RKPTLLH.1R. 0 Trllt Pfhlli'>I'In'Ltij Coui\T of Tax a P£Als of ' JT7.0N City /Rvtacondeay & Co., Inc., in Its Capacity as Agent of the Ms "Fernview" vs. Commissioder of Cus'L'Oms

DECISION -

CTA CASE NO. 2 .70 - 2 - to correct the discrepancy, petitioner submitted an amendment to the vessel's manifest, wh i ch amendment vas accepted and approved by the Collector of Customs of Manila "without prejudice to an admi- n:!..strative action against -che vessel." On December 10, 1969, an administrative proceeding (Administrative Case No. V-503/69) _was ins -ci tuted against the MS "FERNVIEW" f or violation of Section 1005, in relat i on to Sec-c on 2521, of t he Tariff and Cusloms Code. On February 24, 1970 , after the termination of said proceeding, the Collector of Customs of Manila rendered a decision holding the said vesse l liable for an administrative fine of P3,00o;oo for violation of saic sections of the Code .

On June 3

1 1970, on appeal by petitioner, the Commissioner of Customs rendered a decision modifying the decision of the Collec t or of Customs by increasing the amount of t~e fine to Pl O,OOO.OO, for the reason that the vessel !11 .~: "FERNVIEW" ''has been ci ·ced in several instances f or viola~ing Section 1005 of the Tariff a nd Customs Code".

Hence, the present re- course.

The issue to be resolved is whether or not the vessel in question is liable for the fine imposed by respond on ~ Commi s s 1oner of Customs for

- 3 - violation of Section 1005, in relation to Section 2521, of the Tariff and Customs Code, t he pertinent provisions of which state as follows: SEC. 1005 . -Manifest Required of Vessel :t:rom Foreign Port.- E~;:_y vesse l from a foreign port must have on board a complete manifest of al her ca r go.

All of the cargo intended to be landed at a port in the Phil ippines must be described in sepurate manifests for each port of call therein.

Each manifest shall include the port of depar t u re and t he por t of delivery with the marks, number, quantity ~ nd de scription of the p ackag e~ an d l~ e names of the con~ignees theteof . x x x .

I f the vesse l does no t carr y ~ctLSO or pass engers the ma n ifest li1u c t s how tba no c argo or passenqer, a s the case may bn , is car r ied fr om t he por t of d e parture .. o t he port of desti~ation in the Phjlippines.

A ca rgo manifest shall in no case be changed or alter ed a f ter entry of the ve ssel, except by means of an amend- ment by the master, consignee or agent thereof, under oath, ~ nd attached to the origi nal manifes t; Provided, however , that after the invoice and/or entry covering a n importation have been received and recorded in '- he office of t he appraiser, no amendment of t he manifest shall be allowed, except when it is obvious tha t a clerical e r r or or a ny other discre panc y has been commi tted in the preparation o f the manifest, without any fraudulent intent, discovery of which could no t have been mode until after examination of the impor t- ation has been c ompleted.

SEC. 2:2].

Failure to Supply

Requisite Ma ni r-ests.- If any vessel or aircraf t enters or departs from a port o f entry without submitting the proper manifests to the customs authorities, or --

DECISION -)

CTA CASE 110. 2l;rJ - 4 - shall enter or depart conveying unmanifested cargo other than as stated i n the next preceeding section hereof, such vessel or aircraft shall be fined in a sum not exceeding ten thousand pesos.

XXX

XXX

XXX

The de f enses and argume nts raised by peti- tioner in its petition for review and memorandum may be summarized as follows:

1.

The failu e to manifest the cargo in question was due to cle r ical error committed i n good faith or withuu t f r audu lent intent because of a longshoreman strike at t he port of loading. 2.

The amendme nt to the ca r go manifest approved b y the Burc ou of Customs cured the defect thereof a nd relieved t'1e vessel from liability. 3.

The charge agai n s t petitioner for vi6- lation of Section 1005 of the Tariff and Customs

Code

i~ improper because said section is not pena l no r prohibitive but mere l y procedural . : nstead, the charge s hould have bee n for violation of Section 2521 i n relation co Section 1005 of the Code and not vice versa.

4.

The Bureau of cu~toms fail e d to pLove that there wa s fraud in the omission to manifest the c ~(g o in questio n , hence , there is no violation a[ ~~ct i on 1005 of the Code. (

- 5 - 5.

The petitioner, as s hip agent, should not be held liable for the offense of the vessel. 6.

The bill of lading covering the said ship- ment supplies the deficiency in the cargo manifest. 7.

Even if the vessel is guilty of the violation, the amount of ~10,000.00 imposed by the Commissioner of Customs as fine is unconscionable and excessive, and, hence, the same should be reduced. On the other hand, r e s pondent maintains that under Section 1 005 of the Tariff and Customs Code , it is an imperative obligation of every vessel coming from a foreign port to have on board a complete and correct man i fes t of all its cargo and that no exceptiDn is _provided by the statute. \

I

' Therefo re~ the 6efenses of honest mistake, clerical error, good faith , lack of fraudulent intent and amendment to tbe manifest are futile and will not rel ieve th e vessel from liability. And as to the amount of the fine, t he imposition of t he maximum pe n ~ lty of PlO, OO O.O O under Section 25 21 of the Tariff and Customs Code .is justified because the vessel MS "FERNVIEW" has been cited in several instanc es for conveying unmanifestcd cargo in violation of Section 1005 of the Code, specifically in Customs Cases Nos. 903, 967, 970 and 989, now

DECISIOl'l -

CTA CASE NO . 21 70 - 6 - C.T.A. Cases 1930, 2067, 2064 and 2170, respectively.

(See Respondent's Memorandum, pp. 83-87, C.T.A. records.)

The issue and the a r guments presented are not of first impression .

In previous cases of similar or identical nature as the case at bar, this Court has repeatedly Gnd consistently ruled that the law makes it an imperative oblig J tion of every vessel coming from a foreign por t to have on board a complete and proper manifest of all her cargo, and to such mandatory requirement, no except i on i s provided by the sta t ute.

''Under Section 1005 of the

Tariff and Customs Code, it is an imperative obligation of every vessel from a foreign port to have on board a complete mani fest of all her cargo.

No exception is mentioned in the statute.

Nei t he r is there mention of any exception in Section 2521 of said Code p ro· viding for a fine for vessels with- out proper manifests, nor in Section 2530 thereof providing the confis- cation of unmanifested goods.

The ~_<;ogn i_t ion by_ the Court of any_-- attempt to read into the statute any exception, such as misshipment of goods, would be c ontrary to the 2ervasive spir it as well as the

DECISION -

CTA CASE NO . 21 70 - 7 - clear language of the aforesaid pro- visions.

(Smith, Bell & Co. (Phil.)

Inc. vs. Commissioner of Customs, CTA Cases Nos. 1728 & 1921, July 22, 1969; (underlining supplied)~/ The rationale of the foregoing pronouncement of this Court was explicitly enunciated by the Supreme Court in the case of U.S . vs. The Steamship "Rubi", 32 Phil. 228, thus:

ll See a lso Campania General de Tabacos de Fi l ip inas vs. Commissioner of Customs, CTA Case No . 2143, June 30, 1972; Macondray & Co., Inc. vs. Commissioner of Customs, CTA Case No. 2067, Oct. 6 , 1972; Macondray & Co., Inc. vs. Com- miss ~ oner of Customs, CTA Case No. 2082, Sept . 17, 1974; Macondray & Co., Inc. vs. Comm i ssioner of Customs, CTA Case No. 2484, Jan. 19 , 1976; Compa~ia General de Tabacos de Filip inas vs. Commissioner of Customs, CTA Case No. 2144, Ja n . 5, 1 9 76 ; Compa~ia General de Ta bacos de Filipinas vs. The Commissioner of Customs , CTA Case No. 2522, February 2, 1977; Macondray & Co., Inc. vs. Commissioner of Customs, CTA Case No. 2471, April 28 , 1977 ; Compa~ia General de Tabacos de Filipinas vs. Commissioner of Customs, CTA Case No. 2742, Sept. 16, 1977; Compa~ia General de Tabacos de Fi1ipinas vs. Commissioner of Customs, CTA Case No. 2781, Sept. 30, 1977; Macond r ay & Co., Inc. vs. Commissioner of Customs, CTA Case No. 2474, Oct. 24, 1977; Macondr a y & Co. , Inc. vs. Commissioner of Customs, CTA Case No. 2528, Oct. 28, 1977; Macondray & Co., Inc . vs. Commissioner of Customs, CTA Case ~ No. 2069, Nov. 28, 1977; £'-1acondray & Co., -li1c. vs. Commissioner of Customs, CTA Case No. 2472, Nov. 28, 19 77; Litonjua Shipping Co . , Inc. vs. Commissioner of Customs, CTA Case No. 2703, Oct. 20, 1978; Compa~ia General de Tabacos de Filipinas vs. The Commissioner of Customs, CTA Case No. 2559, Dec. 28, 1979; Compa~ia General de Tabacos de Filipinas vs. The Commissioner of Customs, CTA Case No. 2699, Jan . 24, 19 80; Com- pa~ia General de 7abacos de Fi1 i p i nas v s . The Commis~ioner of Customs, CTA Case No. 2537, Jan. 28, 1980.)

l-: ') r) tJI ,'- 1 ,.

,

DECIS ION -

CTA Cl\ SE : '> . 21.70 - 8 - The evident intent and object of these req 1i r emen t s for the submission of mani f ests by all vessels from foreign ports is to impose upon the owners and officers of such vessels an imper a tive obligation to submit lists of the entire lading of the ship in the prescribed form, i n order to facilitate the labors of the Customs and Immigration officers, and to defeat any attemp t t o make use of such vessels to secure the unlawful ent r y of persons o r things into the Islands .

No exception i s made in the statute, and the recognition of any at tempt to r e ad an exception in to _ _J:he s tatute could hardly fail to defeat the :e~ose of its enactment.

(under- lining supplied.)

Consequently, the fact that the failure t o manife s t the vessel's cargo was due to clerical e rr or or i nadvertence committed 1n good faith or without fraudulent inte nt and that an ame ndment to the vessel's man i fest was approve d a nd accepted by th~ Bureau of Customs would no t constitute a valid defense and exculp ate the vessel from liabi- lity .

(See Macondray & Co., Inc. vs. Commissioner o f Customs, CTA Case No. 2503, July 31, 1978; C ompa~ia Gene ral d e Tabacos de F i lipinas vs. Com- missioner of Customs, CTA Case No . 2559, Dec. 28 , 197 9 ; Compa~ia Gene r al de Tabacos de F ilip i nas vs. The Commis s ione r of Customs, CTA Case No . 2699, Jan. 24, 1980; Compa~ia General de Tabacos de Fil ipinas vs. The Commissioner of Customs, CTA • :,_.~·- l'lo. 2537, Jan. 28, 1980.)

DECI Sl ON -

CTA CASE NO. 217 0 - 9 - Besides, on the matter of amendment o f the ves3el's cargo manifest, this Court said: Ano ther strong reason f or no t adopting the interpretation udvocated by petit i oner is fou nd i n the pernicious consequence which would flow from such construc t i on.

If we ar e to exempt the vesse l fr om linbil ity for conveying unmanifcsted car go by the simple expe- dierit of ame nding its manifest after discorcry of he offe nse , it would embolden und encourage other vessels t o deliberately load cargo without list ing them in their manifests.

If

the unmanifested carg o is discovered, as in the present case, the manif e st could simply be amended and thus free t he ve ssel from any liability whatsoeve but if the unmanifested cargo is not discovered, the same would enter the coun t ry free o f dutie s and taxes to the detriment o f the government . In both instance s , the owner or mnster of the vessel has noth ing t o l ose but everything to s~in.

c~ the other hand, the government i s always the loser. Such a result would not be in keeping with the e v ident purpose o f the law in providing effect ive means for the col- lection of customs revenue.

For thi s reason, we are not irriined t o accept the 'nterpre tation of pe titioner. (Macondray & Co., Inc . vs. Commissioner of Customs, CTA Case No. 1930 , Dec . 27 , 1969; Petition for review o n certiorari denied. G.R. No. L-315 99 , Feb . 10, 1970.) Neither would there be tenabili ty and justi- fication in the conte ntions of petitioner that the charge f or violation o f Section 1005 in relation to Section 2521 of the Code is improper; that proof of fraud in the omission to manifest the cargo is necessary to constitute a v1alation o f r .. ~

- 1 0 - the law; that petit i oner, as ship agent, should not be held liable for the offense of the vessel: and that the b i ll of lading covering the shipment in question s upplies tha ~eficie ncy of the cargo manifest.

For a s cat e gorically stated by this Court in rejecting sa i d d e fenses in the case o f Mac ondray & Co., I nc. vs. Commi~sioner of Customs, CTA Case No. 2067, Octobe r 6, 1972, whic h involves a similar viola.tion by the same vessel , iVlS

"FERNVIJ~W "

:

Section 1005 of the Tariff and Customs

Code i mposes upon every vessel the absolute obl i gation to have on board a complete manifest of her c argo.

That the vessel f ailed to comply with Lhis imperative obligation is a clear violation of Section 100 5 .

While said Section does not provide for a penalty, it defines the act punish- able unde r Section 2521.

I n the c ase of Macondray & Co., Inc. vs. Commissioner of Customs, C.T.A. Case No. 1930, Dec. 27, 1969, which involved a similar issue, the Court held:

"x x x Section 1005, of th e Tariff and Customs Code, supra, is so clear and explicit when i t c ommands every vessel from a foreign port to have on board a comple te manifest of all her cargo .

Non-observance of this imperative obligation subjects a vessel to the adm i ~ istrative penalty under Section 2521 of the same Codex x x."

Petitioner's

contention that it should have bee n c lla rged for violation of Secti o~ 2521 in re l a tion to Section 1005 , inste :;d--of vice-versa , is to our mind off tangent.

It is clear under Section 2521 that the penalty there- in . provided is imposed when there is a C· i lur e on the part o f a vessel to sub- .· r t he requisite manifest.

Thi s require- n~ 2:~ i:

~f vessel from a fore ig , 1 port to

DECISION

~ C1A CASE NO. 217 0 - 11 - have o n board a cowplete man ifest of all her cargo is found in Section 1005.

We do not subscribed to peti- tioner's theory that it slou~d have been charg e d for violation o f Sec t ion 2521 in re lation to Section 1 005 ,

We

find, therefore , that the c harge against the vessel is p r oDer. Petitioner's con te nLion that Section 1 005 requi res the ~lement of fraud before i. t c<:m be o.pplied ~E devoid of merit.

While fraud is mentioned therein, t he same refers to t he disallowance o f omendment of a cargo .manifest.

In other words, amendment of the mani fes t may be allowed only i n the absenc e of fraud in the p r e- paration of the manifestJ i n the pr e s e nc e o f fraud, no amendment may be allowed, but i t does not mean t hat Section 1 005 eRn not be applied.

Stated otherwise, whether or not an incomplete ma nifest is amended , Section 1005 is vi ola t ed upon f a ilur e t o s11bmit a complete cargo mani fe st.

XX X

XXX

XXX

Wi th resp~ct to petitioner's claim that an _ _Ment cannot be legally he ld liable f or violation of any law c ommit- ~Pd by its principal, we b~lieve that the same is unmer itorious.

A pe rusal of the decision subject of lh i s appeal will r.:;ho v that the fine is imposed under Sect i on 2S 21 of the Tariff & Customs Code upon the offending vessel.

The fine w.:tt.

imposed upon the vessel in a seizure pro- ceeding, which is in rem, as provided in the Ta r iff and Cus toms Code.

(See

Sees. 2205-2212; Sees. 2301- 2307; and Sees . 2312-2 315, in r elation to Sec. ~532 ~ f the Tariff & Customs Code .) Petitione r was alternately he ld liable for the fine fo r the reason that it sub- mitted itself to the jurisdiction of the Bureau of Customs as agent of the vessel. It is well to note, howeve r, that it can choose not to pay the fine; in the event

DECISIO:--J -

- 12 - that it choos~s not to pay, the vessel will be subject to seizure under Section 2532 of the Tariff & Customs Code.

Pe titioner's argument that although the cargo is ___ u nmanif~sted, the bills of lading, consular i nv~ic~s. and suppliers' invoices submitted with t he manifest, reflected the correct cargo, i s of no moment .

On thi s point, this Court held: "'l'he fact that the whole shipment was ind icate d in the bill of lading does not e xcuse compliance from the require- ment of a manifest. x x x . All these cannot be accomplished by the mere U3e of the bill of lading inasmuch as the bill of lading is not required to be p re sented to the boarding customs officers.

(Macondray & Co., Inc.

vs . Commissione r of Customs, CTA c d s "-' (,] 0 • 16 41 I N 0 v • 15 ' 1 9 6 5 • ) (Cn,k: ;.: lining supplied) _2:/ · Finally, as to the amount of fine, which petitioner ass3ils as unconscionable and excessive, the Court ·:otes that the vessel MS "FERNVIEVv" has indeed be r'i! cited on several occasions for the same viol~tion o f law.

Such being the case, the impositi<'il o [

t. !~ c maximum fine of ~10,000.00 under Secu ";: 2521 of the Tariff and Customs Code (i.e., r~io;.: to the amendment by Presidential Decree No. 34 -----2/ See also Macondr ay & Co . , Inc. vs. C;:--.m;nissione r of Customs, C.T . A. Case No. 2079, Se p t. 29, 1972.

L • .'' .. )

'

-~I

,.J f

DECISION -

CTA CAS~ NO. 2170 - 1 and Pr esidential De , ree No. 1464) is in order. WHEREf ORE, the d e~ ision of respondent Commissioner of Cus t oms is affirmed in toto with costs aga i nbt petitioner.

WE CONCUR:

'-., V<V11avvU:

~ U""

, /) -1-~ / M·1ANTE r LLER v Presiding Judg e