G.R. No. 166134 June 29, 2010
ANGELES CITY vs. ANGELES CITY ELECTRIC COR CORPOR PORATIO TION AND REGI EGIONA ONAL TRIIAL TR CORT !RANC" #$, ANGELES CITY %&'(s) Respond Respondent ent Angeles Angeles City Electric Electric Corporatio Corporation n (AEC), which was granted a legislative franchise to generate and distribute electricity in Angeles City, City, Pampang ampanga, a, pays pays a franch franchise ise tax of two percent (!) of its gross receipts to the "#R$ %hen the &ocal 'overnment Code (&'C) of was passed into law, the *angguniang Pan anlu lung ngso sod d of Ange Angele les s City City en enac acte ted d a tax tax ordinance +nown as the Revised Revenue Code of Angeles City (RRCAC) which imposed a local franchise tax upon AEC$ etro Angeles Chamber of Commerce and #ndustry #nc$ (ACC#) of which AEC is a member -led a petition see+ing the reduction of the tax rates and a review of the provisions of the RRCAC was -led by, claiming that that the ordin ordinanc ance e is oppre oppressi ssive$ ve$ .he petiti petition on was referred to the "ureau of &ocal 'overnment /inance ("&'/) and an indorsement was issued to the City .reasurer of Angeles City, instructing the the latte latterr to ma+ ma+e repr repres esen enta tatio tions ns with with the the *anggunian for the appropriate amendment of the RRCAC$
0n 112, the City .rea .reasur surer er issued issued a 3otice 3otice of Assessment to AEC for payment of business tax, licens license e fee and other charg charges es for the period period 4 4 to 112 112 amoun amountin ting g to P2,56 P2,56, ,2$ 2$1$ 1$ AEC AEC prote protest sted ed the the asse assess ssme ment nt but but the the City City .reasurer .reasurer denied the protest$ AEC appealed to the the R.C of Angel ngeles es City ity via via a Petiti tition on for for 7eclaratory Relief$ .he City .reasurer however levied on the real properties of AEC and a 3otice of Auction *ale was published announcing that a public auction of the levied properties would be held$ .his prompted AEC to -le with the R.C an 8rge 8rgent nt oti otion on for for #ssu #ssuan ance ce of .empo empora rary ry Restraining ing 0rder (.R0) and9or %rit of Prelim Prelimina inary ry #n: #n:unc unctio tion$ n$ After After due notice notice and hear he arin ing, g, the the R.C issu issued ed a .R0 .R0 an and d a %rit rit of Prel Prelimi imina nary ry #n #n:u :unc nctio tion$ n$ Ange Angele les s City City -led -led a motion for dissolution of preliminary in:unction, cont conten endi ding ng that that the the R.C cann cannot ot en en:o :oin in the the collection of taxes pursuant to the &'C, but the R.C denied such motion$ Issue) %hether or not the R.C can en:oin the collection of local taxes$ Ru*+n) No.
.he &'C does not speci-cally prohibit an in:unc in:unction tion en:oin en:oining ing the collec collectio tion n of taxes$ taxes$ A principle deeply embedded in our :urisprudence is that taxes being the lifeblood of the gove govern rnme ment nt shou should ld be coll collec ecte ted d prom prompt ptly, ly, without unnecessary hindrance or delay$ #n line
wit with this this princ rincip iple le,, the 3ati 3ation onal al #nte #nterrna nall Reven evenu ue Code ode of ; (3#R (3#RC) C) expr xpress essly provides provides that no court shall shall have the authority authority to grant an in:unction to restrain the collection of an any y na natio tiona nall inter interna nall reve revenu nue e tax, tax, fee fee or char charge ge impo impose sed d by the the code$ code$ .he .he situ situat atio ion, n, however ver, is diu re>uis isit ites es to warr warran antt the the issu issuan ance ce of such such,, which are the existence of a clear and unmista+able right that must be protected and an urgent and paramount necessity for the writ to prevent serious damage, have been satis-ed$ .he Court then had no other recourse but to grant the prayer for the issuance of a writ of prelim prelimina inary ry in:unc in:unctio tion n consid consideri ering ng that that if the respondent will not be restrained from doing the
acts acts compla complaine ined d of, it will will preem preempt pt the Court from from prope properly rly ad:udi ad:udicat cating ing on the merits merits the vari variou ous s issu issues es betwe between en the the part partie ies, s, an and d will will rend render er moot moot an and d acad academ emic ic the the proc procee eedi ding ngs s before the court$ .he petition was dismissed L- YAANE LAANE /e(+(+ /e(+(+one one v !A LEPANT LEPANTO O CONDOINI CORPORATION (respondent) 0ctober ? 11? @ .inga, $ @ &eigh &ocal .axation axatio n
.he city city trea treasu sure rerr impo impose sed d SPER%ACTS .he taxes on &epanto, a corporation that owned a cond condom omin iniu ium, m, sayi saying ng that that beca becaus use e &epa &epant nto o collected collected assessment assessments s for operating operating expenses expenses for for the the comm common on area areas s of the the cond condom omin iniu ium, m, &epanto was actually engaged in business$ .he *C ruled ruled that that &epan &epanto to was not organi= organi=ed ed for propro-t$ t$ .he .he fees fees it was was coll collec ecti ting ng from from the the cond condom omin iniu ium m un unit it owne owners rs redou edound nd to the the owners themselves because the fees collected are are bein being g used used for for the the main mainte tena nanc nce e of the the condo$ /urther, it appears that the assessment issued by the city treasurer did not state the lega legall basis asis for for the the tax tax bein being g impo impose sed d on &epan epanto to B it merel erely y stat states es that that a+ a+ati ati is authori=ed to collect business taxes under the &'C, but no other reference speci-c reference to speci-c laws were cited$ %ACTS)
wit with this this princ rincip iple le,, the 3ati 3ation onal al #nte #nterrna nall Reven evenu ue Code ode of ; (3#R (3#RC) C) expr xpress essly provides provides that no court shall shall have the authority authority to grant an in:unction to restrain the collection of an any y na natio tiona nall inter interna nall reve revenu nue e tax, tax, fee fee or char charge ge impo impose sed d by the the code$ code$ .he .he situ situat atio ion, n, however ver, is diu re>uis isit ites es to warr warran antt the the issu issuan ance ce of such such,, which are the existence of a clear and unmista+able right that must be protected and an urgent and paramount necessity for the writ to prevent serious damage, have been satis-ed$ .he Court then had no other recourse but to grant the prayer for the issuance of a writ of prelim prelimina inary ry in:unc in:unctio tion n consid consideri ering ng that that if the respondent will not be restrained from doing the
acts acts compla complaine ined d of, it will will preem preempt pt the Court from from prope properly rly ad:udi ad:udicat cating ing on the merits merits the vari variou ous s issu issues es betwe between en the the part partie ies, s, an and d will will rend render er moot moot an and d acad academ emic ic the the proc procee eedi ding ngs s before the court$ .he petition was dismissed L- YAANE LAANE /e(+(+ /e(+(+one one v !A LEPANT LEPANTO O CONDOINI CORPORATION (respondent) 0ctober ? 11? @ .inga, $ @ &eigh &ocal .axation axatio n
.he city city trea treasu sure rerr impo impose sed d SPER%ACTS .he taxes on &epanto, a corporation that owned a cond condom omin iniu ium, m, sayi saying ng that that beca becaus use e &epa &epant nto o collected collected assessment assessments s for operating operating expenses expenses for for the the comm common on area areas s of the the cond condom omin iniu ium, m, &epanto was actually engaged in business$ .he *C ruled ruled that that &epan &epanto to was not organi= organi=ed ed for propro-t$ t$ .he .he fees fees it was was coll collec ecti ting ng from from the the cond condom omin iniu ium m un unit it owne owners rs redou edound nd to the the owners themselves because the fees collected are are bein being g used used for for the the main mainte tena nanc nce e of the the condo$ /urther, it appears that the assessment issued by the city treasurer did not state the lega legall basis asis for for the the tax tax bein being g impo impose sed d on &epan epanto to B it merel erely y stat states es that that a+ a+ati ati is authori=ed to collect business taxes under the &'C, but no other reference speci-c reference to speci-c laws were cited$ %ACTS)
"A &epanto Condominium Corporation (&epanto) owns title over "A&epanto "A&epanto Condominium, and is auth au thor ori= i=ed ed by its its byl bylaw aws s to colle collect ct regu regula larr assess assessmen ments ts from from its member members s for operat operating ing expe expens nses es,, capi capita tall expe expend ndit itur ures es on comm common on areas, and other special assessements$ #n 5, it recei received ved a tax assessme assessment nt in the amount amount of P,6 P,61 1,1 ,14 4$; $;; ; from from &u= Daman amane, e, the the City City .reasurer .reasurer of a+ati, for business taxes for the years ?;$ .he notice of assessment was silent as to the statutory basis of the business taxes assessed$ &epanto protes tested the assessment, saying that F .he Assessment has no basis as the Corporation is not liable for business taxes and surc surcha harg rges es an and d inte intere rest st ther thereo eon, n, un unde derr the the a+ati GRevenueH Code or even under the G&ocal 'overnmentH Code (&'C)$ .he a+ati GRevenueH Code and the &'C do not contain any provisions on which the Assessment coul could d be base based$ d$ 0n 0ne e migh mightt argu argue e that that *ec$ *ec$ 4A$1(m) of the a+ati GRevenueH Code imposes busi busine ness ss tax tax on owne owners rs or oper operat ator ors s of an any y busi busine ness ss not not spec speci-e i-ed d in the the said said code code$$ %e submit, however, that this is not applicable to the Corporation as it is not an owner or operator of an any y busi busine ness ss in the the cont contem empl plat atio ion n of the the a+ati GRevenueH Code and even the &'C$ Proceeding from the premise that its tax liability aros arose e from from *ect *ectio ion n 4A$1 4A$1(m (m)) of the the a+a a+ati ti Revenue Code, &epanto argued that under both
the the a+a a+ati ti Code Code an and d the the &'C, &'C, Ibus Ibusin ines essJ sJ is de-n e-ned as Itra Itrad de or com commerc ercial ial acti activi vity ty regularly engaged in as a means of livelihood or with with a view view to propro-t$J t$J #t was was subm submit itted ted that &epan &epanto, to, as a condom condomini inium um corpor corporati ation, on, was organi=ed not for pro-t, but to hold title over the common areas of the Condominium, to manage the Condominium for the unit owners, and to hold title to the parcels of land on which the Condominium was located$ 3either was &epanto authori=ed, under its A0# or bylaws to engage in pro-tma+ pro-tma+ing ing activities$ activities$ .he assessmen assessments ts it did collect from the unit owners were for capital expenditures and operating expenses$ Damane Damane denied the protest, insisting that the asse assess ssme ment nts s wer were made made in view view of propro-t t ma+in a+ing, g, as the the asses ssess smen ments whic which h wer were collected improved the value of the condominiums, which in turn would increase the chances of getting higher prices$ &epanto then appealed appealed the denial denial to the R.C R.C of a+ati$ a+ati$ R.C a+ati aKrmed the decision of Damane, saying that &epantoLs activities fell under the de-nition of IbusinessJ under *ec$ 4(b) of the &'C, and thus sub:ect to local business taxation$ &epanto then -led a petition for review under Rule 2 with the Court of Appeals$ Appeals$ .he Court of Appeals reversed the R.C, ruling that &epanto was not engaged in pro-t$ CA also said that the very statutory concept of a condominium corporation showe howed d that that it was was not not a :uri :urid dical ical en enti tity ty intended to ma+e pro-t, as its sole purpose was
to hold old titl title e to the the com common area areas s in the the condominium and to maintain the condominium$ Damane Damane &epanto is engaged in business$ .he dues dues collec collected ted are are used used for the beauti beauti-ca -catio tion n and maintenance of the Condominium, resulting in Ifull full appr apprec ecia iati tive ve livi living ng valu values esJ J for for the the cond condom omin iniu ium m un units its whic which h woul would d comm comman and d better mar+et prices should they be sold in the futu future re$$ ore oreov over er,, the the rati ration onal ale e for for busi busine ness ss taxes is not on the pro-t earned by the busi busine nes ss, but but the the priv privil ileg ege e to en eng gage age in business$ Also, on a procedural note &ep &epanto -led the wrong mode of appeal before the CA when it -led its petition for review under rule 2$ .he R.C deci decisi sion on was was ren ende derred in the the cour courtL tLs s exer exerci cise se of orig origin inal al :uri :urisd sdic ictio tion$ n$ .hus .hus,, with with &epanto pursuing an erroneous mode of appeal, the R.C decision became -nal and executory$ R8' petition 7E3#E7 PR0CE78RA& #**8E 7oes the R.C, in deciding an appeal ta+en from a denial of a protest by a local treasurer under *ection ? of the &'C, exerc exercise ise Iorigin original al :urisd :urisdict iction ionJ J or Iappel Iappellate late :urisdictionJM :urisdictionJM 0R#'#3A&, but court still aKrmed the :urisdiction exercised of the CA in this case$ .here are conNicting conNicting views on this issue
) Positi osition on of of CA CA R. R.C, in in rev revie iewin wing g deni denial als s of protests by local treasurers, exercises appellate :urisdiction$ .his is anchored on the language of *ec$ *ec$ ? ? of the the &'C &'C whic which h stat states es that that the the remedy of the taxpayer whose protest is denied by the the loca locall trea treasu sure rerr is Ito Ito appe appeal al with with the the cour courtt of comp compet eten entt :uri :urisd sdic icti tion on$J $J .he .he &'C &'C howev owever er does oes not elab elabor ora ate on how how such such IappealJ should be underta+en$ ) Positio tion of City .reasurer :urisdict iction exercised is original in character$ Court aKrmed the position of the City .reasurer$ .he &'C does not expressly confer appellate :urisdiction on the part of R.Cs .Cs from the denial of a tax prot protes estt by a loca locall trea treasu sure rerr$ 0n the the othe otherr ha hand nd,, *ect *ectio ion n of "P expr expres essl sly y delineates the appellate :urisdiction of the R.Cs, con-ning appellate :urisdiction to cases decided by etropolitan, unicipal, and unicipal Circuit .rial .rial Courts$ "P does not confer appellate :urisdiction on R.Cs .Cs over rulings made by non :udicial entities$ O0%EER, this pronouncement is sub:ect to two >uali-cations$ /irst, in this case there are signi-cant reasons for the Court to overloo+ the procedural error and ultimately uphold the ad:udication of the :urisdiction exercised by the CA$ *econd, the doctrinal weight of the prono onoun unce ceme ment nt is con-n on-ned ed to cas cases and cont contrrover overs sies ies tha hatt eme emerged prior rior to the the
enactment of RA 5 (e
rule rules s
must ust
not
be
*8"*. *8"*.A3. A3.#E #E #**8E #**8E Can a local local gover governme nment nt unit, under the &ocal 'overnment code, impel a cond condom omin iniu ium m corp corpor orat atio ion n to pay pay busi busine ness ss taxesM 30 ) .he .he powe powerr of loca locall gove govern rnme ment nt un unit its s to impose impose taxes taxes within within its territ territori orial al :urisd :urisdict iction ion deri derive ves s from from the the Cons Consti titu tuti tion on itse itself lf,, whic which h recogni=es the power of these units Ito create its own sources of revenue and to levy taxes, fees, fees, and charg charges es sub:ec sub:ectt to such such guidel guideline ines s and limitations as the Congress may provide, con consist sisten entt with with the the basic asic poli policy cy of local ocal autonomy$J autonomy$J .hese guideline are contained in the &ocal 'overnment Code of , which provides for instances when and how local government government unit un its s may may imp impose ose tax taxes$ es$ .he .he sign signii-c can antt limitations limitations are enumerated enumerated primarily primarily in *ection *ection
44 of the Code, which include among others, a prohi prohibit bition ion on the imposi impositio tion n of income income taxes taxes except when levied on ban+s and other -nancial institutions$ 3one of the other general limitations under *ection 44 -nd application to the case at bar$ #t is in Art$ ##, .itle ##, "oo+ ## of the Code, governing municipal taxes, where the provisio provisions ns on business business taxation relevant relevant to this petition may be found$ *ec$ *ec$ 24 24 en enum umer erat ates es type types s of busi busine ness ss on whic which h muni munici cipa pali liti ties es an and d citi cities es may may impo impose se taxes$ .hese include manufacturers, wholesalers, distributors, dealers of any article of commerce of whatever natureQ those engaged in the export or commerce of essential commoditiesQ contractors and other indepe independe ndent nt contra contracto ctorsQ rsQ ban+s ban+s and -nanci -nancial al institutionsQ and peddlers engaged in the sale of any merchandise or article of commerce$ .he coverage of business taxation particular to the the City City of a+a a+ati ti is prov provid ided ed by the the a+a a+ati ti Revenue evenue Code Code (IR (IRevenue evenue CodeJ) CodeJ)$$ Articl Article e A, Chap Ch apte terr ### of the the Reven evenue ue Code Code gover overn ns business taxes in a+ati, and it is >uite speci-c as to the the busi busine ness sses es whic which h are are cove covere red d by business taxes$ .he initial in>uiry is what provision of the a+ati Revenue Code does the City .reasurer .reasurer rely on to ma+e &epanto liable for business taxes$ Even at this point, there already stands a problem with
the City .reasurerLs cause of action$ At no point has the City .reasurer stated in all the records as to what is the statutory basis under the a+ati Revenue Code for the levying of the business tax on &epanto$ .he notice of assessment, which stands as the -rst instance the taxpayer is oKcially made aware of the pending tax liability, should be suKciently informative to apprise the taxpayer the legal basis of the tax$ *ec$ ? of the &'C does not go as far as to re>uire that the notice of assessment speci-cally cite the provision of the ordinance involved but it does re>uire that it state the nature of the tax, fee or charge, the amount of de-ciency, surcharges, interests and penalties$ #n this case, the notice of assessment sent to &epanto did state that the assessment was for business taxes, as well as the amount of the assessment$ .here may have been prima facie compliance with the re>uirement under *ec$ ?$ Oowever, the Revenue Code provides multiple provisions on business taxes$ Oence, we could appreciate the CorporationLs confusion, as expressed in its protest, as to the exact legal basis for the tax$ Reference to the local tax ordinance is vital, for the power of local government units to impose local taxes is exercised through the appropriate ordinance enacted by the sanggunian, and not by the &'C alone$ %hat determines tax liability is the tax ordinance, the &ocal 'overnment Code being the enabling law for the local legislative body$
oreover, a careful examination of the Revenue Code shows that while *ection 4A$1(m) seems designed as a catchall provision, *ection 4A$1(f), which provides for a diuite exhaustive in enumerating the class of businesses taxed under the provision, the listing, while it does not include condominiumrelated enterprises, ends with Ietc$J Certainly, we cannot be disposed to uphold any tax imposition that derives its authority from enigmatic and uncertain words such as Ietc$J Det we cannot even say with de-niteness whether the tax imposed on the Corporation in this case is based on that provision$ (in other words walang basis, the court is :ust citing these to see if the tax imposed could fall under any of these provisions)$ .he City .reasurer has been silent all through out as to the exact basis for the tax imposition which she wishes that this Court uphold$ ) &ocal tax on businesses is authori=ed under *ec$ 24 of the &'C$ .he word IbusinessJ is de-ned under *ection 4(d) of the Code as Itrade or commercial activity regularly engaged in as a means of livelihood or with a view to pro-t$J .his de-nition is importance since *ec$ 24 allows local government units to impose local taxes on businesses other than those
speci-ed under the provision$ #t is thus imperative that in order that &epanto may be sub:ected to business taxes, its activities must fall within the de-nition of business$ And to hold that they do is to ignore the very statutory nature of a condominium corporation$ .he creation of the condominium corporation is sanctioned by RA$ 2;6 (Condominium Act)$ 8nder the law, a condominium is an interest in real property consisting of a separate interest in a unit in a residential, industrial or commercial building and an undivided interest in common, directly or indirectly, in the land on which it is located and in other common areas of the building$ .o enable the orderly administration over these common areas which are :ointly owned by the various unit owners, the Condominium Act permits the creation of a condominium corporation, which is specially formed for the purpose of holding title to the common area, in which the holders of separate interests shall automatically be members or shareholders, to the exclusion of others, in proportion to the appurtenant interest of their respective units$ .hus, it may be authori=ed in the deed of restrictions Ito ma+e reasonable assessments to meet authori=ed expenditures, each condominium unit to be assessed separately for its share of such expenses in proportion (unless otherwise provided) to its ownerLs fractional
interest in any common areas$J #t is the collection of these assessments from unit owners that form the basis of the City .reasurerLs claim that the Corporation is doing business$ .he Condominium Act imposes several limitations on the condominium corporation$ 8nder *ec$ 1 of the law, the corporate purposes of a condominium corporation are limited to the holding of the common areas, either in ownership or any other interest in real property recogni=ed by lawQ the management of the pro:ectQ and such other purposes as may be necessary, incidental or convenient to the accomplishment of such purpose$ /urther, the same provision prohibits the A0# or bylaws of the condominium corporation from containing any provisions which are contrary to the provisions of the Condominium Act$ 3one of these corporate purposes are geared towards obtaining a livelihood pro-t$ #n the present case, the amounts collected are not intended for the incurrence of pro-t by &epanto or its members, but to shoulder the necessary expenses that arise from the maintenance of the Condominium Pro:ect$ .he Court cites with approval the two counterpoints raised by CA in re:ecting the contention of the city treasurer that the assessments amounted to pro-ts for &epanto$
/irst, if any pro-t is obtained by the sale of the units, it accrues not to the corporation but to the unit owner$ *econd, if the unit owner does obtain pro-t from the sale of the corporation, the owner is already re>uired to pay capital gains tax on the appreciated value of the condominium unit$ oreover, by the rationale of the city treasurer, every a+ati City car owner may be considered as being engaged in business, since the repairs or improvements on the car may be deemed oriented towards appreciating the value of the car upon resale$ .here is an evident distinction between persons who spend on repairs and improvements on their personal and real property for the purpose of increasing its resale value, and those who defray such expenses for the purpose of preserving the property$ "esides, we shudder at the thought of upholding tax liability on the basis of the standard of Ifull appreciative living valuesJ, a phrase that de-es statutory explication, commonsensical meaning, the English language, or even de-nition from 'oogle (lol)$ .he exercise of the power of taxation constitutes a deprivation of property under the due process clause, and the taxpayerLs right to due process is violated when arbitrary or oppressive methods are used in assessing and collecting taxes$ .he City .reasurer also contends that the fact that &epanto is engaged in business is evinced
by the A0#, which speci-cally empowers &epanto Ito ac>uire, own, hold, en:oy, lease, operate and maintain, and to convey, sell, transfer mortgage or otherwise dispose of real or personal property$J %hat the City .reasurer fails to add is that every corporation organi=ed under the Corporation Code is so speci-cally empowered, under *ec$ 46(;) of the Corporation Code$ Again, whatever capacity the Corporation may have pursuant to its power to exercise acts of ownership over personal and real property is limited by its stated corporate purposes, which are by themselves further limited by the Condominium Act$ A condominium corporation, while en:oying such powers of ownership, is prohibited by law from transacting its properties for the purpose of gainful pro-t$ Accordingly, we hold that condominium corporations are generally exempt from local business taxation under the &'C, irrespective of any local ordinance that see+s to declare otherwise$ *till, we can note a possible exception to the rule$ #t is not unthin+able that the unit owners of a condominium would band together to engage in activities for pro-t under the shelter of the condominium corporation$ *uch activity would be prohibited under the Condominium Act, but if the fact is established, we see no reason why
the condominium corporation may be made liable by the local government unit for business taxes$ *till, the City .reasurer has not posited the claim that &epanto is engaged in business activities beyond the statutory purposes of a condominium corporation$ .he assessment is based solely on the &epantoLs collection of assessments from unit owners, such assessments being utili=ed to defray the necessary expenses for the Condominium Pro:ect and the common areas$ Oence, the assailed tax assessment has no basis under the &'C or the a+ati Revenue Code, and the insistence of the city in its collection of the void tax constitutes an attempt at deprivation of property without due process of law$ JARDINE DAIES INSRANCE !RO5ERS INC v. ALISPOSA Pursuant to Republic Act 3o$ ;61, otherwise +nown as the &ocal 'overnment Code of , the then *angguniang "ayan of a+ati enacted unicipal 0rdinance 3o$ 1;, otherwise +nown as the a+ati Revenue Code, which provides, inter alia, for the schedule of real estate, business and franchise taxes in the unicipality of a+ati at rates higher than those in the etro anila Revenue Code$
0n ay 1, 4, the Philippine Racing Club, #nc$ (IPRC#J for brevity), a taxpayer of a+ati,
appealed to the 7epartment of ustice (I70J for brevity) for the nulli-cation of said ordinance, alleging that it was approved without previous public hearings, in violation of the &ocal 'overnment Code and Article ;6 of its #mplementing Rules, and that some of the ordinanceLs provisions were unconstitutional () I.he inlieuofalltaxesL clause of the franchise of the Philippine Racing Club, #nc$ exempts it from payment of the real property tax, annual business tax and other new taxes imposed by the ordinance here in >uestion$ .o withdraw the exemption would impair the obligation of contract in violation of its constitutional right as franchise holder$ (4) I.he imposition of the franchise tax is not within the scope of the taxing powers of the unicipality of a+ati (*ections 42, 4; and 2 of Republic Act 3o$ ;61 and Articles 4, 6 and 4 of Rule SSS of the #mplementing Rules and Regulations of the &ocal 'overnment Code of )$ and (2) I.he unicipality of a+ati already shares ? of the ?! franchise tax provided for in *ection 5 of the franchise of the Philippine Racing Club, #nc$ .o allow the said municipality to impose another franchise tax and to base the tax on the gross annual receipts, as it does in the ordinance, would certainly be un:ust, excessive, oppressive or con-scatory (*ection
41 of Republic Act 3o$ ;61 and Article of Rule SSS of the #mplementing Rules and Regulations)$GH
(a) declaring null and void the 70 7ecision dated uly ?, 4Q and
Although re>uired by the 70 to comment on the appeal, respondent a+ati failed to do so$
(b) allowing the full implementation of a+ati unicipal 0rdinance 3o$ 1;$
0n uly ?, 4, the 70 came out with a resolutionGH declaring Inull and void and without legal e
Petitioners pray for such further or other reliefs as this Oonorable Court may deem :ust and e>uitable$G?H
0n August , 4, respondent a+ati sought a reconsideration of the ruling of the 70$ Pending resolution of its motion, said respondent -led a petition ad cautelamG2H with the Regional .rial Court (R.C) of a+ati, entitled Oon$ e:omar C$ "inay and the unicipality of a+ati, Petitioners, v$ Oon$ /ran+lin $ 7rilon, 7epartment of ustice and Philippine Racing Club, #nc$, Respondents, and doc+eted as Case 3o$ 4522$ .he case was raTed to "ranch 25 of the a+ati R.C$ Respondent a+ati alleged, inter alia, that public hearings were conducted before the approval of the ordinance and hence the ordinance was valid$ #t prayed that after due proceedings :udgment be rendered in its favor, thus %OERE/0RE, petitioners respectfully pray that this Oonorable Court promulgate :udgment
#n the meantime, respondent a+ati continued to implement the ordinance$ Petitioner ardine 7avies #nsurance "ro+ers, #nc$, a dulyorgani=ed corporation with principal place of business at 3o$ *en$ 'il $ Puyat Avenue, a+ati, etro anila, was assessed and billed by a+ati the amount of P64,5$2; for taxes, fees and charges under the ordinance for the second >uarter of 4$ #t was again billed by respondent a+ati the same amount for the third >uarter of 4 and the same amount for the fourth >uarter of 4$ Petitioner did not protest the assessment for its >uarterly business taxes for the second, third and fourth >uarters of 4 based on said ordinance euarter), uly , 4 (for the third >uarter) and 0ctober , 4 (for the fourth >uarter), respectively, without any protest$ Respondent a+ati issued the corresponding receipts in favor of petitioner$G6H
0n anuary 41, 2, petitioner wrote the municipal treasurer of a+ati re>uesting that respondent a+ati compute its business tax liabilities in accordance with the etro anila Revenue Code and not under the ordinance considering that said ordinance was already declared by the 70 null and void$ Petitioner li+ewise re>uested that respondent a+ati credit the overpayment in the total amount of P;,5?2$ for the second to fourth >uarters of 4 against its 2 liabilities for 2, or in the alternative, for a+ati to refund the said amount to petitioner$ #n a &etterG;H dated /ebruary 2, 2, respondent a+ati, through aximo &$ Paulino r$, Acting Chief of its unicipal &icense 7ivision, denied the re>uest of petitioner for tax credit9refund$ Respondent a+ati insisted that the >uestioned ordinance code was valid and enforceable pending the -nal outcome of its petition ad cautelam with the Regional .rial Court of a+ati$ #n the meantime, on 0ctober 6, 4, the R.C rendered :udgment in Case 3o$ 4522 granting the petition of a+ati and declaring the ordinance valid$ 0n 3ovember , 4, the 70 issued a memorandum to the Chief *tate Counsel directing the latter to refrain from accepting any appeal or to act on pending appeals on the validity9constitutionality of the
ordinance until the same shall have been -nally resolved by courts of competent :urisdiction$ %hen informed of the denial by respondent a+ati of its letterre>uest, petitioner -led a complaint on arch ;, 2 with the R.C of a+ati against respondents a+ati and its Acting unicipal .reasurer$ .he case was raTed to "ranch ?1 of said court$ Petitioner alleged in its complaint that in view of the resolution of the 70 declaring the a+ati Revenue Code Inull and void and without legal euarters for 4 beginning on April 2, 4 up to 0ctober 2, 2 at rates -xed in the ordinance despite the nullity thereof$ Petitioner prayed that after due proceedings :udgment be rendered as follows $ 7eclaring as 38&& A37 0#7 unicipal 0rdinance 3o$ 1;, (a+ati Revenue Code) of the unicipality of a+ati and ordering 7efendants to refund or issue as tax credit in favor of Plainti< the sum of P;,5?2$ plus interest$ $ Assuming without admitting that the unicipal 0rdinance 3o$ 1; (a+ati Revenue Code) is valid, declaring that the rates imposed by said ordinance accrue only on uly
, 4 and ordering 7efendants to refund or issue as tax credit in favor of Plainti< the sum of P,52$;$G5H 0n ay 5, 2, respondents a+ati and its Acting unicipal .reasurer -led a motion to dismissGH the complaint on the ground of prematurity$ .hey argued that petitionerLs cause of action was predicated on the appealed resolution of the 70, and unless and until nulli-ed by -nal :udgment of a competent court, the ordinance remained in full force and euarter following the euarter following next the e
0n August , 2, the R.C issued an order granting the motion to dismiss of respondent and ordering the dismissal of the complaint$ .he trial court ruled that plaintiuired by *ection ? of the &ocal 'overnment Code$ Oence, petitioner was barred from demanding a refund of its payment or that it be credited for said amounts$ Petitioner received a copy of said order on 0ctober ;, 2$ 0n 0ctober 4, 2, petitioner -led with the trial court a motion for reconsiderationG1H of the order of dismissal, arguing that the trial court erred in applying *ection ? of the &ocal 'overnment Code of as its complaint did not involve an assessment for de-ciency taxes but one for refund9tax credit$ Petitioner further claimed that it was never served with any notice of assessment from respondents and hence there was no need for petitioner to protest$ Petitioner argued that what was applicable was *ection 6 of the &ocal 'overnment Code in con:unction with Article 56 of its #mplementing Rules and Regulations, both of which simply re>uire the -ling of a written claim for refund or
tax credit within two years from the date of payment$ 0n 7ecember 5, 2, the trial court issued an orderGH denying the motion for reconsideration of petitioner, a copy of which was served on petitioner on /ebruary 4, ?$ .he trial court declared that *ection ? of the &ocal 'overnment Code covers all +inds of assessments and not merely de-ciency assessments for taxes, fees or charges$ .he trial court further ruled that the issue of the validity and constitutionality of the ordinance was still pending resolution by "ranch 25 of the R.C in Civil Case 3o$ 4522 and until declared null and void, otherwise by -nal :udgment, the ordinance remained valid$ Petitioner -led on /ebruary 1, ? a petition for review on certiorari under Rule 2? of the Rules of Court, contending that RE*P037E3. 87'E ERRE7 #3 O0&7#3' .OA. .OE #3*.A3. CA*E #* 30. A C&A# /0R RE/837 837ER *EC.#03 6 0/ .OE &'C #3 RE&A.#03 .0 AR.#C&E 56 0/ #.* #P&EE3.#3' R8&E*, "8. A 7E/#C#E3CD A**E**E3. .OA. OA* .0 "E PR0.E*.E7 837ER *EC.#03 ? 0/ .OE *AE C07E$ RE*P037E3. 87'E ERRE7 #3 7#*#**#3' .OE CA*E 03 .OE 'R0837 0/ PE37E3CD 0/ A30.OER AC.#03 C03.E*.#3' .OE &E'A&#.D
0R C03*.#.8.#03A&#.D 0/ .OE AUA.# REE38E C07E #* *.#&& "E#3' 7E.ER#3E7 #3 "RA3CO 25 0/ .OE RE'#03A& .R#A& C08R. 0/ AUA.#$GH Anent the -rst assignment of errors, petitioner avers that its action in the R.C was one for a refund of its overpayments governed by Article 6 of the &ocal 'overnment Code implemented by Article 56 of the #mplementing Rules and Regulations of the Code and not one involving an assessment for de-ciency taxes governed by *ection ? of the said Code$ Petitioner contends that it was not mandated to -rst -le a protest with respondents before instituting its action for a refund of its overpayments or for it to be credited for said overpayments$ /or its part, respondent a+ati avers that petitioner was proscribed from -ling its complaint with the R.C and for a refund of its alleged overpayment, petitioner having paid without any protest the taxes due to respondent a+ati under the ordinance$ #t is further asserted by respondent a+ati that until declared null and void by a competent court, the ordinance was valid and should be enforced$ .he petition has no merit$ .he Court agrees with petitioner that as a general precept, a taxpayer may -le a complaint assailing the validity of the ordinance and praying for a refund of its perceived
overpayments without -rst -ling a protest to the payment of taxes due under the ordinance$ .his was our ruling in .y v$ udge .rampeG4H $ $ $ Oence, if a taxpayer disputes the reasonableness of an increase in a real estate tax assessment, he is re>uired to I-rst pay the taxJ under protest$ 0therwise, the city or municipal treasurer will not act on his protest$ #n the case at bench, however, the petitioners are >uestioning the very authority and power of the assessor, acting solely and independently, to impose the assessment and of the treasurer to collect the tax$ .hese are not >uestions merely of amounts of the increase in the tax but attac+s on the very validity of any increase$ #n this case, petitioner, relying on the resolution of the *ecretary of ustice in .he Philippine Racing Club, #nc$ v$ unicipality of a+ati case, posited in its complaint that the ordinance which was the basis of respondent a+ati for the collection of taxes from petitioner was null and void$ Oowever, the Court agrees with the contention of respondents that petitioner was proscribed from -ling its complaint with the R.C of a+ati for the reason that petitioner failed to appeal to the *ecretary of ustice within 41 days from the e
*ec$ 5;Procedure for Approval and Euestion on the constitutionality or legality of tax ordinances or revenue measures may be raised on appeal within thirty (41) days from the euisite appeal to the *ecretary of ustice is fatal to its complaint for a refund Clearly, the law re>uires that the dissatis-ed taxpayer who >uestions the validity or legality of a tax ordinance must -le his appeal to the
*ecretary of ustice, within 41 days from euisite before see+ing redress in a competent court$ *uch statutory periods are set to prevent delays as well as enhance the orderly and speedy discharge of :udicial functions$ /or this reason the courts construe these provisions of statutes as mandatory$ A municipal tax ordinance empowers a local government unit to impose taxes$ .he power to tax is the most euently, any delay in implementing tax measures would be to the detriment of the public$ #t is for this reason that protests over tax ordinances are re>uired to be done within certain time frames$ #n the instant case, it is our view that the failure of petitioners to appeal to the *ecretary of ustice within 41 days as re>uired by *ec$ 5; of R$A$ ;61 is fatal to their cause$
oreover, petitioner even paid without any protest the amounts of taxes assessed by respondents a+ati and Acting .reasurer as provided for in the ordinance$ Evidently, the complaint of petitioner with the Regional .rial Court was merely an afterthought$ #n view of our foregoing dis>uisitions, the Court no longer deems it necessary to resolve other issues posed by petitioner$ #3 &#'O. 0/ A&& .OE /0RE'0#3', the petition is 7E3#E7$ .he order of the Regional .rial Court dismissing the complaint of petitioner is A//#RE7$ *0 0R7ERE7$ "ellosillo, (Chairman), endo=a, Vuisumbing and Austriaartine=, $, concur$ SAN JAN vs CASTRO G.R. No. 1$461$ De'e7e 2$, 200$ %ACTS) Petitioner, registered owners of real properties in ari+ina City, with consent of his wife, conveyed bydeed of assignment, the properties to the *aints and Angels Realty Corp$ (*ARC), by virtue of incorporations, inexchange for shares of stoc+ therein with a par value of P,111,111$1, placed in *an uan s name and theremaining par value in the name of his wife$ Respondents representatives went to the City
.reasurers 0Kce of ari+ina to pay the transfer tax based on the consideration stated in the deed of assignment$ City .reasurerCastro informed him however that the tax due is based on the fair mar+et value of the property$Petitioner protested the basis of the tax due$ .o which, the respondent replied stating that in cases of transfer or real property not involving monetary consideration, it is certain that the fair mar+et value or the =onal value of the property is the basis of the tax rate$Petitioner -led before the R.C of ari+ina a petition for mandamus and damages against respondent in hiscapacity as City .reasurer, among others, praying that respondent be compelled to Wperform a ministerial duty toaccept payment of transfer tax based on the actual consideration of the transfer and assignment, citing *ection4? of the &'C$ ISSE) %hen can a protest of assessment be availed ofM RLING) 8nder *ection ? of the &ocal 'overnment Code, a taxpayer who disagrees with a tax assessmentmade by a local treasurer may -le a written protest thereof SECTION 19#. Po(es( o8 Assessen( $ %hen the local treasurer or his duly authori=ed representative -nds thatthe correct taxes, fees, or charges have not been paid, he shall issue a notice of assessment stating the nature of the tax, fee, or charge, the amount of
de-ciency, the surcharges, interests and penalties$ %ithin sixty (61) daysfrom the receipt of the notice of assessment, the taxpayer may -le a written protest with the local treasurercontesting the assessmentQ otherwise, the assessment shall become -nal and executory$ .he local treasurer shalldecide the protest within sixty (61) days from the time of its -ling$ #f the local treasurer -nds the protest to bewholly or partly meritorious, he shall issue a notice cancelling wholly or partially the assessment$ Oowever, if thelocal treasurer -nds the assessment to be wholly or partly correct, he shall deny the protest wholly or partly withnotice to the taxpayer$ .he taxpayer shall have thirty (41) days from the receipt of the denial of the protest orfrom the lapse of the sixtyday (61) period prescribed herein within which to appeal with the court of competent :urisdiction, otherwise the assessment becomes conclusive and unappealable$ .hat petitioner protested in writing against the assessment of tax due and the basis thereof is on record as in fact it was on that account that respondent sent him the above>uoted uly ?, 11? letter which operated as a denialof petitioners written protest$ Petitioner should thus have, following the earlier above>uoted *ection ? of the &ocal 'overnment Code,either appealed the assessment before the court of competent :urisdictionG?H or paid the tax and then sought arefund$
Petitioner did not observe any of these remedies available to him, however$ Oe instead opted to -le a petitionfor mandamus to compel respondent to accept payment of transfer tax as computed by him$ Te& P&'+' Coo&(+on v. D&:& G.R. No. 16$$32. Ju*; 11, 2012.Se'on< D+v+s+on= Pee:, $ /acts .eam Paci-c Corporation (.PC), a domestic corporation engaged in the business of assembling and exporting semiconductor devices, conducts its business at the /.# Complex in the then unicipality of .aguig$ #t appears that since the start of its operations in , .PC had beenpaying local business taxes assessed at 9 rate pursuant to *ection ;? (c) of the .aguig RevenueCode (.RC)$ %hen it renewed its business license in 112, however, .PCLs business tax for the -rst >uarter of the same year was computed by osephine 7a=a, in her capacity as then unicipal .reasurer of .aguig, by applying the full value of the rates provided under *ection ;? of the .RC,instead of the 9 rate provided under paragraph (c) because, according to her, *ection ;? (c) of the .RC applies only to exporters of essential commodities B
e$g$, () rice and cornQ () wheat or cassavaNour, meat, dairy products, locally manufactured, processed or preserved food, sugar, salt and otheragricultural, marine, and fresh water products, whether in their original state or notQ (4) coo+ing oiland coo+ing gasQ (2) laundry soap, detergents, and medicineQ (?) agricultural implements, e>uipmentand post harvest facilities, fertili=ers, pesticides, insecticides, herbicides and other farm inputsQ (6)poultry feeds and other animal feedsQ (;) school suppliesQ and (5) cement$ Constrained to pay the assessed business tax on anuary , 112 in view of its being a precondition for the renewal of its business permit, .PC -led on the same day a written protest with 7a=a, insisting on the 9 rate on which its business tax was previously assessed$ *ubse>uent to its demand for the refund and9or issuance of a tax credit for the sum of P12,1?2$55 which it considered as an overpayment of its business taxes for the same year, .PC -led s Rule 6? petitionfor certiorari before a Regional .rial Court (R.C)$ #ssue %hether or not .PC availed of the correct remedy against 7a=aLs illegal assessment when it -led its petition for certiorari before the R.CM Oeld 3o$ .he rule is settled that, as a special civil action, certiorari is available only if the following essential re>uisites concur () it must be directed against a tribunal, board, or oKcer
exercising :udicial or >uasi:udicial functionsQ () the tribunal, board, or oKcer must have acted without or inexcess of :urisdiction or with grave abuse of discretion amounting to lac+ or excess of :urisdictionQand, (4) there is no appeal nor any plain, speedy, and ade>uate remedy in the ordinary course of law$ udicial function entails the power to determine what the law is and what the legal rights of theparties are, and then underta+es to determine these >uestions and ad:udicate upon the rights of theparties$ Vuasi :udicial function, on the other hand, refers to the action and discretion of publicadministrative oKcers or bodies, which are re>uired to investigate facts or ascertain the existence of facts, hold hearings, and draw conclusions from them as a basis for their oKcial action and toexercise discretion of a :udicial nature$'auged from the foregoing de-nitions, 7a=a cannot be said to be performing a :udicial or>uasi :udicial function in assessing .PCLs business tax and9or euasi:udicial functions acted without or in grave abuse of discretionamounting to lac+ or excess of :urisdiction and there is no appeal or any plain, speedy, and ade>uateremedy in law$ 3arrow in scope and inNexible in character,
certiorari is an extraordinary remedy designed for the correction of errors of :urisdiction and not errors of :udgment$ #t is li+ewiseconsidered mutually exclusive with appeal li+e the one provided by Article ? of the &ocal'overnment Code for a local treasurerLs denial of or inaction on a protest$ 2n< +ssue whether or not, as an exporter of semiconductor devices, it should be assessed business taxes at the full rate instead of the onehalf (9) rates provided under *ection ;? (c) of the .aguig Revenue Code and 24 (c) of the &ocal 'overnment Code$ "ELD) A taxpayer dissatis-ed with a local treasurerLs denial of or inaction on his protest over an assessment has thirty (41) days within which to appeal to the court of competent :urisdiction$ 8nder the law, said period is to be rec+oned from the taxpayerLs receipt of the denial of his protest or the lapse of the sixty (61) day period within which the local treasurer is re>uired to 7ecide the protest, from the moment of its -ling$ .his much is clear from *ection ? of the &ocal 'overnment Code Absent any showing of the formal denial of the protest by Atty$ iranda, then Chief of the .aguig "usiness Permit and &icensing 0Kce, we -nd that .PCLs -ling of its petition before the R.C on April 112 still timely$ Rec+oned from the -ling of the letter protest on anuary 112, 7a=a had sixty (61) days or until
arch 112 within which to resolve the same in view of the fact that 112 was a leap year$ /rom the lapse of said period, .PC, in turn, had thirty (41) days or until 5 arch 112 within which to -le its appeal to the R.C$ *ince the latter date fell on a *unday, the R.C correctly ruled that .PCLs -ling of its petition on April 112 was still within the period prescribed under the above >uoted provision$ G.R. No. 111223
information regarding the presence of allegedly untaxed vehicles and parts in the premises owned by a certain Pat Oao located along Vuirino Avenue, Parana>ue and Oonduras *t$, a+ati$ After conducting a surveillance of the two places, respondent a:or aime aglipon, Chief of 0perations and #ntelligence of the E**, recommended the issuance of warrants of sei=ure and detention against the articles stored in the premises$
O'(o7e 6, 199#
NARCISO O. JAO &n< !ERNARDO . EPEYNADO, e(+(+ones, vs. T"E "ONORA!LE O!DSAN CONRADO . AS>E-, &n< SINDL%O SE!ASTIAN, JAIE AGLIPON= JOSE YC"ONGCO= RICARDO CORONADO= ICTOR !ARROS= DENNIS !ANTIGE= ROY LARA= !ENJAIN SANTOS= RODOL%O GONDA= ADONIS REJOSO= DANIEL PENAS= NICANOR !ONES= A!NDIO JAOY= ARTEIO CASTILLO= ANDRESITO A!AYON= R!EN TAG!A= JAIE JAIER= "ER!ERT DOLLANO, &** ?+(@ (@e !ue&u o8 Cus(os= JOY GTIERREo8 (@e &&(+ o*+'e, &n< BJO"N DOESB, eson
/AC.* 0Kce of the 7irector, Enforcement and *ecurity *ervices (E**), "ureau of Customs, received
0n August 4, 1, 7istrict Collector of Customs .itus illanueva issued the warrants of sei=ure and detention$ 0n the same date, respondent aglipon coordinated with the local police substations to assist them in the execution of the respective warrants of sei=ure and detention$ .hereafter, the team searched the two premises$ #n a+ati, they were barred from entering the place, but some members of the team were able to force themselves inside$ .hey were able to inspect the premises and noted that some articles were present which were not included in the list contained in the warrant$$ Oence, on August ?, 1, amended warrants of sei=ure and detention were issued by illanueva$ 0n August ?, 1, customs personnel started hauling the articles pursuant to the amended warrants$ .his prompted petitioners 3arciso ao
and "ernardo Empeynado to -le a case for #n:unction and 7amages, doc+eted as Civil Case 3o$ 145 with prayer for Restraining 0rder and Preliminary #n:unction before the Regional .rial Court of a+ati "ranch ?6 on August ;, 1 against respondents$ 0n the same date, the trial court issued a .emporary Restraining 0rder$ 0n *eptember ;, 1, respondents -led a otion to 7ismiss on the ground that the Regional .rial Court has no :urisdiction over the sub:ect matter of the complaint, claiming that it was the "ureau of Customs that had exclusive :urisdiction over it$ 0n 3ovember 1, 1, the trial court denied respondentsX motion to dismiss$ 0n 3ovember , 1, petitionersX application for preliminary prohibitory and mandatory in:unction was granted conditioned upon the -ling of a one million peso bond$ .he Court also prohibited respondents from sei=ing, detaining, transporting and selling at public auction petitionersX vehicles, spare parts, accessories and other properties located at 3o$ 664 Oonduras *t$, *an #sidro, a+ati and at 3o$ 21 Vuirino Avenue, .ambo, Parana>ue, etro anila$ Respondents were further prohibited from disturbing petitionersX constitutional and proprietary rights over their properties located
at the aforesaid premises$ &astly, respondents were ordered to return the sei=ed items and to render an accounting and inventory thereof$ 0n 7ecember 4, 1, respondents -led a motion for reconsideration based on the following grounds a) the lower court having no :urisdiction over the sub:ect matter of the complaint, it has no recourse but to dismiss the sameQ and (b) the lower court had no legal authority to issue an in:unction therein$ 0n anuary 4, the motion for reconsideration was denied$ Respondents then went to the Court of Appeals on the ground that the :udge acted with grave abuse of discretion in denying their motion to dismiss and in granting petitionersX application for preliminary in:unction$ .hey argued that the Regional .rial Court had no :urisdiction over sei=ure and forfeiture proceedings, such :urisdiction being exclusively vested in the "ureau of Customs$ .he Court of Appeals set aside the >uestioned orders of the trial court and en:oined it from further proceeding with Civil Case 3o$ 145$ .he appellate court also dismissed the said civil case$
0n ay , , petitioners -led a petition with this Court to review the decision of the Court of Appeals doc+eted as '$R$ 3o$ 12612$
purpose of searching smuggled goods found therein without the consent of the owner thereofQ
As regards '$R$ 3o$ 4, petitioners -led criminal charges against respondents, other oKcers and employees of the "ureau of Customs and members of the a+ati Police before the 0Kce of the 0mbudsman for Robbery, iolation of 7omicile and iolation of Republic Act 3o$ 41, doc+eted as 0" Case 3o$ 111;$
.hat after the search, respondents on August 4, 1 up to August ?, 1, this time clothed with a %arrant of *ei=ure and 7etention, with the aid of the a+ati Police and several heavily armed men entered complainants stoc+yard located at 664 Oonduras *t$, a+ati, etro anila, and pulled out therefrom several machineries and truc+ spare parts without issuing the corresponding receipts to the complainants to cover all the items ta+en$
Respondent 0mbudsman summari=ed the case before it as follows .his is an aKdavitcomplaint -led by the complainants against the respondents, 0Kcers and Employees of the "ureau of Customs and members of the a+ati Police allegedly for violation of 7omicile and Robbery de-ned and penali=ed under Articles 5, 4 and 2 of the Revised Penal Code and for violation of R$A$ 41 committed as follows, to wit .hat on August , 1, after receiving intelligence information of the presence of smuggled goods, some of the respondents headed by aime aglipon posed themselves as eralco inspectors and entered complainantsX stoc+yards and residence located at 664 Oonduras *treet, a+ati, etro anila and at 21 Vuirino Avenue, .ambo Parana>ue for the
Respondents claimed in their consolidated and veri-ed comment that they are not liable for violation of domicile because the places entered and searched by them appear not to be the residences of the complainants but only their warehouses$ As proof of this allegation, the respondents presented the pictures of said warehouses, which are attached to their comment as Annexes Y6Y, Y6AY to Y6CY and the *heri
/urther respondents also claimed not liable for robbery (sic) because the complainants appear not to be the owners of the properties ta+en$ oreover, the respondents claimed that the ta+ing is lawful because the same proceeded from a warrant of *ei=ures and 7etentionQ there was no violence or intimidation of person committed and that there was no intent to gain on the part of the respondents, the purpose of the sei=ure of the sub:ect goods being to collect customs duties and taxes due the government$ &astly, the respondents disclaimed liability for a violation of R$A$ 41 because they deny having demanded from the complainants the sum of P11,111$11$ #nstead according to the respondents, it was the complainants who oui$ A preliminary investigation was conducted and on ay 4, , another hearing was held to give the parties a chance to submit further evidence to support their respective claims$ 0n arch ?, 4 respondent 0mbudsman issued a Resolution recommending that the case be dismissed for lac+ of merit$
0n ay ;, 4, petitioners moved for the reconsideration of said resolution, but the same was denied on uly 5, 4$ Oence, the petition in '$R$ 3o$ 4, which was -led on August 6, 4$ #n '$R$ 3o$ 4, petitioners claim that respondent 0mbudsman gravely abused his discretion in dismissing the case and in denying petitionersX motion for reconsideration$ .hey allege that respondent 0mbudsman ignored evidence incriminatory to the raidersQ that the receipts did not tally with petitionersX receipts nor with the Commission on AuditXs inventoryQ that the respondents are guilty of robbery and of violating petitionersX constitutional right against violation of domicile$ /or these reasons, petitioners pray that the 0mbudsmanXs resolution be reversed and that the Court direct the 0mbudsman to cause the -ling of criminal charges as may be warranted against respondents$ %e -nd the petition in '$R$ 3o$ 4 devoid of merit$ .he Court, recogni=ing the investigatory and prosecutory powers granted by the Constitution to the 0Kce of the 0mbudsman and for reasons of practicality, declared, in an En "anc resolution dated August 41, 4, issued in '$R$
3os$ 142262; 4 that the Court will not interfere nor pass upon -ndings of public respondent 0mbudsman to avoid its being hampered by innumerable petitions assailing the dismissal of investigatory proceedings conducted by the 0Kce of the 0mbudsman with regard to complaints -led before it, and that it will not review the exercise of discretion on the part of the -scals or prosecuting attorneys each time they decide to -le an information in court or dismiss a complaint by a private complainant$ .he dismissal by the 0mbudsman of petitionersX complaint, therefore, stands$
.here is no >uestion that Regional .rial Courts are devoid of any competence to pass upon the validity or regularity of sei=ure and forfeiture proceedings conducted by the "ureau of Customs and to en:oin or otherwise interfere with these proceedings 2 .he Collector of Customs sitting in sei=ure and forfeiture proceedings has exclusive :urisdiction to hear and determine all >uestions touching on the sei=ure and forfeiture of dutiable goods$ .he Regional .rial Courts are precluded from assuming cogni=ance over such matters even through petitions of certiorari, prohibition or mandamus$ ?
%e will now discuss '$R$ 3o$ 12612$ Petitioners contend () that the Court of Appeals erred in not holding that the Collector of Customs could no longer order the sei=ure for the second time of items previously sei=ed and released after amnesty payments of duties and taxesQ () that the "ureau of Customs has lost :urisdiction to order the sei=ure of the items because the importation had ceasedQ (4) that the sei=ure of the items deprived the petitioners of their properties without due process of lawQ and (2) that there is no need to exhaust administrative remedies$ "ELD) CORT RLED IN %AOR O% RESPONDENTS %e -nd no merit in petitionersX contentions$
#t is li+ewise wellsettled that the provisions of the .ari< and Customs Code and that of Republic Act 3o$ ?, as amended, otherwise +nown as YAn Act Creating the Court of .ax Appeals,Y specify the proper fora and procedure for the ventilation of any legal ob:ections or issues raised concerning these proceedings$ .hus, actions of the Collector of Customs are appealable to the Commissioner of Customs, whose decision, in turn, is sub:ect to the exclusive appellate :urisdiction of the Court of .ax Appeals and from there to the Court of Appeals$ .he rule that Regional .rial Courts have no review powers over such proceedings is anchored upon the policy of placing no unnecessary hindrance on the governmentXs
drive, not only to prevent smuggling and other frauds upon Customs, but more importantly, to render e
.he allegations of petitioners regarding the propriety of the sei=ure should properly be ventilated before the Collector of Customs$ %e have had occasion to declare .he Collector of Customs when sitting in forfeiture proceedings constitutes a tribunal expressly vested by law with :urisdiction to hear and determine the sub:ect matter of such proceedings without any interference from the Court of /irst #nstance$ (Auyong Oian v$ Court of .ax Appeals, et al$, *CRA 1)$ .he Collector of Customs of *ual7agupan in *ei=ure #denti-cation 3o$ 2/; constituted itself as a tribunal to hear and determine among other things, the >uestion of whether or not the 9 &uc+y *tar # was sei=ed within the territorial waters of the Philippines$ #f the private respondents believe that the sei=ure was made outside the territorial :urisdiction of the Philippines, it should raise the same as a defense before the Collector of Customs and if not satis-ed, follow the correct appellate procedures$ A separate action before the Court of /irst #nstance is not the remedy$ 5 %OERE/0RE, the petitions in '$R$ 3o$ 12612 and in '$R$ 3o$ 4 are hereby 7#*#**E7 for lac+ of merit$ *0 0R7ERE7$
/eliciano, Padilla, Regalado, 7avide, r$, "ellosillo, Puno, itug, Uapunan, endo=a, /rancisco and Oermosisima, r$, $, concur$ S!A v. RODRIGE- ET. AL S"ORT DIGEST) /AC.* 0n *eptember , 11, a shipment described as Iagricultural productJ arrived at *ubic "ay /reeport Zone$ .he "0C issued a emorandum stating that upon examination the shipment was found to contain rice$ .he representative of the importer then stated that there was a ImisshipmentJ and manifested willingness to pay appropriate duties and taxes$ &ater on, the "0C then issued a Oold 0rder$ 7espite several certi-cations for its clearance, Petitioner *"A refused to allow the release of the rice shipment$ Oence, the respondent importers -led with R.C 0longapo a complaint for #n:unction and 7amages against *"A$
#**8E 7id the R.C have :urisdiction over the caseM OE&7 30$ .he Collector of Customs has exclusive :urisdiction over sei=ure and forfeiture proceedings and the regular courts cannot interfere nor can it en:oin these proceedings$ .his is the rule from the moment the imported goods are in the possession or control of the Customs authorities even if no warrant for sei=ure or detention had previously been issued$
.he actions of the "0C are then only appealed to the C.A$ .he Court also said that this rule, which is anchored upon the policy of placing no unnecessary hindrance on the governmentLs drive to prevent smuggling and fraud a nd to collect correct duties, is absolute$ DETAILED DIGEST) %ACTS) $ A cargo shipment described as Iagricultural productJ and valued at 8*[6,111 arrived at the Port of *ubic$ 0n the basis of its declared value, the shipment was assessed customs duties and taxes totaling P?;,1 which were paid by respondent %#RA, the shipmentLs consignee$ $ "0C *ubic Port later on issued a emorandum addressed to the "0C *ubic Port 7istrict Collector, stating that upon examination, the sub:ect shipment was found to contain rice$ 4$ .he emorandum further stated as follows that the importer claimed there was a misshipment since it also had a pending order for riceQ that the Iwarehousing entryJ was amended to reNect the change in description from Iagricultural productJ to riceQ that the shipment, as a warehoused cargo inside the freeport =one, was duty and tax free, and was not recommended for any imposition of penalty and surchargeQ that the consumption entry was changed to reNect a shipment of riceQ and that the consumption
entry, together with supporting documents belatedly received by the importer, was submitted to the ban+ although not yet -led with the "0C$ 2$ Oilda "acani (respondentsL authori=ed representative) wrote "0C *ubic Port 7istrict Collector "illy "ibit, claiming that she was the representative of etro *tar Rice ill (etro *tar), the importer of the sub:ect cargo$ *he stated that there was a ImisshipmentJ of cargo which actually contained rice, and that etro *tar is an authori=ed importer of rice as provided in the permits issued by the 3ational /ood Authority (3/A)$ "acani re>uested that the ImisshipmentJ be upgraded from Iagricultural productJ to a shipment of rice, and at the same time manifested willingness to pay the appropriate duties and taxes$ ?$ .he following day, the "0C issued Oold directing "0C *ubic Port oKcers to () hold the delivery of the shipment, and () to cause its transfer to the security warehouse$ 6$ Respondent %#RA, as the consignee of the shipment, paid the amount of P?,5;2 to the "0C representing additional duties and taxes for the upgraded shipment$ ;$ "0C Commissioner .itus illanueva issued a directive stating as follows A''o<+n*;, (@e s&e &; 7e e*e&se< su7e'( (o &;en( o8
1#3.00FT &n< 'o*+&n'e ?+(@ &** e+s(+n u*es &n< eu*&(+ons. 5$ #n accordance with the shipment upgrade, respondent %#RA paid a further amount of P16, as customs duties and taxes$ $ "0C *ubic Port issued a certi-cation9letter addressed to r$ Augusto Canlas, 'eneral anager of the *eaport 7epartment, stating that the Collecting 0Kcer validated a revenue of Php ?4,5;$11 from above mentioned importation$ An< & G&(e P&ss ?&s +ssue< ?+(@ s+n&(ue o8 . Pe'+(o . Lo:&<&, C@+e8 Assessen( +n 7e@&*8 o8 (@e D+s(+'( Co**e'(o !+**; C. !+7+($ 1$ 7espite the above certi-cation9letter, petitioner *"A refused to allow the release of the rice shipment$ $ Oence, respondents -led with the R.C 0longapo a complaint for #n:unction and 7amages with prayer for issuance of %rit of Preliminary Prohibitory and andatory #n:unction and9or .emporary Restraining 0rder against petitioner *"A and Augusto &$ Canlas$ RTC) 0rder was issued by the Executive udge where granted plainti
Uatalbas, in the oKce of defendant9respondent Canlas, who after much discussion, refused to honor the .R0 issued by "ranch ; alleging among otherGsH, that said 0rder was illegal$ 0n the same day also, plainti
$ As a rule, actions for in:unction and damages
lie within the :urisdiction of the R.C pursuant to *ection of "P $ $ An action for in:unction is a suit which has for its purpose the en:oinment of the defendant, perpetually or for a particular time, from the commission or continuance of a speci-c act, or his compulsion to continue performance of a particular act$ #t has an independent existence, and is distinct from the ancillary remedy of preliminary in:unction which cannot exist except only as a part or an incident of an independent action or proceeding$ #n an action for in:unction, the auxiliary remedy of preliminary in:unction, prohibitory or mandatory, may issue$ 4$ 8ntil the propriety of granting an in:unction, temporary or perpetual, is determined, the court (i$e$, the R.C in this case) may issue a temporary restraining order$ A .R0 is an interlocutory order or writ issued by the court as a restraint on the defendant until the propriety of granting an in:unction can be determined, thus going no further in its operation than to preserve the status >uo until that determination$ A .R0 is not intended to operate as an in:unction pendente lite, and should not in e
pursuant to *ection 61 of Republic Act 3o$ 4;, otherwise +nown as the I.ari< and Customs Code of the PhilippinesJ$ Petitioner contends that the imported ,111 bags of rice were in the actual physical control and possession of the "0C as early as ? 0ctober 11, by virtue of the "0C *ubic Port Oold 0rder of even date, and of the "0C %arrant of *ei=ure and 7etention dated ay 11$ As such, the "0C had ac>uired exclusive original :urisdiction over the sub:ect shipment, to the exclusion of the R.C$ a$ %e agree with petitioner$ b$ #t is well settled that the Co**e'(o o8 Cus(os @&s e'*us+ve u+s<+'(+on ove se+:ue &n< 8o8e+(ue o'ee<+ngs, and regular courts cannot interfere with his exercise thereof or stiNe or put it at naught$ .he Collector of Customs sitting in sei=ure and forfeiture proceedings has exclusive :urisdiction to hear and determine all >uestions touching on the sei=ure and forfeiture of dutiable goods$ #. .he rule is that 8o (@e oen( +o(e< oo
+o(e< oouently, on 2 7ecember 11, the 0KcerinCharge of the "0C *ubic Port Cash 7ivision issued a certi-cation9letter addressed to Augusto Canlas, the 'eneral anager of the *ubic *eaport 7epartment, stating that respondents have already paid the customs taxes and duties due on the shipment, and Ia 'ate Pass was issued on 7ecember 4, 11 with signature of r$ Percito $ &o=ada, Chief Assessment (sic) in behalf of the 7istrict Collector "illy C$ "ibit$JG4?H .hus, the Oold 0rder previously issued by the "0CG46H had been superseded, and made ineuently issued a %arrant of *ei=ure and 7etention dated ay 11 against the sub:ect rice
shipment$ .he warrant was issued upon recommendation made by Atty$ "alta=ar orales of the Customs #ntelligence and #nvestigation *ervice (C##*) on April 11$ G4;H ;$ %ith the issuance of the warrant of sei=ure and detention, exclusive :urisdiction over the sub:ect shipment was regained by the "0C$ 5$ %e note that the appellate court found suspicious the existence of the warrant of sei=ure and detention at the time of -ling of the in:unction and damages case with the R.C by respondents$ .he CA pointed out that petitioner did not mention the existence of the warrant in its Answer and only mentioned the warrant in its Consolidated otion to 7ismiss Gthe Complaint for #n:unction and 7amages, and the Petition for #ndirect ContemptH, -led on August 11$ $ %e do not agree with the appellate court$ PetitionerXs apparent neglect to mention the warrant of sei=ure and detention in its Answer is insuKcient to cast doubt on the existence of said warrant$ RE #37#REC. C03.EP. 1$ Respondents -led a case for indirect contempt against Augusto &$ Canlas, Atty$ /rancisco A$ Abella, r$, and Atty$ Ri=al $ Uatalbas, r$ for allegedly defying the .R0 issued by the R.C in connection with the complaint for in:unction and damages previously -led by respondents$
$ Contempt constitutes disobedience to the court by setting up an opposition to its authority, :ustice and dignity$ .here are two +inds of contempt punishable by law direct contempt and indirect contempt$ $ %hen the .R0 issued by the R.C was served upon the *"A oKcers on 4 une 11, there was already an existing warrant of sei=ure and detention (dated ay 11) issued by the "0C against the sub:ect rice shipment$ .hus, as far as the *"A oKcers were concerned, exclusive :urisdiction over the sub:ect shipment remained with the "0C, and the R.C had no :urisdiction over cases involving said shipment$ Conse>uently, the *"A oKcers refused to comply with the .R0 issued by the R.C$ 4$ Considering the foregoing circumstances, we believe that the *"A oKcers may be considered to have acted in good faith when they refused to follow the .R0 issued by the R.C$ Accordingly, these *"A oKcers should not be held accountable for their acts which were done in good faith and not without legal basis$ .hus, we hold that the R.C 0rder which found the *"A oKcers guilty of indirect contempt should be invalidated$ 2$ /inally, the R.C stated in its 0rder that based on the records, Ithere is a pending case with the Bureau of Customs 7istrict S###, Port of *ubic, 0longapo City, and involving the same ,111 bags of imported rice that is
also the sub:ect matter of the case herein$ .he existence and pendency of said case before the "ureau of Customs have in fact been admitted by the parties$J RE 7#REC.#E 03 "0C .0 RE*0&E *E#Z8RE CA*E .he R.C then proceeded to order the suspension of court proceedings, and directed the "0C *ubic Port Chief of the &aw 7ivision and 7eputy Collector for Administration, Atty$ .itus *angil, to resolve the sei=ure case and submit to the R.C$ %e -nd the issuance of the R.C 0rder improper$ .he pendency of the "0C sei=ure proceedings which was made +nown to the R.C through petitionerXs consolidated motion to dismiss should have prompted said court to dismiss the case before it$ As previously discussed, the !OC @&s e'*us+ve o++n&* u+s<+'(+on ove se+:ue '&ses un
dated 3ovember 11 and ; 3ovember 11$ "ON. JAN PONCE ENRILE, Co+ss+one o8 Cus(os &n< LT. GENERAL PELAGIO A. CR-, /Re(. C@&+&n, An(+Su*+n A'(+on Cen(e /ASAC, petitioners, vs$ ANDRES . INYA &n< "ON. AL%RIDO DE LOS ANGELES, es+<+n u<e o8 !&n'@ I, Cou( o8 %+s( Ins(&n'e o8 R+:&* /s+((+n &( >ue:on C+(;, respondents$ •
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8pon the application of the A*AC, then Collector of Customs of the Port of anila issued a warrant of sei=ure and detention against the Cadillac Car herein$ 0wnerclaimant is Rodolfo Ce\ado=a$ .axes and duties had not been paid %arrant was served and enforced, even before a complaint for replevin was -led against udge de los Angeles (respondent :udge) .he circumstances for failure to pay were alleged in the petition #3/0RA& E3.RD A37 CER.#/#CA.E of payment was for a 6 /iat car, and not the Cadillac in dispute$ Also, the person who paid taxes was Pablo Cru=, not a party herein
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Ce\ado=a is the predecessor in interest of herein respondent Andres inuya Claiming to be aggrieved by such sei=ure, inuya -led a complaint for replevin in the sala of udge$ After -ling a 61,111 bond, udge issued an exparte order to a special sheri< to ta+e possession of the Cadillac$ 0n the very same day, udge gave due course to the replevin complaint and re>uired petitioners to -le an answer Petitioners -led .7 as well as to lift exparte order$ /or .7, petitioners claim the fact that forfeiture proceedings had already been instituted before the C0C who has sole :urisdiction to determine >uestions a
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As their defense, they posture that the warrant is invalid and the sei=ing oKcer was devoid of authority$ Oence, they assert that an illegal sei=ure cannot confer :urisdiction on the C0C$ ISSE) % udge de los Angeles has :urisdiction to entertain a replevin complaint -led by inuya for recovery of a Cadillac car which is sub:ect of a sei=ure and forfeiture proceedingM NO
$ .he prevailing DOCTRINE is that (@e e'*us+ve u+s<+'(+on +n se+:ue &n< 8o8e+(ue '&ses ves(e< +n (@e Co**e'(o o8 Cus(os even(s & C%I 8o &ssu+n 'on+:&n'e ove su'@ & &((e$ (Pacis v. Averia) T@e Co**e'(oBs
uon, &n< (o en
$ Respondents, however, notwithstanding the compelling force of the above doctrines, would assert that respondent udge could entertain the replevin suit as the seizure is illegal, allegedly because the warrant issued is invalid and the seizing ocer likewise was devoid of authority $ .his is to lose sight of the distinction, as earlier made mention of, between the existence of the power and the regularity of the proceeding ta+en under it$ T@e ovenen(&* &en'; 'on'ene<, (@e !ue&u o8 Cus(os, +s ves(e< ?+(@ e'*us+ve &u(@o+(;$ Even if it be assumed that in the exercise of such exclusive competence a taint of illegality may be correctly imputed, (@e os( (@&( '&n 7e s&+< +s (@&( un
is not -nal$ An &e&* *+es (o (@e Co+ss+one o8 Cus(os &n< (@ee&8(e (o (@e Cou( o8 T& Ae&*s. I( &; even e&'@ (@+s Cou( (@ou@ (@e &o+&(e e(+(+on 8o ev+e?$ .he proper ventilation of the legal issues raised is thus indicated$ Certainly a court of -rst instance is not therein included$ #t is devoid of :urisdiction$ %OERE/0RE, the writ of certiorari prayed for is GRANTED, respondent udge being clearly without :urisdiction$ As a result whereof, the orders complained of are set aside and declared to be without any force or euired to dismiss$ .he writ of preliminary in:unction issued by this Court is made permanent$ '$R$ 3o$ &2425
uly 41, 65
%ELIC*DAD IERNE-A, e(+(+one, vs. T"E COISSIONER O% CSTOS, eson
uan .$ 7avid for petitioner$ 0Kce of the *olicitor 'eneral for respondent$ REDE*, $"$&$, $
An appeal from the decision of the Court of .ax Appeals (C$.$A$ Case 3o$ ;6) sustaining a decision of respondent Commissioner of Customs forfeiting, in favor of the 'overnment, ;61 cartons of Chester-eld and Camel cigarettes with blue seals but without internal revenue strip stamps$ Reproduced below are the undisputed -ndings of facts in the decision appealed from ^wph_$\`t At about 11 a$m$ on *eptember 6, ?; the 9 Y&egaspiY a coastwise vessel coming from olo doc+ed at the port of Cebu on her way to anila$ Acting upon a con-dential telegraphic report from an informer in olo that the said vessel was carrying a substantial >uantity of smuggled foreign cigarettes, the Customs authorities of the port of Cebu conducted a search of the vessel which eventually led to the discovery of eight cases containing *#S O837RE7 /#/.D (6?1) CAR.03* of Chester-eld cigarettes and 03E O837RE7 .E3 (1) CAR.03* of Camel cigarettes without the re>uired #nternal Revenue strip stamps$ 8pon investigation it was also discovered that the sub:ect merchandise was covered by "ill of &ading 3o$ 2A (Exhibit ") with Ypersonal belongingsY as its declaration and correspondingly entered into the manifest of the vessel li+ewise with Ypersonal belongingsY as
the noted description, and with *ultan Pula of olo as the consignor and a certain Carlos alde= as the consignee in anila$ 8pon further investigation, however, it was found that a woman passenger was accompanying the sub:ect merchandise appearing later to be rs$ /elicidad ierne=a, the present claimant, who all the while holds the bill of lading$ #t should be noted that when rs$ ierne=a was >uestioned during the course of the search she disclaimed under oath (Exhibit O) ownership of the merchandise$ "elieving that there is a strong evidence of violations of Customs laws, the Collector of Customs of Cebu sei=ed the merchandise and instituted the forfeiture proceedings for violation of *ection ?41 (f), (g) and (m2) of the .ari< and Customs Code of the Philippines and *ection ;2 of the #nternal Revenue Code$ After complying with the procedural re>uirement, of the law, the Collector of Customs of Cebu conducted a hearing of the case $$$ (and) on /ebruary ?, ?5, $$$ rendered his decision forfeiting the sub:ect merchandise in favor of the 'overnment $$$ (pp$ 224, Customs records$) .he claimant of the merchandise, petitioner herein, appealed in due time from the decision of the Collector of Customs of Cebu to the Commissioner of Customs who aKrmed the decision of the Collector, with the modi-cation
that the forfeiture was sustained, among others, under paragraph (m) of *ection ?41 of the .ari< and Customs Code instead of under paragraph (m2) of the same section$ $$$
sei=ed and libeled for alleged violation of particular provisions of law can not be legally forfeited for violation of any other provision of law$
Elevated to the Court of .ax Appeals, the decision of respondent Commissioner of Customs was aKrmed, the court Y(f)inding that the Collector of Customs of Cebu had :urisdiction to order the sei=ure and forfeiture of said cigarettes and that the forfeiture of the same is in accordance with *ection ?41 (f) of the .ari< and Customs CodeY$ .hus, petitioner, who claimed to have merely purchased the cigarettes in the open mar+et in olo, now turns to us for relief, advancing the following assignment of errors ISSEFS) $ .he Court of .ax Appeals erred in aKrming the decision of the respondent -nding that the Collector of Customs for the port of Cebu acted with :urisdiction in instituting sei=ure proceedings against the merchandise herein involved$
All three assigned errors are untenable$
$ .he Court of .ax Appeals erred in aKrming the decision of the respondent -nding that the merchandise involved are liable to the penalty of forfeiture (under *ection ?41 (f) of the .ari< and Customs Code)$ 4$ .he Court of .ax Appeals erred in not -nding that the merchandise involved which were
$ Petitioner argues that the Collector of Customs of olo, who has Y:urisdiction over all matters arising from the enforcement of tari< and customs laws within his collection districtY, as provided for in *ection ;14 of the .ari< and Customs Code, is exclusively authori=ed to proceed against the cigarettes in >uestion inasmuch as the smuggling was allegedly perpetrated in his collection district$ Oence, petitioner concludes that the sei=ure and forfeiture thereof by the Collector of Customs of Cebu is irregular and illegal for lac+ of :urisdiction$ %e do not agree$ /irst, because *ection ;14, on which petitionerXs conclusion is premised, is legally nonexistent, the same having been vetoed by the President$ *econdly, the .ari< and Customs Code clearly empowers the "ureau of Customs to prevent and suppress smuggling and other frauds upon the Customs G*ec$ 61 (b)H over all seas within the :urisdiction of the Philippines and over all coasts, ports, airports, harbors, bays, rivers and inland waters navigable from the sea and, in case of Yhot pursuitY, even beyond the maritime
=one (*ec$ 614)$ /or the due enforcement of this function, a Collector, among others, is authori=ed to search and sei=e (*ec$ 14), at any place within the :urisdiction of the said "ureau (*ec$ 12, sec$ par$), any vessel, aircraft, cargo, article, animal or other movable property when the same is sub:ect to forfeiture or liable for any -ne imposed under customs and tari< laws (*ec$ 1?)$ #t is of no moment where the introduction of the property sub:ect to forfeiture too+ place$ /or, to our mind, Y(i)t is the right of an oKcer of the customs to sei=e goods which are suspected to have been introduced into the country in violation of the revenue laws not only in his own district, but also in any other district than his ownY$ G.aylor vs$ 8$*$, 22 8$*$ (4 Oow$) ;, &$ ed$ ??H$ Any other construction of the .ari< and Customs Code, such as the one proposed by petitioner, would virtually place the Collector of Customs in a strait:ac+et and render inutile his police power of search and sei=ure, thereby frustrating e
the forfeiture of the cigarettes is not in accordance with *ection ?4 of the Code, as the same were, at the time of sei=ure, no longer in the custody and control of the "ureau of Customs nor in the hands, or sub:ect to control, of the importer, original owner, consignee, agent or person with +nowledge that the same were imported contrary to law$ Again, we disagree$ .he forfeiture is euestion that the cigarettes involved were sei=ed and forfeited at the port of Cebu which is within the :urisdiction of the "ureau of Customs and, as will be shown later, while the cigarettes were sub:ect to the control of petitioner, who bought, concealed, and transported the same aboard the 9 Y&egaspiY with +nowledge that they were imported contrary to law$ "esides, it is a settled :urisprudence that forfeiture proceedings are in the nature of proceedings in rem wherein the :urisdiction to proceed against the res is vested in the court of the district where the same is found or sei=ed (? C$$*$ ?;)$ .herefore, the
Collector of Customs of Cebu, who has the authority under the .ari< and Customs Code to institute forfeiture proceedings, lawfully assumed :urisdiction to forfeit, in favor of the 'overnment, the smuggled cigarettes found and sei=ed within his collection district$ $ Petitioner next argues that the cigarettes in >uestion are not merchandise of prohibited importation inasmuch as she had purchased the same in the open mar+et in oloQ which goes to show that she is not the importer, original owner, consignee, agent or person who euestion has been posed before us$ #n the case of 'igare vs$ Commissioner of Customs ('$R$ 3o$ &4;6, August , 66, ; *$C$R$A$ 11), we disposed of the same by holding that Y(s)ince, admittedly, the internal revenue tax on the cigarettes indispute has not been paid, it is clear that said cigarettes fall within the category of Ymerchandise of prohibited importation,Y the importation of which is contrary to law and may :ustify its forfeiture, as provided in *ections
464 (f) and 462 of the Revised Administrative Code,Y which correspond to *ections ?41 (f) and ?4, respectively, of the .ari< and Customs Code$ Yoreover, the blue seals aKxed on said commodities prove satisfactorily that they are foreign products$ Again, the importation thereof into the Philippines is attested by the presence of said products within our :urisdictionY (#bid$) And concerning petitionerXs +nowledge of these facts, the following dis>uisition by the Court of .ax Appeals, lengthily >uoted in the 'igare case, -nds signi-cant application in the case at bar %ere the cigarettes in >uestion illegally imported into the PhilippinesM %e are of the opinion that, the Commissioner of Customs should be sustained in his -nding that the cigarettes in >uestion were imported illegally$ .he absence of Philippine internal revenue strip stamps on cigarettes indicates that they are either manufactured clandestinely within the Philippines or imported illegally into the country$ #n the case at bar, concomitant circumstances militate against the clandestine manufacture within the Philippines of the cigarettes$ .he aKxture of blue seals on the pac+s of the cigarettes, the wrappers, the purchase of the cigarettes in the open mar+et of olo, a place where American and other foreign made cigarettes are, of common +nowledge, fre>uently smuggled from "orneo $$$ and the failure of petitioner to show that the cigarettes
in >uestion were locally manufactured rule out the possibility that the cigarettes in >uestion were manufactured in the Philippines$ Conse>uently, we are constrained to conclude that these cigarettes were foreign (American) made$ .hey were merchandise of prohibited importation, the importation of which was contrary to law, and should be forfeited under *ection 464 (f) of the Revised Administrative Code$ xxx
xxx
xxx
.he fact that petitioner is merely a buyer of the cigarettes in the open mar+et of olo does not render the cigarrettes immune from the penalty of forfeiture$ .his is so because forfeiture proceedings are instituted against the res (cigarettes) $$$ and, by express provision of *ection 462 of the Revised Administrative Code, the forfeiture shall occur while the merchandise is in the hands or sub:ect to control of some person who shall receive, conceal, buy, sell, or transport the same with +nowledge that the merchandise was imported contrary to law$ Petitioner cannot but be charged with the +nowledge that the cigarettes in >uestion were imported contrary to law, for if it were otherwise, why were these cigarettes concealed on board the vessel $$$ M %hy did she deny ownership over said cigarettesM /or what plausible reason was she afraid of detentionM %hat impelled her to believe that she would be
detained by the customs authoritiesM .o uphold the claim of petitioner and forego the forfeiture would be giving a chance to accessories after the fact of smugglers of foreign cigarettes to ply their trade with impunity and with sanction of the courts$ %hat the executive department could not curb, that is rampant smuggling of foreign cigarettes, the courts should not tolerate $$$ 4$ Petitioner -nally contends that the decision of the Commissioner of Customs libeling and forfeiting the cigarettes involved in the present case for violation of *ection ?41 (m) of the .ari< and Customs Code is unconstitutional, in view of the fact that she was allegedly not auestions provided that his -ndings and conclusions are, as in the case at bar, supported by evidence$ #t is of no conse>uence whatsoever what were the original grounds of the sei=ure and forfeiture if, in point of fact, the goods are by law sub:ect to forfeiture G%ood vs$ 8$*$, 6
Pet$ (8$*$) 42, 1 &$ ed$ 5;H$ As there is evidence on record showing that the cigarettes in >uestion were imported and introduced into the country without passing through a customs house, the same may be forfeited under said *ection ?41 (m) of the Code, notwithstanding that it is not one of the original charges$ As we held in Vue Po &ay vs$ Central "an+, et al$ (12 Phil$ 5?4), what counts is not the designation of the particular section of the law that has been violated but the description of the violation in the sei=ure report$ %OERE/0RE, the decision appealed from is hereby aKrmed, with costs against petitioner$ ^wph_$\`t
sei=ed logs forfeited in favor of the government to be disposed of according to law$ #nstead of appealing the CollectorLs decision to the Commissioner of Customs, the private respondents -led an original petition for certiorari with the 7avao C/#$ Respondent alleged lac+ of :urisdiction of the C/#$ #**8E %93 the lower court has :urisdiction to review a decision of the Collector of Customs OE&7 NO .he *upreme Court held in the negative$
RIGOR v. ROSALES %ACTS)
Collector *abino Rigor issued a %arrant of *ei=ure and 7etention against the vessel &C. ;? and its cargo, consisting of 14 pieces of logs for failure to present a manifest for the said logs within the period prescribed$ .he parties who were duly noti-ed and represented, voluntarily submitted to the :urisdiction of the respondent Collector$ After hearing, the Collector rendered a decision ordering the
Articles sub:ect to sei=ure do not have to be goods imported from a foreign country$ .he provisions of the Code refer to unmanifested articles found on vessels or aircraft engaged in the coastwise trade$ .he customs authorities do not have to prove to the satisfaction of a court of -rst instance that the articles on board a vessel were imported from abroad or are intended to be shipped abroad before they may exercise the power to e
Regarding the nature of the port of origin and the port of destination, it is enough if one of the ports is a port of entry$ .he respondent courtLs -nding that Iport of entryJ must be limited to the wharves of *ta$ Ana and *asa where the customs house is located and not extended to Ievery inch of the City of 7avaoJ would unduly hamper if not cripple the e
PAPA v. AGO G.R. No. L2$360F%e7u&; 2K, 196KFEN !ANCO++n&* &'(+on +n (@e *C for prohibition and certiorari , praying for the annulment of the order issued by respondent :udge Parties PetitionersRicardo '$ Papa (Chief of Police of anila), uan Ponce Enrile (Commissioner of Customs), Pedro Pacis(Collector of Customs of the Port of anila), artin Alagao (Patrolman, head of counter intelligence of theanila Police 7epartment)RespondentsRemedios agoOilarion arencio (Presiding udge of "r$ 4, C/# of anila) $ Zaldivar 3ovember 2, 66 B having received information the day before that a certain shipment of misdeclared and undervalued personal e
in the name of one "ienvenido 3aguit$ago -led with the C/# of anila a Petition for andamus with restraining order or preliminary in:unction, alleging that she was the owner of the goods sei=ed, which were purchased from *ta$ onica'rocery in *an /ernando, Pampanga$ *he hired the truc+s owned by &anopa (who -led with her) to bringthe goods to her residence in *ampaloc, anila$ *he complained that the goods were sei=ed without a warrant, and that they were not sub:ect to sei=ure under *ection ?4 of the .ari< and Customs Code even if they were misdeclared and undervalued because she had bought them without +nowing they had been imported illegally$ .hey as+ed that the police not open the bales, the goods be returned, and for moral andexemplary damages$3ovember 1, 66 B udge issued an order restraining the police from opening the nine bales in >uestion, but by then some had already been opened$ /ive days later ago -led an amended petition including asparty defendants Pedro Pacis and artin Alagao$7ecember 4, 66 B ago -led a motion to release the goods, alleging that since the inventory ordered by the court of the goods sei=ed did not show any article of prohibited importation, the same should be releasedupon her posting of the appropriate bond$ .he petitioners in the instant case -led their opposition, allegingthat the court had no :urisdiction over the case and thus no
:urisdiction to order the release (case under :urisdiction of C.A), and as the goods were not declared they were sub:ect to forfeiture$ arch ;, 6; B assailed 0rder issued by arencio, authori=ed release under bond of goods sei=ed and held by petitioners in connection with the enforcement of the .ari< and Customs Code$ .he bond of P21,111$11 was -led -ve days later$ 0n the same day, Papa -led on his own behalf a motion for reconsideration on theground that the anila Police 7epartment had been directed by the Collector of Customs to hold the goodspending termination of the sei=ure proceedings$ %ithout waiting for the courtLs action on the R, petitioners -led the present action$ Arguments of Petitioners (that seem important)() C/# had no :urisdiction over the case() ago had no cause of action in the civil case -led with the C/# due to her failure to exhaust alladministrative remedies before invo+ing :udicial intervention Arguments of Respondents() #t was within the :urisdiction of the lower court presided by respondent udge to hear and decide CivilCase 3o$ 6;26 and to issue the >uestioned order of arch ;, 6;, because said Civil Case 3o$ 6;26 wasinstituted long before sei=ure, and identi-cation proceedings against the nine bales of goods in >uestion were instituted by the Collector of Customs() Petitioners could no longer go after the goods in >uestion after the corresponding
duties and taxes had been paid and said goods had left the customs premises and were no longer within the control of the "ureauof Customs IPORANT ISSE (thereLs another involving illegal search and sei=ure) %03 the :udge acted with :urisdiction in issuing the 0rder releasing the goods in >uestion OE&7 30$ Petition granted, case -led by ago dismissed$ .he "ureau of Customs has the duties, powers and :urisdiction, among others, to() assess and collect all lawful revenues from imported articles, and all other dues, fees, charges, -nes and penalties, accruing under the tari< and customs laws() prevent and suppress smuggling and other frauds upon the customsQ and(4) to enforce tari< and customs laws$ .he goods in >uestion were imported from Oong+ong, as shown in the Y*tatement and Receipts of 7utiesCollected on #nformal EntryY$ As long as the importation has not been terminated the importedgoods remain under the :urisdiction of the "ureau of customs$ #mportation is deemed terminated only upon the payment of the duties, taxes and other charges upon the articles,or secured to be paid, at the port of entry and the legal permit for withdrawal shall have beengranted$ .he payment of the duties, taxes, fees and other charges must be in full$.he record shows, by
comparing the articles and duties stated in the aforesaid Y*tatement and Receipts of 7uties Collected on #nformal EntryY with the manifestation of the 0Kce of the *olicitor 'eneral wherein it is stated that the estimated duties, taxes and other chargeson the goods sub:ect of this case amounted to P?,;;$11 as evidenced by the report of theappraiser of the "ureau of Customs, that the duties, taxes and other charges had not been paid in full$ /urthermore , a comparison of the goods on which duties had been assessed, as shown in the Y*tatement and Receipts of 7uties Collected on #nformal EntryY and the YcomplianceY itemi=ing the articles found in the bales upon examination and inventory, shows that the >uantity of the goods was underdeclared, presumably to avoid the payment of duties thereon$ (e$g$ 21 pieces of ladiesLsweaters assessed in the *tatement when there actually 2 do=en Q 11 watch bands were assessed but ,1do=en, etc$) .he articles contained in the nine bales in >uestion, were, therefore, sub:ect to forfeiture under *ection ?41, pars$ e and m, (), (4), (2), and (?) of the .ari< and Customs Code$ .he Court had held before (and did again in this case) that merchandise, the importation of which is e
Even if it be granted, arguendo , that after the goods in >uestion had been brought out of the customs area the "ureau of Customs had lost :urisdiction over the same, nevertheless, when said goods were intercepted at the Agri-na Circle on 3ovember 2, 66 by members of the anila Police 7epartment, acting under directions and orders of their Chief, Ricardo C$ Papa, who had been formally deputi=ed by the Commissioner of Customs, the "ureau of Customs had regained :urisdiction and custody of the goods$ Se'(+on 1206 o8 (@e T&+H &n< Cus(os Couestion, therefore, were under the custody and at the disposal of the "ureau of Customs at the time the petition for andamus was -led in the Court of /irst #nstance of anila on3ovember , 66$ .he Court of /irst #nstance of anila, therefore, could not exercise :urisdiction over said goods even if the warrant of sei=ure and detention of the goods for thepurposes of the sei=ure and forfeiture proceedings had not yet been issued by the Collectorof Customs$ .he Court reiterated its ruling in
7e oya v$ &antin .he owner of sei=ed goods may set up defenses beforethe Commissioner of Customs during the proceedings following sei=ure$ /rom his decision appeal may bemade to the Court of .ax Appeals$ .o permit recourse to the Court of /irst #nstance in cases of sei=ure of imported goods would in euires exclusive :urisdiction over imported goods, for the purposes of enforcement of the customs laws, from the moment the goods are actually in its possession or control, even if no warrant of sei=ure or detention had previously been issued by the Collector of Customs in connection with sei=ure and forfeiture proceedings$ #n the present case, the "ureau of Customs actually sei=ed the goods in >uestion on 3ovember 2,66, and so from that date the "ureau of
Customs ac>uired :urisdiction over the goods for the purposes of the enforcement of the tari< and customs laws, to the exclusion of the regular courts$ uch less then would the Court of /irst #nstance of anila have :urisdictionover the goods in >uestion after the Collector of Customs had issued the warrant of sei=ure and detention on anuary , 6;$ 3ot having ac>uired :urisdiction over the goods, it follows that the Court of /irst #nstance of anila had no :urisdiction to issue the >uestionedorder of arch ;, 6; releasing said goods$ Concepcion, C$$, Reyes, $"$&$, 7i=on, a+alintal, "eng=on, $P$, *anche=, Castro, Angeles and /ernando, $, concur$
R. &:&n %e+@( &nu8&'(u+n GRN 12K064
vs.
CAF
S@+e*&s
%&'(s) Phil-re issued insurance policy to R$ ar=an, owner of a customs bonded warehouse$ *hielaLs manufacturing engaged in the garment business, the consignee of raw materials from .aiwan$ .he "0C treated the materials as sub:ect to ordinary import taxes and were not
immediate released to respondent$ .he consignee failed to -le the re>uisite import entry and to claim the cargo$"0C authori=ed petitioners for stripping and safe+eeping after ? months, notice of abandonment giving respondents ? days from notice to -le entry the -le cargoes without pre:udice to right of the consignee to redeem articles cargoes would redeemed abandoned and be sold at public auction$ After a month the declaration of abandonment has become -nal and executory but before inventory and sale public auction of goods the warehouse was burned$ Phil-re paid ,111$11 for the warehouse$ After the &apse of more than years from the arrival of the cargo, the private respondent -led a complaint for damaged before R.C$ Petitioner arrived that there is no private of Contract between them since the cargo was received from "0C and that respondent failed to claim the cargo, pay taxes thus not entitled to insurance proceeds$ Issue) %hether or not the trial court had :urisdiction to review and declare ine
abandonment was not given to the consignee$ Evidently, the resolution of this issue is within the exclusive competence of the 7istrict Collector of Customs, the Commissioner of Customs and within the appellate :urisdiction of C.A$ .he rule has R.C has no review powers over such proceedings is anchored upon the policy of placing un necessary hindrance on the government drive not only to prevent smuggling and other frauds upon customs, but more importantly, to render e
C@evon P@+*s v.Co+ss+one o8 !ue&u o8 Cus(os, GR 1$K$#9, Au 11, 200K %ACTS) E
were -led after said date$ Chevron paid customs duties at 4!$ .hree years later, an informer reported the transactions and investigation conducted$ .he C"0C declared the importations abandoned for failure to enter them within 41 days from unloading and issued assessments for more than P "illion$ Oence the appeal to C.A division which ruled that 1! applied per *ec 12, 1? and 215Q there was fraud but no abandonment$ "oth parties went to C.A en banc, which ruled that there was abandonment because #E#R7 was not -led within 41 days per *ec 41 in relation to *ec 1?, thus abandonment ensued per *ec 51 and 51Q notice of abandonment per C0 ?2 was not necessary because Chevron had +nowledgeQ and agreed there was fraud for failure -le entry that was intended to avoid higher rate of duties$ ISSES) $ whether IentryJ under *ection 41 in relation to *ection 51 of the .CC refers to the #E7 or the #E#R7M $ whether fraud was perpetrated by petitionerM RLING) $ .he -ling of the #E#R7s has several important purposes to ascertain the value of the imported articles, collect the correct and -nal amount of customs duties and avoid smuggling of goods into the country$ Entry refers to both$ .hey must be -led within 41 days$
$ Des there was fraud$ /raud, in its general sense, is deemed to comprise anything calculated to deceive, including all acts, omissions, and concealment involving a breach of legal or e>uitable duty, trust or con-dence :ustly reposed, resulting in the damage to another, or by which an undue and unconscionable advantage is ta+en of another$ #t is a >uestion of fact and the circumstances constituting it must be alleged and proved in the court below$ .he -nding of the lower court as to the existence or nonexistence of fraud is -nal and cannot be reviewed here unless clearly shown to be erroneous$ #n this case, fraud was established by the #P7C##* of the "0C$ "oth the C.A /irst 7ivision and en banc agreed completely with this -nding$ Chevron bided its time to avail of lower rate$ Oence, due to the presence of fraud, the one year prescriptive period of the -nality of li>uidation under *ection 614 was inapplicable and 4$ whether the importations can be considered abandoned under *ection 51$ Des, per *ec 51 as amended by RA ;6?$ 3otice was not necessary because "0C learned of fraud after 4 years and importations had been released$ Abandoned article ipso facto deemed the property of the government per *ec 51$ .his section cannot be >uestioned as unconstitutional collaterally$ "esides, there is clear intent to do away with sei=ure proceedings in abandonment$ 0rdered to pay (P54,;5,;65$) plus six percent (6!) legal interest per annum accruing from the date
of promulgation of this decision until its -nality$ 8pon -nality of this decision, the sum so awarded shall bear interest at the rate of twelve percent (!) per annum until its full satisfaction$ '$R$ 3os$ &4;;6;5
0ctober , 4
T"E COISSIONER O% CSTOS, e(+(+one, vs. ANILA STAR %ERRY, INC., NITED NAIGATION M TRANSPORT CORPORATION, CEA!A S"IPPING AGENCY, INC., &n< T"E CORTB O% TA APPEALS, eson
V8#A*03, $ .his is a petition for review under Rule 22 of the Revised Rules of Court -led by the Commissioner of Customs to set aside the consolidated 7ecision dated *eptember 41, 6 of the Court of .ax Appeals in C$.$A$ Cases 3os$ 546, 54; and 54, modifying his decision by ordering only the payment of a -ne, in lieu of the forfeiture of private respondents vessels used in the smuggling of foreignmade cigarettes and other goods$ Private respondents anila *tar /erry, #nc$ and the 8nited 3avigation .ransport Corporation
are domestic corporations engaged in the lighterage business and are the owners and operators, respectively, of the tugboat 0restes and the bargelighter 83&16$ Private respondent Ceaba *hipping Agency, #nc$ (Ceaba) is the local shipping agent of the Chiat &ee 3avigation .rading Co$ of Oong+ong, the registered owner and operator of the *9* Argo, an oceangoing vessel$ 0n une , 66, the *9* Argo, the 0restes and the 83&16, as well as two wooden bancas of un+nown ownership, were apprehended for smuggling by a patrol boat of the Philippine 3avy along the Explosives Anchorage Area of anila "ay$ the patrol boat caught the crew of the *9* Argo in the act of unloading foreign made goods onto the 83&16, which was towed by the 0restes and escorted by the two wooden bancas$ .he goods of 441 cases of foreignmade cigarettes, assorted ladiesX wear, clothing material and plastic bags, all of which were not manifested and declared by the vessel for discharge in anila$ 3o proper notice of arrival of the *9* Argo was given to the local customs authorities$ .hereafter, sei=ure and forfeiture proceedings were separately instituted before the Collector of Customs for the Port of anila against the *9* Argo (*ei=ure #denti-cation Case 3o$ 111, anila) and its cargo (*$#$ 3o$ 111C, anila), the 0restes (*$#$ 3o$ 111A, anila), the 83&
16 (*$#$ 3o$ 11", anila) and the two bancas (*$#$ 3o$ 1117, anila), charging them with violations of *ection ?41 (a), (b) and (c) of the .ari< and Customs Code$ Criminal charges were li+ewise -led against the oKcers and crew of said vessels and watercraft$ #n the sei=ure and forfeiture proceedings, the Collector of Customs rendered a consolidated decision dated 7ecember ;, 66, declaring the forfeiture of said vessels and watercraft in favor of the Philippine government by virtue of *ection ?41 (a) and (b) of the .ari< and Customs Code$ All respondents therein, except the owner of the two wooden bancas, separately appealed the consolidated decision of the Collector of Customs for the Port of anila to the Commissioner of Customs$ #n his 7ecision dated /ebruary , 6;, the Acting Commissioner of Customs found the CollectorXs decision to be in order and aKrmed the same accordingly$ .he same respondents separately elevated the matter to the Court of .ax Appeals (C$.$A$ Cases 3os$ 546, 54; and 54), which in a consolidated decision dated *eptember 41, 5, substantially modi-ed the decision of the Commissioner of Customs, stating thus #3 #E% 0/ .OE /0RE'0#3', the anila *tar /erry, #nc$, petitioner in C$.$A$ Case 3o$ 546,
and the 8nited 3avigation .ransport Corporation, petitioner in C$.$A$ Case 3o$ 54;, are each hereby ordered to pay a -ne of -ve thousand pesos (P?,111$11) and Ceaba *hipping Agency, #nc$, petitioner in C$.$A$ Case 3o$ 54, a -ne of ten thousand pesos (P1,111$11), within thirty days from the date this decision becomes -nal (Rollo, p$, 11)$ #t is this decision of the Court of .ax Appeals that is being >uestioned by the Commissioner of Customs before this Court$ 0n /ebruary ;, ;5, petitioner -led a otion to Allow *ale of the essel (*9* Argo), informing this Court that the said vessel was deteriorating and depreciating in value, and was congesting the Cavite 3aval "ase where it was berthed$ Petitioner prayed that it be allowed to sell the *9* Argo at the best possible price$ .he Court granted petitionerXs motion$ An 8rgent otion for odi-cation was -led by respondent Ceaba, praying that it, instead of petitioner, be allowed to sell the *9* Argo through a negotiated sale and not a public sale$ #n a resolution dated ay , ;5, this Court granted respondent CeabaXs motion, ordering it, however, to -rst pay the -ne of P1,111$11 stated in the decision of the Commissioner of Customs and then Ydeposit the proceeds of the sale with a reputable commercial ban+ in an interest bearing account in trust for whosoever
will prevail in the cases at barY (Rollo, p$ 4;)$ A managerXs chec+ in the amount of P1,111$11 was made payable to the Commissioner of Customs and was delivered y the respondent Ceaba to the Cashier of the *upreme Court$ #n the Resolution of uly , ;5, this payment was accepted, sub:ect to the CourtXs decision in the case (Rollo, p$ 4;)$ .he *9* Argo was sold, with this CourtXs approval, for P?,111$11 to one *everino Caperlac$ .he proceeds were sub:ected to the charging lien of respondent CeabaXs attorneys in the amount of P4?,111$11 (Rollo, p$ 21)$ .he petition for review posits the theory that the sub:ect vessels and watercraft were engaged in smuggling, and that the *9* Argo should be forfeited under *ection ?41 (a), while the barge 83&16 and tugboat 0restes should be forfeited under *ection ?41 (c) of the .ari< and Customs Code$ *ection ?41 (a) and (c) of said law reads as follows *ec$ ?41$ Property *ub:ect to /orfeiture under .ari< and Customs &aws$ Any vessel or aircraft, cargo, articles and other ob:ects shall, under the following conditions, be sub:ect to forfeiture (a) Any vessel or aircraft, including cargo, which shall, be used unlawfully in the
importation or exportation of articles into or from any Philippine port or place except a port of entryQ and any vessel which, being of less than thirty tons capacity shall be used in the importation of articles into any Philippine port or place except into a port of the *ulu sea where importation in such vessel may be authori=ed by the Commissioner, with the approval of the department head$ xxx
xxx xxx
(c) Any vessel or aircraft into which shall be transferred cargo unladen contrary to law prior to the arrival of the importing vessel or aircraft at her port of destination$ .he penalty of forfeiture is imposed on any vessel, engaged in smuggling if the conditions enumerated in *ection ?41 (a) are compresent$ .hese conditions are () .he vessel is Yused unlawfully in the importation or exportation of articles into or fromY the PhilippinesQ () .he articles are imported or exported into or from Yany Philippine port or place, except a port of entryQY or
(4) #f the vessel has a capacity of less than 41 tons and is Yused in the importation of articles into any Philippine Port or place other than a port of the *ulu *ea, where importation in such vessel may be authori=ed by the Commissioner, with the approval of the department head$Y .here is no >uestion that the vessel *9* Argo was apprehended while unloading goods of foreign origin onto the barge 83&16 and the tugboat 0restes, without the necessary papers showing that the goods were entered lawfully though a port of entry and that taxes and duties on said goods had been paid$ .he claim that the *9* Argo made an emergency call at the Port of anila for replacement of crew members and had to stop at the Explosives Anchorage Area because it was carrying nitric acid, a dangerous cargo, cannot be upheld, much less given credence by this Court$ .he facts found by the Court of .ax Appeals are in consonance with the -ndings of the Collector of Customs, and the Commissioner of Customs$ Absent a showing of any irregularity, or arbitrariness, the -ndings of fact of >uasi:udicial and administrative bodies are entitled to great weight, and are conclusive and binding on this Court$ (/eeder #nternational &ine, Pte$, &td$ v$ Court of Appeals, ; *CRA 52 GHQ aculina v$ 3ational Police Commission, 11 *CRA 25 GH)$ oreover, the Collector of Customs in *$#$ 3o$ 111C, anila, ordered on uly 5, 66 the forfeiture of the sub:ect cargo after -nding that they were,
in truth and in fact, smuggled articles (Rollo, p$ ;)$ Respondent Ceaba did not appeal from said order and the same has become -nal$ #n its decision, the Court of .ax Appeals held that while the *9* Argo was caught unloading smuggled goods in anila "ay, the said vessel and the goods cannot be forfeited in favor of the government because the Port of anila is a port of entry (R$A$ 4;, *ec$ ;1)$ .he Commissioner of Customs argues that the phrase Yexcept a port of entryY should mean Yexcept a port of destination,Y and inasmuch as there is no showing that the Port of anila was the port of destination of the *9* Argo, its forfeiture was in order$ %e disagree$ *ection ?41(a) in unmista+able terms provides that a vessel engaged in smuggling Yin a port of entryY cannot be forfeited$ .his is the clear and plain meaning of the law$ #t is not within the province of the Court to in>uire into the wisdom of the law, for indeed, we are bound by the words of the statute$ 3either can we put words in the mouths of the lawma+er$ A verba legis non est recedendum$ #t must be noted that the Revised Administrative Code of ; from which the .ari< and Customs Code is based, contained in *ection 464(a)
thereof almost exactly the same provision in *ection ?41(a) of the .ari< and Customs Code, including the phrase Yexcept a port of entry$Y #f the lawma+ers intended the term Yport of entryY to mean Yport of destination,Y they could have expressed facilely such intention when they adopted the .ari< and Customs Code in ?;$ #nstead on amending the law, Congress reenacted verbatim the provision of *ection 464(a) of the Revised Administrative Code of ;$ Congress, in the very same Article ?41 of the .ari< and Customs Code, used the term Yport of destinationY in subsections (c) and (d) thereof$ .his is a clear indication that Congress is aware of the distinction between the two wordings$ #t was only in ;, after this case was instituted, when the >uestioned exception (Yexcept a port of entryY) in *ection ?41(a) of the .ari< and Customs Code was deleted by P$7$ 3o$ ;2$ 3evertheless, although the vessel cannot be forfeited, it is sub:ect to a -ne of not more than P1,111$11 for failure to supply the re>uisite manifest for the unloaded cargo under *ection ? of Code, which reads as follows *ec$ ?$ /ailure to *upply Re>uisite anifests$ #f any vessel or aircraft enters or departs from a port of entry without submitting the proper manifest to the customs authorities,
or shall enter or depart conveying unmanifested cargo other than as stated in the next preceding section hereof, such vessel or aircraft shall be -ned in a sum not exceeding ten thousand pesos$ xxx
xxx xxx
.he bargelighter 83&16 and the tugboat 0restes, on the other hand, are sub:ect to forfeiture under paragraph (c) of *ection ?41 of the .ari< and Customs Code$ .he barge lighter and tugboat fall under the term YvesselY which includes every sort of boat, craft or other arti-cial contrivance used, or capable of being used, as a means of transportation on water (R$A$ 3o$ 4;, *ection 4?2)$ *aid section ?41 (c) prescribes the forfeiture ofX any vessel or aircraft into which shall be transferred cargo unladen contrary to law before the arrival of the vessel or aircraft at her port of destination anila was not the port of destination, much less a port of call of the *9* Argo, the importing vessel$ .he *9* Argo left Oong+ong and was bound for esselton, 3orth "orneo, 7:a+arta and *uraba:a, #ndonesiaQ and yet it stopped at the Port of anila to unload the smuggled goods onto the 83&16 and the 0restes$ /orfeiture proceedings are proceedings in rem (Commissioner of Customs v$ Court of .ax Appeals, 45 *CRA ?5 G5?H citing ierne=a v$ Commissioner of Customs, 2 *CRA 42 G65H)
and are directed against the res$ #t is no defense that the owner of the vessel sought to be forfeited had no actual +nowledge that his property was used illegally$ .he absence or lac+ of actual +nowledge of such use is a defense personal to the owner himself which cannot in any way absolve the vessel from the liability of forfeiture Commissioner of Customs v$ Court of Appeals, supraQ 8$*$ v$ *teamship YRubi$Y, 4 Phil$ 5, 4 G?H)$ %OERE/0RE, the consolidated 7ecision dated *eptember 41, 6 of respondent Court of .ax Appeals in C$.$A$ Cases 3os$ 546, #54; and 54 is 07#/#E7 as follows () that the *9* Argo through respondent Ceaba *hipping Agency, #nc$ is ordered to pay a -ne of P1,111$11, to be satis-ed from the deposit of the same amount by respondent Ceaba to the Cashier of this Court per Resolution of uly , ;5Q () that the Cashier of this Court is ordered to release the said amount for payment to the Commissioner of Customs, within thirty (41) days from the date this decision becomes -nalQ and 4) the tugboat 0restes and the barge lighter 83&16 of respondents anila *tar /erry, #nc$ and the 8nited 3avigation .ransport$ Corporation respectively, are ordered forfeited in favor of the Philippine 'overnment$ *0 0R7ERE7$ *EC037 7##*#03
'$R$ 3o$ 5;2?
arch 5, 1
COISSIONER O% CSTOS, Pe(+(+one, vs. AG%"A INCORPORATED, Reson
7EC#*#03 E370ZA, $ .his is a petition for review on certiorari under Rule 2? of the Rules of Court assailing the /ebruary ?, 11 7ecision of the Court of .ax Appeals En "anc (C.AEn "anc), in C.A E" Case 3o$ 46, which aKrmed the 0ctober 5, 11? Resolution of its *econd 7ivision (C.A*econd 7ivision), in C.A Case 3o$ ?1, -nding petitioner, the Commissioner of Customs (Commissioner), liable to pay respondent A'/OA #ncorporated (A'/OA) the amount of 8*[61,425$15 for the value of the sei=ed shipment which was lost while in petitionerLs custody$ 0n 7ecember , 4, a shipment containing bales of textile grey cloth arrived at the anila #nternational Container Port (#CP)$ .he Commissioner, however, held the sub:ect shipment because its owner9consignee was allegedly -ctitious$ A'/OA intervened and alleged that it was the owner and actual consignee of the sub:ect shipment$
0n *eptember ?, 2, after sei=ure and forfeiture proceedings too+ place, the 7istrict Collector of Customs, #CP, rendered a decision4 ordering the forfeiture of the sub:ect shipment in favor of the government$ A'/OA -led an appeal$ 0n August ?, ?, the Commissioner rendered a decision2 dismissing it$ 0n 3ovember 2, 6, the C.A*econd 7ivision reversed the CommissionerLs August ?, ? 7ecision and ordered the immediate release of the sub:ect shipment to A'/OA$ .he dispositive portion of the C.A*econd 7ivision 7ecision? reads %OERE/0RE, in view of the foregoing premises, the instant Petition for Review is hereby 'RA3.E7$ Accordingly, the decision of the respondent in Customs Case 3o$ 21;, dated August ?, ?, aKrming the decision of the #CP Collector, dated *eptember ?, 2, which decreed the forfeiture of the sub:ect shipments in favor of the government, is hereby REER*E7 and *E. A*#7E$ Respondent is hereby 0R7ERE7 to e
0n 3ovember ;, 6, the C.A*econd 7ivision issued an entry of :udgment declaring the abovementioned decision -nal and executory$6 .hereafter, on ay 1, ;, A'/OA -led a motion for execution$ #n its une 2, ; Resolution, the C.A*econd 7ivision held in abeyance its action on A'/OALs motion for execution in view of the CommissionerLs appeal with the Court of Appeals (CA), doc+eted as CA'$R$ *P 3o$ 2?1 and entitled YCommissioner of Custom v$ .he Court of .ax Appeals and A'/OA, #ncorporated$Y 0n ay 4, , the CA denied due course to the CommissionerLs appeal for lac+ of merit in a decision,; the dispositive portion of which reads %OERE/0RE, the instant petition is hereby 7E3#E7 78E C08R*E and 7#*#**E7 for lac+ of merit$ Accordingly, the Commissioner of Customs is hereby ordered to e
*0 0R7ERE7$ .hereafter, the Commissioner elevated the aforesaid CA 7ecision to this Court via a petition for review on certiorari, doc+eted as '$R$ 3o$ 41?1 and entitled YRepublic of the Philippines represented by the Commissioner of Customs v$ .he Court of .ax Appeals and A'/OA, #nc$Y 0n 0ctober , 11, the Court dismissed the petition$5 0n anuary 2, 11, the Court denied with -nality the CommissionerLs motion for reconsideration of its 0ctober , 11 7ecision$ 0n arch 5, 11, the Entry of udgment was issued by the Court declaring its aforesaid decision -nal and executory as of /ebruary ?, 11$ #n view thereof, the C.A*econd 7ivision issued the %rit of Execution, dated 0ctober 6, 11, directing the Commissioner and his authori=ed subordinate or representative to e
0n uly 4, 114, the C.A*econd 7ivision received a copy of A'/OALs otion to *how Cause dated uly , 114$ Acting on the motion, the C.A*econd 7ivision issued a notice setting it for hearing on August , 114 at 11 oLcloc+ in the morning$ #n its August 4, 114 Resolution, the C.A *econd 7ivision granted A'/OALs motion and ordered the Commissioner to show cause within -fteen (?) days from receipt of said resolution why he should not be disciplinary dealt with for his failure to comply with the writ of execution$ 0n *eptember , 114, CommissionerLs counsel -led a anifestation and otion, dated August 5, 114, attaching therewith a copy of an Explanation (%ith otion for Clari-cation) dated August , 114 stating, inter alia, that despite diligent euently, A'/OA -led its otion to Cite Petitioner in Contempt of Court dated *eptember 4, 114$ After a series of pleadings, on 3ovember ;, 114, the C.A*econd 7ivision denied, among others, A'/OALs motion to cite
petitioner in contempt for lac+ of merit$ #t, however, stressed that the denial was without pre:udice to other legal remedies available to A'/OA$ 0n August 4, 112, the Commissioner received A'/OALs otion to *et Case for Oearing, dated April , 112, allegedly to determine () whether its shipment was actually lostQ () the cause and9or circumstances surrounding the lossQ and (4) the amount the Commissioner should pay or indemnify A'/OA should the latterLs shipment be found to have been actually lost$ 0n ay ;, 11?, after the parties had submitted their respective memoranda, the C.A*econd 7ivision ad:udged the Commissioner liable to A'/OA$ *peci-cally, the dispositive portion of the resolution reads %OERE/0RE, premises considered, the "ureau of Customs is ad:udged liable to petitioner A'/OA, #3C$ for the value of the sub:ect shipment in the amount of 03E O837ERE7 *#S.D .O08*A37 .OREE O837RE7 /0R.D E#'O. A37 15911 8* 70&&AR* (8*[61,425$15)$ .he "ureau of CustomLs liability may be paid in Philippine Currency, computed at the exchange rate prevailing at the time of actual payment, with legal interests thereon at the rate of 6! per annum computed from /ebruary 4 up to the -nality of this
Resolution$ #n lieu of the 6! interest, the rate of legal interest shall be ! per annum upon -nality of this Resolution until the value of the sub:ect shipment is fully paid$ .he payment shall be ta+en from the sale or sales of the goods or properties which were sei=ed or forfeited by the "ureau of Customs in other cases$ *0 0R7ERE7$ 0n une 1, 11?, the Commissioner -led his otion for Partial Reconsideration arguing that (a) the enforcement and satisfaction of respondentLs money claim must be pursued and -led with the Commission on Audit pursuant to Presidential 7ecree (P$7$) 3o$ 22?Q (b) respondent is entitled to recover only the value of the lost shipment based on its ac>uisition cost at the time of importationQ and (c) taxes and duties on the sub:ect shipment must be deducted from the amount recoverable by respondent$ 0n the same day, the Commissioner received A'/OALs otion for Partial Reconsideration claiming that the ! interest rate should be computed from the time its shipment was lost on une ?, considering that from such date, petitionerLs obligation to release their shipment was converted into a payment for a sum of money$
0n 0ctober 5, 11?, after the -ling of several pleadings, the C.A*econd 7ivision promulgated a resolution which reads %OERE/0RE, premises considered, respondent Commissioner of CustomsL Yotion for Partial ReconsiderationY is hereby PAR.#A&&D 'RA3.E7$ .he Resolution dated ay ;, 11? is hereby 07#/#E7 but only insofar as the Court did not impose the payment of the proper duties and taxes on the sub:ect shipment$ Accordingly, the dispositive portion of 0ur Resolution, dated ay ;, 11?, is hereby 07#/#E7 to read as follows %OERE/0RE, premises considered, the "ureau of Customs is ad:udged liable to petitioner A'/OA, #3C$ for the value of the sub:ect shipment in the amount of 03E O837RE7 *#S.D .O08*A37 .OREE O837RE7 /0R.D E#'O. A37 15911 8* 70&&AR* (8*[61,425$15), sub:ect however, to the payment of the prescribed taxes and duties, at the time of the importation$ .he "ureau of CustomLs liability may be paid in Philippine Currency, computed at the exchange rate prevailing at the time of actual payment, with legal interests thereon at the rate of 6! per annum computed from /ebruary 4 up to the -nality of this Resolution$ #n lieu of the 6! interest, the rate of legal interest shall be ! per annum upon -nality of this Resolution until the value of the sub:ect shipment is fully paid$
.he payment shall be ta+en from the sale or sales of the goods or properties which were sei=ed or forfeited by the "ureau of Customs in other cases$ *0 0R7ERE7$ Petitioner A'/OA, #nc$Ls Yotion for Partial ReconsiderationY is hereby 7E3#E7 for lac+ of merit$ *0 0R7ERE7$1 Conse>uently, the Commissioner elevated the above>uoted resolution to the C.AEn "anc$ 0n /ebruary ?, 11, the C.AEn "anc promulgated the sub:ect decision dismissing the petition for lac+ of merit and aKrming in toto the decision of the C.A*econd 7ivision$ 0n arch 5, 11, the Commissioner -led his otion for Reconsideration, but it was denied by the C.AEn "anc in its April 4, 11 Resolution$ Oence, this petition$
the sub:ect lost shipment that was in the custody of the petitioner$ #n his petition, the Commissioner basically argues two () points H the respondent is entitled to recover the value of the lost shipment based only on its ac>uisition cost at the time of importationQ and H the present action has been theoretically transformed into a suit against the *tate, hence, the enforcement9satisfaction of petitionerLs claim must be pursued in another proceeding consistent with the rule laid down in P$7$ 3o$ 22?$ Oe further argues that the basis for the exchange rate of its liability lac+s basis$ "ased on the emorandum, dated August ;, 11, of the Customs 0perations 0Kcers, the true value of the sub:ect shipment is 8*[61,421$11 based on its commercial invoices which have been found to be spurious$ .he sub:ect shipment arrived at the #CP on 7ecember , and the pesodollar exchange rate was P1$11 per 8*[$11$ .hus, this conversion rate must be applied in the computation of the total land cost of the sub:ect shipment being claimed by A'/OA or P4,16,6$61 plus interest$
#**8E %hether or not the Court of .ax Appeals was correct in awarding the respondent the amount of 8*[61,425$15, as payment for the value of
.he Commissioner further contends that based on Executive 0rder 3o$ 655 (.he .ari< and Customs Code of the Philippines), the proceeds from any legitimate transaction, conveyance or
sale of sei=ed and9or forfeited items for importations or exportations by the customs bureau cannot be lawfully disposed of by the petitioner to satisfy respondentLs money :udgment$ E0 655 mandates that the unclaimed proceeds from the sale of forfeited goods by the "ureau of Customs ("0C) will be considered as customs receipts to be deposited with the "ureau of .reasury and shall form part of the general funds of the government$ Any disposition of the said unclaimed proceeds from the sale of forfeited goods will be violative of the Constitution, which provides that Y3o money shall be paid out of the .reasury except in pursuance of an appropriation made by law$Y .hus, the Commissioner posits that this case has been transformed into a suit against the *tate because the satisfaction of A'/OALs claim will have to be ta+en from the national co
render his 7ecisions and Prescribing the anner of Appeal therefrom, as amended by P$7$ 3o$ 22?)$ 8pon the determination of *tate liability, the prosecution, enforcement or satisfaction thereof must still be pursued in accordance with the rules and procedures laid down in P$7$ 3o$ 22?, otherwise +nown as the 'overnment Auditing Code of the Philippines$ 0n the other hand, A'/OA counters that, in line with prevailing :urisprudence, the applicable pesodollar exchange rate should be the one prevailing at the time of actual payment in order to preserve the real value of the sub:ect shipment to the date of its payment$ .he C.AEn "anc 7ecision does not constitute a money claim against the *tate$ .he CommissionerLs obligation to return the sub:ect shipment did not arise from an importexport contract but from a >uasicontract particularly solutio indebiti under Article ?2 of the Civil Code$ .he payment of the value of the sub:ect lost shipment was in accordance with Article ? of the Civil Code$ .he doctrine of governmental immunity from suit cannot serve as an instrument for perpetrating an in:ustice on a citi=en$ %hen the *tate violates its own laws, it cannot invo+e the doctrine of state immunity to evade liability$ .he commission of an unlawful or illegal act on the part of the *tate is e>uivalent to implied consent$ .OE C08R.L* R8'
.he petition lac+s merit$ .he Court agrees with the ruling of the C.A that A'/OA is entitled to recover the value of its lost shipment based on the ac>uisition cost at the time of payment$ #n the case of C$/$ *harp and Co$, #nc$ v$ 3orthwest Airlines, #nc$ the Court ruled that the rate of exchange for the conversion in the peso e>uivalent should be the prevailing rate at the time of payment #n ruling that the applicable conversion rate of petitionerXs liability is the rate at the time of payment, the Court of Appeals cited the case of Zagala v$ imene=, interpreting the provisions of Republic Act 3o$ ?, as amended by R$A$ 3o$ 211$ 8nder this law, stipulations on the satisfaction of obligations in foreign currency are void$ Payments of monetary obligations, sub:ect to certain exceptions, shall be discharged in the currency which is the legal tender in the Philippines$ "ut since R$A$ 3o$ ? does not provide for the rate of exchange for the payment of foreign currency obligations incurred after its enactment, the Court held in a number of cases that the rate of exchange for the conversion in the peso e>uivalent should be the prevailing rate at the time of payment$ GEmphases suppliedH
&i+ewise, in the case of Republic of the Philippines represented by the Commissioner of Customs v$ 83#ES icroElectronics 'm"O,4 which involved the sei=ure and detention of a shipment of computer game items which disappeared while in the custody of the "ureau of Customs, the Court upheld the decision of the CA holding that petitionerLs liability may be paid in Philippine currency, computed at the exchange rate prevailing at the time of actual payment$ 0n the issue regarding the state immunity doctrine, the Commissioner cannot escape liability for the lost shipment of goods$ .his was clearly discussed in the 83#ES icro Electronics 'm"O decision, where the Court wrote /inally, petitioner argues that a money :udgment or any charge against the government re>uires a corresponding appropriation and cannot be decreed by mere :udicial order$ Although it may be gainsaid that the satisfaction of respondentXs demand will ultimately fall on the government, and that, under the political doctrine of Ystate immunity,Y it cannot be held liable for governmental acts (:us imperii), we still hold that petitioner cannot escape its liability$ .he circumstances of this case warrant its exclusion from the purview of the state immunity doctrine$
As previously discussed, the Court cannot turn a blind eye to "0CXs ineptitude and gross negligence in the safe+eeping of respondentXs goods$ %e are not li+ewise unaware of its lac+adaisical attitude in failing to provide a cogent explanation on the goodsX disappearance, considering that they were in its custody and that they were in fact the sub:ect of litigation$ .he situation does not allow us to re:ect respondentXs claim on the mere invocation of the doctrine of state immunity$ *uccinctly, the doctrine must be fairly observed and the *tate should not avail itself of this prerogative to ta+e undue advantage of parties that may have legitimate claims against it$ #n 7epartment of Oealth v$ C$$ Canchela Associates, we enunciated that this Court, as the staunch guardian of the peopleXs rights and welfare, cannot sanction an in:ustice so patent in its face, and allow itself to be an instrument in the perpetration thereof$ 0ver time, courts have recogni=ed with almost pedantic adherence that what is inconvenient and contrary to reason is not allowed in law$ ustice and e>uity now demand that the *tateXs cloa+ of invincibility against suit and liability be shredded$awphi Accordingly, we agree with the lower courtsX directive that, upon payment of the necessary customs duties by respondent, petitionerXs
Ypayment shall be ta+en from the sale or sales of goods or properties sei=ed or forfeited by the "ureau of Customs$Y %OERE/0RE, the assailed decisions of the Court of Appeals in CA'$R$ *P 3os$ ;?4? and ;?466 are hereby A//#RE7 with 07#/#CA.#03$ Petitioner Republic of the Philippines, represented by the Commissioner of the "ureau of Customs, upon payment of the necessary customs duties by respondent 8nimex icro Electronics 'm"O, is hereby ordered to pay respondent the value of the sub:ect shipment in the amount of Euro 66,5$?6?$ PetitionerXs liability may be paid in Philippine currency, computed at the exchange rate prevailing at the time of actual payment$ *0 0R7ERE7$2 GEmphases suppliedH #n line with the ruling in 83#ES icro Electronics 'm"O, the Commissioner of Customs should pay A'/OA the value of the sub:ect lost shipment in the amount of 8*[61,425$15 which liability may be paid in Philippine currency computed at the exchange rate prevailing at the time of the actual payment$ %OERE/0RE, the /ebruary ?, 11 7ecision of the Court of .ax Appeals En "anc, in C.A E" Case 3o$ 46, is A//#RE7$ .he Commissioner of Customs is hereby ordered to pay, in
