Taxation II

A2010

Prof.Movido
FACTS - The then Collector of Customs of the Port of Manila issued a warrant of seizure and detention against the Cadillac car involved in this case, the owner-claimant being a certain Rodolfo Ce za, as the taxes and duties had not been paid.l h /CITE> The warr - It was moreover shown in the petition that the owner, Rodolfo Ceza, had sold such car to one Francisco Dee from whom respondent Vinuya acquired the same. - Vinuya filed a complaint for replevin in the sala of respondent Judge on the ground of alleged illegality of the seizure which, in the opinion of respondents, did not confer jurisdiction on the Collector of Customs. - Petitioners filed a motion to dismiss on the ground that forfeiture proceedings had already been instituted before the Collector of Customs who has the sole jurisdiction to determine questions affecting the disposition of property under seizure as well as the absence of a cause of action. This was denied for lack of merit. Thus this petition. ISSUE WON the court of first instance is vested with jurisdiction to entertain a complaint for replevin for the recovery of a Cadillac car, subject of a seizure and forfeiture proceeding in the Bureau of Customs HELD NO. The prevailing doctrine is that the exclusive jurisdiction in seizure and forfeiture cases vested in the Collector of Customs precludes a court of first instance from assuming cognizance over such a matter. This has been so, as noted, since Pacis v. Averia. Reasoning a. The existence of the power and the regularity of the proceeding taken under it are distinct from each other. The governmental agency concerned, the Bureau of Customs, is vested with exclusive authority. Even if it be assumed that in the exercise of such exclusive competence a taint of illegality may be correctly imputed, the most that can be said is that under certain circumstances the grave abuse of discretion conferred may oust it of such jurisdiction. It does not mean however that correspondingly a court of first instance is vested with competence when clearly in the light of the above decisions the law has not seen fit to do so.lh/CIJFOAJOJbefore th b. "the Court of First Instance should yield to the jurisdiction of the Collector of Customs. The jurisdiction

REMEDIES UNDER THE TCC

JAO V CA ROMERO: October 6, 1995 FACTS: The Office of the Director, Enforcement and Security Services (ESS), Bureau of Customs, received information regarding the presence of untaxed vehicles and parts in the premises owned by Pat Hao located along Quirino Avenue, Paranaque and Honduras St., Makati. After conducting a surveillance of the two places, respondent Major Jaime Maglipon, Chief of Operations and Intelligence of the ESS, recommended the issuance of warrants of seizure and detention. District Collector of Customs Titus Villanueva issued the warrants of seizure and detention. Maglipon coordinated with the local police to assist in the execution of the respective warrants of seizure and detention.The team searched the two premises. They were barred from entering the place, but some members of the team were able to force themselves inside and were able to inspect the premises and noted that some articles were present which were not included in the list contained in the warrant. Amended warrants of seizure and detention were subsequently issued by Villanueva. Consequently customs personnel started hauling the articles pursuant to the amended warrants. Narciso Jao and Bernardo Empeynado filed a case for Injunction and Damageswith prayer for Restraining Order and Preliminary Injunction before RTC Makati Branch 56 on August 27, 1990 against respondents. On the same date, the trial court issued a Temporary Restraining Order. Respondents filed a Motion to Dismiss on the ground that RTC has no jurisdiction over the subject matter, claiming that it was the Bureau of Customs that had exclusive jurisdiction over it. RTC denied motion to dismiss. Respondents filed MFR . MFR was denied. CA set aside the questioned orders of the trial court and enjoined it from further proceeding with the Case. The appellate court also dismissed the said civil case. ISSUE: WON the RTC has jurisdiction over cases questioning the validity of seizure and forfeiture proceedings conducted by the Bureau of Customs

HELD: The RTC is devoid of any competence to pass upon the validity or regularity of seizure and forfeiture proceedings conducted by the Bureau of Customs and to enjoin or otherwise interfere with these proceedings .The Collector of Customs sitting in seizure and forfeiture proceedings has exclusive jurisdiction to hear and determine all questions touching on the seizure and forfeiture of dutiable goods. The Regional Trial Courts are precluded from assuming cognizance over such matters even through petitions of certiorari, prohibition or mandamus. It is likewise well-settled that the provisions of the Tariff and Customs Code and RA 1125 "An Act Creating the Court of Tax Appeals," specify the proper fora and procedure for the ventilation of any legal objections or issues raised concerning these proceedings. Actions of the Collector of Customs are appealable to the Commissioner of Customs, whose decision, in turn, is subject to the exclusive appellate jurisdiction of the Court of Tax Appeals and from there to the Court of Appeals. The rule that Regional Trial Courts have no review powers over such proceedings is anchored upon the policy of placing no unnecessary hindrance on the government's drive, not only to prevent smuggling and other frauds upon Customs, but more importantly, to render effective and efficient the collection of import and export duties due the State, which enables the government to carry out the functions it has been instituted to perform. The illegality of a seizure by the Collector of Customs does not deprive the Bureau of Customs of jurisdiction thereon. The allegations of petitioners regarding the propriety of the seizure should properly be ventilated before the Collector of Customs. We have had occasion to declare: The Collector of Customs when sitting in forfeiture proceedings constitutes a tribunal expressly vested by law with jurisdiction to hear and determine the subject matter of such proceedings without any interference from the Court of First Instance. (Auyong Hian v. Court of Tax Appeals, et al., 19 SCRA 10). ENRILE vs VINUYA FERNANDO; January 30, 1971 NATURE Certiorari and prohibition proceeding

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Taxation II

A2010

Prof.Movido

of the Collector of Customs is provided for in Republic Act 1937i which took effect on July 1, 1957, much later than the Judiciary Act of 1948ii. It is axiomatic that a later law prevails over a prior statute. c. Moreover, on grounds of public policy, it is more reasonable to conclude that the legislators intended to divest the Court of First Instance of the prerogative to replevin a property which is a subject of a seizure and forfeiture proceedings for violation of the Tariff and Customs Code. Otherwise, actions for forfeiture of property for violation of Customs laws could easily be undermined by the simple devise of replevin." d. Section 2303 of the Tariff and Customs Code requires the Collector of Customs to give to the owner of the property sought to be forfeited written notice of the seizure and to give him the opportunity to be heard in his defense. This provision clearly indicates the intention of the law to confine in the Bureau of Customs the determination of all questions affecting the disposal of property proceeded against in a seizure and forfeiture case. The judicial recourse of the property owner is not in the Court of First Instance but in the Court of Tax Appeals, and only after exhausting administrative remedies in the Bureau of Customs." e Collector of Customs is not final. An appeal lies to the DISPOSITION The writ of certiorari prayed for is granted, respondent Judge being clearly without jurisdiction.

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"The Tariff and Customs Code, in Section 2530 thereof, lists the kinds of property subject to forfeiture. At the same time, in Part 2 of Title VI thereof, it provides for the procedure in seizure and forfeiture cases and vests in the Collector of Customs the authority to hear and decide said cases. The Collector's decision is appealable to the Commissioner of Customs whose decision is in turn appealable to the Court of Tax Appeals. An aggrieved party may appeal from a judgment of the Court of Tax Appeals directly to this Court.

ii

Section 44(c) of the Judiciary Act of 1948 lodges in the Court of First Instance original jurisdiction in all cases in which the value of the property in controversy amounts to more than ten thousand pesos. This original jurisdiction of the Court of First Instance, when exercised in an action for recovery of personal property which is a subject of a forfeiture proceeding in the Bureau of Customs, tends to encroach upon, and to render futile, the jurisdiction of the Collector of Customs in seizure and forfeiture proceedings. This is precisely what took place in this case.l h

ASIAN TERMINALS, INC. V RICAFORT ET AL G.R. NO. 166901 CALLEJO, SR.; October 27, 2006 FACTS -Section 1, RA No. 8506 provides that it shall be unlawful for any person to import, cause the importation of, register, cause the registration of, use or operate right-hand drive vehicles -Noel Tabuelog et al are duly-licensed importers of vehicles, who, between April and May 1998, imported 72 secondhand right-hand drive buses -When the shipment arrived at the Port of Manila, the District Collector of Customs impounded the vehicles and ordered them stored at the warehouse of the Asian Terminals, Inc. (ATI) -Conformably with Section 2607 of the Tariff and Customs Code, the District Collector of Customs issued Warrants of Distraint against the shipment and set the sale at public auction -On October 28, 1998, the Secretary of Justice rendered an opinion stating that shipments of right hand wheel vehicles loaded and exported at the port of origin before February 22, 1998 were not covered by RA No. 8506 unless the same were loaded and imported after said date. -On November 11, 1998, the importers, filed a complaint with the RTC of Paraaque City, against the Secretary of Finance, Customs Commissioner, et al for replevin -The RTC granted the application for a writ of replevin on a bond of P12,000,000.00. -The Chief of Customs Police and four (4) customs policemen prevented the Sheriff and the policemen assisting him from taking custody of the vehicles, claiming that the District Collector of Customs had jurisdiction over the vehicles. -On motion of the plaintiffs, the court issued an order directing the PNP Director to assist the Sheriff in implementing the writ it issued -The District Collector of Customs agreed to transfer the custody of the vehicles to the RTC, on the condition that the required taxes, dues, and other charges be paid. -On November 27, 1998, the defendants, through the OSG, filed a motion seeking the reconsideration of the RTC Order on the ground that the RTC has no jurisdiction over the vehicles subject of seizure and detention before the Bureau of Customs. The ATI filed a motion for the court to allow the vehicles to remain in its warehouse. -On December 1, 1998, the ATI filed a Third-Party Claim over the shipment, alleging that it had a lien over the vehicles for accumulated and unpaid storage and arrastre charges, and wharfage dues -Before the court could resolve the motions, plaintiffs filed a "Motion/Notice to Dismiss/Withdraw Complaint" against the defendants on the ground that they had agreed to the implementation of the writ of replevin -ATI filed a Motion for Intervention and for Admission of its Complaint-in-Intervention, alleging that it had a lien on the vehicles for accumulated storage and arrastre charges and wharfage dues. -On April 27, 1999, the court issued an Order dismissing the complaint -The OSG filed a motion for reconsideration. For its part, ATI filed a motion for clarification of the order, and also pleaded for the court to admit its Complaint-in-Intervention -On September 23, 1999, the RTC issued its Order dismissing the Complaint-in-Intervention -ATI filed a motion for reconsideration, which the court denied on July 31, 2000. -ATI filed a Petition for Certiorari under Rule 65 before the CA -On November 30, 2004, the CA rendered judgment dismissing the petition for lack of merit. The appellate court ruled that the RTC had no jurisdiction over the complaint filed by respondents, since the Collector of Customs sitting in seizure and forfeiture proceedings had the exclusive jurisdiction to hear and determine all questions relating on the seizure and forfeiture of dutiable goods. Since the RTC had no jurisdiction over the main case, it was also bereft of authority to hear the third-party claim or the complaint-in-intervention filed by ATI. -ATI filed a motion for reconsideration, which the CA denied, hence, this petition ISSUE WON the lower courts erred in dismissing ATI's petition HELD No. -Section 602 of the TCC provides that the Bureau of Customs shall exercise exclusive jurisdiction over seized and forfeited cars. It is tasked to enforce tariff, and supervise and control customs law and all other laws, rules and regulations relating to the tariff and customs administration; and to supervise and control all import and export cargoes, loaded or stored in piers, terminal facilities, including container yards and freight stations, for the protection of government revenues. Under Section 2301 of the TCC, the Collector of Customs is empowered to make a seizure of cargoes and issue a receipt for the detention thereof -Section 2530. Property Subject of Forfeiture Under Tariff and Customs Laws. Any vehicle, vessel or aircraft, cargo, article and objects shall, under the following conditions be subject to forfeiture: (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. -In Jao v. Court of Appeals, it was held that the Regional Trial Courts are devoid of any competence to pass upon the validity or regularity of seizure and forfeiture proceedings conducted by the Bureau of Customs and to enjoin or otherwise interfere with these proceedings. It is the Collector of Customs, sitting in seizure and forfeiture proceedings, who has exclusive jurisdiction to hear and determine all questions touching on the seizure and forfeiture of dutiable goods. Actions of the Collector of Customs are appealable to the Commissioner of Customs, whose decision, in turn, is subject to the exclusive appellate jurisdiction of the Court of Tax Appeals and from there to the Court of Appeals. -The rule that Regional Trial Courts have no review powers over such proceedings is anchored upon the policy of placing no unnecessary hindrance on the governments drive, not only to prevent smuggling and other frauds upon Customs, but more importantly, to render effective and efficient the collection of import and export duties due the State, which enables the government to carry out the functions it has been instituted to perform. -The RTC had no jurisdiction to take cognizance of the petition for replevin by respondents herein, issue the writ of replevin and order its enforcement. The RTC should have dismissed the petition for replevin at the outset. -While it is true that the District Collector of Customs allowed the release of the vehicles and the transfer thereof to the custody of the RTC upon the payment by the private respondents of the required taxes, duties and charges, he did not thereby lose jurisdiction over the vehicles; neither did it vest jurisdiction on the RTC to take cognizance of and assume jurisdiction over the petition for replevin. -The RTC cannot be faulted for dismissing petitioners complaint-in-intervention. Considering that it had no jurisdiction over respondents action and over the shipment subject of the complaint, all proceedings before it would be void. The RTC had no jurisdiction to take cognizance of the complaint-in-intervention and act thereon except to dismiss the same. Moreover, considering that intervention is merely ancillary and supplemental to the existing litigation and never an independent action, the dismissal of the principal action necessarily results in the dismissal of the complaint-in-intervention. Likewise, a court which has no jurisdiction over the principal action has no jurisdiction over a complaint-in-intervention.

Pacis v. Pamaran Fernando; 15 March 1974 56 SCRA 16

Facts Pacis is the Acting Collector of Customs for the Port of Manila. The case is prohibition proceeding against Assistant City Fiscal of Manila, Manuel R. Pamaran. Respondent Ricardo Santos is the owner of a Mercury automobile, model 1957. It was brought into this country without the payment of customs duty and taxes, its owner Donald James Hatch being tax-exempt. It was from him that respondent Santos acquired said car. He paid P311.00 for customs duty and taxes. Land Transportation Commission reported that such automobile was a "hot car." By virtue thereof, petitioner Pacis, ascertained that although the amount of P311.00 was already paid for customs duty, the amount collectible on said car should be P2,500.00, more or less. Pacis instituted seizure proceedings and issued a warrant of seizure and detention. Ricardo Santos filed a criminal complaint for usurpation of judicial functions with the City Fiscal of Manila handled by Pamaran. Issue WON the Collector of Customs has the authority to issue the warrant of seizure Held Yes, as Acting Collector of Customs for the Port of Manila, he had the requisite authority for the issuance of the contested warrant of seizure and detention for the automobile owned by respondent Ricardo Santos. It is to be admitted that the constitutional right to be free from unreasonable search and seizure must not be eroded or emasculated. The right to privacy so highly valued in civilized society must not be diluted. Only upon compliance then with the proper requisites mandated by law should one's possessions be subject to seizure. That much is clear. Under the 1935 Constitution the intervention of a judge was well-nigh indispensable. So it was under the Philippine Bill of 1902 and the Philippine Autonomy Act of 1916. Even then, however, as shown by the leading case of Uy Kheytin v. Villareal, a 1920 decision, it was the accepted principle following the landmark case of Boyd v. United States that the seizure of goods concealed to avoid the duties on them is not embraced within the prohibition of this constitutional guarantee. More to the point. In a recent decision of this Court, Papa v. Mago, where the seizure of alleged smuggled goods was effected by a police officer without a search warrant, this Court, through Justice Zaldivar, stated: "Petitioner Martin Alagao and his companion policemen had authority to effect the seizure without any search warrant issued by a component court. The Tariff and Customs Code does not require said warrant in the instant case. The Code authorizes persons having police authority under Section 2203 of the Tariff and Customs Code to enter, pass through or search any land, inclosure, warehouse, store or building, not being a dwelling house; and also to inspect, search and examine any vessel or aircraft and any trunk, package, box or envelope or any person on board, or stop and search and examine any vehicle, beast or person suspected of holding or conveying any dutiable or prohibited article introduced into the Philippines contrary to law, without mentioning the need of a search warrant in said cases. But in the search of a dwelling house, the Code provides that said 'dwelling house may be entered and searched only upon warrant issued by a judge or justice of the peace . . . .' It is our considered view, therefore, that except in the case of the search of a dwelling house, persons exercising police authority under the customs law may effect search and seizure without a search warrant in the enforcement of customs laws." The plenitude of the competence vested in customs officials is thus undeniable. No such constitutional question then can possibly arise. So much is implicit from the very language of Section 2205 of the Tariff and Customs Code. It speaks for itself. It is not susceptible of any misinterpretation. The power of petitioner is thus manifest. It being undeniable then that the sole basis for an alleged criminal act performed by him was the performance of a duty according to law, there is not the slightest justification for respondent Assistant City Fiscal to continue with the preliminary investigation after his attention was duly called to the plain and explicit legal provision that did not suffer at all from any constitutional infirmity. The

remedy of prohibition lies. What was done by petitioner was strictly in accordance with settled principles of law. No doubt need be entertained then as to the validity of the issuance of the warrant of seizure and detention. His liability for any alleged usurpation of judicial function is non-existent. Such imputation was definitely unfounded. Even if however the matter were less clear, the claim that the search and seizure clause was in effect nullified is hardly impressed with merit. Considering that what is involved is an alleged evasion of the payment of customs duties. Disposition WHEREFORE, the writ of prohibition prayed for is granted and the successor of respondent Manuel R. Pamaran, now a criminal circuit court judge, or any one in the City Fiscal's Office of the City of Manila to whom the complaint against petitioner for usurpation of judicial functions arising out of the issuance of the warrant of seizure and detention, subjectmatter of this litigation, has been assigned, is perpetually restrained from acting thereon except to dismiss the same. No costs.

BOAC V PEOPLE G.R. No. 180597 VELASCO; November 7, 2008

NATURE Appeal by certiorari under Rule 45 FACTS - Raul Basilio Boac, Ramon Betuin Golong, Cesar Fantone Beltran, Roger Alcantara Basadre, and Benjamin Castaneda Alfonso are members of the PNP-CIDG. - They were charged with violation of Sec. 2203 in relation to Sec. 3612 of the Tariff and Customs Code in that without lawful authority or delegation from the Collector of Customs, they flagged down, searched and seized three (3) container vans consigned to Japan Trak surplus (Kakiage Surplus). - Atty. Lourdes V. Mangaoang, then Customs District Collector of Cagayan de Oro City, testified that the CIDG operatives (herein petitioners) did not have a written authority from the Commissioner of Customs or the District Collector. According to her, Golong claimed that they had clear orders from Boac to open and search the vans. She instructed her personnel to open the vans only to show that there was nothing illegal in their contents. She prepared a letter of protest addressed to Boac but it was ignored; hence, she filed the instant case. - For the defense, Boac testified that on July 27, 2004, he was in Manila on leave. Beltran allegedly informed him that three container vans with contrabands were released by the BOC; thus, Boac instructed Golong and his team to flag down the subject vans. After the inspection of the vans and without finding any contraband, Boac directed Golong to leave the premises. - The Sandiganbayan convicted the petitioners. The anti-graft court ruled that petitioners belong to the category of officers in Sec. 2203(d); thus, they needed a written authority from the Commissioner of Customs or District Collector in order to conduct searches, seizures and arrests. In this case, the court said, the prosecution established the lack of said written authority; even Beltran and Golong admitted that they did not have any authorization to search the vans. - Petitioners assert that they did not conduct any search, seizure, or arrest; hence, there was no violation of the Tariff and Customs Code. During the search conducted in the consignees warehouse on July 28, 2004, the employees of the owner of the shipment unloaded the goods under BOC personnel supervision. Petitioners allege that they only witnessed the search; they did not make any seizures or arrests. After searching the first van and half of the second van without any contraband being found, Customs Police Yamit and Godoy decided to stop the search despite the request of petitioners to continue. Since the Customs Police were already leaving the area, Boac instructed his team to leave the vicinity. - Petitioners further claim that the polices authority to stop, search, and effect seizure and arrest, if necessary, is no longer exclusively vested on the Collector of Customs. Regular PNP members are generally empowered by law to effect arrests in accordance with Republic Act No. (RA) 6975. - Petitioners contend that they were investigating a possible connivance of smugglers with some corrupt customs personnel. They maintained that their act of flagging down the container vans was not connected with the enforcement of the tariff and customs laws, smuggling being a form of economic sabotage which is within the powers of the PNP-CIDG to monitor and investigate. Thus, according to them, no prior authority from the Collector of Customs is required in performing their duties as police officers. Besides, they said they immediately coordinated with the Customs Police for the latter to conduct the actual search of the container vans; hence, there was no violation of Sec. 2203. ISSUE WON petitioners are guilty of the crime charged HELD NO Reasoning - Petitioners should be acquitted of the charge. The prosecution has the burden of proving the guilt of the accused beyond reasonable doubt. In this case, it is clear that petitioners neither searched the container vans nor effected seizure and arrest. - It should be noted that the container vans were brought to the consignees warehouse and not to the CIDG headquarters. On July 28, 2004, the container vans were searched but not by petitioners. The search was actually conducted by Customs Police Yamit and Godoy on July 28, 2004. The Customs Police held the keys of the vans. Furthermore, the vans were opened without the presence of the PNP-CIDGs team leader, Inspector Golong. The search was under the direction of the Customs Police because when the Customs Police decided to stop the search, petitioners acceded and left the premises. - The foregoing testimony, which Golong corroborated, was not disputed by the prosecution. It is thus very clear that the search was not done by petitioners but by the Customs Police. Petitioners did not seize anything nor arrested anybody.

They merely observed the search which they requested to be undertaken to check for contrabands. Notably, the consignee did not file any complaint against petitioners. - The information charged petitioners for illegally flagging down, searching, and seizing the three container vans on July 27, 2004. Petitioners, however, could not also be held liable for these acts. It is a fact that no search and seizure of the vans was done on the night of July 27, 2004. The act of flagging down the vehicles is not among those proscribed by Sec. 2203 of the Tariff and Customs Code. Mere flagging down of the container vans is not punishable under the said law. - As regards the second issue, there is no conflict between the aforequoted provisions of the Tariff and Customs Code and RA 6975, as amended. The jurisdiction of the Commissioner of Customs is clearly with regard to customs duties. Should the PNP suspect anything, it should coordinate with the BOC and obtain the written authority from the Collector of Customs in order to conduct searches, seizures, or arrests. Disposition Decision reversed and set aside.