Senba Shokai, et al. vs. Commissioner of Customs

DECISION -

C.T.A. CASES NO. 4310 & 4322.

- 2-= (3S) of the Tariff and Customs Code in relation to Central Bank Circular No. 1029.

Fetitioner is a corporation duly organized and existing in accordance with the laws of Japan and engaged as shipper/supplier of used reconditioned cars with principal offices at 1563-1 Imajiku, Himeji, Japan and is represented in CTA Cases No. 4319 by its Attorney-in-fact Takashi Shimizu (see Annex "B" CTA Case No. 4310) a resident of Room 214 Mabini Mansion, Mabini, Ermita, Manila. Subsequently another case was filed by Senba Shokai, Co. Ltd. represented by its President Yoshitaro Okazaki docketed as CTA Case No. 4322 designating Raymundo Caberte as Attorney-in-Fact {see Annex "A" CTA Case No. 4322). Both cases were later on consolidated since they involved the same facts and issues.

The facts are stated in the opinion of the Court.

Sometime in October of 1986, the vessel "Maria VII" left Japan laden with about 136 units of motor vehicles all of which were discharged to various individuals in Rangon, Burma and a firm in Colombo, Sri Lanka except the questioned twenty-eight (28) units which were ordered to be returned to Japan ~ 935

DECISION -

C.T.A. CASES NO. 4310 & 4322. - 3- due to the inability of the consignee to open the proper letters of credit. On its way back to Japan, th e carrying vessel , upon instructions of the ship's owner, proceeded to ) Penang, Malaysia for refueling and to pr~ oceed to Pol""'O Point, La Union, Pt1ilippines for~ a change of cr~w since ' their contracts have already expil'~ed.

While en t~oute to t h e Philippines b•Jt st i 11 in the vessel encoun-tered "boistr:ro \ !!'• " we athe r~ <see Note of Sea Pr~otest, Exh.

"II"> which floo d e d its engine room causing 't to run aground . Co min g to the vessel 's aid, the Royal Malaysian Navy on Oece mbet' 30, 1986 to~oo1ed it to ~<ota ~<inabalu, Sabah, Mala ysia wher~e th e ve ss el's m.;\ ster~ , Capt .

Cr~ is p i t10 Mendoza filed with the h~rbor a uthoriti es there a sworn Note of Sea Pt~ot est (See Exh. "I I">. Soon thet'eaft et~, the owner~ of the vessel sent the R a n ge r~ I te..1gboat to undertake emergency repairs and e v entually towed it to lvJanila.

1 o, 1987' upon arrival of the ve ssel in Manila, Capt. IV1 e ndoza handed to Collectot~ Na"r~ciso Y.

Santiago, Jr.

among a typewt'itten b~ansit ca t~go manifest indicating that the subject c~B units of moto t~ vehicles wet~e in • 938

DECISION -

) C.T.A. CASES NO. 4310 & 4322. - 4 - tt"ansit to Japan <see Exhs.

"MM" and "NN"> .

Subsequently, an E><tension of Note of Sea Pt'otest was filed by Capt.

Mendoza with the Bureau of Customs (see Exh. "JJ">. Upon learning the unexpected development on the voyage of the ves sel and the questioned transit cargoes, herein Petitioner sent a Letter Advice and Noti ce of Cl.;"~im on the Contt~ac t of Afft'eightmen t dated J'un e 1987 to the shipping company, Yasukuni Kauin <Hongkong> Ltd. de manding the return o f t h e s u b j e c t m o t o t' v e h i c 1 e s t o 0 sa ~< a , Japan and also claiming compensation for whate ver loss or damage as well as e><penses at'isi ng from delay or non ·-act ion in releasing the cargoes (s ee Exh.

"LL II).

ln its eat'nest desit'e t o hav e the subject ship me nt to Osaka, Japan, Petit i onet' th~"Ol.IQh its Attorney-in-fact, Atty.

c.

s.

Quintanilla requested Acting Collector of Custo ms, Port of Manila, Cesar z. Daria for t he clearance of the st.lbject v hi cles fa t' the ev ent tal reshipment to On J uly 17 , 1987 a Notice of Levy upon this subject vehicles wa s issued by the sheriff of 840

DECISION -

C.T.A. CASES NO. 4310 & 4322.

~ § = Manila (see Exh. "“QO-1") pursuant to an Order of Attachment issued by the Regional Trial Court of Manila (see Exh. "QQ") in connection with the complaint for sum of money filed by the Master of distressed vessel thru Manning and Management Corporation. However, on September 3, 1987, said Notice of Levy was lifted and cancelled = and considered of no force and effect after it was found out that subject vehicles were not owned by Yasukuni Kaiun (Hongkong) Ltd., and that the lawful owner was Senba Shokai, herein Petitioner.

It should be noted here that the same Master of the distressed vessel, Capt. Crispino Mendoza, never appealed his case from the adverse decision of the Respondent Commissioner of Customs but only to file a Motion For Leave To Intervene in this Court on October 9, 1991 or almost three (3) years from the time it was promulgated on November ai, 1988 Such Motion was not acted upon by this Court, it appearing on . records that the supposed intervenor Capt. Mendoza was not interested in pursuing his case. Another claimant in the administrative level, the Progressive Ecosystem Foundation, Inc., likewise did not appeal to this Court.

941

DECISION —-

C.T.A. CASES NO. 4310 & 4322.

- 6 = In the meantime, on August 19, 1987, despite alleged submission of Bill of Lading and other commercial documents showing that the shipment was not intended to any local evi dries the same was seized and eventually forfeited, in view of the alleged findings of the Fort Collector that the subject cargoes were unmanifested and that there was an attempt to effect release of the seized vehicles through fake documents, and in pursuant to Section 8530, paragraphs d, yg and 1, sub-paragraphs (3), (4) and (5) of the Tariff and Customs Code, of the Philippines, thus:

"SEC. 8330. Property Subject To Forfeiture Under Tariff and Customs Law. ~ Any vehiele, vessel or aircraft, cargo, article and other object shall, under the following eonditions be subjeet to forfeiturar

MHM HRK MKX

KKK KK HK

d. Any part of the cargo, stores or supplies of vessel or aircraft arriving from a foreign port which is unladen before arrival at the vesselss or aircraft’s port of destinations and without authority from the customs officials; but such cargo, ship or aircraft stores and supply shall not be forfeited if such unloading was due to accident, stress of weather or other necessity and is subsequently approved by the collectors

XK KKH «KX

§ 942

DECISION -

C.T.A. CASES NO. 4310 & 4322. - 7 -

X X ><

XXX XXX g.

Unmanife s ted article any ve ssel air·cr·aft if therefor i s required; fou n d in man ifest

X X ><

XXX XXX XXX XXX XXX 1.

Any artic le s ought imported or exported: to be (1) XXX

XX X

XXX XXX

XX X

>< X )(

(3) On the st r·e ngth of a false dec l arat ion or af fid av it execL1ted by the own er·, import er , exporter or co nsi gnee concerning the imp ortatio n of such a r·ticle;

(4 ) On the stre ng t h of a false invoice ot' othe r docum e nt executed by the owner·, importe r , exporter or co n signe e conc erning the mportat ion o r exportation of s uc h art icle; and <5> Through a ny other practice ot~ devise co11t r~ .::u·y to 1 aw by means of which such articles were entered through a customs-house to the prejudice of the go VlH'n ment . "

r·equir· es a rnonn other's , ·the s ubmi ssio n of Cent ral B an ~< autho~· it y to i mpot' t or t he nece ssary release certif i cate fr om th e Ce ntral Bank or its agen t bank ·• 943

DECISION -

C.T.A. CASES NO. 4310 & 4322.

authorizing the release of articles imported or brought into the country.

On November £1, 1988, the Commissioner of Customs affirmed the decision of the Collector of Customs, thugs (see Annex "A") "The Collector, in his decision, maintained that "the said motor vehicles were not manifested in the Inward Cargo Manifest of the vessel and that no shipping and commercial documents covering the said shipment were submitted in due course as required by law and thus, as "the charges imputed against the motor vehicle in question have not been refuted, the same have therefore incurred and liability of forfeiture under the law".

"Claimant-Intervenor-Appellant on appeal, averred in essence that the Collector of manila erred in disregarding the evidentiary and probative value of the C1) Bills of Lading and the Commercial Invoices it submitted which could have established the ownership of the vehicles and their destination which was Sri Lanka as well as the (2) official report of the Chief, Fier Inspection Division of this Bureau, that the Master of the vessel submitted among others, a typewritten Transit Cargo Manifest indicating that the 28 units of motor vehicles on board were only in transit.

“The first argument of Appellant is untenable. The authenticity of the: documents it adverted to above, which was not seasonably offered as evidence, was not indubitably established, in as much as appellant was not able to impugn Bills of Lading OM-101 and OM-011 submitted by the prosecution and the Claimant Amirul din Islam indicating that the 28 vehicles were destined for Manila and that the vessel and the cargoes were owned = by Yasukuni Kaiun Co., Ltd. We cannot help % oy « 944

DECISION -

C.T.A. CASES NO. 4310 & 4322. - 9 - but cast doubt on the genui n eness of the f ormer Bills of Lading as e v e n the master of the v esse 1 h im s e 1 f, whose privity in the s hipper-carrier relati onship was not remote , utilized the l a tt er Bills of Lading i n the pt~osecution of t1is claim for unpaid wa ge s.

"The second contention of appellant i s a lso devoid of met~it .

Alt hough it is conceded that the mastet~ of the vessel indeed submitted to the Chief of the Pier Inspection Division of this Bm~eau, the Transit Cargo Manifest disclosing that the su bject cargoes were in transit, it wa s also the sa id offic i a l who upon evaluation of the said doc u ment, concluded per hi s Memoran du m to the Di s trict Co llector of the Po r t o f Manila dated 14 l'l'lay 1'387 ot~ be fo t~e the seizm~e of the vehicles, that the said Tt~ansit ca~~go Mani fest "did no t confor~m in s u bs'tance and in fot'm with the requit~ed Tnansit Cat~go Manifest, t hus, it i s as if no Tr~ ansit Car·go Manifest wa s subm itted at all''.

On top elf this, is the damaging evidence on hand the Inward Cargo Manifest , submitted to the Customs authorities on the date of th e arrival of the vessel , which decl at~ed the contents of tha vessel as ' NIL CARGO'. "Thr.~ f'a c:t 'l:hus t~ e main , that the forfeiture of the seize d vehic l es was legal and proper.

The sh ipment was •,m m an i f t~ s t e d , t h e en t t~ y o f t h e v e s s e 1 i 11 the Philipp i ne s allegedl y unde r stress was not s u fficientl y established, the s hipm ent was illegally unlad e n hereat, there was an attempt to re lease the importation th t~oug h f a~<e docu me nts violations of the customs laws warranting the forfeiture of the RES. "WHEREFORE, the appealed from s hould AFFinMED."

Hence, t hi s appeal. :.

•• 84fi forfeiture decision be, as it is hereby . ' .

DECISION -

C.T.A. CASES NO. 4310 & 4322. - 10 - only issue to be resolvep is :

whether or not there was violation of Section 2530 paragraphs d, g, and 1, s •.tb -pe:n~a gt~aphs

(3) , <4>, and <5> of the Ti~wiff and Cust oms Code in re lation to Centt~al Ban k Cit~ culat~ No.

1029.

We , howevet~ , can only resolve the issue after the follo wi ng que stions are alread y c leared: a) Was t h et~e an impot~ta t io n of th e s ubject vehicles discharged and unladen a t the P ort of Manila?

b) Did the carrying vessel ar t~i v e undet~ stress of weather ?

c> the Bills of Lading and othet~ com mercic.'l documents presented by Petition et~ authentic and not falsified in view of the He s pan d en t ' s t~ e 1 i an c e o f B i 1 1 s o f Lad i n g No •

OM- 010

and

ON- 011

submi tted by the othet~ c laimant Din Islam A1-Philippines, Inc.'?

d> Wa s the que s tioned s hipment covered b y a Transit Cargo Manifest ? e > Wa s the sa me s hipment cove t~e d by I nwat~d Foreign Manifest?

f) Was t h ere an attempt by the Petiti on er to have the ship ment re leased docum•?nts?

946

DECIS ION -

C.T.A. CASES NO.

~310 & ~322.

- 11 - T h f?

an s wet' t o t h e f i t' s t q u e s t i rJ n i s i n t h e negative, the subject vehicles not being importation intended for the Port of Manila bt1t only t· r~t ur· n s hipment to J •. pan ..

Impm· tation, gener·ally as well as et ym ologically, "consists of a voluntat•y bringing in of goods with intent to unlade the same" <Republic of Hawaii v. Flndet·s on, 10 Haw.

252) .

"It tal<es place when the vessel at•t•ives at a port of entry , intending there .J to dischat•ge her cat•qo" CKidd v .

Flagler·, 54 F.

3€,7 , Undet•scot• ing supplied). In the case at bar, the fact of impot·tation was not established. On the contt•at·y, documentat•y evidences <Exhs. A to HH and thei.t· su b- m.:n· l<ings> , showed to the effect that all the 2 8 units of motor vehicles origi n ated from Osaka, Japan and the port of Discharge was Colombo, St•i Lanka.

In shot·t, sai d motor vehicles were nevet· intended to be unladen in the Philippines.

In fact, the pt•a yet• of the Petitioner wa s fat• the reshipm e nt of ·the · cat•goes back to Osa~<a, Japan.

Yes, thet·e was unloading of t h e subject vehicles but it was not illegal as it was upon the appro val o f the then Acting Distt· ict Collector of Cttsto ms Cesar z. Daria of the Port of Manila as embodied in his letter• to Deputy Shet·iff Melchot• Pena of the Hegion a l Tt' i a 1 Court of Ma nila Br·anch 94

DECISION -

C.T.A. CASES NO. 4310 & 4322. - 12 - August 5 , 1987 wherein he informed the latter that th e discharge "may be effected at the pier at"ea with the coordination of the Philippi ne Ports Authority a nd the party in int et"est " <Exh.

HR a nd it s s ub- markings>. Mot~eovet", the vessel ad mittedly arrived under stre~;s w st h •t-".

This was s ufficiently establi s hed by the sworn Note of Sea Protest dated Decembet' 31, 198S filed by th ve ssel's master with aut horit ie$ of Kota Kinabalu, Sa bah, Malaysia <seo EHh.

II I I II }

... s w~ll as the sworn Extension of Note of Sea Protes t dated January 19, 1987 which he filed with the port authot"ities <see Exh.

J"J and s ub -rna t~~<ings> .

As such, Petitione r should n ot be liable unde r Section 2530 paragraph d of the Tariff and Customs Code. As succi nctly put in .the case of Kisajit"O Okamoto v.

Col l ectot' o f Customs, "t he right of asylu m f t'Om stt'ess of weather is a right well recogni zed by international law and is in accordance wi th the dictates of Christian ity .

The only limitation is that t he weath er must be s uch as to create an hone st belief in the mind of a skil l ful and fir m mari ner" (60 Phil. 218, Ju 1 y 11 , 1934 > • That sett les t h e second question.

DECISION -

C.T.A. CASES NO. 4310 & 4322. - 13 - l=ls to the thit~d que stion, the Petitioner~ t1as reasonably established the authenticity of the bill s of lading a n d invoices through the documents submitt~d A to HH and their sub- markin gs) to this Ca urt nd the oral testimonies of witness Luce ro raneisco of S mith Be l l and Co., t he Atto r ney - in - fact o f the P t i tioner and that of Atty. c. S. Qllin ·l: .s\rli. ll · d n"inu the seizm~e case at the Bureau of Customs <s ~a Ex s . TT and TT-1>. The Bills of Ladi t1g No s .

OM- 010 and OM-011 submitted by Ami rul Din Islam Al - Philippines, Inc., heavil y relied upon by the Commis si oner of Customs are dubious in c haracter in view of the fact that its very own counsel fil ed a notice of Withdrawal since the "d onor of my client by the name of Julie 1-<eneyoshi has failed to turn over the original documents consisting of bills of lading and other~ commet~ cial documents which are pr~ oof of ownership of the subject mattet~ of the case" (see Exh. "VV"). Undoubted 1 y, the questioned shipment was covered by a typewritten Transit Cargo Manifest handed by the master of the vessel to the customs authorities upon its ar~r~ival in Manila <see Exhs . MM an d NN with theit~ s ub - m at~ kings>.

Hence , the fourth question necessitates a positive answer.

DECISION -

C.T.A. CASES NO. 4310 & 4322. - 14 - n ~> 'to ttl f.~ f i f ·t h que m'ti.on, tho qt..u~~ t :l. c1ned shipment being met~e 1 y in tt~ans it tht~ u and not intfH1ded fot~ Ma nil a, the sa me would not be rofl ect•~ d on ·th tJ lnw a r~ d FoY'ei nn M ni femt l)f tho vessel which e><plaitHI the "NIL" on the co 1 um·n for car go appearing in sa id manifest.

it s h ould be re me mb . red th a t the vessel arrived under st t~ e s':2 of wa at h£n~ and was eve n desct~ ibed by the Collectot~ of and PID Ch ief · Narciso Santiago, J ~~. • a s "dee d ship" to wed by the t1.1gboat "Rangfn~ I" of the Malayan Towa ge and Sa lvage Lastly, no iota of evide 11ce was pt~esente d by the Res pondent to prove directl y or indirectly the alleged attempt by the Pet itioner to h a ve the shipment relea s ed through fake documents.

WHEREFORE, h a ving cleared all the pertinent questions, We het"'eby

RES OLVE

t hat no violation of the C1.1 s tom s Liaws E.HI cha~·ge d was ever~ cornmitted by the Pet ition r.H~ ;

n ei tht:n~ w s thet~e a viol ation of t h e Bank C i t"'CIJ 1 .:u~ 102'3 s ince the pt~ ociJrement of impot~t a1.1thori ty from the Central Bank does not ap ply, the s ubject vehicles being not intend e d ta b e unl~den in the Philippines . ..

950 ..

DECISION -

C.T.A. CASES NO. 4310 & 4322. - 15 - ACCORDINGLY, thP deci.sio11 of the F~ espond£-~ nt is het'eb y REVERSED and the sa me Respondent is het'eby ORDERED to RELEASE the s ubject 28 units of Nissan and Toyota vehicles to the Petitioner for re- shipm•?nt to i; he place of a t'i ~Ji n <O sa ~< a, .J a pan) as herein prayed for.

In view o f the informatio n ft .. tr n ish ed by Petit i onet'' s couns£~1 in the it' m<.Hlife~; ti.\tion <Htd Motion d;::\ted 17 AU!;.lU St 1':Y:J:3 that some of the vehicles \.'lere sold at Public Aucti on, t h e p t ' o c e e d s w i t h ~; u c h s i:.\ 1 e s h a 1 1 b e d e l i v £> t' e d t o 1: ht-~ f""'r•t :i.tionr.r· i.n l i. f!t.A nf thr~ velli clr~n wl1i c lt h~ve already bee n sold.

This c ourt does not take cognizance of the Motion For Le ve To Intorveno filed by Cept.

Crispino Mendez .

on October 9 , 1991 it .appearing that i t was filed in order to c ircumvent procedural rules .

Capt. Mendo za should have filed a Petition for Review in this Court within thirty ( 30 > days after receipt of th adv r e Decision of the Commissioner of Customs over h ia c laim s in the administrative le vel.

Having failed to do so directly within the rogl montary period, he cannot do it indirectly by way of int ervention . For lack of .jurisdiction over his case, the s me is hereby DISMISSED.

------ ----

DECISION -

C.T.A. CASES NO.

~310 & ~322.

WE - 16 -

~- ~Q

.. ~ ERNESTO D. ACOSTA Presiding Judg e Court of Tax Appeals