CTA Case No. 3061

Kt~u_..:UC OV i !U £"gi'L~Pr1Nt...~

CO .H:'·:T OF ''FAX . ./'i!.,_'"'J?'f::.' '~JL9

Of 'lf ('(VJ C'iT"lt

EVERI:'I"l' S'TEI\lv'lSHIP CORP. r

Pe Li. t ioner,

--· ve :c s ·1s -

COi.\UviiSSIOl\d::R OF

CUST0~·1S v

P.es~lonc!.<~ n t.

C.T . A. CASE NO. 3061

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D E C I S I 0 N

Appeal by petitioner. Everett Stean.sbip Corpo-

ration from the decision of respondent Commissioner

of Customs dated Deceillber 28, 1979 i n Customs Cas~

No. 79-191, affirming the decision of the Collector

of Customs of Davao dated December llr 1978,

irnposing an adrninist!..:ative fine of ?10;000 .. 00

against the vcssc:.:. \,1j:; "C:-Il\LHEVERf'IT" for. allcgE>clly

conveying an unmanifested article consisting of

one (1 ) .transistorized v;all clock: in violatinn

of Section 1005, in relation to S0ction 2571, of

the Tariff and Customs Code,

~s amended by Pres-

idential Decree No. 34 2nd Pr esidential Decree

The facts are not in dispute.

It appears that on June 14, 1978, the v~~sel

M/S "CFAU·lE\7EEET'I'" 1 of \•lh ich ;'G L:i t i.onet i.s tb

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DBCISION -

CTA CASE NO.

061

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found to have on board an article, c~nsisling

of one (l) transistorized wall clock, which was

not listed in its cargo manifest no£ entered in

the baggage declaration or entry forms required

by the Bureau of Customs .

Consequently, customs

administrative proceeding w~a instituted 2gainst

the said vessel for violation of Sect i on 1005,

in relation to Section 2521, of the Tariff and

Customs Code, as amended.

On July 7, 1978, the Collector of Customs

of Davao issued an Order impositg an administrative

fine of PlO,OOO.OO against the said vessel.

And

on December llr 1978, after further proceedings~

said Collecto~ rendered a decision reiterating

his order of July 7, 197B holding the vessel liable

for a fine of ?10,000.08.

On ,January J.., 1979 1 petitioner appe'-'lled to

the Commissiorer of Cus~oms who, on December 28,

1979, rendered a decision affirming

~.D. !9.-t:.:?. the

decision of the Collector of Customs of Davao.

Hence the present appeal.

Tho sole issue for resoluti0n is whctner or

not tbc~ vessc·l r·-1/S "CE'\Li:IE\i'EIU::'l'T" :i.n J.}.able foi:

the adrninist:r.ative fine of ~10,()00.00 for 'Jio-

278

DEC IS ION ••

CTi\ Ci'.E>E NO. 3 G } L

2521, of the Tariff and Customs Code, as

amended, the pertinent pto isio~s of which,

provide;

"So:~ction 1005 -

~~~nifesE __ H~~.:.Lr.£.0.:

of Ve;;-~1:_ fr'2!.il...F<?_rQ i<Jn

~P.E . .!:· - Gver:y

vessel (rom a foreign port must have

on board a complete manifest of all her

ca:cgo.

All the cargo intended to be landed

at:. a por.: t in the· Phi1 ippines must. be

desctibed in separate manifests for each

port of call tlH::xcin.

Each manifest

shall include the port of departure and

the port of del:vcry w~th the marks,

numhers, quantity and description of the

packages and the names of the consignees

thereof.

Every vessel from a foreign

port must have on board a complete

manifest of passengers and their baggage,

in the prescribed form, setting forth

their destination and all particulars

required by

th(~ immigration laws, a.nd

every such vessel shall have prepared

for presentation to the proper custo~s

officia~ upon arrival in ports of the

Philippines a complete l.ist of all sea

stores then on boord.

If the vessel

dqes not carry cargo or passengers tho

manifests must show

~hat no cargo or

~assenger, as the ca0e may be, is

carried fro:n dw port of departure to

~he port of destination in the Philip-

pines.11

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"Sectjon 2521.

Failure to Supply

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_:~3.~-l.~~L::.~-.. '::::.0 r!..~!~.e ·~:..~~ •

c~ I l y \ .. _, ~·:; (. ..

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aircraft er:t:.crs o:t 'if.:;9arU:; frorn 2 po:::t

of. entry without: f,;u.bmittinq the pruper

1nar1ifests r:.c)

~:l1e

~;~J.stotiiG autllt)} .... i ti -~), c,r.

sha1.l c~nt er or dep··rt conve 'i.n':J unmani.feb···

ted cargo other th2n as staled in the next

pt:0.C8ding ;3\;::ct }.on

he:rc·:':l~, sc..cb vN,scl. o,:

279

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c' ~ : c. Is IC)J.~

C'l'A Cl'.:3E !.1U,

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aircraft. shall be finec1 an .:::nou:1t

not less than ten thousand

(~!0,000.00)

pesos but not exceeding thirty thou~and

(F30

1l000.00)

f>C:;JcJ:S.,

(i\s

ar--~ct1tJ<~d l:!y

P.D. No, l2SS-A)

Petitioner contenas that the vessel M/S

r~lation to Section 2521, of th0 Ta~iff ~nd Customs

Code, bc>causc:

(a)

The value of said wall cloc k is insig-

brought it on board tie vessel has no intention

of defrauding the gove~nment of taxes ;

(b)

Said w2ll clock partakes of the nature

of:

"rer~;onal. effects" and the.\:efou? it is not

rc~Ulted to bo listed ln the manifest as 1t w~~

violation of this nat0re , and being the first

offense, she merits a lighter p~nalty, poseibly

fully submitted, suftlcc.

~ s o

CI'A

Cli.S':~ NO. 30 6 l

~10,000.00 is out of proportion to the cffenE~

because the value

i. s min i.r::al and

there is no fraudulent in~ent to defraud the

'!'•·i'~l.nment of taxes.

Hence, the said penalty is

harsh and excessive.

(Par . 3, Pe t it i on For Review,

November 25, 1980 hearing.)

On the other hand, respondent maintains tha~

the carrying by the vessel of the unmanifestcd

article is a vic1.ation of Section lOGS of the

Tariff and Customs Cede because said law imposes

foreign port to have on board a complete, true and

accurate manifest of all her cargo and a complete

manifest of passengers and their baggage in the

;;>rescr ibed form [.-;ct ti!i9 f:or U.1 tlw ir dc:s'cind t:i.on

and all particulars requiled by immigration laws.

And for such violation,

t~e vessel is nu:

relieved frLm the penalty of finG im9ose6 under

2St

r;t~ClSIC)i'1 ....

Cqf.f\.

C'!~SE T\~0~

306.1

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in ques t ion is c J_;:u.;sifi abl e

i:--\S

"basy:jagE:~" .:.nd,

citing _he c:ase of Col! mi ~.:;s ioner of Cu:;; to s vs .

Francisco Gc.~o n imo , L-31612, Octoher 28 , 1977,

80 ~RA 74 , the same should have been entered in

the baggage declaration and entry forms prescribsd

by the Bureau of Customs to Datisfy the requireme~ts

of

t h~~ l cnv.

The Cour t agrees with the view of respondent

and hereby sustains the same.

From the provisions of Sect i on 1005 of the

Tariff and Customs Code, as amended, which state

that:

"Every vessel from a

fo~eign port must have

and "Every 'Jesscd. i:i:om a foreign port must b;:we on

their destination and all particulars required by

the immigration laws, x x x'' (unde cscor i ng supplied),

i t i s quite clear tha~ a separate manifest for

its cargo and

;;:;e;p.::1r.~i re man ifcs t for

it~> p.:u:;:c;;c•;;']Cr s

and their baggag8 are tequircdd the incoming

for. c. ign ve ;;sc l,

Doth l be ve ~~, sc~ l' s c a.>::go and the

lis r.ecJ

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while baggage must be ente~ed in the baggage man-

ifest or ilt least in the b~ggage declaration and

en·ry forms prescribed by the Bureau of Cu2toms.

The reason for the distinction can be gleaned

from the decision enunciated by the Supreme Court

in the case of Commissioner of Customs vs. Francisco

Geronimo,

L~31642, October

28

~ 1977; 80 SCRA 74.

Thus:

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It is easy to see that inward

manifests are required by the State

principally for the purpose of informr

ing itself what dutiable goods are

n

board an incoming foreign vessel .

As

a general practice, -oods of commercial

quantity or value, usuallr covered by the

corresponding bil s of lading, are

entered by the carrying vessel in an

inward cargo man:Lf:est. which is suhri.tted

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the port authorities and scrutinized

by them.

Upon the other ha d~ baggage

belonging to arriving passengers i~

normally entered in baggage d:3Glar -. t.ion

Qnd er ·:ry forms prescribed by the i3uJ:eau

of Customs.

(80 SCRA 7 ., 78)

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The law itse_f recognizes a dis-

tinction between "cargo

11 and ab2.•393<Je

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when it treats them separately.

Se~tion

1005 of the TariZf and Customs Code

(R.A. 1937, as amended) declares that

(a) ":Svery vesssl from a fcreiqn port

musi have on board a comnlstc manifest

of all he.r carqon v and (iJ) ."Every vessel.

from a foreign pbrt must have or- board

~ompletc manifests cf passengers and

the:r baggage, in the pres~ribcd form,

setting forth their destination and

all particulard_ required by the immig-

rat~on laws; ••• "

The distinction

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DEC .f;ION -

CTA CASE NO. 3061

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is by no means ~n idle one because

the customs processing of passengers;

baggage, unlike that of general cargo,

must be done with dispatch, first, in

order to avoid unnecessa~y inconvenience

to tbc passengers accompanying them ~.ndr

second, because their contents are

generally considered to be of little

or no taxable importance.

All too often the priv i lege of

"passenger baggage" i s abused by unscru-

pulou f:; "tr ave le r s ." .,

The word "mg age" 1

as ·He under;;;ta:1d it, refers to "such

articles of epparel, orna~ent, etc . , as

are in daily use by travelers, for con-

venience according to the habits or wants

of the particular ~lass~ which he belongs,

either wi th reference to the immediate

necessicies ox ultimate purpose of the

journey •.. only such articles of

necessity or convenience aa are generally

carried by passengers for their personal

use".

As such, when entered in the baggage

declaration and entry forms prescribed

by the Bureau of Customs, passengers'

baggage is deemed manifested in accordance

with law.

Dutiable goods of commercial

quantity or value cannot be sure, be

considered pa~sengers

1 baggage which can

pass under the same manifest forms.

They

fall within th~ category of general cargo

and are required by law to be declared in

the inward cargo manifest of the carrying

vessel X X x. (80 SCRA 74, 79)

an obligation of the vessel comj.ng from a foreign

port .o have on board not only a complete manifest

of all its CClrgo but. also a complete mani:l:>st of

its passengers and their baggage h~s obviously

rcndererl in~onsequential and u~necessary the tactual