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G.R. No.

126634 January 25, 1999 then considered submitted for decision based on
TRANSGLOBE INTERNATIONAL, INC., existing documents. On 26 August 1992 after
petitioner, vs. COURT OF APPEALS and finding that a violation of the cited provisions
COMMISSIONER OF CUSTOMS, was indeed committed, District Collector
respondents. Rosqueta decreed the forfeiture of the shipment
in favor of the government to be disposed of in
On 27 April 1992 a shipment from Hongkong accordance with law.2
arrived in the Port of Manila on board the "S/S Thereafter petitioner filed a petition for
Sea Dragon." Its Inward Foreign Manifest redemption of the shipment. On 2 October 1992
indicated that the shipment contained 1,054 Hearing Officer Geoffrey G. Gacula
pieces of various hand tools. Acting on recommended that the petition be given due
information that the shipment violated certain course and that petitioner be allowed to effect
provisions of the Tariff and Customs Code as the release of the shipment upon payment of
amended, agents of the Economic Intelligence P1,300,132.04 representing its domestic market
and Investigation Bureau (EIIB) seized the value. Hearing Officer Gacula took into
shipment while in transit to the Trans Orient consideration the following
container yard-container freight station. An
examination thereof yielded significant results Record shows that the shipment consists of
good which are in legal contemplation not
1. The 40 ft. van was made to appear as a prohibited, nor the release thereof to the
consolidation shipment consisting of 232 claimant contrary to law . . . . the spirit and
packages with Translink Int'l. Freight Forwarder intent of Executive Order No. 38, to increase
as shipper and Transglobe Int'l., Inc. as and accelerate revenue collection by the
consignee; government thru redemption of forfeited
cargoes, which would also benefit importers by
2. There were eight (8) shippers and eight (8) giving them the chance to recover portions of
consignees declared as co-loaders and co- their investment . . . . 3
owners of the contents of the van, when in truth
the entire shipment belongs to only one entity; Chief of the Law Division Buenaventura S.
Tenorio concurred in the recommendation. On
3. Not one of the items declared as the contents the same day, District Collector Rosqueta
of the van, i.e., various hand tools, water recommended approval thereof and forwarded
cooling tower g-clamps compressors, bright the case to respondent Commissioner of
roping wire and knitting machine w(as) found in Customs Gulliermo L. Parayno Jr. through
the van. Instead the van was fully stuffed with Deputy Commissioner Licerio C. Evangelista. 4
textile piece goods. 1 On 7 October 1992 the latter likewise
recommended favorable action thereon. 5
On those accounts, which were deemed to However respondent Commissioner Parayno Jr.
constitute a violation of Sec. 2503 in relation to denied the offer of redemption in his 1st
Sec. 2530, pars. (f) and (m), subpars. 3, 4 and Indorsement dated 27 November 1992 for these
5, of the Tariff and Customs Code, the EIIB reasons
recommended seizure of the entire shipment.
On 21 May 1992 District Collector of Customs 1. The shipment was made to appear to be an
Emma M. Rosqueta issued the corresponding innocuous consolidation shipment destined for
warrant of seizure and detention. stripping at an outside CY-CFS 6 in order to
conceal the textile fabrics;
The case was set for hearing on 2 June 1992 but
petitioner Transglobe International, Inc., or its 2. The eight (8) co-loaders/consignee of the
duly authorized representative, failed to appear shipment are all fictitious;
despite due notice. Resetting was ordered to 19
June 1992, yet, for the same reason was further 3. Under Section 3B, CMO 87-92, offers of
reset to 8 July 1992. Still petitioner or its redemption shall be denied when the seized
representative was unable to appear which thus shipment is consigned to a fictitious consignee.
led to its being declared in default. The case was 7
Thus respondent Commissioner Parayno Jr. the denial of the redemption by respondent
instructed the Auction and Cargo Disposal Commissioner of Customs. On 28 June 1996 it
Division of the Port of Manila to include the set aside the ruling of the CTA 15 on the
shipment in the next public auction. 8 On 8 ratiocination that
February 1993 reconsideration was denied. 9
Petitioner moved for another reconsideration The findings of the Economic Intelligence and
which was referred to District Collector Rosqueta Investigation Bureau: "that the shipment was
for comment. Even after further review, she made to appear to be an innocuous
maintained her previous recommendation consolidation shipment destined for stripping at
allowing redemption an outside CY-CFS in order to conceal the textile
fabrics," and "that the eight (8)
1. Since no entry has been filed so far, the coloaders/consignees were all fictitious" had not
consignee could not be faulted for been refuted during the seizure proceedings by
misdeclaration under Section 2503 of the Tariff respondent Transglobe International, Inc. The
and Customs Code. While the shipment was failure of respondent Transglobe to refute this
misdeclared in the rider and the manifest, the fact negates its claim that no violation of the
consignee is innocent of the facts stated therein above cited provisions (Sec. 2503 in relation to
as it had no hand in their preparation or Sec. 2530, pars. (f) and (m), subpars. 3, 4 and
issuance. Law and regulation allow the 5 of the Tariff and Customs Code as amended)
amendment of the manifest at any time before had been committed. The findings of the EIIB
the filing of entry in order to protect the above referred to remain unassailed and
innocent consignee. uncontradicted. Said findings clearly show
badges of fraud . . . The seizure of the property
2. Transglobe International, Inc., is a juridical in question was made upon findings that the
person duly organized in accordance with the documents covering the said shipment were
laws of the Philippines and is qualified as a forged, thus:
consignee. It is not fictitious as evidenced by its
Articles of Incorporation registered with the FRAUD the following cases herein
Securities and Exchange Commission. enumerated demonstrate the presence of fraud:
1.a. The use of forged or spurious
3. The shipment consists of goods which are in documents . . . (Section 1, CMO-87-92). 16
legal contemplation not prohibited, nor the
release thereof to the Claimant contrary to law, On 3 September 1996 reconsideration was
and the redemption offer is well within the denied. 17
purview of Executive Order No. 38. 10
We now resolve the issue of whether petitioner
Nevertheless, reconsideration was again denied should be allowed to redeem the forfeited
on 1 July 1993. 11 On 4 August 1993 the shipment.
forfeiture of the shipment and denial of the Petitioner asserts that it is not guilty of fraud
request for redemption were affirmed by because, as held in Farolan Jr. v. Court of Tax
respondent Commissioner Parayno Jr. 12 Appeals 18 and Aznar v. Court of Tax Appeals,
19 the fraud referred to is one that is intentional
In the appeal which was solely concerned with with the sole object of avoiding payment of
the propriety of redemption, the Court of Tax taxes. While petitioner admits that it is the only
Appeals (CTA) expressed a different view. consignee of the cargo and that the van
Relying on Sec. 1 of Executive Order No. 38, as contains textiles, contrary to those declared in
applied in Gazzingan v. Commissioner of the manifest and rider, it avers that these
Customs 13 since no fraud was found on the discrepancies do not evince deliberate evasion
part of the redemptioner, the CTA directed on of taxes or payment of duties, especially
27 June 1995 that petitioner be allowed to considering that it is a duly registered domestic
redeem the shipment upon payment of its corporation, and that it has no knowledge or
computed domestic market value. 14 participation in the execution of the manifest
and the rider thereon.
However respondent Court of Appeals sustained
A violation of Sec. 2503 in relation to Sec. 2530, owner, importer, exporter, or consignee or his
pars. (f) and (m), subpars. 3, 4 and 5, of the agent shall offer to pay to the collector a fine
Tariff and Customs Code as amended was found imposed by him upon the property, or in case of
by the Bureau of Customs. Section 203 deals forfeiture, the owner, exporter, importer or
with undervaluation, misclassification and consignee or his agent shall offer to pay for the
misdeclaration in entry. On the other hand, Sec. domestic market value of the seized article. The
2530, pars. (f) and (m), subpars. 3, 4 and 5 Commissioner may accept the settlement of any
provides seizure case on appeal in the same manner
(emphasis supplied) . . . Settlement of any
Sec. 2530. Property Subject to Forfeiture Under seizure case by payment of the fine or
Tariff and Customs Law. Any vehicle, vessel redemption of forfeited property shall not be
or aircraft, cargo, article and other objects shall, allowed in any case where the importation is
under the following conditions be subject to absolutely prohibited or where the release of the
forfeiture . . . . property would be contrary to law.

f. Any article the importation or exportation of As a means of settlement, redemption of

which is effected or attempted contrary to law, forfeited property is unavailing in three (3)
or any article of prohibited importation or instances, namely, when there is fraud, where
exportation, and all other articles which, in the the importation is absolutely prohibited, or
opinion of the Collector, have been used, are or where the release of the property would be
were entered to be used as instruments in the contrary to law. Respondent Commissioner of
importation or exportation of the former . . . . Customs disallowed the redemption on the
ground of fraud which consisted of the
m. Any article sought to be imported or following: "The shipment was made to appear to
exported . . . . be an innocuous consolidation shipment
destined for stripping at an outside CY-CFS in
(3) On the strength of a false declaration or order to conceal the textile fabrics; the eight (8)
affidavit executed by the owner, importer, co-loaders/consignees of the shipment are all
exporter or consignee concerning the fictitious; and, under Section 3B, CMO 87-92,
importation of such article; offers of redemption shall be denied when the
seized shipment is consigned to a fictitious
(4) On the strength of a false invoice or other consignee." 21 Respondent court sustained this
document executed by the owner, importer, ruling which it considered based on undisputed
exporter or consignee concerning the findings of the EIIB.
importation or exportation of such article; and
We rule that respondent Court of Appeals
(5) Through any other practice or device committed reversible error in rendering the
contrary to law by means of which such article assailed decision. The findings of respondent
was entered through a customhouse to the Commissioner of Customs which provided the
prejudice of the government. bases for denying petitioner's offer of
redemption were his own, not of the EIIB, and
From the decision of the District Collector of were merely stated in his 1st Indorsement with
Customs decreeing forfeiture, petitioner no evidence whatsoever to substantiate them.
Transglobe International, Inc., filed a petition These findings prompted petitioner to seek
for redemption pursuant to Sec. 2307 of the reconsideration and dispute them with these
Tariff and Customs Code as amended by Sec. 1 claims
of E.O. No. 38 20 which states
. . . First . . . . the shipment was not destined
Sec. 2307. Settlement of Case by Payment of for stripping. It was then being transported to a
Fine or Redemption of Forfeited Property. CY-CFS operator where it would be examined by
Subject to approval of the Commissioner, the a customs appraiser who would determine the
District Collector may, while the case is still proper taxes and duties to be paid on the
pending except when there is fraud, accept the shipment. Second . . . . the petitioner is a
settlement of any seizure case provided that the legitimate corporation registered with the
Securities and Exchange Commission in second motion for reconsideration is
accordance with the laws of the Philippines . . . . enlightening: "While the shipment was
22 misdeclared in the rider and the manifest, the
consignee is innocent of the facts stated therein
On petitioner's second motion for as it had no hand in their preparation or
reconsideration, District Collector Rosqueta was issuance." 27 We mention in passing that in
silent on the first claim but upheld the second having thus stated, she in effect nullified her
claim. According to her, petitioner is a juridical prior finding that petitioner violated the cited
person duly organized in accordance with the provisions of the Tariff and Customs Code as
laws of the Philippines and is qualified as a amended. Consequently, we agree with the
consignee; it is not fictitious as evidenced by its finding of the CTA that fraud was not committed
Articles of Incorporation registered with the by petitioner in the importation of the shipment.
Securities and Exchange Commission. 23
Despite these, respondent Commissioner of Taking into consideration the circumstances
Customs maintained his denial of the obtaining in the present case, namely, the
redemption based on his previous absence of fraud, the importation is not
unsubstantiated findings. It is settled that absolutely prohibited and the release of the
findings of fact of an administrative agency property would not be contrary to law, the Court
must be respected so long as they are deems it proper to allow the redemption of the
supported by substantial evidence 24 or that forfeited shipment by petitioner upon payment
amount of relevant evidence which a reasonable of its computed domestic market value. Doing
mind might accept as adequate to justify a so is definitely in keeping with the two-way
conclusion. 25 Lacking support, the factual intent of E. O. No. 38, to wit, to expedite the
findings of respondent Commissioner of collection of revenues and hasten the release of
Customs cannot stand on their own and cargoes under seizure proceedings to the end
therefore not binding on the courts. that importers and exporters will benefit in the
form of reduction in expenditures and assurance
In the appeal before the CTA, respondent of return of their investments that have been
Commissioner of Customs contended that the tied up with their importations. 28
seizure of the shipment was made also upon a
finding that the documents covering it were Finally, one may be tempted to argue that for
forged, thus constituting fraud as defined in failure to appear in the forfeiture proceedings
Sec. 1, par. 1.a. CMO-87-92. This Section is of despite due notice, petitioner was in default and
the same tenor as Sec. 2530, pars. (f) and (m), deemed to have admitted its violation of Sec.
subpars. 3, 4 and 5, which for emphasis deals 2503, in relation to Sec. 2530, pars. (f) and
with falsities committed by the owner, importer, (m), as found by District Collector of Customs
exporter or consignee or Rosqueta, interpreted by the Court of Appeals
importation/exportation through any other as "badges of fraud," and, as a consequence,
practice or device. In Aznar, as reiterated in petitioner is now estopped from claiming that in
Farolan, we clarified that the fraud the proceedings for redemption there was no
contemplated by law must be actual and not fraud on its part.
constructive. It must be intentional, consisting
of deception willfully and deliberately done or The argument surfs on a wrong premise.
resorted to in order to induce another to give up Forfeiture of seized goods in the Bureau of
some right. The misdeclarations in the manifest Customs is a proceeding against the goods and
and rider cannot be ascribed to petitioner as not against the owner. It is in the nature of a
consignee since it was not the one that prepared proceeding in rem, i.e., directed against the res
them. As we said in Farolan, if at all, the or imported articles and entails a determination
wrongful making or falsity of the documents can of the legality of their importation. 29 In this
only be attributed to the foreign suppliers or proceeding, it is in legal contemplation the
shippers. 26 Moreover, it was not shown in the property itself which commits the violation and
forfeiture decision that petitioner had knowledge is treated as the offender, without reference
of any falsity in the shipping documents. District whatsoever to the character or conduct of the
Collector Rosqueta's comment on petitioner's owner. 30 The issue here is limited to whether
the imported goods should be forfeited and 90 parks of Salem cigarettes and 414 cases of
disposed of in accordance with law for violation Union cigarettes. The authorities turned over
of the Tariff and Customs Code. Hence, the the vessel, its crew and its cargo of blue seal
ruling of District Collector Rosqueta in the cigarettes to the Small Craft Unit of the
forfeiture case, insofar as the aspect of fraud is Philippine Navy for disposition. Thereafter,
concerned, is not conclusive; nor does it Seizure Identification Case Nos. 8006 and 8006-
preclude petitioner from invoking absence of A against the vessel and the cargo of blue seal
fraud in the redemption proceedings. cigarettes, respectively, were instituted before
Significantly, while District Collector Rosqueta the Collector of Customs.
decreed the forfeiture of the subject goods for
violation of the Tariff and Customs Code, she For failure of anybody to claim ownership over
nevertheless recommended the approval of the cigarettes, the same were forfeited in favor
petitioner's offer of redemption, 31 and of the Government.
categorically acknowledged that as consignee
there was no fraud on its part.32 On the other hand, during the forfeiture
proceedings against the vessel private
WHEREFORE, the petition is GRANTED. The respondent claimed that on December 4, 1963,
Decision of respondent Court of Appeals of 28 his vessel with fourteen (14) crew and a captain
June 1996 sustaining the denial of the went to Bulalakao, Mindoro to catch fish; that
redemption of the forfeited shipment and the after three days of fishing, all the fishing nets
Resolution of 3 September 1996 denying were destroyed; that Jose Joloc captain of the
reconsideration are SET ASIDE. The Decision of boat, notified private respondent in Manila about
the Court of Tax Appeals of 27 June 1995 the nets and the latter ordered the former to
ordering respondent Commissioner of Customs bring the boat back to Manila; that for failure of
to allow petitioner Transglobe International, the boat to arrive in Manila on the date
Inc., to redeem the forfeited shipment upon expected by private respondent, he sent a
payment of its domestic market value telegram addressed to the captain reiterating
amounting to P1,300,132.04 is REINSTATED. his previous order, but no answer was received;
that private respondent sent a certain Artemio
Buenvenuto to Mindoro on December 13, 1963
G.R. No. L-31733 September 20, 1985 to fetch the boat; that on even date Buenvenuto
COMMISSIONER OF CUSTOMS, sent a telegram to private respondent that the
petitioner,vs.COURT OF TAX APPEALS and boat had left Mindoro; that after receiving the
JOSE PASCUAL, respondents, telegram on the same date, private respondent
notified the Philippine Navy that his boat was
MAKASIAR, J.: missing and expressed fear that it might be
This is a petition for review on certiorari of the used illegally.
decision dated September 30, 1969 of
respondent Court of Tax Appeals which modified Jose Joloc captain of the vessel claimed that he
the decision of petitioner Commissioner of was not able to bring the boat back to Manila
Customs by ordering only the payment of a fire due to bad weather; that while in Mindoro,
in lieu of the forfeiture of private respondent Fructuoso Maniego, whom he knew since 1962
Jose Pascual's vessel M/B "Maria Victoria-P", approached and asked him if he could load the
used in the illegal importation of blue seal former's fishes on board M/B "Maria Victoria-P"
cigarettes. for a fee of P20,000.00; that the fishes were out
in the sea aboard a disabled boat; that he
Private respondent Jose Pascual is the agreed and upon reaching the place where the
registered owner of the M/B "Maria Victoria-P", boatload of fishes is located, they found a
a motor boat of 63.25 gross tonnage duly kumpit with seven armed Muslims on board and
licensed by the Bureau of Customs to engage in that the kumpit was loaded with blue seal
coastwise trade. On December 16, 1963, the cigarettes; that at gun points, he was forced to
said vessel was apprehended by the elements of load the blue seal cigarettes which allegedly
the Philippine Navy five miles off the coast of belong to one Datu Jacob of Jolo, Sulo.
Naic, Cavite for carrying untaxed 105 cases and
On July 3, 1964, the Collector of Customs cigarettes. Thus, the law applicable is
rendered a decision declaring the vessel paragraphs (a) and (b), Section 2530 of the
forfeited in favor of the Government. The Tariff and Customs Code which states:
Collector of Customs ruled that since it was
established that the vessel was hired for a fee of SEC. 2530. Property Subject to Forfeiture Under
P20,000.00 thru its captain, to ferry the untaxed Tariff and Customs Law.- Any vehicle, vessel or
cigarettes, there was a contract of carriage aircraft, cargo, article and other objects shall
entered into between Jose Joloc and the owner under the following conditions be subject to
of the cigarettes; that Jose Pascual, owner of forfeiture
the vessel is bound by the acts of his agent,
a. Any vehicle, vessel or aircraft, including
On appeal by herein private respondent, the cargo, which shall be used unlawfully in the
decision was affirmed by the Commissioner of importation or exportation of articles or in
Customs. Private respondent appealed before conveying and or transporting contraband, or
the Court of Tax Appeals and on September 30, smuggled article in commercial quantities into or
1969, the said Court, as already stated, from any Philippine port or place, and any
modified the decision of the Commissioner of vessel which, being of less than thirty tons
Customs and ordered private respondent to pay capacity shall be used in the importation of
a fine of P5,000.00 instead of the forfeiture of articles into any Philippine Port or place. The
the vessel. mere carrying or holding on board of contraband
or smuggled articles in commercial quantities
Respondent Court stated that there is no shall subject such vessel vehicle, aircraft or any
question that the vessel was used in the illegal other craft to forfeiture: Provided, That the
importation of blue seal cigarettes; hence, vessel, vehicle, aircraft or any other craft is not
subject to penalty imposed by Section 2530 of used as a duly authorized common carrier and
the Tariff and Customs Code. However, the as such a carrier it is not chartered or leased;
penalty of forfeiture appears to be excessive
since herein private respondent took all the b. Any vessel engaging in the coastwise trade
necessary action to prevent the vessel from which shall have on board any article of foreign
being used illegally by notifying the Philippine growth, produce, or manufacture in excess of
Navy of the disappearance of the vessel. the amount necessary for sea stores, without
such article having been properly entered or
From the aforesaid decision, petitioner instituted legally imported.
the present petition.
Pursuant to the aforesaid provision, the vessel is
The imperative question presented to Us in this clearly subject to forfeiture in favor of the
appeal is whether or not the motor boat M/B Government. Forfeiture proceedings are in the
"Maria Victoria-P" is subject to forfeiture under nature of proceedings in rem (Vierneza vs.
the Tariff and Customs Code, particularly Commissioner of Customs, 24 SCRA 394) and
paragraphs (a) and (b) of Section 2530. are directed against the res. The fact that
private respondent has allegedly no actual
After the petition was given due course, private knowledge that M/B "Maria Victoria-P" was used
respondent in his answer stated that during the illegally does not render the vessel immune
pendency of the case before the Court of from forfeiture. This is so because the forfeiture
Appeals, the vessel M/B "Maria Victoria-P" was proceedings in this case was instituted against
sold at public auction by the Auction and Sales the vessel itself. Private respondent's defense
Division of the Bureau of Customs. that he has no actual knowledge that the vessel
was used illegally is personal to him but cannot
WE find merit in the petition. absolve the vessel from liability of forfeiture.

M/B "Maria Victoria-P" was a vessel duly Moreover, the aforequoted provision prescribes
authorized to engage in coastwise trade. It is in an unequivocal term the imposition of the
undisputed and, in fact, established that it was penalty of forfeiture in cases of unlawful
used in the illegal importation of blue seal importation of foreign articles regardless of
whether such importation occurred with or out at sea aboard an alleged disabled boat. It is
without the knowledge of the owner of the unbelievable that he could risk going out to sea
vessel. to load the fish cargo of Maniego in the midst of
the storm, but could not sail back to Manila.
In United States vs. Steamship "Rubi" (32 Phil.
239), this Court, in resolving the question of Taking all these circumstances, the conclusion is
whether or not the innocence of the owner in inevitable that the vessel was not used in
the illegal importation of foreign articles can catching fish but was used in the smuggling of
withdraw the ship from the penalty of blue seal cigarettes.
confiscation, said:
The vessel which commits the aggression is DATED SEPTEMBER 30, 1969 OF RESPONDENT
treated as the offender, without any reference COURT OF TAX APPEALS IS HEREBY SET ASIDE;
whatsoever to the character or conduct of the AND THE VESSEL M/B "MARIA VICTORIA-P" IS
owner. ... This is done from the necessity of the HEREBY ORDERED FORFEITED IN FAVOR OF
case, as the only adequate means of THE GOVERNMENT. COSTS AGAINST PRIVATE
suppressing the offense or wrong. ... The RESPONDENT. SO ORDERED.
doctrine also is familiarly applied to cases of
smuggling and other misconduct under our G.R. No. 132929 March 27, 2000
revenue laws; and ... embargo and non- COMMISSIONER OF CUSTOMS, petitioner,
intercourse acts. ... The same thing applies to vs. COURT OF APPEALS and PHILIPPINE
proceeding in rem or seizures in admiralty ... CASINO OPERATORS CORPORATION,
The acts of the master and crew, in cases of this respondents.
sort, bind the interest of the owner of the ship,
whether he be innocent or guilty. D E C I S I O N MENDOZA, J.:
The issue for decision in this case is whether the
The claim of private respondent that while the Philippine Casino Operators Corporation (PCOC)
crew members of the vessel were fishing, all the is, by virtue of its concessionaire's contract with
fishing nets were destroyed and that he was the Philippine Amusement and Gaming
even notified in this regard is hardly convincing. Corporation (PAGCOR), exempt from the
It may be possible that while in the course of payment of duties, taxes and other imposts on
catching fish, one or two fishing nets may be importations. Both the Court of Appeals and the
destroyed. But the destruction of all the fishing Court of Tax Appeals ruled in the affirmative.
nets at the same time is highly improbable. Hence this petition.
Furthermore, private respondent reported to the
Philippine Navy instead of the Coast Guard that The facts are as follows:
his vessel was missing, only after a lapse of six PAGCOR is a government corporation with
(6) days from the time he was informed of the exclusive franchise to operate and maintain
alleged destruction of all the fishing nets. Could gambling casinos. On July 5, 1977, it entered
it be that all those notification of destruction of into a contract with PCOC for the operation of its
fishing nets and eventually of the loss of vessel floating casino off Manila Bay. This
are just a part of a scheme to prevent the establishment was, however, gutted by fire in
vessel from any liability should, as it happened 1979, for which reason, PAGCOR shifted its
in this case, it be intercepted by the authorities? operations to land-based casinos and entered
into another contract with PCOC for the
The insistence of Jose Joloc captain of the vessel management of a casino at the Provident
that the boat could not be brought back to International Resources Corporation (PIRC)
Manila due to bad weather is not supported by building on Imelda Avenue, Paraaque City.
evidence. No weather report in Mindoro was Both contracts contained the following
ever presented during the hearing of the case. stipulation:1
His insistence becomes even more dubious by
the fact that he agreed with Fructuoso Maniego Sec. 2(e). The CONCESSIONAIRE shall be
to load the latter's fishes on board M/B "Maria authorized in behalf of the FRANCHISE[E] to . . .
Victoria-P" when the alleged fishes were even procure either local or imported equipment and
facilities from foreign sources as may be III. ERRONEOUSLY AFFIRMED THE ORDER TO
required in the casino operation . . . . RELEASE THE SEIZED ARTICLE ILLEGALLY
From 1982 to 1984, PCOC imported various
articles and equipment which, on the strength of First. Petitioner was represented in the CTA by
endorsements of exemption it had procured the Office of the Solicitor General which
from the Ministry of Finance, were released from deputized lawyers in the Legal Service Division
the Bureau of Customs free of tax. of the Bureau of Customs to serve as
collaborating counsels. In accordance with this
Sometime in May 1988, the Customs Bureau arrangement, lawyers in both offices (Bureau of
received confidential information that PCOC had Customs and the OSG) were served copies of
been able to obtain tax exemption through fraud decisions of the CTA. The lawyers at the Bureau
and misrepresentation. Accordingly, the District received a copy of the decision of the CTA on
Collector of Customs issued a warrant for the May 30, 1997, while the OSG received its own
seizure of the imported articles. On March 12, on June 5, 1997. As earlier stated, the OSG filed
1989, agents of the Bureau served the warrants its motion for reconsideration on June 20, 1997.
at the PIRC building, where the articles were Counted from this date, the motion was
kept, and several auto parts, escalators, seasonably filed, but if the period for appealing
elevators, power systems, kitchen equipment or filing a motion for reconsideration were
and other heavy equipment were seized or reckoned from the date of receipt of the decision
detained.2 by the lawyers of the Bureau of Customs, then
the motion was filed five days late. The Court of
After hearing, the District Collector of Customs Appeals ruled that service of the copy of the
ordered on February 22, 1990 the forfeiture of CTA decision on the lawyers of the Bureau of
the imported articles. PCOC appealed, but the Customs was equivalent to service on the OSG,
Commissioner of Customs, on February 12, and, therefore, the motion for reconsideration
1991, affirmed the ruling. PCOC elevated the was filed late.4
case to the CTA, which, on May 28, 1997,
reversed the ruling of the Commissioner of This is error. In National Power Corp. v. NLRC,5
Customs and ordered the release of the articles it was already settled that although the OSG
to PCOC. may have deputized the lawyers in a
government agency represented by it, the OSG
On June 20, 1997, the Commissioner filed a continues to be the principal counsel, and,
motion for reconsideration but his motion was therefore, service on it of legal processes, and
denied on the ground that it was filed late. The not that on the deputized lawyers, is decisive. It
CTA, therefore, ordered the entry of its was explained:
. . . The lawyer deputized and designated as
The Commissioner then filed a petition for "special attorney-OSG" is a mere representative
certiorari. But in its decision dated March 3, of the OSG and the latter retains supervision
1998, the Court of Appeals dismissed the and control over the deputized lawyer. The OSG
petition. Hence, this petition for review on continues to be the principal counsel . . . . and
certiorari. Petitioner contends that the Court of as such, the Solicitor General is the party
Appeals3 entitled to be furnished copies of the orders,
notices and decisions. The deputized special
I. ERRONEOUSLY AFFIRMED THE DECISION OF attorney has no legal authority to decide
THE COURT OF TAX APPEALS THAT SERVICE TO whether or not an appeal should be made.
OF CUSTOMS IS BINDING ON THE OSG. As a consequence, copies of orders and
decisions served on the deputized counsel,
II. [ERRONEOUSLY] DISMISSED THE PETITION acting as agent or representative of the Solicitor
FOR CERTIORARI AS, ALLEGEDLY, THE PROPER General, are not binding until they are actually
REMEDY IS AN APPEAL. received by the latter. We have likewise
consistently held that the proper basis for
computing reglementary period to file an appeal its error would be an error of judgment
and for determining whether a decision had committed in the exercise of its jurisdiction.12
attained finality is service on the OSG . . . .6
We disagree. In its order of August 14, 1997,
In ruling that it is service of the adverse the CTA denied petitioner's motion for
decision on the deputized lawyers and not that reconsideration and ordered the entry of
on the OSG which is decisive, the CA cited the judgment. As far as petitioner was concerned,
cases of Republic v. Soriano7 and National there was no longer any appeal and execution of
Irrigation Administration v. Regino.8 the decision was in order, whereas the prime
specification of petition for certiorari is that
These cases are not in point. In Soriano, the there is no appeal, nor any other plain, speedy,
Court dismissed the petition of the OSG not adequate remedy in the ordinary course of law.
because it was bound by the earlier service of
its orders on the deputized counsel but because, Third. Coming now into the merits of the case,
counted from the OSG's receipt of the the CTA ruled that the importations of PCOC
questioned orders, its Motion for were exempt from tax pursuant to 4(2)(b) of
Reconsideration was filed late. Thus, it was B.P. Blg. 1067-B, as amended by P.D. No.
stated:9 1399,13 , which provides:

The three . . . Orders in question were received Sec. 4. EXEMPTIONS.

by the OSG on October 14, 1986 having been
referred to it by the Insurance Commissioner on (2) Income and other taxes.
that same day . . . Applying the Interim Rules
and Guidelines of the Rules of Court, the OSG (b) Others: The exemption herein granted for
had until October 29, 1986 to file its appeal earnings derived from the operations conducted
from the questioned Orders. Consequently, the under the franchise, specifically from the
Motion for Reconsideration filed on November payment of any tax, income or otherwise, as
10, 1986 was filed out of time. . . . well as any form of charges, fees, or levies,
shall inure to the benefit of and extend to
On the other hand, the case of National corporation/s, association/s, agency/ies, or
Irrigation Administration v. Regino is different individual/s with whom the Franchisee
because there the OSG did not deputize any [PAGCOR] has any contractual relationship in
special counsel. The other counsel of record, connection with the operations of the casino/s
Atty. Basuil, was deputized by the NIA. Thus, authorized to be conducted under the franchise
the Court's ruling therein that the service of the and to those receiving compensation or other
lower court's order (denying motion for remuneration from the Franchise Holder as a
reconsideration) to Atty. Basuil was also result of essential facilities furnished and/or
deemed service to the OSG was based on Rule technical services rendered to the Franchise
13, 2 of the Rules of Court.10 The Court itself Holder.
impliedly recognized that had Atty. Basuil been
a deputized special counsel of the OSG, he This provision is not applicable because it refers
would have no authority to decide on his own to income tax exemption. As PCOC claims to be
what action to take on any incident regarding exempt from the payment of duties, taxes, and
the case. The Court stated: "[A]s aptly noted by other imposts for imported articles, the CTA
the private respondent, the Solicitor General did should have applied instead the provision of the
not appoint Atty. Basuil a special attorney or his first paragraph of 4(1), to wit:
Second. The Court of Appeals ruled that
petitioner should have filed an appeal and not a (1) Duties, taxes and other imposts on
petition for certiorari under Rule 65 of the 1997 importations All importations of equipment,
Rules of Civil Procedure because even assuming vehicles, automobiles, boats, ships, barges,
that the CTA erred in ruling that PCOC is exempt aircraft and such other gambling paraphernalia,
from the payment of importation-related taxes, including accessories or related facilities, for the
sole and exclusive use of the casinos, the proper paying income tax, surtax of improperly
and efficient management and administration accumulated profits, and business tax.
thereof, and such other clubs, recreation or
amusement places to be established under and Fourth. Prescinding from what has been said, we
by virtue of this Franchise shall be exempt from hold that the forfeiture of the illegally released
the payment of duties, taxes and other imposts, equipment was proper under 2530, pars. (f)
including all kinds of fees, levies, or charges of and (l), sub-paragraph 3, 4 and 5 of the and
any kind or nature. Customs Code, as amended .17 Contrary to
private respondent's contention, the forfeiture
Vessels and/or accessory ferry boats imported proceedings were not barred by prescription as
or to be imported by any corporation having the one year prescriptive period under Sec.
existing contractual arrangements with the 160318 of the Tariff and Customs Code, as
Franchisee, for the sole and exclusive use of the amended, applies only in the absence of fraud.
casino or to be used to service the operations In this case, PCOC's importations were released
and requirements of the casino, shall likewise be by the Bureau of Customs free of tax by virtue
totally exempt from the payment of all taxes, of endorsements issued by the Ministry (now
duties and other imposts, including all kinds of Department) of Finance. These, in turn, were
fees, levies, assessments or charges of any kind issued on certain misrepresentations of
or nature, whether National or local. Constancio Francisco, an interlocking officer of
PCOC and PIRC,19 to the effect that the
Under the first paragraph above, full exemption importations were exempt from taxes and
from the payment of importation-related taxes duties. The following letter20 is typical of the
is granted to PAGCOR and no other requests he made:21
irrespective of the type of article imported. On
the other hand, while the second paragraph PHILIPPINE AMUSEMENT & GAMING
grants exemption not only to PACCOR but also CORPORATION METRO MANILA
to "any corporation having existing contractual
April 22, 1983.
arrangements with [it]," the exemption covers
only the importation of vessels and/or accessory THE HONORABLE MINISTER
ferry boats, whereas the imported articles Ministry of Finance
involved in this case consisted of auto parts, Manila
elevators, escalators, power systems, kitchen
equipment and other heavy equipment. PCOC Sir:
admittedly did not import vessels or accessory
Re: Shipment of 62 Packages Containing five
ferry boats so as to be exempt from the units Traction Geared Elevators Per Eastern B/L
payment of customs duties. No. YMA-20 From: Nippon Otis Elevator
Company, Tokyo
Nonetheless, the CTA ruled that PAGCOR's
exemption under the first paragraph of 4(1) This is in connection with the above-
extends to PCOC by virtue of the captioned importation consisting of 62 packages
concessionaire's contract under which PCOC was traction geared elevator shipped per Eastern B/L
allowed to import equipment and facilities for No. YMA-20 by Nippon Otis Elevator Co. relating
the use of PAGCOR's casinos.14 This is not shipping documents of which are hereto
correct. It is settled that tax exemptions should attached.
be strictly construed against those claiming to
be qualified thereto.15 In as much as the said shipment shall be for
the sole and exclusive use of the Casino, we are
The CTA's ruling in Philippine Casino Operators requesting for an authority to secure release of
Corporation v. Commissioner of Internal said shipment, tax-free and duty-free, under the
Revenue,16 which it cited in deciding this case, provisions of P.D. No. 1067-B and quoted
is not in point. The sole issue posed in that herein-below as follows:
case, which it answered in the affirmative using
4(2)(b), was whether PCOC was exempt from Sec. 4. Exemptions

1) Duties, taxes and other imposts on No. 1177, pursuant to the Joint Circular Issued
Importations by the Budget Commission and the Ministry of
Finance dated May 9, 1978 . . . .
All importations of equipment, vehicles,
boats, ships, aircrafts and other recreations or By Authority of the Minister:
amusement places to be established under and
by virtue of this Franchise shall be exempt from (SGD .)
the payment of duties, taxes and other imposts.
Likewise, we are requesting that the proper Chief Local Tax Adviser
[i]ndorsement be addressed to the and concurrently Officer-In-Charge
Commissioner of Customs and then to the Finance Revenue Service
Collector of Customs, South Harbor, Manila,
allowing release from Customs the above- However, during the hearings conducted by the
mentioned shipment. Collector of Customs, Francisco admitted that he
was not an employee, much less an officer, of
Very truly yours, PAGCOR.23 Despite this, Francisco used
PAGCOR's official stationery and signed his
PHILIPPINE AMUSEMENT & GAMING CORP. name below the printed words "Philippine
Amusement and Gaming Corporation" in his
letters to the Ministry of Finance. He thus gave
(SGD.) the false impression that he was connected to
CONSTANCIO D. FRANCISCO PAGCOR and that it was PAGCOR which asked
for the release of the imported equipment
The corresponding endorsement22 for such without paying tax.1wphi1
request reads:
Nor can we give merit to Francisco's claims that
MINISTRI NG PANANALAPI his representations were sanctioned under the
MAYNILA concessionaire's contract between PAGCOR and
PCOC.24 In light of Francisco's own admission
1st Indorsement that he is not in any way connected with
PAGCOR and the fact that the former Ministry of
April 26, 1983 Finance favorably acted on the requests for
exemptions on the basis of such
Respectfully referred to the Commissioner of
Customs Manila. misrepresentations, thereby causing enormous
losses to the government in the form of
In view of the representation of Mr. uncollected taxes, the Collector of Customs'
Constancio D. Francisco of the Philippine finding of fraud on the part of PCOC, as affirmed
Amusement and Gaming Corporation in his by petitioner, was therefore well founded. The
herein . . . letter dated April 22 . ., 1983, the essence of fraud is the intentional and willful
shipments consigned to the said Corporation for employment of deceit deliberately done or
the exclusive use of the Philippine Casino resorted to in order to induce another to give up
Operators Corporation consisting of: some right.25

Sixty two (62) packages of five (5) units WHEREFORE, the decision of the Court of
Geared Traction Elevators covered by Bill of Appeals is REVERSED and the decision of the
Lading No. YMA-20 of the vessel "EASTERN Commissioner of Customs, dated February 12,
METEOR" and Proforma Invoice dated My 18, 1991, is REINSTATED.1wphi1.nt
xxx xxx xxx
G.R. No. 138081 March 30, 2000
may be released without the pre-payment of
duties and taxes required by Section 23 6f PD
THE BUREAU OF CUSTOMS (BOC) and THE goods from the ship and at the same time they
ECONOMIC INTELLIGENCE AND jointly barred unloading and loading activities of
INVESTIGATION BUREAU (EIIB), the plaintiffs' laborers of the herein-mentioned
petitioners, vs.NELSON OGARIO and MARK rice.
MONTELIBANO, respondents.
6.) The plaintiffs then presented all the
MENDOZA, J.: pertinent and necessary documents to all of the
The question for decision in this case is whether defendants but the latter refused to believe that
the Regional Trial Court has jurisdiction to the same is from Palawan because their minds
enjoin forfeiture proceedings in the Bureau of are closed due to some reason or another Civil
Customs. In accordance with what is now [while] the plaintiffs believed that the same is
settled law, we hold it does not. merely an act of harassment. The documents
are as follows:
The facts are as follows: On December 9, 1998,
Felipe A. Bartolome, District Collector of A.) Certification from the National Food
Customs of Cebu, issued a Warrant of Seizure Authority that the same is from Palawan. This is
and Detention1 of 25,000 bags of rice, bearing hereto attached Annex A.
the name of SNOWMAN, Milled in Palawan"
shipped on board the M/V "Alberto", which was B) Bill of Lading issued by ANMA PHILIPPINES
then docketed at Pier 6 in Cebu City. The Shipping Company. This is hereto attached as
warrant was issued on the basis of the report of Annex B.
the Economic Intelligence and Investigation
Bureau (EIIB), Region VII that the rice had been 7.) The acts of the defendants in stopping he
illegally imported. The report stated that the loading and unloading activities of the plaintiff's
rice was landed in Palawan by a foreign vessel laborers [have] no basis in law and in fact; thus,
and then placed in sacks marked "SNOWMAN," unlawful and illegal. A mere suspicious which is
Milled in Palawan." It was then shipped to Cebu not coupled with any proof or evidence to that
City on board the vessel M/V "Alberto." effect is [a] matter which the law prohibits.
Forfeiture proceedings were started in the
customs office in Cebu, docketed as Cebu 8.) That for more than three days and despite
Seizure Identification Case No. 17-98. the repeated plea of the plaintiffs that their
goods should be released to them and the
On December 10, 1998, respondent Mark defendants should stop from barring the
Montelibano, the consignee of the sacks of rice, unloading and loading activities, the latter
and his buyer, respondent Elson Ogario, filed a blindly refused [to] heed the same.
complaint for injunction (Civil Case No. CEB-
23077) in the Regional Trial Court of Cebu City, 9.) That the acts of all of the defendants which
alleging: are greatly unlawful and erroneous would
caused [sic] irreparable damage, injury, and
4.) That upon arrival of the herein-mentioned grave injustices to the plaintiffs.
sacks of rice at the PIER 5 of Cebu City,
Philippines on the 7th day of December 1998 all 10.) That by way of example or correction for
of the defendants rushed to the port with long the public good and to deter the defendants
arms commanding the plaintiff's laborer[s] to from doing the same acts to other businessmen,
stopped [sic] the unloading of the same from defendants should be held liable for exemplary
the vessel named M/V Alberto. The defendants damages in amount of not less than One
alleged that the herein-mentioned rice were Hundred Thousand Pesos (P100,000.00).
[sic] smuggled from abroad without even proof
that the same were [sic] purchased from a 11.) That the plaintiffs are entitled to the relief
particularly country. prayed in this complaint and the whole or part
of such reliefs consists in restraining perpetually
5.) By the mere suspicion of the defendants that the defendants from holding the herein-
the goods were smuggled from abroad, they mentioned twenty-five thousand sacks of rice.
immediately put on hold the release of the That defendants should be restrained
perpetually from barring the unloading and It is further prayed that after due hearing,
loading activities of the plaintiffs' laborers. judgment be rendered:

12.) That allowing the defendants to continue 1.) Making the restraining order and/or
their unlawful acts would work grave injustice to preliminary injunction permanent.
the plaintiffs. Unless a preliminary injunction be
granted ex-parte, grave and irreparable injury 2.) Ordering the defendants jointly to pay
and damage would result to the plaintiffs before exemplary or corrective damages to the
the latter can be heard on notice. plaintiff[s] in the amount of One Hundred
Thousand Pesos (P100,000.00)
13.) That if the defendants be not restrained
perpetually from their unlawful acts, the herein- Such other relief which are just and demandable
mentioned rice will deteriorate and turn into under the circumstances are also prayed for.2
dusts [sic] if not properly disposed.1wphi1.nt
In separate motions, petitioners Bureau of
14.) That a Warrant of Seizure and detention Customs (BOC), Port of Cebu3 and the EIIB, as
issued by the Collector of Custom[s] dated well as the Philippine Navy and Coast Guard,
December 9, 1998 be quashed because the sought the dismissal of the complaint on the
defendants' act of seizing and detaining the ground that the RTC had no jurisdiction, but
herein-mentioned sacks of rice are illegal. The their motions were denied. In its resolution,
continuing act of detaining the herein- dated January 11, 1999, the RTC said:
mentioned sacks of rice will led to the
deterioration of the same. That no public The Warrant of Seizure and Detention issued by
auction sale of the same should be conducted by the Bureau of Customs cannot divest this court
the Bureau of Custom[s] or any government of jurisdiction since its issuance is without legal
agenc[y]. basis as it was anchored merely on suspicion
that the items in question were imported or
15.) That plaintiffs are ready and willing to file a smuggled. It is very clear that the defendants
bond executed to the defendants in an amount are bereft of any evidence to prove that the
to be fixed by this Honorable Court to the effect goods were indeed imported or smuggled, that
that plaintiffs will pay to the defendants all is why the plaintiffs have very vigorously
damages which they may sustain by reason of protested against the seizure of cargoes by the
the injunction if this Honorable Court should defendants. In fact, as revealed by defendants'
finally decide that the plaintiffs are not entitled counsel, the Warrant of Seizure and Detention
thereto. was issued merely to shift the burden of proof
to the shippers or owners of the goods to prove
PRAYER that the bags of rice were not imported or
smuggled. However, the court feels this is unfair
WHEREFORE, Premised on the foregoing, it is because the settled rule is that he who alleges
most respectfully prayed before this Honorable must prove the same. Besides, at this time
Court that a restraining order or temporary when our economy is not good, it would be a
injunction be immediately issued prohibiting the [dis]service to the nation to use the strong arm
defendants from holding plaintiffs' above- of the law to make things hard or difficult for
mentioned goods. That it is further prayed that the businessmen.4
a restraining order or temporary injunction be
issued prohibiting the defendants from barring The 25,000 bags of rice were ordered returned
the unloading and loading activities of the to respondents upon the posting by them of an
plaintiffs' laborers. Further, the plaintiffs prayed P8,000,000.00 bond.
that the warrant of seizure and detention issued
by the Collector of Custom[s] dated December Petitioners BOC and EIIB moved for a
9, 1998 be quashed and no public auction sale reconsideration, but their motion was denied by
of the same should be conducted by any the RTC in its order dated January 25, 1999.5 In
government agency or authority. the same order, the RTC also increased the
amount of respondents' bond to
P22,500,000.00. On certiorari to the Court of Respondent Montelibano did not take part in the
Appeals, the resolution and order of the RTC proceedings before the District Collector of
were sustained.6 Customs despite due notice sent to his counsel
because he refused to recognize the validity of
Accordingly, on April 26, 1999, upon motion of the forfeiture proceedings.8
respondents, the RTC ordered the sheriff to
place in respondents' possession the 25,000 On April 30, 1999, petitioners filed the present
bags of rice. petition for review on certiorari of the decision
of the Court of Appeals, dated April 15, 1999,
Meanwhile, in the forfeiture proceedings before upholding the resolution of the RTC denying
the Collector of Customs of Cebu (Cebu Seizure petitioners' motions to dismiss. They contend
Identification Case No. 17-98), a decision was that:
rendered, the dispositive portion of which reads:
in me by law, it is hereby ordered and decreed SUBJECT MATTER OF THE INSTANT
that the vessel M/V "Alberto"; the 25,000 bags CONTROVERSY, AND THE BUREAU OF CUSTOMS
of rice brand "Snowman"; and the two (2) HAD ALREADY EXERCISED EXCLUSIVE
trucks bearing Plate Nos. GCC 844 and GHZ 388 ORIGINAL JURISDICTION OVER THE SAME, THE
are all FORFEITED in favor of the government to COURT OF APPEALS SERIOUSLY ERRED IN
be disposed of in the manner prescribed by law SUSTAINING THE EXERCISE BY THE TRIAL
while the seven (7) trucks bearing Plate Nos. JUDGE OF JURISDICTION OVER THE CASE
989; and GDF 548 are RELEASED in favor of RESOLUTION DATED JANUARY 11, 1999 AND
their respective owners upon proper ORDER DATED JANUARY 25, 1999 IN CIVIL
identification and compliance with pertinent CASE NO. CEB-23077.
laws, rules and regulations.
Since this decision involves the release of some EXHAUSTED ALL THE ADMINISTRATIVE
of the articles subject matter of herein case REMEDIES PROVIDED FOR BY LAW, THE COURT
which is considered adverse to the government, OF APPEALS SERIOUSLY ERRED IN UPHOLDING
the same is hereby elevated to the THE TRIAL JUDGE'S DENIALS OF PETITIONERS'
Commissioner of Customs for automatic review SEPARATE MOTIONS TO DISMISS AND
pursuant to Republic Act 7651. 7 MOTIONS FOR RECONSIDERATION.9

The District Collector of Customs found "strong In Jao v. Court of Appeals, 10 this Court,
reliable, and convincing evidence" that the reiterating its ruling in a long line of cases, said:
25,000 bags of rice were smuggled. Said
evidence consisted of certifications by the There is no question that Regional Trial Courts
Philippine Coast Guard, the Philippine Ports are devoid of any competence to pass upon the
Authority, and the Arrastre Stevedoring Office in validity or regularity of seizure and forfeiture
Palawan that M/V "Alberto" had never docked in proceedings conducted by the Bureau of
Palawan since November, 1998; a certification Customs and to enjoin or otherwise interfere
by Officer-in-Charge Elenita Ganelo of the with these proceedings. The Collector of
National Food Authority (NFA) Palawan that her Customs sitting in seizure and forfeiture
signature in NFA Grains Permit Control No. proceedings has exclusive jurisdiction to hear
00986, attesting that the 25,000 bags of rice and determine all questions touching on the
originated from Palawan, was forged; and the seizure and forfeiture of dutiable goods. The
result of the laboratory analysis of a sample of Regional Trial Courts are precluded from
the subject rice by the International Rice assuming cognizance over such matters even
Research Institute (IRRI) stating that the through petitions of certiorari, prohibition or
sample "does not compare with any of our IRRI mandamus.
released varieties."

It is likewise well-settled that the provisions of exercise of such exclusive competence a taint of
the Tariff and Customs Code and that of illegality may be correctly imputed, the most
Republic Act No. 1125, as amended, otherwise that can be said is that under certain
known as "An Act Creating the Court of Tax circumstances the grave abuse of discretion
Appeals," specify the proper fora and procedure conferred may oust it of such jurisdiction. It
for the ventilation of any legal objections or does not mean however that correspondingly a
issues raised concerning these proceedings. court of first instance is vested with competence
Thus, actions of the Collector of Customs are when clearly in the light of the above decisions
appealable to the Commissioner of Customs, the law has not seen fit to do so. The
whose decision, in turn, is subject to the proceeding before the Collector of Customs is
exclusive appellate jurisdiction of the Court of not final. An appeal lies to the Commissioner of
Tax Appeals and from there to the Court of Customs and thereafter to the Court of Tax
Appeals. Appeals. It may even reach this Court through
the appropriate petition for review. The proper
The rule that Regional Trial Courts have no ventilation of the legal issues raised is thus
review powers over such proceedings is indicated. Certainly a court of first instance is
anchored upon the policy of placing no not therein included. It is devoid of jurisdiction.
unnecessary hindrance on the government's
drive, not only to prevent smuggling and other It is noteworthy that because of the
frauds upon Customs, but more importantly, to indiscriminate issuance of writs of injunction,
render effective and efficient the collection of the Supreme Court issued on June 25, 1999
import and export duties due the State, which Administrative Circular No. 07-99 to all judges
enables the government to carry out the of lower courts entitled EXERCISE OF UTMOST
functions it has been instituted to perform. CAUTION, PRUDENCE, AND JUDICIOUSNESS IN
Even if the seizure by the Collector of Customs ORDERS AND WRITS OF PRELIMINARY
were illegal, which has yet to be proven, we INJUNCTION. The circular states in part:
have said that such act does not deprive the
Bureau of Customs of jurisdiction thereon. Finally, judges should never forget what the
Court categorically declared in Mison v.
Respondents cite the statement of the Court of Natividad (213 SCRA 734, 742 [1992]) that
Appeals that regular courts still retain "[b]y express provision of law, amply supported
jurisdiction "where, as in this case, for lack of by well-settled jurisprudence, the Collector of
probable cause, there is serious doubt as to the Customs has exclusive jurisdiction over seizure
propriety of placing the articles under Customs and forfeiture proceedings, and regular courts
jurisdiction through seizure/forfeiture cannot interfere with his exercise thereof or
proceedings" 11 They overlook the fact, stifle or put it to naught.
however, that under the law, the question of
whether probable cause exists for the seizure of The Office of the Court Administrator shall see
the subject sacks of rice is not for the Regional to it that this circular is immediately
Trial Court to determine. The customs disseminated and shall monitor implementation
authorities do not have to prove to the thereof.1wphi1.nt
satisfaction of the court that the articles on
board a vessel were imported from abroad or STRICT OBSERVANCE AND COMPLIANCE of this
are intended to be shipped abroad before they Circular is hereby enjoined.
may exercise the power to effect customs'
searches, seizures, or arrests provided by law WHEREFORE, the temporary restraining order
and continue with the administrative hearings. issued on May 17, 1999 is hereby made
12 As the Court held in Ponce Enrile v. Vinuya: permanent. The decision, dated April 15, 1999,
13 of the Court of Appeals is REVERSED and Civil
Case No. CEB-23077 in the Regional Trial Court,
The governmental agency concerned, the Branch 5, Cebu City is DISMISSED.
Bureau of Customs, is vested with exclusive
authority. Even if it be assumed that in the SO ORDERED.