Sec. 1204. Liability of Importer for Duties.

Unless relieved by laws or

regulations, the liability for duties, taxes, fees and other charges attaching on
importation constitutes a personal debt due from the importer to the
government which can be discharged only by payment in full of all duties, taxes,
fees and other charges legally accruing. It also constitutes a lien upon the
articles imported which may be enforced while such articles are in custody or
subject to the control of the government.
Pilipinas Shell v RP (BoC) (2008)
Facts:
- Shell was assigned to Tax Debit Memos and Tax Credit Certificates by
various entities.
o This assignment was approved by the BOI and the One Stop Shop
Inter-Agency Tax Credit Center.
o Some of these TCCs were used by Shell to pay for its taxes and
import duties for the period of 1997-8. The BoC accepted such
payment.
- 3 Nov. 1999: Subsequently, DOF Sec informed Shell that the TDMs and
TCCs were fraudulently issued. They had to be CANCELLED.
o He also asked that Shell pay the value of the cancelled TCCs.
- Shells Defense: We acted in good faith we followed the procedure laid
down by the one stop shop.
o BoC still demanded payment.
o 23 Dec 1999: Shell filed a formal protest, which the BoC did not act
upon.
o The question of legality of cancellation was raised to the CTA.
- 3 Apr 2002: BoC then filed a complaint for Collection with the RTC Manila.
o Fraudulent TCCs!
o Shells answer: RTC has no jurisdiction. The case of cancellation of
TCCs is still pending with the CTA. As such, assessment was not
final. And as per Yabes v Flojo, RTC only acquires jurisdiction when
the assessment becomes final and incontestable.
o RTC still ordered Shell to file an answer.
Issue: W/N RTC should have dismissed the collection case and transferred it to
the CTA
Held: No. Subject matter falls within the jurisdiction of the RTC. The filing of a
collection case was a proper remedy.
-

An assessment or liquidation by the BoC attains finality and conclusiveness

one year from the date of the final payment of duties except when:
o There was fraud.
o There is pending protest.
o The liquidation of import entry was merely tentative.
None of the exceptions apply to the case at bar.
Assessment in the case at bar had long become final and incontestable.
Pursuant to Yabes, BoC HAD a right to file a collection case.
o Legal Basis: Sec. 1204: liability for dutieson importation
constitutes a personal debt constitutes a lien upon the articles
imported which may be enforced while such articles are in the
custody of the government
o Import duties must be paid in full, fyi.

Since the BoC already released the goods, the lien over such was
extinguished.
o The only way BoC could enforce the payment was by filing a
collection case against Shell.

Intra-Strata Assurance Corp v RP (BoC) (2008)

Facts:
- 1974: Grand Textile imported various textile products from different
countries.
- These products were transferred to Customs Bonded Warehouse No. 462.
- The BoC computed its customs duties and to secure the payment of these
obligations pursuant to Sec. 1904 of the TCCP, IntraStrata and Philhome
each issued general warehousing bonds in favor of the BoC.
o Provision: Goods shall be withdrawn from the warehouse on
payment of legal customs duties.
- UH OH. WITHOUT PAYMENT, Grand Textile withdrew the imported goods
from storage.
- BoC demanded payment from (1) Grand Textile and (2) Intra-strata and
Philhome.
- All 3 failed to pay.
- RTC held (1) and (2) liable to pay. CA affirmed the decision.
Issue: W/N the withdrawal of the stored goods without notice to them as sureties
released them from any liability
Held: No. A surety is released from its obligation when there is a material
alteration of the contract in connection A surety is not released by a change in the
contract which does not have the effect of making its obligation more onerous. In
this case, the withdrawal by Grand Textile does not make the obligation more
onerous.
The lack of consent of Interstrata and Philhome in the withdrawal is a matter
between them and their Principal, Grand Textile. It is a matter outside the concern
of the government whose interest as creditor-obligee in the importation
transaction is the payment by the importer-obligor of the duties due before the
importation process is concluded.
OLD Sec. 1301. Persons Authorized to Make Import Entry. Imported
articles must be entered in the customhouse at the port of entry within fifteen
days from date of discharge of the last package from the vessel either (a) by the
importer, being holder of the bill of lading, (b) by any other holder of the bill of
lading in due course, (c) by a customs broker acting under authority from a holder
of the bill, or (d) by a person duly empowered to act as agent or attorney-in-fact
for such holder: Provided, That the Collector may grant an extension of not more
than fifteen days.
NEW Section 1301. Persons Authorized to Make Import Entry. - Imported articles
must be entered in the customhouse at the port of entry within thirty
(30) days, which shall not be extendible from date of discharge of the
last package from the vessel or aircraft either (a) by the importer, being
holder of the bill of lading, (b) by a duly licensed customs broker acting under
authority from a holder of the bill or (c) by a person duly empowered to act as
agent or attorney-in-fact for each holder: Provided, That where the entry is filed
by a party other than the importer, said importer shall himself be required to
declare under oath and under the penalties of falsification or perjury that the
declarations and statements contained in the entry are true and correct: Provided,
further, That such statements under oath shall constitute prima facie evidence of

knowledge and consent of the importer of violation against applicable provisions

of this Code when the importation is found to be unlawful. (Emphasis supplied)
Chevron v Commissioner of BoC (2008)
Facts:
- 1996: Chevron imported petroleum products covered by 8 bills of lading.
o Earliest March 8 1996 April 10 1996
- Shipments were unloaded from the carrying vessels onto Chevrons oil
tanks over a period 3 days from arrival.
- Import Entry Declarations (IEDs) were filed and 90% of the total customs
duties were paid. Filed March-April 1996.
- Import Entry and Internal Revenue Declarations were thereafter filed. Filed
May-June 1996.
- Importations were appraised ata duty rate of 3% as provided by the
Downstream Oil Deregulation Act effective April 16, 1996.
o Prior to such Act, rate of duty was 10%.
- June 10, 1999: Someone told the DOF Sec that Chevron (and shell) was
guilty of concealment, manipulation and scheming in the importation of
crude oil. The government was losing huge amounts of revenue.
- An investigation was initiated by the BoC.
- 1 Aug 2000: Chevron received a demand letter from the Collector of
Customs of Batangas
o Demanding payment for difference between the 10% and 3% tariff
rates on the shipments.
- Chevron objected. Its the 3%, not the 10%, that should be applied. Please
cancel the assessment for deficiency.
- The Inspection and Prosecution Division issued a finding that
o The import entries were filed beyond the 30-day non-extendible
period prescribed under Sec 1301 of the TCCP.
As such, the importations were considered abandoned in
favor of the government.
o Fraud was committed by Chevron in collusion with the former
District Collector.
- Because of the findings, the BoC once again sent a demand letter to
Chevron.
- Chevron then filed a petition for review in the CTA first division asking for
reversal.
o Ruling: There was fraud. Prescription was not applicable. Chevron
did not abandon shipments. 10% was the prevailing rate at the time
of thei removal of the goods from the custody of the BoC.
- CTA En Banc Ruling: entry means filing of IEIRDs. These were filed
beyond the 30-day period and therefore, deemed abandoned. Theres
fraud intent to evade higher rate.
ISSUE: W/N entry under Sec. 1301 refers to IED or IEIRD
HELD: It refers to BOTH. Strong issues of public policy militate against Chevrons
interpretation that it is only the IED that matters Chevron has no legal basis.
Duties and taxes must be paid in full before the BOC can allow the release of the
imported articles from its custody. Both must be filed within 30 days from date of
discharge of last package from the vessel/aircraft. No more extensions.
Was there fraud? Yes, it was established. Chevron took its time in filing the IEIRD
to avail of the lower rate of duty. They knew that it was during that time that the
Congress was deliberating over the lowering of the duty on oil products. They
colluded with the District Collector who accepted the IEIRDs even if filed late.

What does entry really mean?

(1) docs filed at customs house
(2) submission and acceptance of docs
(3) procedure of passing goods through customs house
What does entered mean?
Sec. 205 Imported articles shall be deemed entered in the Phils for consumption
when the specified entry form is properly filed and accepted.
What operative act constitutes entry of imported articles at the port of entry?
The filing and acceptance of the specified entry form together with other docs.
What is the purpose of the IED?
Basis for payment of advance duties on importations. This is the provisional entry.
What is the purpose of IEIRD?
Evidences the final payment of duties and taxes. This is considered the regular
consumption entry.
Specifically: (1) ascertain value of imported articles (2) collect correct and final
amount of customs duties and (3) avoid smuggling
It is the IEIRD which accompanies the final payment.
Effect of filing late IEIRD?
Products are deemed abandoned in favor of the government.
Sec. 1603. Finality of Liquidation. When articles have been entered and
passed free of duty or final adjustment of duties made, with subsequent delivery,
such entry and passage free of duty or settlement of duties will, after the
expiration of one year, from the date of the final payment of duties, in the
absence of fraud or protest, be final and conclusive upon all parties, unless the
liquidation of the import entry was merely tentative.
Commissioner of Customs v PhilPhos (2004)
Facts:
-

Philphos is engaged in the manufacture and prod of fertilizers for domestic

and international distribution.
o Based in Leyte Industrial Development Estate
o Registered with the Philippine Export Zone Authority
To make fertilizer, Philphos has to purchase fuel for its machineries.
o Their fuel was secured domestically from local distributors
Petron.
Where does Petron get their fuel?
o Petron imports. Petron pays the duties the BOC and ad valorem and
specific taxes to the BIR.
Where is the fuel brought?
o To the Leyte Industrial Development Estate remember its
registered with PEZA
Does Philphos pay for anything other than the purchase price of the
petroleum products?
o Yes, Petron bills them for the customs duties imposed built into
the selling price.
From Oct 1991- June 1992, Philphos made several purchases for petroleum
products used directly or indirectly in the manufacture of the fertilizer.

o Philphose indirectly paid customs duties.

As such, Philphos wanted a refund for the duties it paid during that period.
o Basis: Since the base of Philiphos is inside a tax export processing
zone, it is entitled to certain tax incentives.
o Claim denied by the BoC. CTA allowed the claim and ordered
issuance of a TCC in Philphos favor. The CA affirmed the CTAs
decision.
Basis of CTA and CA: Sec. 17(1) EPZA/PEZA Law.
Commissioners argument: since subject products, made by
seller Petron,m had already been finally terminated all
future claims for refund are thus barred. Sec. 18(1) should
apply.
To set the record straight, there is no dispute as to the amount only the
LEGAL BASIS FOR EXEMPTION.

Issue: what is the basis of Philphos exemption from customs duties, if any?
Held: Sec. 17(1)
SEC. 17. Tax Treatment of Merchandise in the Zone. (1) Except as otherwise
provided in this Decree, foreign and domestic merchandise, raw materials,
supplies, articles, equipment, machineries, spare parts and wares of
every description, except those prohibited by law, brought into the Zone to be
sold, stored, broken up, repacked, assembled, installed, sorted, cleaned, graded,
or otherwise processed, manipulated, manufactured, mixed with foreign or
domestic merchandise or used whether directly or indirectly in such
activity, shall not be subject to customs and internal revenue laws and
regulations nor to local tax ordinances, the following provisions of law to
the contrary notwithstanding. (emphasis supplied)
This covers petroleum supplies used, directly or indirectly, by Philphos to facilitate
its production of fertilizers, subject to the minimal requirement that these supplies
are brought into the zone. The supplies are not subject to customs and internal
revenue laws and regulations nor to local tax ordinances.
BoC Commissioners arguments must fail especially the point that importation
was deemed terminated and that termination barred any future claim.
Even our recent ruling in Nestle Philippines, Inc. v. Court of Appeals, to the effect
that the claim for refund of customs duties in protestable cases may be foreclosed
by the failure to file a written protest, is not apropos in the case at bar because
petitioner therein was not a duly registered enterprise under the EPZA Law and
thus not entitled to the exemptions therein
What is the prescriptive period which a duly registered enterprise should observe
in applying for a refund when registered under EPZA?
Dont apply solutio indebiti Civil Code provisions.

Sec. 1708. Claim for Refund and Mode of Payment. All claims for refund of
duties shall be made in writing, and forwarded to the Collector to whom such
duties are paid, who upon receipt of such claim shall verify the same by the
records of his office, and if found to be correct and in accordance with law, shall
certify the same to the Commissioner with his recommendation together with all
necessary papers and documents. Upon receipt by the Commissioner of such
certified claim he shall cause the same to be paid if found correct.

Nestle Phils v CA (2001)

Facts
- Nestle is engaged in the importation of milk and milk products for
processing, distribution and sale in the Phils.
- Jul Nov 1984: 16 separate importations of milk and milk products from
different countries.
- Nestle was assessed customs duties and advance sales taxes by the
Collector of Customs of Manila (separately) on the basis of the published
Home Consumption Value indicated in the BoC revision orders.
o Nestle paid by filed a protest before the Manila Customs Collector
Alleged that the Collector applied the higher HCV in
determining the duties.
- 14 Oct 1986: Nestle formally filed a claim for refund of allegedly overpaid
advance sales taxes of the 16 importations. This was filed with the BIR.
- 15 Oct 1986 (note: still within 2 year prescriptive period under the NIRC for
claiming a refund): Nestle filed a Petition for Review with the CTA.
o Ruled in favor of Nestle. Ordered BIR to refund.
- What about the alleged overpaid customs duties? Their protest cases were
still left with the Manila Customs Collector.
o The latter never rendered a decision, even after almost 6 years
since Nestle paid under protest.
o Nestle immediately filed a petition for review with the CTA, even
without a ruling from the Collector and Customs Commissioner, just
to keep it from going stale.
o This was dismissed for want of jurisdiction. MR also denied.
o Nestle appealed to the CA (Rule 45, Rules of Court)
CA Ruling: CTAs jurisdiction is not concurrent with the
appellate jurisdiction of the Commissioner of Customs since
no ruling yet. Neither does Nestle fall into any of the
recognized exceptions.
- Nestle said:
o Refunds are based on solution indebiti that prescribes in 6 years.
Pendency of its protest cases before the Manila Customs
Collector did not interrupt the running of the prescriptive
period under the aforesaid provision of law.
o Overpayment of customs duties had been duly established and
resolved with finality when the CTA ruled on the advance sales
taxes.
AST were computed using wrong ACV.
These are the taxes imposed on the same 16 milk
importations.
Issue: W/N claim for refund was properly made
Held: No. 1708 clearly states that all claims for refund of duties shall be made in
writing and forwarded to the Collector to whom such duties are paid, who, upon
receipt of such claim, shall verify the same by the records of his Office. If the
claim is found correct and in accordance with law, the Collector shall certify the
same to the Commissioner with his recommendation together with all necessary
papers and docs.
"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. Any claim, for refund of customs duties, therefore,
take the nature of tax exemptions that must be construed strictissimi juris against

the claimants and liberal]y in favor of the taxing authority. This power of taxation
being a high prerogative of sovereignty, its relinquishment is never presumed.
Any reduction or diminution thereof with respect to its mode or its rate must be
strictly construed, and the same must be couched in clear and unmistakable
terms in order that it may be applied.
Thus, any outright award for the refund of allegedly overpaid customs duties in
favor of petitioner on its subject sixteen (16) importations is not favored in this
jurisdiction unless there is a direct and clear finding thereon. The fact alone that
the tax court, in C.T.A Case No. 4114, has awarded in favor of the petitioner the
refund of overpaid Advance Sales Tax involving the same sixteen (16)
importations does not in any way excuse the petitioner from proving its claims for
refund of alleged over payment of customs duties. We have scrutinized the
decision rendered by the tax court C.T.A. Case No. 4114 and found no clear
indication therein that the tax court has ruled on petitioner's claims for alleged
overpayment of customs duties.
In the present case, there is no factual showing that the collection of the alleged
overpaid customs duties was more than what is required of the petitioner when it
made the aforesaid separate importations. There is no factual finding yet by the
government agency concerned that petitioner is indeed entitled to its claim of
overpayment and, if true, for how much it is entitled. It bears stress that in
determining whether or not petitioner is entitled to refund of alleged overpayment
of customs duties, it is necessary to determine exactly how much the Government
is entitled to collect as customs duties on the importations. Thus, it would only be
just and fair that the petitioner-taxpayer and the Government alike be given equal
opportunities to avail of the remedies under the law to contest or defeat each
other's claim and to determine all matters of dispute between them in one single
case.19 If the State expects its taxpayers to observe fairness and honesty in
paying their taxes, so must it apply the same standard against itself in refunding
excess payments, if truly proven, of such taxes. Indeed, the State must lead by its
own example of honor, dignity and uprightness.
Sec. 1801. Abandonment, Kinds and Effect of Abandonment is express
when it is made direct to the Collector by the interested party in writing, and it is
implied when, from the action or omission of the interested party, an intention to
abandon can be clearly inferred. The failure of any interested party to file the
import entry within fifteen days or any extension thereof from the discharge of the
vessel or aircraft, shall be implied abandonment. An implied abandonment shall
not be effective until the article is declared by the Collector to have been
abandoned after notice thereof is given to the interested party as in seizure
cases.
Any person who abandons an imported article renounces all his interests and
property rights therein.
RV Marzan Freight v CA (2004)
Facts:
- RV Marzan Freight owned and operated a customs-bonded warehouse
located at the Bachrach Corp.
o This is where they accepted all forms of goods and merchandise for
storage and safekeeping.
- Philfire issued an insurance policy in favor of RV Marzan covering the (1)
warehouse and (2) stocks in trade of every kind and description usual to
the warehouse operations of the Assured and other interest that may
appear while contained in the Bachrach Bldg.
- 12 April 1989: rawmats consigned to the Shielas Mfg (garment biz) arrived
in the Phils from Taiwan.

The vessel used to ship it was owned by Sea-Land Service

The rawmats were supplied by Tricon Enterprises.
Tax treatment: ordinary import taxes
Not immediately released to Shielas Mfg.
Shielas Mfg failed to file requisite import entry and failed to claim
the cargo.
24 July 1989: Sea-Land authorized RV Marzan to take delivery of the
container of rawmats consigned to Shielas for stripping and safekeeping.
The Intl Container Terminal Services requested BoC for authority to clear
storage areas of cargoes which have been abandoned by their owners or
seized by the BoC.
o This included the cargo of Shielas Mfg.
The District Collector issued a notice to Shielas re: the various overstaying
cargo.
o 15 days from notice to file entry of the cargoes without prejudice to
the right of the consignees to redeem articles pursuant to 1801 of
TCCP within prescribed period therein.
o If no entry filed, cargoes would be deemed abandoned and sold at
public auction.
o Notice was posted on the Bulletin Board but no separate notice sent
to Shielas reason: address unkwnn.
Memo was issued by the BOC informing the Chief for Auction and Cargo
Disposal Division that the declaration of abandonment in the aforestated
proceedings had become f & e.
o Cargoes should be inventoried and sold at public auction.
BUT BEFORE AUCTION COULD BE ACCOMPLISHED, THE WAREHOUSE
CONTIANING SHIPMENT WAS BURNED!!!!!
o Goodbye rawmats !
o Philfire paid Php12M.
19 Mar 1991: Shielas sent a letter to RV Marzan demanding payment of
the value of the goods.
o RV Marzan rejected demands.
o Petitioner executed a Release of Claim and Hold Harmless
Undertaking.
After more than 2 years from arrival of the cargo in the Phils, Shielas filed
a complaint for damages before the RTC Pasig against RV Marzan. They
wanted RV Marzan and Philfireto pay for the avalue of the goods.
o Goods were stored in RV Marzans warehouse due to problems it
(RV Marzan) encountered with BoC
o Goods were stored in the bonded warehouse of RV Marzan
o Shielas demanded that the goods be released but RV Marzan
refused
RV Marzans defense:
o No privity of contract between them and Shielas.
o Shielas not a real party in interest.
o Good were received from the BoC under an AO covering forfeited
and abandoned cargoes.
o Before the fire, Shielas violated the TCCP and failed to pay the
corresponding taxes.
o Government owned the cargo, not shielas.
o Fire is a fortuitous event.
Philfires defense no contractual obligation to Shielas.
RTC ruling: RV marzan solely liable.
o
o
o
o
o

ISSUE: W/N RTC had jurisdiction to review and declare ineffective the
declaration of the District Collector of Customs in Abandonment Proceedings

that the subject shipment was abandoned cargo and that government became
the owner thereof.
HELD: Yes. The action of Shielas Mfg was one of collection of value of cargo
gutted by fire while under the custody of RV Marzan, in prep for sale at public
auction by BoC. The core issue re: who owned the cargo was indicated in the
pleadings.
- Allegations in the pleadings determine the jurisdiction.
- Character of relief sought, irrespective of w/n plaintiff is entitled to recover
upon all or some of the claims accorded therein.
ISSUE: W/N goods were already abandoned that at the time of the fire, Shielas
Mfg was no longer the owner of said goods.
Held: Sec. 1801 states that abandonment is implied when, from the action or
omission of the interested party to file the import entry within 5 days or an
extension thereof from the discharge of the vessel or aircraft. If entry has been
filed, goods are deemed abandoned if interested party fails to file claim within 5
days thereafter or extension of not more than 5 days. If not complied with, the
party is deemed to have renounced all his interests and property rights.
SEC. 1802. Abandonment of Imported Articles.- The owner or importer of any
articles may, within ten days after filing of the import entry, abandon to the
Government all or a part of the articles included in an invoice, and, thereupon, he
shall be relieved from the payment of duties, taxes and all other charges and
expenses due thereon: Provided, That the portion so abandoned is not less than
ten per cent of the total invoice and is not less than one package, except in cases
of articles imported for personal or family use. The articles so abandoned shall be
delivered by the owner or importer at such place within the port of arrival as the
Collector shall designate, and upon his failure to so comply, the owner or importer
shall be liable for all expenses that may be incurred in connection with the
disposition of the articles.
Abandoned articles shall be subject to sale under conditions provided by Sec.
2601 TCCP.
This declaration of abandoned proceedings is found by the Court to be ineffective.
Under the law, notice of the proceedings of abandonment was not given to the
consignee or the plaintiff herein or his agent. The consignee in this case being
known, should have been notified of the abandonment of his property in favor of
the government and that he should have been given a chance at a public hearing
to present evidence and to be heard with respect to the cargo subject of
abandonment. This is part of due process.

Sec. 2301. Warrant for Detention of Property-Cash Bond. Upon making

any seizure, the Collector 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 Collector shall, with the approval of the Commissioner of
Customs, 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 and/or
any fine, expenses and costs which may be adjudged in the case: Provided, That
such importation shall not be released under any bond when there is a prima facie
evidence of fraud in the importation of article: Provided, further, That articles the
importation of which is prohibited by law shall not be released under any
circumstance whatsoever: 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.
Asian Terminals v Bautista-Ricafort (2006)
Facts:
- RA 8506 took effect on Feb 22, 1998:
o Sec. 1. Unlawful for any person to import, cause the importation of,
register, cause the registration of, use or operate any vehicle with
its steering wheel right hand side thereof xxx
- Tabuelog et al are duly licensed importers of vehicles.
- They imported 72 2nd-hand right-hand drive buses from Japan.
o Manila District Collector impounded the vehicles and ordered them
stored at the warehouse of Asian Terminals.
Asian Terminals is a customs-bonded warehouse under the
custody of the Aviation and Cargo Regional Division.
o The same collector also issued Warrants of Distraint against the
shipment. He set the sale at public auction on 10 Sep 1998.
- On Oct 28, 1998. DOJ Sec issued an Opinion stating that the shipments
loaded and exported at the port of origin before 22 Feb 1998 were not
covered by RA 8506 UNLESS loaded and imported after said date.
- The importers thereafter filed a complaint with RTC Paranaque for replevin
o Asian Terminals: importation of right hand drive vehicles are not
prohibited provided that conversion kits are included.
o RTC granted writ of replevin on a Php12m bond
- Chief of Customs Police and other customs police prevented sheriff from
taking custody of the vehicles.
o Why? District Collector of Customs had jurisdiction over the
vehicles.
- Eventually, District Collector agreed to transfer custody of the vehicles to
the RTC on the condition that the required taxes, dues and other charges
be paid. Approved by commissioner.
o The importers filed an Omnibus Motion seeking reconsideration of
the rtC order granting Asian Terminals plea for writ of replevin.
o ATI filed a 3rd party claim over the shipment alleging that it had a
lien over the vehicles.
- CA rendered judgment: RTC has no juris over complaint filed by the
Importers. The Collector sitting in seizure and forfeiture proceedings had
the exclusive juris to hear and determine all questions relating on the
seizure and forfeiture of dutiable goods.
o RTC cant review, CTA can.
ISSUE: W/N trial court acted in accordance with the TCCP
HELD: yes!
- Sec 602: TCC provides that BoC shall exercise exclusive juris over seized
and forfeited cars.
o BoC shall supervise and control customs law and all other laws, etc,
import and export cargoes
- Sec 2301: Collector is empowered to make a seizure of cargoes and issue a
receipt for detention thereof.
o Upon seizure: Collector shall issue a warrant for detention.
o If owner/importer wants it released - it has to be for legitimate use
and a cash bond must be filed.
- Sec 2350 What kind of property can be subject of forfeiture?

The cars in the case at bar fall under any article the importation or
exportation of which is effected or attempted contrary to law or any
article or prohibited importation or exportation, and all other
articles which in the opinion of the Collector have been used, are,
were entered to be used as instruments in the importation of
exportation of the former.
Jao Ruling: RTC has no competence to pass upon validity or regularity of
seizure and forfeiture proceedings conducted by the BoC.
o Collector of Customs has exclusive juris to hear and determine all
questions touching on the seizure and forfeiture of dutiable goods.
o RTC are precluded from assuming cognizance over such matters,
even through petitions of certiorari, prohibition, mandamus
Case at bar: Collector had already seized the vehicles and set sale at
public auction.
o RTC should have dismissed the petition for replevin at the outset.
o By granting the plea of the importers for the seizure of vehicles and
the transfer of custody to court
o

It bears stressing that the forfeiture of seized goods in the Bureau of Customs is a
proceeding against the goods and not against the owner. It 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. In 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.
In fine, the initial orders of the RTC granting the issuance of the writ of replevin
and its implementation are void. While it is true that the District Collector of
Customs allowed the release of the vehicles and the transfer thereof to the
custody of the RTC upon the payment by the private respondents of the required
taxes, duties and charges, he did not thereby lose jurisdiction over the vehicles;
neither did it vest jurisdiction on the RTC to take cognizance of and assume
jurisdiction over the petition for replevin. As very well explained by the Office of
the Solicitor General, the District Collector of Customs agreed to transfer the
vehicles to the custody of the RTC since the latter had ordered the arrest of those
who would obstruct the implementation of the writ. The District Collector of
Customs had yet to resolve whether to order the vehicles forfeited in favor of the
government, in light of the opinion of the Secretary of Justice that, under RA No.
8506, the importation was illegal.

Commissioner of BoC v CTA (2009)

Facts
- Las Islas Filipinas Food owned a warehouse catering to food manufacturers.
o Condition for its establishment: import allocation from the Sugar
Regulatory Administration every time it imported sugar for its
clients.
- PPOC, a Thai company, appointed Las Islas as its exclusive offshore
trading, storage and transfer facility in the Phils for its local and foreign
transshipment operations.
o Ten 20-foot containers of refined sugar to Las Islas.
- 24 April 2004: PPOCs sugar arrived in Manila.
o Las islas failed to present an import allocation from the SRA
shipment became subject to an Alert Order.
- July 2004: a decree of abandonment was issued due to Las Islas failure to

file an import entry.

Collector of Customs issued a warrant of seizure and detention in view of
the SRAs advice that no import allocation had been granted to Las Islas.
Las Islas and PPOC moved to quash the decree of abandonment
o Motion Denied filed outta time.
After reviewing evidence, BoC Commish found that Las Islas and PPOC
were not informed of the abandonment proceedings.
o 4 Feb 2005: Commish set aside decree of abandonment.
o Commish ordered institution of proceedings for seizure and
forfeiture.
RP instituted proceedings for seizure and forfeiture of the sugar
importation.
o Reason: instituted proceedings for seizure and forfeiture of the
sugar.
Las Islas response: the sugar was merely transshipped while PPOC was
looking for a buyer in the intl market. No import allocation necessary.
Collectors Held: because LIFFC did not secure an import allocation,
shipment was an illegal importation. Sugar forfeited in favor of govt!
o Commish affirmed!
Las Islas and PPOC appealed to the CTA contending that Commish erred.
Import alloc from SRA is really unnecessary!!!
Las Islas then filed a motion to release cargo for exportation upon filing of
Surety Bond.
o Commish opposed Sec. 2301 such importation shall not be
released under any bond when there is prima facie evidence of
fraud in the importation of the article
We cant release the sugar cos Las Islas had no import
allocation from las Islas prima facie evidence of fraud!
Subsequent reso: CTA granted motion and ordered release of shipment
subject to Las Islas filing of a continuing surety bond.
o Las islas was ordered to comply within 10 days
o BUT UH OH release was held in abeyance for months because las
islas and ppoc failed to comply.
Commish still sought annulment of the resos.

ISSUE: W/N CTA committed gad when it disregarded Sec. 2301 and ordered
release of Las Islas shipment of refined sugar.
HELD: Yes.
Section 2301 of the TCCP states that seized articles may not be released under
bond if there is prima facie evidence of fraud in their importation. Fraud is a
"generic term embracing all multifarious means which human ingenuity can
devise and which are resorted to by one individual to secure an advantage and
includes all surprise, trick, cunning, dissembling and any unfair way by which
another is cheated." Since fraud is a state of mind, its presence can only be
determined by examining the attendant circumstances.
Under Section 1202 of the TCCP, importation takes place when merchandise is
brought into the customs territory of the Philippines with the intention of
unloading the same at port.
An exception to this rule is transit cargo entered for immediate exportation.
None of the requisites above was present in this case. While respondents insist
that the shipment was sent to the Philippines only for temporary storage and
warehousing, the bill of lading clearly denominated "South Manila, Philippines" as
the port of discharge. This not only negated any intent to export but also

contradicted LIFFCs representation. Moreover, the shipment was unloaded from

the carrying vessel for the purpose of storing the same at LIFFCs warehouse.
Importation therefore took place and the only logical conclusion is that the refined
sugar was truly intended for domestic consumption.
Furthermore, while respondents insisted that an import allocation was
unnecessary, they filed an application, albeit belatedly, in the SRA for the
shipment of refined sugar. Respondents web of conflicting statements and
actuations undoubtedly proves bad faith, if not outright fraud.
All things considered, pursuant to Section 2301 of the TCCP, the shipment of
refined sugar should not be released under bond.
Sec. 2308. Protest and Payment upon Protest in Civil Matters. When a
ruling or decision of the Collector is made whereby liability for duties, fees, or
other money charge is determined, except the fixing of fines in seizure cases, the
party adversely affected may protest such ruling or decision by presenting to the
Collector at the time when payment of the amount claimed to be due the
Government is made, or within thirty days thereafter, a written protest setting
forth his objections to the ruling or decision in question, together with the reasons
therefor. No protest shall be considered unless payment of the amount due after
final liquidation has first been made.
Sec. 2309. Protest Exclusive Remedy in Protestable Case. In all cases
subject to protest, the interested party who desires to have the action of the
Collector reviewed, shall make a protest, otherwise, the action of the Collector
shall be final and conclusive against him, except as to matters correctible for
manifest error in the manner prescribed in section one thousand seven hundred
and seven hereof.
CJH Devt v BIR (2008)
Facts
-

Proc 420 issued by FVR proclaimed that a portion of Camp John Hay would
be treated as a Special Economic Zone.
o Sec. 3 Same incentives as Subic SEZ like
Exemption from payment of local and national for biz inside
the SEZ
Operation of SEZ as a special customs territory providing for
tax and duty free imports of rawmats, capital and equpt
BIR issued RR 12-97.
BoC issued Customs AO 2-98.
Sec. 3 wad declared unconsti but other rules were to be implemented.
o Became final when Court en banc denied the MR through a
resolution dated 29 Mar 05
While MR was pending, the OCT of Baguio sent a demand letter stating
that since Sec. 3 is null and void, please settle rpt on real estate.
BoC also demanded duties and taxes on imports made by CJH from 1998
2004.
CJH questioned the retroactive application by the VOC. Claimed that
assessment was null and void because it violated the non-retro principle
under TCCP

In an Order dated 28 June 2005, the RTC dropped the City of Baguio as a party to
the case. The remaining parties were required to submit their respective
memoranda. On 14 October 2005, the RTC rendered its assailed order. It held that
the decision in G.R. No. 119775 applies retroactively because the tax exemption
granted by Proclamation No. 420 is null and void from the beginning. The RTC also

ruled that the petition for declaratory relief is not the appropriate remedy. A
judgment of the court cannot be the proper subject of a petition for declaratory
relief; the enumeration in Rule 64 is exclusive. Moreover, the RTC held that
Commonwealth Act No. 55 (CA No. 55) which proscribes the use of declaratory
relief in cases where a taxpayer questions his tax liability is still in force and
effect.
First: is the remedy of Declaratory Relief proper?
CA 55 has not been repealed its still in effect. Plus the proper s/m of a DR is a
deed, will, contract, other written instrument or construction of a statute or
ordinance.
- Camp John Hay hinges its petition on the demand letter or assessment
sent to it by the BoC but the demand letter is not really the s/m of the
petition.
Issue: w/n decision in GR 119776 has a retro effect.
Held: NO. court decisions are not proper court subject matter.
Commish v Oilink
Facts
-

1991 1994: URC imported oil products into the country.

1996: Oilink was incorporated for dealing with oil and gas and their
refinements and by-products at wholesale and retail of petroleum
URC and Oilink had interlocking directors when Oilink started its business.
To expedite transfer of the operators name for the Customs bonded
Warehouse, then operated by URC, URCs VP and GM sent a letter to
manifest that URC and Oilink had the same board of directors and that
oilink was 100% owned by URC
Manila District Collector formally demanded payment for taxes and duties
on its oil imports. Another demand for VAT, special duties, excise taxes.
URC challenged the inconsistencies of the demands.
Commish directed that URC pay = special duties, VAT, Excise Taxes that it
had failed to pay upon the release of the 17 shipments.

Sec. 2402. Review by Court of Tax Appeals. The party aggrieved by a ruling
of the Commissioner in any matter brought before him upon protest or by his
action or ruling in any case of seizure may appeal to the Court of Tax Appeals, in
the manner and within the period prescribed by law and regulations.
Unless an appeal is made to the Court of Tax Appeals in the manner and within
the period prescribed by laws and regulations, the action or ruling of the
Commissioner shall be final and conclusive.
Pilipinas Shell v COC (2009)
Facts
-

1997-1998: Shell settled its liabilities for cutoms using TCCs transferred to
it by several BOi-registered companies.
Transfers of said TCCs to shell were processed by the transfeors BOI refd
companies and were eventually approved by the one stop shop inter
agency tax credit drawback center
o DOF, BIR, BOC, BOI
TCCs were discovered to be fraudulently secured by the original grantees
(not shell) so they had to be cancelled.
Centers Nov 3 letter: informed shel it was cancelling the TCC

Shells Nov3 letter (ooh same day Center didnt know): reasons why it
shouldnt be cancelled.
o Center did not act on this. Instead they sent another letter to Shell
requiring it to replace the amount equivalent to the amount of the
cancelled TCCs
o A lot of back and forth.
- 3 years later: atty Valera deputy commissioner for revenue collections
monitoring group formally demanded from shell payment of the amounts
corresponding to the listed TCCs that the center had previously cancelled.
o Signed only found by atty Valera
- Shell eventually filed with the CTA a petition for review questioning the
BoC Collection efforts for lack of legal and factual basis
o Commish filed MTD shell filed beyond 30-day period
- CTA ruled in favor of Shell
o Collection letters were only signed by Atty. Valera not the Commish
- We resolve to DENY Shells petition; the present case does not involve a
tax protest case within the jurisdiction of the CTA to resolve.
The parties argue over which act serves as the decision of the
respondent that, under the law, can be the subject of an appeal before the CTA,
and from which act the 30-day period to appeal shall be reckoned. Shell insists it
should be the filing of the collection suits as this was indicative of the finality of
the respondents action. The respondent, on the other hand, claims, it should be
the earlier act of sending the collection letters where the respondent finally
indicated his resolve to collect the duties due and demandable from Shell.
Section 7 of RA No. 1125, as amended, states:

Sec. 7. Jurisdiction. The CTA shall exercise: (a)

jurisdiction to review by appeal xxx;

Exclusive appellate

xxx xxx xxx

4. Decisions of the Commissioner of Customs in cases involving
liability for customs duties, fees or other money charges, seizure,
detention, or release or property affected, fines, forfeitures or other
penalties in relation thereto, or other matters arising under the Customs
Law or other laws administered by the Bureau of Customs;
These decisions of the respondent involving customs duties specifically refer to
his decisions on administrative tax protest cases, as stated in Section 2402 of the
Tariff and Customs Code of the Philippines (TCCP):
Section 2402. Review by Court of Tax Appeals. The party aggrieved
by a ruling of the Commissioner in any matter brought before
him upon protest or by his action or ruling in any case of seizure may
appeal to the Court of Tax Appeals, in the manner and within the
period prescribed by law and regulations.
Unless an appeal is made to the Court of Tax Appeals in the manner and
within the period prescribed by laws and regulations, the action or ruling
of the Commissioner shall be final and conclusive. [Emphasis supplied.]

A tax protest case, under the TCCP, involves a protest of the liquidation
of import entries. A liquidation is the final computation and
ascertainment by the collector of the duties on imported merchandise,
based on official reports as to the quantity, character, and value thereof,
and the collectors own finding as to the applicable rate of duty; it is akin
to an assessment of internal revenue taxes under the National Internal
Revenue Code where the tax liability of the taxpayer is definitely
determined.
In the present case, the facts reveal that Shell received three sets of letters:
a. the Centers November 3 letter, signed by the Secretary of Finance, informing it
of the cancellation of the TCCs;
b. the respondents November 19 letter requiring it to replace the amount
equivalent to the amount of the cancelled TCCs used by Shell; and
c. the respondents collection letters issued through Atty. Valera, formally
demanding the amount covered by the cancelled TCCs.
None of these letters, however, can be considered as a liquidation or an
assessment of Shells import tax liabilities that can be the subject of an
administrative tax protest proceeding before the respondent whose decision is
appealable to the CTA. Shells import tax liabilities had long been computed and
ascertained in the original assessments, and Shell paid these liabilities using the
TCCs transferred to it as payment. It is even an error to consider the letters as a
reassessment because they refer to the same tax liabilities on the same
importations covered by the original assessments. The letters merely reissued
the original assessments that were previously settled by Shell with the use of the
TCCs. However, on account of the cancellation of the TCCs, the tax liabilities of
Shell under the original assessments were considered unpaid; hence, the letters
and the actions for collection. When Shell went to the CTA, the issues it raised in
its petition were all related to the fact and efficacy of the payments made,
specifically the genuineness of the TCCs; the absence of due process in the
enforcement of the decision to cancel the TCCs; the facts surrounding the fraud in
originally securing the TCCs; and the application of estoppel. These are payment
and collection issues, not tax protest issues within the CTAs jurisdiction to rule
upon.
We note in this regard that Shell never protested the original assessments of its
tax liabilities and in fact settled them using the TCCs. These original assessments,
therefore, have become final, incontestable, and beyond any subsequent protest
proceeding, administrative or judicial, to rule upon.
In light of our conclusion that the present case does not involve a decision of the
respondent on a matter brought to him as a tax protest, Atty. Valeras lack of
authority to issue the collection letters and to institute the collection suits is
irrelevant. For this same reason, the injunction against Atty. Valera cannot be
invoked to enjoin the collection of unpaid taxes due from Shell.

Sec. 2503. Undervaluation and Misdeclaration in Entry. When the value of

the imported articles shall be so declared and entered that the duties, based on
the declaration of the importer on the face of the entry, would be less by twenty
per centum than should be legally collected, or when the dutiable weight
measurement or quantity of imported articles is found upon examination to
exceed by ten per centum or more, the entered weight, measurement or quantity,
a surcharge may, in the discretion of the Collector be collected from the importer
in an amount not less than the difference between the full duty and the duty
based upon the declaration of the importer, nor more than five times of such
difference: Provided, That in cases where the Collector decides to waive

imposition of any surcharge in excess of one hundred pesos in any entry, his
action shall be subject to review by the Commissioner.
DOF Sec. v Oro Maura (2009)
Facts
-

24 Nov 1992: MARINA authorized import of 1 unit vessel M/V Haruna

o under a bareboat charter
o 5 years from its actual delivery to the charterer
o under a bareboat charter
- Original parties were
o Haruna Maritime thru Mr Yoji of Panama
o Glory Shipping Lines (the charterer) thru Mr. Guerrero
(proprietor/manager)
- 1992: DOF 1st indorsement allowed the temporary registration of MV
Haruna and its tax and duty-free release to Glory Shipping
o subject to conditions imposed by Marina
- BOC required Glory Shipping to post a bond = 150% of the duties
o Conditioned on re-exportation of the vessel
o No case to extend beyond the year 1999
- So GSL posted the bond.
o Condition: re-export of the vessel within 1 year from Mar 22, 1993
o Condition: in case of default, pay customs duty, tax and charges
- 22 Mar 1993: M/V Haruna arrived at the Port of Mactan
o Import Entry No. 120-93 dutiable value = Php6.1m and est.
customs duty Php 1.3m
- one year later GSLs re-export bond expired.
- 2 months after: GSL sent a letter of guarantee to collector guaranteeing reexport bond.
o If not, itd pay duties and taxes.
BUT WHOA WHOA WHOA GSL NEVER COMPLIED.
Collector of Mactan then assessed its customs duties and other charges.
- Demand letters, demand demand demand.
- GSL FAILED TO PAY
What the Mactan Port Collector didnt know:
- GSL had already offered to sell the M/V Haruna to the Oro Maura Shipping.
o OM was in the process of applying for Authority to Import the vessel
with Marina on 21 Oct 1994:
PEG ACQUISITION COST: Php1.1m
- Marina granted the request peg acquisition cost is reasonable.
Haruna and GSL sold M/V Haruna to Oro Maura WITHOUT informing or notifying
the Collector of the Port of Mactan!!!
Kariton and Company representing the respondent inquired with DOF if it could
pay the duties and taxes due on the vessel.
- Kariton knew that the vessel was acquired by GSL through a bareboat
charter and was previously authorized by the DOF to be released under a
re-export bond.
- Letter was referred to the Commish
Kariton filed import entry at the port of Manila on behalf of Oro Maura.
Mactan Port Collector discovered the M/V Haruna had been sold to Oro Maura.
- He then sent Oro Maura a demand letter.
- OM failed to pay
- Collector instituted seizure proceedings against the vessel for violation of

Sec. 2530 par 1 subpar 1 to 5 of the TCCP.

In his Sept 1998 Decision, Mactan Port Collector ordered the forfeiture of the
vessel in favor of the Govt. AFTER DISCOVERING FRAUD!!!!
Cebu District Collector reversed Mactan Port Collectors decision.
- Even if there is fraud in the sale of the vessel, there was no proof the Oro
Maura was a party.
DOF Sec sought review with the CA.
Issue: W/N the DOF Sec can order a re-assessment of the M/V Haruna
Held: Yes!
Mactan Port Collectors Finding: Oro Maura defrauded the BOC of the proper
customs duty.
Cebu District Collectors Ruling: no fraud on Oro Mauras part - Affirmed by
Commish, CTA, CA
DOF agrees that ok fine, no fraud. But wanted a reassessment of the dutiable
value of the vessel based on the ORIGINAL entered value, without allowance for
depreciation.
The CTA and the CA overlooked and misinterpreted factual circumstances that,
had they been brought to light and properly considered, would have changed the
outcome of the case.
There was fraud that deprived the State of the Customs Duties properly due to it.
Four phases
First original tax and duty-free entry of the MV Haruna when GSL filed Import
Entry with the Mactan Port Collector.
- Original price was Php5m.
- dutiable value of 6m, estimated customs duty 1.3m
- allowed on the basis of a 1 year re-entry bond which lapsed and was not
renewed.
- Demand letters proved ineffective as no customs duties were paid.
- Vessel in Phils.
Second GSL offered to sell the vessel to Oro Maura in Oct 1994
- OM applied for authority to import
- Proposed acquisition cost: Php1.1m after only 19 months; 80% drop.
- Marina granted the request based on that amount, taking depreciation into
account.
Bad faith in between GSL, instead of paying in accordance with its commitment,
simply turned around and disregarded the Mactan Port Collectors demand letters.
Just sold the vessel.
More bad faith OM KNEW the status of the vessel. It asked for authority to import
when the vessel was already in the Phils. It paid the purchase price without even
notifying the Mactan Port Collector.
Third OM asked the DOF if it could pay the duties and taxes on the vessel,
KNOWING FULLY WELL the vessels history of entry into the country. The value they
declared was Php1.1m the lower appraisal secured from Marina. Taxes due were
assessed to be Php150k.
- Again, after payment of the Php150k, no notice was given in this 3 rd phase
to the Mactan Port as the Port that allowed entry of the vessel into the

country and which had existing demand letters for customs duties and
charges on the vessel.
Fourth Mactan Port Collector acted after learning of the sale of the vessel to OM.
He instituted the seizure proceedings.
Fantastic things that happened:
FRAUD! From 5m original price the selling price dropped to 1.1m an 80% drop
in 19 months.
From 1.3m customs due Php150k
Why didnt the lower courts notice this? Because they disregarded the records of
the original entry of the vessel through the Mactan Port.
Sec 2503 on Undervaluation of Entry applies in the case. An undervaluation of
MORE THAN 30% b/w the value, weight, measurement, qty declared in the entry
vs actual value, etc. = prima facie evidence of fraud. CASE AT BAR 80% drop.
OM never explained the glaring disparity to overturn the prima facie finding of
fraud. GSL Is in the shipping business it must have known the standard prices of
vessels. Why then did it propose an extraordinarily low price?
Note also: nowhere in the TCCP does it state that the depreciated value of an
imported item can be used as basis to determine an imported items dutiable
value.
Note also: Estoppel does not lie against the government or any of its agencies
arising from unauthorized or illegal acts of public officers.
Did OM participate? Yes! 4 phases + their acknowledgment to the DOF that MV
Haruna conditionally entered the country under a re-export bond. They should
have known that this original entry was subject to specific conditions, among
them, the obligation to guarantee the re-export of the vessel within a given
period, or otherwise to pay the customs duties on the vessel. It should have
known of the conditions to pay the customs duties on the vessel. Should have also
known the conditions of the vessels release under the re-export bond and of the
state of GSL status of compliance.
Case at bar is an Incomplete Importation because duties had not been paid.
Since there is fraud, Manila Port Collectors assessment cannot become final and
conclusive.
The Php150k payment of OM did not extinguish the lien which was worth Php1.2m
(original importation)

Sec. 2530. Property Subject to Forfeiture Under Tariff and Customs Laws.
Any vessel or aircraft, cargo, articles and other objects shall, under the
following conditions, be subject to forfeiture:
a. Any vessel or aircraft, including cargo, which shall be used lawfully in the
importation or exportation of articles into or from any Philippine port or place
except a port of entry; and any vessel which, being of less than thirty tons
capacity shall be used in the importation of articles into any Philippine port or
place except into a port of the Sulu sea where importation in such vessel may be
authorized by the Commissioner, with the approval of the department head.
b. Any vessel engaging in the coastwise trade which shall have on board any
article of foreign growth, product or manufacture in excess of the amount

necessary for sea stores, without such article having been properly entered or
legally imported.
c. Any vessel or aircraft into which shall be transferred cargo unladen contrary to
law prior to the arrival of the importing vessel or aircraft at her port of destination.
d. Any part of the cargo of a vessel or aircraft arriving from a foreign port which is
unladen before arrival at the vessel's or aircraft's port of destination and without
authority from the proper customs official; but such cargo shall not be forfeited if
such unlading was due to accident, stress of weather or other necessity and is
subsequently approved by the Collector.
e. Any article which is fraudulently concealed in or removed from any public or
private warehouse under customs supervision.
f. Any article of prohibited importation or exportation, the importation or
exportation of which is effected or attempted contrary to law, and all other
articles which, in the opinion of the Collector, have been used, are or were
intended to be used as instrument in the importation or exportation of the former.
g. Unmanifested article found on any vessel or aircraft, if manifest therefor is
required.
h. Sea stores or stores for aircraft adjudged by the Collector to be excessive, when
the duties assessed by the Collector thereon are not paid or secured forthwith
upon assessment of the same.
i. Any package of imported article which is found by the examining official to
contain any article not specified in the invoice or entry, including all other
packages purportedly containing imported articles similar to those declared in the
invoice or entry to be the contents of the misdeclared package, provided the
Collector is of the opinion that the misdeclaration was caused with fraudulent
intent.
j. Boxes, cases, trunks, envelopes and other containers of whatever character
used as receptacles or as devices to conceal article which is itself subject to
forfeiture under the customs and tariff laws or which is so designed as to conceal
the character of such article.
k. Any beast actually being used for the conveyance of article subject to forfeiture
under the customs and tariff laws with its equipage or trappings, and any vehicles
similarly used, together with its equipage and appurtenances, including the beast,
team or other motive power drawing or propelling the same; but the forfeiture
shall not be effected if it is established that the owner of the means of
conveyance used as aforesaid or his agent in charge thereof at the time, has no
knowledge of the unlawful act.
l. Any money or thing of value offered as a bribe or for the purpose of exerting
improper influence over a customs official or employee.
m. Any article sought to be imported or exported:
(1) Without going through a customhouse, whether the act was consummated,
frustrated or attempted;
(2) By failure to mention to a customs official, articles found in the baggage of a
person arriving from abroad.
(3) On the strength of a false declaration or affidavit executed by the owner,
importer, exporter or consignee concerning the importation or exportation of such
article.

(4) On the strength of a false invoice or other document executed by the owner,
importer, exporter or consignee concerning the importation or exportation of such
article.
(5) Through any other fraudulent practice or device by means of which such
articles was entered through a customhouse to the prejudice of the government.
RP v CTA and AGFHA (2001)
12 Dec 1992: a shipment of bales of textile gray cloth arrived at the Manila Port
on board S/S ACX Daisy.
- Shipping agent FIL-JAPAN
- Accdg to the Inward Foreign Manifest: Consigned to GQ Garments.
- Accdg to the Clean Report Findings: Consigned to AGFHA
FIL-JAPAN sought to correct the name by amending the IFM. The amended IFM (GQ
to AGFHA) was submitted to the Manila Port. The Manila Port indorsed it to
Customs Intel, which placed the shipment under Hold Order.
- Ground: GQ was a fictitious firm.
- Action: forfeiture proceedings
AGFHA Inc filed a motion for intervention contending that AGFHA is the lawful
owner and actual consignee of the subject shipment. A draft decision ordering the
lifting of the hold order/seizure and detention warrant of the shipment was made
by the Customs Collector. Deputy commish rejected the draft decision.
Ruling of Customs Collector: Dont release the goods! Suspicious that it took more
than a month before the alleged error in the consignee was discovered. Plus other
suspicious things.
District Collector of Customs ordered forfeiture of the shipment.
- AGFHA appealed but the same was dismissed.
AGFHA filed PetRev with the CTA questioning the forfeiture of the bales of textile
cloth.
- CTA granted the petition and ordered the release of the goods to AGFHA.
Commish challenged the CTA ruling in the CA.
CA dismissed the appeal for lack of merit. BoC has failed to satisfy its burden of
proving fraud on the part of the importer or consignee.
Sec. 2530(f) and (1) 3-5 of the TCCP prove that in order that a shipment be liable
to forfeiture, it must be proved that fraud has been committed by the
Importer/Consignee to evade payment of the duties due. To establish the
existence of fraud, the burden of proof is on the part of the BoC who ordered the
forfeiture of the subject shipments. BoC findings do not reveal any kind of
deception.
CA assigned the error (GQ instead of AGFHA) to FIL-JAPAN.
BoC instituted PetRev for CAs decision.
Requisites for forfeiture of goods under Sec 2530(f) in relation to (1) (3-5) of the
TCCP are:
(a) (1) wrongful making by the owner, importer, exporter, consignee of any
declaration or affidavit or (2) wrongful making or delivery by the same
person of any invoice, letter or paper all touching on the importation or

exportation of merchandise
(b) falsity of such declaration, affidavit, invoice, letter or paper and
(c) intention on the part of the importer/consignee to evade payment of the
duties due
ISSUE: w/n there was fraud in this case
HELD: Commish asserts that all of these requisites are present in this case. It
contends that it did not presume fraud, rather the events positively point to the
existence of fraud. AGFHA, Inc., on the other hand, maintains that there has only
been an inadvertent error and not an intentional wrongful declaration by the
shipper to evade payment of any tax due.
The resolution of this issue would entail a reevaluation of the attendant
circumstances, a matter that cannot be freely undertaken by this Tribunal. It has
been a settled rule that the Supreme Court is not a trier of facts. Findings of the
appellate court are generally binding and cannot be disturbed by this Court unless
it is sufficiently shown that there has been no evidence on record to support such
findings.
The assessment made by the appellate court carry even more weight when it is
consistent with that of the trial court. Consonantly, the factual determination of
the Court of Tax Appeals, when supported by substantial evidence, will not be
reversed on appeal unless it is clear that the said court has committed gross error
in the process. The Collector of Customs, Court of Tax Appeals and the Court of
Appeals are unanimous in concluding that no fraud has been committed by
private respondent in the importation of the bales of cloth. The records do appear
to sustain this conclusion.
Fraud must be proved to justify forfeiture. It must be actual, amounting to
intentional wrong-doing with the clear purpose of avoiding the tax. Forfeiture is
not favored in law nor in equity. Mere negligence is not equivalent to the fraud
contemplated by law. What is here involved is an honest mistake, not even
directly attributable to private respondent, which will not deprive the government
of its right to collect the proper tax. The conclusion of the appellate court, being
consistent with the evidence on record and not contrary to law and jurisprudence,
hardly can be overturned by this Court.
El Greco Ship Manning v Commish of Customs (2008)
Facts
-

23 Sept 2001: M/V Criston docked at the Port of Albay. Operated by Glucer
Shipping.
o 35k bags of imported rice
o consigned to Chua and Carillo
o payable upon delivery
BOC Commish ordered issuance of a warrant of seizure and detention.
o Left manila without necessary clearance from Coast Guard.
Later, another warrant of seizure was issued to include the vessel M/V
Criston.
Chua and Carillo filed before the RTC a petition for prohibition with TRO
assailing authority of District Collectors to issue such warrants.
o TRO granted upon filing of bond.
o After bond was filed, the 35k bags of rice were released.
Seizure hearing was set but vessel operator Glucer failed to appear.
Meanwhile: M/V Criston was berthing at the Albay Port, under the custody
of the BoC.
o There was a typhoon so they allowed the ship to be transferred to

seek temporary shelter.

After the typhoon, vessel nowhere to be found.
Eventually, it was spotted in Bataan with a new name: Neptune
Breeze.
Seized again! Violating Sec 2530 (a), (f), (k)
El Greco (authorized local agent of Neptune Breeze) filed with the Manila
District Collector a Motion for Intervention and MTQ of Seizure Detention.
o Claim: M/V Neptune Breeze was different from the M/V Criston.
o Collector granted the motion for lack of PC that Neptune was the
same as Criston.
Auto review by BoC Commish: Reverse collectoors order. Ordered
forfeiture of the M/V Neptune Breeze.
o
o

Issue: W/N M/V Criston is the same as M/V Neptune Breeze.

HELD: It is, as found by the CTA En Banc. There is overwhelming evidence to
prove. Same serial number of engines and generators. Glucer didnt appear
strange considering they were about to lose property of enormous value.
M/V Criston appears to be a mere fictional identity assumed by M/V Neptune
Breeze so it may conduct its smuggling activities with little risk of being identified
and held liable therefor.
Issue: W/N forfeiture order over the M/V Neptune Breeze is valid
Note:
The penalty of forfeiture is imposed on any vessel engaged in
smuggling, provided that the following conditions are present:
(1) The vessel is used unlawfully in the importation or exportation of
articles into or from the Philippines;
(2) The articles are imported to or exported from any Philippine port or
place, except a port of entry; or
(3) If the vessel has a capacity of less than 30 tons and is used in the importation
of articles into any Philippine port or place other than a port of the Sulu Sea,
where importation in such vessel may be authorized by the Commissioner, with
the approval of the department head.
There is no question that M/V Neptune Breeze, then known as M/V Criston, was
carrying 35,000 bags of imported rice without the necessary papers showing that
they were entered lawfully through a Philippine port after the payment of
appropriate taxes and duties thereon. This gives rise to the presumption that such
importation was illegal. Consequently, the rice subject of the importation, as well
as the vessel M/V Neptune Breeze used in importation are subject to forfeiture.
The burden is on El Greco, as the owner of M/V Neptune Breeze, to show that its
conveyance of the rice was actually legal. Unfortunately, its claim that the cargo
was not of foreign origin but was merely loaded at North Harbor, Manila, was
belied by the following evidence - the Incoming Journal of the Philippine Coast
Guard, Certification issued by the Department of Transportation and
Communications (DOTC) Port State Control Center of Manila, and the letter dated
4 October 2001 issued by the Sub-Port of North Harbor Collector Edward de la
Cuesta, confirming that there was no such loading of rice or calling of vessel
occurring at North Harbor, Manila. It is, therefore, uncontroverted that the 35,000
bags of imported rice were smuggled into the Philippines using M/V Neptune
Breeze.
Sec. 3601. Unlawful Importation. Any person who shall fraudulently import or

bring into the Philippines, or assist in so doing, any article, contrary to law, or shall
receive, conceal, buy, sell, or in any manner facilitate the transportation,
concealment, or sale of such article after importation, knowing the same to have
been imported contrary to law, shall be guilty of smuggling and shall be punished
with:
"1. A fine of not less than fifty pesos more than two hundred pesos and
imprisonment of not less than five days nor more than twenty days, if the
appraised value, to be determined in the manner prescribed under the Tariff and
Customs Code, including duties and taxes, of the article unlawfully imported does
not exceed twenty-five pesos;
"2. A fine of not less than eight hundred pesos nor more than five thousand pesos
and imprisonment of not less than six months and one day nor more than four
years, if the appraised value, to be determined in the manner prescribed under
the Tariff and Customs Code, including duties and taxes, of the article unlawfully
imported exceeds twenty-five pesos but does not exceed fifty thousand pesos;
"3. A fine of not less than six thousand pesos nor more than eight thousand pesos
and imprisonment of not less than five years and one day nor more than eight
years, if the appraised value, to be determined in the manner prescribed under
the Tariff and Customs Code, including duties and taxes, of the article unlawfully
imported is more than fifty thousand pesos but does not exceed one hundred fifty
thousand pesos.
"4. A fine of not less than eight thousand pesos nor more than ten thousand pesos
and imprisonment of not less than eight years and one day nor more than twelve
years, if the appraised value, to be determined in the manner prescribed under
the Tariff and Customs Code, including duties and taxes, of the article unlawfully
imported exceeds one hundred fifty thousand pesos.
"5. The penalty of prision mayor shall be imposed when the crime of serious
physical injuries shall have been committed and the penalty of reclusion perpetua
to death shall be imposed when the crime of homicide shall have been committed
by reason or on the occasion of the unlawful importation.
"In applying the above scale of penalties, if the offender is an alien and the
prescribed penalty is not death, he shall be deported after serving the sentence
without further proceeding for deportation. If the offender is a government official
or employee, the penalty shall be the maximum as hereinabove prescribed and
the offender shall suffer an additional penalty of perpetual disqualification from
public office, to vote and to participate in any public election.
"When, upon trial for a violation of this section, the defendant is shown to have
had possession of the article in question, possession shall be deemed sufficient
evidence to authorize conviction, unless the defendant shall explain the
possession to the satisfaction of the court: Provided, however, That payment of
the tax due after apprehension shall not constitute a valid defense in any
prosecution under this section.

Remigio v SB (2002)
Facts
-

15 Aug 1988: HK to MNL; S/S Norsund shipment of one 40-foot container

van
o consigned to borham trading

o 25 mt of sodium bicarbonate = 25k kgs

Remigio was a customs broker.
o He filed with the Manila Port Collector an IEIRD covering the
shipment.
Sevilla, a customs examiner conducted an examination of the van on the
same day.
o 1000 bags of 25kg sodium bicarb.
o Reco: subject to PCCI clearance and magna scale weighing.
PCCI clearance was granted. Sevilla forwarded the IEIRD papers to the
Customs Principal Examiner forwarded to appraisers group.
Imported paid 23k in duties.
3pm same day: Customs Collector allowed container van to leave customs
area to be delivered to Borham Trading.
o BUT BENJIE KHO OF THE SPECIAL OPS GROUP INTERCEPTED THE
VAN AND BROUGHT IT TO CAMP AGUINALDO.
SETTING: CAMP AGUI: FINDINGS
o Only 185 bags sodium bicarb. The rest were random shit. JOGGING
PANTS to TIRES.
o Then they figured out that Borham Trading was non-existent!!!
Infos were then filed against customs examiner and customs broker
Remigio for violation of Sec 3604 (d) and (e) and Sec 3602 in relation Sec
3601 (4) TCCP.
o Felonious entrees of the imported shipment in the Import Entry.
False examination.
o Assessment made: 23k. Correct assessment: 1.6M!!!!

SB Ruling: Remigio Guilty. But liable also under 3407 any person who files an
entry shall be liable for SMUGGLING if ostensible owner is fictitious and
shipment is found to be unlawful. If violator is a customs broker, his license shall
also be revoked.
Issue: w/n Remigio was guilty of 3602 wrt 3601 tccp
SB is partially wrong because Sec. 3407 did not exist during the time of shipment.
Ahahaha. Only introduced in 1993. Note: no retro effect.
Sec. 3602. Various fraudulent practices against customs revenue.Any person who
(1) makes or attempts to make any entry of imported or exported article
-

by means of any false or fraudulent invoice, declaration, affidavit, letter,

paper, or
by any means of any false statement, written or verbal,
by any means of any false or fraudulent practice whatsoever, or knowingly
effects any entry of goods, wares or merchandise,
o at less than true weight or measures thereof or
o upon a false classification as to quality or value, or
by the payment of less than the amount legally due, or

(2) knowingly and willfully

- files any false or fraudulent entry or claim for the payment of drawback or
refund of duties upon exportation of merchandise, or
- makes or files any affidavit, abstract, record, certificate or other document,
with a view to securing the payment to himself or others of any drawback,
allowance, or refund of duties on the exportation of merchandise, greater
than that legally due thereon, or
who shall be guilty of any willful act or omission,

shall, for each offense, be punished in accordance with the penalties prescribed in
the preceding section.

The term entry in customs law has a triple meaning. It

means (1) the documents filed at the customs house; (2)
the submission and acceptance of the documents; and (3)
the procedure of passing goods through the customs
house.
Petitioner Remigio did not make or attempt to make an
entry of imported articles by means of any false or
fraudulent invoice, declaration, affidavit, letter, paper, or by
means of any false statement, verbal or oral, or by means
of any false or fraudulent practice whatsoever. In fact, it
was the given address of the consignee Borham Trading
that the Sandiganbayan found to be fictitious
In the instant case, there is no evidence to show that the
owner, importer or consignee in question, BORHAM
TRADING is fictitious. The only evidence introduced was
the report of an investigator that the address of the
consignee appearing in the entry, the bill of lading and the
packing list cannot be located. The investigator himself
testified that Borham Trading was registered with the
Bureau of Domestic Trade; that a Letter of Credit covering
the shipment was opened with the Metropolitan Bank and
the shipping documents, i.e., the bill of lading, the packing
list were all in the name of Borham Trading at its given
address. (as contemplated by 3407s last par)
While the investigator testified that at the time of the
investigation the address of Borham Trading could not be
located at Harvard Street, Quezon City, the investigator
did not bother to check whether there was any change in
the numbers of the buildings at Harvard Street.
Accused Erwin C. Remigio, as customs broker, prepared
the entry covering the shipment based on the bill of lading,
the invoice, the packing list, letter of credit, the import

entry declaration and the Central Bank Release

Certificate. The given address of Borham Trading was at
37 Harvard Street, Quezon City. There was nothing in the
documents to show that there was anything amiss in the
shipment or the covering documents. A customs broker is
not required to go beyond the documents presented to
him in filing an entry on the basis of such documents.
Accused Remigio did not fraudulently assist in the
importation of any article contrary to law nor facilitated its
transportation, knowing the same to have been imported
contrary to law. All accused Remigio did was to prepare
the import entry based on the shipping and other
documents required by the Bureau of Customs and file the
same. Fraud must be actual, not constructive.
The liability for smuggling is provided in Section 3601,
which in the instant case has not been proved.
Rimorin v People (2003)
Facts
As per OSG
- 12 Oct 1979: Metrocom Intel/Sec Group received info
that syndicates were engaged in smuggling activities
somewhere in Port Area, manila.
Stake out time! Watch out a for a specific cargo truck bound for
malabon, registered in the name of Teresita Estacio.
A cargo truck was intercepted. There was also a car chase because a
Toyota following the truck made a sharp U-Trun!
o Truck: 305 cases of blue seal/UNTAXED CIGS. :/
o Car: firearms and Sergeants without mission orders.
o

As per Rimorin accused policeman

- R was assigned at Manila Intl Airport.
- He met a man named Leonardo aka Boy who asked him for assistance
occasionally.
o They gave each other rice. Nghh.
- One day, Boy came and requested that he accompany him to Divi to haul
household fixtures.
o R met Boys friends, some of whom were policemen.
o R also found it strange that the route it was taking was not going to
Divi and they made a stop for random loading of goods.
- and then Boy decided to not go to Divi that day.
- Then the Metrocom checkpoint/stake out.

Rimorin claims that he did not see the Metrocom men

opentheirtruck.TheywerehauledlatertoCampCrame.
There he asked: Whats this? But a certain Barrameda,
whilepointingtoatruckdifferentfromwhattheyused,
told them thats the reason why youll be jailed. So he
thoughttheywerebeingframedup.Itwasonlytwoto
threedayslaterthathesawtheallegedsmuggledcigarettes
attheofficeoftheMISGwhenitwaspresentedbythe
investigator. They were not present when these alleged
smuggledcigarettesweretakenfromthetrucktheyrode
in.

Issue 1: w/n necessary to present seized goods to prove corpus delicti.

Held 1: no. to prove corpus delicti, it is sufficient for prosecution to be able to
show that (1) a certain fact has been prove say a person has died or a building
has been burned and (2) a particular person is criminally responsible for the act.
Even a single witness uncorroborated testimony, if credible, may suffice to prove
it and warrant a conviction therefore. Even circumstantial evidence is ok. Plus the
testimonies given by the public officers are given credence, especially since there
is a presumption of regularity.
Issue 2: W/N Rimorin knew cargo being transpod was illegal
Held 2:

When, upon trial for a violation of this section, the

defendantisshowntohaveortohavehadpossessionofthe
article in question, possession shall be deemed sufficient
evidencetoauthorizeconvictionunlessthedefendantshall
explain the possession to the satisfaction of the court;
Provided, however that payment of the tax due after
apprehension shall not constitute a valid defense in any
prosecutionunderthissection.
3601:

The prosecution competently established that (1) the 305

cases of untaxed blue seal cigarettes discovered inside
the cargo truck were fraudulently imported; and (2)
petitioner was in control of the truck when it transported
the cargo on October 15, 1979. Petitioner was unable to
satisfactorily explain his possession of the untaxed

cigarettes, which the MISG agents seized from him and

his co-accused. Rather, he feigns ignorance of the true
nature of the cargo, a claim which the RTC and the CA
found incredible:
NowontheexplanationsofPoliceSgt.RimorinofPasayCity
PoliceForceandPat.RietaofKawitPoliceForce,ridersinthe
loadedcargotruckdrivenbyBoy.Theirclaimthattheydidnot
haveanyknowledgeaboutthecargoofbluesealcigarettesis
not given credence by the court. They tried to show lack of
knowledgebyclaimingthatalongtheway,BoyandGonzalo
Vargasleftthembehindatacertainpointforsnacksandpicked
themuplaterafterthecargohadbeenloaded.TheCourtcannot
seeitswaythroughhowtwopolicemen,joiningBoyinthedead
of the night, explicitly to give him and his goods some
protection,whichservicewouldbepaid,yetwouldnotknow
whattheyareouttoprotect.AndneithercouldtheCourtsee
reasoninBoysleavingthembehindwhenhewasgoingtopick
upandloadthebluesealcigarettes.Boyknewtherisks.He
wantedthemforprotection,sowhywillhediscardthem?How
sounnaturalandsocontrarytoreason.
Issue 3: W/n in the sale of the seized cargo, notice to Rimorin was required
Held 3: No.
Rieta v People (2004)
Facts:
OSG same facts as previous case.
Rietas Story:
- Rieta was a policeman in Kawit.
- Rieta met Boy after Boy figured in an accident.
- Boy would visit Rieta at the station. He learned Boy was a bizman hauling
slippers, fish and veggies from Divi to Cavite.
- Sometimes, Rieta would accompany him on biz trips.
- 15 Oct 1979: one particular biz trip.
o Went to cartimar on a jeep.
o Boy left him at a gas station because Boy will get the cargo truck
theyll use.
o When he returned, boy had companions, including Rimoroin.
o They were on their way to Divi when he let Boy know that he was
very hungry.
o So boy dropped him and rimorin off at a small resto.
o Boy said hed come back for them after going to the Port Area.

The Metrocom soldiers did not find anything from their bodies.
Thereafter, they (Rieta, Rimorin and Gonzalo) were ordered by the
Metrocom soldiers to transfer to a jeep. While they were aboard
the jeep, he overheard from the Metrocom soldiers that their driver
was able to escape. Likewise, they were also informed by the
Metrocom soldiers that the cargo truck was loaded with blue seal
cigarettes. The cargo truck was not opened in their presence, nor
were the contents thereof shown to them upon their apprehension.
From the time he boarded the cargo truck in Cartimar until he and
Sgt. Rimorin alighted to take their snacks, up to the time they were
apprehended by the Metrocom soldiers, he had not seen a pack of
blue cigarette in the cargo truck. He did not notice whether the
Metrocom soldiers opened the cargo truck. At Camp Crame, he
was investigated without the benefit of counsel, but, nonetheless,
he executed and signed a statement because as far as he was
concerned he has done nothing wrong. He was detained at
Bicutan for more than a year.
There is no merit, either, in the claim of petitioner that the
prosecution failed to prove the nonpayment of the taxes and duties
on the confiscated cigarettes. There is an exception to the general
rule requiring the prosecution to prove a criminal charge
predicated on a negative allegation, or a negative averment
constituting an essential element of a crime. In People v. JulianFernandez, we held:
"Where the negative of an issue does not permit of direct proof, or
where the facts are more immediately within the knowledge of the
accused, the onus probandi rests upon him. Stated otherwise, it is
not incumbent upon the prosecution to adduce positive
evidence to support a negative averment the truth of which is
fairly indicated by established circumstances and which, if
untrue, could readily be disproved by the production of
documents or other evidence within the defendant's
knowledge or control. For example, where a charge is made that
a defendant carried on a certain business without a license x x x,
the fact that he has a license is a matter which is peculiar[ly] within
his knowledge and he must establish that fact or suffer
conviction."28(Emphasis supplied)
The truth of the negative averment that the duties and specific
taxes on the cigarettes were not paid to the proper authorities is
fairly indicated by the following circumstances that have been
established: (1) the cargo truck, which carried the contraband
cigarettes and some passengers including petitioner, immediately

came from the 2nd COSAC Detachment; (2) the truck was
intercepted at the unholy hour of 4:00 a.m.; (3) it fitted the
undisclosed informer's earlier description of it as one that was
carrying contraband; and (4) the driver ran away. Hence, it was up
to petitioner to disprove these damning circumstances, simply by
presenting the receipts showing payment of the taxes. But he did
not do so; all that he could offer was his bare and self-serving
denial.