregard the restrictions imposed by the principal. Sout!ern Cross Cement Cor$oration vs. Cement 3anufaturers Assoiation of t!e P!ili$$ines" =.<. 'o. 8-.-+9, Resolution dated August B, @99-, +C- 23<A -B@. '. EXTENT OF THE POWER OF THE PRESIDENT TO FIX TARIFF RATES 4 The /resident may increase tariff rates as authorized by law even for revenue purposes solely. n determining the validity of #xecutive )rders 'os. +,- and +,. issued by the /resident which imposes additional duty of 01 ad valorem and special duty to crude oil and other imported oil products, the 2upreme 3ourt held that6 4There is thus explicit constitutional permission to 3ongress to authorize the /resident "sub!ect to such limitations and restrictions as H3ongressI may impose" to fix "within specific limits" "tariff rates . . . and other duties or imposts . . . ." The relevant congressional statute is the Tariff and 3ustoms 3ode of the /hilippines, and 2ections 89+ and +98, the pertinent provisions thereof. These are the provisions which the /resident explicitly invo%ed in promulgating #xecutive )rders 'os. +,- and +,.. The 3ourt was ')T persuaded by the argument that the /resident is authorized to act under the Tariff and 3ustoms 3ode only "to protect local industries and products for the sa!e of the national economy, general welfare and"or national security." nstead, it held that there is nothing in the language of either 2ection 89+ or of +98 of the Tariff and 3ustoms 3ode that suggest such a sharp and absolute limitation of authority. xxx The 3ourt believed that #xecutive )rders 'os. +,- and +,. which may be conceded to be substantially moved by the desire to generate additional public revenues, are not, for that reason alone, either constitutionally flawed, or legally infirm under 2ection +98 of the Tariff and 3ustoms 3ode. Garia vs. E)eutive Seretar%" su$ra. . E:UAL PROTECTION CLAUSE; UNIFORMITY AND E:UITABILITY IN TAXATION <A 0BB, was declared constitutional, not violative of the constitutional limitations on e"ual protection clause and uniformity in taxation. The e"ual protection clause under the 3onstitution means that "no person or class of persons shall be deprived of the same protection of laws which is en!oyed by other persons or other classes in the same place and in li%e circumstances." The power of the 2tate to ma%e reasonable and natural classifications for the purposes of taxation has long been established. xxx The e"ual protection clause does not re"uire the universal application of the laws on all persons or things without distinction. This might in fact sometimes result in une"ual protection. (hat the clause re"uires is e"uality among e"uals as determined according to a valid classification. ?y classification is meant the grouping of persons or things similar to each other in certain particulars and different from all others in these same particulars. Jniformity in taxation means that all taxable articles or %inds of property of the same class shall be taxed at the same rate. >ifferent articles may be taxed at different amounts provided that the rate is uniform on the same class everywhere with all people at all times. A&a4a'a Guro Part% List vs. Ermita" su$ra. *eanwhile, the 2upreme 3ourt upheld the constitutionality of <epublic Act $<A& 0BB- $Attrition Act of @99-& with the exception of 2ection 8@ of the said law. The classification and treatment accorded to the ?< and the ?)3 under <A 0BB- fully satisfy the demands of e"ual protection. 2ince the sub!ect of the law is the revenue-generation capability and collection of the ?< and the ?)3, the incentives andDor sanctions provided in the law should logically pertain to the said agencies. *oreover, the law concerns only the ?< and the ?)3 because they have the common distinct primary function of generating revenues for the national government through the collection of taxes, customs duties, fees and charges. xxx They principally perform the special function of being the instrumentalities through which the 2tate exercises one of its great inherent functions 7 taxation. ndubitably, such substantial distinction is germane and intimately related to the purpose of the law. A&a4a'a Guro Part% List vs. Purisima" G.R. No. 166'1!" A$;$73 1*" ())" !6( SCRA (!1. +. REVENUE OR TARIFF BILLS SHALL ORIGINATE EXCLUSIVELY IN THE HOUSE OF REPRESENTATIVES Article A, 2ection @+ of the 80., 3onstitution provides that all appropriation, revenue or tariff bills, bills authorizing increase of the public debt, bills of local application, and private bills shall originate exclusively in the ;ouse of <epresentatives, but the 2enate may propose or concur with amendments. 5 <epublic Act 'o. ,,8C was held constitutional notwithstanding the bill from which it originated underwent extensive changes in the 2enate. t is not the law 7 but the revenue bill 7 which is re"uired by the 3onstitution to "originate exclusively" in the ;ouse of <epresentatives. A bill originating in the ;ouse may undergo such extensive changes in the 2enate that the result may be a rewriting of the whole. Tolentino vs. Seretar% of Finane" G.R. No7. 11!*!!" 11!!(!" 11!!*3" 11!!**" 11!'!*" 11!'1" 11!!(" 11!'3" 11!+31" A$;$73 (!" 1++*" (3! SCRA 63). n the exercise of this power, the 2enate may propose an entirely new bill as a substitute measure. xxx because revenue bills are re"uired to originate exclusively in the ;ouse of <epresentatives, the 2enate cannot enact revenue measures of its own without such bills. After a revenue bill is passed and sent over to it by the ;ouse, however, the 2enate certainly can pass its own version on the same sub!ect matter. Tolentino vs. Seretar% of Finane" su$ra. R27o%$3.o< =/32= O03o52- 3)" 1++!" (*+ SCRA 6(. PART II. TARIFF AND C5STO3S D5TIES A. MEANING AND PURPOSE FOR ITS IMPOSITION 1). CUSTOMS DUTIES "3ustoms duties" is "the name given to taxes on the importation and exportation of commodities, the tariff or tax assessed upon merchandise imported from, or exported to, a foreign country." The levying of customs duties on imported goods may have in some measure the effect of protecting local industries 7 where such local industries actually exist and are producing comparable goods. 2imultaneously, however, the very same customs duties inevitably have the effect of producing governmental revenues. 3ustoms duties li%e internal revenue taxes are rarely, if ever, designed to achieve one policy ob!ective only. *ost commonly, customs duties, which constitute taxes in the sense of exactions the proceeds of which become public funds 7 have either or both the generation of revenue and the regulation of economic or social activity as their moving purposes and fre"uently, it is very difficult to say which, in a particular instance, is the dominant or principal ob!ective. Garia vs. E)eutive Seretar%" su$ra. C. CLASSIFICATION OF IMPORTATIONS (SECTIONS 1))" 1)1 8 1)! OF THE TCCP) SEC. 1)). IMPORTED ARTICLES SUB#ECT TO DUTY All articles, when imported from any foreign country into the /hilippines, shall be sub!ect to duty upon each importation, even though previously exported form the /hilippines, except as otherwise specifically provided for in this 3ode or in other laws. SEC. 1)1. PROHIBITED IMPORTATIONS 8. :irearms and explosives @. 2ubversiveDseditious materials B. )bsceneDimmoral articles +. Abortive articlesDdrugsDsubstances -. =ambling apparatusDdevices C. KotteryDsweepsta%es tic%ets except authorized by the government ,. Articles made of precious metal which do not indicate the actual fineness of said metals .. AdulteratedDmisbranded articles of foodDdrug in violation of :ood and >rugs Act 0. Articles which are habit-forming e.g. mari!uana, coca leaves, etc. 89. )pium pipes and parts 88. )ther prohibited importations SEC. 1)!. CONDITIONALLY6FREE IMPORTATIONS 8. A"uatic products gathered by vessels of /hilippine registry @. #"uipment for use in the salvage of vessels or aircrafts upon posting of bond 6 B. 3ost of repairs in foreign countries upon /hilippine vessels or aircraft; +. Articles for repair upon posting of bond -. *edals, badges, or those received or accepted as honorary distinction C. /ersonal and household effects belonging to residents of the /hilippines returning from abroad ,. (earing apparel, articles of personal adornment and similar effects of travelers, or tourists upon posting of bond .. /ersonal and household effects and vehicles of foreign consultants and experts hired by the government upon posting of bond 0. /rofessional instruments and implements of )verseas :ilipinos who come to settle in the /hilippines 89. Articles used exclusively for public entertainment and for display in public expositions upon posting of bond 88. Articles for ma%ing or recording motion picture films in the /hilippines upon posting of bond 8@. mportations for the official use of foreign embassies 8B. >onated articles 8+. 3ontainers for re-export upon posting of bond 8-. 2upplies of vessel or aircraft 8C. 2alvaged articles 8,. 3offins or urns except vehicles of the deceased person 8.. 2amplesDmodels upon posting of bond 80. Animals except race horses for scientific, experimental, national defense, etc purposes @9. ?oo%s for scientific, philosophical, etc purposes @8. Articles previously exported from the /hilippines @@. Aircraft, e"uipment, spare parts for the use of airlines with congressional franchise @B. *achineries and e"uipment for use of mines @+. 2pare parts of vessel for use as replacements or emergency repair @-. Articles exported from the /hilippines for repair and subse"uently reimported @C. Trailer chassis upon posting of bond 11. DOCTRINE OF CLASSIFICATION BY USE /arts of machines, apparatus of appliances which are suitable for use solely or principally with a particular %ind of machine or with a number of machines falling within a specific heading, as a rule, are to be classified with the machines in the same heading $2ee *ontano A. Te!am, 3ommentaries on the <evised Tariff and 3ustoms 3ode of the /hilippines, p. 88+9, Aol. , 80.+ <evised #dition&. There being a clear showing that the sub!ect imported flashers are to be used solely and principally to signal or indicate a right or left hand turn in front and at the rear of motor vehicles, they should be classified under Tariff ;eading 'o. .-.90 as electrical lighting and signalling e"uipment. The 2upreme 3ourt citing #a Compa$a %eneral de Tobacos de &ilipinas v. 'nited (tates, . /hil. +B., it ruled6 "The general purpose for which an article is used must govern the assessment of duty; any other rule would lead to confusion and in!ustice. t is the general use to which articles are chiefly adopted and for which they are chiefly used that determine their character within the meaning of the Tariff laws. t is the predominating use to which articles are generally applied or used that determines their character for the purpose of fixing the duty, and not the specific or special use which any particular importer may ma%e of the articles imported $;artranft v. Kangfeld, 8@- J.2., 8@.&. Commissioner of Customs vs. Cam$os Rue'a Cor$." G.R. No. !!)()" A$;$73 ()" 1++)" 1 SCRA 613. C. CLASSIFICATION OF DUTIES 1. ORDINARY>REGULAR DUTIES /. A' valorem S203.o< ()1" TCCP substantially provides6 .6/ 7 Transation value L the price actually paid or payable for the goods when sold for export to the /hilippines ad!usted by adding 7 commissions and bro%erage fees $except buying commissions&; cost of containers; cost of pac%ing, whether for labor or materials; value of the goods and services incorporated in the goods; amount of royalties and license fees; value of the proceeds of any subse"uent sale of the imported goods; cost of transport; handling charges and insurance cost. .*/ 7 Transation value of I'ential 1oo's. L the transaction value of identical goods sold for export to the /hilippines and exported at or about the same time as the goods being valued. "dentical goods" shall mean goods which are the same in all respects, including physical characteristics, "uality and reputation. *inor differences in appearances shall not preclude goods otherwise conforming to the definition from being regarded as identical. .8/ 7 Transation value of Similar 1oo's L the transaction value of similar goods sold for export to the /hilippines and exported at or about the same time as the goods being valued. "2imilar goods" shall mean goods which, although not ali%e in all respects, have li%e characteristics and li%e component materials which enable them to perform the same functions and to be commercially interchangeable. .,/ 7 De'utive value L the unit price at which the imported goods or identical or similar imported goods are sold in the /hilippines, in the same condition as when imported sub!ect to deductions of commissions; costs of transport and insurance and associated costs incurred within the /hilippines; costs and charges referred to in subsection $A& $B&, $+& and $-&; and the customs duties and other national taxes payable in the /hilippines by reason of the importation or sale of the goods. .9/ 7 Com$ute' value L computed value which shall be the sum of the cost or the value of materials and fabrication or other processing employed in producing the imported goods; the amount for profit and general expenses e"ual to that usually reflected in the sale of goods of the same class or %ind as the goods being valued which are made by producers in the country of exportation for export to the /hilippines; the freight, insurance fees and other transportation expenses for the importation of the goods; and the cost of containers and pac%ing. .:/ 7 Fall&a4 value - f the dutiable value cannot be determined under the preceding methods described above, it shall be determined by using other reasonable means and on the basis of data available in the /hilippines. 5. S,20.?.0 @ S20. ()(" TCCP substantially provides6 $8& 1ross #ei1!t - the dutiable weight shall be the weight of same, together with the weight of all containers, pac%ages, holders and pac%ing, of any %ind, in which said articles are contained, held or pac%ed at the time of importation. 8 $@& le1al #ei1!t - legal weight thereof shall be the weight of same, together with the weight of the immediate containers, holders andDor pac%ing in which such articles are usually contained, held or pac%ed at the time of importation andDor, when imported in retail pac%ages, at the time of their sale to the public in usual retail "uantities $B& net #ei1!t - the actual weight of the articles at the time of importation, excluding the weight of the immediate and all other containers, holders or pac%ing in which such articles are contained, held or pac%ed. $+& ;!en affi)e' to a !ol'er - dutiable together with the weight of such holders. $-& (hen a single pac%age contains imported articles dutiable according to different weights, or to weight and value, the common exterior receptacles shall be prorated and the different proportions thereof treated in accordance with the provisions of this 3ode as to the dutiability or non-dutiability of such pac%ing. (. SPECIAL DUTIES IN ADDITION TO THE REGULAR DUTIES SECTIONS 3)163)*" TCCP substantially provides6 SEC. 8<6. Anti=Dum$in1 Dut% L (henever any article of commerce imported into the /hilippines at an export price less than its normal value in the ordinary course of trade for the li%e article destined for consumption in the exporting country is causing or is threatening to cause material in!ury to a domestic industry, or materially retarding the establishment of a domestic industry, the anti-dumping duty shall be imposed which is e"ual to the margin of dumping on such product, commodity or article and on li%e product, commodity or article thereafter imported to the /hilippines under similar circumstances, in addition to ordinary duties, taxes and charges imposed by law on the imported product, commodity or article. $As amended by <A .,-@& SEC. 8<*. Countervailin1 Dut% - (henever any article of commerce is granted directly or indirectly by the government in the country of origin, any %ind or form of specific subsidy upon the production, manufacture or exportation of such article, and the importation of such subsidized article has caused or threatens to cause material in!ury to a domestic industry or has materially retarded the growth or prevents the establishment of a domestic industry as determined by the Tariff 3ommission the countervailing duty shall be imposed which is e"ual to the ascertained amount of the subsidy. $As amended by <A .,-8& SEC. 8<8. 3ar4in1 Dut% - f at the time of importation any article $or its container, as provided in subsection "b" hereof&, is not mar%ed in accordance with the re"uirements of this section, there shall be levied, collected and paid upon such article a mar%ing duty of - per cent ad valorem, which shall be deemed to 9 have accrued at the time of importation, except when such article is exported or destroyed under customs supervision and prior to the final li"uidation of the corresponding entry. SEC. 8<,. Disriminator% Dut% - The /resident may impose new or additional duties in an amount not exceeding one hundred $899& per cent ad valorem upon articles wholly or in part the growth or product of, or imported in a vessel of, any foreign country whenever he shall find that such country imposes unreasonable charge and discriminates against the commerce of the /hilippines. PART III. I3PORTATION IN GENERAL A. ENTRY OF ARTICLES THROUGH CUSTOMHOUSE (SECTIONS 1()1" 1()( 8 13)(" TCCP) Setion 6*<6. Artile to Be Im$orte' Onl% T!rou1! Custom!ouse. 7 All articles imported into the /hilippines whether sub!ect to duty or not shall be entered through a customhouse at a port of entry. Se. 6*<*. ;!en Im$ortation Be1ins an' Deeme' Terminate'. 7 mportation begins when the carrying vessel or aircraft enters the !urisdiction of the /hilippines with intention to unlade therein. mportation is deemed terminated upon payment of the duties, taxes and other charges due upon the articles, or secured to be paid, at a port of entry and the legal permit for withdrawal shall have been granted, or in case said articles are free of duties, taxes and other charges, until they have legally left the !urisdiction of the customs. Se. 68<*. Im$ort Entries. 7 All imported articles, except importations admitted free of duty under 2ubsection "%", 2ection one hundred and five of this 3ode, shall be sub!ect to a formal or informal entry. Articles of a commercial nature intended for sale, barter or hire, the dutiable value of which is Two thousand pesos $/@,999.99& or less, and personal and household effects or articles, not in commercial "uantity, imported in passengerEs baggage, mail or otherwise, for personal use, shall be cleared on an informal entry whenever duty, tax or other charges are collectible. The 3ommissioner may, upon instruction of the 2ecretary of :inance, for the protection of domestic industry or of the revenue, re"uire a formal entry, regardless of value, whatever be the purpose and nature of the importation. A formal entry may be for immediate consumption, or under irrevocable domestic letter of credit, ban% guarantee or bond for6 $a& /lacing the article in customs bonded warehouse; $b& 3onstructive warehousing and immediate transportation to other port of the /hilippines upon proper examination and appraisal; or $c& 3onstructive warehousing and immediate exportation. mport entries under irrevocable domestic letter of credit, ban% guarantee or 10 bond shall be sub!ect to the provisions of Title A, ?oo% of this 3ode. All importations entered under formal entry shall be covered by a letter of credit or any other verifiable document evidencing payment. B. ABANDONMENT Se. 6-<6. A&an'onment" >in's an' Effets of . 7 An imported article is deemed abandoned under any of the following circumstances6 $a& (hen the owner, importer or consignee of the imported article expressly signifies in writing to the 3ollector of 3ustoms his intentions to abandon; or $b& (hen the owner, importer, consignee or interested party after due notice, fails to file an entry within thirty $B9& days, which shall not be extendible, from the date of discharge of the last pac%age from the vessel or aircraft, or having filed such entry, fails to claim his importation within fifteen $8-& days which shall not li%ewise be extendible, from the date of posting of the notice to claim such importation. Any person who abandons an article or who fails to claim his importation as provided for in the preceding paragraph shall be deemed to have renounced all his interests and property rights therein. Se. 6-<*. A&an'onment of Im$orte' Artiles. 7 An abandoned article shall ipso facto be deemed the property of the =overnment and shall be disposed of in accordance with the provisions of this 3ode. 'othing in this section shall be construed as relieving the owner or importer from any criminal liability which may arise from any violation of law committed in connection with the importation of the abandoned article. Any official or employee of the ?ureau of 3ustoms or of other government agencies who, having %nowledge of the existence of an abandoned article or having control or custody of such abandoned article, fails to report to the 3ollector within twenty- four $@+& hours from the time the article is deemed abandoned, shall be punished with the penalties prescribed in /aragraph 8, 2ection BC9+ of this 3ode. 1(. WHEN IMPORTATION BEGINS AND ENDS 2ection 8@9@ of the Tariff and 3ustoms 3ode provides that importation begins when the carrying vessel or aircraft enters the !urisdiction of the /hilippines with intention to unload therein. t is clear from the provision of the law that mere intent to unload is sufficient to commence an importation. And "intent," being a state of mind, is rarely susceptible of direct proof, but must ordinarily be inferred from the facts, and therefore can only be proved by unguarded, expressions, conduct and circumstances generally. n this case, petitioner is guilty of illegal importation, there having been an intent to unload, is amply supported by substantial evidence. Fee'er International Line" Pte." Lt'. vs. Court of A$$eals" G.R. No. +*(6(" M/& 31" 1++1" 1+' SCRA *( 0.3.<; Peo$le vs. Court of First Instane of Ri?al" et." et al." 1)1 SCRA 6. 11 mportation ta%es place when merchandise is brought into the customs territory of the /hilippines with the intention of unloading the same at port. An exception to this rule is transit cargo entered for immediate exportation under 2ection @89B of the T33/. xxx :or an entry for immediate exportation to be allowed under this provision, the following must concur6 $a& there is a clear intent to export the article as shown in the bill of lading, invoice, cargo manifest or other satisfactory evidence; $b& the 3ollector must designate the vessel or aircraft wherein the articles are laden as a constructive warehouse to facilitate the direct transfer of the articles to the exporting vessel or aircraft; $c& the imported articles are directly transferred from the vessel or aircraft designated as a constructive warehouse to the exporting vessel or aircraft and $d& an irrevocable domestic letter of credit, ban% guaranty or bond in an amount e"ual to the ascertained duties, taxes and other charges is submitted to the 3ollector $unless it appears in the bill of lading, invoice, manifest or satisfactory evidence that the articles are destined for transshipment&. 'one of the re"uisites above was present in this case. (hile respondents insist that the shipment was sent to the /hilippines only for temporary storage and warehousing, the bill of lading clearly denominated "2outh *anila, /hilippines" as the port of discharge. This not only negated any intent to export but also contradicted K::3Es representation. *oreover, the shipment was unloaded from the carrying vessel for the purpose of storing the same at K::3Es warehouse. mportation therefore too% place and the only logical conclusion is that the refined sugar was truly intended for domestic consumption. Commissioner of Customs vs. Court of Ta) A$$eals" G.R. No7. 1'1!1661'" Resolution =/32= F25-$/-& 13" ())+" !'+ SCRA (+. (here the transfer of the shipment was made by virtue of the ?oat 'otes issued by the 3ustoms nspector giving specific instruction that the shipment should be 4under continuous guarding5 by the 3ustoms guard 4until released by the 3ustoms authorities,5 the physical and legal custody over the shipment remained with the 3ustoms authorities. Acceptance by the ?ureau of 3ustoms of the importerFs payment of the customs duties and taxes on the shipment legally terminates the importation of goods or articles. Commissioner of Customs vs. 3il#au4ee In'ustries Cor$oration" G.R. No. 13!(!3" D202452- +" ())*" **! SCRA 6)*. (hen the Aessel was allowed to be released tax and duty-free sub!ect to bond and re-exportation, its subse"uent sale without paying the duties and taxes never completed and terminated the importation. n order for an importation to be deemed terminated, the payment of the duties, taxes, fees and other charges of the item brought into the country must be in full. :or as long as the importation has not been completed, the imported item remains under the !urisdiction of the ?)3. Seretar% of Finane vs. Oro 3aura S!i$$in1 Lines" G.R. No. 1!6+*6" #$%& 1!" ())+" !+3 SCRA 1*. 13. MEANING OF AENTRYB IN CUSTOMS LAW; FILING OF BOTH IED AND IEIRD ARE NECESSARY TO CONSTITUTE ENTRY UNDER TCCP; WHAT CONSTITUTES ABANDONMENT The term "entry" in customs law has a triple meaning. t means $8& the documents filed at the customs house; $@& the submission and acceptance of the documents and $B& the procedure of passing goods through the customs house. The operative act that constitutes "entry" of the imported articles at the port of entry is the filing and acceptance of the "specified entry form" together with the other documents re"uired by law and regulations. ?oth the Import )ntry Declaration *I)D+ and Import )ntry and Internal ,evenue Declaration *I)I,D+ should be filed within a non- extendible period of thirty $B9& days from the date of discharge of the last pac%age from the vessel or aircraft. n delaying the filing of #<>s to ta%e advantage of the reduction in import duties on petroleum products from 891 to B1 under <epublic Act $<A& 'o. .8.9, which too% effect on April 8C, 800C, the importer petroleum company is deemed to have abandoned the imported products, resulting in forfeiture; the abandoned articles shall ipso facto be deemed the property of the government. C!evron P!ili$$ines" In. vs. Commissioner of t!e Bureau of Customs, =.<. 'o. 8,.,-0, August 88, @99., -C8 23<A ,89. PART I+. TAX RE3EDIES 12 I. RE3EDIES A+AILABLE TO T2E GO+ERN3ENT A. SEARCH" SEICURE AND ARREST Se. **<8. Persons 2avin1 Polie Aut!orit%. 7 :or the enforcement of the tariff and customs laws, the following persons are authorized to effect searches, seizures and arrests conformably with the provisions of said laws6 a. )fficials of the ?ureau of 3ustoms, district collectors, deputy collectors, police officers, agents, inspectors and guards of the ?ureau of 3ustoms; b. )fficers of the /hilippine 'avy and other members of the Armed :orces of the /hilippines and national law enforcement agencies when authorized by the 3ommissioner; c. )fficials of the ?ureau of nternal <evenue on all cases falling within the regular performance of their duties, when payment of internal revenue taxes are involved; d. )fficers generally empowered by law to effect arrests and execute processes of courts, when acting under direction of the 3ollector. n order to avoid conflicts, and insure coordination among these persons having authority to effect searches, seizures and arrests for the effective enforcement of, and conformably with tariff and customs laws, the 2ecretary of :inance, shall, sub!ect to the approval of the /resident of the /hilippines, define the scope, areas covered, procedures and conditions governing the exercise of such police authority including custody and responsibility for the goods seized. The rules and regulations to this effect shall be furnished to all the government agencies and personnel concerned for their guidance and compliance, and shall be published in a newspaper of general circulation. Se. **<-. Ri1!t of Polie Offier to Enter Inlosure. 7 :or the more effective discharge of his official duties, any person exercising the powers herein conferred, may at anytime enter, pass through, or search any land or inclosure or any warehouse, store or other building, not being a dwelling house. A warehouse, store or other building or inclosure used for the %eeping or storage of articles does not become a dwelling house within the meaning hereof merely by reason of the fact that a person employed as watchman lives in the place, nor will the fact that his family stays there with him alter the case. 1*. MERE FLAGGING DOWN OF VEHICLE DOES NOT CONSTITUTE SEARCH /etitioners were members of the /hilippine 'ational /olice $/'/&- 3riminal nvestigation and >etection =roup $3>=&. /etitioners, upon the order of /olice 2enior 2uperintendent ?oac, but without the authority from and coordination with the ?ureau of 3ustoms $?)3&, flagged down three container vans consigned to Ma%iage 2urplus. The 2andiganbayan found the petitioners guilty beyond reasonable doubt for violation of 2ection @@9B of the Tariff and 3ustoms 3ode. 13 The 2upreme 3ourt reversed the ruling of the 2andiganbayan. The act of flagging down the vehicles is not among those proscribed by 2ec. @@9B of the Tariff and 3ustoms 3ode. *ere flagging down of the container vans is not punishable under the said law. 3oordination between ?)3 and /'/ is emphasized in the laws. 2hould the /'/ suspect anything, it should coordinate with the ?)3 and obtain the written authority from the 3ollector of 3ustoms in order to conduct searches, seizures, or arrests. Boa vs. Peo$le" G.R. No. 1)!+'" NoD2452- '" ())" !') SCRA !33. 1!. NO SEARCH OR SEICURE SHALL BE MADE WITHOUT A WARRANT; EXCEPTION TO THE RULE; VALIDITY OF SEARCH" SEICURE AND ARREST IN CUSTOMS CASES /etitioner was arrested and charged of smuggling of blue-seal cigarettes. ;e assailed the validity of his arrest contending that the Arrest 2earch and 2eizure )rder $A22)& 'o. +,-+ was invalid. Thus, he asserted, any evidence obtained pursuant thereto is inadmissible in evidence. ;e maintained his lac% of %nowledge of the illegal nature of goods. The 2upreme 3ourt affirmed the decision of the lower court which found the /etitioner guilty as charged. (arrantless search and seizure in customs search can be made, without violation of the constitutional provision, as it is one of the exceptions to the rule. 4xxx the search and seizure of goods, suspected to have been introduced into the country in violation of customs laws, is one of the seven doctrinally accepted exceptions to the constitutional provision. xxx Jnder the Tariff and 3ustoms 3ode, a search, seizure and arrest may be made even without a warrant for purposes of enforcing customs and tariff laws. /ersons found to be in possession of smuggled items are presumed to be engaged in smuggling, pursuant to the last paragraph of 2ection BC98 of the Tariff and 3ustoms 3ode; claim of good faith and lac% of %nowledge of the unlawful source of the cigarettes is not enough to rebut the presumption. Rieta vs. Peo$le" G.R. No. 1*'1'" A$;$73 1(" ())*" *36 SCRA ('3. 16. CUSTOMS SEARCH; WARRANTLESS SEARCH; WHO MAY EXERCISE POLICE AUTHORITY UNDER CUSTOMS LAW ntelligence operatives of the /hilippine Air :orce $/A:& were tas%ed to conduct a surveillance operation to verify reports of drug traffic%ing and smuggling by certain /AK personnel when they apprehended petitioner for alleged smuggling of !ewelries. /etitioner contented that the warrantless search and seizure was illegal. The 2upreme 3ourt denied the petition. The search made by /A: team while petitioner was on board a moving /AK aircraft tow truc% within the vicinity of the airport was in the nature of a customs search. /A: properly effected the search and seizure without a search warrant since it exercised police authority under the customs law. Salva'or vs. Peo$le" G.R. No. 1*6')6" #$%& 1!" ())!" *63 SCRA *+. B. ADMINISTRATIVE PROCEEDINGS Se. *98*. Con'itions Affetin1 Forfeiture of Artile. 7 As regards imported or exported article or articles whereof the importation or exportation is merely attempted, the forfeiture shall be effected only when and while the article is in the custody or within the !urisdiction of the customs authorities or in the hands or sub!ect to the control of the importer, exporter, original owner, consignee, agent of other person effecting the importation, entry or exportation in "uestion, or in the hands or sub!ect to the control of some persons who shall receive, conceal, buy, sell or transport the same or aid in any such acts, with %nowledge that the article was imported, or was the sub!ect of an attempt at importation or exportation, contrary to law. Se. *988. Enforement of Lien" A'ministrative Fines" an' Forfeitures. 7 Administrative fines and forfeitures shall be enforced by the seizure of the vehicle, vessel or aircraft or other property sub!ect to the fine or forfeiture and by subse"uent proceedings in conformity with the provisions of /arts @ and B, Title A, ?oo% , of this 3ode. :or 14 the purpose of enforcing the lien for customs duties, fees and other charges on any seized or confiscated article in the custody of the ?ureau of nternal <evenue, the ?ureau of nternal <evenue is hereby authorized to impose and enforce the said lien. Se. *98,. Sei?ure of +essel or Airraft for Delin@uen% of O#ner or Offier. 7 (hen the owner, agent, master, pilot in command or other responsible officer of any vessel or aircraft becomes liable to be fined under the tariff and customs laws on account of a delin"uency in the discharge of a duty imposed upon him with reference to the said vessel or aircraft, the vessel or aircraft itself may be seized and sub!ected in an administrative proceeding for the satisfaction of the fine for which such person would have been liable. 1'. NATURE OF FORFEITURE PROCEEDINGS" NOT CRIMINAL IN NATURE; PROOF BEYOND REASONABLE DOUBT IS NOT RE:UIRED The vessel *T 4JKJ (A5 and its cargoes were declared forfeited by the 3ommissioner of 3ustoms whose Decision was affirmed by both the 3TA and 3A. The owner of the vessel assailed the Decision contending that the forfeiture proceeding was not !ustified as the Decision was not supported by proof beyond reasonable doubt. The 2upreme 3ourt affirmed the decision in toto. "xxx A forfeiture proceeding under the tariff and customs laws is not criminal in nature since they do not result in the conviction of the wrongdoer nor in the imposition upon him of a penalty, proof beyond reasonable doubt is not re"uired in order to !ustify the forfeiture of the goods; xxx the degree of proof re"uired is merely substantial evidence which means such relevant evidence as a reasonable mind might accept as ade"uate to support a conclusion.5 4xxx seizure proceedings, such as those instituted in this case, are purely civil and administrative in character, the main purpose of which is to enforce the administrative fines or forfeiture incident to unlawful importation of goods or their deliberate possession. The penalty in seizure cases is distinct and separate from the criminal liability that might be imposed against the indicted importer or possessor and both %inds of penalties may be imposed. xxx the decision of the 3ollector of 3ustoms, as in other seizure proceedings, concerns the res rather than the persona.5 Fee'er International Line" Pte." Lt'. vs. Court of A$$eals" su$ra. 0.3.<; Peo$le vs. Court of First Instane of Ri?al" et." et al." 1)1 SCRA 6. xxx forfeiture retroacts to the date of the commission of the offense; Thus, when the vessel and its cargo are ordered forfeited, the effect will retroact to the moment the vessel entered /hilippine waters. Commissioner of Customs vs. Court of A$$eals" G.R. No7. 111()(6)!" #/<$/-& 31" ())6" *1 SCRA 1)+. 1. NATURE OF FORFEITURE" PROCEEDING IN RE3; LACE OF ENOWLEDGE OF ILLEGAL IMPORTATION IS A PERSONAL DEFENSE" BUT CANNOT ABSOLVE THE VESSEL FROM FORFEITURE 3TA modified the Decision of petitioner 3ommissioner of 3ustoms by ordering only the payment of a fine in lieu of the forfeiture of the vessel *D? "*aria Aictoria-/" used in the illegal importation. The 3TA anchored its Decision on the ownerFs lac% of %nowledge of the vesselFs involvement in illegal importation. The 2upreme 3ourt set aside the assailed Decision and held that 4forfeiture proceedings are in the nature of proceedings in rem $Aierneza vs. 3ommissioner of 3ustoms, @+ 23<A B0+& and are directed against the res. The fact that private respondent has allegedly no actual %nowledge that *D? "*aria Aictoria-/" was used illegally does not render the vessel immune from forfeiture. This is so because the forfeiture proceedings *sic+ in this case was instituted against the vessel itself. /rivate respondentEs defense that he has no actual %nowledge that the vessel was used illegally is personal to him but cannot absolve the vessel from liability of forfeiture.5 Commissioner of Customs vs. Court of Ta) A$$eals" No. L6 31'33" S2,32452- ()" 1+!" 13 SCRA !1. 15 At bears stressing that the forfeiture of seized goods in the ?ureau of 3ustoms is a proceeding against the goods and not against the owner. t is in the nature of a proceeding in rem, i.e., directed against the res or imported articles and entails a determination of the legality of their importation. n this proceeding, it is, in legal contemplation, the property itself which commits the violation and is treated as the offender, without reference whatsoever to the character or conduct of the owner. Asian Terminals" In. vs. Bautista=Riafort" su$ra. 1+. ENFORCEMENT OF A TAX LIEN Aessel *DA 4;A<J'AF with declared dutiable value of /C,8,8,90@ and estimated customs duty of /8,@0C,,89 was allowed to be released tax and duty-free to =lory 2hipping Kines $=2K& upon posting of a bond and conditioned on re-exportation upon termination of --year bareboat charter. After the expiration of the bond, =2K failed to pay the duties and taxes. t instead sold the vessel to )ro *aura 2hipping Kines who applied for Authority to mport, based on ac"uisition cost of /8,899,999 with assesses duties and taxes of /8+0,0.0. At this point, bad faith already intervened. )ro *aura 2hipping Kines !oined =2K in attempt to evade payment of customs duties N charges demanded by *actan 3ollector by pushing through with purchase without notification to *actan 3ollector. *actan 3ollector subse"uently instituted seizure proceedings. Jndervaluation resulting in decrease of .91 $more than B91& pursuant to 2ection @-9B T33/. (ithout the renewal of the vesselEs re-export bond, the obligation to pay customs duties, taxes and other charges on the importation in the amount of /8,@0C,,89.99 arose and attached to the vessel. The obligation is a tax lien that attaches to imported goods, regardless of ownership. )ro *aura was ordered to pay the duties and taxes without considering depreciation in determining dutiable value. Seretar% of Finane vs. Oro 3aura S!i$$in1 Lines" su$ra. C. COMPROMISE AGREEMENT Se. *86:. Aut!orit% of Commissioner to ma4e Com$romise. L 2ub!ect to the approval of the 2ecretary of :inance, the 3ommissioner of 3ustoms may compromise any case arising under this 3ode or other laws or part of laws enforced by the ?ureau of 3ustoms involving the imposition of fines, surcharges and forfeitures unless otherwise specified by law. (). WHO CAN COMPROMISE TAX CASES; COMPROMISE ENTERED INTO BY DEPUTY COMMISSIONER WITHOUT PROPER AUTHORITY IS WITHOUT EFFECT >eputy 3ommissioner Aalera filed in the <T3 of *anila, for an on behalf of the ?ureau of 3ustoms a collection case for the collection of /B,,80-,.-0.99 in unpaid duties and taxes against 2teel Asia *anufacturing 3orporation $2A*3&. Aalera and 2A*3 entered into a compromise agreement wherein the latter offered to pay on a staggered basis through thirty $B9& monthly e"ual installments the /B,,80-,.-0.99 duties and taxes sought to be collected in the civil case. The 2upreme 3ourt ruled that there is no conflict between 2ection @B8C $-uthority of Commissioner to ma!e Compromise& and 2ection @+98 $(upervision and Control over Criminal and Civil Proceedings& of the T33/. 2ection @+98 covers the matter of the institution and filing of civil and criminal actions by customs officers, which is sub!ect to the approval of the 3ommissioner if filed for the recovery of duties or the enforcement of any fine, penalty or forfeiture under the 3ode. t does not cover the compromise of such civil or criminal actions, while 2ection @B8C is the provision that deals with such a situation. n fact, the latter is categorical in providing an encompassing scope for the strict conditions for any compromise. ts coverage includes 4an% ase arisin1 un'er t!is o'e or ot!er la#s or $art of la#s enfore' &% t!e Bureau of Customs involvin1 t!e im$osition of fines" sur!ar1es an' forfeitures unless ot!er#ise s$eifie' &% la#.5 xxx #.). 'o. 8-C, as amended by #.). 'o. B., is clear in its re"uirement that in ases involvin1 ta) re'it sams t!e favora&le reommen'ation for a$$roval &% t!e S$eial Tas4 Fore an' t!e a$$roval &% t!e Presi'ent of t!e Re$u&li are &ot! re@uire'. The approval by the 3hairmen of the 2pecial Tas% :orce is still sub!ect to approval of the /resident. /rior presidential approval is the 16 highest form of chec% and balance within the #xecutive branch of government and cannot be satisfied by mere failure of the /resident to reverse or reprobate the acts of subordinates. +alera vs. Offie of t!e Om&u'sman" G.R. No. 16'('" F25-$/-& ('" ())" !*' SCRA *(. D. #UDICIAL ACTION AGAINST THE TAXPAYER S20. (*)1. Su$ervision an' Control Over Criminal an' Civil Proee'in1s. . 3ivil and criminal actions and proceedings instituted in behalf of the government under the authority of this 3ode or other law enforced by the ?ureau shall be brought in the name of the government of the /hilippines and shall be conducted by customs but no civil or criminal action for the recovery of duties or the enforcement of any fine, penalty or forfeiture under this 3ode shall be filed in court without the approval of the 3ommissioner. Se. *,<*. Revie# &% Court of Ta) A$$eals. 7 The party aggrieved by the ruling of the 3ommissioner in any matter brought before him upon protest or by his action or ruling in any case of seizure may appeal to the 3ourt of Tax Appeals, in the manner and within the period prescribed by law and regulations. Jnless an appeal is made to the 3ourt of Tax Appeals in the manner and within the period prescribed by laws and regulations, the action or ruling of the 3ommissioner shall be final and conclusive. (1. COLLECTION OF OUTSTANDING CUSTOMS DUTIES AND TAXES MAY PROCEED WITHOUT AWAITING THE RESOLUTION OF PETITION WITH THE CTA /ilipinas 2hell /etroleum 3orporationFs $2hell& tax debit memos $T>*s& and tax credit certificates $T33s& were cancelled due to fraud. The 3ommissioner of 3ustoms demanded immediate payment of unpaid customs duties and taxes. 2hell protested, however, the ?)3 did not act on the protest. t then filed a petition for review in the 3TA "uestioning the legality of the cancellation of the T33s. /ending petition, ?)3 filed a complaint for collection in <T3 *anila. 2hell moved for the dismissal of the collection case but <T3 denied the motion. The 2upreme 3ourt upheld the <T3 and ruled that 4(e are not unmindful of petitionerEs pending petition for review in the 3TA where it is "uestioning the validity of the cancellation of the T33s. ;owever, respondent cannot and should not await the resolution of that case before it collects petitionerEs outstanding customs duties and taxes for such delay will unduly restrain the performance of its functions. *oreover, if the ultimate outcome of the 3TA case turns out to be favorable to petitioner, the law affords it the ade"uate remedy of see%ing a refund.5 Pili$inas S!ell Petroleum Cor$oration vs. Re$u&li" G.R. No. 161+!3" M/-01 6" ())" !*' SCRA ')1. ((. GOVERNMENT NEED NOT AWAIT THE RESULT OF THE CRIMINAL PROCEEDINGS BEFORE IT CAN COLLECT THE TAXES; INVALID PAYMENT The ?)3 instituted a 3omplaint for 3ollection of *oney with >amages against /roton /ilipinas 3orporation $/roton& see%ing the payment of customs duties and taxes which remain unpaid by reason of cancellation of the Tax 3redit 3ertificates $T33s& for being spurious. /rior to the collection case, a criminal case against the officers of /roton was pending with the 2andiganbayan. /roton moved for the dismissal of the collection case arguing, among others, that the collection case is the civil aspect of the criminal case pending with the 2andiganbayan, hence, it is deemed instituted in the latter, and; the determination of the validity of the 17 T33s was a pre!udicial issue. The 2upreme 3ourt sustained the governmentFs right to collect unpaid customs duties and taxes, T33s being found to be fa%e and spurious notwithstanding validation by the >epartment of :inance. t held6 4The payment of taxes is a duty which the law re"uires to be paid. 2aid obligation is not a conse"uence of the felonious acts charged in the criminal proceeding nor is it a mere civil liability arising from crime that could be wiped out by the !udicial declaration of non-existence of the criminal acts charged. ;ence, the payment and collection of customs duties and taxes in itself creates civil liability on the part of the taxpayer. xxx the determination of the validity or invalidity of the T33s cannot be regarded as a pre!udicial issue that must first be resolved with finality in the 3riminal 3ases filed before the 2andiganbayan. The =overnment should not and must not await the result of the criminal proceedings in the 2andiganbayan before it can collect the outstanding customs duties and taxes of the petitioner for such will unduly restrain the =overnment in doing its functions. The machineries of the =overnment will not be able to function well if the collection of taxes will be delayed so much so if its collection will depend on the outcome of any criminal proceedings on the guise that the issue of collection of taxes is a pre!udicial issue that need to be first resolved before enforcing its collection.5 Proton Pili$inas Cor$oration vs. Re$u&li" G.R. No. 16!)('" O03o52- 16" ())6" !)* SCRA !(. (3. THE PARTICIPATION OF BOC IN CRIMINAL AND CIVIL ASPECT OF THE CASE IS LIMITED TO THAT OF A WITNESS; OSG HAS THE PRIMARY RESPONSIBILITY TO APPEAR FOR THE GOVERNMENT The ?)3 filed a criminal complaint before the >epartment of Gustice against the officers of *ar% 2ensing /hilippines, nc. $*2/& for unlawful importation. An nformation was filed with the 3TA after determination of probable cause. (hile the case was pending, the 2ecretary of Gustice reversed the 2tate /rosecutorFs <esolution and accordingly directed the withdrawal of the nformation. 3TA granted the motion to withdraw. ?)3 assailed the 3TAFs resolution. The 2upreme 3ourt dismissed ?)3Fs petition. t ruled that public prosecutor has control and supervision over the cases. The participation in the case of a private complainant, li%e ?)3, is limited to that of a witness, both in the criminal and civil aspect of the case. Also, the 2upreme 3ourt noticed that ?)3 was not represented by the )ffice of the 2olicitor =eneral $)2=& in instituting the petition, which contravenes established doctrine that 4the )2= shall represent the =overnment of the /hilippines, its agencies and instrumentalities and its officials and agents in any litigation, proceeding, investigation, or matter re"uiring the services of lawyers.5 Bureau of Customs vs. Peter S!erman" et. al." G.R. No. 1+)*'" A,-.% 13" ()11. ?y the 2olicitor =eneral L )n appeal in criminal cases N in all civil cases. S203.o< 3!" C1/,32- 1(" T.3%2 III" 312 R2D.72= A=4.<.73-/3.D2 Co=2 o? 1+' (1+' RAC); CIR v. La Suerte Ci1ar an' Ci1arette Fator%, =< 8++0+@, Gune @., @998 ?y the 2ecretary of Gustice, through the 3hief 2tate /rosecutor N /rovincialD3ity /rosecutors in original criminal cases - S203.o< (()" C1/,32- (" T.3%2 III" 312 1+' RAC. I. RE3EDIES A+AILABLE TO T2E TAXPAAER A. ADMINISTRATIVE REMEDIES Se. *8<6. ;arrant for Detention of Pro$ert%= Cas! Bon'. 7 Jpon ma%ing any seizure, the 3ollector shall issue a warrant for the detention of the property; and if the owner or importer desires to secure the release of the property for legitimate use, the 3ollector shall, with the approval of the 3ommissioner of 3ustoms, surrender it upon the filing of a cash bond, in an amount to be fixed by him, conditioned upon the payment of the appraised value of the article andDor any fine, expenses and costs which may be ad!udged in the case6 Provided, That such importation shall not be released under any bond when there is a prima facie evidence of fraud in the importation of article6 Provided, further, That articles the importation 18 of which is prohibited by law shall not be released under any circumstance whatsoever6 Provided, finally, That nothing in this section shall be construed as relieving the owner or importer from any criminal liability which may arise from any violation of law committed in connection with the importation of the article. Se. *8<-. Protest an' Pa%ment u$on Protest in Civil 3atters. 7 (hen a ruling or decision of the 3ollector is made whereby liability for duties, taxes, fees, or other charges are determined, except the fixing of fines in seizure cases, the party adversely affected may protest such ruling or decision by presenting to the 3ollector at the time when payment of the amount claimed to be due the =overnment is made, or within fifteen $8-& days thereafter, a written protest setting forth his ob!ection to the ruling or decision in "uestion, together with the reasons therefore. 'o protest shall be considered unless payment of the amount due after final li"uidation has first been made and the corresponding doc%et fee, as provided for in 2ection BB98. Se. *8<B. Protest E)lusive Reme'% in Protesta&le Case. 7 n all cases sub!ect to protest, the interested party who desires to have the action of the 3ollector reviewed, shall ma%e a protest, otherwise, the action of the 3ollector shall be final and conclusive against him, except as to matters collectible for manifest error in the manner prescribed in section one thousand seven hundred and seven hereof. Se. *86*. Deision or Ation &% Colletor in Protest an' Sei?ure Cases. 7 (hen a protest in proper form is presented in a case where protest is re"uired, the 3ollector shall issue an order for hearing within fifteen $8-& days from receipt of the protest and hear the matter thus presented. Jpon termination of the hearing, the 3ollector shall render a decision within thirty $B9& days, and if the protest is sustained, in whole or in part, he shall ma%e the appropriate order, the entry reli"uidated necessary. n seizure cases, the 3ollector, after a hearing shall in writing ma%e a declaration of forfeiture or fix the amount of the fine or ta%e such other action as may be proper. Se. *868. Revie# &% Commissioner. 7 The person aggrieved by the decision or action of the 3ollector in any matter presented upon protest or by his action in any case of seizure may, within fifteen $8-& days after notification in writing by the 3ollector of his action or decision, file a written notice to the 3ollector with a copy furnished to the 3ommissioner of his intention to appeal the action or decision of the 3ollector to the 3ommissioner. Thereupon the 3ollector shall forthwith transmit all the records of the proceedings to the 3ommissioner, who shall approve, modify or reverse the action or decision of the 3ollector and ta%e such steps and ma%e such orders as may be necessary to give effect to his decision6 Provided, That when an appeal is filed beyond the period herein prescribed, the same shall be deemed dismissed. 19 f in any seizure proceedings, the 3ollector renders a decision adverse to the =overnment, such decision shall be automatically reviewed by the 3ommissioner and the records of the case elevated within five $-& days from the promulgation of the decision of the 3ollector. The 3ommissioner shall render a decision of the automatic appeal within thirty $B9& days from receipt of the records of the case. f the 3ollectorEs decision is reversed by the 3ommissioner, the decision of the 3ommissioner shall be final and executory. ;owever, if the 3ollectorEs decision is affirmed, or if within thirty $B9& days from receipt of the records of the case by the 3ommissioner no decision is rendered or the decision involves imported articles whose published value is :ive million pesos $/-,999,999& or more, such decision shall be deemed automatically appealed to the 2ecretary of :inance and the records of the proceedings shall be elevated within five $-& days from the promulgation of the decision of the 3ommissioner or of the 3ollector under appeal, as the case may be6 /rovided, further, That if the decision of the 3ommissioner or of the 3ollector under appeal, as the case may be, is affirmed by the 2ecretary of :inance, or if within thirty $B9& days from receipt of the records of the proceedings by the 2ecretary of :inance, no decision is rendered, the decision of the 2ecretary of :inance, or of the 3ommissioner, or of the 3ollector under appeal, as the case may be, shall become final and executory. n any seizure proceeding, the release of imported articles shall not be allowed unless and until a decision of the 3ollector has been confirmed in writing by the 3ommissioner of 3ustoms. (*. POSTING OF BOND; SEICED ARTICLES MAY NOT BE RELEASED UNDER BOND IF THERE IS PRI3A FACIE EVIDENCE OF FRAUD; WHEN IMPORTATION TAEES PLACE" EXCEPTION TO THE RULE The 3ommissioner of 3ustoms affirmed the decision of the 3ollector of 3ustoms which ordered the forfeiture of the imported refined sugar for failure of its importer to secure the re"uired import allocation from the 2ugar <egulatory Administration $2<A&. (hile on appeal to the 3TA, the importer filed a motion to release cargo for exportation upon filing of a surety bond. The 3TA granted the motion and ordered the release of the shipment sub!ect to the filing of a continuing surety bond. The 2upreme 3ourt reversed the 3TAFs resolution and ruled that 4seized articles may not be released under bond if there is prima facie evidence of fraud in their importation. xxx5 2ection @B98 of the Tariff and 3ustoms 3ode of the /hilippines $T33/& prohibits the release under bond of seized importation in such case. Commissioner of Customs vs. Court of Ta) A$$eals" su$ra. (!. TAX PROTEST; LI:UIDATION )n account of the cancellation of the fraudulently issued T33s, the ?)3 thru its >eputy 3ommissioner for <evenue 3ollections *onitoring =roup sent collection letters demanding payment from /ilipinas 2hell /etroleum 3orporation $2hell& of the amount covered by the cancelled T33s it paid in 800, and 800.. Three collection cases against 2hell were filed before <T3 *anila. 2hell then filed with the 3TA a /etition for <eview "uestioning the ?)3 collection efforts. The parties argue over which act serves as the decision of the 3ommissioner that, under the law, can be the sub!ect of an appeal before the 3TA, and from which act the B9-day period to appeal shall be rec%oned. 20 The 2upreme 3ourt denied 2hellFs petition. The 3TA has no !urisdiction, the case did not involve a tax protest case, but payment and collection issues. The decisions of the 3ommissioner which is appealable to the 3TA involving customs duties specifically refer to his decisions on administrative tax protest cases in relation to 2ection @+9@ of the T33/. A tax protest case, under the T33/, involves a protest of the li"uidation of import entries. A li"uidation is the final computation and ascertainment by the collector of the duties on imported merchandise, based on official reports as to the "uantity, character, and value thereof, and the collectorEs own finding as to the applicable rate of duty; it is a%in to an assessment of internal revenue taxes under the 'ational nternal <evenue 3ode where the tax liability of the taxpayer is definitely determined. Pili$inas S!ell Petroleum Cor$oration vs. Commissioner of Customs" G.R. No. 1'63)" #$<2 1" ())+" !+ SCRA !'*. (6. PROTEST RE:UIREMENT The change in tariff classification by 3ustoms-(oci/t/ %/n/rale de (urveillance $2=2& mports Aaluation and 3lassification 3ommittee resulting in higher valuation leading to petitionerFs liability for additional duties and taxes is protestable. Accordingly, failure to protest the demand of the 3ollector adopting valuation is fatal. :or failure of petitioner to pay under protest, the action of the 3ollector to collect additional duties became final and conclusive. GST P!ili$$ines" In. vs. Commissioner of Customs C Se. of Finane, 3TA #? 'o. ++0, Gune 8-, @990, 2upreme 3ourt denied with finality petitionerFs /etition for <eview and *otion for <econsideration in <esolutions dated )ctober @C, @990 and Ganuary @,, @989. #ntry of Gudgment dated :ebruary @+, @989. ('. BOC HAS EXCLUSIVE ORIGINAL #URISDICTION ON SEICURE AND FORFEITURE OF GOODS; THE RULE THAT THE RTC MUST DEFER TO BOC9S #URIDICTION IS ABSOLUTE <T3 of )longapo 3ity issued an )rder rendering 2eaport >epartment =eneral *anager 3anlas and two other lawyers guilty of indirect contempt for refusing to honor the T<) issued by the <T3 which restrained them to interfere on the withdrawal and release of the imported rice consigned to (<A nternational Trading, nc. The 2upreme 3ourt declared the )rder void. 4t is well settled that the 3ollector of 3ustoms has exclusive !urisdiction over seizure and forfeiture proceedings, and regular courts cannot interfere with his exercise thereof or stifle or put it at naught. The 3ollector of 3ustoms sitting in seizure and forfeiture proceedings has exclusive !urisdiction to hear and determine all "uestions touching on the seizure and forfeiture of dutiable goods. <egional trial courts are devoid of any competence to pass upon the validity or regularity of seizure and forfeiture proceedings conducted by the ?)3 and to en!oin or otherwise interfere with these proceedings. <egional trial courts are precluded from assuming cognizance over such matters even through petitions for certiorari, prohibition or mandamus. xxx from the moment imported goods are actually in the possession or control of the 3ustoms authorities, even if no warrant for seizure or detention had previously been issued by the 3ollector of 3ustoms in connection with the seizure and forfeiture proceedings, the ?)3 ac"uires exclusive !urisdiction over such imported goods for the purpose of enforcing the customs laws, sub!ect to appeal to the 3ourt of Tax Appeals whose decisions are appealable to this 3ourt. Su&i Ba% 3etro$olitan Aut!orit% vs. Ro'ri1ue?" G.R. No. 16)(')" A,-.% (3" ()1)" 61+ SCRA 1'6" 0.3.<; Dao vs. Court of A$$eals" G.R. No7. 1)*6)* /<= 111((3" O03o52- 6" 1++!" (*+ SCRA 3!. (. RTC HAS NO REVIEW POWER OVER SEICURE AND FORFEITURE PROCEEDINGS CONDUCTED BY THE BOC mporters of right hand drive buses filed a complaint with the <T3 of /araOa"ue 3ity for replevin with prayer for the issuance of a writ of preliminary and mandatory in!unction and damages. The <T3 granted the application for a writ of replevin. n a subse"uent order issued by the <T3, it dismissed the complaint on the ground of lac% of !urisdiction while Asian Terminal, nc. $AT&, a custom bonded warehouse where the vehicles were previously stored, "uestioned the said )rder alleging that it had a lien on the vehicles. 21 The 2upreme 3ourt sustained the dismissal. t held that <T3s are devoid of any competence to pass upon the validity or regularity of seizure and forfeiture proceedings conducted by the ?ureau of 3ustoms and to en!oin or otherwise interfere with these proceedings. t is the 3ollector of 3ustoms, sitting in seizure and forfeiture proceedings, who has exclusive !urisdiction to hear and determine all "uestions touching on the seizure and forfeiture of dutiable goods. The <T3s are precluded from assuming cognizance over such matters even through petitions of certiorari, prohibition or mandamus. xxx actions of the 3ollector of 3ustoms are appealable to the 3ommissioner of 3ustoms, whose decision, in turn, is sub!ect to the exclusive appellate !urisdiction of the 3ourt of Tax Appeals xxx Asian Terminals" In. vs. Bautista=Riafort" G.R. No. 166+)1" O03o52- ('" ())6" !)! SCRA '* 0.3.<; Dao vs. Court of A$$eals" G.R. No7. 1)*6)* /<= 111((3" O03o52- 6" 1++!" (*+ SCRA 3!" *(. <T3 has no !urisdiction to entertain a replevin suit involving an article sub!ect of customs seizure and forfeiture proceeding. ?)3 has exclusive !urisdiction in seizure and forfeiture cases even if it be assumed that in the exercise of such exclusive competence a taint of illegality may be correctly imputed. Pone Enrile vs. +inu%a" No. L6(+)*3" #/<$/-& 3)" 1+'1" 3' SCRA 31. (+. DETERMINATION OF PROBABLE CAUSE IN SEICURE CASE IS NOT FOR THE RTC TO DETERMINE A (arrant of 2eizure and >etention of @-,999 bags of rice was issued by the >istrict 3ollector of 3ustoms of 3ebu. The consignee of the sac%s of rice and his buyer filed a complaint for in!unction in the <T3 of 3ebu 3ity. The <T3 ruled that the (arrant of 2eizure and >etention issued by the ?ureau of 3ustoms cannot divest the court of !urisdiction since its issuance is without legal basis as it was anchored merely on suspicion that the items in "uestion were imported or smuggled. 3A affirmed the <T3. t stated that regular courts still retain !urisdiction "where, as in this case, for lac% of probable cause, there is serious doubt as to the propriety of placing the articles under 3ustoms !urisdiction through seizureDforfeiture proceedings." The 2upreme 3ourt reversed both the <T3 and 3A. t was held that 4the "uestion of whether probable cause exists for the seizure of the sub!ect sac%s of rice is not for the <egional Trial 3ourt to determine. The customs authorities do not have to prove to the satisfaction of the court that the articles on board a vessel were imported from abroad or are intended to be shipped abroad before they may exercise the power to effect customs searches, seizures, or arrests provided by law and continue with the administrative hearings. Bureau of Customs vs. O1ario" G.R. No. 13)1" M/-01 3)" ()))" 3(+ SCRA (+. 3). BOC HAS #URISDICTION OVER THE GOODS SEICED; WHERE TO APPEAL THE DECISION OF COLLECTOR OF CUSTOMS Jpon effecting the seizure of the goods, the ?ureau of 3ustoms ac"uired exclusive !urisdiction ')T only over the case but also over the goods seized for the purpose of enforcing the tariff and customs laws. A party dissatisfied with the decision of the 3ollector may appeal to the 3ommissioner of 3ustoms, whose decision is appealable to the 3ourt of Tax Appeals in the manner and within the period prescribed by law and regulations. The decision of the 3ourt of Tax Appeals may be elevated to the 2upreme 3ourt for review. C!ia vs. Atin1 Colletor of Customs" G.R. No. L6*31)" S2,32452- (6" 1++" 1'' SCRA '!!. 31. COLLECTOR9S DECISION IN SEICURE PROCEEDINGS WHEN ADVERSE TO THE GOVERNMENT IS SUB#ECT TO AUTOMATIC REVIEW BY COMMISSIONER OF CUSTOMS" BY SECRETARY OF FINANCE The >ecision of the 3ollector of 3ustoms when adverse to the government shall be automatically reviewed by the 3ommissioner of 3ustoms. The 3ommissioner shall render a decision on the automatic appeal within thirty $B9& days from receipt of the records of the case. n case the ?)3 3ommissioner fails to decide on the automatic appeal of the 3ollectorEs >ecision within B9 days from receipt of the records thereof, the case shall again be deemed automatically appealed to the 2ecretary of :inance. (S203.o< (313" TCCP)" El Greo S!i$ 3annin1 an' 3ana1ement 22 Cor$oration vs. Commissioner of Customs" G.R. No. 1''1" D202452- *" ())" !'3 SCRA '). 3(. #URISDICTION OF COLLECTOR OF CUSTOMS OVER ABANDONMENT PROCEEDINGS The >istrict 3ollector of 3ustoms initiated Abandonment /roceedings on overstaying cargoes located at the customs-bonded warehouse. ?efore the goods can be inventoried and sold at public auction, part of the warehouse containing the shipment was burned including that of the private respondentFs shipments. /rivate respondent filed a complaint for damages before the <T3 of /asig 3ity claiming the value of the shipment. The <T3 ruled ineffective the ?)3Fs declaration of abandonment. The 2upreme 3ourt reversed the decision of the <T3. The resolution of the issue of abandonment and ownership of the shipment $2ections8.98 N 8.9@ T33& is within the exclusive competence of the >istrict 3ollector of 3ustoms, the 3ommissioner of 3ustoms and within the appellate !urisdiction of the 3TA. The >istrict 3ollector of 3ustoms did not lose !urisdiction over the abandonment proceedings notwithstanding the loss of the cargo nor render functus oficio her declaration that the sub!ect shipment had been abandoned. <T3 was incompetent to pass upon and nullify seizure and abandonment proceedings as well as the issue on ownership over the goods seized. R.+. 3ar?an Frei1!t" In. vs. Court of A$$eals" G.R. No. 1()6*" M/-01 *" ())*" *(* SCRA !+6. B. #UDICIAL REMEDIES 33. LIABILITY OF THE GOVERNMENT IN CASE OF LOSS OF ARTICLES WHILE IN CUSTODY; EXCEPTION TO STATE IMMUNITY; NON6LIABILITY FOR INTEREST As an exception to the principle of state immunity from suit, due to gross negligence in the loss of imported goods in its custody, the ?ureau of 3ustoms was held liable to pay the value of the shipment, payment to be ta%en from the sale or sales of goods or properties seized or forfeited, upon payment of the necessary customs duties; liability may be paid in Philippine currency, computed at the exchange rate prevailing at the time of actual payment. Re$u&li of t!e P!ili$$ines" Re$resente' &% t!e Commissioner of Customs v. 5nime) 3iro=Eletronis .G3B2/" G.R. No. 1663)+61)" M/-01 +" ())'" !1 SCRA 1+" /7 0.32= .< 312 -202<3 0/72 o? Commissioner of Customs vs. A1f!a Inor$orate'" G.R. No. 1'*(!" M/-01 (" ()11. n addition to the value of the shipment lost while in the custody of ?)3, respondent J'*#P was awarded legal interest of C1 p.a. from 2eptember -, @998 $date of !udicial demand by filing the petition for revival of the Gune 8-, 800@& until the finality of the *arch 0, @99, 23 decision. Thereafter, the rate of legal interest shall be 8@1 p.a. until the ?)3 fully pays its obligation. Re$u&li of t!e P!ili$$ines" Re$resente' &% t!e Commissioner of Customs v. 5nime) 3iro=Eletronis .G3B2/" G.R. No. 1663)+61)" Resolution =/32= D202452- 1)" ())'. C. CLAIM FOR REFUND Se. 6E<-. Claim for Refun' of Duties an' Ta)es an' 3o'e of Pa%ment. 7 All claims for refund of duties shall be made in writing and forwarded to the 3ollector to whom such duties are paid, who upon receipt of such claim shall verify the same by the records of his )ffice, and if found to be correct and in accordance with law, shall certify the same to the 3ommissioner with his recommendation together with all necessary papers and documents. Jpon receipt by the 3ommissioner of such certified claim he shall cause the same to be paid if found correct. f as a result of the refund of customs duties there would necessarily result a corresponding refund of internal revenue taxes on the same importation, the 3ollector shall li%ewise certify the same to the 3ommissioner who shall cause the said taxes to be paid, refunded, or tax credited in favor of the importer, with advice to the 3ommissioner of nternal <evenue. 23 Se. *8<-. Protest an' Pa%ment u$on Protest in Civil 3atters. @ see A. Administrative remedies available to the taxpayer Se. *8<B. Protest E)lusive Reme'% in Protesta&le Case. = see A. Administrative remedies available to the taxpayer 3*. PERIOD TO FILE REFUND; APPEAL TO CTA WAS ALLOWED EVEN WITHOUT DECISION OF THE COMMISSIONER OF CUSTOMS The right to claim for refund of customs duties is specifically governed by 2ection 8,9. of the Tariff and 3ustoms 3ode which provides that in all claims for refund of customs duties, the 3ollector to whom such customs duties are paid and upon receipt of such claim is mandated to verify the same by the records of his )ffice. f such claim is found correct and in accordance with law, the 3ollector shall certify the same to the 3ommissioner with his recommendation together with all the necessary papers and documents. *0ote1 0o specific period for filing the claim for refund was provided under the said section.+ *eanwhile, 2ections @B9. and @B90 finds application in all cases sub2ect to protest, the claim for refund of customs duties shall be preceded by a protest before the 3ollector of 3ustoms either at the time when payment of the amount claimed to be due the government is made or within fifteen $8-& days thereafter a written protest shall be made. n con!unction with this right of the claimant is the duty of the 3ollector of 3ustoms to hear and decide such protest within thirty $B9& days upon termination of the hearing. $2ection @B8@, T33/& Appeal to 3TA on protest cases was allowed even without decision of the 3ollector as well as 3ommissioner of 3ustoms due to inaction by 3ollector for an unreasonable length of time $almost C years&. Nestle P!ili$$ines" In. vs. Court of A$$eals" G.R. No. 13*11*" #$%& 6" ())1" 36) SCRA !'!. 3TA ac"uires !urisdiction in a refund of customs duties even in the absence of the decision of the 3ommissioner of 3ustoms; tax officialFs silence is a denial of its claim; the two $@&-year prescriptive period under 2ection @B9 $now 2ection @@0& of the '<3 was applied. Commissioner of Customs an' Commissioner of Internal Revenue vs. T!e 2onora&le Court of Ta) A$$eals an' Planters Pro'uts" In." G.R. No. (61" M/-01 16" 1++. A duly registered enterprise under the #/QA $now /#QA& Kaw was allowed refund of erroneously or mista%enly paid customs duties applying the provision of the 3ivil 3ode on solutio indebiti $within C years from date of payment&. Commissioner of Customs vs. P!ili$$ine P!os$!ate Fertili?er Cor$oration" G.R. No. 1****)" S2,32452- 1" ())*" *3' SCRA *!(. 3!. PERIOD TO FILE REFUND; CAO !6+(; PAYMENT OF REFUND PROCESSING FEE (hether or not the failure to pay the refund processing fee with the ?)3 is fatal to a claim for tax refund of advance deposit for customs duties and taxes arising from unused Ketter of 3redit $K3s& for the supposed importation which did not materialize. 3ustoms Administrative )rder $3A)& 'o. --0@, period to file claim for refund. Gran'te@ In'ustrial Steel Pro'uts" In. !erein re$resente' &% its Presi'ent" A&elar'o Gon?ale? vs. 2on. Seretar% of t!e De$artment of Finane, 3TA 3ase 'o. .@98. PART IV. CTA9S #URISDICTION OVER CUSTOM CASES A. CTA9S #URISDICTION @SPECIAL AND LIMITED TCCP S20. (*)1. Su$ervision an' Control Over Criminal an' Civil Proee'in1s. 2ee Gudicial Action against the taxpayer. Se. *,<*. Revie# &% Court of Ta) A$$eals. 2ee Gudicial Action against the taxpayer. 24 AN ACT CREATING THE COURT OF TAX APPEALS" RA 11(! AS AMENDED BY RA +(( SEC. E. Duris'ition. 7 The 3TA shall exercise6 $a& #xclusive appellate !urisdiction to review by appeal, as herein provided6 xxx xxx xxx $+& >ecisions of the 3ommissioner of 3ustoms in cases involving liability for customs duties, fees or other money charges, seizure, detention or release of property affected, fines, forfeitures or other penalties in relation thereto, or other matters arising under the 3ustoms Kaw or other laws administered by the ?ureau of 3ustoms; xxx xxx xxx $C& >ecisions of the 2ecretary of :inance on customs cases elevated to him automatically for review from decisions of the 3ommissioner of 3ustoms which are adverse to the =overnment under 2ec. @B8- of the Tariff and 3ustoms 3ode; $,& >ecisions of the 2ecretary of Trade and ndustry, in the case of nonagricultural product, commodity or article, and the 2ecretary of Agriculture in the case of agricultural product, commodity or article, involving dumping and countervailing duties under 2ections B98 and B9@, respectively, of the Tariff and 3ustoms 3ode, and safeguard measures under <epublic Act no. ..99, where either party may appeal the decision to impose or not to impose duties. xxx xxx xxx Se. 66. ;!o 3a% A$$ealF 3o'e of A$$ealF Effet of A$$eal. 7 Any party adversely affected by a decision, ruling or inaction of the 3ommissioner of nternal <evenue, the 3ommissioner of 3ustoms, the 2ecretary of :inance, the 2ecretary of Trade and ndustry or the 2ecretary of Agriculture or the 3entral ?oard of Assessment Appeals or the <egional Trial 3ourts may file an appeal with the 3TA within thirty $B9& days after the receipt of such decision or ruling or after the expiry of the period fixed by law for action as referred to in 2ection ,$a&$@& herein. Appeal shall be made by filing a petition for review under a procedure analogous to that provided for under <ule +@ of the 800, <ules of 3ivil /rocedure with the 3TA within thirty $B9& days from the receipt of the decision or ruling or in the case of inaction as herein provided, from the expiration of the period fixed by law to act thereon. A >ivision of the 3TA shall hear the appeal6 xxx xxx xxx All other cases involving rulings, orders, or decisions filed with the 3TA as provided for in 2ection , shall be raffled to its >ivisions. A 25 party adversely affected by a ruling, order or decision of a >ivision of the 3TA may file a motion for reconsideration or new trial before the same >ivision of the 3TA within fifteen $8-& days from notice thereof6 Provided, however, That in criminal cases, the general rule applicable in regular 3ourts on matters of prosecution and appeal shall li%ewise apply. 'o appeal ta%en to the 3TA from the decision of the 3ommissioner of nternal <evenue or the 3ommissioner of 3ustoms xxx or the 2ecretary of :inance, the 2ecretary of Trade and ndustry or the 2ecretary of Agriculture, as the case may be, shall suspend the payment, levy, distraint, andDor sale of any property of the taxpayer for the satisfaction of his liability as provided by existing law6 Provided, however, That when in the opinion of the 3ourt the collection by the aforementioned government agencies may !eopardize the interest of the =overnment andDor the taxpayer the 3ourt at any stage of the proceeding may suspend the said collection and re"uire the taxpayer either to deposit the amount claimed or to file a surety bond for not more than double the amount with the 3ourt. xxx xxx xxx Se. 6-. A$$eal to t!e Court of Ta) A$$eals En Ban. 7 'o civil proceeding involving matters arising under the 'ational nternal <evenue 3ode, the Tariff and 3ustoms 3ode or the Kocal =overnment 3ode shall be maintained, except as here in provided, until and unless an appeal has been previously filed with the 3TA and disposed of in accordance with the provisions of this Act. A party adversely affected by a resolution of a >ivision of the 3TA on a motion for reconsideration or new trial, may file a petition for review with the 3TA en banc. Se. 6B. Revie# &% Certiorari. 7 A party adversely affected by a decision or ruling of the 3TA en banc may file with the 2upreme 3ourt a verified petition for review on certiorari pursuant to <ule +- of the 800, <ules of 3ivil /rocedure. 36. CTA@LIMITED #URISDICTION The 3ourt has long recognized the legislative determination to vest sole and exclusive !urisdiction on matters involving internal revenue and customs duties to such a specialized court. ?y the very nature of its function, the 3TA is dedicated exclusively to the study and consideration of tax problems and has necessarily developed an expertise on the sub!ect. At the same time, since the 3TA is a court of limited !urisdiction, its !urisdiction to ta%e cognizance of a case should be clearly conferred and should not be deemed to exist on mere implication. The acts of other bodies that were granted some powers by the 2afeguard *easures Act, such as the Tariff 3ommission, are not sub!ect to direct review by the 3TA. #ven prior to <.A. 0@.@, the 3TA, not the 3A, has !urisdiction over the non-imposition of safeguard measures, citing rule against split !urisdiction. Sout!ern Cross Cement Cor$oration vs. P!ili$$ine Cement 3anufaturers Cor$oration" su$ra. The )ne 2top 2hop nter-Agency Tax 3redit and >uty >rawbac% 3enter $the 3enter&- cancelled the Tax 3redit 3ertificates assigned to /ilipinas 2hell. 3TA has no !urisdiction over decisions of the 3enter. Pili$inas S!ell Petroleum Cor$oration vs. Commissioner of Customs" G.R. No. 1'63)" #$<2 1" ())+" !+ SCRA !'*. 26 3'. DECISION>ORDER OF THE COLLECTOR OF CUSTOMS IS NOT APPEALABLE TO THE CTA An )rder issued by the >istrict 3ollector of the /ort of *anila ordering the forfeiture in favor of the =overnment of the sub!ect importation shipments of flour by petitioner is not the decision appealable before the 3TA. To properly invo%e the !urisdiction of the 3TA, the "decisions" mentioned in 2ection , $a& $+& of <A 88@-, as amended by <A 0@.@ pertain to decisions of the 3ommissioner of 3ustoms involving liability for customs duties, fees or other money charges, seizure, detention or release of property affected, fines, forfeitures or other penalties in relation thereto, or other matters arising under the 3ustoms Kaw or other laws administered by the ?ureau of 3ustoms. The decision or order of the 3ollector of 3ustoms, as such in this case, is not the decision being contemplated by the provision of law. 3TA is a court of special appellate !urisdiction, it can only try cases permitted by statute. Ru&ills International" In. et. al. vs. Na$oleon L. 3orales" et al." CTA EB No. *'1 (CTA C/72 No. ''()" #$%& (+" ())+. 3. MERE REFERRAL LETTER ISSUED BY THE COMMISSIONER OF CUSTOMS DOES NOT CONSTITUTE DECISION APPEALABLE TO THE CTA The 3TA 3ourt in >ivision has exclusive appellate !urisdiction to review by appeal the decisions of the 3ommissioner of 3ustoms. 2ettled is the rule that the decision or order which is appealable to the 3TA, is that which has resolved the case with finality, and in effect terminates or finally disposes of a case, as it leaves nothing to be done by the 3ommissioner of 3ustoms, as the case has been decided on the merits. A mere referral letter issued by the 3ommissioner of 3ustoms referring the case to the )3- >istrict 3ollector for appropriate action is not a decision appealable to the 3TA. 5nioil Petroleum P!ili$$ines" In. vs. Na$oleon 3orales" et. al., CTA EB No. !)3 (CTA C/72 No. ''+)" A,-.% 1!" ()1). 3+. CTA HAS NO APPELLATE #URISDICTION OVER AN ACTION TO COLLECT ON A BOND USED TO SECURE THE PAYMENT OF TAXES" SUCH ACTION IS NOT A TAX COLLECTION CASE BUT A SIMPLE ENFORCEMENT OF CONTRACTUAL LIABILITY The <epublic of the /hilippines represented by the ?ureau of 3ustoms $?)3& filed a 3ollection of *oney with >amages before the <egional Trial 3ourt $<T3& against /hilippine ?ritish Assurance 3ompany, nc. $/?A3& for the outstanding unli"uidated customs bonds issued by the latter to its clients to secure the release of imported goods with the ?)3. The <T3 ruled in favor of the <epublic. /?A3 appealed the decision to the 3ourt of Appeals $3A&. Thereafter, 3A dismissed the appeal for lac% of !urisdiction. According to 3A, the case is rooted on the payment of taxes and duties, one which involves a collection of taxes where the !urisdiction is with the 3TA. The 23 reversed the 3A and ruled that 4an action based upon a surety bond cannot be considered a tax collection case. <ather, such action would properly be a case based on a contract.5 P!ili$$ine Britis! Assurane Co. In. vs. Re$u&li of t!e P!ili$$ines re$resente' &% t!e Bureau of Customs" =.<. 'o. 8.--.., :ebruary @, @989. *). #URISDICTION OF THE CTA; ISSUES OF OWNERSHIP OVER GOODS IN THE CUSTODY OF CUSTOM OFFICIALS ARE WITHIN THE POWER OF CTA TO DETERMINE n order to enforce a maritime lien over the sub!ect of a seizure and detention proceeding in customs cases, several cases where filed both in the <T3 and the 3A raising, among others, the issue of ownership over the sub!ect of seizure. The 3A en!oined the 3TA from exercising !urisdiction over the case. This was reversed by the 2upreme 3ourt. 4(hile the party contended that the 3ommissioner of 3ustomEs custody was illegal, such fact, even if true, does not deprive the 3ommissioner of 3ustoms of !urisdiction thereon. This is a "uestion that ought to be resolved in the seizure and forfeiture cases, which are now pending with the 3TA, and not by the regular courts as a collateral matter to enforce his lien. xxx 4the 3A was clearly in error when it issued an in!unction against it from deciding the 27 forfeiture case on the basis that it interfered with the sub!ect of ownership over the vessel which was, according to the 3A, beyond the !urisdiction of the 3TA. xxx allegations of ownership neither divest the 3ollector of 3ustoms of such !urisdiction nor confer upon the trial court !urisdiction over the case. )wnership of goods or the legality of its ac"uisition can be raised as defenses in a seizure proceeding. The actions of the 3ollectors of 3ustoms are appealable to the 3ommissioner of 3ustoms, whose decision, in turn, is sub!ect to the exclusive appellate !urisdiction of the 3TA. 3learly, issues of ownership over goods in the custody of custom officials are within the power of the 3TA to determine.5 Commissioner of Customs vs. Court of A$$eals" su$ra. B. APPEAL *1. PERIOD TO APPEAL; PERFECTION OF AN APPEAL IN THE CTA EN BANC IS NOT ONLY MANDATORY BUT ALSO #URISDICTIONAL The assailed <esolution dated Ganuary -, @989 issued by the 3TA :irst >ivision dismissing the criminal case for failure to prosecute was received by the >epartment of Gustice and ?ureau of 3ustoms $?)3& on Ganuary 8-, @989. /etitioner ?)3 filed the /etition for <eview in the 3TA )n 3anc on :ebruary @, @989. An appeal to the 3ourt #n ?anc in criminal cases shall be ta%en by filing a petition for review within fifteen $8-& days from receipt of a copy of the decision or resolution appealed from. ;owever, for good cause, the time for filing the petition may be extended for an additional period not exceeding fifteen days. H2ection 0 $b&, <ule 0 of the @99- <evised <ules of the 3ourt of Tax Appeals $<<3TA&I /etition was filed out of time. The period for filing is mandatory unless good cause is shown. /erfection of an appeal in the manner and within the period laid down by law is not only mandatory but also !urisdictional. Peo$le of t!e P!ili$$ines vs. Allan Franiso" et. al." CTA EB C-.4 C/72 No. ))' (CTA C-.4 C/72 No. O6)+)" F25-$/-& 1!" ()11 0.3.<; Commissioner of Internal Revenue vs. Fort Bonifaio Develo$ment Cor$oration" G.R. No. 16'6)6" A$;$73 11" ()1). *(. CTA EN BANC HAS EXCLUSIVE APPELLATE #URISDICTION OVER DECISIONS AND RESOLUTIONS OF CTA DIVISION; FAILURE TO FILE MOTION FOR RECONSIDERATION SHALL RENDER THE DECISION OF THE CTA DIVISION FINAL AND EXECUTORY The 3ommissioner of 3ustoms $3)3& assailed the >ecision of 3TA :irst >ivision, reversing the formerFs decree of forfeiture, lifting the (arrants of 2eizure and >etention $(2>&, and ordering the release to =elmart ndustries /hilippines, nc. of its imported fabrics. As found by the 2upreme 3ourt, 3)3 committed procedural missteps when if failed to observe 2ections 0 and 88 of <A 0@.@ as well as the <evised <ules of the 3ourt of Tax Appeals. A party adversely affected by a ruling, order or decision of a >ivision of the 3TA may file a motion for reconsideration or new trial before the same >ivision of the 3TA within fifteen $8-& from thereof. $2ec. 0 of <.A. 'o. 0@.@& 2ec. 88 of the same law provides that, ". . . A party adversely affected by a resolution of a >ivision of the 3TA on a motion for reconsideration or new trial may file a petition for review with the 3TA en banc." n turn, "A party adversely affected by a decision or ruling of the 3TA en banc may file with the 2upreme 3ourt a verified petition for review on certiorari pursuant to <ule +- of the 800, <ules of 3ivil /rocedure." $2ec. 8@ of <.A. 'o. 0@.@& 2ec. @, <ule + of the <evised <ules of the 3ourt of Tax Appeals $<<3TA& reiterates the exclusive appellate !urisdiction of the 3TA en banc relative to the review of decisions or resolutions on motion for reconsideration or new trial of the courtEs two $@& divisions in cases arising from administrative agencies such as the ?ureau of 3ustoms. xxx /etitionerEs failure to file a motion for reconsideration of the assailed decision of the 3TA :irst >ivision, or at least a petition for review with the 3TA en banc, invo%ing the latterEs exclusive appellate !urisdiction to review decisions of the 3TA divisions, rendered the assailed decision final and executory. Commissioner of Customs vs. Gelmart In'ustries P!ili$$ines" In." G.R. No. 16+3!(" F25-$/-& 13" ())+" !'+ SCRA ('(. A /etition for <eview )n 3anc filed by the 3ommissioner of 3ustoms before the 3TA )n 3anc was dismissed for failure to file a *otion 28 for <econsideration before the 3TA >ivision. The 2upreme 3ourt agrees with the 3TA )n 3anc that the 3ommissioner failed to comply with the mandatory provisions of <ule ., 2ection 8 of <<3TA re"uiring that "the petition for review of a decision or resolution of the 3ourt in >ivision must be preceded by the filing of a timely motion for reconsideration or new trial with the >ivision." The word "must" clearly indicates the mandatory 7 not merely directory 7 nature of a re"uirement." Commissioner of Customs vs. 3arina Sales" In." G.R. No. 136" NoD2452- ((" ()1). C. SUSPENSION OF COLLECTION OF TAXES *3. SUSPENSION OF COLLECTION OF TAXES; FILING OF PETITION DOES NOT SUSPEND THE COLLECTION OF TAXES 'o appeal ta%en to the 3TA from the decision of the 3ommissioner of nternal <evenue or the 3ommissioner of 3ustoms or the <egional Trial 3ourt, provincial, city or municipal treasurer or the 2ecretary of :inance, the 2ecretary of Trade and ndustry or the 2ecretary of Agriculture, as the case may be, shall suspend the payment, levy, distraint, andDor sale of any property of the taxpayer for the satisfaction of his tax liability as provided by existing law6 Provi'e'" !o#ever, That when in the opinion of the 3ourt the collection by the aforementioned government agencies may !eopardize the interest of the =overnment andDor the taxpayer the 3ourt at any stage of the proceeding may suspend the said collection and re"uire the taxpayer either to deposit the amount claimed or to file a surety bond for not more than double the amount with the 3ourt. .Se. 66" RA 66*9" amen'e' &% Se. B" RA B*-*/ F-ssociation of Pilipinas (hell Dealers, et al. vs. Cesar 4. Purisima, et al. N &rancis 5oseph %. )scudero, et al. vs. Cesar 4. Purisima, et al., =.<. 'os. 8C.+C8 N 8C.+CB, <esolution, Guly 8, @99-, issuing T<9 on enforcement and implementation of <A 0BB,, #xpanded AAT Act of @99- and consolidating cases with -3-6-D- %uro Party #ist 7&ormerly --(5(8 9fficers (amson (. -lcantara, et al. vs. :on. )xecutive (ecretary )duardo ,. )rmita, et al., =.<. 'o. 8C.9-C N -;uilino <. Pimentel, et al. vs. )xecutive (ecretary )duardo ,. )rmita, et al., =.<. 'o. 8C.@9,, >ecision 2eptember 8, @99- upholding constitutionality and lifting T<) upon finality; Fili$ino 3etals Cor$. vs. Seretar% of t!e De$artment of Tra'e an' In'ustr%, =.<. 'o. 8-,+0., Guly 8-, @99-, writ of in!unction issued by <T3 sustainedG EH02,3.o<" .Se. *8<6" TCCP/ Commissioner of Customs v. CTA" Las Islas Fili$inas Foo' Cor$oration an' Pat=Pro Overseas Co." Lt'." GR 1'1!1661'" R27. F25-$/-& 13" ())+. 2ection @0 of <A 'o. ..99 $the 42afeguard *easure Act5& provides that6 4Any interested party who is adversely affected by the ruling of the 2ecretary in connection with the imposition of a safeguard measure may file with the 3ourt of Tax Appeals, a petition for review of such ruling within thirty $B9& days from receipt thereof6 /rovided, however, That the filing of such petition for review shall not in any way stop, suspend or otherwise toll the imposition or collection of the appropriate tariff duties or the adoption of other appropriate safeguard measures, as the case may be.5 /etitionerFs prayer for a Temporary <estraining )rder andDor /reliminary n!unction was denied for failure to prove that the collection of safeguard duties shall !eopardize their interest. Com1laso A1uila Cor$oration" San Franiso 3irror Cor$oration" All Plus Cor$oration" An' G!ani Float Glass" Limite' vs. Seretar% of t!e De$artment of Tra'e an' In'ustr%" et. al." CTA C/72 No. '*!3" R27o%$3.o< =/32= A$;$73 (+" ())6. /etitionerFs 4*otion to 2uspend 3ollection of >isputed Tax Kiability,5 with allegation that the collection of the sub!ect taxes would cause serious pre!udice and irreparable damage leading to ban%ruptcy and closure of business, was granted sub!ect to the filing of a bond. t appearing that the collection of deficiency taxes will seriously !eopardize not only the interest of petitioner but also of the governmentFs. International P!armaeutials In. vs. Commissioner Lillian 2efti in !er a$ait% as Commissioner of Internal Revenue" et al." CTA C/72 No. ''36" R27o%$3.o< =/32= M/& '" ()). D. OTHER SIGNIFICANT ISSUES **. NO GRAVE ABUSE OF DISCRETION WHEN THE COURT9S CONCLUSION IS SUPPORTED BY LEGAL BASES :A3T26 A certiorari case was filed against 3TA for alleged grave abuse of discretion in granting the *otion to <elease =oods Jnder ?ond. The goods sub!ect of seizure for alleged 29 violation of 2ection @-B9 of the T33/ consisted of bags of rice loaded in container vans. <JK'=6 (hile this case was pending before the 23, the 3TA decided the main case which rendered this petition moot and academic. At any rate, the 23 dismissed the petition as there was no grave abuse of discretion and the assailed <esolution was bac%ed by legal bases, i.e., the sub!ect goods were merely 4regulated5 and not 4prohibited5 commodities. 4An act of a court or tribunal can only be considered to be tainted with grave abuse of discretion when such act is done in a capricious or whimsical exercise of !udgment as is e"uivalent to lac% of !urisdiction. n order to be "ualified as 4grave,5 the abuse of discretion must be so patent or gross as to constitute an evasion of a positive duty or a virtual refusal to perform the duty or to act at all in contemplation of law.5 Seretar% of T!e De$artment of Finane v. CTA .* n' Div./ an' >utan1&ato Conventional Tra'in1 3ulti=Pur$ose Coo$erative, =.<. 'o. 8C.8B,, Aug. ,, @98B. *!. MERE SUBSTANTIAL EVIDENCE IS NECESSARY TO #USTIFY FORFEITURE IN CUSTOMS CASES; VESSELS MAY BE CONSIDERED DUTIABLE ARTICLES The sub!ect vessel *DA 3oco #xplorer @, a.%.a. ,89, slands 3ruise entered the /hilippines allegedly for purposes of repair. ;owever, what was proven was its sale prior to repair. 2ection 89- of the T33/ allows as 4conditionally free importations5 articles brought into the /hilippines for repair sub!ect to re-exportation and posting of bond. There was no showing of compliance with the re"uirements, hence, the vessel was forfeited. :orfeiture proceeding under tariff and customs laws is not penal in nature since it does not result in the conviction of the wrongdoer nor in the imposition upon him of a penalty; proof beyond reasonable doubt is not re"uired in order to !ustify the forfeiture of the goods. The degree of proof re"uired is merely substantial evidence, which means such relevant evidence as a reasonable mind might accept as ade"uate to support a conclusion citing Fee'er International Line" PTE." LTD." et al. vs. CA" et al." =.<. 'o. 0+@C@, *ay B8, 8008. E6<E Islan's S!i$$in1 Cor$. vs. Se. of Finane, 3TA 3ase 'o. ,0--, *ar. C, @98@. (hen used with reference to importation and exportation, articles include goods, merchandise and in general anything that may be made the sub!ect of importation or exportation. 2hips, boats and floating structures such as the sub!ect vessels are dutiable articles under ;eading .0.9+-.9- of 3hapter .0 of the T33/. Aessels may be considered articles sub!ect of importation. Cornelio G. Casi'o vs. RP" et al., 3TA 3ase 'o. .9.,, :eb. ., @98@. *6. THE PARTICIPATION OF BOC IN CRIMINAL AND CIVIL ASPECT OF THE CASE IS LIMITED TO THAT OF A WITNESS; OSG HAS THE PRIMARY RESPONSIBILITY TO APPEAR FOR THE GOVERNMENT The ?)3 filed a criminal complaint before the >epartment of Gustice against the officers of *ar% 2ensing /hilippines, nc. $*2/& for unlawful importation. An nformation was filed with the 3TA after determination of probable cause. (hile the case was pending, the 2ecretary of Gustice reversed the 2tate /rosecutorFs <esolution and accordingly directed the withdrawal of the nformation. 3TA granted the motion to withdraw. ?)3 assailed the 3TAFs resolution. The 2upreme 3ourt dismissed ?)3Fs petition. t ruled that public prosecutor has control and supervision over the cases. The participation in the case of a private complainant, li%e ?)3, is limited to that of a witness, both in the criminal and civil aspect of the case. Also, the 2upreme 3ourt noticed that ?)3 was not represented by the )ffice of the 2olicitor =eneral $)2=& in instituting the petition, which contravenes established doctrine that 4the )2= shall represent the =overnment of the /hilippines, its agencies and instrumentalities and its officials and agents in any litigation, proceeding, investigation, or matter re"uiring the services of lawyers.5 Bureau of Customs vs. Peter S!erman" et. al." G.R. No. 1+)*'" A,-.% 13" ()11. ?y the 2olicitor =eneral L )n appeal in criminal cases N in all civil cases. S203.o< 3!" C1/,32- 1(" T.3%2 III" 312 R2D.72= A=4.<.73-/3.D2 Co=2 o? 1+' (1+' RAC); CIR v. La Suerte Ci1ar an' Ci1arette Fator%, =< 8++0+@, Gune @., @998 30 ?y the 2ecretary of Gustice, through the 3hief 2tate /rosecutor N /rovincialD3ity /rosecutors in original criminal cases - S203.o< (()" C1/,32- (" T.3%2 III" 312 1+' RAC. *'. REGULAR COURTS AND NOT CTA HAS THE #URIDICTION TO RULE ON THE CONSTITUTIONALITY OR VALIDITY OF A LAW" RULE OR REGULATION ISSUED BY COC>CIR 23 sustained the <T3 when the latter struc% down 3ustoms *emorandum )rder $3*)& 'o. @,-@99B on the tariff classification of wheat issued by 3ommissioner of 3ustoms $3)3& for being invalid and of no force and effect. 23 sustained the ruling upon finding that 3)3 violated taxpayerFs right to due process in the issuance of 3*) @,-@99B when they failed to observe the re"uirements of notice and hearing under the <evised Administrative 3ode. 3)3 li%ewise violated respondentFs right to e"ual protection of laws when they provided for an unreasonable classification in the application of the regulation. :inally, 3)3 went beyond his powers of delegated authority when the regulation limited the powers of the customs officer to examine and assess imported articles. COC an' t!e Distrit Colletor of t!e Port of Su&i vs. 2%$ermi) Fee's Cor$., =.<. 'o. 8,0-,0, :eb. 8, @98@. t is not within the !urisdiction of the 3TA to determine the validity of 3ustoms Administrative )rder 'o. ,-0@ $,ules and ,egulations %overning the 9vertime Pay and 9ther Compensations ,elated Thereto Due to Customs Personnel at the 0-I-&. The !urisdiction over the validity and constitutionality of rules and regulations issued by the 3)3 by virtue of its rule ma%ing power under 2ection C9., T33/ lies before the regular courts. Ser1io I. Car&onilla" et al vs. Boar' of Airlines Re$resentative .BAR/" et al" =.<. 'o. 80B@+,, OP" re$resente' &% 2on. Pa@uito N. O!oa" et al vs. BAR" et al, =.<. 'o. 80+@,C, 2ept. 8+, @988. 3TAFs !urisdiction to resolve tax disputes excludes the power to rule on the constitutionality or validity of a law, rule of regulation, which is vested in the regular courts citing Britis! Amerian To&ao vs. Dose Isi'ro Cama!o, et al, =.<. 'o. 8CB-.B, Aug. @9, @99.. 31