CTA Case No. 2802

LL OTT

OT Oi A

REPUBLIC OF THF PHILIPPiR |

COURT OF TAX APPBA

QUELON city DELGADO SHIPPING AGENCI"S, INC, in its ac as agent of the ss " nPOKIKO manos * retittoner, - Wersus « CTA CASE 80, 2802 COMMISSIONER OF CUSTOMS, Nespondent, a Rewenseeaeeceenwceeewsce X (gel

Decistrey#

This is an appeal from the decision of the Commis- sioner of Customs af Arming the decision ef the Cellect- or of Customs in Administrative Case No, %=531/70 ime posing an administrative fine of P10,039,0 upon the | vessel SS "TOKUKO MAR" end/or petitioner herein as ship agent, for violation of Seetion 2523 of the Tariff and Customs Code, which reads as follows:

gross ele or pac or ne = age ng eg the sanifest exceeds ~~ yl declared in .y ame S or bill of lading thereof, and the Collector shall ef op fon that such 44 was ear ny ty or ears of tne” toe command ~ 2 gh of the 3 or aireraft tine oF a0 than 7t..2 boy the cxken of the per or article ak to gH the the impor Sea ae The faets, as shown by the records, are as follows: The SS “TOKUKO MARU" arrived at the Port of Manila on September 20, 1969 ant discharged 15 bales of textile remmaits imported from the "nited States covered by Bill of Lading Wo, KM-42 with a declared weight of 15,470 lbs. Upon examination of the shipment, however, | it was found by a Customs "xaminer that it actually 355

DECISION = «

CTA CASE NO, 2802 a 2 « weighe’ 19,497 lbe., or with an excess veizht of 4,<- 027 1ds.

On Jarmary 13, 1970, “duardo R, Cateholian, Chief of the Law Division of the Buresu of Customs wrote a let er to petitioner requiring it to explain in vrite ing why no administrative fine should be imposed on the vessel, the 53 “TOKUKO MAM", for vicletion of Section 2523 of the Tariff and Customs Code, In a letter dated Februery 4, 1970, petitioner as- serted that there wes no violation of Section 2523 of the Tariff and Customs Code reasoning out to the col- lector of Customs (1) thet the weight an? measurement indicated in its Permit To Deliver Imported Goods is the same as that indicated in the ship's Inward Cargo Foreign Manifest and the 8411 of Leading, (7) that the freight collected on the shipment was not based on cargo's weirht but on its measurements and (3) that the weight reflected in the Inward Foreign Manifest and the. 8411 of Leding was based upon the declaration mde by the shipper to the Agent or Master of the carrying vessel, .

After a hearing conducted in the fureau of Customs, the Collector of Customs of Manila rendered a decision on October 22, 1970 against the ss “TOKUKO MARI" hold- ing it Mable for vielation of Section 2523 of the Tar- aff and Customs Code and Imposing upon it and/or ites agent, petitioner herein, a fine of P2,008,0C, and that 356 DECISION =~.

CTA CASE WO, 2802 -3@ npen failure to remit the fine, the vessel shall be subject te forfeiture.

On November 6, 197%, petitioner filed a “Motion To Bet Aside Decision” of the Collector cf Customs, Rearing was conducted on the motion to set aside the €ecision on Yovember 26, 1970, Sonsequently, on Hove ember 19, 1974, the Collector ef Customs, modsfied, his decision of October 22, 1970, by inerensicg the fine to 710,039.00 pursuant to Seetion 231? of the Tam iff and Customs Code ageinst the solid Sf “TOKUKO Kant" and/or its locel shipring agent, On Decamber 20, 197, petitioner apnesied to the Commissioner of Customs, who, on Pabruary 17, 1976, renfered a decision hol“ing the °S "TOKUKO "AU" and/or its local agent, petitioner herein, liable for a fine for violation of Seetion 2593, affirming therefore, the Gecisior of the Collector of Curctoms dated November 12, 197%, Ané from this decision, petitioner appealed to this:-Court, The enly issue in this ease is whether or not the SS “TOKUKL MAT has violated Section 25223 cf the Tar- iff and Customs Code which will subjeet it and/or its local agent, petitioner herein, to a fine of P10,039,@, Petitioner contends that it 1s nct liable fer a fine beeanse (1) the discrepaney in weight vas act due to earelessnes: or incompetence of the master cr ship 357

DECISION «

CTA Case WO, 2802 ~ & « agent, (2) the Tariff andé Customs Code does not re- quire the statement of the weight of the cargo in the manifest, (3) the cargo was freighted on the measure~ ment basis an¢ not on its weight, and (4+) the weight in the b41i of lading as declared by the shipver was eonsidered as basis in manifesting the cargo, Yetitia- er, therefore, is of the view that the declaration of the carge was nct due to the carelessness cr negligence of its master, ower, or employee of the 55 "TOKUKO

KARI

We have held in Macondray & Co,, Inc. va, Commis- sioner of Customs, CTA Case No, 2696, January 21, 1977 (Certiorari denied in 0.%, L-46287, June 20, 1977) ine Wolving substantially similer facts, as follows:

As yageess the contention of peti- tioner that the diserepancy is act due to the carelessness or incompetence of the master, owner, or employee of the vessel because the weight declared in the bil! of lading or manifest was supolied by the shipper, and that un¢er Seetion 512 of the Sede of Comserce, an’ even under the Tao riff and Customs Cede, the captain or - Master of the vessel ts not required to ascertain the weight of the cargo, a simi- lar issue was settled by this So rt in the ease of “F.8, Zuellig, Inc,, in its Capacity as agent of the hy¥ Grace", vs, Commissioner of Cus oms, CTA Case No, — ge 10, 1975, wherein it wos reled the e fact’ that the ea tain of a vessel is not careless on the s ef his @uties under the Code of Commerce is no defense against this penalty, Bee ecanse of its contrelling effect on the — @ase, we will quote from the deci-

One

e «¢ « On the other mie petitioner Claimed thet the said diserepancy is by no means attributable to the master 358 DFCIGION - .

CTA CaS& NO. 2802 oS or captain of the vessel beeause, unier

Article 612 of the Code of Commerce

listing the duties of the said offie Gial, he is not required toescertain the actual weight c! the eargo of any tiewlar shipper, Consequently, it s argued that neither carelessness nor incompetence ean be imputed against the eaptain of the vessel "Hongkong Grace” to justify the imposition of the pre- nalty imposed by the Tariff and Cus. toms Code, It is not Article 612 of the Code of Commerce which deals with the duties of the captein of a vessel

but Seeticn 2523 of the Tariff and

Customs Vode that governs this ease, Unier the latter law the facet that the cap sin of a vessel is not eare- less om the bases of his duties as enue merated in the Code of Commerce is no defense against the penalty, The lew includes ‘the carelessness o* the owner or employee of the vessel. The explae- nation of the manager of the Ship) jng Division of petitioner to the effeet that no shipoing line in the United States has facilities for ps ggpenen the weight or contents of the goods shipped therefrom; Syat t bavorid the control of the siiong 29 rn [2 Vali axeus: apte ing petitioner's explo nation as a valid defense {s virtually mllifying Seetion 2923 of the Tarif’ and Customs Code, brushing asice the provisions of Seetion 2523 of the said Code as a deat letter, Deing business in the Philippines, it behooves petitioner to abide by our Customs laws an’ to ignore them is nething short of gross carelessness, It 4s an omisgion of the concern that one with ordinary prudener shovid have of the Customs laws cf the country which it does business, (Unterlining Anent petitioner's averme:t that the freightage of the subject shipment was - mode on @ measurement dasig, suffice it 4 fc.

399

DECISION «

CTA CASE NO. 2502 - 6 « to state that freighta e is merely the charge or compensation paid by the ship- per or importer to the carrier, ani is not a determinative factor in the assess=- ment and imposition of 4nties and penalties on the imported goods, As aptly onserved by the respontent, freightsge is never a faetor in determining the responsi tility of the veesel unter Seetion 2523 of the Tariff and Customs Code, Accorcingly, since it has been esta- bDiished that there is a Ciscrepancy of ne lbs, (%,066 lds, in the present ease) between the declared weight (9°,93% lbs.) and the actual weight (131)358.1bs.) of the subjeet importation 51,084 lbs, ant 75,152.1bs. in the instint ap-eal), which Giserepancy is chviously more than 70% of the weight, and which is attributable to the carelegsness or incompetence of the waster, officer or employes of the vessel beeanuse of his reliance solely on the deelared weight furnished by the shipper and failure te take steps to ascertain and verify the correct weight of the earzo be- fore transporting the same, In utter die- Pegearé of his obligation imposed on him by the law, the vessel MS ““ernbank" and/or its ship agent sre liable fcr the fine of not more than 15% gf the value of saic ee} pel pursuant to Yeetion 2923 0” the Tariff ond Customs Code, x x x,* Gonst@e ing that the imposed “ine under jection 2523 of the Tariff and Customs Code sho'il¢ be based only on the value of the artfcles where the defieteney in weizht exists, or in tha di Terence in the valne of the declared ant the saectual weight ef the immorted articles {uacendray and le.,5 Ine, as agents of the 360 oP - M/S "“FGRNSTED" va. The Commissioner cif Customs, CTA Case No, 268%, April 2%, 1978; Macondray & Co., Incy Vs» Commissioner of Customs, CTA Case Now 27%], Fabroae FY 3) 19775 Delgado Shipping Agencies, Ines vs. Cowxise~ sioner of Customs, CT) Case No, 2685, February 15, 1977), we find no showing in this ease that the fine of 710,039.00 imposed by the Bureau of Customs is beyon! the maximum Limit provided in said Section 2523, How ever, this Court notes that the negligence or incompet= ence of the master, pilot in comand, ower, or employes @an not be considered as owing to a willful negligence or gross incompetence of such waster, pilot in comand, owner or employeo of the So “IOKUKD MARU” to merit the maximum fine. And considering thet the lew has allowed a latitude of discretion in the imposition of the fine, to our mind, the just ami reasonsble fine that should be imposed is 73,000,00, WHGREPORE, the decision of the Commissioner of Customs is hereby modified, arm! the vessel So “TOKUKO MARU” and/or petitioner Delgado Shipping Agencies, Inc, avo hereby orgered to pay a fine of P},000,00 for vice lation of Section 2523 of the Tariff and Custows Codes With costs, 361

DECISTON «

/ CTA CASE NO. 2802 ‘¢ anwre €. ROAQUIN _ hasociate Judge

XI CONCURs

/ a." > AMANTS ee t ac ing Judge 362