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Philippine Merchant Marine School

San Antonio Valley Road, Talon 1, Las Pias City

Case Study Presentation

Bureau of Customs
(Petitioner)

-versus-

Peter Sherman, Michael Whelan, Teodoro B. Lingan,


Atty. Ofelia B. Cajigal and the Court of Tax Appeals
(Respondents)

Submitted to:
Mr. CrisMhar B. Alejandro, LCB

Submitted by:

Leader:
Bobadilla, Raa Marie M.

Members:
Cereneo, Marie Joy
Dineros, Janica
Espiritu, Angelica
Estilloso, Mary Grace
Fernandez, Angelica
Lacson, Jenniawell

In Partial Fulfillment of the Course Requirement in Customs 6


(Administrative and Judicial Proceedings)
March 13, 2017
ACKNOWLEDGEMENT

First and foremost, we would like to express our gratitude to our Almighty God for
blessing us with the life, knowledge, and skills that we needed to accomplish our goals.

We also appreciate the love, care, and continuous encouragement and prayers from our
families and friends which gave us the inspiration to go on.

Furthermore, we would like to thank the whole BSCA Faculty for instilling us with all the
knowledge, ideas and advices since we were freshmen which is a great foundation in our
studies.

Lastly, we thank our Administrative and Judicial Proceedings adviser, Mr. CrisMhar B.
Alejandro, LCB, for his guidance and support in the completion of our case study and for
steering us to the right directions towards success.

Our accomplishments would not have been possible without them.

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INTRODUCTION
Our case is about the petition for review by certiorari filed by the Bureau of Customs
before the Supreme Court and the criminal complaint of the Bureau of Customs against Mark
Sensing Philippines, Inc. (MSPI) who did not pay duties and taxes for their importation violating
Section 3601 vis a visSection2530 (f), and (l) 5 and 101 (f) of the Tariff and Customs Code of the
Philippines, now Section 1401 vis a vis Section 1113 (f) and (l) 5 and Section 119 of the Customs
Modernization and Tariff Act.

As students of Bachelor of Science in Customs Administration, this is a learning tool as


well as a preparation to improve our cognizance in our future profession as licensed customs
brokers. The case is exciting and we took our motivation to understand and analyze the case
deeper.

Our primary purpose is to enhance our ability to comprehend and decide on cases
relating to the Customs Industry and also to share knowledge. We expect that this case study
and its implication will help the future students of Bachelor of Science in Customs
Administration and of other related fields.

FACTS

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Mark Sensing Philippines, Inc. (MSPI), the company of the respondents, caused the
importation of 255, 870 pieces of finished bet slips and 205, 200 rolls of finished thermal
papers from June 2005 to December 2007. MSPI facilitated the release of the shipment
from the Clark Special Economic Zone (CSEZ), where it was brought, to the Philippine
Charity Sweepstakes Office (PCSO) for its lotto operations in Luzon. The problem was
MSPI did not pay duties or taxes, so, the Bureau of Customs filed a criminal complaint
before the DOJ against the respondents MSPI Chairman Peter Sherman, Managing
Director Michael Whelan, Country Manager Atty. Ofelia B. Cajigal and Finance Manager
and Corporate Secretary Teodoro B. Lingan, along with Erick B. Ariarte and Ricardo J.
Ebuna and Eugenio Pasco, licensed customs brokers who acted as agents of MSPI, for
violation of Section 3601 vis-a-vis Sections 2530 (f) and (l) 5 and 101 (f) of the Tariff and
Customs Code of the Philippines, as amended and Republic Act No. 7916.
State Prosecutor Rohaira Lao-Tamano, by Resolution of March 25, 2008, found probable
cause against respondents and accordingly recommended the filing of Information
against them. Respondents filed a petition for review before the Secretary of Justice
during the pendency of which the Information was filed on April 11, 2008 before the
Court of Tax Appeals (CTA),the accusatory portion of which reads:

That on or about June 2005 to December 2007, in Manila City, and within the
jurisdiction of this Honorable Court, the above named accused, in conspiracy
with one another, made forty (40) unlawful importations of 255, 870 pieces
of finished printed bet slips and 205, 200 rolls of finished thermal papers
from Australia valued at approximately One Million Two Hundred Forty
Thousand Eight Hundred Eighty US Dollars & Fourteen Cents
(US$1,240,880.14), and caused the removal of said imported articles from
the Clark Special Economic Zone and delivery thereof to the Philippine
Charity Sweepstakes Offices without payment of its corresponding duties and
taxes estimated at around Fifteen Million Nine Hundred Seventeen Thousand
Six Hundred Eleven Pesos and Eighty Three Cents (Php15,917,611.83) in
violation of Section 3601 in relation to Sections 2530 and 101 paragraph (f)
of the Tariff and Customs Code of the Philippines to the damage and
prejudice of herein complainant.

Only respondents Cajigal and Lingan were served warrants of arrest following which
they posted cash bail bonds.
By Resolution of March 20, 2009, the Secretary of Justice reversed the State
Prosecutors Resolution and accordingly directed the withdrawal of the Information.
Petitioners motion for reconsideration having been denied by Resolution of April 29,
2009, it elevated the case by certiorari before the Court of Appeals, docketed as CA GR
SP No. 10-9431.
In the meantime, Prosecutor Lao-Tamano filed before the CTA a Motion to Withdraw
Information with Leave of Court to which petitioner filed an Opposition. Respondents,
on their part, moved for the dismissal of the Information. The CTA, by the herein

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assailed Resolution of September 3, 2009, granted the withdrawal of, and accordingly
dismissed the Information.
Petitioners motion for reconsideration filed on September 22, 2009 was Noted Without
Action by the CTA by Resolution of October 14, 2009, viz:

Considering that an Entry of Judgment was already issued in this case on September
23, 2009, no Motion for Reconsideration of the Resolution dated September 3, 2009
having been filed by State Prosecutor Rohairah Lao-Tamano of the Department of
Justice; the Motion for Reconsideration of the Resolution dated 3 September 2009
filed on September 22, 2009 by Atty. Christopher F.C. Bolastig of the Bureau of
Customs is NOTED, without action.

Hence, petitioners present petition for certiorari. The petition is bereft of merit.
As stated in the above-quoted ratio of the October 14, 2009 Resolution of the CTA, it
noted without action petitioners motion for reconsideration, entry of judgment having
been made as no Motion for Execution was filed by the State Prosecutor.
By merely noting without action petitioners motion for reconsideration, the CTA did not
gravely abuse its discretion. For, as stated earlier, a public prosecutor has control and
supervision over the cases. The participation in the case of a private complainant, like
petitioner, is limited to that of a witness, both in the criminal and civil aspect of the
case.
Parenthetically, petitioner is not represented by the Office of the Solicitor General (OSG)
in instituting the present petition, which contravenes established doctrine that the OSG
shall represent the Government of the Philippines, its agencies and instrumentalities
and its officials and agents in any litigation, proceeding, investigation, or matter
requiring the services of lawyers.
IN FINE, as petitioners motion for reconsideration of the challenged CTA Resolution did
not bear the imprimatur of the public prosecutor to which the control of the
prosecution of the case belongs, the present petition fails.

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ISSUE OF THE CASE

Whether or not, the petitioner, Bureau of Customs, may seek relief via certiorari before the
Supreme Court.

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DECISION
SUPREME COURTS DECISION:

The Motion for Reconsideration of the Resolution dated September 03, 2009 of the
Bureau of Customs is NOTED, without action.
By merely noting without action petitioners motion for reconsideration, the CTA did not
gravely abuse its discretion. For, as stated earlier, a public prosecutor has control and
supervision over the cases. The participation in the case of a private complainant, like
petitioner, is limited to that of a witness, both in the criminal and civil aspect of the case.
Parenthetically, petitioner is not represented by the Office of the Solicitor General (OSG) in
instituting the present petition, which contravenes established doctrine that the OSG shall
represent the Government of the Philippines, its agencies and instrumentalities and its officials
and agents in any litigation, proceeding, investigation, or matter requiring the services of
lawyers.
IN FINE, as petitioners motion for reconsideration of the challenged CTA
Resolution did not bear the imprimatur of the public prosecutor to which the control of
the prosecution of the case belongs, the present petition fails.
WHEREFORE, the petition is DISMISSED.

COURT OF TAX APPEALS RESOLUTION:

The accuseds Manifestation and Motion to dismiss and prosecutions Motion to


Withdraw the Information With Leave of Court are both GRANTED. Consequently, the
Information is deemed WITHDRAWN and the case against the accused Peter Sherman, Michae
Whelan, Ofelia B. Cajigal, and Teodoro B. Lingan is hereby dismissed.

COURT OF APPEALS RESOLUTION:


The Motion to Dismiss is GRANTED and the instant petition is DISMISSED.

Records show that the Resolution dates April 29, 2009 of the Secretary of Justice
denying petitioners Motion for Reconsideration of the Secretarys Resolution dated March 20,
2009 (dismissing the complaint against private respondents for lack of probable cause) was
received by petitioner on May 08, 2009. This being the case, the last day for filing a petition for
certiorari was on July 07, 2009. Thus, the petition in this case, belatedly filed on July 08, 2009,
was filed beyond the 60-day reglementary period prescribed by the Rules of Court.

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CONCLUSION

The group contends that the importation by the Mark Sensing Philippines, Inc. (MSPI)
which is the finished thermal papers and finished bet slips is not a prohibited importation and
therefore, Section 101 (f) is not violated since the articles are not classified as Lottery and
Sweepstakes Tickets. Furthermore, the company which is the MSPI, is an authorized supplier of
Philippine Charity Sweepstakes Office (PCSO).

As the case was focused on the criminal complaint of the Bureau of Customs (Petitioner)
against Mark Sensing Philippines, Inc. (Respondents), the group accepts the decision of the
Court that the petition of the Bureau of Customs before the Supreme Court be dismissed,and
the case against respondents cannot anymore prosper considering that:

1. In the prosecution of special laws, there must be designation of special prosecutors to


assist the public prosecutor.
2. It was noted that petitioner is not represented by the Office of the Solicitor General
(OSG)which contravenes the established doctrine that the OSG shall represent the
Government of the Philippines, its agencies and instrumentalities and its officials and
agents in any litigation, proceeding, investigation, or matter requiring the services of
lawyers."

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ACTUAL CASE

Republic of the Philippines


Supreme Court
Baguio City

THIRD DIVISION

BUREAU OF CUSTOMS, G.R. No. 190487


Petitioner,

Present:
- versus -
CARPIO MORALES,
Chairperson, J.,
BRION,
PETER SHERMAN, MICHAEL BERSAMIN,
WHELAN, TEODORO B. LINGAN, VILLARAMA, JR.,
ATTY. OFELIA B. CAJIGAL and the SERENO, JJ.
COURT OF TAX APPEALS,
Respondents. Promulgated:

April 13, 2011


x-----------------------------------------------------------------------------------------x

DECISION

CARPIO MORALES, J.

Mark Sensing Philippines, Inc. (MSPI) caused the importation of 255, 870 pieces of finished bet
slips and 205, 200 rolls of finished thermal papers from June 2005 to December 2007. MSPI

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facilitated the release of the shipment from the Clark Special Economic Zone (CSEZ), where it
was brought, to the Philippine Charity Sweepstakes Office (PCSO) for its lotto operations
in Luzon. MSPI did not pay duties or taxes, however, prompting the Bureau of Customs
(petitioner) to file, under its Run After The Smugglers (RATS) Program, a criminal complaint
before the Department of Justice against herein respondents MSPI Chairman Peter Sherman,
Managing Director Michael Whelan, Country Manager Atty. Ofelia B. Cajigal and Finance
Manager and Corporate Secretary Teodoro B. Lingan, along with Erick B. Ariarte and Ricardo J.
Ebuna and Eugenio Pasco, licensed customs broker who acted as agents of MSPI, for violation
of Section 3601[1] vis--vis Sections 2530 (f) and (l) 5[2] and 101 (f)[3] of the Tariff and Customs
Code of the Philippines, as amended and Republic Act No. 7916.[4]

State Prosecutor Rohaira Lao-Tamano, by Resolution of March 25, 2008,[5] found probable
cause against respondents and accordingly recommended the filing of Information against
them.

Respondents filed a petition for review[6] before the Secretary of Justice during the pendency of
which the Information was filed on April 11, 2009 before the Court of Tax Appeals (CTA), [7] the
accusatory portion of which reads:

That on or about June 2005 to December 2007, in Manila City, and within the
jurisdiction of this Honorable Court, the above named accused, in conspiracy
with one another, made forty (40) unlawful importations of 255, 870 pieces of
finished printed bet slips and 205, 200 rolls of finished thermal papers from
Australia valued at approximately One Million Two Hundred Forty Thousand
Eight Hundred Eighty US Dollars & Fourteen Cents (US$1,240,880.14), and
caused the removal of said imported articles from the Clark Special Economic
Zone and delivery thereof to the Philippine Charity Sweepstakes Offices without
payment of its corresponding duties and taxes estimated at around Fifteen
Million Nine Hundred Seventeen Thousand Six Hundred Eleven Pesos and Eighty
Three Cents (Php15,917,611.83) in violation of Section 3601 in relation to
Sections 2530 and 101 paragraph (f) of the Tariff and Customs Code of the
Philippines to the damage and prejudice of herein complainant.

CONTRARY TO LAW.[8]

Only respondents Cajigal and Lingan were served warrants of arrest following which they
posted cash bail bonds.

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By Resolution of March 20, 2009,[9] the Secretary of Justice reversed the State Prosecutors
Resolution and accordingly directed the withdrawal of the Information.

Petitioners motion for reconsideration having been denied by Resolution of April 29, 2009, [10] it
elevated the case by certiorari before the Court of Appeals, docketed as CA GR SP No. 10-
9431.[11]

In the meantime, Prosecutor Lao-Tamano filed before the CTA a Motion to Withdraw
Information with Leave of Court[12] to which petitioner filed an Opposition.[13]Respondents, on
their part, moved for the dismissal of the Information.

The CTA, by the herein assailed Resolution of September 3, 2009,[14] granted the withdrawal of,
and accordingly dismissed the Information.

Petitioners motion for reconsideration filed on September 22, 2009[15] was Noted Without
Action by the CTA by Resolution of October 14, 2009, viz:

Considering that an Entry of Judgment was already issued in this case on


September 23, 2009, no Motion for Reconsideration of the Resolution dated
September 3, 2009 having been filed by State Prosecutor Rohairah Lao-
Tamano of the Department of Justice; the Motion for Reconsideration of the
Resolution dated 3 September 2009 filed on September 22, 2009 by Atty.
Christopher F.C. Bolastig of the Bureau of Customs is NOTED, without action.

SO ORDERED.[16] (emphasis partly in the original and partly supplied)

Hence, petitioners present petition for certiorari.[17]


The petition is bereft of merit.

It is well-settled that prosecution of crimes pertains to the executive department of the


government whose principal power and responsibility is to insure that laws are faithfully
executed. Corollary to this power is the right to prosecute violators.[18]

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All criminal actions commenced by complaint or information are prosecuted under the
direction and control of public prosecutors.[19] In the prosecution of special laws, the exigencies
of public service sometimes require the designation of special prosecutors from diff
erent government agencies to assist the public prosecutor. The designation does not,
however, detract from the public prosecutor having control and supervision over the case.
As stated in the above-quoted ratio of the October 14, 2009 Resolution of the CTA, it noted
without action petitioners motion for reconsideration, entry of judgment having been made as
no Motion for Execution was filed by the State Prosecutor.

By merely noting without action petitioners motion for reconsideration, the CTA did not gravely
abuse its discretion. For, as stated earlier, a public prosecutor has control and supervision over
the cases. The participation in the case of a private complainant, like petitioner, is limited to
that of a witness, both in the criminal and civil aspect of the case.
Parenthetically, petitioner is not represented by the Office of the Solicitor General (OSG) in
instituting the present petition, which contravenes established doctrine[20] that the OSG shall
represent the Government of the Philippines, its agencies and instrumentalities and its officials
and agents in any litigation, proceeding, investigation, or matter requiring the services of
lawyers.[21]

IN FINE, as petitioners motion for reconsideration of the challenged CTA Resolution did
not bear the imprimatur of the public prosecutor to which the control of the prosecution of the
case belongs, the present petition fails.

WHEREFORE, the petition is DISMISSED.

SO ORDERED.

CONCHITA CARPIO MORALES


Associate Justice

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WE CONCUR:

ARTURO D. BRION LUCAS P. BERSAMIN


Associate Justice Associate Justice

MARTIN S. VILLARAMA, JR. MARIA LOURDES P. A. SERENO


Associate Justice Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before the
case was assigned to the writer of the opinion of the Courts Division.

CONCHITA CARPIO MORALES


Associate Justice
Chairperson

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairpersons
Attestation, I certify that the conclusions in the above decision had been reached in
consultation before the case was assigned to the writer of the opinion of the Courts Division.

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RENATO C. CORONA
Chief Justice

[1] Section 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 be have been imported contrary to
law shall be guilty of smuggling and shall be punished with:

x xxx

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 proceedings
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 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 the payment of the tax due after apprehension shall not
constitute a valid defense in any prosecution under this section.
[2] Section 2530. Property Subject to Forfeiture under Tariff and Customs Laws Any vehicle,

vessel or aircraft, cargo, article and other objects shall, under the following conditions
be subject to forfeiture:
x xxx
(f) Any article the importation or exportation of which is effected or attempted
contrary to law, or any article of prohibited importation or exportation, and all other
articles which, in the opinion of the Collector, have been used, are or were entered to
be used as instruments in the importation of exportation of the former:
(l) Any article sought to be imported or exported:
x xxx

5. Through any other practice or device contrary to law by means of which such article was
entered through a customhouse to the prejudice of the government.
[3] Section 101. Prohibited Importations. The importation into the Philippines of the following

articles is prohibited:
x xxx
(f) Lottery and sweepstakes tickets except those authorized by the Philippine
Government, advertisements thereof and list of drawings therein.
[4] Otherwise known as the SPECIAL ECONOMIC ZONE ACT of 1995.
[5] Rollo, pp. 375-386.
[6] Id. at 394-413.

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[7] The Court of Tax Appeals Second Division is composed of Associate Justices Juanito C.
Castaeda (Chairperson), Erlinda P. Uy and Olga Palanca-Enriquez.
[8] Rollo, pp. 387-388.
[9] Id. at 414-418.
[10] Id. at 424-425.
[11] Id. at 426-462.
[12] Id. at 463-469.
[13] Id. at 470-473.
[14] Id. at 27-38.
[15] Ibid.
[16] Id. at 40.
[17] Id. at 2-24.
[18] Webb v. De Leon, G.R. No. 121234, August 23, 1995, 247 SCRA 652, 685.
[19] RULES OF COURT, Rule 110, Sec. 5.
[20] Ong v. Genio, G.R. No. 182336, December 23, 2009, 609 SCRA 188, 194.
[21] Citing Section 35 (1), Chapter 12, Title III, Book IV of the Administrative Code of 1987.

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GLOSSARY
A

Agents- are persons or companies licensed by the Commissioner of Customs to act on behalf of
the importers and exporters

Appeal- applies to a higher court for a reversal of the decision of a lower court

Bureau of Customs a Philippine government agency task to collect duties and taxes on
imported goods, combat smuggling and promote trade facilitation

Cash Bail Bonds- is a Court-ordered financial guarantee requiring the full amount of the bail to
be paid in cash

Certiorari- a writ or order by which a higher court reviews a decision of a lower court

Collector of Customs the customs chief operating officer of a port of entry

Complaint is a sworn statement charging a person with an offense, subscribed by the


offended party, any peace officer, or other public officer charged with the enforcement of he
law violated.

Criminal Action- a procedure by which a person accused of committing a crime is charged,


brought to trial and judged

Customhouse government building or facility at a port of entry used for clearance of export
and imported goods, and for entry and departure of ships.

Decision- a conclusion or resolution reached after consideration

Deportation it is the return of an alien to his country who has broken the conditions upon
which he could continue to reside in the Philippines

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Entry of Judgment - the term given to the written record of a court's decision and is in the
permanent records of the court.

Forfeiture a legal action taken by customs to divest an owner of title over a shipment

Importation the business of bringing in to the country any commodity or service from abroad.

Information accusation in writing charging a person with an offense, subscribed by the fiscal
and filed with the court

Motion for Reconsideration- to reopen a criminal case; illegal possession of firearm case;
effects of the gross negligence of former defense counsel

Motion to Withdraw - is a legal instrument that basically acts as a petition asking a court to
remove a lawsuit from its docket or to authorize the departure of a particular attorney from a
case.

Petitioner- a person who presents a petition to an authority in respect of a particular cause

Petition- a formal written request, typically one signed by many people, appealing to authority
with respect to a particular cause

Philippine Charity Sweepstakes Office (PCSO)- wholly owned and controlled government
corporation engaged in lottery gaming to raise revenues to fund the priority health, medical
and social programs of the government, continually exerts efforts to find game innovations to
increase its funds for charitable purposes.

Probable Cause facts and circumstances antecedent to the issuance of warrant sufficient n
themselves to induce a cautious man to rely upon them.

Prohibited Importation goods that cannot be imported like pornographic materials,


subversive documents, illegal drugs, products used for abortion

Prosecutor- a person, especially a public official, who institutes legal proceedings against
someone

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Resolution- the action of solving a problem, dispute, or contentious matter

Respondents- a person who replies to something, especially one supplying information for a
survey or questionnaire or responding to an advertisement

Shipment the cargo carried under the terms of a single bill of lading

Smuggling any act that involves fraudulent importations or exportations providing assistance
to receiving concealing, buying, selling the transportation concealment or sale of a smuggled
article, knowing the same to have been imported contrary to law

Special Economic Zones (SEZ) hereinafter referred to as the ECOZONES, are selected areas
with highly developed or which have the potential to be developed into agro-industrial,
Industrial tourist/recreational, commercial, banking, investment and financial centers. An
ECOZONE may contain any or all of the following: Industrial Estates (IEs), Export Processing
Zones (EPZs), Free Trade Zones, and Tourist/Recreational Centers.

Tariff and Customs Code of the Philippines the provisions of the TCCP the regulations
pursuant thereto, and all laws, rules and regulations subject to enforcement by customs, or
otherwise within its jurisdiction

Warrant of Arrest order in writing issued in he name of the People of the Philippines, signed
by the Judge and directed to a peace officer, commanding him to arrest a person designated.

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REFERENCES

http://sc.judiciary.gov.ph/jurisprudence/2011/april2011/190487.htm
Republic Act No. 7916- The Special Economic Zone Act of 1995.
Section 3601 TCCP Vol. II- Unlawful Importation (Section 1401 Unlawful Importation or
Exportation of the CMTA)
Section 2530 TCCP Vol. II Property Subject to Forfeiture under Tariff and Customs Laws
(Section 1113 Property Subject to Seizure and Forfeiture of the CMTA)
Section 101 TCCP Vol. II- Prohibited Importations (Section 119 Restricted Importation
and Exportation of the CMTA)
Section 13, Article VII of the 1987 Constitution of The Philippines
Section 35 (1), Chapter 12, Title III, Book IV of the Administrative Code of 1987 Powers
and Functions - Office of the Solicitor General

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TABLE OF CONTENTS

Acknowledgement 1
Introduction 2
Facts of the Case 3
Issues of the Case 5
Decision of the Court 6
Conclusion 7
Actual Case 8
Glossary 15
References 18

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