CTA Case No. 3497

DECISION

This is about the liability of petitioner toa surcharge imposed on late payinennt of import liabilities on sia importation.

As it appears, an importation of One (1) unit of Reechcraft Duchess ‘76 Nodel with Serial No. ME 124 arrived at the Manila International Airport (MIA for short) on March 15, 1979, consigned to petitioner Liberty Aviation Corporatian by Beech Aircraft Corporation of Wichita, FEansas, U.S.A.3 the aircraft was imported for “demonstration flight only" and was released from Customs’ custody on a conditionally tax free basis pursuant to the provisions of Section 108(1) of the Tariff and 424 DFr:: I !3 I Uf\.!

CTA CASE NU. 3497 Cu s toms Code, as a me nded, upon posting of Ordinary in the tot.<:\l a mount of F'2.1.5,6.1.4.00 issued by the F'hi l ipp.inr2 Amr:~ r·· i c: an Co.

o f the cor .. r·e~;pond in<:J duties, and other t.•J.i thin si:-:

( 6) months date of <:l cr:::E~ptancE' n ·f the import entr-y .'' !=3ul::lsF:>quf?n t 1 y, petit ir.mt?r- opted to ,:;~. cqui re ·for itse lf the conditionally entered aircraft by paying

t. h r:> ;:>.mount.

F'.l44,842.00 repr·esen t. ing the a sce rtained duties, taxes and other charges as evidenc:f?d by an () ·f fi c:i.::t.l Receipt ,?.ncl '"'

'' Statement

o ·f F'.?.ymPnt'' .i.sf::; uE~d .by the Bur .. eau o·f Customf::;. The release of the aircraft was effected on August 28v 1981 under a covering Cu~toms Re l ease Certificate. As consequence, petitioner sought the di s charge of the Re Ex port Bond earlier posted but Co 11 ector·· of

Customs

District

III

(MIA)

instead, demanded the payment of the face value of the bond in the amount of F'2J..5,6.1. 2 .00 for the taJ.J.un.7.•' to the a.i.rcr.:dt vJ.it hin thf? si:-:·-month per·iod e:-:pir·ing on September Cra CASE MO. S497?

15, 1979, The same demand was reiterated by the sanpandenk Commissioner of Custame aun his letter dated June 15, 1982.

Hence hig appeal, Tn the caurcse af the hearing respondent dropped the demand for the face value of the bond after haking valid cagnizance af petitioner's payment oof the corresponding duties, taxes and other charges due oon the subject importation but insisted on the liabilaty af petitioner for surcharge in the amount of PLE,S79.95 computed at 6% per annum basec on the total amount of duties and taxes for delayed payment pursuant to the preavigioans of Far. A, rer Impasitioaon of surcharge for the payment of duties and taxes. of Customs Administrative Order Na, 8-BoO, Taking excephkion petitianer AY QS that, a Custans Administrative Order lacks the requisite publication and therefore unenforceable; an the said Order is inapplicable as no bond was breacheds the payment af the duties, taxes and other law fud charges could have included the yO on 6) DFC I f:3 I ON -- CTA CASE NO. 3 497 -· LJ. -- s urcharges then due and paya ble on the subject im po r-t ,"\ticm;

and~ thE• claimed s urcharg e has Posed i s the s implE~ ques tion of the l Pgality of a surc harge i mpos ed as a pen a lty for impor-t l :ir.,\bi l i ties on impor·ted i:'\it~cr· aft.

thu •s s hown the con cl it .i. CHI'"' l l y

t. a :·: -- f r·ee e:·: por-t.P d nor· the corrpsponc:ling duties~ taxPs and other charges paid upon expiry of the r e-Px port bond on SPptemher 15 ~

I

1. 979 .in br- p .:~ch of the condition ther-eof. P ayme nt of c:or·· r<·:?~; pond .i nq .i.mpor· t liabilities was e ·ff pc::ted only orY April 15~ .198.1.

or· a lapsf.? of one

(l) year an d sevPn ( 7 ) months from due date.

1 j E.'S t.hP n .. tb.

un v i:'\t"' Y inq asset' .. tion that the p ayment on April 15~ 1981 (Official Recei pt No. 44- 2836) was long ove rdu e thus incurring the s urc harge of Pl3,759 .99 computed at 6% per annum based on the tota l amount of dutiPs and taxes~ imposed under Customs Administrative OrdPr No. 8 - 80~ implementing thP pr·o v:i.s.ion s o·f th e Cu.st:.oms la~.-<J i~:;

mor·e than a sta t e me nt of the obv ious . 427

DECISION ~

We sustain.

Fetitioner’s breach of the terms of the Re- expart Fond posted on. the imported aircraft “conditioned for exportation thereof or payment of the corresponding duties, taxes and other charges within six (6) months fram date of acceptance of the import entry" in “compliance with the formalities prescribed in, or with, the regulations which shall be promulgated by the Commissioner of Customs with the approval of the Minister (now Secretary) of Finance." (Section 105 of the Tariff and Customs Code) "shall be subject to forfeiture - @ and the importation shall constitute a fraudulent practice against customs revenue punishable under Section Thirty-six hundred and two, as amended of this Code." (Id.).

We shall. be less than respecting the full and compelling import and force of the customs law shauld the validity of the assailed implementing regulatory thrust issued aursuBnd thereof remains cantingent upon publication.

DECISION ~

~ & =~

WHEREFORE . petition is dismissed at petitioner’s casts.

Associate Judge

WE CONCUR:

AMANTE FILLER

Presiding Judge

(On official leave) CONSTANTE C. ROAQUIN

Associate Judge

CERTIFICATION

I hereby certify that this decision was reached after due consultation among the members of the Court of Tax Appeals in accordance with Section 12, Article VIII of the Constitution.

AMANTE FILLER

Presiding Judge

Court of Tax Appeals