Court of Tax Appeals
0~E!'Ijbuc of Fhe I'J!.Il!Pf'Inf' ~..:Ourt of Tax A.PPEAL.'~ Quezon En~ Rolando Ligon, et al. vs. Commissioner of Customs
~E!'IJBUC OF
fHE
i'J!.IL!Pf'INf'
~..:OURT OF TAX A.PPEAL.'~
QUEZON
en~
ROLANDO LIGON,
Pe t itioner,
- versus -
C.T.A. CASE NO. 3607
COMMISSIONER OF CUSTOMS,
Respondent.
X -
-
-
-
-
-
-
-
-
X
....
D E C I S I 0 N
The case revolves on a question of whether or not
the subject articles are of for eign origin and the
appropriate taxes and duties thereon have been pa1d, to
wit:
Descriptio~
1.
Cotton denims (maong)
2.
Cordur oy
3.
Trueran
4.
Synthetic dress materials
5.
Suiting materials
Rolls
158
749
430
482
9
Yards
11,893
62,136
1,770
22,165
435
It appears that sometime on September 15, 1981
elements of t he Finance Ministry Intelligence Bureau
( F~H B)
· .with warrant of seizure and detention issued by
~h e
' Collector of Customs of Manila seized the aforesaid
materials allegedly of foreign origin from the petitioner ' s
storage/bodega at 576 Padre Rada Street, Tondo, Manila;
that in the exercise of an original and exclusive juris-
diction, the ·said Collector instituted Seizure Proceedings
45
I
DEC IS ION -
CTA CASE NO. 3607
-
2 -
against the articles in violation of the pertinent
proyisions of Section 2536 in relation to Section
2530(f) and (1)-3 , 4 and 5 of the Tariff and Customs
Code with petitioner as claimant; that after due
hearing and on findings that the articles were imported
~ .!2.§. payment of the corresponding taxes and duties
decreed the forfeiture thereof in favor of the Government
(Seizure Identification No. 14 2-81 , August 18, 1982),
wh i ch order was upheld by the respondent Comm i ssioner
of Cu s toms (Customs Case No. 82-26) .on March 15, 1983.
In assailing the decree of forfeiture, petitioner
a lleges that he is engaged in buying and selling t0xtile
goods/mater{als under the busines s name and style
"Bahaghari Mar keting"; that his stocks are locally p~r-
c hased in the normal and usual course of trade in good
fai t h and for value; that he is not an importer and
therefore does not come under the purview of the law
relied upon by the Collector of Customs; that the
textile materials in question could have been procured
t hrough third parties of auctioned confiscated import-
ations in the port of Cebu and/or authorized sales of
e xcess clothing materials from Siegfield, Philippines,
Inc., a licensed operator in the Export Processing Zone;
and, that "A possessor in the concept of an owner has
in his favor the legal presumption that he possesses
46
/
DECISION .:..
CTA CASE NO. 3607
3
with a just title and he cannot be obliged to show or
prove it" (Article 541, Nevl Civil Code),_ and, "that
things which a person possesses -or exercises acts of
ownersh i p over, are owned by him".
( R u 1 e 131 , .sec • 5 ( j )
Ne w Rules of Court) ~
The Collector of Customs, as sustained by the
respondent Commissioner of Customs, found, "After
evaluation of the evidence obtaining herein, this Office
hereby finds that claimant (petitioner) failed to
establish that the cotton denims (maong) were the same
materials l~gally released from, and covered by Notice
o f Award by, the Bureau of Customs, Port of Cebu.
The
alleged Deed of Sale between William A. Dicdon (Seigfield,
Philippines, Inc.) .and Pedro Jesuitas (Exh. "14
11
)
was
a mere xerox copy and has no probative value.
If at
all, howe~er, while
i~ showed that certain textile
materials were the subject of sale, it did not prove
that duties and taxes due thereon were paid.
As to
the various sales invoices and delivery receipts, the
.
same only establish the fact that claimant had purch sed
c otton piece goods, dress materials and suiting materials
from a legal text i le mill and dealer.
It could be error,
however, to assume that these locally purchased materials
we:e also locally produced.
Samples taken from the
seized materials and subjected to laboratory analysis
47
' •
DECISION -
- 4 - revealed tha t the same were of foreign manufacture. There havi ng been no showing that duties and taxes due thereon were paid, the same had incurred the liability of forfeiture as charged."
We do not think any different ccnclvsion ought be reached in the instant case as we find nothing cryptic in the language of Section 2536 of the Tariff and Customs Code as to pose any ambiguity in its application, which reads:
SEC. 2536.
Seizure of Other Articles. -The
Commissioner of Customs and Collector of Customs
and/or ·any other customs officer, v-1i th the prior authorization in writing by the Commissioner, may demand evidence of payment of duties and taxes on foreign articles openly offered for sale or kept in storage, and if no such evidence can be produced, such articles may be seized and subjected to forfeiture proceedings:
Provided, however, That during s uch proceedings the person or entity from whom such articles have been sei2ed shall be given the opportunity to prove cr show the source of such article :::; o.n d the payment vf duties and taxes due thereon.
As the statute indicates any foreign article offered for sale or in storage must not only show the source but be evidenced by payment of duties and taxe~ otherwise the same shall be subject to seizure. In th~ case at bar the records make it clear that insofar as the provision is brought to bear upon the circumstances obtaining, such proof is wanting as to any evidence of the payment of import liabilities on the subject articles thereby inevi- tably incurring the penalty of forfeiture. The fact that 48
- 5 - the goods were supposedly procured from the Bureau of Customs and the Export Processing Zone will not relieve the res from the liability to forfeiture since the prophylactic function of Section 2536 mandating the requisite evidence of payment of duties and taxes irre- spective of circumstances or intent, has lost none of its efficacy but remains just as valid and effec t ive. "To require less would sanct ~ on an expedient arrangement unsustainable either by operation of law or application of settled principles.
These proscriptions of securing the integrity of the collection of the lawfu l dues are no mere ingenuous sophistries conjured out of sore~ quirky insights but are tinged with strong issues vf public policy to prevent fraud upon the revenue lest the cornerstone of effective collection be placed in the quicksand of self-interest."
(Samhwa Company Ltd. v.
Commissioner of Customs, CTA Case No. 3099, July 31, 1981).
Petitioner's quibble on the legal presumpti n of owner~hip and possession can ha~dly be a reassuring ·prospect that can easily be reconc iled with the statutory intendment.
1\ It may suffice to state t hat the burden of proof in seizure and forfeiture cases shall lie upon
Jl
the claimant (Section 2535, Tariff and Customs Code). And _this bur~en, petitioner has failed to satisfactorily 49
- 6 - discharge.
"The legal presumption in Section 5(j) Rule 131 of the Rules of Court and Article 541 of the Civil Code relied upon by the petitioner are of general character an d cannot prevail over the specific provisions of the Tariff and Customs Code."
(Ac tg. Commissioner of ------------------------------------------ Customs v . CTA and Andrulis, No. L-6::636, Apr i l 27, 1984,
1 29 SCRA 76) ~
Accordingly we fee l compelled to affirm the i mport and force of the r ~s "ondent's findings which may not be suf fE. red to petrify in futility.
WHEREFORE, the instant petition is hereby dismissed with costs against the petitioner.
SO ORDERED.
WE CONCUR:
- ~ -- - / · '\ ' "' l r / · ' a ~ .__ .. .:_.L~(/ / M-'IAN'I'E .#'ILLER Presid,prg,Judge rd r't;/~/--- . CONSTANTE C~ ROAQUIN / s sociute J udge 50