AEMILIANUM COLLEGE OF LAW

CUSTOMS MODERNIZATION AND TARIFF ACT (R.A. 10863)

(Customs and Tariff Law)
Atty. Martin Gacias

COURSE SYLLABUS

I. GENERAL PRINCIPLES
a. Policy Reforms under R.A. 10863
b. Tariff
c. Kinds of Tariff
d. Customs Duties
e. Free Zones
f. Purpose of imposition

Cases:
 Garcia vs. Executive Secretary, G.R. No. 101273
 Nestle Philippines vs. Court of Appeals, G.R. No. 134114

II. ADMINISTRATION OF TARIFF AND CUSTOMS LAWS

a. Bureau of Customs Chief Officials
b. Functions of the Bureau of Customs
c. Powers and Functions of the Commissioner
d. Duties of District Collector
e. Persons Exercising Police Authority
f. Place where authority may be exercised
g. Authority to enter properties
h. Authority to search
i. Visitorial Power
j. Who may exercise the visitorial power of the Bureau of Customs
k. Places where the visitorial power may be exercised
l. Manner of exercise of visitorial power
m. Proceedings when goods seized in the exercise of power to inspect and visit
n. Jurisdiction of the Bureau of Customs
o. Doctrine of Hot Pursuit in Customs Administration
p. Tariff Commission officials
q. Functions of the Tariff Commission
r. Composition of Congressional Customs and Tariff Oversight Committee
s. Functions of the Congressional Oversight Committee, In Aid of Legislation

Cases:
 Boac vs. People, G.R. No. 180597
 Agriex Co. Ltd. vs. Commissioner of Customs, G.R. No. 158150
 Commissioner of Customs vs. Court of Appeals, G.R. Nos. 111202-05
 Commissioner of Customs vs. Hypermix Feeds Corporation, G.R. No. 179579
 Hon. Executive Secretary vs. Southwing Heavy Industries, Inc., G.R. No. 164171
III. GOODS
a. Concept of Goods for Customs Duty
b. Kinds of Goods

Cases
 Commissioner of Customs vs. Capistrano, G.R. No. L-11075
 Bastida vs. Commissioner of Customs, G.R. No. L-24011

IV. CUSTOMS DUTIES

Classification of Customs Duties
A. Regular Duties
a. Regular Duties
a.1 Ad Valorem Duty
a.2 Criteria for determination of dutiable value

b. Specific Duty

B. Special Duties
a. Anti-Dumping Duty
b. Countervailing Duty
c. Marking Duty
d. Discriminatory Duty
e. Safeguard Duty
f.
Cases:
 Nestle Philippines vs. Court of Appeals, G.R. No. 134114
 CIR vs. Pilipinas Shell Petroleum, G.R. No. 188497

V. FLEXIBLE CLAUSE
a. Basis
b. Requisites for the Exercise of Power
c. Exceptions
d. Effectivity of Order issued by the President
e. Preferential Tariff
f. Tariff Barrier

VI. METHODS OF DETERMINING DUTIABLE VALUE

A. Dutiable Value
B. Methods of determining dutiable value
C. Sequential Rule
D. Exceptions
d.1 Transaction Value System
d.2 Transaction Value of identical goods
d.3 Transaction value of similar goods
d.4 Deductive Value
d.5 Computed Value
d.6 Fallback Value

VII. IMPORTATION IN GENERAL

a. Importation
b. When importation begins
c. When importation is deemed terminated
d. Persons who may act as declarant
e. Owner of imported articles
f. Requirement to issue proof of payment
g. Applicable rate of duty
h. Applicable rate of duty for goods withdrawn from free zone for introduction to customs
territory
i. Rates of duty for goods sold at customs public auction
j. Entry at customhouse
k. Port of entry

Cases:
 Feeder International Line vs. Court of Appeals, G.R. No. 94262
 Papa vs. Mago, G.R. No. L-27360
 Chevron PHL, Inc. vs. Commissioner of Customs, G.R. No. 178759

VIII. IMPORT CLEARANCE AND FORMALITIES

Obligations of the importer
a. Cargo Manifest
b. Import Entry
Goods declaration
Importations subject to goods declaration
Provisional goods declaration
Contents of goods declaration
Kinds of import entry
Formal entry
Informal entry
Preparation of the import entry
Where import entry filed by person other than the importer
Lodgment of goods declaration
Relief consignment
c. Declaration of correct weight or value
d. Liability for payment of duties
d.1 Failure to pay correct duties and taxes on imported goods
d.2 Two degrees of culpability
d.3 Assessment and Payment of duties and taxes
d.4 When assessment is deemed tentative
d.5 When assessment of duty less than the declared value of goods
d.6 When assessment is deemed final
d.7 Legal interest on unpaid duties and taxes
d.8 Surcharge for failure to pay

e. Keeping of records

IX. CRIMES AND OTHER OFFENSES

a. Smuggling
b. Elements of Smuggling
c. Outright Smuggling
d. Purpose of outright smuggling
e. Technical Smuggling
f. Types of technical smuggling
g. Imposition of surcharge
h. Effect of intentional/fraudulent misdeclaration, misclassification or undervaluation
i. Contraband
j. Evidence for conviction in smuggling cases
k. Things subject to confiscation in smuggling cases
Cases:
 Rimorin, Sr. vs. People, G.R. No. 146481
 Kurst Nilsen vs. Commissioner of Customs, 89 SCRA 43
 C.F. Stamp vs. Commissioner of Customs, 22 SCRA 760
 Llamado vs. Commissioner of Customs, G.R. No. 28809
 Rodriguez vs. Court of Appeals, G.R. No. 115218
 Carrara Marble PHL, Inc. vs. Commissioner of Customs, G.R. No. 129680

X. TAX REMEDIES
I. Tax Remedies of the Government:
A. Administrative Remedies
1. Compulsory Acquisition
2. Reduction of Customs duties and compromise
3. Alert orders
Effect of issuance of alert orders
Action after examination
Basic considerations on alert orders
What may be considered as derogatory information
4. Seizure and Forfeiture
Property subject to seizure and forfeiture
Jurisdiction
Reasons for exclusive jurisdiction upon the Collector of Customs
Nature of forfeiture proceedings
When forfeiture can be effected
Requisites for customs forfeiture
Forfeiture of common carrier
Prima Facie presumption of knowledge by the owner of the common carrier
Burden of proof in seizure and forfeiture proceedings
5. Distraint of personal property
Procedure for distraint
Constructive distraint of personal property
How constructive distraint of personal property can be effected
6. Levy of Real Property
Procedure for Levy

B. Judicial Remedies

Cases:
 Commissioner of Customs vs. Pascual, 138 SCRA 581
 Gako vs. Commissioner of Customs 344, SCRA 178
 Republic vs. Court of First Instance of Manila, G.R. No. 43747
 Rigor vs. Rosales, G.R. No. L-33756
 Subic Bay Metropolitan Authority vs. Rodriguez, G.R. No. 160270
 Jao vs. Court of Appeals, G.R. No. 104604
 Republic vs. Sandiganbayam, G.R. No. 152154
 Transglobe Internation Inc., vs. Court of Appeals, G.R. No. 126634
 Almeda, Sr., et. al. vs. Perez, et. al., G.R. No. L-18428
 Commissioner of Customs vs. Court of Tax Appeals, G.R. No. L-31733
 People vs. Desiderio, G.R. No. L-20805
 Farolan, Jr. vs. Court of Tax Appeals, G.R. No. 42204
 Republic vs. Court of Appeals, G.R. No. 139050
 Alemanya International Trading Corp. vs. Commissioner of Customs, CTA Case No.
4389
 II. Tax Remedies of the Taxpayer
A. Administrative Remedies
1. Protest
When protest may arise
When protest may be made
Protest exclusive remedy in protestable case
Amount protested may or may not be paid at the time of protest
Form and scope of protest
Decision in protest
Decision adverse to the government
2. Refund (Abatement or drawback)
Abatement
Claim for abatement
Refund
Grant of refund
Denial of refund
Claim for refund
Instances when abatement or refund is allowed
When abatement and refund is allowed
Drawback

3. Payment of fine or redemption

4. Abandonment
Kinds of abandonment
Express abandonment
Implied abandonment
Due notice requirement in abandonment
Effects of abandonment

5. Appeal to the Commissioner

Forfeiture cases
Protest

B. Judicial Remedies
1. Appeal
2. Filing of criminal action against erring customs officials

Cases:
 Yaokasin vs. Commissioner of Customs, G.R. No. 84111
 Transglobe Internation Inc., vs. Court of Appeals, G.R. No. 126634
 Pilipinas Shell Corporation vs. Commissioner of Customs, G.R. No. 195876

XI. DISPOSITION OF PROPERTY

a. Goods subject to disposition
b. Place of disposition of goods
c. Mode of disposition
d. Disqualification to participate in auction sale
e. Disposition of proceeds
f. Disposition of perishable goods
g. Disposition of goods injurious to public health
h. Disposition of unsold goods for want of bidders
i. Disposition of smuggled goods
j. Procedure in customs protest

References:
1. Principles and Remedies in the Customs Modernization and Tariff Act (Atty. Joseph Romano);
2. R.A. 10863 (Customs Modernization and Tariff Act);
3. Cases provided.