Commissioner of Customs vs. Court of Tax Appeals

Articles imported in violation of Central Bank Circulars have the status of "merchandise of prohibited importation" under Section 102(k) of the Tariff and Customs Code and cannot be released under bond pursuant to Section 2301.

The case arises from the Central Bank's foreign exchange control regulations under the Tariff and Customs Code and Republic Act No. 1410, which restricted "no-dollar imports" of non-essential consumer goods to protect the country's international reserves. The Bureau of Customs routinely seized shipments lacking required Central Bank release certificates, creating conflict between importers seeking release of perishable goods and customs authorities enforcing foreign exchange controls.

• Before the Bureau of Customs: Seizure and detention ordered December 28, 1970; forfeiture decreed January 19, 1971; affirmed by Commissioner January 21, 1971.
• Court of Tax Appeals (CTA Case No. 2206): Petition for review filed January 27, 1971. CTA initially granted release under bond (February 3, 1971), granted reconsideration and set aside release (March 8, 1971), then reversed again ordering release (March 24, 1971). Denied Commissioner's omnibus motion April 27, 1971.
• Supreme Court: Petition for certiorari filed April 1971; Temporary Restraining Order issued May 5-6, 1971; decision rendered January 31, 1972.

• Subject: 438 packages of foodstuffs declared under Entry No. 109924 (70), arriving December 16, 1970 at Port of Manila on S/S "St. Isidro" under a "Customs No-Dollar Declaration."
• Seizure: Collector of Customs issued warrant of seizure and detention (December 28, 1970) for violation of Section 2530(f) in relation to Central Bank Circulars Nos. 247, 289, 294, and 295 and Section 102(k) of the Tariff and Customs Code.
• Payment: Dichoco paid P25,998.00 in taxes and duties but was denied release upon bond.
• Forfeiture: Collector decreed forfeiture (January 19, 1971) for failure to secure Central Bank release certificates; affirmed by Commissioner (January 21, 1971).
• CTA Proceedings: Dichoco sought review and release under bond. CTA flip-flopped on release orders ultimately ordering compliance despite the Commissioner's refusal based on the "prohibited importation" classification.

• Procedural Issues:

  • Whether the CTA resolutions were final and unappealable when the Commissioner filed the petition for certiorari.
  • Whether certiorari lies to challenge interlocutory orders of the CTA.
  • Whether the petition is defective for lack of certified copies of the orders.

• Substantive Issues:

  • Whether the importation of foodstuffs without Central Bank release certificates constitutes "prohibited importation" under Section 102(k) of the Tariff and Customs Code or merely "importation effected contrary to law."
  • Whether the principle of ejusdem generis restricts Section 102(k) to only absolutely prohibited articles.
  • Whether Section 2301 prohibits release under bond of articles imported in violation of Central Bank Circulars.
  • Whether Customs Administrative Order No. 19-70 is valid and enforceable.
  • Whether the purpose of the importation (legitimate consumption) or the perishable nature of the goods justifies release under bond despite statutory prohibition.

• Procedural:

  • The order of March 24, 1971 was interlocutory, not final; interlocutory orders remain subject to correction and amendment before final judgment.
  • Certiorari is the proper vehicle to obtain relief from interlocutory orders when the inferior court acts without or in excess of jurisdiction, not merely when acting with grave abuse of discretion.
  • Procedural defects regarding uncertified copies are excused; rules should be liberally construed to determine cases on the merits rather than on procedural technicalities.

• Substantive:

  • Section 102(k) is comprehensive and includes both absolutely prohibited articles and qualifiedly prohibited articles (those imported contrary to conditions or limitations imposed by law).
  • Ejusdem generis does not apply to restrict Section 102(k) because the specific items enumerated in Sections 102(a)-(j) lack common characteristics; the general term remains unaffected.
  • Central Bank Circulars have the force and effect of law; articles imported in violation thereof are "merchandise of prohibited importation" under Section 102(k).
  • Section 2301 absolutely prohibits release under bond of articles whose importation is prohibited by law; the proviso applies to the foodstuffs in question.
  • Customs Administrative Order No. 19-70 merely reiterates the statutory prohibition and is valid; it does not contravene Section 2301.
  • The legitimacy of the purpose (consumption) or the perishable nature of the goods does not cleanse the importation of its illegality; the end does not justify the means, and allowing release would nullify foreign exchange controls.

• Ejusdem Generis — The rule that general words following specific enumerations are limited to things of the same kind as those specified.

• Application: The SC rejected its application to Section 102(k) because the enumerated items in paragraphs (a)-(j) differ fundamentally (e.g., explosives vs. lottery tickets), lacking the common characteristic required to restrict the general term "all other articles" in paragraph (k).

• Interlocutory Order vs. Final Order — An interlocutory order is one that does not finally dispose of the case and is subject to revision before final judgment; a final order ends the litigation.

• Application: The SC held the CTA's release order was interlocutory because it did not terminate the forfeiture proceedings; therefore, it remained subject to correction by the SC via certiorari.

• Prohibited Importation vs. Importation Contrary to Law — While respondents argued for a distinction allowing bond release for the latter only, the SC held that under the Tariff and Customs Code, articles imported contrary to Central Bank regulations are classified as "prohibited importation" with the same legal effects as absolutely prohibited articles (forfeiture, no bond release, no redemption).

• "Articles imported in violation of Central Bank Circulars have the status of 'merchandise of prohibited importation' as this expression is used in said section."
• "The Government expects no revenue from such banned articles, since they are not allowed to be imported. Otherwise, the law's prohibition would be rendered totally nugatory since such banned articles, which are mostly luxury items, are in great demand and command sky-high prices assuring great profit to the smuggler."
• "The reason advanced by private respondent for the release of the importation in question is that foodstuffs are intended to be eaten, and eating is always legitimate. This argument is beside the point... this is a case where the end does not justify the means."
• "An interlocutory order is such that it is always subject to correction and amendment before final judgment is rendered in the case."

• Geotina vs. Court of Tax Appeals, G.R. No. L-33500, August 30, 1971 (40 SCRA 362) — Controlling precedent establishing that goods violating Central Bank Circulars are prohibited importations subject to forfeiture without redemption or release under bond; also cited for the validity of Customs Administrative Order No. 19-70.
• Sare vs. Commissioner of Customs, G.R. No. L-22988, June 30, 1969 (28 SCRA 715) — Cited for the chain of precedents (Eastern Sea Trading, Santos, Nepomuceno, Pascual, Seree Investment, Lazaro) establishing that goods without release certificates are prohibited importations under Section 2530(f).
• Chan Kian vs. Collector of Customs of Manila, No. L-20803, January 31, 1966 (16 SCRA 133) — Precedent that violations of Central Bank Circulars create "prohibited importation" status.
• Seree Investment Co. vs. Commissioner of Customs, No. L-21217, November 29, 1965 (15 SCRA 431) — Reinforced the classification of Central Bank violations as prohibited importations.
• Bombay Department Store vs. Commissioner of Customs, No. L-20460, September 30, 1965 (15 SCRA 104) — Additional support for the "prohibited importation" doctrine regarding foreign exchange violations.

• Section 102(k), Tariff and Customs Code — Prohibits importation of "all other articles the importation of which is prohibited by law"; interpreted to include articles violating Central Bank Circulars.
• Section 2301, Tariff and Customs Code — Allows release of seized property upon bond "Provided, That articles the importation of which is prohibited by law shall not be released under bond."
• Section 2530(f), Tariff and Customs Code — Provides for forfeiture of goods imported contrary to laws relating to foreign exchange regulations (Central Bank Circulars).
• Section 3514, Tariff and Customs Code — Defines "customs law" to include not only the Code but all other laws and regulations subject to Bureau of Customs enforcement.
• Section 2307, Tariff and Customs Code — Cited by respondents regarding redemption (distinguished by SC as applicable only to non-prohibited importations).
• Republic Act No. 1410, Section 3 — Prohibits no-dollar imports and mandates seizure and confiscation without right of redemption or release under bond.
• Rule 65, Section 1, Rules of Court — Governs certiorari; SC held it applies to interlocutory orders where jurisdiction is exceeded.

N/A (Concepcion, C.J., Reyes, J.B.L., Castro, Fernando, Teehankee, Barredo, Villamor, and Makasiar, JJ., concurred without separate opinions; Makalintal, J., took no part).