Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-19259             September 23, 1966

GENERAL TRAVEL SERVICE, LTD., petitioner and appellant,

vs.
EDILBERTO Y. DAVID, personally and as Collector of Customs of the Manila International
Airport, respondent and appellee.

Eliezer A. Manikan for petitioner and appellant.

Office of the Solicitor General for respondent and appellee.

MAKALINTAL, J.:

This is an appeal from the decision of the Court of First Instance of Rizal dismissing the petition for
prohibition and mandamus filed by General Travel Service, Ltd., against Edilberto Y. David, in his
private capacity and as Collector of Customs at the Manila International Airport.

The petition alleges: that on August 25, 1961 an SAS plane and a KLM plane from Bangkok arrived
at the Manila International Airport bringing, among other things, eight big packages owned by
petitioner, a limited partnership duly organized and existing under the laws of the British Crown
Colony of Hongkong; that respondent ordered the unloading of said packages over the objection of
local representatives of the two airlines, who explained that the packages had been mistakenly
brought to the Philippines (from Hongkong via Bangkok) and requested respondent that they be
returned to the airport of origin; that upon learning of respondent's intention to open, inspect and
inventory the packages, petitioner, through counsel, wrote a letter to respondent on August 28,
1961, requesting that their immediate reshipment be permitted; and that since the packages had not
been imported but were erroneously brought to the Philippines, respondent gravely abused his
discretion in ordering their unloading, opening and inspection. Petitioner, therefore, prayed that a writ
of preliminary injunction be issued, but the remedy became moot because in the meantime all the
packages had been opened.

Respondent, in his answer, alleges: that he did not order the unloading of the eight packages, but
the airlines employees voluntarily unloaded them because they bore the names of consignees with
Manila addresses, as shown by the plane cargo manifest of the SAS plane which carried seven
packages and of the cargo manifest of the KLM plane which carried the eighth package; that said
packages were covered by false declarations and papers, for while they were declared in the cargo
manifests and air waybills as containing frozen goods intended for Manila, they were found upon
examination to contain highly dutiable articles in commercial quantities  1 and of the kind not specified
in either the cargo manifests or the air waybills, for which reason the corresponding seizure
proceeding were instituted for violation of Section 2530 (i), (m)-3 and (m)-4 of the Tariff and Customs
Code and of Circular No. 96, as amended by Circular No. 123, of the Central Bank, in relation to
Section 2530(f) of the same code; that respondent Collector of Customs may not be prohibited from
taking cognizance of such seizure proceedings, nor may he be compelled to allow the return of the

Page 1 of 63
packages since he has jurisdiction over all matters arising from the enforcement of tariff and
customs laws within his collection district, his decision being subject to review only the
Commissioner of Customs, whose decision is in turn appealable only to the Court of Tax Appeals;
that Republic Act No. 1125 has removed from the Courts of First Instance the power to review the
decisions of customs authorities; and that since petitioner has not been organized and registered
under our laws, it has no legal capacity to sue, and even if it had, it is not the proper party-petitioner
because it does not own the packages, not being either the consignee or shipper thereof, the air
waybills showing that Ana D. Riana, Hector Reyes, Barbara Mallari and Milagros Isip, all of Manila,
Philippines, were the consignees of two packages each, while the corresponding shippers were R.B.
Henson, Peferlia Roberts, T.H. Leung and David Todd, all of Melbourne Hotel, Kowloon.

Subsequently, T.H. Leung, David Todd Peferlia Roberts and R.B. Henson moved for permission to
file an amended petition substituting themselves for the original petitioner since they were the real
owners of the eight packages in question, the original petitioner having merely handled the shipment
for them.

In the decision appealed from the lower court denied motion for amendment and dismissed the
petition. Petitioner appealed to this Court and now avers that the lower court erred in holding: (1) that
the eight packages were imported into the Philippines; (2) that consequently respondent had the
right to seize and hold them until the duties and taxes due thereon shall have been paid; (3) that
respondent had the authority to determine whether or not the packages had been imported, his
ruling being appealable only to the Commissioner of Customs and thence to the Court of Tax
Appeals; and (4) that the original petitioner is an entity separate and apart from the persons named
in the amended petition, and hence the amendment prayed for was improper.

Whether or not appellee acted with grave abuse of discretion amounting to lack and/ or excess of
jurisdiction in ordering the seizure and forfeiture of the packages depends ultimately on whether or
not the packages in question were imported into the Philippines within the meaning of the Customs
Laws.

According to Section 1202 of the Tariff and Customs Code, "importation begins when the carrying
vessel or aircraft enters the jurisdiction of the Philippines with the intention to unlade therein ... and 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 ... until they have legally left the jurisdiction of the customs."

It is undisputed that the eight packages arrived at the Manila International Airport on August 25,
1961. The cargo manifests of the planes carrying them show that they were destined for the
Philippines. 2 The air waybills covering the packages were of the same import. The appellee,
therefore, was justified in considering said packages as having been imported into the Philippines.  1awphîl.nèt

The functions of the Bureau of Customs include the assessment and collection of the lawful
revenues from imported articles and all other dues, fees, charges, finess and penalties accruing
under the tariff and customs laws; and the prevention and suppression of smuggling and other
frauds upon the customs. 3 It is the duty of the Collector of Customs to cause all articles entering the
jurisdiction of his district and destined for importation through his port to be entered at the
customshouse to have all such articles appraised and classified, and to assess and collect the
duties, taxes and other charges thereon, and have possession of all imported articles upon which
duties, taxes, and other charges have not been paid or received to be paid, disposing of the same
according to law. 4 For the enforcement of the customs and tariff laws, he is authorized to effect
searches and seizures conformably with the provisions of said laws.  5 It shall be his duty to make
seizure of any article when the same is subject to forfeiture.  6 A package or article is subject to

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forfeiture if it is found by the examining official to contain any article not specified in the invoice or
entry, provided the Collector is of the opinion that the misdirection was caused with fraudulent intent;
or if it was sought to be imported on the strength of a false declaration or affidavit, or a false invoice
or other document, executed by the owner, importer, exporter or consignee concerning the
importation. 7

The facts and circumstances relative to the arrival here of the eight packages afforded sufficient
basis for respondent Collector to conclude that they had been imported to this country; and since
there was indubitable proof of wrongful declaration it was clearly within his power to order their
seizure and forfeiture. This case has no similarity with U.S. v. Chua Loy (37 Phil. 510) cited by
petitioner. In that case, there was no evidence of intention to import all indications being to the
contrary. 8

Appellant maintains that the evidence of intention to import has been counteracted by the notice of
wrong shipment served by the airlines representatives upon appellee when the goods were
unloaded, coupled with the request that the packages be returned or shipped back to the airport of
origin. Such notice and request were reiterated in the formal letter sent to appellee on August 28,
1961. As proof of erroneous shipment, appellant points to the circumstances: (1) that the supposed
consignees of the packages never claimed them for entry through the airport customshouse as
required by Section 1201 of the Tariff and Customs Code; and (2) that the packages were found to
contain dry goods and other articles instead of "frozen goods" as their labels indicated.
Circumstance No. 1 was the logical result of the timely discovery of the misdeclaration; and
circumstance No. 2, if anything, was precisely the justification for the seizure proceedings. In any
event, it was within the appellee's authority to determine whether or not the bare notice of wrong
shipment served upon him was sufficient to overcome the convincing objective evidence of
importation on which he acted. We are not prepared to say that in acting as he did he committed a
grave abuse of discretion correctible by the extraordinary remedy of prohibition, or so far failed to
perform a duty especially enjoined by law as to be subject to mandamus. Otherwise the exercise of
the powers and functions vested by law in the Bureau of Customs in order to prevent smuggling
could be easily frustrated. 9 .

If appellant believed that appellee's conclusion was erroneous, the remedy was by appeal to the
Commissioner of Customs, and then to the Court of Tax Appeals should the Commissioner uphold
appellee's decision. The Tax Court has exclusive appellate jurisdiction to review the action of the
Commissioner in seizure and confiscation cases such as this one. And that power is to the exclusion
of the Court of First Instance, which may not interfere with decisions of the Commissioner even in
the form of proceedings for certiorari, prohibition or mandamus, which are in reality attempts to
review the Commissioner's actuations (Millarez vs. Amparo, 98 Phil. 282; Namarco vs. Macadaeg,
98 Phil. 185; Pepsi-Cola Bottling Company of the Philippines, Inc. vs. Manahan, L-12096, April 30,
1959, Acting Collector of Customs vs. De la Rama Steamship Co., Inc., L-20676, February 26,
1965.)

WHEREFORE, the decision appealed from is affirmed, with costs against the appellant.

Concepcion, C.J., Reyes, J.B.L., Barrera, Dizon, Bengzon, J.P., Zaldivar, Sanchez and Castro, JJ.,
concur.
Regala, J., took no part.

Footnotes

1
Transistors, clocks, men's and ladies' banlon sweaters, socks, fountain pens, watches,
bags, purses, buckles, belts, nylon articles, bracelets, pipes, lighters, etc.

Page 3 of 63
2
Section 1105 of the Tariff and Customs Code provides that for the purpose of making entry,
there shall be presented to the customs boarding official four copies of a general declaration
which shall contain among others: A cargo manifest together with information as to names of
consignees, their nationalities and their addresses, numbers and marks of packages, nature
of goods, destination, gross weight and value; and that the cargo manifest shall in no case
be changed or altered after entry of the aircraft, except by means of an amendment by the
pilot in command or authorized agent thereof, under oath, and attached to the original
manifest: Provided, however, that after the invoice and/or entry covering an importation have
been received and recorded in the office of the appraiser, no amendment shall be allowed,
except when it is obvious that a clerical error or any other discrepancy has been committed
without any fraudulent intent in the preparation of the manifest, discovery of which could not
have been made until after examination of the importation has been completed.

3
Section 602, paragraphs (a) and (b), Tariff and Customs Code.

4
Section 1206, Tariff and Customs Code.

5
Section 2203, id.

6
Section 2205, id.

7
Section 2530, pars. i, m(3) and m(4), id.

8
The facts of that case are: "That the steamship Castle-field, an English vessel, arrived at the
port of Manila on the 15th day of August, 1917, from Saigon, Indo-China; that this was the
first trip of said vessel to the port of Manila; that its accustomed trips were Hongkong to
Saigon and return; that it cleared for the purpose of sailing out of the port of Manila on the
17th day of August, 1917; that the appellant was chief cook on board said vessel and had
been for three trips; that said trips had been between Hongkong and Saigon; that he did not
know that the vessel was coming to the port of Manila when it left Saigon a few days prior to
the 15th day of August; that the 60 tins of opium in question were delivered to him at Saigon
to be turned over to some one at Hongkong; that said tins were kept by him in the kitchen of
said vessel until it arrived in the Philippine waters, when they were delivered to the
defendant (Lee Kam) to be kept in the room of one of the officers of the vessel until after the
same had sailed out of the port of Manila; that there was no attempt made to bring said
opium ashore nor to discharge it at Manila, notwithstanding the fact that the vessel had been
in the port for two days prior to the time when they were found in the place above indicated;
that the said vessel sailed from the port of Manila on the 17th day of August, 1917. Under
these facts, is the appellant guilty of the illegal importation of opium? He frankly admitted that
the opium was in his possession. Considering the fact that no effort was made by him to
discharge said opium during the two days while the vessel was at anchor in the port of
Manila, we are inclined to accept his statement that it was his intention to carry the opium in
question to Hongkong and not to deliver it in the Philippine Islands, especially in view of the
fact that when the vessel left Saigon he did not know that it was coming to Manila."

9
SEC. 2210.—It shall be lawful for any official or person exercising police authority under the
provisions of this Code to go aboard any vessel or aircraft within the limits of any collection
district, and to inspect, search and examine said vessel or aircraft and any trunk, package,
box or envelope on board, and to search any person on board the said vessel or aircraft and
to this end to hail and such vessel or aircraft if under way, to use all necessary force to
compel compliance; and if it shall appear that any breach or violation of the customs and
tariff laws of the Philippines has been committed, whereby or in consequence of which such

Page 4 of 63
vessels or aircrafts, or the articles, or any part thereof, on board of or imported by such
vessel or aircraft, is liable to forfeiture, to make seizures of the same or any part thereof.

The power of search hereinabove given shall attend to the removal of any false
bottom, partition, bulkhead or other obstruction, so far as may be necessary to
enable the officer to discover whether any dutiable or forfeitable articles may be
concealed therein.

No proceeding herein shall give rise to any claim for the damage thereby caused to
article or vessel or aircraft.

SEC. 2211.—It shall also be lawful for a person exercising authority as aforesaid to
open and examine any box, trunk, envelope or other container, wherever found when
he has reasonable cause to suspect the presence therein of dutiable or prohibited
article or articles introduced into the Philippines contrary to law, and likewise to stop,
search and examine any vehicle, beast or person reasonably suspected of holding or
conveying such article as aforesaid. (Tariff and Customs Code)

Page 5 of 63
 July 8, 2015

G.R. No. 167510

ALVIN MERCADO, Petitioner,
vs.
PEOPLE OF THE PHILIPPINES, Respondent.

DECISION

BERSAMIN, J.:

This appeal is taken from the decision promulgated on March 18, 2005 in CA-G.R. CR No. 28263
entitled People of the Philippines v. Alvin Mercado and Lita Sena/Lita Senia,   whereby the Court of
1

Appeals (CA) affirmed the judgment rendered on November 25, 2003 by the Regional Trial Court
(RTC), Branch 21, in Manila convicting the petitioner of the violation of Section 3602, in relation to
Section 2503, of the Tariff and Customs Code of the Philippines (TCCP) charged herein. 2

Antecedents

In the information dated October 1, 200 I, the petitioner and his co-accused were charged in the
RTC with the violation of Section 3602, in relation to Section 2503, of the TCCP, committed as
follows:

That on or about July 29, 2000, at Port Area, Manila and within the jurisdiction of this Honorable
Court, the above-named accused did, then and there willfully, unlawfully and feloniously made (sic)
an entry of:

a) 6, 728 yards fabric;

b) 1,937 pcs. assorted bags of Ferragamo, Prada and Polo brands;

c) 3,027 pcs. jeans with Levi's brand;

d) 586 sandals;

e) 312 pairs of rainbow shoes;

f) 120 pairs step-in;

g) 77 pairs of slippers;

h) 24 pcs. of pillows;

i) 36 dozens of shirts with Polo brand;

j) 2 cartons of assorted children's wear;

k) 8 pcs. of folding chairs;

Page 6 of 63
 1) 3 cartons of assorted groceries;

m) 120 pcs. of mini-racer toy cars;

n) 4 pcs. of race track;

o) 48 pcs. of gripmate golf set cover;

p) 10 cartons of sampaloc in 6 packs per carton;

q) 40 pcs. raincover folf (sic) bag;

r) 1 carton of wood tray;

s) 240 pcs. golf gloves;

t) 12 pcs. of plastic vase.

by means of false and fraudulent invoice and declaration as regards the true kind, nature, quality
and quantity of the goods such that the goods indicated or declared therein were 162 cartons of
"personal effects of no commercial value", when in truth and in fact, they were the aforesaid various
articles, so as to pay less than the amount legally due to the Government, to its damage and
prejudice.

CONTRARY TO LAW. 3

Only the petitioner was arraigned because Sefia remained at large. The petitioner pleaded not
guilty to the information.  Hence, the case was tried and decided only as to the petitioner.
4

The Prosecution established that a shipment from Bangkok, Thailand had arrived at the Manila
International Container Port (MICP) on July 29, 2000 on board the vessel Sumire;  that the shipment,
5

which was declared under Bill of Lading No. NYKS481501191 to consist of one 1 x 20 container of
assorted men's and ladies' wearing apparel, textile and accessories in 162 packages;  that the
6

shipment was consigned to Al-Mer Cargo Management, an entity owned and managed by the
petitioner;  that sensing a possible violation of the TCCP, Atty. Angel L. Africa, then the Director of
7

the Customs Investigation and Intelligence Services, issued Alert Order No. A/CI/20000731-105 on
July 31, 2000 directing Customs Special Agent Roberto A. Tibayan (SA Tibayan) to witness the
100% examination of the shipment by the assigned customs examiner;  that in the meanwhile, Al-
8

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 mens and ladies wearing apparels, (sic) textile and accessories;"  that upon
9

examination of the shipment on August 7, 2000, Customs Examiner Rogelio Dizon and SA Tibayan
found the shipment to contain general merchandise in commercial quantities instead of personal
effects of no commercial value;  and that, accordingly, the shipment was placed under Seizure
10

Identification No. 00-092 MICP. 11

The Prosecution further established that pending the seizure and forfeiture proceedings, the
petitioner sought the settlement of the case in exchange for the payment of the proper taxes and
duties, plus 20% penalty; that in his 2nd Indorsement dated February 23, 2001, then Customs
Commissioner Titus B. Villanueva approved the offer of settlement amounting to P85,000.00 and the
release of the shipment with the exception of the infringing Levi's jeans and assorted bags;  that
12

Page 7 of 63
despite the payment of the settlement, the petitioner and Sefia were still charged with the violation of
Section 3602 of the TCCP, in relation to its Section 2503, and with the violation of the Intellectual
Property Code;   and that through his resolution dated September 27, 2001,  Prosecutor Juan C.
13 14

Navera of the Anti-Smuggling Task Force of the Department of Justice found probable cause against
the petitioner and Sefia for the violation of Section 3602 of the TCCP.

In his defense, the petitioner asserted that he had only accommodated the shipment upon the
request of Sefia and Apolonio Viray, President of Worth Brokerage Corporation;  that Sefia had
15

represented to him that the shipment contained only personal and household effects;  that he did not
16

have any participation in following up the clearance for the shipment; that as a licensed customs
broker, his signature did not appear in the informal entry; that he executed a deed of assignment
over the shipment in favor of Benita Ochoa;  and that the broker prepared the import entry
17

declaration.18

On November 25, 2003, the RTC rendered its decision finding the petitioner guilty as charged, to wit:

WHEREFORE, premises considered, the Court finds accused AL VIN MERCADO GUILTY beyond
reasonable doubt as principal of the crime charged and is hereby sentenced to suffer the penalty of
TWO (2) YEARS, FOUR (4) MONTHS and ONE (1) DAY to FOUR (4) YEARS, TWO (2) MONTHS
of prision correccional as maximum and to pay the costs.

Accordingly, the bond posted for the provisional liberty of the accused is hereby CANCELLED.

It appearing that accused Lito Sena has not been apprehended nor voluntarily surrendered, let
warrant be issued for his arrest and the case against him be ARCHIVED to be reinstated upon his
apprehension.

SO ORDERED. 19

On appeal, the petitioner assigned the following errors, to wit:

THE COURT A QUO ERRED WHEN IT OVERLOOKED THE FACT THAT ACCUSED DID NOT IN
ANYWAY WILFULLY, UNLAWFULLY AND FELONIOUSLY MADE (sic) AN ENTRY OF THE
SUBJECT IMPORTED ARTICLES BY MEANS OF FALSE AND FRAUDULENT INVOICE AND
DECLARATION.

II

THE COURT A QUO ERRED WHEN IT FOUND THAT ACCUSED IS GUILTY BEYOND
REASONABLE DOUBT IN THE ABSENCE OF CONVINCING EVIDENCE.

II

THE COURT A QUO ERRED WHEN IT FAILED TO EXPRESS CLEARLY AND DISTINCTLY THE
FACTS AND THE LAW ON WHICH IT BASED ITS DECISION TO CONVICT
ACCUSEDAPPELLANT OF THE CRIME CHARGED. 20

On March 18, 2005, however, the CA affirmed the RTC,  viz.: 21

Page 8 of 63
Noteworthy to stress that "unless it is shown that the trial court overlooked, misunderstood or
misapplied some facts or circumstances of weight or substance that would otherwise affect the
result of the case, its findings will not be disturbed on appeal" and "accorded finality." The rule is not,
however, absolute and admit certain exceptions which must be satisfactory established within its
ambit in order for it to find application. Contrary to accused-appellant's claim, an extensive perusal of
the records do not show the existence of the exceptions in the instant case which, if considered,
would have affected the result of the case. Moreover, from the allegations propounded, accused-
appellant failed to show persuasive proof relative to the exceptions aforesaid. The appreciation of
evidence and assessment of witnesses by public respondent could need not be disturbed on this
appeal absent any showing of patent misapprehension or misapplication involving the same. The
respondent court, in this case, has not exercised its judgment in despotic or arbitrary manner in the
appreciation of the evidence or assessment of the witnesses which would warrant reversal of the
appealed decision.

In any event, this court does not subscribe on the argument raised by the accused appellant that
nothing is concrete on the findings made by public respondent court to warrant his conviction in view
of the foregoing.

Lastly, the assailed decision narrated clearly the chronological incident in arriving at its conclusion
and, to reiterate, no more than the assessment of witnesses and evaluation of the evidence adduced
and presented wherefrom the assailed decision was based. Hence, the third issue above-noted finds
no application in the case at bar.

WHEREFORE, considering the foregoing, the petition is hereby DENIED and the decision of the

Regional Trial Court Branch No. 21 of Manila in Criminal Case No. 01 196770 for violation of Sec.
3602 of the Tariff and Customs Code is hereby AFFIRMED. Accused-appellant, Alvin B. Mercado, is
sentenced hereby to suffer the indeterminate penalty of TWO (2) YEARS, FOUR (4)
MONTHS and ONE (1) DAY of prision correccional, as minimum to FOUR (4) YEARS and TWO (2)
MONTHS of prision correccional, as maximum and to pay the costs.

SO ORDERED. 22

Issues

Hence, this appeal, with the petitioner urging the following, namely:

I.

WHETHER OR NOT ACCUSED MAY BE HELD GUILTY FOR VIOLATION OF SECTION 3602 IN
RELATION TO SECTION 2503 OF THE TARIFF AND CUSTOMS CODE WHEN EVIDENCES
PROVE THAT HE DID NOT IN ANY WAY WILFULLY, UNLAWFULLY AND FELONIOUSLY MADE
(sic) AN ENTRY OF THE SUBJECT IMPORTED ARTICLES BY MEANS OF FALSE AND
FRAUDULENT INVOICE AND DECLARATION AND IN THE ABSENCE OF CRIMINAL INTENT.

II.

WHETHER OR NOT PETITIONER MAY BE HELD GUILTY FOR VIOLATION OF SECTION 3601
OF THE TARIFF AND CUSTOMS CODE NOTWITHSTANDING THE FACT THAT HE WAS
CHARGED FOR VIOLATION OF SEC. 3602 OF THE TARIFF AND CUSTOMS CODE. 23

Page 9 of 63
The petitioner argues that it was not him, but Rolando Saganay, a licensed customs broker from
Consular Cargo Services, who had made and signed the IIDE;  that he did not participate in
24

following up the clearance of the shipment;  that the entry of the cargo was not made through a false
25

or fraudulent invoice, declaration, letter or paper;  that the import declaration was made in
26

accordance with the shipping documents that were entirely prepared by the supplier from the country
of export;  that he relied in good faith on the entries prepared by Saganay, which he presumed to be
27

true and correct;  and that he could not be held criminally liable for the violation of Section 3601 of
28

the TCCP, an offense for which he was not charged. 29

Ruling of the Court

The appeal is meritorious.

The provisions of law under which the petitioner was prosecuted and convicted were Section 2503
and Section 3602 of the TCCP, which state:

Section 2503. Undervaluation, Misclassification and Misdeclaration in Entry. - When the dutiable

value of the imported articles shall be so declared and entered that the duties, based on the
declaration of the importer on the face of the entry, would be less by ten percent (10%) than should
be legally collected, or when the imported articles shall be so described and entered that the duties
based on the importer's description on the face of the entry would be less by ten percent (10%) than
should be legally collected based on the tariff classification, or when the dutiable weight,
measurement or quantity of imported articles is found upon examination to exceed by ten percent
(10%) or more than the entered weight, measurement or quantity, a surcharge shall be collected
from the importer in an amount of not less than the difference between the full duty and the
estimated duty based upon the declaration of the importer, nor more than twice of such
difference: Provided, That an undervaluation, misdeclaration in weight, measurement or quantity of
more than thirty percent (30%) between the value, weight, measurement or quantity declared in the
entry, and the actual value, weight, quantity, or measurement shall constitute a prima facie evidence
of fraud penalized under Section 2530 of this Code: Provided, further, That any misdeclared or
undeclared imported articles/items found upon examination shall ipso facto be forfeited in favour of
the Government to be disposed of pursuant to the provisions of this Code

When the undervaluation, misdescription, misclassification or misdrclaration in the import

entry is intentional, the importer shall be subject to the penal provision under Section 3602 of
this Code.

Section 3602. Various Fraudulent Practices Against Customs Revenue. - Any person who makes or
attempts to make any entry of imported or exported article by means of any false or fraudulent
invoice, declaration, affidavit, letter, paper or by any means of any false statement, written or verbal,
or by any means of any false or fraudulent practice whatsoever, or knowingly effects any entry of
goods, wares or merchandise, at less than true weight or measures thereof or upon a false
classification as to quality or value, or by the payment of less than the amount legally due, or
knowingly and willfully files any false or fraudulent entry or claim for the payment of drawback or
refund of duties upon the exportation of merchandise, or makes or files any affidavit abstract, record,
certificate or other document, with a view to securing the payment to himself or others of any
drawback, allowance, or refund of duties on the exportation of merchandise, greater than that legally
due thereon, or who shall be guilty of any willful act or omission shall, for each offence, be punished
in accordance with the penalties prescribed in the preceding section.

Section 3602 enumerates the various prohibited fraudulent practices, like the entry of imported or
exported articles by means of any false or fraudulent invoice, statement or practice; the entry of

Page 10 of 63
goods at less than the true weight or measure; or the filing of any false or fraudulent entry for the
payment of drawback or refund of duties.  The following specific acts are punishable under Section
30

3602:

1. Making or attempting to make any entry of imported or exported article by means of any
false or fraudulent invoice, declaration, affidavit, letter, or paper;

2. Making or attempting to make any entry of imported or exported article by means of any
false statement, written or verbal;

3. Making or attempting to make any entry of imported or exported article by means of any
false or fraudulent practice whatsoever;

4. Knowingly effects any entry of goods, wares or merchandise, at less than true weight or
measures thereof;

5. Knowingly effects any entry of goods, wares or merchandise upon a false classification as
to quality or value;

6. Knowingly effects any entry of goods, wares or merchandise by the payment of less than
the amount legally due;

7. Knowingly and willfully files any false or fraudulent entry or claim for the payment of
drawback or refund of duties upon the exportation of merchandise;

8. Knowingly and willfully makes or files any affidavit abstract, record, certificate or other
document, with a view to securing the payment to himself or others of any drawback,
allowance, or refund of duties on the exportation of merchandise, greater than that legally
due thereon.

In alleging the violation of the foregoing legal provisions, the information specified that the petitioner
had made an entry –

x x x by means of false and fraudulent invoice and declaration as regards the true kind, nature,
quality and quantity of the goods such that the goods indicated or declared therein were 162 cartons
of ''personal effects of no commercial value", when in truth and in fact, they were the aforesaid
various articles, so as to pay less than the amount legally due to the Government, to its damage
and prejudice.  (Emphasis supplied)
31

The act thereby imputed against the petitioner - 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. 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 relevant to clarify that the term entry as used in the TCCP is susceptible of any of the following
three meanings, to wit: (1) the documents filed at the Customs house; or (2) the submission and
acceptance of the documents; or (3) 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. 32

Page 11 of 63
The petitioner was not charged with making an entry of goods at less than the true weight or
measure, or the filing of any false or fraudulent entry for the payment of drawback or refund of
duties, other acts punishable under Section 3602 of the TCCP. He was specifically charged only of
making an entry by means of a false and fraudulent invoice and declaration. The importance of
properly alleging the nature and cause of the accusation in the information should not ever be taken
for granted by the State. To determine whether or not the guilt of the accused was established
beyond reasonable doubt, therefore, the Court must look at the text and tenor of the information to
determine and to know what was the offense charged against him. It is elementary that to try him for
and convict him of an offense other than that charged in the information would be violative of his
Constitutional right to be informed of the nature and cause of the accusation. As such, he could not
be tried for and convicted of a crime, even if duly proved, unless the crime was properly and fully
alleged or necessarily included in the information filed against him.
33

In finding the petitioner guilty as charged, the RTC observed as follows:

As evidence stands, there was really a misdeclaration of the shipment consigned to Almer Cargo
Management covered by Bill of Lading No. NYKS-48150191 and Informal Entry No. 45929. Upon
examination of the shipment, the BOC officers discovered that the declaration "as personal effects
and of no commercial value" is not accurate. Contrary to the declaration of personal effects, the
shipment consisted of general merchandise on commercial quantity such as fabrics, assorted bags
of Ferragamo, Prada and Polo, children's wear, shoes, slippers etc. which were brand new and not
"used". As the misdeclaration would benefit accused, he is therefore, liable as charged.

Supreme Court ruling is to the effect that under the Tariff and Customs Code, declarations and
statements contained in the Import Entry and Permit to Deliver Imported Goods are presumed to be
true and correct under the penalties of falsification and perjury. Moreover, descriptions on entries
and other documents are admission against interest and presumptively correct. (Caltex (Phil) v. CA
et al. G.R. No. 10478l, July 10, 1998).

To the mind of the Court the prosecution should not have spared Benita Ochoa (alleged assignee of
the shipment) as the real owner of the shipment (par. 2 Deed of Assignment, pp. 18, record) she
should have been impleaded as a co-accused. All persons working behind the shipments should
have suffered the consequences. 34

After reviewing the records, the Court holds that the petitioner deserved an acquittal because the
Prosecution did not prove his guilt beyond reasonable doubt.

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
35

the consignee of the shipment, he did not file the informal entry in the Bureau of Customs; that
based on the documents, the filer was Consular Cargo; that he had no knowledge about the entry;
that it was the broker who prepared the import entry declaration; that the papers were submitted by
Viray;  and that only Saganay signed the IIDE.
36 37

In this regard, the Office of the Solicitor General (OSG) contends that the declaration made in the
IIDE by Saganay as the petitioner's agent-broker bound the latter as the consignee considering that
he did not repudiate the declaration. 38

Page 12 of 63
We disagree with the contention of the OSG. The only basis to hold the petitioner criminally liable
under the declaration made by Saganay would be if the two of them had acted pursuant to a
conspiracy.  But even if they had acted pursuant to a conspiracy, there must be an allegation to that
39

effect in the information. We note, however, that the information did not charge Saganay as the co-
conspirator of the petitioner, thereby removing any basis for any inference in that regard. Neither did
the information aver that Saganay was at all an accomplice of the petitioner. Under Article 18 of
the Revised Penal Code, an accomplice is one who, without being a principal either by direct
participation, or by inducement, or by indispensable cooperation, cooperates in the execution of the
offense by previous or simultaneous acts. It would violate the constitutional right of the petitioner to
be informed of the charge brought against him if he were held criminally responsible for Saganay's
act or omission on the basis that Saganay had been his agent in the transaction. In other words, the
importer or consignee should not be held criminally liable for any underdeclaration or misdeclaration
made by the broker unless either a conspiracy between them had been alleged and proved, or the
Prosecution sufficiently established that the importer had knowledge of and actively participated in
the underdeclaration or misdeclaration. Indeed, to allow the act or omission of Saganay to bind the
petitioner would be unacceptable under the principle of res inter alias acta embodied in Section
28, Rule 130 of the Rules of Court.
40

The OSG further posits that the petitioner, as the importer, warranted that the declarations by
Saganay, which were under oath and subject to the penalties of falsification and perjury, were true
and correct. Hence, the petitioner should be held liable upon such declarations.

The records of the case do not support the OSG' s position. Although the import documents,
particularly in the IIDE, Permit to Deliver Import Goods and Bill of Lading, showed Al-mer Cargo
Management as the consignee or importer, it was only Saganay who made the sworn declaration in
the IIDE inasmuch as only his name and signature appeared therein.  The petitioner's name was
41

nowhere to be found in said documents,  which further showed no trace of his signature, or his
42

participation in their preparation, or his conformity with their contents. Verily, the concrete proof
showing that he had affirmed the declarations under oath, as to thereby subject himself to criminal
responsibility for either falsification or perjury, was entirely lacking.

Even assuming that the petitioner was involved in the preparation of the import documents, a clear
showing of his intent to falsify the same in order to avoid the payment of duties and taxes would still
be wanting. The Customs officials themselves testified that the declarations made in the import
documents largely depended on the description of the goods made by the exporter or shipper from a
foreign country. In his testimony, Customs Examiner Dizon explained so:

Q As Customs Examiner of the Informal Entry Division since 1991, are you aware of the Customs
laws, Customs procedures and practices with respect to the importation under the Informal Entry?

A Yes, Sir.

Q And you are also familiar with the documents require (sic) to be attached to the Formal Entry?

A Yes, Sir.

Q And one of the attachments what you called the commercial invoice, is that correct?

A Yes, Sir.

Page 13 of 63
Q In your experience as Customs Examiner usually this commercial invoice prepared by the
exporter or supplier, isn't it?

A Yes, Sir.

Q And this exporter or supplier is usually based in the Country where the goods were manufactured
or were bought by the importer, is that right?

A Yes, Sir.

xxxx

Q In your experience as Customs Examiner, usually the description appearing in the bill of lading is
also the description appearing in the commercial invoice, is that correct?

A Yes, Sir.

Q In the description of the cargo appearing in the bill of lading is likewise the description appearing
in the permit to deliver imported goods, is that correct?

A Yes, Sir.

xxxx

Q x x x Is it not a fact, Mr. Witness, that it is a standard practice at the Bureau of Customs that the
description appearing in the permit to deliver imported goods is a general description of the cargo,
isn't it?

A Yes, Sir.

Q And that the informal entry and import declaration almost always involved the specific description
of the cargo?

A Yes Sir.

xxxx

Atty. Leabres:

So the difference in the two documents is that, the permit to deliver imported goods contained in a
general description while the informal import declaration of entry contained the specific description
there of the cargo covered by the informal entry, is that correct?

A Yes, Sir. 43

Similarly, Atty. Domingo Leguiab stated:

Q In your experience, Mr. witness, as a Hearing Officer of the Bureau of Customs, is that a fact that
these shipment documents are prepared not by the importer but by the supplier?

Page 14 of 63
A That is the procedure.

Q And, therefore, the importer has no hand in the preparation of this shipping document?

A Precisely.

Q And, whatever declaration misrepresentations are made not by the importer but by the supplier?

A Correct, because it's the supplier which prepare (sic) the shipping documents where the
declaration are being made. 4

The petitioner's assertion that he had relied in good faith on the declarations made by his broker,
who had based them on the information provided in the shipping documents by the foreign exporter,
stood unrebutted by the Prosecution. If that was so, his intentional or deliberate participation in any
misdeclaration or underdeclaration could not be properly presumed. In so saying, we cannot but
conclude that the trial court wrongly found him criminally liable, for, as aptly observed in Transglobe
International, Inc. v. Court of Appeals: 45

In the appeal before the CT A, respondent Commissioner of Customs contended that the seizure of
the shipment was made also upon a finding that the documents covering it were forged, thus
constituting fraud as defined in Sec. 1, par. 1. a., CM0-87-92. This Section is of the same tenor as
Sec. 2530, pars. (f) and (m), subpars. 3, 4 and 5, which for emphasis deals with falsities committed
by the owner, importer, exporter or consignee or importation/exportation through any other practice
or device. In Aznar, as reiterated in Farolan, we clarified that the fraud contemplated by law must be
actual and not constructive. It must be intentional, consisting of deception willfully and deliberately
done or resorted to in order to induce another to give up some right. The misdeclarations in the
manifest and rider cannot be ascribed to petitioner as consignee since it was not the one that
prepared them. As we said in Farolan, if at all, the wrongful making or falsity of the documents can
only be attributed to the foreign suppliers or shippers. Moreover, it was not shown in the forfeiture
decision that petitioner had knowledge of any falsity in the shipping documents. District Collector
Rosqueta's comment on petitioner's second motion for reconsideration is enlightening: "While the
shipment was misdeclared in the rider and the manifest, the consignee is innocent of the facts stated
therein as it had no hand in their preparation or issuance." We mention in passing that in having thus
stated, she in effect nullified her prior finding that petitioner violated the cited provisions of the Tariff
and Customs Code as amended. Consequently, we agree with the finding of the CT A that fraud
was not committed by petitioner in the importation of the shipment.

We also made a similar observation in Remigio v. Sandiganbayan,  which involved a customs

46

broker, to wit:

Petitioner Remigio did not make or attempt to make an entry of imported articles by means of any
false or fraudulent invoice, declaration, affidavit, letter, paper, or by means of any false statement,
verbal or oral, or by means of any false or fraudulent practice whatsoever. x x x

xxxx

Accused Erwin C. Remigio, as customs broker, prepared the entry covering the shipment based on
the bill of lading, the invoice, the packing list, letter of credit, the import entry declaration and the
Central Bank Release Certificate. The given address of Borham Trading was at 37 Harvard Street,
Quezon City. There was nothing in the documents to show that there was anything amiss in the

Page 15 of 63
shipment or the covering documents. A customs broker is not required to go beyond the documents
presented to him in filing an entry on the basis of such documents.

Section 3601 provides that x x x Any person who shall fraudulently import or bring into the
Philippines, or assist in so doing, any article, contrary to law, or shall receive, conceal, buy, sell or in
any manner facilitate the transportation, concealment, or sale of such article after importation,
knowing the same to have been imported contrary to law, shall be guilty of smuggling and shall be
punished with x x x.

Accused Remigio did not fraudulently assist in the importation of any article contrary to law nor
facilitated its transportation, knowing the same to have been imported contrary to law. All accused
Remigio did was to prepare the import entry based on the shipping and other documents required by
the Bureau of Customs and file the same.

Lastly, the petitioner's participation in the settlement payment and in the release of the shipment
could not be given any meaning or import adverse to his penal interest. Such payment and release
were actually irrelevant to the criminal act charged against him.

As a final word, it is timely to reiterate People v. Mamalias,  where the Court has reminded with
47

emphasis about the main objective of the courts in the dispensation of justice in criminal
prosecutions:

We emphasize that the great goal of our criminal law and procedure is not to send people to the gaol
but to do justice. The prosecution's job is to prove that the accused is guilty beyond reasonable
doubt. Conviction must be based on the strength of the prosecution and not on the weakness of the
defense - the obligation is upon the shoulders of the prosecution to prove the guilt of the accused,
not on the accused to prove his innocence. Thus, when the evidence of the prosecution is not
enough to sustain a conviction, it must be rejected and the accused absolved and released at once.

WHEREFORE, the Court REVERSES and SETS ASIDE the decision promulgated on March 18,

2005 by the Court of Appeals in C.A.G. R. CR No. 28263 entitled People of the Philippines v. Alvin
Mercado and Lito Seña/Lito Senia; and ACQUITS petitioner ALVIN MERCADO for failure of the
State to establish his guilt beyond reasonable doubt.

No pronouncements on costs of suit.

SO ORDERED.

LUCAS P. BERSAMIN
Associate Justice

WE CONCUR:

MARIA LOURDES P. A. SERENO

Chief Justice

TERESITA J. LEONARDO-DE CASTRO JOSE PORTUGAL PEREZ

Associate Justice Associate Justice

ESTELA M. PERLAS-BERNABE
Associate Justice

Page 16 of 63
 CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above
Decision had been reached in consultation before the case was assigned to the writer of the opinion
of the Court's Division.

MARIA LOURDES P.A. SERENO

Chief Justice

Footnotes

 Rollo, pp. 7-14; penned by Associate Justice Eugenio S. Labitoria (retired), with Associate
1

Justice Amelita G. Tolentino (retired) and Associate Justice Lucenito N. Tagle (retired)
concurring.

2
 Id. at 62-72; penned by Judge Amor A. Reyes.

3
 Records, pp. 1-2.

4
 Id. at 72.

5
 Id. at 35.

6
 Id. at 35-37.

7
 Id. at 27, 35-36.

8
 Id. at 37.

9
 Id. at 35-36.

10
 Id. at 38-39

11
 Id. at 27.

12
 Id. at 23.

13
 Id. at 4.

14
 Id. at 4-8.

15
 Id. at 16.

16
 Id.

17
 Id. at l8-19.

Page 17 of 63
  Id. at 35.
18

 Rollo, p. 72.
19

 Id. at ll-12.
20

 Id. at 12-13.
21

 Id.atl2-13.
22

 Id. at 25-26.
23

 Id. at 30.
24

 Id. at 30-32.
25

 Id. at 32-35.
26

 Id. at 35.
27

 Id.
28

 Id. at 38-44.
29

 Jardeleza v. People, G.R. No. 165265, February 6, 2006, 481 SCRA 638, 662.
30

 Records. p 2.
31

 Jardeleza v. People, supra note 30, at 663.

32

 Patula v. People, G.R. No. 164457, April 11, 2012, 669 SCRA 135, 146.
33

 Rollo, p. 71.
34

 TSN of October 1, 2002, pp. 15-16.

35

 TSN of October 21. 2002, pp. 23-25.

36

 Records, p. 35.
37

 Rollo, p. 120.
38

 Section 30, Rule 130 of the Rules of Court provides:

39

Section 30. Admission by conspirator. - The act or declaration of a conspiratur

reiating to the conspiracy and during its existence, may be given in evidence against
the co- conspirator after the conspiracy is shown by evidence other than such act of
declaration. (27)

Page 18 of 63
  Section 28. Admission by third party. - The rights of a party cannot be prejudiced by an act,
40

declaration. or omission of another, except as hereinafter provided. (25a)

 Records, p. 35.
41

 Id. at 35·-36, 152-154.

42

 TSN of June 17, 2002, pp. 3-4, 6, 16-17.

43

 TSN of February 24, 2003, pp. 37-38.

44

 G.R. No. 126634, January 25, 1999, 302 SCRA 57, 68-69.
45

 G.R. No. 145422-23, January 18, 2002, 374 SCRA 114, 122-123.
46

 G.R. No. 128073, March 27, 2000, 328 SCRA 760, 773.
47

Page 19 of 63
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-20489             June 22, 1965

BOMBAY DEPARTMENT STORE, petitioner,

vs.
THE COMMISSIONER OF CUSTOMS, respondent.

Clemente M. Soriano for petitioner.

Office of the Solicitor General for respondent.

BENGZON, J.P., J.:

On December 12, 1954 five cases of goods shipped by Milshire International Corporation, 110 W.
40th St., New York, N.Y., U.S.A., consigned to Bombay Department Store, Manila arrived in the Port
of Manila on board "SS Pioneer Wave."

Said goods were declared in the commercial invoice as:

68 cartons Parts of Cycle

12 cartons Parts of Cycle

Packed in five wooden cases iron strapped.

Similarly, the consular invoice described them as:

68 cartons Parts of Cycle

12 cartons Parts of Cycle

The bill of lading stated:

4 Cases Parts of Cycles

1 Case Parts of Cycles General Mdse.

So, also, the import entry and internal revenue declaration set forth:

4 Cases Parts of Cycles

1 Case Parts of Cycles (Gen. Merchandise).

Finally, the Central Bank release certificate, classifying the goods under 730302 EP described them
as:

(4 cases) Parts of Cycles

(1 case)

Page 20 of 63
When opened for inventory and examination, however, the five cases were found to contain the
following:

Case No. 1 — 4 pcs. — Bicycle, complete, Murray brand, Men's;

Case No. 2 — 4 pcs. — Bicycle, complete, Murray brand, Men's and 1 pc. — Tricycle, boy's;
Case No. 3 — 6 pcs. — Motor Bike, complete,
Case No. 4 — 6 pcs. — Motor Bike, complete,
Case No. 5 — 151 pcs. — Cases for Sheaffer's pen, carton,

1 pc. — Children's sweater of estron acetate and cotton materials,

1 pr. Children's (Baby) shoes of estron acetate and cotton materials,
40 pcs. — Sportswear, rayon men's
42 pcs. — Handbags, tin frame and plastic or velvet siding
36 pcs. Jackets, leather, men's
20 boxes cufflinks and buttons
2-½ boxes cufflinks and buttons
6 boxes cufflinks
6 boxes buttons
3 small boxes buttons
20 boxes Handkerchiefs

For alleged violation of Sections 1363(f), 1363(i), 1363 (m) 3 and 4, Revised Administrative Code,
and of Central Bank Circulars Nos. 44 and 45, the aforesaid goods were seized. After seizure
proceedings the Collector of Customs, on July 11, 1955, declared the goods forfeited.

Subsequently, on August 8, 1955, the Collector of Customs authorized the release of the goods
under a bond in the amount of P5,779.81.

Bombay Department Store appealed from the Collector of Customs' decision to the Commissioner of
Customs but the latter, on March 29, 1960, affirmed said decision, confiscating the bond and
ordering the principal and the surety, jointly and severally, to pay the amount thereof to the Bureau
of Customs.

Appeal was further taken by Bombay Department Store to the Court of Tax Appeals which in turn, on
August 1, 1962, affirmed the decision of the Commissioner of Customs, resulting in this petition for
review of the decision of the Tax Court.

Appellant maintains, first, that there is no misdeclaration of the goods to warrant their forfeiture
under Section 1363(m) 3 and 4 of the Revised Administrative Code; and, secondly, that said goods
are not subject to forfeiture under Central Bank Circulars Nos. 44 and 45 which required a release
certificate for the same.

Section 1365(m) 3 and 4 of the Revised Administrative Code provides:

SEC. 1363. Property subject to forfeiture under customs laws. — Vessels, cargo,

merchandise, and other objects and things shall, under the conditions hereinbelow specified,
be subject to forfeiture:

xxx     xxx     xxx

Page 21 of 63
 (m) Any merchandise the importation or exportation of which is effected or attempted in any
of the ways or under any of the conditions hereinbelow described —

xxx     xxx     xxx

3. Upon the wrongful making by the owner, importer, exporter, or consignee of any
merchandise, or by the agent of either, of any false declaration or affidavit, touching such
merchandise and in connection with the importation or exportation of the same.

4. Upon the wrongful making or delivery by the same person or persons, of any false invoice,
letter or paper touching such merchandise and in connection with the importation or
exportation of the same.

It is true that the commercial and consular invoices tally with the import entry and internal revenue
declaration, but it is likewise true that, as stated, said invoices, as well as the import entry and
internal revenue declaration do not tally with the contents of the boxes shipped. For while said
papers stated the contents to be "parts of cycles" the boxes in fact contained complete cycles. Since
a seizure and forfeiture proceedings for misdeclaration is directed against the merchandise
imported, the basis in determining misdeclaration should be the goods actually received as
compared with their accompanying papers, such as the invoices, bill of lading and import entry and
internal revenue declaration. The goods received in this case being different from those described in
said papers, it follows that there was misdeclaration of the same, rendering them subject to forfeiture
under Section 1363(m)3 and 4 of the Revised Administrative Code.

Central Bank Circulars Nos. 44 and 45 require the presentation of a release certificate issued by the
Central Bank before an importation is released to the claimant or consignee.

It is appellant's contention that the goods in question are covered by the release certificate
presented. An examination of said release certificate, however, shows that it covers only "parts of
cycles" classified as 730302 EP. The shipment consisted not of cycle "parts" but of "complete"
bicycles which do not fall under 730302 EP (Essential Producer) but under 730302 NEC (Non-
Essential Consumer).

The record shows that the testimony referred to by appellant in support of its contention that at least
the children's cycles were only "parts," states precisely the opposite:

Q. ... . Did you find the shipment?

A. I found out that instead of parts of cycles, the shipment consist [sic] of complete children's
bicycle

Q. Already assembled?

A. No, in parts. (CTA Record p. 36).

We need hardly point out that complete bicycles, even in knocked-down condition, are dutiable as an
entirety 1 and that the rates of duty on parts of cycles and on complete cycles are different.  2 Such
being the case the goods in question — complete bicycles and general merchandise — do not fall
under the release certificate presented. Accordingly, their importation ran counter to the aforesaid
Central Bank Circulars Nos. 44 and 45, for lack of release certificate. Forfeiture of said goods by the
Bureau of Customs is, therefore, in order pursuant to Section 1363(f) of the Revised Administrative

Page 22 of 63
Code, 3 since violation of Circulars Nos. 44 and 45 made them fall thereunder as "merchandise of
prohibited importation" or merchandise "the importation ... of which is effected ... contrary to law."  4

Appellant's final argument is that Central Bank Circular No. 133, effective January 21, 1962,
impliedly repealed Circulars Nos. 44 and 45, thereby rendering the present seizure and forfeiture
proceedings without legal basis. Suffice it to state on this point that, far from being impliedly
repeated, the requirement of a release certificate is reiterated in Circular No. 133:

6. Imports shall be released from the port of entry only upon presentation of a release
certificate issued by the Central Bank based on the letters of credit opened.

WHEREFORE, the decision appealed from is hereby affirmed, with costs against appellant. It is so
ordered.

Bengzon, C.J., Bautista Angelo, Concepcion, Reyes, J.B.L., Paredes, Dizon, Regala, Makalintal and
Zaldivar, JJ., concur.
Barrera, J., is on leave.

Footnotes

1
Close & Stewart vs. U.S., 2 CCH 318, CD 151.

2
See Headings 87.10 and 87.12, Tariff and Customs Code of 1957.

3
"SEC. 1363. Property subject to forfeiture under customs laws. — Vessels, cargo,
merchandise, and other objects and things shall, under the conditions hereinbelow specified,
be subject to forfeiture:

xxx     xxx     xxx

(f) Any merchandise of prohibited importation or exportation, the importation or

exportation of which is effected or attempted contrary to law, and all other
merchandise which, in the opinion of the collector, have been used, are or were
intended to be used as instrument in the importation or exportation of the former."

4
Pascual vs. Commissioner of Customs, L-17097, June 30, 1959; Commissioner of Custom,
vs. Serree Investment Co., L-12007, May 16, 1960; Commissioner vs. Eastern Sea Trading,
L-14279, October 31, 1961; Commissioner vs. Santos, L-11911 March 30, 1962;
Commissioner vs. Nepomuceno, L-11126, March 31, 1962; Pascual vs. Collector of
Customs, L-12219, April 25, 1962; Serree Investment Co. vs. Commissioner of Customs, L-
19564, Nov. 28, 1964.

Page 23 of 63
 EN BANC

September 8, 2015

G.R. No. 193253

BUREAU OF CUSTOMS, Petitioner,
vs.
THE HONORABLE AGNES VST DEVANADERA, ACTING SECRETARY, DEPARTMENT OF
JUSTICE; HONORABLE JOVENCITO R. ZUNO, PEDRITO L. RANCES, ARMAN A. DE ANDRES,
PAUL CHI TING CO, KENNETH PUNDANERA, MANUEL T. CO, SALLY L. CO,, STANLEY L.
TAN, ROCHELLE E. VICENCIO, LIZA R. MAGAWAY, JANICE L. CO, VIVENCIO ABANO, GREG
YU, EDWIN AGUSTIN, VICTOR D. PIAMONTE, UNIOIL PETROLEUM PHILIPPINES, INC., and
OILINK, INTERNATIONAL, INC., Respondents.

DECISION

PERALTA, J.:

Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court, seeking to
reverse and set aside the Court of Appeals (CA) Resolutions dated March 26, 2010  and August 4,
1

2010,  and to reinstate the petition for certiorari in CA-G.R. SP No. 113069, or in the alternative, to
2

issue a decision finding probable cause to prosecute the private respondents for violation of
Sections 3601 and 3602, in relation to Sections 2503 and 2530, paragraphs f and l (3), (4) and (5) of
the Tariff and Customs Code of the Philippines (TCCP), as amended.

The antecedents are as follows:

Private respondent UNIOIL Petroleum Philippines, Inc. is engaged in marketing, distribution, and
sale of petroleum, oil and other products, while its co-respondent OILINK International, Inc. is
engaged in manufacturing, importing, exporting, buying, selling, or otherwise dealing in at wholesale
and retails of petroleum, oil, gas and of any and all refinements and byproducts thereof. Except for
respondent Victor D. Piamonte who is a Licensed Customs Broker, the following private respondents
are either officers or directors of UNIOIL or OILINK:

1. Paul Chi Ting Co – Chairman of UNIOIL and OILINK

2. Kenneth Pundanera – President/Director of UNIOIL

3. Manuel T. Co – Officer/Director of UNIOIL

4. Sally L. Co – Officer/Director of UNIOIL

5. Stanley L. Tan – Officer/Director of UNIOIL

6. Rochelle E. Vicencio – Corporate Administrative Supervisor of UNIOIL

7. Liza R. Magaway – President of OILINK

Page 24 of 63
 8. Janice L. Co – Director of OILINK

9. Vivencio Abaño – Director of OILINK

10. Greg Yu – Director of OILINK

11. Edwin Agustin – Corporate Secretary of OILINK

On January 30, 2007, Commissioner Napoleon L. Morales of petitioner Bureau of Customs (BOC)
issued Audit Notification Letter (ANL) No. 0701246,  informing the President of OILINK that the Post
3

Entry Audit Group (PEAG) of the BOC will be conducting a compliance audit, including the
examination, inspection, verification and/or investigation of all pertinent records of OILINK's import
transactions for the past three (3)-year period counted from the said date.

On March 2, 2007, a pre-audit conference was held between the BOC Audit Team  and the 4

representatives of OILINK.  During the conference, the Audit Team explained to OILINK
5

representatives the purpose of the postentry audit and the manner by which it would be conducted,
and advised it as to the import documents required for such audit.

On March 14, 2007, OILINK submitted to the Audit Team the following documents: Post-Entry Audit
Group General Customs Questionnaire, General Information Sheet for the year 2006, SEC
Registration, Articles of Incorporation, Company By-laws, and Audited Financial Report for the year
2005.

On April 20, 2007, the Audit Team requested OILINK to submit the other documents stated in the
List of Initial Requirements for Submission, namely: 2004 Audited Financial Report, 2004-2006
Quarterly VAT Returns with the accompanying schedule of importations, Organizational
chart/structure, and List of foreign suppliers with details on the products imported and the total
amount, on a yearly basis.

On May 7, 2007, OILINK expressed its willingness to comply with the request for the production of
the said documents, but claimed that it was hampered by the resignation of its employees from the
Accounting and Supply Department. OILINK also averred that it would refer the matter to the
Commissioner of Customs in view of the independent investigation being conducted by the latter.

On June 4, 2007, OILINK sent a letter stating that the documents which the Audit Team previously
requested were available with the Special Committee of the BOC, and that it could not open in the
meantime its Bureau of Internal Revenue (BIR) – registered books of accounts for validation and
review purposes.

In a letter dated July 11, 2007, the Audit Team informed OILINK of the adverse effects of its request
for the postponement of the exit conference and its continuous refusal to furnish it the required
documents. It advised OILINK that such acts constitute as waiver on its part to be informed of the
audit findings and an administrative case would be filed against it, without prejudice to the filing of a
criminal action.

On July 24, 2007, Commissioner Morales approved the filing of an administrative case against
OILINK for failure to comply with the requirements of Customs Administrative Order (CAO) No. 4-
2004.  Such case was filed on July 30, 2007.
6

Page 25 of 63
On September 20, 2007, an Order was issued by the Legal Service of the BOC, submitting the case
for resolution in view of OILINK's failure to file its Answer within the prescribed period.

On December 14, 2007, the Legal Service of the BOC rendered a Decision finding that OILINK
violated Section IV.A.2(c) and (e) of CAO 4- 2004  when it refused to furnish the Audit Team copies
7

of the required documents, despite repeated demands. The dispositive portion of the Decision
states:

WHEREFORE, in view of the foregoing, this Office finds herein respondent liable for violating
Sections IV.A.2 (c) and (e) of Customs Administrative Order No. 4-2004, and a DECISION is hereby
rendered:

1. Ordering OILINK INTERNATIONAL CORPORATION to pay the equivalent of twenty

percent (20%) ad valorem on the article/s subject of the Importation for which no records
were kept and maintained as prescribed in Section 2504 of the Customs Code in the amount
of Pesos: Two Billion Seven Hundred Sixty-Four Million Eight Hundred Fifty-Nine
Thousand Three Hundred Four and 80/100 (Php 2,764,859,304.80);

2. Ordering the Bureau of Customs to hold the delivery or release of subsequent imported
articles to answer for the fine, any revised assessment, and/or as a penalty for failure to keep
records.

This is without prejudice to the filing of a criminal case or any appropriate legal action against the
importer in order to protect the interest of the government and deter other importers from committing
the same offense.

SO ORDERED. 8

Pursuant to the Decision dated December 14, 2007, Commissioner Morales, in a letter  of even date,
9

directed the President of OILINK to pay the BOC the administrative fine of _2,764,859,304.80 for
violation of CAO No. 4-2004, in relation to Section 2504 of the TCCP. Copy of the said Decision and
letter were served to OILINK through personal service on December 28, 2007. 10

On March 13, 2008, Atty. Noemi B. Alcala, Officer-in-Charge, Collection Service, Revenue and
Monitoring Group, sent a final demand letter for OILINK to settle the administrative fine, otherwise,
the BOC will be compelled to file the necessary legal action and put in force Section 1508  of the
11

TCCP against its succeeding shipments to protect the government's interest. 12

On April 23, 2008, a Hold Order  was issued by Horacio P. Suansing, Jr., District Collector, Port of
13

Manila, against all shipments of OILINK for failure to settle its outstanding account with the BOC and
to protect the interest of the government pursuant to Section 1508 of the TCCP.

On May 2, 2008, Rochelle E. Vicencio, Corporate Administrative Supervisor of UNIOIL, citing the
existing Terminalling Agreement dated January 2, 2008 with OILINK for the Storage of UNIOIL's
aromatic process oil and industrial lubricating oils (collectively, "base oils"), requested District
Collector Suansing Jr. to allow it to withdraw base oils from OILINK's temporarily closed Terminal.

On May 6, 2008, Commissioner Morales granted the request of UNIOIL to withdraw its base oils
stored at OILINK's terminal/depot based on the Terminalling Agreement between the two
companies, subject to the following conditions:

Page 26 of 63
 1. Only Unioil products shall be withdrawn subject to proper inventory by the BIR and BOC.

2. Appropriate duties and taxes due on the products to be withdrawn are fully paid or settled.

3. The company should allow the operation/withdrawal to be closely monitored and

continuously underguarded by assigned Customs personnel. 14

On May 9, 2008, a Warrant of Seizure and Detention (WSD), docketed as Seizure Identification
(S.I.) No. 2008-082, was issued by District Collector Suansing Jr., directing the BOC officials to seal
and padlock the oil tanks/depots of OILINK located in Bataan.

On May 12, 2008, Kenneth C. Pundanera, Operations Manager of UNIOIL, requested Zaldy E.
Almoradie, District Collector of Mariveles, Bataan, for permission to release UNIOIL-owned products
from OILINK's storage terminal. Pertinent portion of the request letter reads:

Unioil is a licensed importer of various Petroleum Products by virtue of its import license LTAD-0-
021-2002 issued on March 26, 2002 which was revised to include all other petroleum products in
2007 through LTAMII (P) 001-10-07-13639. To pursue its line of business, Unioil has an existing
Terminalling Agreement with Oilink for the storage of various Unioil products at the Oilink terminal
located at Lucanin Pt., Mariveles, Bataan.

In view of the said temporary closure of Oilink's terminal, Unioil is currently unable to fully utilize its
leased tanks as well as make use of the products contained therein. We understand that there is still
an unresolved issue between Oilink and the Bureau of Customs. However, with all due respect, said
issue should not affect Unioil because it is not a party to the same, furthermore there is a legal and
binding terminalling agreement between Oilink and Unioil which should be honored.

Last May 8, 2008, an asphalt importation for Unioil Petroleum Philippines, Inc. arrived in Mariveles,
Bataan. This was issued the corresponding discharging permit by the Bureau of Customs. All duties,
excise taxes and value added taxes for this product have already been settled. However, we are still
unable to withdraw these products in order to serve our customers who are using the product to
supply major government infrastructure projects in the country.

In line with the endorsement coming from the Bureau of Customs Commissioner Napoleon D.
Morales issued last May 6, 2008, Unioil has complied with the conditions stipulated therein which
are:

1. Only Unioil products shall be withdrawn subject to proper inventory by the BIR and BOC.

2. Appropriate duties and taxes due on the products to be withdrawn are fully paid or settled.

3. The company (Unioil) should allow the operation/withdrawal to be closely monitored and
continuously underguarded by assigned Customs personnel.

In this regard, may we respectfully request your good office to please allow Unioil to withdraw from
Oilink's terminal its products which are stored in the following tanks[:]15

TANK PROD CONTENTS (Liters)

2 diesel 2,171,670.00

Page 27 of 63
 6 rexo 1,862,846.00
10 asphalt 4,573.14
13 gasoline 809,345.00
14 gasoline 746,629.00
17 diesel 360,097.00
19 sn 500 203,659.00
20 sn 500 643,236.00

In the same request letter, District Collector Almoradie approved the release of the above petroleum
products through a handwritten note dated May 12, 2008: "All concerned: Pls. allow the release of
the Unioil-owned products from the Oilink Storage Terminal per this request. Thanks." 16

On May 15, 2008, Pundanera wrote a clarificatory letter pursuant to the verbal instruction of District
Collector Almoradie to explain the withdrawal of products from the Terminal of OILINK, to wit:

As far as Unioil is concerned, we affirm to your good office that the products withdrawn/loaded at the
Terminal are entirely Unioil products. Unioil owns these products pursuant to its supply and
terminalling agreements with Oilink. (We shall be submitting to you copies of these documents as
soon as they arrive from our office in Manila.) In addition, due to the issue involving Oilink and the
Bureau of Customs, Unioil was forced to secure its petroleum products from local sources in order to
comply with its valid contractual commitments.

Unioil intended to withdraw these products because it believed in good faith and based on
documents in its possession that it is allowed to do so. Unioil based its intention pursuant to the
Indorsements of the Collector of the Port of Manila as well as the Office of the Commissioner that
allowed the withdrawal of Unioil products subject to compliance with the three (3) conditions
specified in the abovementioned Indorsements.

This being the precedent, we believe in good faith that, since Unioil owns the products, and it is
considered a stranger to the issue between Oilink and the Bureau, then Unioil is allowed to withdraw
the products it owns subject to the compliance with the three (3) stated conditions. Besides, any
withdrawal is covered by an appropriate delivery receipt, which would clearly indicate that Unioil
owns the products being withdrawn. 17

In a complaint-affidavit dated December 15, 2008, Atty. Balmyrson M. Valdez, a member of the
petitioner BOC's Anti-Oil Smuggling Coordinating Committee that investigated the illegal withdrawal
by UNIOIL of oil products consigned to OILINK, valued at _181,988,627.00 with corresponding
duties and taxes in the amount of _35,507,597.00, accused the private respondents of violation of
Sections 3601  and 3602,  in relation to Sections 2503  and 2530,  paragraphs f and l (3), (4) and
18 19 20 21

(5), of the TCCP.

In a letter  dated December 15, 2008, Commissioner Morales referred to the Office of Chief State
22

Prosecutor Jovencito R. Zuño the said complaintaffidavit, together with its annexes, for preliminary
investigation. During the said investigation, BOC's counsel appeared and all of the private
respondents submitted their respective counter-affidavits.

Page 28 of 63
In a Resolution  dated May 29, 2009, public respondent Arman A. De Andres, State Prosecutor of
23

the Department of Justice (DOJ), recommended the dismissal of the complaint-affidavit for lack of
probable cause. The Resolution was approved by public respondents Assistant Chief State
Prosecutor Pedrito L. Rances and Chief State Prosecutor Zuño. On automatic review, the Resolution
was affirmed by then Secretary of Justice Raul M. Gonzales. 24

Dissatisfied, the BOC filed a motion for reconsideration which was denied by the public respondent,
the Acting Secretary of Justice Agnes VST Devanadera, in a Resolution  dated December 28, 2009.
25

On March 11, 2010, the BOC filed a petition for certiorari with the CA.

In the Resolution dated March 26, 2010, the CA dismissed outright the petition due to procedural
defects:

The instant petition (i) contains no explanation why service thereof was not done personally (Sec.
11, Rule 13, 1997 Rules of Civil Procedure); (ii) shows that it has no proper verification and
certification against forum shopping and (iii) the docket and other lawful fees payment is short by
P1,530.00. 26

In the Resolution dated August 4, 2010, the CA denied the private respondents' motion for
reconsideration of the March 26, 2010 Resolution, as follows:

We made a cursory examination of the petition filed in this case as well as the whole rollo of the
case. It is our finding that, up to the date hereof, the petitioner has not duly submitted to this Court
another set of petition with a certification against forum shopping embodied therein or appended
thereto. Thus, the petition really suffers from a fatal defect until now, and so, the petitioner has to
bear the consequence thereof. 27

The CA stressed that procedural rules are not to be belittled or dismissed simply because their non-
observance may have resulted in prejudice to a party's substantive rights. Like all rules, they are
required to be followed except only when, for the most persuasive of reasons, they may be relaxed
to relieve a litigant of an injustice not commensurate with the degree of thoughtlessness in not
complying with the procedure prescribed. While it is true that litigation is not a game of technicalities,
this does not mean that Rules of Court may be ignored at will and at random to the prejudice of the
orderly presentation and assessment of the issues and their just resolution.

Aggrieved, the BOC filed the instant petition for review on certiorari, raising the following issues:

WHETHER THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED WHEN IT

DENIED PETITIONER'S MOTION FOR RECONSIDERATION SOLELY ON THE GROUND
THAT, ALLEGEDLY, IT DID NOT RECEIVE THE SECOND AND COMPLETE COPY OF
THE PETITION, CONTAINING THE VERIFICATION AND CERTIFICATION AGAINST
FORUM SHOPPING.

WHETHER THE HONORABLE COURT OF APPEALS GRIEVOUSLY ERRED IN LAW AND

JURISPRUDENCE WHEN IT AFFIRMED ITS 26 MARCH 2010 RESOLUTION,
DISMISSING THE PETITION ON ACCOUNT OF MERE TECHNICALITIES.

WHETHER THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERROR

WHEN IT DID NOT LOOK INTO THE MERITS OF THE CASE, WHERE IT WAS CLEARLY
ESTABLISHED THAT THERE IS PROBABLE CAUSE TO INDICT RESPONDENTS FOR

Page 29 of 63
 TRIAL FOR VIOLATION OF SECTION 3601 AND 3602 IN RELATION TO SECTION 2530,
PARAGRAPHS (E), AND SECTION 3604 (D), (E), (F), AND (H) OF THE TCCP, AS
AMENDED. 28

The petition is partly meritorious.

Although the question of jurisdiction over the subject matter was not raised at bench by either of the
parties, the Court will first address such question before delving into the procedural and substantive
issues of the instant petition. After all, it is the duty of the courts to consider the question of
jurisdiction before they look into other matters involved in the case, even though such question is not
raised by any of the parties.  Courts are bound to take notice of the limits of their authority and, even
29

if such question is neither raised by the pleadings nor suggested by counsel, they may recognize the
want of jurisdiction and act accordingly by staying pleadings, dismissing the action, or otherwise
noticing the defect, at any stage of the proceedings.  Besides, issues or errors not raised by the
30

parties may be resolved by the Court where, as in this case, the issue is one of jurisdiction; it is
necessary in arriving at a just decision; and the resolution of the issues raised by the parties depend
upon the determination of the unassigned issue or error, or is necessary to give justice to the
parties.31

On the issue of whether or not the CA has certiorari jurisdiction over the resolution of the Acting
Secretary of Justice, affirming the dismissal of the complaint-affidavit for violation of provisions of the
TCCP due to lackof probable cause, the Court rules in negative.

The elementary rule is that the CA has jurisdiction to review the resolution of the DOJ through a
petition for certiorari under Rule 65 of the Rules of Court on the ground that the Secretary of Justice
committed grave abuse of his discretion amounting to excess or lack of jurisdiction.  However, with
32

the enactment  of Republic Act (R.A.) No. 9282, amending R.A. No. 1125  by expanding the
33 34

jurisdiction of the CTA, enlarging its membership and elevating its rank to the level of a collegiate
court with special jurisdiction, it is no longer clear which between the CA and the CTA has
jurisdiction to review through a petition for certiorari the DOJ resolution in preliminary investigations
involving tax and tariff offenses.

Apropos is City of Manila v. Hon. Grecia-Cuerdo  where the Court en banc declared that the CTA
35

has appellate jurisdiction over a special civil action for certiorari assailing an interlocutory order

issued by the RTC in a local tax case, despite the fact that there is no categorical statement to that
effect under R.A. No. 1125, as well as the amendatory R.A. No. 9282. Thus:

x x x Section 5 (1), Article VIII of the 1987 Constitution grants power to the Supreme Court, in the
exercise of its original jurisdiction, to issue writs of certiorari, prohibition and mandamus. With
respect to the Court of Appeals, Section 9 (1) of Batas Pambansa Blg. 129 (BP 129) gives the
appellate court, also in the exercise of its original jurisdiction, the power to issue, among others, a
writ of certiorari, whether or not in aid of its appellate jurisdiction. As to Regional Trial Courts, the
power to issue a writ of certiorari, in the exercise of their original jurisdiction, is provided under
Section 21 of BP 129.

The foregoing notwithstanding, while there is no express grant of such power, with respect to the
CTA, Section 1, Article VIII of the 1987 Constitution provides, nonetheless, that judicial power shall
be vested in one Supreme Court and in such lower courts as may be established by law and that
judicial power includes the duty of the courts of justice to settle actual controversies involving rights
which are legally demandable and enforceable, and to determine whether or not there has been a
grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any
branch or instrumentality of the Government.

Page 30 of 63
On the strength of the above constitutional provisions, it can be fairly interpreted that the power of
the CTA includes that of determining whether or not there has been grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of the RTC in issuing an interlocutory order in
cases falling within the exclusive appellate jurisdiction of the tax court. It, thus, follows that the CTA,
by constitutional mandate, is vested with jurisdiction to issue writs of certiorari in these cases.

Indeed, in order for any appellate court to effectively exercise its appellate jurisdiction, it must have
the authority to issue, among others, a writ of certiorari. In transferring exclusive jurisdiction over
appealed tax cases to the CTA, it can reasonably be assumed that the law intended to transfer also
such power as is deemed necessary, if not indispensable, in aid of such appellate jurisdiction. There
is no perceivable reason why the transfer should only be considered as partial, not total.

xxxx

Furthermore, Section 6, Rule 135 of the present Rules of Court provides that when by law,
jurisdiction is conferred on a court or judicial officer, all auxiliary writs, processes and other means
necessary to carry it into effect may be employed by such court or officer.

If this Court were to sustain petitioners' contention that jurisdiction over their certiorari petition lies
with the CA, this Court would be confirming the exercise by two judicial bodies, the CA and the CTA,
of jurisdiction over basically the same subject matter – precisely the split-jurisdiction situation which
is anathema to the orderly administration of justice. The Court cannot accept that such was the
legislative motive, especially considering that the law expressly confers on the CTA, the tribunal with
the specialized competence over tax and tariff matters, the role of judicial review over local tax cases
without mention of any other court that may exercise such power. Thus, the Court agrees with the
ruling of the CA that since appellate jurisdiction over private respondents' complaint for tax refund is
vested in the CTA, it follows that a petition for certiorari seeking nullification of an interlocutory order
issued in the said case should, likewise, be filed with the same court. To rule otherwise would lead to
an absurd situation where one court decides an appeal in the main case while another court rules on
an incident in the very same case.

Stated differently, it would be somewhat incongruent with the pronounced judicial abhorrence to split
jurisdiction to conclude that the intention of the law is to divide the authority over a local tax case
filed with the RTC by giving to the CA or this Court jurisdiction to issue a writ of certiorari against
interlocutory orders of the RTC but giving to the CTA the jurisdiction over the appeal from the
decision of the trial court in the same case. It is more in consonance with logic and legal soundness
to conclude that the grant of appellate jurisdiction to the CTA over tax cases filed in and decided by
the RTC carries with it the power to issue a writ of certiorari when necessary in aid of such appellate
jurisdiction. The supervisory power or jurisdiction of the CTA to issue a writ of certiorari in aid of its
appellate jurisdiction should co-exist with, and be a complement to, its appellate jurisdiction to
review, by appeal, the final orders and decisions of the RTC, in order to have complete supervision
over the acts of the latter.

A grant of appellate jurisdiction implies that there is included in it the power necessary to exercise it
effectively, to make all orders that will preserve the subject of the action, and to give effect to the
final determination of the appeal. It carries with it the power to protect that jurisdiction and to make
the decisions of the court thereunder effective.

The court, in aid of its appellate jurisdiction, has authority to control all auxiliary and incidental
matters necessary to the efficient and proper exercise of that jurisdiction. For this purpose, it may,
when necessary, prohibit or restrain the performance of any act which might interfere with the proper
exercise of its rightful jurisdiction in cases pending before it.

Page 31 of 63
Lastly, it would not be amiss to point out that a court which is endowed with a particular jurisdiction
should have powers which are necessary to enable it to act effectively within such jurisdiction. These
should be regarded as powers which are inherent in its jurisdiction and the court must possess them
in order to enforce its rules of practice and to suppress any abuses of its process and to defeat any
attempted thwarting of such process.

In this regard, Section 1 of RA 9282 states that the CTA shall be of the same level as the CA and
shall possess all the inherent powers of a court of justice.

Indeed, courts possess certain inherent powers which may be said to be implied from a general
grant of jurisdiction, in addition to those expressly conferred on them. These inherent powers are
such powers as are necessary for the ordinary and efficient exercise of jurisdiction; or are essential
to the existence, dignity and functions of the courts, as well as to the due administration of justice; or
are directly appropriate, convenient and suitable to the execution of their granted powers; and
include the power to maintain the court's jurisdiction and render it effective in behalf of the litigants.

Thus, this Court has held that "while a court may be expressly granted the incidental powers
necessary to effectuate its jurisdiction, a grant of jurisdiction, in the absence of prohibitive legislation,
implies the necessary and usual incidental powers essential to effectuate it, and, subject to existing
laws and constitutional provisions, every regularly constituted court has power to do all things that
are reasonably necessary for the administration of justice within the scope of its jurisdiction and for
the enforcement of its judgments and mandates." Hence, demands, matters or questions ancillary or
incidental to, or growing out of, the main action, and coming within the above principles, may be
taken cognizance of by the court and determined, since such jurisdiction is in aid of its authority over
the principal matter, even though the court may thus be called on to consider and decide matters
which, as original causes of action, would not be within its cognizance.

Based on the foregoing disquisitions, it can be reasonably concluded that the authority of the CTA to
take cognizance of petitions for certiorari questioning interlocutory orders issued by the RTC in a
local tax case is included in the powers granted by the Constitution as well as inherent in the
exercise of its appellate jurisdiction.
36

Since the Court ruled in City of Manila v. Hon. Grecia-Cuerdo  that the CTA has jurisdiction over a
37

special civil action for certiorari questioning an interlocutory order of the RTC in a local tax
case via express constitutional mandate and for being inherent in the exercise of its appellate
jurisdiction, it can also be reasonably concluded based on the same premise that the CTA has
original jurisdiction over a petition for certiorari assailing the DOJ resolution in a preliminary
investigation involving tax and tariff offenses.

If the Court were to rule that jurisdiction over a petition for certiorari assailing such DOJ resolution
lies with the CA, it would be confirming theexercise by two judicial bodies, the CA and the CTA, of
jurisdiction over basically the same subject matter – precisely the split-jurisdiction situation which is
anathema to the orderly administration of justice. The Court cannot accept that such was the
legislative intent, especially considering that R.A. No. 9282 expressly confers on the CTA, the
tribunal with the specialized competence over tax and tariff matters, the role of judicial review over
local tax cases without mention of any other court that may exercise such power. 38

Concededly, there is no clear statement under R.A. No. 1125, the amendatory R.A. No. 9282, let
alone in the Constitution, that the CTA has original jurisdiction over a petition for certiorari. By virtue
of Section 1,

Page 32 of 63
Article VIII of the 1987 Constitution, vesting judicial power in the Supreme Court and such lower
courts as may be established by law, to determine whether or not there has been a grave abuse of
discretion on the part of any branch or instrumentality of the Government, in relation to Section 5(5),
Article VIII thereof, vesting upon it the power to promulgate rules concerning practice and procedure
in all courts, the Court thus declares that the CA's original jurisdiction  over a petition
39

for certiorari assailing the DOJ resolution in a preliminary investigation involving tax and tariff
offenses was necessarily transferred to the CTA pursuant to Section 7 of R.A. No. 9282,  and that
40

such petition shall be governed by Rule 65 of the Rules of Court, as amended. Accordingly, it is the
CTA, not the CA, which has jurisdiction over the petition for certiorari assailing the DOJ resolution of
dismissal of the BOC's complaint-affidavit against private respondents for violation of the TCCP.

On the procedural issue of whether the CA erred in dismissing the petition for certiorari on the sole
ground of lack of verification and certification against forum shopping, the Court rules in the
affirmative, despite the above discussion that such petition should have been filed with the CTA.

In Traveño, et al. v. Bobongon Banana Growers Multi-Purpose Cooperative, et al.,  the Court
41

restated the jurisprudence on non-compliancewith the requirements on, or submission of defective,

verification and certification against forum shopping:

1) A distinction must be made between non-compliance with the requirement on or

submission of defective verification, and noncompliance with the requirement on or
submission of defective certification against forum shopping.

2) As to verification, non-compliance therewith or a defect therein does not necessarily

render the pleading fatally defective. The court may order its submission or correction or act
on the pleading if the attending circumstances are such that strict compliance with the Rule
may be dispensed with in order that the ends of justice may be served thereby.

3) Verification is deemed substantially complied with when one who has ample knowledge to
swear to the truth of the allegations in the complaint or petition signs the verification, and
when matters alleged in the petition have been made in good faith or are true and correct.

4) As to certification against forum shopping, non-compliance therewith or a defect therein,

unlike in verification, is generally not curable by its subsequent submission or correction
thereof, unless there is a need to relax the Rule on the ground of "substantial compliance" or
presence of "special circumstances or compelling reasons."

5) The certification against forum shopping must be signed by all the plaintiffs or petitioners
in a case; otherwise, those who did not sign will be dropped as parties to the case. Under
reasonable or justifiable circumstances, however, as when all the plaintiffs or petitioners
share a common interest and invoke a common cause of action or defense, the signature of
only one of them in the certification against forum shopping substantially complies with the
Rule.

6) Finally, the certification against forum shopping must be executed by the party-pleader,
not by his counsel. If, however, for reasonable or justifiable reasons, the party-pleader is
unable to sign, he must execute a Special Power of Attorney designating his counsel of
record to sign on his behalf.
42

While it admittedly filed a petition for certiorari without a certification against forum shopping on

March 11, 2010, the BOC claimed to have subsequently complied with such requirement by filing
through registered mail a complete set of such petition, the following day which was also the last day

Page 33 of 63
of the reglementary period. The problem arose when the CA failed to receive such complete set of
the petition for certiorari with the verification and certification against forum shopping. In support of
the motion for reconsideration of the CA's March 26, 2010 resolution which dismissed outright the
petition, the BOC asserted that it filed a complete set of petition by registered mail. It also submitted
an affidavit of the person who did the mailing as required by Section 12,  Rule 13 of the Rules of
43

Court, including the registry receipt numbers, but not the receipts themselves which were allegedly
attached to the original copy mailed to the CA. Instead of ordering the BOC to secure a certification
from the postmaster to verify if a complete set of the petition was indeed filed by registered mail, the
CA – after examining the whole case rollo and finding that no other set of petition with a certification
against forum shopping was duly submitted – denied the motion for reconsideration.

Faced with the issue of whether or not there is a need to relax the strict compliance with procedural
rules in order that the ends of justice may be served thereby and whether "special circumstances or
compelling reasons" are present to warrant a liberal interpretation of such rules, the Court rules –
after a careful review of the merits of the case – in the affirmative.

Despite the BOC's failed attempt to comply with the requirement of verification and certification
against forum shopping, the Court cannot simply ignore the CA's perfunctory dismissal of the petition
on such sole procedural ground vis-à-vis the paramount public interest in the subject matter and the
substantial amount involved, i.e., the alleged illegal withdrawal of oil products worth
_181,988,627.00 with corresponding duties and taxes worth _35,507,597.00. Due to the presence of
such special circumstances and in the interest of justice, the CA should have at least passed upon
the substantive issue raised in the petition, instead of dismissing it on such procedural ground.
Although it does not condone the failure of BOC to comply with the said basic requirement, the Court
is constrained to exercise the inherent power to suspend its own rules in order to do justice in this
particular case.

Given that the petition for certiorari should have been filed with the CTA, the mistake committed by
the BOC in filing such petition before the CA may be excused. In this regard, Court takes note that
nothing in R.A. No. 1125, as amended by R.A. No. 9282, indicates that a petition for certiorari under
Rule 65 may be filed with the CTA. Despite the enactment of R.A. No. 9282 on March 30, 2004, it
was only about ten (10) years later in the case of City of Manila v. Hon. Grecia-Cuerdo  that the
44

Court ruled that the authority of the CTA to take cognizance of such petitions is included in the
powers granted by the Constitution, as well as inherent in the exercise of its appellate jurisdiction.
While the rule on perfection of appeals cannot be classified as a difficult question of law,  mistake in
45

the construction or application of a doubtful question of law, as in this case, may be considered as a
mistake of fact, excusing the BOC from the consequences of the erroneous filing of its petition with
the CA.

As the CA dismissed the petition for certiorari solely due to a procedural defect without resolving the
issue of whether or not the Acting Secretary of Justice gravely abused her discretion in affirming the
dismissal of the BOC's complaint-affidavit for lack of probable cause, the Court ought to reinstate the
petition and refer it to the CTA for proper disposition. For one, as a highly specialized court
specifically created for the purpose of reviewing tax and customs cases,  the CTA is dedicated
46

exclusively to the study and consideration of revenue-related problems, and has necessarily
developed an expertise on the subject.  For another, the referral of the petition to the CTA is in line
47

with the policy of hierarchy of courts in order to prevent inordinate demands upon the Court's time
and attention which are better devoted to those matters within its exclusive jurisdiction, and to
prevent further overcrowding of its docket. 48

Be that as it may, the Court stressed in The Diocese of Bacolod v. Commission on Elections  that 49

the doctrine of hierarchy of courts is not an iron-clad rule, and that it has full discretionary power to

Page 34 of 63
take cognizance and assume jurisdiction over special civil actions for certiorari filed directly with it for
exceptionally compelling reasons or if warranted by the nature of the issues clearly and specifically
raised in the petition. Recognized exceptions to the said doctrine are as follows: (a) when there are
genuine issues of constitutionality that must be addressed at the most immediate time; (b) when the
issues involved are of transcendental importance; (c) cases of first impression where no
jurisprudence yet exists that will guide the lower courts on the matter; (d) the constitutional issues
raised are better decided by the Court; (e) where exigency in certain situations necessitate urgency
in the resolution of the cases; (f) the filed petition reviews the act of a constitutional organ; (g) when
petitioners rightly claim that they had no other plain, speedy, and adequate remedy in the ordinary
course of law that could free them from the injurious effects of respondents’ acts in violation of their
right to freedom of expression; and (h) the petition includes questions that are dictated by public
welfare and the advancement of public policy, or demanded by the broader interest of justice, or the
orders complained of were found to be patent nullities, or the appeal was considered as clearly an
inappropriate remedy.  Since the present case includes questions that are dictated by public welfare
50

and the advancement of public policy, or demanded by the broader interest of justice, as well as to
avoid multiplicity of suits and further delay in its disposition, the Court shall directly resolve the
petition for certiorari, instead of referring it to the CTA.

On the substantive issue of whether the Acting Secretary of Justice gravely abused her discretion in
affirming the dismissal of the BOC's complaint-affidavit for lack of probable cause, the settled policy
of noninterference in the prosecutor’s exercise of discretion requires the courts to leave to the
prosecutor and to the DOJ the determination of what constitutes sufficient evidence to establish
probable cause. As the Court explained in Unilever Philippines, Inc. v. Tan: 51

The determination of probable cause for purposes of filing of information in court is essentially an
executive function that is lodged, at the first instance, with the public prosecutor and, ultimately, to
the Secretary of Justice. The prosecutor and the Secretary of Justice have wide latitude of discretion
in the conduct of preliminary investigation; and their findings with respect to the existence or non-
existence of probable cause are generally not subject to review by the Court.

Consistent with this rule, the settled policy of non-interference in the prosecutor’s exercise of
discretion requires the courts to leave to the prosecutor and to the DOJ the determination of what
constitutes sufficient evidence to establish probable cause. Courts can neither override their
determination nor substitute their own judgment for that of the latter. They cannot likewise order the
prosecution of the accused when the prosecutor has not found a prima facie case.

Nevertheless, this policy of non-interference is not without exception. The Constitution itself allows
(and even directs) court action where executive discretion has been gravely abused. In other words,
the court may intervene in the executive determination of probable cause, review the findings and
conclusions, and ultimately resolve the existence or non-existence of probable cause by examining
the records of the preliminary investigation when necessary for the orderly administration of justice. 52

Probable cause for purposes of filing a criminal information is defined as such facts as are sufficient
to engender a well-founded belief that a crime has been committed and the respondent is probably
guilty thereof, and should be held for trial.  As explained in Sy v. Secretary of
53

Justice,  citing Villanueva v. Secretary of Justice:

54 55

x x x [Probable cause] is such a state of facts in the mind of the prosecutor as would lead a person
of ordinary caution and prudence to believe or entertain an honest or strong suspicion that a thing is
so. The term does not mean "actual or positive cause"; nor does it import absolute certainty. It is
merely based on opinion and reasonable belief. Thus, a finding of probable cause does not require
an inquiry into whether there is sufficient evidence to procure a conviction. It is enough that it is

Page 35 of 63
believed that the act or omission complained of constitutes the offense charged. Precisely,
there is a trial for the reception of evidence of the prosecution in support of the charge.
56

To find out if there is a reasonable ground to believe that acts or ommissions complained of
constitute the offenses charged, the Court must first examine whether or not the allegations against
private respondents in the BOC's complaint-affidavit constitute the offenses of unlawful importation
under Section 3601 and various fraudulent practices against customs revenue under Section 3602
of the TCCP.

In Jardeleza v. People,  the Court discussed the concepts of unlawful importation under Section
57

3601 of the TCCP, and various fraudulent practices against customs revenue under Section 3602
thereof, thus:

Section 3601 of the TCC was designed to supplement the existing provisions of the TCC against the
means leading up to smuggling, which might render it beneficial by a substantive and criminal
statement separately providing for the punishment of smuggling. The law was intended not to merge
into one and the same offense all the many acts which are classified and punished by different
penalties, penal or administrative, but to legislate against the overt act of smuggling itself. This is
manifested by the use of the words "fraudulently" and "contrary to law" in the law.

Smuggling is committed by any person who: (1) fraudulently imports or brings into the Philippines
any article contrary to law; (2) assists in so doing any article contrary to law; or (3) receives,
conceals, buys, sells or in any manner facilitate the transportation, concealment or sale of such
goods after importation, knowing the same to have been imported contrary to law.

The phrase "contrary to law" in Section 3601 qualifies the phrases "imports or brings into the
Philippines" and "assists in so doing," and not the word "article." The law penalizes the importation of
any merchandise in any manner contrary to law.

The word "law" includes regulations having the force and effect of law, meaning substantive or
legislative type rules as opposed to general statements of policy or rules of agency, organization,
procedures or positions. An inherent characteristic of a substantive rule is one affecting individual
rights and obligations; the regulation must have been promulgated pursuant to a congressional grant
of quasi-legislative authority; the regulation must have been promulgated in conformity to with
congressionally-imposed procedural requisites.

xxxx

Section 3602 of the TCC, on the other hand, provides:

Sec. 3602. Various Fraudulent Practices Against Customs Revenue. – Any person who makes or
attempts to make any entry of imported or exported article by means of any false or fraudulent
invoice, declaration, affidavit, letter, paper or by any means of any false statement, written or verbal,
or by any means of any false or fraudulent practice whatsoever, or knowingly effects any entry of
goods, wares or merchandise, at less than the true weight or measures thereof or upon a false
classification as to quality or value, or by the payment of less than the amount legally due, or
knowingly and wilfully files any false or fraudulent entry or claim for the payment of drawback or
refund of duties upon the exportation of merchandise, or makes or files any affidavit, abstract,
record, certificate or other document, with a view to securing the payment to himself or others of any
drawback, allowance or refund of duties on the exportation of merchandise, greater than that legally
due thereon, or who shall be guilty of any wilful act or omission shall, for each offense, be punished
in accordance with the penalties prescribed in the preceding section.

Page 36 of 63
The provision enumerates the various fraudulent practices against customs revenue, such as the
entry of imported or exported articles by means of any false or fraudulent invoice, statement or
practice; the entry of goods at less than the true weight or measure; or the filing of any false or
fraudulent entry for the payment of drawback or refund of duties.

The fraud contemplated by law must be intentional fraud, consisting of deception, willfully and
deliberately dared or resorted to in order to give up some right. The offender must have acted
knowingly and with the specific intent to deceive for the purpose of causing financial loss to another;
even false representations or statements or omissions of material facts come within fraudulent
intent. The fraud envisaged in the law includes the suppression of a material fact which a party is
bound in good faith to disclose. Fraudulent nondisclosure and fraudulent concealment are of the
same genre.

Fraudulent concealment presupposes a duty to disclose the truth and that disclosure was not made
when opportunity to speak and inform was present, and that the party to whom the duty of disclosure
as to a material fact was due was thereby induced to act to his injury.  Fraud is not confined to words
1âwphi1

or positive assertions; it may consist as well of deeds, acts or artifice of a nature calculated to
mislead another and thus allow one to obtain an undue advantage. 58

In unlawful importation, also known as outright smuggling, goods and articles of commerce are
brought into the country without the required importation documents, or are disposed of in the local
market without having been cleared by the BOC or other authorized government agencies, to evade
the payment of correct taxes, duties and other charges. Such goods and articles do not undergo the
processing and clearing procedures at the BOC, and are not declared through submission of import
documents, such as the import entry and internal revenue declaration.

In various fraudulent practices against customs revenue, also known as technical smuggling, on the
other hand, the goods and articles are brought into the country through fraudulent, falsified or
erroneous declarations, to substantially reduce, if not totally avoid, the payment of correct taxes,
duties and other charges. Such goods and articles pass through the BOC, but the processing and
clearing procedures are attended by fraudulent acts in order to evade the payment of correct taxes,
duties, and other charges. Often committed by means of misclassification of the nature, quality or
value of goods and articles, undervaluation in terms of their price, quality or weight, and
misdeclaration of their kind, such form of smuggling is made possible through the involvement of the
importers, the brokers and even some customs officials and personnel.

In light of the foregoing discussion, the Court holds that private respondents cannot be charged with
unlawful importation under Section 3601 of the TCCP because there is no allegation in the BOC's
complaint-affidavit to the effect that they committed any of the following acts: (1) fraudulently
imported or brought into the Philippines the subject petroleum products, contrary to law; (2) assisted
in so doing; or (3) received, concealed, bought, sold or in any manner facilitated the transportation,
concealment or sale of such goods after importation, knowing the same to have been imported
contrary to law.

The said acts constituting unlawful importation under Section 3601 of the TCCP can hardly be
gathered from the following allegations in the BOC's complaint-affidavit:

19.1 From May 23, 2007 to February 10, 2008, UNIOIL is not an accredited importer of the BOC;

19.2 From the time UNIOIL was accredited on February 11, 2008 until the time of its request to
withdraw its oil products on 02 May 2008, they did not import Gasoil (diesel) and Mogas Gasoline;

Page 37 of 63
19.3 The Terminalling Agreement allegedly executed between OILINK and UNIOIL was obviously for
the purpose of circumventing the Warrant of Seizure and Detention issued against the shipments of
OILINK aside from the fact that it was only executed on 02 January 2008 after the decision of the
Commissioner finding OILINK liable to pay an administrative fine of Two Billion Seven Hundred
Sixty-Four Million Eight Hundred Fifty-Nine Thousand Three Hundred Four Pesos and 80/100
(Php2,764,859,304.80);

19.4 Only base oil should have been withdrawn by UNIOIL since it is the only product subject of its
request and approved by the Commissioner;

19.5 UNIOIL withdrew Gasoil (Diesel) and Mogas which were not covered by importations;

19.6 Finally, the illegal release/withdrawal of the oil products deprived the government of the
supposed partial payment on the Php2.7 billion liability of OILINK in the approximate amount of
Php181,988,627 representing the customs value of the released/withdrawn oil products and
estimated duties and taxes of Php35,507,597 due thereon or the total amount
of Php217,496,224.00. 59

xxxx

21.1 When UNIOIL withdrew Gasoil (Diesel) and Mogas without filing the corresponding Import
Entry, the shipment becomes unlawful per se and thus falls under unlawful importation under
Section 3601 of the Tariff and Customs Code of the Philippines, as amended;

21.2 The fact that UNIOIL and OILINK executed a belated Terminalling Agreement after the
issuance of the Warrant of Seizure and Detention showed the fraudulent intent of the respondents
whereby UNIOIL can still withdraw the oil products stored at OILINK's depot likewise in clear
violation of section 3601 and 3602 of the Tariff and Customs Code of the Philippines, as amended;

21.3 The fact that the UNIOIL make [sic] it appear that they are the owner of Gasoil (Diesel) and
Mogas when in truth and in fact they did not import said products make them liable for [violation of]
Section 3602 of the Tariff and Customs Code of the Philippines, as amended and falsification; 60

Since the foregoing allegations do not constitute the crime of unlawful importation under Section
3601 of the TCCP, the Acting Secretary of Justice did not commit grave abuse of discretion when
she affirmed the State Prosecutor's dismissal the BOC's complaint-affidavit for lack of probable
cause.

Neither could private respondents be charged with various fraudulent practices against customs
revenue under Section 3602 of the TCCP as the above allegations do not fall under any of the
following acts or omissions constituting such crime/s: (1) making or attempting to make any entry of
imported or exported article: (a) by means of any false or fraudulent invoice, declaration, affidavit,
letter, paper or by any means of any false statement, written or verbal; or (b) by any means of any
false or fraudulent practice whatsoever; or (2) knowingly effecting any entry of goods, wares or
merchandise, at less than the true weight or measures thereof or upon a false classification as to
quality or value, or by the payment of less than the amount legally due; or (3) knowingly and wilfully
filing any false or fraudulent entry or claim for the payment of drawback or refund of duties upon the
exportation of merchandise; or (4) making or filing any affidavit, abstract, record, certificate or other
document, with a view to securing the payment to himself or others of any drawback, allowance or
refund of duties on the exportation of merchandise, greater than that legally due thereon.

Page 38 of 63
Related to various fraudulent practices against customs revenue by means of undervaluation,
misclassification and misdeclaration in the import entry is the following provision of R.A. No. 7651 -
An Act to Revitalize and Strengthen the Bureau of Customs, Amending for the Purpose Certain
Sections of the Tariff and Customs Code of the Philippines, as amended: 61

Sec. 2503. Undervaluation, Misclassification and Misdeclaration in Entry. – When the dutiable value
of the imported articles shall be so declared and entered that the duties, based on the declaration of
the importer on the face of the entry, would be less by ten percent (10%) than should be legally
collected, or when the imported articles shall be so described and entered that the duties based on
the importer's description on the face of the entry would be less by ten percent (10%) than should
be legally collected based on the tariff classification, or when the dutiable weight, measurement or
quantity of imported articles is found upon examination to exceed by ten percent (10%) or more than
the entered weight, measurement or quantity, a surcharge shall be collected from the importer in an
amount of not less than the difference between the full duty and the estimated duty based upon the
declaration of the importer, nor more than twice of such difference: Provided, that an
undervaluation, misdeclaration in weight, measurement or quantity of more than thirty
percent (30%) between the value, weight, measurement, or quantity declared in the entry, and
the actual value, weight, quantity, or measurement shall constitute a prima facie evidence of
fraud penalized under Sec. 2530 of this Code: Provided, further, that any misdeclared or
undeclared imported articles/items found upon examination shall ipso facto be forfeited in favor of
the Government to be disposed of pursuant to the provisions of this Code.

When the undervaluation, misdescription, misclassification or misdeclaration in the import

entry is intentional, the importer shall be subject to the penal provision under Sec. 3602 of
this Code. 62

A careful reading of the BOC's complaint-affidavit would show that there is no allegation to the effect
that private respondents committed undervaluation, misdeclaration in weight, measurement or
quantity of more than thirty percent (30%) between the value, weight, measurement, or quantity
declared in the entry, and the actual value, weight, quantity, or measurement which constitute prima
facie evidence of fraud. Nor is there an allegation that they intentionally committed undervaluation,
misdescription, misclassification or misdeclaration in the import entry. Since the allegations in the
BOC's complaint-affidavit fall short of the acts or omissions constituting the various fraudulent acts
against customs revenue under Section 3602 of the TCCP, the Acting Secretary of Justice correctly
ruled that there was no probable cause to believe that they committed such crime/s.

While it is true that the sole office of the writ of certiorari is the correction of errors of jurisdiction,
including the commission of grave abuse of discretion amounting to lack of jurisdiction, and does not
include a correction of the public respondents' evaluation of the evidence and factual findings
thereon, it is sometimes necessary to delve into factual issues in order to resolve the allegations of
grave abuse of discretion as a ground for the special civil action of certiorari.  In light of this principle,
63

the Court reviews the following findings of the Acting Secretary of Justice in affirming the State
Prosecutor's dismissal of the BOC's complaint-affidavit for lack of probable cause:

Respondents are being charged for unlawful importation under Section 3601, and fraudulent
practices against customs revenues under Section 3602, of the TCCP, as amended. For these
charges to prosper, complainant must prove, first and foremost, that the subject articles were
imported. On this score alone, complainant has miserably failed.

Indeed, except for complainant's sweeping allegation, no clear and convincing proof was presented
to show that the subject petroleum products (gasoil and mogas) withdrawn by Unioil from the oil
depot/terminal of Oilink were imported. For, only when the articles are imported that the

Page 39 of 63
importer/consignee is required to file an import entry declaration and pay the corresponding customs
duties and taxes. The fact that complainant's record fails to show that an import entry was filed for
the subject articles does not altogether make out a case of unlawful importation under Section 3601,
or fraudulent practices against customs revenue under Section 3602, of the TCCP, without having
first determined whether the subject articles are indeed imported. Thus, in this case, complainant still
bears the burden of proof to show that the subject petroleum products are imported, by means of
documents other than the import entry declaration, such as but not limited to, the transport
documents consisting of the inward foreign manifest, bill of lading, commercial invoice and packing
list, all indicating that the goods were bought from a supplier/seller in a foreign country and imported
or transported to the Philippines. Instead[,] complainant merely surmised that since the subject
products were placed under warrant of seizure and detention[,] they must necessarily be imported.
Regrettably, speculation and surmises do not constitute evidence and should not, therefore, be
taken against the respondents. x x x Taken in this light, we find more weight and credence in
respondent Unioil's claim that the subject petroleum products were not imported by them, but were
locally purchased, more so since it was able to present local sales invoices covering the same.

Even assuming gratia argumenti that the subject petroleum products were imported, it still behooves
the complainant to present clear and convincing proof that the importation was unlawful or that it was
carried out through any fraudulent means, practice or device to prejudice the government. But again,
complainant failed to discharge this burden.

As can be culled from the records, the warrant of seizure and detention docketed as Seizure
Identification No. 2008-082, which covers various gas tanks already stored at Oilink's depot/terminal
located at Lucanin Pt., Mariveles, Bataan, was issued pursuant to Section 2536, in relation to
Section 1508, of the TCCP because of Oilink's failure to pay the administrative fine of
P2,764,859,304.80 that was previously meted against the company for its failure/refusal to submit to
a post entry audit. In fact, the delivery of all shipments consigned to or handled directly or indirectly
by Oilink was put on hold as per order of the Customs Commissioner dated April 23, 2008 pursuant
to Section 1508 of the TCCP, also for the same reason. There was nothing on record which shows,
or from which it could be inferred, that the warrant of seizure and detention or hold order were
imposed pursuant to Section 2530 of the same Code which relates, among others, to unlawfully
imported articles or those imported through any fraudulent practice or device to prejudice the
government, much less due to non-payment of the corresponding customs duties and taxes due on
the shipments/articles covered by the warrant of seizure and detention. Again, what complainant's
evidence clearly shows is that Oilink's failure to pay the administrative fine precipitated the issuance
of the warrant of seizure and detention and hold order. 64

After a careful review of records, the Court affirms the dismissal of the BOC's complaint-affidavit for
lack of probable cause, but partly digresses from the reasoning of the Acting Secretary of Justice in
arriving at such conclusion. While the Acting Secretary of Justice correctly stated that the act of
fraudulent importation of articles must be first proven in order to be charged for violation of Section
3601 of the TCCP, the Court disagrees that proof of such importation is also required for various
fraudulent practices against customs revenue under Section 3602 thereof.

As held in Jardeleza v. People,  the crime of unlawful importation under Section 3601 of the TCCP is
65

complete, in the absence of a bona fide intent to make entry and pay duties when the prohibited
article enters Philippine territory. Importation, which consists of bringing an article into the country
from the outside, is complete when the taxable, dutiable commodity is brought within the limits of the
port of entry.  Entry through a customs house is not the essence of the act.  On the other hand, as
66 67

regards Section 3602 of the TCCP which particularly deals with the making or attempting to make a
fraudulent entry of imported or exported articles, the term "entry" in customs law has a triple
meaning, namely: (1) the documents filed at the customs house; (2) the submission and acceptance

Page 40 of 63
of the documents; and (3) the procedure of passing goods through the customs house.  In view 68

thereof, it is only for charges for unlawful importation under Section 3601 that the BOC must first
prove that the subject articles were imported. For violation of Section 3602, in contrast, what must be
proved is the act of making or attempting to make such entry of articles.

The Court likewise disagrees with the finding of the Acting Secretary of Justice that the BOC failed to
prove that the products subject of the WSD were imported. No such proof was necessary because
private respondents themselves presented in support of their counter-affidavits copies of import
entries  which can be considered as prima facie evidence that OILINK imported the subject
69

petroleum products. At any rate, the Acting Secretary of Justice aptly gave credence to their twenty
(20) sales invoices  covering the dates October 1, 2007 until April 30, 2008 which tend to prove that
70

UNIOIL locally purchased such products from OILINK even before the BOC rendered the Decision
dated December 14, 2007 imposing a _2,764,859,304.80 administrative fine, and holding the
delivery or release of its subsequently imported articles to answer for the fine, any revised
assessment and/or penalty for failure to keep records.

The Court also finds as misplaced the BOC's reliance on the Terminalling Agreement dated January
2, 2008 and the Certification  that UNIOIL made no importation of Gasoil (diesel) and Mogas
71

gasoline from January 2007 up to June 2008 in order to prove that it illegally imported the said
products. Such documentary evidence tend to prove only that UNIOIL was engaged in the
importation of petroleum products and that it did not import the said products during the said period.
Such documents, however, do not negate the evidence on record which tend to show that OILINK
was the one that filed the import entries,  and that UNIOIL locally purchased from OILINK such
72

products as indicated in the sales invoices.  Not being the importer of such products, UNIOIL, its
73

directors and officers, are not required to file their corresponding import entries. Hence, contrary to
the BOC's allegation, UNIOIL's withdrawal of the Gasoil (Diesel) and Mogas gasoline without filing
the corresponding import entries can neither be considered as unlawful importation under Section
3601 of the TCCP nor as a fraudulent practice against customs revenue under Section 3602 thereof.

Moreover, the fact that private respondent Paul Chi Ting Co is both the Chairman of UNIOIL and
OILINK is not enough to justify the application of the doctrine of piercing the corporate veil. In fact,
mere ownership by a single stockholder or by another corporation of a substantial block of shares of
a corporation does not, standing alone, provide sufficient justification for disregarding the separate
corporate personality.  In Kukan International Corporation v. Hon. Judge Reyes, et al.  the Court
74 75

explained the application of the said doctrine in this wise:

In fine, to justify the piercing of the veil of corporate fiction, it must be shown by clear and convincing
proof that the separate and distinct personality of the corporation was purposefully employed to
evade a legitimate and binding commitment and perpetuate a fraud or like wrongdoings. To be sure,
the Court has, on numerous occasions, applied the principle where a corporation is dissolved and its
assets are transferred to another to avoid a financial liability of the first corporation with the result
that the second corporation should be considered a continuation and successor of the first entity.

In those instances when the Court pierced the veil of corporate fiction of two corporations, there was
a confluence of the following factors:

1. A first corporation is dissolved;

2. The assets of the first corporation is transferred to a second corporation to avoid a

financial liability of the first corporation; and

Page 41 of 63
 3. Both corporations are owned and controlled by the same persons such that the second
corporation should be considered as a continuation and successor of the first corporation. 76

Granted that the principle of piercing the veil of corporate entity comes into play only during the trial
of the case for the purpose of determining liability,  it is noteworthy that even the BOC itself virtually
77

recognized that OILINK and UNIOIL are separate and distinct entities when it alleged that only the
base oil products should have been withdrawn by UNIOIL, since they were the only products subject
of its request and approved by the Customs Commissioner. As discussed above, however, private
respondents were able to present sales invoices which tend to show that UNIOIL locally purchased
Gasoil (diesel) and Mogas gasoline products from OILINK. Hence, the BOC cannot invoke the
doctrine of piercing the veil of corporate entity in this case.

On a final note, the Court stresses that OILINK, its directors or officers, and Victor D. Piamonte, the
Licensed Customs Broker, may still be held liable for various fraudulent practices against customs
revenue under

Section 3602 of the TCCP, if the final results of the post-entry audit and examination would show
that they committed any of the following acts or omissions: (1) making or attempting to make any
entry of imported or exported article: (a) by means of any false or fraudulent invoice, declaration,
affidavit, letter, paper or by any means of any false statement, written or verbal; or (b) by any means
of any false or fraudulent practice; or (2) intentional undervaluation, misdescription, misclassification
or misdeclaration in the import entries; or (3) undervaluation, misdeclaration in weight, measurement
or quantity of more than thirty percent (30%) between the value, weight, measurement, or quantity
declared in the entries, and the actual value, weight, quantity, or measurement. This is consistent
with Section 2301  (Warrant for Detention of Property-Cash Bond) of the TCCP which states that
78

nothing therein shall be construed as relieving the owner or importer from any criminal liability which
may arise from any violation of law committed in connection with the importation of articles, which in
this case were placed under a WSD for failure of the importer, OILINK, to submit the required post-
entry audit documents under CAO No. 4-2004.

In addition, OILINK and its directors or officers may be held liable under Section 16 of R.A. No.
9135:79

SEC. 16. A new section to be known as Section 3611 is hereby inserted in Part 3, Title VII of the
Tariff and Customs Code of the Philippines, as amended, which shall read as follows:

SEC. 3611. Failure to Pay Correct Duties and Taxes on Imported Goods. - Any person who, after
being subjected to post-entry audit and examination as provided in Section 3515 of Part 2, Title
VII hereof, is found to have incurred deficiencies in duties and taxes paid for imported goods,
shall be penalized according to three (3) degrees of culpability subject to any mitigating,
aggravating or extraordinary factors that are clearly established by the available evidence:

(a) Negligence - When the deficiency results from an offender’s failure, through an act or
acts of omission or commission, to exercise reasonable care and competence to ensure that
a statement made is correct, it shall be determined to be negligent and punishable by a fine
equivalent to not less than one-half (1/2) but not more than two (2) times the revenue loss.

(b) Gross Negligence - When a deficiency results from an act or acts of omission or
commission done with actual knowledge or wanton disregard for the relevant facts and with
indifference to or disregard for the offender’s obligation under the statute, it shall be
determined to be grossly negligent and punishable by a fine equivalent to not less than two
and a half (2 ½) but not more than four (4) times the revenue loss.

Page 42 of 63
 (c) Fraud - When the material false statement or act in connection with the transaction was
committed or omitted knowingly, voluntarily and intentionally, as established by clear and
convincing evidence, it shall be determined to be fraudulent and be punishable by a fine
equivalent to not less than five (5) times but not more than eight (8) times the revenue loss
and imprisonment of not less than two (2) years but not more than eight (8) years.

The decision of the Commissioner of Customs, upon proper hearing, to impose penalties as
prescribed in this Section may be appealed in accordance with Section 2402 hereof. 80

With respect to the directors or officers of OILINK, they may further be held liable jointly and
severally for all damages suffered by the government on account of such violation of Sections 3602
and 3611 of the TCCP, upon clear and convincing proof that they willfully and knowingly voted for or
assented to patently unlawful acts of the corporation or was guilty of gross negligence or bad faith in
directing its corporate affairs.
81

WHEREFORE, the petition is PARTLY GRANTED. The Court of Appeals Resolutions dated March

26, 2010 and August 4, 2010, in CA-G.R. SP No. 113069, are REVERSED and SET ASIDE. The
Resolution dated December 28, 2009 of the ·Acting Secretary of Justice Agnes VST Devanedera,
which upheld the State Prosecutor's dismissal of the complaintaffidavit filed by the Bureau of
Customs for lack of probable cause, is AFFIRMED. This is without prejudice to the filing of the
appropriate criminal and administrative charges under Sections 3602 and 3611 of the Tariff and
Customs Code of the Philippines, as amended, against private respondents OILINK, its officers and
directors, and Victor D. Piamonte, if the final results of the post-entry audit and examination would
show that they violated the said provisions.

SO ORDERED.

DIOSDADO M. PERALTA
Associate Justice

WE CONCUR:

MARIA LOURDES P. A. SERENO

Chief Justice

ANTONIO T. CARPIO PRESBITERO J. VELASCO, JR.

Associate Justice Associate Justice

TERESITA J. LEONARDO-DE CASTRO ARTURO D. BRION

Associate Justice Associate Justice

LUCAS P. BERSAMIN MARIANO C. DEL CASTILLO

Associate Justice Associate Justice

MARTIN S. VILLARAMA, JR. JOSE PORTUGAL PEREZ

Associate Justice Associate Justice

JOSE CATRAL MENDOZA BIENVENIDO L. REYES*

Associate Justice Associate Justice

Page 43 of 63
 ESTELA M. PERLAS-BERNABE MARIVIC M.V.F LEONEN
Associate Justice Associate Justice

FRANCIS H. JARDELEZA
Associate Justice

CERTIFICATION

Pursuant to Section 13, article VIII of constitution, I certify that the conclusion in the above Decision
were reached in consultation before the case was assigned to the writer of the opinion of the Court.

MARIA LOURDES P. A. SERENO

Chief Justice

Footnotes

* On leave.

 Penned by Associate Justice Pampio A. Abarintos, with Associate Justices Isaias P.

1

Dicdican and Florito S. Macalino, concurring; rollo, p. 273.

 Penned by Associate Justice Isaias P. Dicdican with Associate Justices Michael P. Elbinias
2

and Florito S. Macalino, concurring; id. at 306-308.

3
 Rollo, p. 130.

 Composed of Atty. Balmyrson M. Valdez (Team Leader), Ma. Elenita A. Salcedo (Team
4

Head), Henry D. Angeles and Deo Augustus Y. Yalong.

 Composed of Liza Magaway and Atty. Raymond Zorilla, OILINK's Executive Vice-President
5

and Corporate Counsel, respectively.

6
 CA rollo, p. 63.

7
 SEC. IV. RECORDKEEPING AND COMPLIANCE AUDIT

a. Record keeping

xxxx

2. The following records are required to be kept by importers:

xxxx

c. Shipping, importation, exportation, and transportation documentation including the

following to the extent that they are relevant for the verification of the accuracy of the
Page 44 of 63
transaction value declared on the import entry and necessary for the purpose of
collecting the proper duties and taxes on imports, as the case may be:

1. Import and/or export entry;

2. Invoice and or consignment notes;

3. Import and export licenses/permit;

4. Ocean bill of lading, and/or master air waybill, and/or house air waybill,
and/or consolidator bill of lading;

5. Shipping instructions and/or freight forwarders instructions;

6. Certificates of Origin, and/or Certificates of Eligibility, and/or Certificate of

Inspection and/or Loading;

7. Freight and insurance contracts;

8. Packing Lists;

9. Transhipment permits, and/or boatnotes, and/or special permits to transfer;

10. Quota Allocation and/or Certificates;

11. Customs brokerage agreements, and/or billings, and/or statement of

accounts, and/or receipts,

12. Receipts for arrester charges, cargo handling and storage fees;

13. Short shipped/bad order reports, if applicable;

14. Goods tally records, if applicable;

15. Letter of credits, application for letter of credit banks details;

16. Remittance advice;

17. Credit Card Transactions;

18. Telegraphic money transfers;

19. Offshore monetary transactions; and

20. Evidence of payments by any other means, including information

detailing non-cash compensation transactions.

xxxx

Page 45 of 63
 e. The following bank documents, financial statements, and other accounting
information to the extent that they are relevant for the verification of the accuracy of
the transaction value declared on the import entry and necessary for the purpose of
collecting proper duties and taxes on imports;

1. Receipts, cashbooks;

2. Schedules of accounts payables and accounts receivables and

3. Cheque records.

xxxx

8
 Rollo, pp. 137-138. (Emphasis added)

9
 Id. at 139.

10
 CA rollo, p. 9.

 SEC. 1508. Authority of the Collector of Customs to Hold the Delivery or Release of

11

Imported Articles. - Whenever any importer, except the government, has an outstanding and
demandable account with the Bureau of Customs, the Collector shall hold the delivery of any
article imported or consigned to such importer unless subsequently authorized by the
Commissioner of Customs, and upon notice as in seizure cases, he may sell such
importation or any portion thereof to cover the outstanding account of such importer;
Provided, however, That at any time prior to the sale, the delinquent importer may settle his
obligations with the Bureau of Customs, in which case the aforesaid articles may be
delivered upon payment of the corresponding duties and taxes and compliance with all other
legal requirements.

12
 Rollo, p. 140.

13
 Id. at 141.

14
 Id. at 145.

15
 Id. at 156-157.

16
 Id. at 157.

17
 Id. at 159.

 Sec. 3601. Unlawful Importation.– Any person who shall fraudulently import or bring into
18

the Philippines, or assist in so doing, any article, contrary to law, or shall receive, conceal,
buy, sell, or in any manner facilitate the transportation, concealment, or sale of such article
after importation, knowing the same to have been imported contrary to law, shall be guilty of
smuggling and shall be punished with:

1. A fine of not less than fifty pesos nor more than two hundred pesos and
imprisonment of not less than five days nor more than twenty days, if the appraised
value, to be determined in the manner prescribed under the Tariff and Customs
Page 46 of 63
 Code, including duties and taxes, of the article unlawfully imported does not exceed
twenty-five pesos;

2. A fine of not less than eight hundred pesos nor more than five thousand pesos and
imprisonment of not less than six months and one day nor more than four years, if
the appraised value, to be determined in the manner prescribed under the Tariff and
Customs Code, including duties and taxes, of the article unlawfully imported exceeds
twenty-five pesos but does not exceed fifty thousand pesos;

3. A fine of not less than six thousand pesos nor more than eight thousand pesos
and imprisonment of not less than five years and one day nor more than eight years,
if the appraised value, to be determined in the manner prescribed under the Tariff
and Customs Code, including duties and taxes, of the article unlawfully imported is
more than fifty thousand pesos but does not exceed one hundred thousand pesos.

4. A fine of not less than eight thousand pesos nor more than ten thousand pesos
and imprisonment of not less than eight years and one day nor more than twelve
years, if the appraised value, to be determined in the manner prescribed under the
Tariff and Customs Code, including duties and taxes, of the article unlawfully
imported exceeds one hundred fifty thousand pesos.

5. The penalty of prision mayor shall be imposed when the crime of serious physical
injuries shall have been committed and the penalty of reclusion perpetua to death
shall be imposed when the crime of homicide shall have been committed by reason
or on the occasion of the unlawful importation. In applying the above scale of
penalties, if the offender is an alien and the prescribed penalty is not death, he shall
be deported after serving the sentence without further proceeding for deportation. If
the offender is a government official or employee, the penalty shall be the maximum
as hereinabove prescribed and the offender shall suffer an additional penalty of
perpetual disqualification from public office, to vote and to participate in any public
election. When, upon trial for a violation of this section, the defendant is shown to
have had possession of the article in question, possession shall be deemed sufficient
evidence to authorize conviction, unless the defendant shall explain the possession
to the satisfaction of the court: Provided, however, That payment of the tax due after
apprehension shall not constitute a valid defense in any prosecution under this
section. (R.A. No. 4712, June 18, 1966).

 Sec. 3602. Various Fraudulent Practices Against Customs Revenue. – Any person who
19

makes or attempts to make any entry of imported or exported article by means of any false
or fraudulent invoice, declaration, affidavit, letter, paper, or by any means of any false
statement, written or verbal, or by any means of any false or fraudulent practice whatsoever,
or knowingly effects any entry of goods, wares or merchandise, at less than true weight or
measures thereof or upon a false classification as to quality or value, or by the payment of
less than the amount legally due, or knowingly and willfully files any false or fraudulent entry
or claim for the payment of drawback or refund of duties upon the exportation of
merchandise, or makes or files any affidavit, abstract, record, certificate or other document,
with a view to securing the payment to himself or others of any drawback, allowance, or
refund of duties on the exportation of merchandise, greater than that legally due thereon, or
who shall be guilty of any willful act or omission, shall, for each offense, be punished in
accordance with the penalties prescribed in the preceding section. (R.A. No. 4712, June 18,
1966)

Page 47 of 63
  Sec. 2503. Undervaluation, Misclassification and Misdeclaration in Entry. – When the
20

dutiable value of the imported articles shall be so declared and entered that the duties,
based on the declaration of the importer on the face of the entry, would be less by ten
percent (10%) than should be legally collected, or when the imported articles shall be so
described and entered that the duties based on the importer's description on the face of the
entry would be less by ten percent (10%) than should be legally collected based on the tariff
classification, or when the dutiable weight, measurement or quantity of imported articles is
found upon examination to exceed by ten percent (10%) or more than the entered weight,
measurement or quantity, a surcharge shall be collected from the importer in an amount of
not less than the difference between the full duty and the estimated duty based upon the
declaration of the importer, nor more than twice of such difference:

Provided, That an undervaluation, misdeclaration in weight, measurement or quantity

of more than thirty percent (30%) between the value, weight, measurement, or
quantity declared in the entry, and the actual value, weight, quantity, or measurement
shall constitute a prima facie evidence of fraud penalized under Section 2530 of this
Code: Provided, further, That any misdeclared or undeclared imported articles/items
found upon examination shall ipso facto be forfeited in favor of the Government to be
disposed of pursuant to the provisions of this Code. When the undervaluation,
misdescription, misclassification or misdeclaration in the import entry is intentional,
the importer shall be subject to the penal provision under Section 3602 of this Code.
(R.A. No. 7651, June 04, 1993).

 Sec. 2530. Property Subject to Forfeiture Under Tariff and Customs Laws. – Any vessel or
21

aircraft, cargo, articles and other objects shall, under the following conditions, be subject to
forfeiture:

xxxx

f. Any article of prohibited importation or exportation, the importation or exportation of

which is effected or attempted contrary to law, and all other articles which, in the
opinion of the Collector, have been used, are or were intended to be used as
instrument in the importation or exportation of the former.

xxxx

m.. Any article sought to be imported or exported

xxxx

(3) On the strength of a false declaration or affidavit executed by the owner, importer,
exporter or consignee concerning the importation or exportation of such article.

(4) On the strength of a false invoice or other document executed by the owner,
importer, exporter or consignee concerning the importation or exportation of such
article.

(5) Through any other fraudulent practice or device by means of which such articles
was entered through a customhouse to the prejudice of the government.

 Rollo, pp. 454-458.
22

Page 48 of 63
  Id. at 118-127.
23

 Id. at113-114.
24

 Id. at 96-99.
25

 Id. at 273.
26

 Id. at 306-307.
27

 Id. at 33.
28

 20 Am. Jur. 2d, Courts, §92, 1965.

29

 Ace Publications, Inc. v. Commissioner of Customs, 120 Phil. 143, 149 (1964), citing 15
30

C.J. 852.

 Villaflores v. Ram System Services, Inc., 530 Phil. 749, 763 (2006).
31

 Hasegawa v. Giron, G.R. No. 184536, August 14, 2013, 703 SCRA 549, 558.
32

 Passed into law on March 30, 2004.

33

 An Act Creating the Court of Tax Appeals.

34

 G.R. No. 175723, February 4, 2014, 715 SCRA 182.

35

 City of Manila v. Hon. Grecia-Cuerdo, supra, at 201-206. (Emphasis in the original; citation
36

omitted)

 Supra note 35.
37

 Id.
38

 Section 9 (1), BP Blg. 129 – The Court of Appeals shall exercise: (1) Original jurisdiction to
39

issue writs of mandamus, prohibition, habeas corpus, and quo warranto and auxiliary writs or

processes, whether or not in aid of its appellate jurisdiction.

 Sec. 7. Jurisdiction. - The CTA shall exercise:

40

xxxx

b. Jurisdiction over cases involving criminal offenses as herein provided:

1. Exclusive original jurisdiction over all criminal offenses arising from

violations of the National Internal Revenue Code or Tariff and Customs Code
and other laws administered by the Bureau of Internal Revenue or the Bureau
of Customs: Provided, however, That offenses or felonies mentioned in this
paragraph where the principal amount of taxes and fees, exclusive of charges and
penalties, claimed is less than One million pesos (P1,000,000.00) or where there is

Page 49 of 63
 no specified amount claimed shall be tried by the regular Courts and the jurisdiction
of the CTA shall be appellate. Any provision of law or the Rules of Court to the
contrary notwithstanding, the criminal action and the corresponding civil action for the
recovery of civil liability for taxes and penalties shall at all times be simultaneously
instituted with, and jointly determined in the same proceeding by the CTA, the filing
of the criminal action being deemed to necessarily carry with it the filing of the civil
action, and no right to reserve the filling of such civil action separately from the
criminal action will be recognized. (Emphasis added)

 614 Phil. 222 (2009).

41

 Traveño, et al. v. Bobongon Banana Growers Multi-Purpose Cooperative, et al., supra, at

42

231-232, citing Vda. De Formoso, et al. v. Philippine National Bank, et al., 665 Phil. 184,
193-194 (2011).

 Sec. 12. Proof of filing - The filing of a pleading or paper shall be proved by its existence in
43

the record of the case. If it is not in the record, but is claimed to have been filed personally,
the filing shall be proved by the written or stamped acknowledgment of its filing by the clerk
of court on a copy of the same;

if filed by registered mail, by the registry receipt and by the affidavit of the
person who did the mailing, containing a full statement of the date and place of
depositing the mail in the post office in a sealed envelope addressed to the
court, with postage fully prepaid, and with instructions to the postmaster to
return the mail to sender after ten (10) days if not delivered. (Emphasis added)

 Supra note 35.
44

 Santos v. Velarde, 450 Phil. 381 (2003)

45

 Chevron Phils., Inc. v. Commissioner of the Bureau of Customs, 583 Phil. 706, 737 (2008).
46

 Western Mindanao Power Corporation v. Commissioner of Internal Revenue, G.R. No.

47

181136, June 13, 2012, 672 SCRA 350.

 Cabarles v. Hon. Maceda, 545 Phil. 210, 223 (2007).

48

 G.R. No. 205728, January 21, 2015. (Citations omitted).

49

 Diocese of Bacolod v. Commission on Elections, supra.

50

 G.R. No. 179367, January 29, 2014, 715 SCRA 36.

51

 Unilever Philippines, Inc. v. Tan, supra, at 44-45.

52

 Alejandro, et al. v. Atty. Jose A. Bernas, et al., 672 Phil. 698, 707 (2011).
53

 540 Phil. 111, 117 (2006).

54

 512 Phil. 145 (2005).

55

Page 50 of 63
  Villanueva v. Secretary of Justice, supra, at 159. (Emphasis added)
56

 517 Phil. 179 (2006).

57

 Jardeleza v. People, supra, at 201-203.

58

 Rollo, pp. 168-169.

59

 Id. at 171-172.
60

 Approved June 4, 1993.

61

 Emphasis added.
62

 United Coconut Planters Bank v. Looyuko, 560 Phil. 581 (2007).

63

 Rollo, pp. 97-98. (Citation omitted)

64

 Supra note 57, at 202.

65

 Id.
66

 Id., citing Tomplain v. United States, 42 F. 2d 203 (1930).

67

 Id. at 203.
68

 Rollo, pp. 236-240; CA rollo, pp. 171-175.

69

 Id. at 216-235; id. at 150-170.

70

 Rollo, p. 161; CA rollo, p. 93.

71

 Id. at 236-240; id. at 171-175.

72

 Id. at 216-235; id. at 150-170.

73

 Kukan International Corp. v. Hon. Judge Reyes, et al., 646 Phil. 210, 239 (2010),
74

citing Francisco v. Mejia, 415 Phil. 153 (2001).

 Supra.
75

 Id. at 237-238.
76

 Id. at 234.
77

 SEC. 2301. Warrant for Detention of Property-Cash Bond. - Upon making any, seizure, the
78

Collector shall issue a warrant for the detention of the property; and if the owner or importer
desires to secure the release of the property for legitimate use, the Collector shall, with the
approval of the Commissioner of Customs, surrender it upon the filing of a cash bond, in an
amount to be fixed by him, conditioned upon the payment of the appraised value of the
Page 51 of 63
article and/or any fine, expenses and costs which may be adjudged in the case: Provided,
That such importation shall not be released under any bond when there is prima facie
evidence of fraud in the importation of the article: Provided, further, That articles the
importation of which is prohibited by law shall not be released under any circumstance
whomsoever, Provided, finally, That nothing in this section shall be construed as relieving the
owner or importer from any criminal liability which may arise from any violation of law
committed in connection with the importation of the article.

 An Act Amending Certain Provisions of Presidential Decree No. 1464, Otherwise Known as
79

the Tariff and Customs Code of the Philippines, As Amended, and For Other Purposes.

 Emphasis added.
80

 Corporation Code, Sec. 31. Liability of directors, trustees or officers. - Directors or trustees

81

who willfully and knowingly vote for or assent to patently unlawful acts of the corporation or
who are guilty of gross negligence or bad faith in directing the affairs of the corporation or
acquire any personal or pecuniary interest in conflict with their duty as such directors or
trustees shall be liable jointly and severally for all damages resulting therefrom suffered by
the corporation, its stockholders or members and other persons. When a director, trustee or
officer attempts to acquire or acquires, in violation of his duty, any interest adverse to the
corporation in respect of any matter which has been reposed in him in confidence, as to
which equity imposes a disability upon him to deal in his own behalf, he shall be liable as a
trustee for the cocporat;on and mu't ac<ount for the profiV; which otherw;,. would have
accrued to the corporation.

Page 52 of 63
 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 126634 January 25, 1999

TRANSGLOBE INTERNATIONAL, INC., petitioner,

vs.
COURT OF APPEALS and COMMISSIONER OF CUSTOMS, respondents.

BELLOSILLO, J.:

On 27 April 1992 a shipment from Hongkong arrived in the Port of Manila on board the "S/S Sea
Dragon." Its Inward Foreign Manifest indicated that the shipment contained 1,054 pieces of various
hand tools. Acting on information that the shipment violated certain provisions of the Tariff and
Customs Code as amended, agents of the Economic Intelligence and Investigation Bureau (EIIB)
seized the shipment while in transit to the Trans Orient container yard-container freight station. An
examination thereof yielded significant results —

1. The 40 ft. van was made to appear as a consolidation shipment consisting of 232
packages with Translink Int'l. Freight Forwarder as shipper and Transglobe Int'l., Inc.
as consignee;

2. There were eight (8) shippers and eight (8) consignees declared as co-loaders
and co-owners of the contents of the van, when in truth the entire shipment belongs
to only one entity;

3. Not one of the items declared as the contents of the van, i.e., various hand tools,
water cooling tower g-clamps compressors, bright roping wire and knitting machine
w(as) found in the van. Instead the van was fully stuffed with textile piece goods. 1

On those accounts, which were deemed to constitute a violation of Sec. 2503 in relation to Sec.
2530, pars. (f) and (m), subpars. 3, 4 and 5, of the Tariff and Customs Code, the EIIB recommended
seizure of the entire shipment. On 21 May 1992 District Collector of Customs Emma M. Rosqueta
issued the corresponding warrant of seizure and detention.

The case was set for hearing on 2 June 1992 but petitioner Transglobe International, Inc., or its duly
authorized representative, failed to appear despite due notice. Resetting was ordered to 19 June
1992, yet, for the same reason was further reset to 8 July 1992. Still petitioner or its representative
was unable to appear which thus led to its being declared in default. The case was then considered
submitted for decision based on existing documents. On 26 August 1992 after finding that a violation
of the cited provisions was indeed committed, District Collector Rosqueta decreed the forfeiture of
the shipment in favor of the government to be disposed of in accordance with law. 2

Page 53 of 63
Thereafter petitioner filed a petition for redemption of the shipment. On 2 October 1992 Hearing
Officer Geoffrey G. Gacula recommended that the petition be given due course and that petitioner
be allowed to effect the release of the shipment upon

payment of P1,300,132.04 representing its domestic market value. Hearing Officer Gacula took into
consideration the following —

Record shows that the shipment consists of good which are in legal contemplation
not prohibited, nor the release thereof to the claimant contrary to law . . . . the spirit
and intent of Executive Order No. 38, to increase and accelerate revenue collection
by the government thru redemption of forfeited cargoes, which would also benefit
importers by giving them the chance to recover portions of their investment . . . .  3

Chief of the Law Division Buenaventura S. Tenorio concurred in the recommendation. On the same
day, District Collector Rosqueta recommended approval thereof and forwarded the case to
respondent Commissioner of Customs Gulliermo L. Parayno Jr. through Deputy Commissioner
Licerio C. Evangelista.   On 7 October 1992 the latter likewise recommended favorable action
4

thereon.   However respondent Commissioner Parayno Jr. denied the offer of redemption in his 1st
5

Indorsement dated 27 November 1992 for these reasons —

1. The shipment was made to appear to be an innocuous consolidation shipment

destined for stripping at an outside CY-CFS   in order to conceal the textile fabrics;
6

2. The eight (8) co-loaders/consignee of the shipment are all fictitious;

3. Under Section 3B, CMO 87-92, offers of redemption shall be denied when the
seized shipment is consigned to a fictitious consignee.  7

Thus respondent Commissioner Parayno Jr. instructed the Auction and Cargo Disposal Division of
the Port of Manila to include the shipment in the next public auction.   On 8 February 1993
8

reconsideration was denied.   Petitioner moved for another reconsideration which was referred to
9

District Collector Rosqueta for comment. Even after further review, she maintained her previous
recommendation allowing redemption —

1. Since no entry has been filed so far, the consignee could not be faulted for
misdeclaration under Section 2503 of the Tariff and Customs Code. While the
shipment was misdeclared in the rider and the manifest, the consignee is innocent of
the facts stated therein as it had no hand in their preparation or issuance. Law and
regulation allow the amendment of the manifest at any time before the filing of entry
in order to protect the innocent consignee.

2. Transglobe International, Inc., is a juridical person duly organized in accordance

with the laws of the Philippines and is qualified as a consignee. It is not fictitious as
evidenced by its Articles of Incorporation registered with the Securities and
Exchange Commission.

3. The shipment consists of goods which are in legal contemplation not prohibited,
nor the release thereof to the Claimant contrary to law, and the redemption offer is
well within the purview of Executive Order No. 38.  10

Page 54 of 63
Nevertheless, reconsideration was again denied on 1 July 1993.   On 4 August 1993 the forfeiture of
11

the shipment and denial of the request for redemption were affirmed by respondent Commissioner
Parayno Jr.  12

In the appeal which was solely concerned with the propriety of redemption, the Court of Tax Appeals
(CTA) expressed a different view. Relying on Sec. 1 of Executive Order No. 38, as applied
in Gazzingan v. Commissioner of Customs   since no fraud was found on the part of the
13

redemptioner, the CTA directed on 27 June 1995 that petitioner be allowed to redeem the shipment
upon payment of its computed domestic market value.  14

However respondent Court of Appeals sustained the denial of the redemption by respondent
Commissioner of Customs. On 28 June 1996 it set aside the ruling of the CTA   on the ratiocination
15

that —

The findings of the Economic Intelligence and Investigation Bureau: "that the
shipment was made to appear to be an innocuous consolidation shipment destined
for stripping at an outside CY-CFS in order to conceal the textile fabrics," and "that
the eight (8) coloaders/consignees were all fictitious" had not been refuted during the
seizure proceedings by respondent Transglobe International, Inc. The failure of
respondent Transglobe to refute this fact negates its claim that no violation of the
above cited provisions (Sec. 2503 in relation to Sec. 2530, pars. (f) and (m), subpars.
3, 4 and 5 of the Tariff and Customs Code as amended) had been committed. The
findings of the EIIB above referred to remain unassailed and uncontradicted. Said
findings clearly show badges of fraud . . . The seizure of the property in question was
made upon findings that the documents covering the said shipment were forged,
thus:

FRAUD — the following cases herein enumerated demonstrate the presence of

fraud: 1.a. The use of forged or spurious documents . . . (Section 1, CMO-87-92).  16

On 3 September 1996 reconsideration was denied.  17

We now resolve the issue of whether petitioner should be allowed to redeem the forfeited shipment.

Petitioner asserts that it is not guilty of fraud because, as held in Farolan Jr. v. Court of Tax
Appeals   and Aznar v. Court of Tax Appeals,   the fraud referred to is one that is intentional with the
18 19

sole object of avoiding payment of taxes. While petitioner admits that it is the only consignee of the
cargo and that the van contains textiles, contrary to those declared in the manifest and rider, it avers
that these discrepancies do not evince deliberate evasion of taxes or payment of duties, especially
considering that it is a duly registered domestic corporation, and that it has no knowledge or
participation in the execution of the manifest and the rider thereon.

A violation of Sec. 2503 in relation to Sec. 2530, pars. (f) and (m), subpars. 3, 4 and 5, of the Tariff
and Customs Code as amended was found by the Bureau of Customs. Section 203 deals with
undervaluation, misclassification and misdeclaration in entry. On the other hand, Sec. 2530, pars. (f)
and (m), subpars. 3, 4 and 5 provides —

Sec. 2530. Property Subject to Forfeiture Under Tariff and Customs Law. — Any
vehicle, vessel or aircraft, cargo, article and other objects shall, under the following
conditions be subject to forfeiture . . . .

Page 55 of 63
 f. Any article the importation or exportation of which is effected or attempted contrary
to law, or any article of prohibited importation or exportation, and all other articles
which, in the opinion of the Collector, have been used, are or were entered to be
used as instruments in the importation or exportation of the former . . . .

m. Any article sought to be imported or exported . . . .

(3) On the strength of a false declaration or affidavit executed by the owner, importer,
exporter or consignee concerning the importation of such article;

(4) On the strength of a false invoice or other document executed by the owner,
importer, exporter or consignee concerning the importation or exportation of such
article; and

(5) Through any other practice or device contrary to law by means of which such
article was entered through a customhouse to the prejudice of the government.

From the decision of the District Collector of Customs decreeing forfeiture, petitioner Transglobe
International, Inc., filed a petition for redemption pursuant to Sec. 2307 of the Tariff and Customs
Code as amended by Sec. 1 of E.O. No. 38   which states —
20

Sec. 2307. Settlement of Case by Payment of Fine or Redemption of Forfeited

Property. — Subject to approval of the Commissioner, the District Collector may,
while the case is still pending except when there is fraud, accept the settlement of
any seizure case provided that the owner, importer, exporter, or consignee or his
agent shall offer to pay to the collector a fine imposed by him upon the property, or in
case of forfeiture, the owner, exporter, importer or consignee or his agent shall offer
to pay for the domestic market value of the seized article. The Commissioner may
accept the settlement of any seizure case on appeal in the same manner (emphasis
supplied) . . . Settlement of any seizure case by payment of the fine or redemption of
forfeited property shall not be allowed in any case where the importation is absolutely
prohibited or where the release of the property would be contrary to law.

As a means of settlement, redemption of forfeited property is unavailing in three (3) instances,

namely, when there is fraud, where the importation is absolutely prohibited, or where the release of
the property would be contrary to law. Respondent Commissioner of Customs disallowed the
redemption on the ground of fraud which consisted of the following: "The shipment was made to
appear to be an innocuous consolidation shipment destined for stripping at an outside CY-CFS in
order to conceal the textile fabrics; the eight (8) co-loaders/consignees of the shipment are all
fictitious; and, under Section 3B, CMO 87-92, offers of redemption shall be denied when the seized
shipment is consigned to a fictitious consignee."   Respondent court sustained this ruling which it
21

considered based on undisputed findings of the EIIB.

We rule that respondent Court of Appeals committed reversible error in rendering the assailed
decision. The findings of respondent Commissioner of Customs which provided the bases for
denying petitioner's offer of redemption were his own, not of the EIIB, and were merely stated in his
1st Indorsement with no evidence whatsoever to substantiate them. These findings prompted
petitioner to seek reconsideration and dispute them with these claims —

. . . First . . . . the shipment was not destined for stripping. It was then being
transported to a CY-CFS operator where it would be examined by a customs
appraiser who would determine the proper taxes and duties to be paid on the

Page 56 of 63
 shipment. Second . . . . the petitioner is a legitimate corporation registered with the
Securities and Exchange Commission in accordance with the laws of the
Philippines . . . .  22

On petitioner's second motion for reconsideration, District Collector Rosqueta was silent on the first
claim but upheld the second claim. According to her, petitioner is a juridical person duly organized in
accordance with the laws of the Philippines and is qualified as a consignee; it is not fictitious as
evidenced by its Articles of Incorporation registered with the Securities and Exchange
Commission.   Despite these, respondent Commissioner of Customs maintained his denial of the
23

redemption based on his previous unsubstantiated findings. It is settled that findings of fact of an
administrative agency must be respected so long as they are supported by substantial evidence   or 24

that amount of relevant evidence which a reasonable mind might accept as adequate to justify a
conclusion.   Lacking support, the factual findings of respondent Commissioner of Customs cannot
25

stand on their own and therefore not binding on the courts.

In the appeal before the CTA, respondent Commissioner of Customs contended that the seizure of
the shipment was made also upon a finding that the documents covering it were forged, thus
constituting fraud as defined in Sec. 1, par. 1.a. CMO-87-92. This Section is of the same tenor as
Sec. 2530, pars. (f) and (m), subpars. 3, 4 and 5, which for emphasis deals with falsities committed
by the owner, importer, exporter or consignee or importation/exportation through any other practice
or device. In Aznar, as reiterated in Farolan, we clarified that the fraud contemplated by law must be
actual and not constructive. It must be intentional, consisting of deception willfully and deliberately
done or resorted to in order to induce another to give up some right. The misdeclarations in the
manifest and rider cannot be ascribed to petitioner as consignee since it was not the one that
prepared them. As we said in Farolan, if at all, the wrongful making or falsity of the documents can
only be attributed to the foreign suppliers or shippers.   Moreover, it was not shown in the forfeiture
26

decision that petitioner had knowledge of any falsity in the shipping documents. District Collector
Rosqueta's comment on petitioner's second motion for reconsideration is enlightening: "While the
shipment was misdeclared in the rider and the manifest, the consignee is innocent of the facts stated
therein as it had no hand in their preparation or issuance."   We mention in passing that in having
27

thus stated, she in effect nullified her prior finding that petitioner violated the cited provisions of
the Tariff and Customs Code as amended. Consequently, we agree with the finding of the CTA that
fraud was not committed by petitioner in the importation of the shipment.

Taking into consideration the circumstances obtaining in the present case, namely, the absence of
fraud, the importation is not absolutely prohibited and the release of the property would not be
contrary to law, the Court deems it proper to allow the redemption of the forfeited shipment by
petitioner upon payment of its computed domestic market value. Doing so is definitely in keeping
with the two-way intent of E. O. No. 38, to wit, to expedite the collection of revenues and hasten the
release of cargoes under seizure proceedings to the end that importers and exporters will benefit in
the form of reduction in expenditures and assurance of return of their investments that have been
tied up with their importations.  28

Finally, one may be tempted to argue that for failure to appear in the forfeiture proceedings despite
due notice, petitioner was in default and deemed to have admitted its violation of Sec. 2503, in
relation to Sec. 2530, pars. (f) and (m), as found by District Collector of Customs Rosqueta,
interpreted by the Court of Appeals as "badges of fraud," and, as a consequence, petitioner is now
estopped from claiming that in the proceedings for redemption there was no fraud on its part.

The argument surfs on a wrong premise. 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

Page 57 of 63
their
importation.   In this proceeding, it is in legal contemplation the property itself which commits the
29

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
30

disposed of in accordance with law for violation of the Tariff and Customs Code. Hence, the ruling of
District Collector Rosqueta in the forfeiture case, insofar as the aspect of fraud is concerned, is not
conclusive; nor does it preclude petitioner from invoking absence of fraud in the redemption
proceedings. Significantly, while District Collector Rosqueta decreed the forfeiture of the subject
goods for violation of the Tariff and Customs Code, she nevertheless recommended the approval of
petitioner's offer of redemption,   and categorically acknowledged that as consignee there was no
31

fraud on its part. 32

WHEREFORE, the petition is GRANTED. The Decision of respondent Court of Appeals of 28 June
1996 sustaining the denial of the redemption of the forfeited shipment and the Resolution of 3
September 1996 denying reconsideration are SET ASIDE. The Decision of the Court of Tax Appeals
of 27 June 1995 ordering respondent Commissioner of Customs to allow petitioner Transglobe
International, Inc., to redeem the forfeited shipment upon payment of its domestic market value
amounting to P1,300,132.04 is REINSTATED.

SO ORDERED.

Mendoza, Quisumbing and Buena, JJ., concur.

Puno, J., Pls. see Dissent.

Separate Opinions

PUNO, J., dissenting opinion;

The petition at bar seeks to reverse the Decision of the Court of Appeals in CA-GR SP No. 37866
which, in effect, barred herein petitioner Transglobe International, Inc. from redeeming its shipment
from Hongkong which was seized by the Bureau of Customs after finding that the entries in its
covering documents were false and fictitious.

It is respectfully submitted that the petition should be denied as petitioner failed to show that the
Court of Appeals committed a reversible error in its ruling.

Sec. 2307 of the Tariff and Customs Code provides:

Subject to the approval of the Commissioner, the District Collector may, while the
case is still pending except when there is fraud, accept the settlement of any seizure
case provided that the owner, importer, exporter, consignee or his agent shall offer to
pay to the collector a fine imposed by him upon the property or in case of forfeiture,

Page 58 of 63
 the owner, exporter, importer or consignee or his agent shall offer to pay for the
domestic value of the seized article. The Commissioner may accept the settlement of
any seizure case on appeal in the same manner.

x x x           x x x          x x x

Redemption of forfeited property shall not be allowed in any case where the
importation is absolutely prohibited or where the surrender of the property to the
person offering the same would he contrary to law.

Under the foregoing provision, redemption is not allowed in three instances: (1) when there
is fraud; (2) when the importation is absolutely prohibited; and (3) when the surrender of the
property to the person offering the redemption would be contrary to law.

This case fails under the first instance. Respondent Commissioner of Customs has shown by clear
and convincing evidence the existence of fraud in connection with the documentation of the seized
goods. The undisputed facts reveal that the documents covering the shipment in question were
falsified. The investigation conducted by the agents of the Economic Intelligence and Investigation
Bureau (EIIB) yielded the following result:

1. The 40-foot van was made to appear as consolidation shipment

consisting of 232 packages with Translink International Freight
Forwarder as shipper and Transglobe International, Inc. as
consignee;

2. There were eight (8) shippers and eight (8) consignees declared
as co-loaders and co-owners of the contents of the van, when in truth
the entire shipment belonged to only one consignee, petitioner
Transglode International, Inc. The other consignees were fictitious.

3. Not one of the items declared as the contents of the van, i.e.,

various hand tools, water cooling, tower G-clamps compressors,
bright roping wire and knitting machines was found in the van.
Instead, the van was fully stuffed with textile goods.

These were not refuted, and therefore deemed admitted, by petitioner. The EIIB thus
concluded that the shipment was made to appear to be an innocuous consolidation shipment
destined for stripping at an outside Customs Yard-Customs Freight Services in order to
conceal the textile fabrics. These falsities constitute fraud as defined in Section 1 of Customs
Memorandum Order No. 87-92, thus:

FRAUD — the following cases herein enumerated demonstrate the presence of

fraud:

1.a. the use of forged or spurious documents;

1.b. prima facie evidence of fraud under Section 2503

of the TCCP on undervaluation, misclassification, and
misdeclaration in entry;

Page 59 of 63
 1.c. the use of false machinations, misrepresentation,
concealment of facts that resulted in loss of revenues
reaching levels that is unconscionable and
unbecoming of a law-abiding taxpayer and citizen;

1.d. other cases similarly situated.

Thus, under the circumstances, petitioner may not be allowed to redeem the seized goods under
Section 2307 of the Tariff and Customs Code.

I am not impressed by petitioner's pretension that it is innocent of the use of forged documents.
Petitioner has admitted that it is the only consignee of the smuggled goods. It does not explain who
else could have been responsible for the use of the forged documents. It is far fetched to assume
that the criminal act can be attributed to the foreign suppliers or shippers for they do not have any
motive to commit the falsification. Petitioner was summoned to shed light on the use of these forged
documents in the seizure proceedings. Petitioner never appeared to explain.

I appreciate the majority's concern on the need for government to collect more taxes. But more
important than this desideratum is the need to curb smuggling in our Bureau of Customs. The facts
of the case at bar show an out and out attempt to smuggle highly dutiable textiles thru the use of
forged documents. The use of forged documents is fraud under any habiliment. These textiles
should be confiscated and sold at public auction. To allow their redemption is to sanction the
circumvention of laws.

IN VIEW WHEREOF, I vote to DENY the petition.

Separate Opinions
PUNO, J., dissenting opinion;

The petition at bar seeks to reverse the Decision of the Court of Appeals in CA-GR SP No. 37866
which, in effect, barred herein petitioner Transglobe International, Inc. from redeeming its shipment
from Hongkong which was seized by the Bureau of Customs after finding that the entries in its
covering documents were false and fictitious.

It is respectfully submitted that the petition should be denied as petitioner failed to show that the
Court of Appeals committed a reversible error in its ruling.

Sec. 2307 of the Tariff and Customs Code provides:

Subject to the approval of the Commissioner, the District Collector may, while the
case is still pending except when there is fraud, accept the settlement of any seizure
case provided that the owner, importer, exporter, consignee or his agent shall offer to
pay to the collector a fine imposed by him upon the property or in case of forfeiture,
the owner, exporter, importer or consignee or his agent shall offer to pay for the
domestic value of the seized article. The Commissioner may accept the settlement of
any seizure case on appeal in the same manner.

x x x           x x x          x x x

Page 60 of 63
 Redemption of forfeited property shall not be allowed in any case where the
importation is absolutely prohibited or where the surrender of the property to the
person offering the same would he contrary to law.

Under the foregoing provision, redemption is not allowed in three instances: (1) when there
is fraud; (2) when the importation is absolutely prohibited; and (3) when the surrender of the
property to the person offering the redemption would be contrary to law.

This case fails under the first instance. Respondent Commissioner of Customs has shown by clear
and convincing evidence the existence of fraud in connection with the documentation of the seized
goods. The undisputed facts reveal that the documents covering the shipment in question were
falsified. The investigation conducted by the agents of the Economic Intelligence and Investigation
Bureau (EIIB) yielded the following result:

1. The 40-foot van was made to appear as consolidation shipment

consisting of 232 packages with Translink International Freight
Forwarder as shipper and Transglobe International, Inc. as
consignee;

2. There were eight (8) shippers and eight (8) consignees declared
as co-loaders and co-owners of the contents of the van, when in truth
the entire shipment belonged to only one consignee, petitioner
Transglode International, Inc. The other consignees were fictitious.

3. Not one of the items declared as the contents of the van, i.e.,

various hand tools, water cooling, tower G-clamps compressors,
bright roping wire and knitting machines was found in the van.
Instead, the van was fully stuffed with textile goods.

These were not refuted, and therefore deemed admitted, by petitioner. The EIIB thus concluded that
the shipment was made to appear to be an innocuous consolidation shipment destined for stripping
at an outside Customs Yard-Customs Freight Services in order to conceal the textile fabrics. These
falsities constitute fraud as defined in Section 1 of Customs Memorandum Order No. 87-92, thus:

FRAUD — the following cases herein enumerated demonstrate the presence of

fraud:

1.a. the use of forged or spurious documents;

1.b. prima facie evidence of fraud under Section 2503

of the TCCP on undervaluation, misclassification, and
misdeclaration in entry;

1.c. the use of false machinations, misrepresentation,

concealment of facts that resulted in loss of revenues
reaching levels that is unconscionable and
unbecoming of a law-abiding taxpayer and citizen;

1.d. other cases similarly situated.

Page 61 of 63
Thus, under the circumstances, petitioner may not be allowed to redeem the seized goods under
Section 2307 of the Tariff and Customs Code.

I am not impressed by petitioner's pretension that it is innocent of the use of forged documents.
Petitioner has admitted that it is the only consignee of the smuggled goods. It does not explain who
else could have been responsible for the use of the forged documents. It is far fetched to assume
that the criminal act can be attributed to the foreign suppliers or shippers for they do not have any
motive to commit the falsification. Petitioner was summoned to shed light on the use of these forged
documents in the seizure proceedings. Petitioner never appeared to explain.

I appreciate the majority's concern on the need for government to collect more taxes. But more
important than this desideratum is the need to curb smuggling in our Bureau of Customs. The facts
of the case at bar show an out and out attempt to smuggle highly dutiable textiles thru the use of
forged documents. The use of forged documents is fraud under any habiliment. These textiles
should be confiscated and sold at public auction. To allow their redemption is to sanction the
circumvention of laws. 1âwphi1.nêt

IN VIEW WHEREOF, I vote to DENY the petition.

Footnotes
1 Court of Tax Appeals Records, Vol. I, pp. 147-148.

2 Id., p. 149.

3 Id., p. 150.

4 Id., p. 151.

5 Id., p. 152.

6 Container Yard-Container Freight Station.

7 CTA Records, Vol, I, p. 153.

8 Ibid.

9 Id., p. 159.

10 Id., p. 33.

11 Id., p. 163.

12 Id., pp. 38 and 39.

13 CTA Case No. 4428, 15 September 1994.

14 Decision penned by Presiding Judge Ernesto D. Acosta with the concurrence of

Associate Judges Manuel K. Gruba and Ramon O. de Veyra; CTA Records, Vol. I, p.
198.
Page 62 of 63
15 Decision penned by Justice Jose C. de la Rama with the concurrence of Justices
Emeterio C. Cui and Eduardo G. Montenegro; Rollo, pp. 64-65.

16 Id., pp. 62-64.

17 Id., p. 67.

18 No. L-42204, 21 January 1993, 217 SCRA 298.

19 No. L-20569, 23 August 1974, 58 SCRA 519.

20 Issued on 8 August 1986.

21 See Note 7.

22 CTA Records, Vol. I, pp. 4-5, 24-25.

23 See Note 10.

24 Rubenecia v. Civil Service Commission, G.R. No. 115942, 31 May 1996, 244
SCRA 640.

25 Reno Foods, Inc. v. NLRC, G.R. No. 116462, 18 October 1995, 249 SCRA 379.

26 Citing Farm Implement and Machinery Co. v. Commissioner of Customs, No. L-

22212, 30 August 1968, 24 SCRA 905.

27 See Note 10.

28 Spelled out in the Whereas clauses.

29 Vierneza v. Commissioner of Customs, No. L-24348, 30 July 1968, 24 SCRA 394.

30 See United State v. Steamship "Rubi", 32 Phil. 228 (1915); Commissioner of

Customs v. Pascual, L-31733, 20 September 1985, 138 SCRA 581.

31 Exh. "D."

32 See Note 10.

Page 63 of 63