Antonio Colao vs. Commissioner of Customs

DECISION -

CTA CASES NOS. 3106 & 3107 - 3 - jewelr i es now s~ bj ect matter of these proceedings . On March 17, 1976 , the Metropoli t an Police Command , or Metrocom, r epresented by i t s Comm and i ~g Of fic er, t ur ned over t he j ewelries to t he ~ i stric t Col l ec tor of Cust oms of the Manila I n te rn ~ t i ona l Ai rpor t f or sei zur e proceedi ngs . Seizure proceed ings were t hus institut ed against s aid jewe ~ r i es by the Cust oms author ities f or v i ola t i on of Section 2505 ; Section 2530 , paragraph ( m ) ~ sub- par agraphs 1 , 2 and 5 1 Secti on 2530 , par agraph ( f )~ a l l of t he Tariff and Customs Code as amended by President i al Decr ee No . 34 , i n r e l ation tQ Central Bank Ci rcul ar No . 247 as amended , in t he c ase entitled "Republ i c of t he Philippines vs. Var ious J ewelr ies l i s t ed i n Inventory Repor t dated March 17 , 1976 and April 17 , 1976 , r espec t i vely, Ant onio Colao, .

claimant " , Sei zur e I denti ficat i on. No . 1 44 1-~ 6 .

I n a decision dated Mar ch 19, 1979 , the Collector of C u st~ms of the Mani la I nternati onal Airpor t decl ared the forfeiture of t he jewel ries i n f avor :of the Republic of t he Philippi nes to he disposed of in the manner pres - c ribed by· l aw.

Copy of s~i d decision was r eceived by petitioner Antonio 9o1ao on April 20 , 1979. · On May 7, 1979, pet a' b i aner Colao f iled his notice of appea l before respondel"lt Commi ssioner of Cus t oms . The required cus toms stamp ot ~1 0. 0 0 as fil i ng f ee was not however affixed t o the noti ce of appeal o Meanwhile , on ·255 ..

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DECISION -

CTA CASES NOS . 3106 & 3107 - 4 - J uly 26 , 1979 , petiti oner Gdden Lane Societa A Responsibilita Limi t ata (Golden Lane for short) liled wi t h r espondent Commi ssi oner of Customs its mot i on f or i n~ervention . on Oct ober 5, 1979 , respondent Commi ssione r of Customs i ssued an Or der d i smiss i ng petitioner Colao's appeal for the l att e r '• failure to affix . the cus toms s tamp of PlO. OO as required by ~ aw.

Copy of sai d order was rece i ved each by peti tioner Colao and by petitione r Golden Lane on November 29 , 1979 e On Decembe r 12 , 1979, peti t i oner Colao filed wi th responden t Commissioner of Customs his motion for r econsi- deration of the l atter• • orde r of d ismi ssal , contendi ng , allegedly , excusable negligence . And on i ts part, peti - tioner Golden Lane f i l ed also with respondent on December 13 , 1979 , an Omnibus Motion adopting petitioner Colao 0 • moti on f or reconsideration .

On April 24 , 1980, however , respondent Commissi one r .

of Cust oms i ssued an Order denying for l acK of merit pet i - • ' tioners •· .motion for rec:o-nsideration . Copies of sai d order were r ecei ved by pe titiP~r Antonio Colao and petitione r Golden Lane on May 15 , -9 ~ 0 . Hence, the present jo i ~t pe t ition for review filed be f or e thi s Court on June 11 , 1980 by petitione r Anton i o Col ao and petiti one r Golden Lane s 256 -- --------- • . .

DECISION -

CTA CASES NOS. 3106 & 3107 5 Ins tead of answering the joint petition f or review, respondent filed on August 25, 198 0 a motion to dismi ss the appeal based on lack of jurisdiction Ol} t he ground t hat the decisions of the Col1ectpr of Customs of the Manila International Airport and the Commissioner of Customs had become final and executory.

In ' a Resolu~ion dated April 12, 1~82, this Court deferred the determination of the jurisdic t ional ques tion raised in responden t'~ ~otion to dismiss and to consider the same submitted together with the principal issue on the mer i ts of the case, i t appearing that the jurisdictional gromdraised by respondent did not appear to be indubitable at that time .

The issues here presented are therefore: (1 ) whether or not this Court has jurisdiction over this case· and

(2) ~hether or not there was violation of the Tariff and Customs Code .

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Jurisdicti on over the subject matte r is fun amental for a court to act on a given controversy. It is conferred by l aw.

It can be challenged at any stage of the proceed- . ings and f or lack of it, a court can dismiss a case ex mero !!!2.E!.· To inquire into the e~dstence of jurisdiction over the subject matter is the primary concern of a court, for thereon would depend the validity of the entire proceedings. (Commissioner of Internal Revenue vs. Leonardo s. Villa and 257 I .

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DECIS ION -

CTA CASES NOS. 3106 & 3107 - 6 - The Cour t of Tax Appeal s , L-23988 , J anuary 2, 1968 , 22 SCRA 4, and cases c ited t herein.) In invoking l ack of jurisdicti on of thi s Court over the c ase on the ground that t he decisions of the Collector of Customs of the Manila I nternational Airport and Commis- s ione r of Customs had become final and execut ory, respondent argu~s~ Dec i sion of the Collector of Customs has become final and executory .

Section 231 3 of the Tar iff and Customs Code provides :

"Review by Commissioner .

The person aggr i eved by the decision or action of the Col- l ector i n any matter presented upon protest or by his action in any c ase of seizure may, within f i fteen (15) days after " notification in writing by the Collector of his action or de- c ision, give written not ice to t he Collector and one copy f ur- nished t o the Commissioner of his desire to have t he matte r reviewed by the Commissi oner . Thereupon t he Col lector s hall f orthwith t ransm i t all the re- cords of the proceedings to the Commissioner , who shall appr ove , modify or reverse the action or decision of the Collect or and t ake such steps and make such orders as may be necessary to give effect to his dec i s i on ." (As amended by P.D. No. 34) Additionally , par . VII , CAO No . 226 dated December 3, 1957 of the Bureau of Customs prov i des :

"The person aggrieved by the dec i s i on or action of a 258 .

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DECISION -

CTA CASES NOS. 3106 & 3107 ..

- 7 - Collector of Customs in any matter presented upon protest or by hi s action in any case of seizure pursuant to Sect ion 2312 of the Cust oms Law of the Philippine s may give a written notice to the Collector of Cus- t oms of his desire to have the matter r eviewed by t he Commis- s i oner of Customs .

Such notice of appeal must be filed in trip- licate wi t hin f i fteen (15) days includ i ng Sundays and l egai hol- idays , f rom receipt by t he ag- grieved party or his authorized r epr esentative of written noti- fication of t he action or decision sought s hall be s ubject t o a filing fee of PlO.OO in customs stamp and shall, t ogether with the recor ds of t he case, be forthwith transmit- t ed by the Collector to t he Commis- s ioner of Customs."

It i s not disputed by the parties tha t the decision ·of t he Collector of Customs dated March 19, 1979 was rece i ved by petitioner on April 20,

1979 .

Petitioners, therefore, had lS days from April 20 , 1979 or up to May 5, 1979 within which to appeal to respondent Commissioner of Customs. It is a condition pr ecedent , however, tha a ten- peso customs stamp be affixed to the notice of appeal, such stamps being in the nature of filing f ee .

Petitioners filed t heir notice o~ appeal on May 7, 1979 (Exh. "2" ), t wo 2) days after t he ~eg l ementary period of fifteen · (15) days within which t o appeal the Collector' s decision and without affixing the aforesaid customs stamp as required by Customs Administrative Order No . 226 in r e l ation to Sec t ion 3301 of the Tariff and Cus toms Code .

Such failure is fatal to t heir appeal and , consequent ly, the appealed decision had became f inal and executory . So it has been held that:

"The stamp requirement i s in the nature of a docket fee and f a ilure to pay the docket 259

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DECIS I ON -

CTA CASES NOS . 310 6 & 3107 - 8 f ee f or appeals on time is f atal . " (Lipat v. Comm . of Customs , .T . A.

Case No . 1442, Oc t . 26, 19 66) " The period of 1 5 days prescr ibed by l aw f or a n appeal in cases of f or- f eiture i s no t a matte r o f p roc edu r e which t he court may ignor e.

The p r o- visions of customs l aw, like those of t he i nternal revenue code , are no t d i- r ectory but mandatory, x x x . I t is beyond t he power o f the c ourts to ex t end the period f o r appea l s . "

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C.T .A., e t a l ., G. R. ro . L-1218 4 , May 26 , 1959 ) "The period o f 15 days p rescribed by l aw f or an appeal i n c ase s of f o r - f eiture i s not a matt er of proc edu e wh i c h the courts may i gnore.

The prov is ions of the Customs Law , like those of the i n t ernal r evenue code , a re not d i r ect ory mer e l y but mandator y The pe riod for a n a ppeal i s fixed by l aw at 15 day s in order t hat pe- na l ties for violation o f the l aws or rules on i mportati on should be decide d p romptly and expedi tiou s ly a s del a y s t he r ein may · r esult in t he c l ogging of cus toms arehouses wi th me rchand ise illegally i mporte d . It i s beyond the power o f the courts t o e x t e nd t he per i od of appeal "

(Shanghai Ting Ting Soy

Factory vs . Cour t of Tax Appea ~s and the Col lector o f Customs , 47 OG., 8 661 ) The assailed deci s i on having become final and executory, the Commi ss i one r of Customs ha d no o ther r ecourse bu t t o di smiss t he appeal • Likewise , the dec i sion of the Commissione.r of Customs had become fina l and executory .

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Under Sect ion 11 , Republic Ac t No. 1125 , as amended, creating the Cour t of (Tax) Appeals , "any person , association or corporat i on ·adversely affected by a decision o r r uling o f the X X X Commissioner o f Customs may f i le an a ppeal i n the Cour t o f Tax Appeal s wi thin 30 d a y s af t e r receipt of such decision o r ruling'' {underscor i ng supplied ) ~ The record of th i s case shows that the appealed Order dated Oc tober 5 , 1979 (Exh . " 3 11 ) o f t he Commissioner of Customs deny ing peti tioner s 9 a ppeal was received by bo th o f them on November 29 , 1979 (Exhs . "3- A" & "3~Bn) .

Th i s f act , peti- t ioners a dmi t.

The ir j oint petit i on s f or rev i ew 260

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DEC ISION -

CTA CASES NOS . 3106 & 3107 - 9 -

in CTA Cases Nos

3106 and 3107 so allege (PP e 4-~ , par .

7 )~ thus:

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n the meantime , how- ever , petitioner Colao r eceived on November 29 , 1979 , a copy of the order of t he r espondent Com- missioner, dated October 5, 1979 (Annex "B" , hereof) , dismissing the appeal on the ground that petiti oner fai ed to affix the ~10 .00 customs stamp on t he ap- peal on time o Said petitioner filed on December 12 , 1979 a motion f or the reconsi deration of the order, on the ground that the failure to aff ix the ~10 . 0 0 customs stamp on the appeal at the time i t was filed by the complainant was due to excusa- ble mistake and negligence .

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I n the meanti me also , petitioner Golden Lane , as owner of t he j ewelries, filed a motion for i ntervention with the respon- dent , dated J u y 26 , 1979 .

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act ion ·was taken on said motion . for interventi on .

On ovember 29, 1979 , counsel for the i nt er venor received a copy of the order of the respondent Commis- . sioner denying the appeal on the ground t hat although an appeal ..

was filed within the 15-day perio~, the PlO . OO customs stamp was af- fixed out of time (Annex "C" here of) .

I n tervenor then filed an Omnibus Moti on, dated December 12 , 1979 , wherein it adopted the motion for reconsideration filed by the claimant Colao and in t he alternative prayed that his motion f or i ntervention and supporting memorandum be con- . sidered as an independen t claim." Petitioners had 30 days fr om November 29, 1979 or up to December 29 , 1979 , within which to 261 r

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DECISION -

CTA CASES NOS. 3106 & 3107 - 10 - file th~ petit i on for review before the Court of Tax Appeals .

On December 12 , 1979, after a lapse of 13 days , they filed their motions for reconsideration of the above Order, which was denied by the Commissioner of Customs per reso- lution dated April 24, 1980.

Copies of said Order were received by petitioners on May 15 , 1980 (Exhs. "6" & "6-~")~ (This fact is admitted by private respondents as per their allegations in page 1 of their petition for review, in CTA Cases No. 3106 and 3107).

Petitioners, therefore, h,ad 17 days from Hay 15, ·1980 (after deducting the '13 days that have elapsed when they filed their motions for reconsi deration) within which to file their appeal before the Court of Tax Appeals or up to June 1 , 1980.

Petitioners filed their appeal only on June 11, 1980, which was ten (10 ) · days beyond the reglemen tary period of 30 days. · Consequently , the assailed Order has become final and executory as of June 2, 1980 (Eduardo Sales vs. Commissioner of Customs, CTA Case - ~an. 31 , 1967 , infra) •.

The thirty-qay per iod prescr i bed by Section 11 of RA 1125 , as amended , within which a tax- payer adversely affected by a decision of the Commissioner of Internal Revenue (in this case the Commissioner of Customs) should. file his appeal with the Tax Court, is a jurisdictional requirement, and the fa ilure of a taxpayer to take such step within the prescribed period bars his appeal and renders t he questioned decision final and executory (Surigao Electric Co. vs . CTA, 57 SCRA 528; Acting Commissioner;'.vs. Joseph, et al., 5 SCRA 895; Republic vs. Kim Tian Teng Sons & Co., Inc. , · 16 SCRA 584; Republic vs . del Rosario, 105 Phil. 277; Uy Ham vs. Republic , G.R. 13809 , Oct . 20, 1959; underscoring supplied)~ In North Camarines Lumber Co., Inc. vs. Collector of Internal Revenue (G R. L-12353, Sept. 30, 1969; 6 Velayo ' s Digest 419 ) ,· this Honorable Court declared that for the Tax Court to have jur isdiction over any case , the party seeking redres s must first invoke its exercise in the manne r and within the time prescribed by law.

Thus Section 7 of RA 1125

which enumerates the specific cases falling within the jurisdiction of the Court of Tax Appeals, must be read together with Section 11, 26 2

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DECISION - .

CTA CASES NOS. 3106 & 3107 - 11 - which fixes the time for invoking said j uris- diction .

I ndeed 6 as contended by r espondent, this issue is not one of first i mpression.

Aside from t he cases cited by respondent, supra, in C.B. Antolin Enterprises , et al ., vs . Commissioner of Cust oms , C.T.A. Cas e No . 1435 , J anuary ·14 , 1965, where t he f actual setting is similar to ..

t ha t i n the case at bar, t his Cour t unequivocally established t he r ule that f a i lure to comply f ully with the stamp re- quirement as mandated under Paragraph VII of Customs Admi- nistrati ve Order No . 226 , is f at al and t his Court cannot acqu ire j urisdiction over the c ase. Because of i t s con- trolling effects on. the pre s ent case, we will quote at l ength from the decision .

But it is respondent' ~ theory that, even granting a r guendo that the petitioner's appeal was filed wi thin the reglementary period prescribed by law, nevertheless, the failure of t he petitioners to comply with the require- . ment s of Paragr aph VII of Customs Adm inistr~tive Order No. 226 dated December 3, 1957, which reads as f oll ows :

"The per son aggr ieved by the decision or action of a collector of customs in any matter presented upon pr otest or by his action in any c as e of sei zure pu r su~n t to section 2312 of the Tar i f f

an~ Customs Code

of the Phi l ippines may g i ve a written notice to t he eollector of Customs of his desire to have the matter reviewed by the Commi s sioner of Cus toms .

Such notice of appeal must be fi led in triplicate within fif t een (15) days, including Sundays and legal hoiidays, from rece i pt by the aggrieved party or his 263

DECISION -

CTA CASES NOS. 3106 & 3107 - 12 - authorized representative of wri t ten notification of the action or decis i on sought to be reviewed .

The notice of appeal shall be subject to a f i ling fee of PlO in customs stamp and shall, to- . gether with the records of the case, be forthwi t h transmi~ted by the Collector to the Commissioner of Customs. ' made the decisi on of the Collector final, executory and unappealable .

~ From the above-quoted administrative order , it can be gathered that in order to perfect an appeal to the Commissioner of Cus t oms, the following requi- s ites should be complied with , to wit: (1) filing of a written notice of appeal within fifteen days from the rece i pt of the Collector'• decision or act ion in any case of seizure and (2) payment of the f iling fee of ~10 .00 in customs stamps . As has been shown above, the petitioners were able to file their written notice of appeal to the Commissioner of Customs within the reglementary per iod of fifteen days.

However, they paid a f i ling fee of only ~10 . 00 for all of the fifteen seizure cases covered by this case.

To our min6, this failure to co~ply fully with

Paragraph VII of Customs Administrative Order No

266 is fatal in the sense that we cannot take cog- nizance of Seizure Identification Nos . 161 , 1631, 1634, 1646, 1654, 1685 , 1701, 1703 , 1785, 1803 , 18 07, 1809, 1810 and 1812.

It seems already well- settled that the payment of the full amount of the docket fee is an ind ispensable step in the perfection of an appeal (Lazar.o vs. Endencia, 57 Phil. 552), and upon failure of the appellant in a civil case to pay . the said fee, the appeal is deemed abandoned (Salavaria vs. Albindo, 39 Phil . 922; Alvero vs. de la Roxas, 76 Phil . 428 ; Ampang Tan vs . Commis- sioner of Customs, C.T.A. Case No. 92 , April 2, 1956).

Invoking interest of justice , petitioners however contend that their failure to affix the ten- peso customs stamp on their appeal at the time it was filed was an honest mistake or accident.

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DECISION -

CTA CASES NOS. 3106 & 3107 - 13 - this point calls to mind Al f redo E. Lipat vs. Commissioner of Customs, C.T.A. Case No. 1442, October 26, 1966, the factual setting of which is identical to that in the instant appeal, and where this Court disposed of the same contention in clear and unambiguous terms, in the following wise:

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The 15- qay period ment ioned in the foregoing excerpt has been interpreted as not merely pro- . cedural bu t j urisdictional, not directory but mandatory, and unextendible by Courts.

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Supreme Court in Chan Ki an vs. The Court of Tax Appeals and the Collector of Customs (G.R. No. L-12184, May 29, 1959)~ "The petition admits that a copy of the decision of the Collector of Cus toms was furnished the petitioner on October 24 , 1955.

But he claims that he believed from t he notice received from the Collector of · Customs that the period within which he should appeal was 30 days from the date of demand for p a yment~ that his failure to appeal within 15 days was due to an honest mis take.

This is the gist of the br i ef filed in his behalf by his counsel.

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is argued in support of this claim tha a rule of procedure may be overlooked if ~ it does not involve a public policy and when a lapse in procedure arises from an honest mistake · or an unforseen event not prejudicial to the adverse party.

We find no merit in this argument .

The period of 15 days prescribed by law f or an appeal in cases of forfeiture is not a matter of procedure which courts may i gnor e .

The provis ions of the customs law, like those of the internal revenue code , are not directory merely but mandatory. The period for an appeal is fixed by l aw at 15 days in order that penalties for violations of the laws or rules on importation may be promptly enforced .

Questions involvi ng forfeiture should be decided pr,omptly and expeditiously, as delays therein may result 265 \

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DECISION - .

CTA CASES NOS. 3106 & 3107 - 14 - in the clogging of customs warehouses with merchandise illegally i mported& It is beyond the power of the courts to extend the period for appeal. The Commi ssioner of Customs and the Court of Tax Appeals acted correctly in dis- missing the appeal of the petitioner, as it was not filed within the period of 15 days prescr i bed by law." Again, the settled rule in this j ur i sdict i on is that tardiness of one day in the filing of an appeal i s· sufficient to bar an appeal (Juan G. de Rodriguez vs . Hon. Enrique Ae Fernandez , e t al., G.R. No 8 L-10823, May 28, 1957 )~ "We d9 not agree t hat 't.he ends of j ustice would be better subserved' .by allowing an appeal presented 'o.nly one day late .• There i s no basis in fact, law, or reason for such conclusion. On the contrary , these considerations militate against i t :

(1) The orderly adrnh i stration of justice would suffer a drawback if the period for perfecting appeals be rendered uncert ain , as it would be, by sanctioning such transgression of the deadline .

(2) The appea~ed decision is presumed by law to ·be just and correct , and therefore the denial of the appeal does not necessarily imply an injustice to the appellant.

(3) The right to appeal is a purely statutory right, and he who wants to exercise it must comply with the ~tatute.' (Leoncia Reyes vs. The Court of Appeals and Enrique Bauti sta , No. 48960 , June 29, 1943 , 74 Phil. 238.) .

Lastly, it is not den ied t hat the appeal of t he petitioner had no customs stamp of PlO . OO as required by Customs Admin i s trative Order No . 226 when it was filed .

The necessary stamps were sent to t he Bureau of Customs only on May 15, 1961 wi t h a request that same be attached to the notice of appeal .

To our mind, the stamp requirement is i n t he nature of a docket fee and good author ity is to the effect that failur e to pay the docket fee for appeals on t ime is fatal (Adriano Valdez , vs. Rodrigo Ocurnen, et al., G.R. No . L-~35 36 , J an . 29, 1960 ) •.

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DECISION -

CTA CASES NOS . 3106 & 3107 - 15 - We find no valid and cogent reason to modify, much less depart, fr om the conclusion reached i n Lipat vs . Commissioner of Customs, as expressed in t~e above-quoted opinion of the Court there, ~nd the same should resolve the identical problem now brought before us in these proceedings.

To ·this end , and bearing in mind that the customs stamp requ irement is in the nature of a docket fee, fai lur e to pay such fee within the 15-qay period for filing the appeal did not confer jurisdiction on the Commissioner of Customs to t ake cognizance of these proceedings.

(See Ampang Tan vs. Commissioner , 10 6 Phil . 233 ; Ramon Roces vs. Commiss ioner, 106 Phil . 233. )

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having been no valid appeal from the decision dated March 19, 1979 of the Collector of Customs of the Manila International Airport to r espondent Commissioner of Customs, i t fol lows that this Court has no jurisdiction to take .

cognizance of this case.

Having arrived at 'this conclusion, we deem it unnecessary to pass upon the question of whether or not t he orde r of the Commissioner of Customs dated October 5 , 1979 had become final and executory, and the issue of whether or not there was violation of the Tariff and Customs Code.

WHEREFORE, the joint petition for review is hereby di sm is~ed at petitioners' ~osts . 267

DECISION =

CTA CASES NOS. 3106 & 3107 ~ 16 =

Presiding Judge

WE CONCUR:

ROAQUIN

Judge

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