M/V "DON MARTIN" VOY 047 vs.

SECRETARY OF FINANCE
G.R. No. 160206 July 15, 2015

DOCTRINE
The burden of proof to show that a vessel and its cargo are subject to forfeiture and
seizure for violation of the Tariff and Customs Code fall upon the party alleging that such
were smuggled goods. Absent substantial evidence to disprove documentary evidence
submitted by the vessel owner there can be no forfeiture and seizure. Inconclusive evidence
pertaining to the length of the grain of rice cannot overcome documentary evidence that
show that said rice were produced, milled, and acquired locally.

FACTS
Petitioner Palacio Schipping Inc. was the owner of M/V Don Martin, a vessel of
Philippine registry engaged in coastwise trade. The vessel docked at the port of Cagayan de
Oro City with its cargo of 6,500 sacks of rice consigned to petitioner Leopoldo “Juniors”
Pamulaklakin a day after its cargo was loaded in Sablayan, Occidental Mindoro. It was
apprehended and seized by the Economic Intelligence and Investigation Bureau (EEIB) after
receiving intelligence that the cargo was smuggled. Thereafter, the District Collector of
Customs in Cagayan de Oro City issued a warrant of seizure and detention pursuant to 2301
of the Tariff and Customs Code of the Philippines. Petitioner contended that the vessel was a
common carrier and that the cargo was locally produced and supported by several
documents. However, the District Collector of Customs rendered ruling that in the absence
of a showing of lawful entry into the country, the cargo were of foreign origin and thus
subject to seizure and forfeiture for violation of the Tariff and Customs Code of the
Philippines. The grains were unusually long and that some white sacks were marked with
Premium Rice which is for yellow color sacks. It concluded that the documents presented by
petitioner were a strategy to conceal the true nature and origin of the cargoes.

ISSUES
Whether or not the CTA had jurisdiction on the forfeiture of the cargo and of the
vessel
Whether or not the sacks of rice were unlawfully imported

HELD
Yes. Republic Act No. 1125 (An Act Creating the Court of Tax Appeals), provides that
decisions of the Commissioner of Customs in cases involving seizure and forfeiture are
appealable to the CTA and the TCCP reiterates the same for as long as the same is appealed
within the period prescribed by law.
No. The onus probandi rests on the party who ordered the shipment of rice and the
vessel. The inconclusive findings cannot overcome the documentary evidence of petitioners
that show that said rice was produced, milled and acquired locally. Also, at the time the
vessel and cargo were seized, the agents of the EIIB and the Bureau of Customs never had a
probable cause that would warrant the filing of the seizure proceedings. The Government
agents only made their inquiries about the alleged smuggling only three (3) days after the
seizure. This is a gross violation of Section 2535 in relation to Section 2531 of the Tariff and
Customs Code of the Philippines.