X ----- -- --- -- - ---- ----- - ------ - - --- - -- - -- ------ --- --- -- ----- X
DECISION
T he case at bar seeks fo r th e reversa l/se ttin g as ide o r the dec ision of the
Commiss ione r of C usto ms dated Decem ber 8, 1999, a fnrmin g th e dec is ion o f th e MIC P
Di strict Co ll ecto r dated August 13, 1999, whi ch o rd ered th e forfe iture in favo r of th e
und er the name, firm or style of RI TZ ENT ERPRI SES, w ith office address at Edi son
A ve nu e, Paranaqu e C ity.
On March 5, 1999, the shi pment in ques ti on a rri ved a t the MI C P on boa rd th e
vessel "Yangj i" w ith Bill of Lad ing N o . 5294538 0 <:n d for whi ch Impo rt Entry No.
19724 -99 was fil ed . Subj ect of A lert Order N o . A/MI/030399-02, th e shipme nt was
Sf2
r
DEC ISION -
CTA CASE NO . 6007
PAGE 2
subjected to a I 00% exa minatio n, th e res ult of whi ch yie lded motors of three (3) di ffe rent
dec larati on of 2.700 ctns. of Industri al Supp li es and 2.700 sets o f Mini M otor A04 524 -
25 W . O n Ma rch 30, 1999, a wa rrant o f seiz ure and d istra int (WS D) was iss ued against
th e shipmen t.
O n June 9, 1999, Petiti oner fi·lect a fo rm a l offer of settl ement. A fter evaluation, the
C ustoms Di stri c t Collector's Offi ce iss ued an Order accep tin g th e same on Jun e 2 1, 1999 .
B ut befo re th e offer co uld be ac ted upo n by the C ustoms Legal Serv ice, Petiti oner
w ithdrew the settl e ment offer and th e case was re turn ed to the D istri ct Co llector.
co nfi rm ed its w ithdrawal o f th e settl ement offer and proceeded w ith the presentati on of
its docum entary ev idence . Wit hout presenting any testim oni a l ev idence, Petiti oner rested
On A ugust 13, 1999, Mr. Fell pe A. Bartolome, Dis tri ct Co llector of C usto ms,
MI CP, rende red a dec ision on th e above se izu re case, o rde rin g the forfe iture of th e
"A ft er du e eva luatiOil.,fllld care ful stud y, we find th at c la im ant has not
sati sfac to ril y proved th at it~ ; shipm e nt sho uld not be he ld liabl e as cha rged,
and tha t it has not incurred the li ability of forfe iture unde r th e law. Its
defense th a t it merely re li ed on th e SGS-C RF fo r th e shi p ment a nd th at it is in
good fa ith beca use of !i(sic) is insuffic ient to overcome the prim a fac ie
ev idence of und e rvaluati on a nd mi sdecla rati o n o n reco rd .
13
DEC ISION-
CTA CAS E NO. 600 7
PAG E 3
SO ORDERED."
Co nsequ entl y, on February .8. 2000, Petiti oner fi led w ith thi s Co urt the instant
.'•:.. ,
Pe titi on fo r Rev iew.
.·.::
O n A ugLJ st 22. 2000, th e Sl.l b)ec ~ importatio n consistin g of motors o f three (3)
diffe re nt s izes was o rde red re l ea :;~;d by thi s Co urt to Petiti oner, after the la tte r posted a
Ma nil a Insurance Co ., Inc. Surety Bond in favo r of th e Bureau of C ustoms in the amount
of P6 I 2,538 .00.
514
DECISION-
CT A CASE NO. 6007
PAGE 4
On December 7, 2000, the case was submitted for decision based on the pleadings
Import Entry No. 19724-99, he merely relied on the ac,· ompanying Societe Generale de
Surveillance (SGS) - Clean Report of Findings (CRF) No. CHN 4600 I 7 (Annexes E and
F, Petition for Rev iew), hence, it will be a mi stake to accuse Petitioner of any
wrongdoing and the forfeiture of hi s importation . Further, he asseverates that SGS not
only ensures the inspected goods to conform to Philippine import regulations, it also
verifies if the quantity and quality of the goods conform to contractual specifications
fraud stating that there was no ev idence to show that he had any knowledge or intention
invoking the decision of the Supreme Court in th e case entitled Farolan vs. Court of
..
Tax Appeals and Bagong Buha)· :j;p!ding, 217 SCRA 298, asseverates th e following :
·"'. .
1) Where the importer(~ o n :-; i g nee pr~pared the import entry on the basis of
shippin~ doct!p1ent 'prpYide~ by j he forei gn SUJ pli er or shipper there is
good faith ancl .po frcl~IQ; · : , ·
'·"' :· .... ,,
. ·.
~ ~ .: ' I ~.
Moreover, Petitioner submits that the assailed dec ision of the Respond ents were not
s upported by suf'Jicient evidence that would warran( the forf'eiture of the subject
importat ion. l-Ie articulated that the actions of the Respondents were not in accordance
with Section 253 5 of the Tariff and Customs Code of the Phi I ippines (TCCP), in,ji-a.
\
Finally, Petitioner argued that since the matter in question involves the
findings/reports of the SGS as evidence by the SGS-CRF cited earlier, the case should
have been brought to the Bureau of Customs (BOC) - SGS Appeals Committee pursuant
to Customs Memorandum Order (CMO) Nos. 39-92 and 3-95 and should not have
proceeded as a se izu re case und er Section 2503 of the TCCP, in relation to Section 2530
516
DECISION-
CTA CASE NO . 6007
PAG E 6
m eas urement shall co ns titute a prima facie ev id ence of fraud penali zed under
Secti o n 2530 of thi s Code: Provided, further, That any mi sdecl ared ot·
und ecl a red imported articl es/item s found upon ex aminati on shall ipsa facto
be fo rfe ited in favo r o f th e Governm ent to be di sposed o f pursuant to the
prov isio ns of thi s Code.
( J) XXX
~ -·=;t:~·:~~
(3) On th e s trengtl1..() f.n fa lse dec la ration o r a ffid av it exec uted by
) '
(5) T hro ugh any oth e r pract ice o r dev ice co ntrary to law by m ea ns
of whi ch such arti c les was entered through a custo mhouse to the
prejudice of the government.
DEC ISION-
CTA CASE NO. 6007
PAGE 7
On the other hand, Respond ents maintain that there was prima facie evid ence of
fraud in the mi sclecl arati on and/o r und ervaluati on of the subj ect shipm ent. They
proc laimed th at it is undi sputed th at Petiti oner had dec lared the subj ect shipment as 2,700
ctns. of Industrial Suppli es and 2, 700 sets of Mini motor A04524 with rated output of
25 W, contrary to Respo ndents' examinati on and inventory whi ch showed that the
shi pment actuall y consisted of motors o f different sizes and wa ttages, i. e., 182W-I /4 HP,
375W-l /2 l-IP and 3/4 HP (Petiti on, Annex A, p. 2; Annex C, p. 2; Annex E) which is a
The Res pondents stressed that Petitioner's co ntenti on that there was no fraud since
it merely relied on the acco mpanying Societe Ge nerale de Surveillance - Clea n Report of
Findings (SGS-CRF ) is of no moment. They sa id th at the report itse lf states that the
"computed dut ies payab le are for reference purposes onl y" and "Final Assessment is for
the Philippine Bureau of Customs" pursuant to Customs Memorandum Order (CMO) No.
furth ermore, they arg ued th <\! ihe; citati on of the case o f Far·olan Jr. v. Court of
Appeals, 217 SCRA 290 119~~~ j~~ ~~.;~1ev~i1 t since the co nsignee therein made its entry
.. ! ; ~:\ ;·:·;: \. ··:~· ~:·_,.; "':' .
on the cjata prepared by Hs fore!~~~ ~;~ppl i c 1:~ or shippers. In thi s case, th ey said Petition~~ ·
~f • I:~ ~~ ':" '~ f~-~ : .·. .· ~ ,. • ~...
it ., ,(_~ :~j
"reli eq" on the report of the SGS. whiCh i ~ p1erely an agent of the Bureq4 ."b f C u stpt~(::;
. . .• ;
:·.:,..A:<~ :'<.- . · ·.. . :;,r:.~: ~~:~. ·:;;::.
Needless to state, it is uHim afely the co nsignee ' s ob li gat ion to pe rson al!.~ .· ... rify th .
'
importati on conforms to our customs laws. Thus. they arti cul ated that to uphold
Petiti oner's stance wo uld res ult in an absurd situati on wherein a mi sdeclared or
underva lued shipment co ul d be " legall y imported" through the simpl e expedi ent of taking
51 6
DEC ISION-
CTA CASE NO. 6007
PAGE 8
th e SGS-C RF at face value. lndeed. Secti o ns 25 03 and 2530 of th e T ari ff Code would be
C MO 3-95 cited by Petiti oner whi ch preclud es th e m from forfe iting the shipment
pursuant to Secti on 2503 when th ere is prima fac ie e' '. idence o f fraud penali zed under
Section 253 0(£) and (I) - 3, 4 and 5. They pro poun ded that the aforesaid CMOs m ere ly
re fe r to the procedure to be undertaken w hen th ere is a qu es ti on rega rdin g the value and
A rte r a c irc um spect stud y ol ~he . attendin g fac ts, th e di squi siti on o f the pa rti es, the
~ ..
·.•. ~· ~
appli cabl e laws, rul es and rc ~~i tm i.·~ )s, th e ~o urt find s fo r th e Res pond ents.
It is a n undi sp ute9 fac~ ·j ·,; ;~!W·~qse ~~ ~ar th at the importati on in ques ti on consistc~!
.. ~ ..
-~~ .. ~ - ~~·, __ .· __ -·:·.:.. ~ ; :~~:
o fmo ~o rs of di ffe rent sizes '1110 waH&ges, i.e., 182 W- 1/4 1-IP, 375 W- 1/2 li P a nd Jn ~ i··
.: .. :, . ~~ ' .'';: >... : : ·'.~ ;, '}.i . ~.: ~ ~ )
and not 2,700 c tns. of lndusfrial s uppli es and 2. 700 sets o f mini motui· AD 4 524 .,.:it'! .:
' ~-
rated output o f 25 W as declared by Petiti oner in the import e ntry. Thus, the re was indeed
an ap parent mi sdec lara ti on o f th e shi pment on th e part of Petiti o ner. T his co nsti tuted a
primafacie ev idence of infringe ment o f the prov is ions o f the Tariff and C ustoms Code,
519
DEC ISION-
CTA CASE NO. 6007
PA GE9
specificall y Secti on 2530, th ereo f, and prov ided suffic' ent bas is for th e se iz ure of the
subject importation.
lt should be stressed th at both parti es waived the ir rights to present evidence and
mere ly submitted the case for decision on th e bas is of the records a nd pleadings. As to
w ho has the burde n of proof in se iz ure or fo rfe iture proceedings is ex pli ci tl y a nswered by
Sec ti on 2535 of th e TCCP, whi ch provides that the same shall li e upon the claimant,
provided tha t the ex istence of probabl e ca use Jirst be shown before the filing of the
forfeiture proceedin gs. The term " probable cause", which has bee n held synonymous
with " reaso nab le cause", means less th an the ev idence which will justi fy co nd emnation.
It import s a seiz ure made und e r circumstances whi ch wa rrant suspicion (Sanchez vs.
Commissioner· of Customs, BTA Case No. 185, November 2, 1954, citing U.S. vs.
One Bag of Paradis e and Choura Feathers, N.Y., 365 F. 301, 167, CCA 473;
Associate Banking Corp. vs. Commissioner of Customs. ct. al., CTA Case No. 2448,
August 6, 1976; M etropolitan Garment Corp. vs. Ramon Farolan, CTA Case No .
• : -:: _:l
!
CTA Case No. 2823, February I"' ' 987). Sa id Sec tion 2535 of th e TCCP provides,
~ i .;
,.
th LI S: ,. '
. .
. '·"
SEC. 2535. Burrled' ·;:;'FP-roof In S~izure and/or FOJfeitit(·{!•.. In all
proceedings taken for
the,'se'l·zl.{i·~ aiicilor .forfeiture o f any vessel,. \ ~l1icle;
a irc ra ft , beast or arti c l e~' ~111der th e prov ision of the tariff and custo ms laws,
the bunlcn of proof shall lie upon the claimant: Prov ided , That probabl e
ca use sha ll be first shown for th e instituti o n of such proceedings and that
se iz ure and/or forfe iture was made und er the c ircu mstances and in the manner
clescri bed in the preced ing secti ons o f thi s Code (e mphas is Ours).
52 0
DEC ISION-
CT A CASE NO . 6007
PAGEIO
As discussed above there was probable cause thus, it is incumbent upon Petitioner
to p rove that hi s allegations are correct and th at the Respondents' asserti ons were wrong.
It is not am iss to mentio n that when an importer cha ll enges by legal steps the
correctness or the validity of the actions of the Com miss ioner of Customs, the question to
be decided is no t whether th e Co mmi ss ioner was wrong but w heth e r the importer was
seiz ure and fo rfe iture proceedings, th e burden of proof lies upon th e claimant (see Feede1·
International Line PTE., Ltd. vs. C ourt of Appeals, ct. al., 197 SCRA 843;
Commissione1· of Customs vs. Stat Ferry, 227 SCRA 317). The good faith of tax
assessors and the validity of their ac ti ons are presumed. They wi ll be presumed to have
taken into cons iderat ion all th e facts to whi ch their atte nti on was ca ll ed. No presumption
'.'>:~)~}~:
ca n be indulged th at pub li c oflicia!s
!:··
of th e state who have to do w ith the assessment of
;~~
..·... :,.
property for taxat ion w ill kn8~i ng l y v iol a te the duties imposed upon th e m by law (see
. :: ; .
..
Intc•:-p•·ovincial AutoJ~us ~~;
: . .
fOf·JS- C~ llectOJ· of Internal Revenue, 19 PHIL 290).
., ..
valid ity or w hi ch as slwwn }'rom the ~·ec~rds or the case, have the effe ct of null i: · lr
Petitione r' s ca use of actio n, if not controverted by adequate and compe tent ev idence.
Moreove r, in the recen t case e ntitl ed Com miss ion e1· of the Bureau of C ustoms vs.
5~1
DEC ISION-
CT A CASE NO. 6007
PAGE I I
11, 1999, the Co urt o f Appeals expli c itl y rul ed th at (I ) g, >Od fa ith canno t avo id forfe iture,
as fo rfe iture proceedin gs are in the nature o f proceedin gs in rem and , directed against the
res, and no t th e perso na, and (2) th e impo rt er ca nn o t simpl y s hift th e blam e o f the
e rron eous o r de fec ti ve decl arati o n in the impo rt entry unto its suppli er, ove r w hich our
co urts ha ve no jurisdi c ti o n.
Pe rtin ent po rti ons of said deci sion are quo ted below:
T hus it is that to legal i ~tJ:~nt s and purposes, the res pond ent has fa il ed to
o ve rco me th e prima fac ie :¢vide nce of kn owledge, or scinter, th at the
shipme nt in ques ti o n was fr~~d ule ntl y mi sdcc lared . N eedl ess to say, owing
to th e resp o nd ent's fa il ~1 r~ t{l:'·ove rthrow thi s pri na fac ie pres umpti o n, suc h
pres um ed or constru ed ~h()~ ~t.:dl,?e b c:\~ now atta ined a co nclusive o r j ure et de
1
. I ,, th . · .... ,
JUre c 1arac ter. ,· •; · <,...,;1:;·,: · .... ,· t
,,
.. ~\.~~: j~~~-~::. I
We do not thin k any di fferent co nc lu sio n o ught to be reached in th e case at ba,·: . ·
I
the circ um stances of thi s case are o n a ll lo urs w ith the above-c ited case deci ded by the
Final ly. this Court stressed that it is in total acqUiescence with Respondents'
contention that there is nothing in CMO 39-92 and CMO 3-95 which precludes the
Respondents from forfeiting the shipment pursuant to Section 2503 of the TCCP when
there is prima facie evidence of fraud penalized under Section 2530(f) and (1), 3, 4 and 5
Commiss ioner of Customs dated December 8, 1999, forfeiting the subject shipment in
In surance Co., Inc . Surety Bond in the amount of P612 ,538 .00, which was earlier posted
by Petitioner for the release of the said shipment is hereby ORDERED FORFEITED in
SO ORDERED.
~jQ.o~
ERNESTO D. ACOSTA
Presiding Judge
J~·7- t. I • ~
C~ HTI FI CATION
.~. ~ . ~ . '
r hereby certify that the above decision was reached after due consultation with the.
members of the Court of Tax Appeals in accordance with Section 13, Article VIII of the
Constitu ti on. / .
~&>· 0......-vL
ERNESTO D. A COST A
Presiding Judge
5~3