This document is a summary of a court case regarding the misdeclaration and forfeiture of goods imported by Bagong Buhay Trading.
1) Bagong Buhay Trading imported mosquito nets from abroad that were misdeclared in quantity and weight by foreign suppliers in the shipping documents. Based on this false information, Bagong Buhay also misdeclared the goods in their customs entry.
2) Upon reexamination, customs found discrepancies in the quantity and weight and reclassified the goods under a higher tariff leading. This resulted in additional duties owed. Customs also forfeited the goods, finding misdeclaration and fraud.
3) The court ruled that while there was misdeclaration, forfeiture
This document is a summary of a court case regarding the misdeclaration and forfeiture of goods imported by Bagong Buhay Trading.
1) Bagong Buhay Trading imported mosquito nets from abroad that were misdeclared in quantity and weight by foreign suppliers in the shipping documents. Based on this false information, Bagong Buhay also misdeclared the goods in their customs entry.
2) Upon reexamination, customs found discrepancies in the quantity and weight and reclassified the goods under a higher tariff leading. This resulted in additional duties owed. Customs also forfeited the goods, finding misdeclaration and fraud.
3) The court ruled that while there was misdeclaration, forfeiture
This document is a summary of a court case regarding the misdeclaration and forfeiture of goods imported by Bagong Buhay Trading.
1) Bagong Buhay Trading imported mosquito nets from abroad that were misdeclared in quantity and weight by foreign suppliers in the shipping documents. Based on this false information, Bagong Buhay also misdeclared the goods in their customs entry.
2) Upon reexamination, customs found discrepancies in the quantity and weight and reclassified the goods under a higher tariff leading. This resulted in additional duties owed. Customs also forfeited the goods, finding misdeclaration and fraud.
3) The court ruled that while there was misdeclaration, forfeiture
This document is a summary of a court case regarding the misdeclaration and forfeiture of goods imported by Bagong Buhay Trading.
1) Bagong Buhay Trading imported mosquito nets from abroad that were misdeclared in quantity and weight by foreign suppliers in the shipping documents. Based on this false information, Bagong Buhay also misdeclared the goods in their customs entry.
2) Upon reexamination, customs found discrepancies in the quantity and weight and reclassified the goods under a higher tariff leading. This resulted in additional duties owed. Customs also forfeited the goods, finding misdeclaration and fraud.
3) The court ruled that while there was misdeclaration, forfeiture
HON. RAMON J. FAROLAN, JR., in his capacity as o!!ission"r o# usto!s, petitioner, vs. O$R% OF %A& A''(AL) an* +AGONG +$HA, %RA-.NG, respondents. The Solicitor General for petitioner. Jorge G. Macapagal counsel for respondent. Aurea Aragon-Casiano for Bagong Buhay Trading.
ROM(RO, J.: This is a petition for review on certiorari which seeks to annul and set aside the decision of the Court of Tax Appeals dated December 27, 17! "CTA Case #o. 2!$% reversin& the decision of the Commissioner of Customs which affirmed the decision of the Collector of Customs. 1 The undisputed facts are as follows' (n )anuar* +$, 172, the vessel ,-, ./acific 0awk. with 1e&istr* #o. 17$ arrived at the /ort of 2anila carr*in&, amon& others, 3$ bales of screen net consi&ned to 4a&on& 4uha* Tradin& "4a&on& 4uha*%. ,aid importation was declared throu&h a customs broker under 5ntr* #o. 3671872 as 3$ bales of screen net of 7$$ rolls with a &ross wei&ht of 12,777 kilo&rams valued at 9+,77$.$$ and classified under Tariff 0eadin& #o. +.$684 of the Tariff and Customs Code 2 at +7: ad valorem. ,ince the customs examiner found the sub;ect shipment reflective of the declaration, 4a&on& 4uha* paid the duties and taxes due in the amount of /11,+7$.$$ which was paid throu&h the 4ank of Asia under (fficial 1eceipt #o. $!2737 dated <ebruar* 1, 172. Thereafter, the customs appraiser made a return of dut*. Actin& on the stren&th of an information that the shipment consisted of .mos=uito net. made of n*lon dutiable under Tariff 0eadin& #o. 62.$2 of the Tariff and Customs Code, the (ffice of the Collector of Customs ordered a re8examination of the shipment. A report on the re8examination revealed that the shipment consisted of 3$ bales of screen net, each bale containin& 2$ rolls or a total of 1,6$$ rolls. 3 1e8appraised, the shipment was valued at 9+7,76$.$$ or 91$.17 per *ard instead of 9.$77 per *ard as previousl* declared. <urthermore, the Collector of Customs determined the sub;ect shipment as made of s*nthetic "pol*eth*lene% woven fabric classifiable under Tariff 0eadin& #o. 71.$!84 at 1$$: ad valorem. Thus, 4a&on& 4uha* Tradin& was assessed /272,6$$.$$ as duties and taxes due on the shipment in =uestion. 4 ,ince the shipment was also misdeclared as to =uantit* and value, the Collector of Customs forfeited the sub;ect shipment in favor of the &overnment. / /rivate respondent then appealed the decision of the Collector of Customs b* filin& a petition for review with the Commissioner of Customs. (n #ovember 27, 172 the Commissioner affirmed the Collector of Customs. 0 /rivate respondent moved for reconsideration but the same was denied on )anuar* 22, 17+. 1 <rom the Commissioner of Customs, private respondent elevated his case before the Court of Tax Appeals. >pon review, the Court of Tax Appeals reversed the decision of the Commissioner of Customs. ?t ruled that the Commissioner erred in imputin& fraud upon private respondent because fraud is never presumed and thus concluded that the forfeiture of the articles in =uestion was not in accordance with law. 2oreover, the appellate court stated that the imported articles in =uestion should be classified as .pol*eth*lene plastic. at the rate of +7: ad valorem instead of .s*nthetic "pol*eth*lene% woven fabric. at the rate of 1$$: ad valorem based upon the results conducted b* the 4ureau of Customs @aborator*. Conse=uentl*, the Court of Tax Appeals ordered the release of the said article upon pa*ment of the correspondin& duties and taxes. "C.T.A. Case #o. 2!$%. 2 Thereafter, the Commissioner of Customs moved for reconsideration. (n #ovember 1, 177, the Court of Tax Appeals denied said motion for reconsideration. 9 (n Au&ust 2$, 176, private respondent filed a petition askin& for the release of the =uestioned &oods which this Court denied. After several motions for the earl* resolution of this case and for the release of &oods and in view of the fact that the &oods were bein& exposed to the natural elements, we ordered the release of the &oods on )une 2, 136. Conse=uentl*, on )ul* 26, 136, private respondent posted a cash bond of /1!,!!+.+6 to secure the release of 6! bales 10 out of the 3$ bales 11 ori&inall* delivered on )anuar* +$, 172. ,ixteen bales 12 remain missin&. /rivate respondent alle&es that of the 1!+,!7! *ards "6! bales% released to 4a&on& 4uha*, onl* 116,7$ *ards were in &ood condition and the 26,7$! *ards were in bad condition. Conse=uentl*, private respondent demands that the 4ureau of Customs be ordered to pa* for dama&es for the !+,$7$ *ards 13 it actuall* lost. 14 0ence, this petition, the issues bein&A a% whether or not the shipment in =uestion is sub;ect to forfeiture under ,ection 27+$82 subpara&raphs "+%, "!% and "7% of the Tariff and Customs CodeA b% whether or not the shipment in =uestion falls under Tariff 0eadin& #o. +.$684 "should be +.$284% of the Tariff and Customs Code sub;ect to ad valorem dut* of +7: instead of Tariff 0eadin& #o. 71.$!84 with ad valorem of 1$$: and c% whether or not the Collector of Customs ma* be held liable for the !+,$7$ *ards actuall* lost b* private respondent. ,ection 27+$, para&raph m, subpara&raphs "+%, "!% and "7% states' ,ec. 27+$. Property Su!ect to "orfeiture #nder Tariff and Customs $a%. B An* vehicle, vessel or aircraft, car&o, article and other ob;ects shall, under the followin& conditions be sub;ected to forfeiture' xxx xxx xxx m. An* article sou&ht to be imported or exported. xxx xxx xxx "+% (n the stren&th of a false declaration or affidavit or affidavit executed b* the owner, importer, exporter or consi&nee concernin& the importation of such articleA "!% (n the stren&th of a false invoice or other document executed b* the owner, importer, exporter or consi&nee concernin& the importation or exportation of such articleA and. "7% Throu&h any other practice or device contrary to la% b* means of which such articles was entered throu&h a custom8house to the pre;udice of &overnment. "5mphasis supplied%. /etitioner contends that there has been a misdeclaration as to the =uantit* in rolls of the shipment in =uestion, the undisputed fact bein& that the said shipment consisted of 1,6$$ rolls and not 7$$ rolls as declared in the import entr*. Ce a&ree with the contention of the petitioner. ?n declarin& the wei&ht of its shipment in an import entr*, throu&h its customs broker as 12,777 kilo&rams when in truth and in fact the actual wei&ht is 1+,6$$ kilo&rams, an apparent misdeclaration as to the wei&ht of the =uestioned &oods was committed b* private respondent. 0ad it not been for a re8examination and re8appraisal of the shipment b* the Collector of Customs which *ielded a difference of 32+ kilo&rams, the &overnment would have lost revenue derived from customs duties. Althou&h it is admitted that indeed there was a misdeclaration, such violation, however, does not warrant forfeiture for such act was not committed directl* b* the owner, importer, exporter or consi&nee as set forth in ,ection 27+$, para&raph m, subpara&raph "+%, and-or "!%. ?n defense of its position den*in& the commission of misdeclaration, private respondent contends that its import entr* was based solel* on the shippin& documents and that it had no knowled&e of an* flaw in the said documents at the time the entr* was filed. <or this reason, private respondent believes that if there was an* discrepanc* in the =uantit* of the &oods as declared and as examined, such discrepanc* should not be attributed to 4a&on& 4uha*. 1/ /rivate respondentDs ar&ument is persuasive. >nder ,ection 27+$, para&raph m, subpara&raphs "+% and "!%, the re=uisites for forfeiture are' "1% the wron&ful makin& b* the owner, importer, exporter or consi&nees of an* declaration or affidavit, or the wron&ful makin& or deliver* b* the same persons of an* invoice, letter or paper B all touchin& on the importation or exportation of merchandiseA and "2% that such declaration, affidavit, invoice, letter or paper is false. 10 ?n the case at bar, althou&h it cannot be denied that private respondent caused to be prepared throu&h its customs broker a false import entr* or declaration, it cannot be char&ed with the wron&ful makin& thereof because such entr* or declaration merel* restated faithfull* the data found in the correspondin& certificate of ori&in, 11 certificate of mana&er of the shipper, 12 the packin& lists 19 and the bill of ladin& 20 which were all prepared b* its suppliers abroad. ?f, at all, the wron&ful makin& or falsit* of the documents above8mentioned can onl* be attributed to 4a&on& 4uha*Ds forei&n suppliers or shippers. Cith re&ard to the second re=uirement on falsit*, it bears mentionin& that the evidence on record, specificall*, the decisions of the Collector of Customs and the Commissioner of Customs, do not reveal that the importer or consi&nee, 4a&on& 4uha* Tradin& had an* knowled&e of an* falsit* on the sub;ect importation. ,ince private respondentDs misdeclaration can be traced directl* to its forei&n suppliers, ,ection 27+$, para&raph m, subpara&raphs "+% and "!% cannot find application. Appl*in& subpara&raph "7%, fraud must be committed b* an importer-consi&nee to evade pa*ment of the duties due. 21 Ce support the stance of the Court of Tax Appeals that the Commissioner of Customs failed to show that fraud had been committed b* the private respondent. The fraud contemplated b* law must be actual and not constructive. ?t must be intentional fraud, consistin& of deception willfull* and deliberatel* done or resorted to in order to induce another to &ive up some ri&ht. 22 As explained earlier, the import entr* was prepared on the basis of the shippin& documents provided b* the forei&n supplier or shipper. 0ence, 4a&on& 4uha* Tradin& can be considered to have acted in &ood faith when it relied on these documents. /roceedin& now to the =uestion of the correct classification of the =uestioned shipments, petitioner contends that the same falls under Tariff 0eadin& #o. 71.$! bein& a .s*nthetic "pol*eth*lene% woven fabric.. (n the other hand, private respondent contends that these fall under Tariff 0eadin& #o. +.$6 "should be +.$2%, havin& been found to be made of pol*eth*lene plastic. 0eadin& #o. +.$2 of the Tariff and Customs Code provides' +.$2 B /ol*merisation and copol*merisation products "for example, pol*eth*lene, pol*tetrahaloeth*lene, pol*isobut*lene, pol*st*rene, pol*vin*l chloride, pol*vin*l acetate, pol*vin*l chloroacetate and other pol*vin*l derivatives, pol*acr*lic and pol*methacr*lic derivatives, coumaroneindene resins%. The principal products included in this headin& are' "1% Polymeri&ation products of ethylene or its sustitution derivatives, particularl* the halo&en derivatives. 5xamples of these are pol*eth*lene, pol*tetrafluro8eth*lene and pol*chlorotrifluro8eth*lene. Their characteristic is that the* are translucent, flexible and li&ht in wei&ht. The* are used lar&el* for insulatin& electric wire. 23 (n the other hand, Tariff 0eadin& #o. 71.$! provides' 71.$!. B Coven fabrics of man8made fibers "continuous% includin& woven fabrics of monofil or strip of headin& #o. 71.$1 or 71.$2. This headin& covers %oven farics "as described in /art E?F ECF of the General 5xplanator* #ote on ,ection H?% made of yarns of continuous man-made fiers, or of monofil or strip of headin& 71.$1 and 71.$2A it includes a ver* lar&e variet* of dress fabrics, linin&s, curtain materials, furnishin& fabrics, t*re fabrics, tent fabrics, parachute fabrics, etc. 24 "5mphasis supplied% To correctl* classif* the sub;ect importation, we need to refer to chemical anal*sis submitted before the Court of Tax Appeals. 2r. #orberto I. 2anuel, an Anal*tical Chemist of the 4ureau of Customs and an Assistant to the Chief of the Customs @aborator*, testified that a chemical test was conducted on the sample 2/ and .the result is that the attached sample submitted under 5ntr* #o. 3671 was found to be made %holly of Polyethylene plastic.. 20 A similar result conducted b* the Adamson >niversit* Testin& @aboratories provides as follows' The submitted sample, bein& insoluble in 1$: sodium carbonateA h*drochloric acid, &lacial acetic acid, toluene, acetone, formic acid, and nitric acid, does not belon& to the man8made fibers, i.e., cellulosic and al&inate ra*ons, pol* "vin*l chloride%, pol*acr*lonitrile, copol*mer or pol*ester silicones includin& Dolan, Dralon, (rlin, /A#, 1edon, Courtelle, etc., Tar*lene, DacronA ut it is a type of plastic not possessing' the properties of the man-made fiers. 21 "5mphasis supplied% Conse=uentl*, the Court of Tax Appeals, rel*in& on the laborator* findin&s of the 4ureau of Customs and Adamson >niversit* correctl* classified the =uestioned shipment as pol*eth*lene plastic taxable under Tariff 0eadin& #o. +.$2 instead of s*nthetic "pol*eth*lene% woven fabric under Tariff 0eadin& 71.$!, to wit' Chile it is true that the findin& and conclusion of the Collector of Customs with respect to classification of imported articles are presumptivel* correct, *et as matters that re=uire laborator* tests or anal*sis to arrive at the proper classification, the opinion of the Collector must *ield to the findin& of an expert whose opinion is based on such laborator* test or anal*sis unless such laborator* anal*sis is shown to be erroneous. And this is especiall* so in this case where the test and anal*sis were made in the laborator* of the 4ureau of Customs itself. ?t has not been shown wh* such laborator* findin& was disre&arded. There is no claim or pretense that an error was committed b* the laborator* technician. ,i&nificantl*, the said findin& of the Chief, Customs @aborator* finds support in the .15/(1T (< A#A@J,?,. submitted b* the Adamson >niversit* Testin& @aboratories, dated ,eptember 21, 166. 22 (n the third issue, we opine that the 4ureau of Customs cannot be held liable for actual dama&es that the private respondent sustained with re&ard to its &oods. (therwise, to permit private respondentDs claim to prosper would violate the doctrine of soverei&n immunit*. ,ince it demands that the Commissioner of Customs be ordered to pa* for actual dama&es it sustained, for which ultimatel* liabilit* will fall on the &overnment, it is obvious that this case has been converted technicall* into a suit a&ainst the state. 29 (n this point, the political doctrine that .the state ma* not be sued without its consent,. cate&oricall* applies. 30 As an unincorporated &overnment a&enc* without an* separate ;uridical personalit* of its own, the 4ureau of Customs en;o*s immunit* from suit. Alon& with the 4ureau of ?nternal 1evenue, it is invested with an inherent power of soverei&nt*, namel*, taxation. As an a&enc*, the 4ureau of Customs performs the &overnmental function of collectin& revenues which is definitel* not a proprietar* function. Thus, private respondentDs claim for dama&es a&ainst the Commissioner of Customs must fail. C0515<(15, the decision of the respondent Court of Tax Appeals is A<<?125D. The Collector of Customs is directed to expeditiousl* re8compute the customs duties appl*in& Tariff 0eadin& +.$2 at the rate of +7: ad valorem on the 1+,6$$ kilo&rams of pol*eth*lene plastic imported b* private respondent. ,( (1D515D.