Reviewer on Customs Law (2018)

References:

a) Handbook on the Tariff and Customs Code of the Philippines (“TCCP”) by Atty.
Ferdinand A. Nague, C.B. 2004 ed. (“Nague”);
b) Customs Modernization and Tariff Act (“CMTA”) by Atty. Ferdinand A. Nague, C.B.
2016ed.; and,
c) Answers to Bar Examination Questions – UP Law Center (“UP Law Center”)

1. What are Customs Duties?

"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. (Nestle Philippines, Inc. vs. CA, GR No. 134114 dated July 6, 2001)

2. What is a Specific Duty?

It is a duty levied on imports that is proportional to the number of items or units (i.e.,
based on the weight, volume, gauge or other measure of quantity or based upon or
regulated by value) without regard to its value. (Nague)

3. What is an Ad Valorem Duty?

It is a duty levied which is equal to a certain percentage of the value of the imported
articles. (Nague)

4. When may an Anti-Dumping Duty be imposed?

Anti-dumping duty refers to a special duty imposed on the importation of a product,

commodity or article of commerce into the Philippines at less than its normal value
when destined for domestic consumption in the exporting country, which is the
difference between the export price and the normal value of such product, commodity
or article.

Whenever any product, commodity or article of commerce imported into the

Philippines at an export price less than its normal value in the ordinary course of trade
for the like product, commodity or article destined for consumption in the exporting
country is causing or is threatening to cause material injury to a domestic industry, or
materially retarding the establishment of a domestic industry producing the like
product. (RA No. 8752 – “Anti-Dumping Act of 1999)
5. How much amount of Anti-Dumping Duty may be imposed?

The Secretary of Trade and Industry, in the case of non-agricultural product, commodity
or article, or the Secretary of Agriculture, in the case of agricultural product, commodity
or article, after formal investigation and affirmative finding of the Tariff Commission
(“the Commission”), shall cause the imposition of an anti-dumping duty equal to the
margin of dumping on such product, commodity or article and on like product,
commodity or article thereafter imported to the Philippines under similar
circumstances, in addition to ordinary duties, taxes and charges imposed by law on the
imported product, commodity or article. However, the anti-dumping duty may be less
than the margin if such lesser duty will be adequate to remove the injury to the
domestic industry. Even when all the requirements for the imposition have been
fulfilled, the decision on whether or not to impose a definitive anti-dumping duty
remains the prerogative of the Commission. It may consider, among others, the effect of
imposing an anti-dumping duty on the welfare of consumers and/ or the general public,
and other related local industries. (RA No. 8752 – “Anti-Dumping Act of 1999)

6. When may a Countervailing Duty be imposed?

Whenever any product, commodity or article of commerce is granted directly or

indirectly by the government in the country or origin or exportation, any kind or form of
specific subsidy upon the production, manufacture or exportation of such product,
commodity or article, and the importation of such subsidized product, commodity or
article has caused or threatens to cause material injury to a domestic industry or has
materially retarded the growth or prevents the establishment of a domestic industry as
determined by the Tariff Commission. (RA No. 8751 – Amendments to the TCCP)

7. How much amount of Countervailing Duty may be imposed?

The Secretary of Trade and Industry, in the case of nonagricultural product, commodity
or article, or the Secretary of Agriculture, in the case of agricultural product, commodity
or article shall issue a department order imposing a countervailing duty equal to the
ascertained amount of the subsidy. The same levy shall be imposed on the like product,
commodity or article thereafter imported to the Philippines under similar
circumstances. The countervailing duty shall be in addition to any ordinary duties, taxes
and charges imposed by law on such imported product, commodity or article. (RA No.
8751 – Amendments to the TCCP)

8. What is a Marking Duty?

Marking duty refers to a duty on ad valorem basis imposed for improperly marked
articles. The law requires that foreign importations must be marked in any official
language of the Philippines the name of the country of origin of the article. (Nague and
UP Law Center)
9. What is the rationale for the imposition of a Marking Duty?
In order to protect consumers from the deceptive practice of passing of imported
articles, as coming from a particular country other than its actual country of origin.
(Customs Memorandum Order 121-88 dated October 13, 1988)

10. What is a Discriminatory or Retaliatory Duty?

This is a duty imposed on imported goods whenever it is found as a fact that the country
of origin discriminates against the commerce of the Philippines in such a manner as to
place the commerce of the Philippines at a disadvantage compared with the commerce
of any foreign country. (Nague and UP Law Center)

11. When may a Safeguard Duty be imposed?

The Secretary of the Department of Trade and Industry in the case of non-agricultural
products or the Secretary of the Department of Agriculture in the case of agricultural
products shall apply a general safeguard measure upon a positive final determination of
the Tariff Commission that a product is being imported into the country in increased
quantities, whether absolute or relative to the domestic production, as to be a
substantial cause of serious injury or threat thereof to the domestic industry. However,
in the case of non-agricultural products, the Secretary shall first establish that the
application of such safeguard measure will be in the public interest. (Republic Act No.
8800 – “Safeguard Measures Act”)

12. May the Department of Trade and Industry (“DTI”) Secretary impose general
safeguard measures in the absence of a positive final determination by the Tariff
Commission?

No, the plain meaning of Section 5 of Republic Act No. 8800 shows that it is the Tariff
Commission that has the power to make a "positive final determination." This power
lodged in the Tariff Commission, must be distinguished from the power to impose the
general safeguard measure which is properly vested on the DTI Secretary.

All in all, there are two condition precedents that must be satisfied before the DTI
Secretary may impose a general safeguard measure on grey Portland cement. First,
there must be a positive final determination by the Tariff Commission that a product is
being imported into the country in increased quantities (whether absolute or relative to
domestic production), as to be a substantial cause of serious injury or threat to the
domestic industry. Second, in the case of non-agricultural products the Secretary must
establish that the application of such safeguard measures is in the public interest.
(Southern Cross Cement Corporation vs. Philippine Cement Manufacturers Corporation,
GR No. 158540 dated July 8, 2004)
13. What is the flexible tariff clause?
It refers to the authority or power given to the President to adjust tariff rates under
Section 1608 of the CMTA.

14. When may the power under the flexible tariff clause be exercised by the President?

Upon recommendation of the National Economic and Development Authority and in the
interest of the general welfare and national security.

The President shall exercise the said power only when Congress is not in session.
Moreover, the power delegated to the President may be withdrawn or terminated by
Congress through a joint resolution. (Sec. 1608 of the CMTA)

15. What may the President do in the exercise of his power under the flexible tariff clause?

a) Increase, reduce or remove existing rates of import duty including any necessary
change in classification. Limitation: rate of increase shall not be higher than a
maximum of 100% ad valorem;
b) Establish import quotas or ban imports of any commodity;
c) Impose an additional duty on all imports not exceeding 10% ad valorem; and,
d) Modify the form of duty.

Before any recommendation is submitted to the President, conduct of investigation,

public hearings, hearing of views and recommendations of government offices by the
Tariff Commission is necessary except under letter “c)”. (Sec. 1608 of the CMTA)

16. When shall the Order issued by the President pursuant to the exercise of his powers
under the flexible tariff clause take effect?

Any Order issued by the President pursuant to the provisions of Sec. 1608 of the CMTA
shall take effect thirty (30) days after promulgation, except in the imposition of
additional duty not exceeding 10% ad valorem which shall take effect at the discretion
of the President. (Sec. 1608 of the CMTA)

17. When does importation begin and when does it end?

Importation begins when the carrying vessel or aircraft enters the jurisdiction of the
Philippines with intention to unload therein.

It is clear from the provision of the law that mere intent to unload is sufficient to
commence an importation. (Feeder International Line, Pte., Ltd. vs. CA, GR No. 94262
dated May 31, 1991)

Importation is deemed terminated when:

 (a) The duties, taxes and other charges due upon the goods have been paid or secured
to be paid at the port of entry unless the goods are from duties, taxes and other
charges and legal permit for withdrawal has been granted; or
(b) In case the goods are deemed free of duties, taxes and other charges, the goods
have legally left the jurisdiction of the Bureau of Customs. (Sec. 103 of the CMTA)

As long as the importation has not been terminated, the imported goods remain under
the jurisdiction of the Bureau of Customs. Importation is deemed terminated only upon
the payment of the duties, taxes and other charges upon the articles, or secured to be
paid, at the port of entry and the legal permit for withdrawal shall have been granted.
The payment of the duties, taxes, fees and other charges must be in full. (Papa vs.
Mago, GR No. L-27360 dated February 28, 1968)

18. Will mere possession of merchandise on board a vessel in Philippine waters constitute
importation of the said merchandise?

No, the mere possession of merchandise on board a vessel in the Philippine waters is
not of itself sufficient to amount to an importation of the same. There must be proof of
an intent to import. (U. S. vs. Jose, 34 Phil. Rep., 840; U. S. vs. Ah Sing, 36 Phil. Rep., 978.
cited in US vs. Chu Loy, GR No. L-12594 dated January 31, 1918)

19. Glory Shipping Lines (“GSL”) imported one (1) unit of shipping vessel which was
authorized by the Department of Finance subject to the posting of a re-export bond.
After expiration of the re-export bond, GSL, however, refused to pay the correct
amount of taxes after demand and thereafter sold the vessel to Oro Maura Shipping
Lines (“OMSL”). OMSL separately filed for the importation of the same vessel.

Was the importation made by OMSL separate from that of GSL’s importation?

No, with the knowledge that the vessel was released under a re-export bond, OMSL
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, too, of the
conditions of the vessel’s release under the re-export bond and of the state of GSL’s
status of compliance.

There was an original but incomplete importation by GSL that OMSL could not have
simply disregarded proceeds from knowledge of the vessel’s history and the application
of the relevant law. In this respect, Section 1202 of the TCCP (now Sec. 103 of the
CMTA) provides:

“Importation begins when the carrying vessel or aircraft enters the

jurisdiction of the Philippines with intention to unlade
therein. Importation is deemed terminated upon payment of the duties,
 taxes and other charges due upon the articles, or secured to be paid, at
a port of entry and the legal permit for withdrawal shall have been
granted, or in case said articles are free of duties, taxes and other
charges, until they have legally left the jurisdiction of the customs.”

In order for an importation to be deemed terminated, the payment of the duties, taxes,
fees and other charges of the item brought into the country must be in full. For as long
as the importation has not been completed, the imported item remains under the
jurisdiction of the BOC. From the perspective of process, the importation that
originally started with GSL was therefore never completed and terminated, so that the
OMSL’s present importation is merely a continuation of that original process.
(Secretary of Finance vs. Oro Maura Shipping Lines, GR No. 156946, July 15, 2009).

20. What does the term “entry” mean under customs law?

It is relevant to clarify that the term “entry” as used in the TCCP is susceptible of any of
the following three (3) meanings, to wit:

a) The documents filed at the Customs house; or

b) The submission and acceptance of the documents; or
c) The procedure of passing goods through the Customs house. Customs
declaration forms or customs entry forms required to be accomplished by
the passengers of incoming vessels or passenger planes are embraced in the
section. (Mercado vs. People, GR No. 167510 dated July 8, 2015)

21. When is there “entry” under customs law?

Imported goods shall be deemed “entered” in the Philippines for consumption when the
goods declaration is electronically lodged together with any required supporting
documents with the pertinent customs office. (Sec. 115 of the CMTA)

22. Where must an “entry” of imported articles be made?

All goods imported into the Philippines shall be entered through a customs office at a
port of entry, or may be admitted to or removed from a free zone. (Sec. 400 of the
CMTA)

23. When is a formal declaration required and when is an informal declaration required?

All goods declaration for consumption shall be cleared through a formal entry process
except for the following goods which shall be cleared thorough an informal entry
process:

a) Goods of a commercial nature with Free on Board (“FOB”) or Free Carrier

 at (“FCA”) value of less than fifty thousand pesos (P50,000.00).
b) Personal and household effects or goods, not in commercial quantity,
imported in a passenger’s baggage or mail. (Sec. 402 of the CMTA)

24. What is the period to file a goods declaration or entry declaration?

Goods declaration must be lodged within fifteen (15) days from the date of discharge of
the last package from the vessel or aircraft. The period to file the goods declaration
may, upon request, be extended on valid grounds for another fifteen (15) days. The
Commissioner may adjust the period of the lodgement of the goods declaration. (Sec.
407 of the CMTA)

25. Who is liable for the payment of import duties?

Unless relieved by laws or regulations, the liability for duties, taxes, fess, and other
charges attached to importation constitutes a personal debt due and demandable
against the importer in favor of the government and shall be discharged only upon
payment of duties, taxes, fees and other charges. It also constitutes a lien on the
imported goods which may be enforced while such goods are under customs’ custody.
(Sec. 405 of the CMTA)

26. Glory Shipping Lines (“GSL”) imported one (1) unit of shipping vessel which was
authorized by the Department of Finance subject to the posting of a re-export bond.
After expiration of the re-export bond, GSL, however, refused to pay the correct
amount of taxes after demand and thereafter sold the vessel to Oro Maura Shipping
Lines (“OMSL”). OMSL separately filed for the importation of the same vessel.

Did the transfer of ownership of the vessel extinguish the liability to pay the tax?

No, an important factual circumstance that the CTA and the CA appear to have
completely overlooked is that the vessel first entered the Philippines through the Port of
Mactan and it was the Collector of the Port of Mactan who first acquired jurisdiction
over the vessel when he approved the vessel’s temporary release from the custody of
the BOC, after GSL filed Ordinary Re-Export Bond No. C(9) 121818.

When this re-export bond expired on March 22, 1994, GSL filed a letter dated May 10,
1994 guaranteeing the renewal of the re-export bond on or before May 20, 1994,
otherwise the duties, taxes and other charges on the vessel would be paid. Therefore,
when May 20, 1994 came and went without the renewal of the vessel’s re-export bond,
the obligation to pay customs duties, taxes and other charges on the importation in the
amount of P1,296,710.00 arose and attached to the vessel. Undoubtedly, this lien was
never paid by GSL, thus it continued to exist even after the vessel was sold to the
respondent. Section 1204 of the TCCP (now Sec. 405 of the CMTA) in this regard states:
 Section 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.

As defined by Black’s Law Dictionary, a lien is a claim or charge on property for payment
of some debt, obligation or duty. In this particular instance, the obligation is a tax lien
that attaches to imported goods, regardless of ownership.

Consequently, when the respondent bought the vessel from GSL on December 2, 1994,
the obligation to pay the BOC P1,296,710.00 as customs duties had already attached to
the vessel and the non-renewal of the re-export bond made this liability due and
demandable. The subsequent transfer of ownership of the vessel from GSL to OMSL
did not extinguish this liability. (Secretary of Finance vs. Oro Maura Shipping Lines, GR
No. 156946, July 15, 2009).

27. What is the general rule on imported goods being subject to customs duties?

Except as otherwise provided for under the CMTA or in other laws, all goods, when
imported into the Philippines, shall be subject to duty upon importation, including
goods previously exported from the Philippines. (Sec. 104 of the CMTA)

28. Which goods are considered Prohibited Importations and Exportations?

The importation and exportation of the following goods are prohibited:

a) Written or printed goods in any form containing any matter advocating or

inciting treason, rebellion, insurrection, sedition against the government of the
Philippines, or forcible resistance to any law of the Philippines, or written or printed
goods containing any threat to take the life of, or inflict bodily harm upon any
person in the Philippines;
b) Goods, instruments, drugs and substances designed, intended or adapted for
producing unlawful abortion, or any printed matter which advertises, describes or
gives direct or indirect information where, how or by whom unlawful abortion is
committed;
c) Written or printed goods, negatives or cinematographic films, photographs,
engravings, lithographs, objects, paintings, drawings or other representation of an
obscene or immoral character;
 d) Any goods manufactured in whole or in part of gold, silver or other precious
metals or alloys and the stamp, brand or mark does not indicate the actual fineness
of quality of the metals or alloys;
e) Any adulterated or misbranded food or goods for human consumption or any
adulterated or misbranded drug in violation of relevant laws and regulations;
f) Infringing goods as defined under the Intellectual Property Code and related
laws; and,
g) All other goods or parts thereof, which importation and exportation are explicitly
prohibited by law or rules and regulations issued by the competent authority. (Sec.
118 of the CMTA)

29. What is the rule with respect to de minimis importations?

No duties and taxes shall be collected on goods with an FOB or FCA value of ten
thousand pesos (P10,000.00) or below. (Sec. 423 of the CMTA)

30. What are the requirements or rules in order for importations made by returning
residents to be exempt from customs duties?

a) Returning Residents - shall refer to nationals who have stayed in a foreign country
for a period of at least six (6) months. It includes spouse and dependent children.
b) Exemption covers:
1. Personal and household effects belonging to returning residents including
household appliances, jewelry, precious stones, and other goods of luxury
previously exported from the Philippines must be covered by a Certificate of
Identification (“CI”) issued by the District Collector or a Customs Officer. Upon
importation of the exported goods, the Customs Examiner shall verify the
identity of the goods brought in as against the CI; and,
2. Personal and household effects normally used for the comfort and
convenience of the Returning Residents during their stay abroad which must
accompany them on their return, or arrive within a reasonable time which,
barring unforeseen and fortuitous events, in no case shall exceed sixty (60)
calendar days after the owner's return. It does not cover luxury items, vehicles,
watercrafts, aircrafts and animals purchased in foreign countries.
c) The imported goods must: (1) not be in commercial quantities; and, (2) not
intended for barter, sale or for hire.
d) Exemption is limited to the following FOB and FCA values:
1. Three hundred fifty thousand pesos (P350,000.00) for those who have stayed
in a foreign country for at least ten (10) years and have not availed of this
privilege within ten (10) years prior to returning resident's arrival;
 2. Two hundred fifty thousand pesos (P250,000.00) for those who have stayed
in a foreign country for a period of at least five (5) but not more than ten (10)
years and have not availed of this privilege within five (5) years prior to returning
resident's arrival; or
3. One hundred fifty thousand pesos (P150,000.00) for those who have stayed
in a foreign country for a period of less than five (5) years and have not availed
of this privilege within six (6) months prior to returning resident's arrival.(Sec.
800 of the CMTA and CAO 6-2016 dated December 2, 2016)

31. What are the tax exemption privileges of OFWs?

In addition to the tax-exempt privileges enjoyed by returning residents, OFWs shall have
the privilege to bring in tax and duty free home appliances and other durables limited to
one (1) of every kind once every calendar year accompanying them on their return or
arriving within a period not exceeding sixty (60) days after the OFW’s return with a value
not exceeding One hundred fifty thousand pesos (P150,000.00). Durables refer to
goods, as household appliances, machinery or sports equipment that may be used
repeatedly or continuously over a period of a year or more, assuming a normal or
average rate of physical usage. (Sec. 800 of the CMTA and CAO 6-2016 dated December
2, 2016)

32. What are the requirements or rules in order for “balikbayan boxes” to be exempt from
customs duties?

a) Who are entitled to the exemption? Non-resident Filipinos, OFWs and Returning
Residents (“Qualified Filipinos”);
b) Qualified Filipinos while abroad are allowed to send to their families or relatives
in the Philippines Balikbayan Boxes which shall be exempt from the payment of
duties and taxes, up to three (3) times in a calendar year;
c) Balikbayan Boxes brought in by Qualified Filipinos from abroad as accompanied
or unaccompanied baggage as passengers shall be included in counting the
availment;
d) De minimis importation shall not be included in the counting. A shipment that is
above Php10,000.00 shall be automatically considered as one availment; and,
e) Balikbayan boxes shall contain personal and household effects only and shall
neither be in commercial quantities nor intended for barter, sale or for hire, and that
the total FCA value for all Balikbayan Boxes per sender in any calendar year shall not
exceed one hundred fifty thousand pesos (P150,000.00). (Sec. 800 of the CMTA and
CAO 5-2016 dated December 2, 2016)
33. When does an assessment become final for purposes of accrual of interest?

Assessment shall be deemed final fifteen (15) days after receipt of the notice of
assessment by the importer or consignee. (Sec. 429 of the CMTA)

Unpaid duties, taxes and other charges, shall incur legal interest of twenty percent
(20%) per annum computed from the date of final assessment, when payment becomes
due and demandable. The legal interest shall likewise accrue on any fine or penalty
imposed. (Sec. 104 of the CMTA)

34. When does an assessment become conclusive?

In the absence of fraud and when the goods have been finally assessed and released,
the assessment shall be conclusive upon all parties three (3) years from the date of final
payment of duties and taxes or upon completion of the post clearance audit. (Sec. 430
of the CMTA)

35. When may a Provisional Goods Declaration be allowed?

Where the declarant does not have all the information or supporting documents
required to complete the goods declaration, the lodging of a provisional goods
declaration may be allowed. Provided, that the goods declaration substantially contains
the necessary information required by the Bureau of Customs and the declarant
undertakes to complete the information or submit the supporting documents within
forty-five (45) days, which period may be extended for another forty-five (45) days for
valid reasons.

Goods under a provisional goods declaration may be released upon posting of any
required security equivalent to the amount ascertained to be the applicable duties and
taxes. (Sec. 403 of the CMTA)

36. What is a relief consignment?

Goods such as food, medicine, equipment and materials for shelter, donated or leased
to government institutions and accredited private entities for free distribution to or use
of victims of calamities shall be treated and entered as relief consignment. Relief
consignment imported during a state of calamity and intended for a specific calamity
area for the use of the calamity victims therein, shall be exempt from duties and taxes.
(Secs. 120 and 121 of the CMTA)
37. When is there Misdeclaration, Misclassification and Undervaluation in Goods
Declaration?

a) Misdeclaration – when there is a discrepancy in the quantity, quality,

description, weight, or measurement of the goods.
b) Misclassification – when there is insufficient or wrong description of the goods
or use of wrong tariff heading resulting in a discrepancy in duty and tax to be paid.
c) Undervaluation – when: (1) the declared value fails to disclose in full the price
actually paid or payable; or (2) when an incorrect valuation method is used or
valuation rules are not properly observed. (Sec. 1400 of the CMTA)

38. What is the effect if there is a Misdeclaration, Misclassification and Undervaluation in

the Goods Declaration?

There shall be imposed a surcharge equivalent to 250% of the duty and tax due. No
surcharge shall be imposed: (a) when the discrepancy in the duty is less than 10%; (b)
when the declared tariff heading is rejected in a formal customs dispute settlement
process involving difficult or highly technical question of tariff classification; (c) when
the tariff classification declaration relied on an official government ruling.

If the Misdeclaration, Misclassification and Undervaluation in the Goods Declaration is

intentional or fraudulent, a surcharge of 500% shall be imposed without prejudice to the
application of fines and penalties under Sec. 1401 of the CMTA. There is prima facie
evidence of fraud if the discrepancy in duty and tax to be paid between what is legally
determined and what is declared is more than 30% percent. (Sec. 1400 of the CMTA)

39. What is outright smuggling and technical smuggling?

a) Outright Smuggling – refers to an act of importing goods into the country

without complete customs prescribed importation documents, or without
being cleared by customs or other regulatory government agencies, for the
purpose of evading payment of prescribed taxes, duties and other
government charges.
b) Technical Smuggling – refers to an act of importing goods into the
country by means of fraudulent, falsified or erroneous declaration of goods
to it nature, kind, quality, quantity or weight, for the purpose of reducing or
avoiding payment of prescribed taxes, duties and other charges. (Sec. 102 of
the CMTA)

40. What is the legal effect of possession of smuggled goods?

When, upon trial for smuggling, the defendant is shown to have or to have had
possession of the goods in question, possession shall be deemed sufficient evidence to
authorize conviction unless the defendant shall explain the possession to the
 satisfaction of the court. (Sec. 1401 of the CMTA)

41. What is the effect of payment of the tax due in smuggling cases?

Payment of the tax due after apprehension shall not constitute a valid defense. (Sec.
1401 of the CMTA)

42. What are the other fraudulent practices under the CMTA?

a) Making or attempting to make any entry of imported or exported goods by

means of any false or fraudulent statement, document or practice; or
b) Knowingly and willfully filing of any false or fraudulent claim for payment of
drawback or refund of duties. (Sec. 1403 of the CMTA)

43. Mercado is the owner of Al-Mer Cargo Management. A shipment coming from
Bangkok, Thailand arrived at the Manila International Container Port with Al-Mer
Cargo Management as consignee. Al-Mer Cargo Management filed an Informal Import
Declaration and Entry (“IIDE”) and Permit to Deliver through its broker, Consular Cargo
Services, describing the items in the shipment as "personal effects, assorted men’s and
ladies’ wearing apparels, (sic) textile and accessories.” Upon examination of the
shipment, the Bureau of Customs found the shipment to contain general merchandise
in commercial quantities instead of personal effects of no commercial value.

Eventually, Mercado was charged and convicted for violation of Sec. 3602 of the TCCP
(now Sec. 1403 of the CMTA), specifically for making an entry by means of false and
fraudulent invoice and declaration.

Was the conviction of Mercado correct?

No, the act thereby imputed against Mercado — making an entry by means of false and
fraudulent invoice and declaration — fell under the first form of fraudulent practice
punished under Section 3602 of the TCCP (now Sec. 1403 of the CMTA). The elements to
be established in order to convict him of the crime charged are, specifically: (1) there
must be an entry of imported or exported articles; (2) the entry was made by means of
any false or fraudulent invoice, declaration, affidavit, letter, or paper; and (3) there must
be intent to avoid payment of taxes.

It is undisputed that the customs documents (like the IIDE and Permit to Deliver) were
filed with and the imported goods passed through the customs authorities, thereby
satisfying the first element of entry of imported articles. However, the second and third
elements were not established beyond reasonable doubt. Although there was a
discrepancy between the declaration made and the actual contents of the shipment, the
petitioner firmly disavowed his participation in securing the clearance for the shipment
as well as in preparing and filing the import documents. He insisted that being only the
 consignee of the shipment, he did not file the IIDE in the Bureau of Customs and he had
no knowledge about the entry. It was the broker who prepared and signed the IIDE.
(Mercado vs. People, GR No. 167510 dated July 8, 2015)

44. Who are the persons having police authority under the CMTA?

For the enforcement of the customs and tariff laws, the following persons are
authorized to effect searches, seizures and arrests conformably with the provisions of
said laws:

a) Officials of the Bureau of Customs, district collectors, deputy collectors,

police officers, agents, inspectors and guards of the Bureau of Customs;
b) Officers of the Philippine Navy and other members of the Armed Forces
of the Philippines and national law enforcement agencies when authorized
by the Commissioner; and,
c) Officials of the Bureau of Internal Revenue on all cases falling within the
regular performance of their duties, when the payment of internal revenue
taxes are involved; (Sec.214 of the CMTA)

45. May a dwelling house be searched without a warrant pursuant to a customs law
violation?

No, a dwelling house may be entered and searched only upon warrant issued by a Judge
of a competent court, the sworn application thereon showing probable cause and
particularly describing the place to be searched and the goods to be seized may be
entered and searched only upon warrant issued by a judge or justice of the peace, upon
sworn application showing probable case and particularly describing the place to be
searched and person or thing to be seized.

When a security personnel or any other employee lives in the warehouse, store, or any
building, structure or enclosure that is used for storage of goods, it shall not be
considered as a dwelling house. (Secs. 219 and 220 of the CMTA)

46. What are some of the important doctrines laid down by the Supreme Court involving
customs seizures and forfeitures?

a) There is no question that Regional Trial Courts are devoid of any

competence to pass upon the validity or regularity of seizure and forfeiture
proceedings conducted by the Bureau of Customs and to enjoin or otherwise
interfere with these proceedings.

The Collector of Customs sitting in seizure and forfeiture proceedings has

exclusive jurisdiction to hear and determine all questions touching on the
seizure and forfeiture of dutiable goods. The Regional Trial Courts are
precluded from assuming cognizance over such matters even through
petitions of certiorari, prohibition or mandamus.

The rule that Regional Trial Courts have no review powers over such
proceedings is anchored upon the policy of placing no unnecessary hindrance
on the government's drive, not only to prevent smuggling and other frauds
upon Customs, but more importantly, to render effective and efficient the
collection of import and export duties due the State, which enables the
government to carry out the functions it has been instituted to perform. (Jao
vs. CA, GR No. 104604 dated October 6, 1995)

b) Even if the seizure by the Collector of Customs were illegal, which has yet
to be proven, such act does not deprive the Bureau of Customs of jurisdiction
thereon. (R.V. Marzan Freight, Inc. vs. CA, GR No. 128064 dated March 4,
2004)

c) The decision of the Collector of Customs in seizure proceedings, concerns

the res rather than the persona. The proceeding is a probe on contraband or
illegally imported goods. These merchandise violated the revenue law of the
country, and as such, have been prevented from being assimilated in lawful
commerce until corresponding duties are paid thereon and the penalties
imposed and satisfied either in the form of fine or of forfeiture in favor of the
government who will dispose of them in accordance with law. The importer
or possessor is treated differently. The fact that the administrative penalty
be falls on him is an inconsequential incidence to criminal liability. By the
same token, the probable guilt cannot be negated simply because he was not
held administratively liable. The Collector's final declaration that the articles
are not subject to forfeiture does not detract his findings that untaxed goods
were transported in respondents' car and seized from their possession by
agents of the law. Whether criminal liability lurks on the strength of the
provision of the Tariff and Customs Code adduced in the information can
only be determined in a separate criminal action. Respondents' exoneration
in the administrative cases cannot deprive the State of its right to prosecute.
But under our penal laws, criminal responsibility, if any, must be proven not
by preponderance of evidence but by proof beyond reasonable doubt.

Considering, therefore, that proceedings for the forfeiture of goods illegally

imported are not criminal in nature since they do not result in the conviction
of the wrongdoer nor in the imposition upon him of a penalty, proof beyond
reasonable doubt is not required in order to justify the forfeiture of the
goods. In this case, the degree of proof required is merely substantial
evidence which means such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion.(Feeder International Line, Pte.,
Ltd. vs. CA, GR No. 94262 dated May 31, 1991)
 d) The acquittal in a criminal proceeding is not a bar to a forfeiture
proceeding. Thus, it has been held that since the forfeiture proceedings is
one in rem under which the offense is attached primarily to the thing rather
than the offender, the forfeiture proceedings stands independent of, and
wholly unaffected by, any criminal proceeding in personam and is not barred
by a conviction of the individual under a criminal charge.(Acting
Commissioner of Customs vs. CTA, GR No. 62636 dated April 27, 1984)

e) 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. The issue here is limited to whether the
imported goods should be forfeited and disposed of in accordance with law
for violation of the Tariff and Customs Code. Hence, the ruling of the District
Collector in the forfeiture case, insofar as the aspect of fraud is concerned, is
not conclusive; nor does it preclude the importer from invoking absence of
fraud in the redemption proceedings. (Transglobe International, Inc. vs. CA,
GR No. 126634 dated January 25, 1999)

47. What are the remedies available if the Collector of Customs (“Collector”) renders a
decision in a seizure or forfeiture case?

Decision of Collector Adverse to the Claimant Decision of Collector Adverse to the

▪ Claimant appeals to the Commissioner
within 15 days from receipt of notice of
decision or 5 days in case of perishable
goods; (Sec. 1126)
▪ Appeal by filing a Written Notice of
Appeal with the Collector copy furnished
to the Commissioner. Collector shall
transmit all records of the proceedings to
the Commissioner; (Sec. 1126)
▪ Commissioner shall review and decide the
appeal within 30 days from receipt of
records or 15 days in case of perishable
goods.
Government
▪ Automatic review by the Commissioner of
Customs (“Commissioner”); (Sec. 1127)
▪ Records of the case are elevated within
five (5) days from the promulgation of the
decision of the Collector; (Sec. 1127)
▪ The Commissioner decides within 30 days
or within 10 days in the case of perishable
goods, from receipt of the records; (Sec.
1127)

If the Commissioner does not decide

within 30 days, the decision of the
 Collector is deemed affirmed; (Sec. 1126)
Claimant appeals to the Commissioner
and the Commissioner decides:
▪ Commissioner rules in favor of the
Claimant AND the imported goods have a
FOB or FCA value of P10M – Automatic
review by the Secretary; (Sec. 1127)
▪ Commissioner rules in favor of the
Claimant AND the imported goods have a
FOB or FCA value of less than P10M–
Decision of the Commissioner becomes
final and executory; (impliedly – Sec.
1127)
▪ Commissioner decides in favor of the
Government - Claimant must file a
Petition for Review within 30 days from
receipt of the Decision of the
Commissioner with the CTA Division;
Decision on the Automatic review by the
Secretary, See procedure →
Commissioner decides:
▪ Commissioner decides in favor of the
Government – Claimant must file a
Petition for Review within 30 days from
receipt of the Decision of the
Commissioner with the Court of Tax
Appeals (“CTA”) Division; (Sec. 1104)
▪ Commissioner rules in favor of the
Claimant AND the imported goods have a
FOB or FCA value of P10M or more–
Automatic review by the Secretary; (Sec.
1127)
▪ Commissioner rules in favor of the
Claimant AND the imported goods have a
FOB or FCA value of less than P10M–
Decision of the Commissioner becomes
Final and Executory and is not subject to
further appeal; (impliedly – Sec. 1127)
▪ Commissioner does not rule within 30
days from receipt of the records of the
case or 10 days in case of perishable
goods – Automatic review by the
Secretary; (Sec. 1127)
In cases where the Secretary decides within 30
days or within 10 days in case of perishable
goods from receipt of the records:
▪ Secretary rules in favor of the
Government - Claimant must file a
Petition for Review within 30 days from
receipt of the Decision of the Secretary
with the CTA Division. (Sec. 1104)
▪ Secretary rules in favor of the Claimant –
decision becomes Final and Executory and
is not subject to further appeal. (Sec.
1127)
48. In general when may a vehicle, vessel or aircraft and its cargo be subject to forfeiture?

Any vehicle, vessel or aircraft, including cargo, which shall be used unlawfully in the
importation or exportation of articles or in conveying and/or transporting contraband
or smuggled articles in commercial quantities into or from any Philippine port or
place. The mere carrying or holding on board of contraband or smuggled articles in
commercial quantities shall subject such vessel, vehicle, aircraft or any other craft to
forfeiture; Provided, That the vessel, or aircraft or any other craft is not used as duly
authorized common carrier and as such a carrier it is not chartered or leased;

Moreover, under Sec. 1114 of the CMTA, the forfeiture of the vehicle, vessel, or
aircraft shall not be effected if it is established that the owner thereof or his agent in
charge of the means of conveyance used as aforesaid has no knowledge of or
participation in the unlawful act: Provided, however, That a prima facie presumption
shall exist against the vessel, vehicle or aircraft under any of the following
circumstances:

1. If the conveyance has been used for smuggling before;

2. If the owner is not in the business for which the conveyance is generally
used; and,
3. If the owner is not financially in a position to own such conveyance.

Note also that the burden of proof in seizure and forfeiture cases is with the
claimant.(Sec. 1123 of the CMTA.)

49. Palacio Shipping, Inc. (“Palacio”) is the owner of the M/V Don Martin, a vessel of
Philippine registry engaged in coastwise trade. The M/V Don Martin docked at the
port of Cagayan de Oro City with its cargo of 6,500 sacks of rice. The 6,500 sacks of rice
was purchased in Sablayan, Occidental Mindoro. The District Collector of Customs
concluded that in the absence of a showing of lawful entry into the country, the 6,500
sacks of rice were of foreign origin and thus subject to seizure and forfeiture.

Was the seizure and forfeiture of the rice cargo and its carrying vessel correct?

No, to warrant forfeiture, Section 2530(a) and (f) of the TCCP (now Sec. 1113 of the
CMTA) requires that the importation must have been unlawful or prohibited. To warrant
the forfeiture of the 6,500 sacks of rice and the carrying vessel, there must be a prior
showing of probable cause that the rice cargo was smuggled. Once probable cause has
been shown, the burden of proof is shifted to the claimant. The government should
establish probable cause prior to forfeiture by proving: (1) that the importation or
exportation of the 6,500 sacks of rice was effected or attempted contrary to law, or that
the shipment of the 6,500 sacks of rice constituted prohibited importation or
exportation; and (2) that the vessel was used unlawfully in the importation or
exportation of the rice, or in conveying or transporting the rice, if considered as
 contraband or smuggled articles in commercial quantities, into or from any Philippine
port or place.

The Supreme Court, after a review of the records held that no probable cause existed to
justify the forfeiture of the rice cargo and the vessel. The court ruled that the rice cargo
was purchased locally and that the carrying vessel was licensed only for coastwise trade.
In the absence of any showing by the government that the vessel was licensed to
engage in trade with foreign countries and was not limited to coastwise trade, the
inference that the shipment of the 6,500 sacks of rice was transported only between
Philippine ports and not imported from a foreign country became fully warranted. With
the petitioners having convincingly established that the 6,500 sacks of rice were of local
origin, the shipment need not be accompanied by import documents. (M/V Don Martin
VOY 047 and its cargoes, Palacio Shipping vs. The Secretary of Finance, GR No. 160206
dated July 15, 2015)

50. Mr. Jose D. Cruz is a driver of a taxi cab. While in the Manila International Airport, he
was engaged by a passenger who loaded three (3) boxes in his taxi cab. When they
were about to depart, elements of the National Customs Police stopped the cab and
upon investigation, found that the three (3) boxes loaded therein contained articles
smuggled out of the Manila International Airport. As a consequence, the
apprehending officers recommended that the three (3) boxes, its contents and the taxi
cab be seized and made subject of a forfeiture proceeding under Section 2530 (k) of
the Tariff and Customs Code as amended (now Sec. 1113 of the CMTA). Is the
recommendation correct? Why?

The recommendation to seize the taxi cab is not correct. Sec. 1114 of the CMTA
provides that “the forfeiture shall not be effected if it is established that the owner of
the means of conveyance is engaged as a common carrier or his agent at the time has
no knowledge of the unlawful act.” The taxi cab is a common carrier, and we presume
that the driver had no knowledge of the unlawful act. (1979 CBLE Question – Nague
citing M. Tejam)

However, in one case, the Supreme Court held that lack of knowledge by the owner
that a vessel is being used illegally in the importation of goods will not absolve the
vessel from forfeiture.

According to the Supreme Court, under Section 2530 of the TCCP (now Sec. 1113 of the
CMTA), the vessel is clearly subject to forfeiture in favor of the Government. Forfeiture
proceedings are in the nature of proceedings in rem (Vierneza vs. Commissioner of
Customs, 24 SCRA 394) and are directed against the res. The fact that private
respondent has allegedly no actual knowledge that M/B "Maria Victoria-P" was used
illegally does not render the vessel immune from forfeiture. This is so because the
forfeiture proceedings in this case was instituted against the vessel itself. Private
respondent's defense that he has no actual knowledge that the vessel was used illegally
 is personal to him but cannot absolve the vessel from liability of forfeiture.

Moreover, Section 2530 of the TCCP (now Sec. 1113 of the CMTA) prescribes in an
unequivocal term the imposition of the penalty of forfeiture in cases of unlawful
importation of foreign articles regardless of whether such importation occurred with or
without the knowledge of the owner of the vessel. (Commissioner of Customs vs. CTA,
GR No. L-31733 dated September 20, 1985).

51. What is the nature of a tax protest case under the TCCP, now completion of an
assessment in relation to Sec. 426 of the CMTA?

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 collector’s 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. (Pilipinas Shell
Petroleum Corporation vs. Commissioner of Customs, G.R. No. 176380 dated June 18,
2009)

52. What are the procedures involving protest cases under the CMTA?

1. The Collector or customs officer issues a ruling or decision involving goods with
valuation, rules of origin, and other customs issues is made.
2. File a Protest with the Commissioner within 15 days from payment or receipt of
ruling or decision. (Secs. 1106, 1107, 1126 and 114)
3. In relation to the need for payment under protest, Sec. 1106 of the CMTA provides
that: “Subject to the approval of the Secretary of Finance, the Commissioner shall
provide such rules and regulations as to the requirement for payment or
nonpayment of the disputed amount and in case of nonpayment, the release of the
importation under protest upon posting of sufficient security.”
4. The Commissioner a renders decision within 30 days of the protest hearing. (Sec.
1110)
5. If the ruling is favorable to the government, importer/owner appeals to the Court of
Tax Appeals Division within 30 days from receipt of notice of decision. (RA 9282)
6. If the ruling is favorable to the importer/owner (protest is sustained), the
appropriate order for reassessment shall be issued. (Sec. 1110)

53. What is the judicial procedure with respect to customs cases?

1. Appeal to the Court of Tax Appeals Division within 30 days from receipt of the
decision via Petition for Review under Rule 42 in the following cases:
 a) Decisions of the Commissioner of Customs in cases involving liability for
customs duties, fees or other money charges, seizure, detention or release
of property affected, fines, forfeitures of other penalties in relation thereto,
or other matters arising under the Customs Law or other laws administered
by the Bureau of Customs;
b) Decisions of the Secretary of Finance on customs cases elevated to him
automatically for review from decisions of the Commissioner of Customs
adverse to the Government under Section 2315 of the Tariff and Customs
Code (now Sec. 1104 of the CMTA by analogy in relation to Secs. 1127 and
1128) ; and,
c) Decisions of the Secretary of Trade and Industry, in the case of non-
agricultural product, commodity or article, and the Secretary of Agriculture,
in the case of agricultural product, commodity or article, involving dumping
and countervailing duties under Section 301 and 302, respectively, of the
Tariff and Customs Code (now Secs. 711 and 713 of the CMTA), and
safeguard measures under Republic Act No. 8800 (now Sec. 712 of the
CMTA), where either party may appeal the decision to impose or not to
impose said duties;

2. Party aggrieved by the decision of the Court of Tax Appeals Division should file a
motion for reconsideration or new trial (mandatory) with the Court of Tax Appeals
Division within 15 days from receipt of the decision.

3. From a denial of the motion for reconsideration or new trial, the Party aggrieved
may appeal to the Court of Tax Appeals En Banc via Petition for review under Rule
43 within 15 days from receipt of the said denial.

4. Party aggrieved by the decision of the Court of Tax Appeals En Banc may file a
motion for reconsideration or new trial (optional) within 15 days from receipt of the
said decision.

5. Party aggrieved by the decision of the Court of Tax Appeals En Banc or denial of the
motion for reconsideration or new trial may file an appeal with the Supreme Court
via Petition for Review on Certiorari under Rule 45 within 15 days from receipt of
said decision or denial.

54. What is the rationale for providing an automatic review involving the decision made
by the Collector which is adverse to the Government?

It is intended to protect the interest of the Government in the collection of taxes and
customs duties in those seizure and protest cases which, without the automatic review
provided therein, neither the Commissioner of Customs nor the Secretary of Finance
would probably ever know about. Without the automatic review by the Commissioner
of Customs and the Secretary of Finance, a collector in any of our country's far-flung
 ports, would have absolute and unbridled discretion to determine whether goods seized
by him are locally produced, hence, not dutiable or of foreign origin, and therefore
subject to payment of customs duties and taxes. His decision, unless appealed by the
aggrieved party (the owner of the goods), would become final with 'the no one the
wiser except himself and the owner of the goods. The owner of the goods cannot be
expected to appeal the collector's decision when it is favorable to him. A decision that is
favorable to the taxpayer would correspondingly be unfavorable to the Government,
but who will appeal the collector's decision in that case certainly not the collector.

Evidently, it was to cure this anomalous situation (which may have already defrauded
our government of huge amounts of uncollected taxes), that the provision for automatic
review by the Commissioner of Customs and the Secretary of Finance of unappealed
seizure and protest cases was conceived to protect the government against corrupt and
conniving customs collectors. (Yaokasin vs. Commissioner of Customs, GR No. 84111
dated December 22, 1989)

55. What are the kinds of abandonment?

a) Express abandonment – There is an express abandonment when the owner,

importer or consignee signifies with the Collector of Customs in writing his intention
to abandon his importation in favor of the government; and,
b) Implied abandonment – There is an implied abandonment when:
i. The importer, owner, consignee or interested party after due notice, fails to
file a goods declaration for the importation within a period of fifteen (15) days
from the date of the discharge of the last package from the vessel or aircraft. The
period to file the goods declaration may, upon request, be extended on valid
grounds for another fifteen (15) days;
ii. Having filed an entry for shipment, an interested party fails to pay the
assessed duties, taxes and other charges thereon, or if the regulated goods failed
to comply with Section 117 of the CMTA, within fifteen (15) days from the date of
final assessment: Provided, That if such regulated goods are subject of an alert
order and the assessed duties, taxes and other charges thereof are not paid
within fifteen (15) days from notification by the Bureau of Customs of the
resolution of the alert order, the same shall also be deemed abandoned claim his
importation within a non-extendible period of fifteen (15) days from the date of
posting of the notice to claim such importation;
iii. Having paid the assessed duties, taxes and other charges, the owner,
importer or consignee or interested party after due notice, fails to claim the
goods within thirty (30) days from payment; and,
iv. When the owner or importer fails to claim goods in customs bonded
warehouses within the prescribed period. (Sec. 1129 of the CMTA)
56. What are the effects of abandonment?

a) Expressly abandoned goods shall be ipso facto be deemed the property of the
government and to be disposed off in accordance with the CMTA.
b) If the Bureau of Customs has not disposed of the abandoned goods, the owner or
importer of goods impliedly abandoned may, at any time within thirty (30) days after
the lapse of the prescribed period to file the declaration, reclaim the goods provided
that all legal requirements have been complied with and the corresponding duties, taxes
and other charges, without prejudice to charges and fees due to the port or terminal
operator, as well as expenses incurred have been paid before the release of the goods
from customs custody.
c) When the Bureau of Customs sells goods which have been impliedly abandoned,
although no offense has been discovered, the proceeds of the sale, after deduction of
any duty and tax and all other charges and expenses incurred as provided in Section
1143 of the CMTA, shall be turned over to those persons entitled to receive them or,
when this is not possible, held at their disposal for a specified period. After the lapse of
the specified period, the balance shall be transferred to the forfeiture fund as provided
in Section 1151 of the CMTA. (Sec. 1130 of the CMTA)

57. Pilipinas Shell imported Crude Oil but belatedly filed the required Import Entry
Declaration outside of the 30-day (now 15-days under the CMTA) period counted from
date of discharge of the last package from the vessel or aircraft. Pilipinas Shell also
paid customs duties on said importation and was able to withdraw the Crude Oil and
use the same in its operations.

Four (4) years from the filing of the Import Entry Declaration, the Bureau of Customs
sent a demand letter to PIlipinas Shell saying that it was deficient in paying customs
duties on its importation of Crude Oil. A year after, the Bureau of Customs sent a
demand letter to Pilipinas Shell this time saying that it is liable to pay the value of the
imported Crude Oil in view of its withdrawal and use of the Crude Oil. The Bureau of
Customs argues that the Crude Oil is already considered property of the government.
The Bureau of Customs said that Pilipinas Shell’s belated filing of the Import Entry
Declaration constitutes abandonment of the Crude Oil in favor of the government.

Is the Crude Oil considered abandoned in favor of the government in view of the
belated filing of the Import Entry Declaration?

No, when an importer after due notice fails to file an Import Entry and Internal Revenue
Declaration within a period of thirty 30 days (now 15 days under the CMTA) from the
discharge of the last package, the imported article is deemed abandoned in favor of the
government.

However, the provisions on abandonment must consider Sec. 1603 of the TCCP (now
Sec. 430 of the CMTA) which provides:
 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 (now 3 years under the TCCP and
the CMTA), 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. (Emphasis supplied)

There being no evidence to prove that Pilipinas Shell committed fraud in belatedly filing
its Import Entry and Internal Revenue Declaration within the 30-day period (now 15
days under the CMTA) prescribed under Section 1301 of the TCCP, as amended,
respondent's right to question the propriety thereof and to collect the amount of the
alleged deficiency customs duties, more so the entire value of the subject shipment,
have already prescribed. Simply put, in the absence of fraud, the entry and
corresponding payment of duties made by petitioner becomes final and conclusive upon
all parties after one (1) year (now 3 years under the TCCP and the CMTA) from the date
of the payment of duties in accordance with Section 1603 of the TCCP.

It is commonsensical that the finality of liquidation referred to under Section 1603 (now
Sec. 430 of the CMTA) covers the propriety of the submission and acceptance of the
Import Entry and Internal Revenue Declaration covering the imported articles being
brought in the country for the sole purpose of determining whether it is subject to tax
or not; and if it is, whether the computation of the tax or impost to be paid to the
government was properly made.

Thus, should there be failure on the part of the owner, importer, consignee or
interested party, after due notice of the arrival of its shipment (except in cases of
knowledgeable owners or importers), to file an entry within the period of 30 days (now
15 days) from the date of discharge of the last package (shipment) from the vessel, such
owner, importer, consignee or interested party is deemed to have abandoned said
shipment in favor of the government.

As imperative, however, is the strict compliance with Section 1603 of the TCCP (now
Sec. 430 of the CMTA). Any action or claim questioning the propriety of the entry and
settlement of duties pertaining to such shipment made beyond the 1-year (now 3-year)
prescriptive period from the date of payment of final duties, is barred by prescription. In
the present case, the failure on the part of respondent to timely question the propriety
of the entry and settlement of duties by petitioner involving the subject shipment,
renders such entry and settlement of duties final and conclusive against both parties.
Hence, respondent cannot any longer have any claim from petitioner. Sections 1301,
1801, and 1802 of the TCCP (abandonment provisions) (now Secs. 1129 and 1130 of the
CMTA) have been rendered inoperable by reason of the lapse of the period stated in
Section 1603 of the same Code (now Sec. 430 of the CMTA). (Pilipinas Shell vs. COC, GR
 No. 195876 dated December 5, 2016)

58. What is procedure for claiming refund under the CMTA?

a) File a written claim for refund with the Bureau of Customs within twelve (12)
months from the date of payment of duties and taxes;
b) The importer may file an appeal of a denial of a claim for refund or abatement,
whether it is a full or partial denial, with the Commissioner within thirty (30) days from
the date of the receipt of the denial;
c) The Commissioner shall render a decision within thirty (30) days from the receipt of
all the necessary documents supporting the application;
d) Within thirty (30) days from receipt of the decision of the Commissioner, the case
may also be appealed to the CTA Division; and,
e) Same procedure under No. 53 above. (Sec. 913 of the CMTA)

59. Does the Bureau of Customs have jurisdiction over seizure cases within the Subic
Freeport?

Yes, under RA 7227, its implementing rules and CAO 4-93 (Rules and Regulations for
Customs Operations in the Subic Special Economic and Freeport Zone), both the SBMA
and the Bureau of Customs have the power to seize and forfeit goods or articles
entering the Subic Bay Freeport, except that SBMA’s authority to seize and forfeit goods
or articles entering the Subic Bay Freeport has been limited only to cases involving
violations of RA No. 7227 or its IRR. There is no question therefore, that the authority of
the Bureau of Customs is larger in scope because it covers cases concerning violations of
the customs laws.

The authority of the Bureau of Customs to seize and forfeit goods and articles entering
the Subic Bay Freeport does not contravene the nature of the Subic Bay Freeport as a
separate customs authority. Indeed, the investors can generally and freely engage in any
kind of business as well as import into and export out goods with minimum interference
from the Government. (Agriex Co., Ltd., vs. Villanueva, GR No. 158150 dated September
10, 2014)

************Good Luck and God Bless************