Saturning A. Gazzingan vs. ~ Commissioner of Customs

DECISION -

C.T.A. CASE NO.

4428 ...

.:::..

and ( 1 ) 3, 4 and 5 of and Customs Code, as amended.

On June 27, 1 '::H::l9, Petit i onet~ pet~sonall y appeat~ed during the sch.eduled hearing ot the se1zure proceedings and requested that he be .:d lowed to avail of the pt~ovision of Section 2307 of the Tariff and Customs Code, as amended by Executive No.

38 by offer1ng imposable ta><es, dut1es and t1ne thet~eon, amounting to P123, 641.00.

The govern me nt prosecutor did not interpose any objection.

!::i a 1 d r e que s t was g ~ ~ ant e d by the L o 1 l e c t o t' of Customs and was for c learance to the Commissioner Df Custom s, who, in h:is ·:.:»nd ·- Indorsement dated Septembet~ 11, 1989 Q _en~l::...!:.e..::d::____,t'-<h..!..!:.e__,s~_a"'-'-'m'-'e,___ :i .t appearing t t"!_~- Pet i t ion e r' 1 s financial c apacit y to a nd ..!J!tr!or...t. the said motor vehicle :is doubtful. Hence, this appeal.

In the meantime, the Re spondent, know1ng very well that there was a pending appeal before this Court on his f ot-- f e it ut~ e decision, de l :i be~ ~ at e 1 y ot~ not, sold the vehicle in a public auction sale conducted by his office.

Such vehicle was ne ver re cove r e d despite orders by this Court for Respondent to ~ -·ett'i eve the same. The only issue raised by the Petitione r i s : Whether not Respondent ql'i:l Vt' J y abused hi !:· rJ :i SCT fd: ion in denying ~·etit:ionet~' s offer o f se ttlement ptwstaant to £.0. 898 DECISION C.T.A. CASE NO. 4428 No. 38, the subj The case 15 hereby q and ame as amended, which denial led to the forfeiture of ect vehicle.

applicable provision in the resolution of this Section 1, Executive Order No. 3H, which uoted, thusly:

SECTION 1. Section 23507 of the Tariff Customs Code of the Philippines is hereby nded to read as follows:

"Sec. 2307. Setttement af Case by Payment af Fine ar Redemptian af Ferfeited Prapert y. - $ubject to the approval of the Commissioner, the district collector may while the case is still pending, except mwwhen there is fraud, accept the settiement of any seizure case provided that the owner, importer, exporter, or consignee or his agent cwshall otfer to pay to the callectar a fine imposed by him wpon the property, or ain case of forfeiture, the owner, exporter, importer or coansiqnee or his agent shall offer to pay for the domestic market value of the seized article. The Commissioner may accept the settlement of any seizure case on appeal in the same manner.

Upon payment of the fine as determined by the district collector which shall be in an amount not less than twenty percentum (20%) nor more than eighty percentum (BO*%) of the landed cost of the seized imported articie or the F.0O.B. value af the seized article for export, or payment of the domestic market value, the property shall be forthwith released and all liabilaty which may or might attach to the property by virtue of the offense which was the occasion of the seizure and all daability which might have been incurred under any cash deposit or bond yiven by the owner or agent an respect to such property shall thereupon be deemed to be discharyed.

897 1s

DECISION -

C.T.A. CASE NO. 4428 4 - Settlement of any seizure case by payment of the ·fine or redemption of forfeited property shall not be allowed in any case where the importation is absolutely prohibited or where the release of the property would be contrary to law."

<Underscoring supplied> • It is to be remembered that Petitioner offered to settle the case pursuant to the above mentioned law in the amount of P123,641 as payment for the duties and taxes of the subject vehicle and penalty thereon.

Clearly, under the said law, Petitioner is entitled to the settlement of the case as there was no fraud on his part and that the sub.ject importation is not absolutely prohibited.

In fact, the Law Division of the Bureau of Customs re~ommended for the settlement of the case since there was no fraud committed by the Petitioner and found "no legal impediment to deny his right to settlement enunciated in Executive Order No.

38."

A pertinent portion of the memorandum to the Collector of Customs is hereby quoted, thus:

After a careful review of the evidences thus adduced, this Office finds that there is no fraud in the importation of the subject motor vehicle.

Claimant has properly declared in the covering entry the vehicle under litigation which t a llied to the findings of the Customs Examiner concerned.

As further established from the submitted evidences, claimant is the registered owner of the said vehicle as evidenced by Certificate of Registration No. 6452 9458 i ssued on June 15, 1987.

It should be noted that the subject motor vehicle was personally u s ed by the claimant during his s tay in Germany from June 3, 1988 to January 8, 1989 whel~ e he was employed at G.

Belvan Merchandising.

The

DECISION -

C.T.A. CASE NO.

4428 Yet, 5 - reason why claimant failed to use the sa1d vehicle at the tim~ of registration because he was t~ equested by his daughter, who is living in Japan, to extend h1s stay 1n Japan unt1J they could find a trusted driver as his replacement . Not withstanding the foregoing circumstances, it is safe to state that claimant has been using the Ruestioned vehicle for more than six (6) months; thus there is sufficient compliance of six month use requirement as prescribed by CB Cit~ culat~ No.

1069 on 1"1otm~ Vehicles.

Aside from his stay in Germany, has stayed in Japan for more than one as shown in his Passport No. 0542859. claimant Cl> yeat~ As borne out from the claimant's request mer1t consideration, finding no leoal deny his right to settlement Executive Order No. 38. without rhyme , ~eas on but.

above facts, tavot~ abl e impediment to enunciated 1n solely because of Petitioner~' s "financial capac ity to acquit"e subject vehicle creates doubt to h1s good faith i n the importation thet~ eof", Respondent adamantly refused the off et~ of settlement and denied the recommendation of release by the Collector of Custom!:'. The specific reason advanced by the respondent is, S lW p I" i S i n g l y , not a mong those provided by the Tariff and Customs Code. Q.

A.

Q.

Well !yon You A.

Yes.

anyway, what in:it:i .:dly, of Customs':l I s t o be l" e 1 e i:1 !; 11 d was the decision, the Collec tor of i t.

n o t f or t. h e c at·· a 1 l " e ad y t o y o u ?

and decision ng Col l ector .. . have t o d i s t i n g u i s h th e Co 1 l e c t o )' f l' o m t h e Co m m i s :;. 1 on e l ' • 899 even

DECISION —

C.T.A. CASE NO.

Be that as it may, records of the case, however, showed that the subject vehicie was donated by Gerhard BRelwan, a daughter, September Appellate A.

4428 - & - So the recommendation of the Colleetor was, what?

Irerelease na iyong kotse. Now, when the approval/indorsement of document wes submitted ta the Commissioner, then Commissioner *. Mason of Customs, © what did. Commissioner Mison do? Do you know?

Dinenay iyong kuwan ng Collectar.

On what ground did he deny the favorable recommendation for the release of the vehicle on the part of the Collector of Customs? What was the reason given by then Commissioner Mison?

Because wala daw akong financial Capacity =%ona magkaroon ng Mercedez Benz.

So the only ™4reason on which Commissioner blison based his decision oar action tsa reverse the recommendatian of his you have no financial Capacity to purchase a Mercedez Benz?

Yes.

(T.5.N. pp. 14-16, Aug. 6, 1993) German Zenurida MW. Gazzingan. In the hearing 30, Division of the Bureau of Custams who made a 1993, Atty. Manuel Relorcasa, Attorney 111, 900 Rational who was married ta Petitioner’

DECISION -

C.T.A. CASE NO.

44 2 8 - 7 - review and subsequently ~ecommended f o r the settlement of the case, test1fied, thus: Q.

What add1tional matter was the lawyer of Mr. Gazzingan able to show? A.

~1r.

Gazzingan ••• I mean the lawyer of J'>k.

Gazzingan shov1ed a donation paper fo~- m his so .fl -_!.!l :::-Ji!.!:'L .~-"Ih_lL__!_i a Ge r man natio!lal who is marri~~ :t.Q._hi..~-.Q~~y.D_tJ~.r:.. . Q.

His daught et~ ?

A.

Yes, Q.

In his daughte,~ .

other wot~ds , th e heat~i ng conducted by you, Mr .

Gazz1ngan was able to prove that he did not buy the vehicle and he did not pay for that vehicle, 1n as much as, 1t was donated to him by his son in law who is a German national.

In other words, in that hearing Mr.

Gazzingan was able to adduce evidence that no cash amount involve.

and his financial capacity was not required 1n o t~ de t~ t o a c q u ]t~ e t h e car, i n a s much as, 1t was don a ted to h1m by his son in law in the person of this German national who owned the vehicle in Ge r many. A.

Yes.

Aft ~- the_b_ear in.!h___ l. __ f!r::!:f!areQ. f.Qr:._m_ i!_Dd [ ~-· ecommended for' the reversal of the decis i on of the collector at the Custgms to the Co m m i s s i on e !:.L___j:;__Q____Q_g___ a p p r o v e d a g a L!:L__.!":!_y__~!J_g_ __ __b_g_g~l . __ _§_~r v .i.£.g_ Division but st1!l the Commissioner in sis ted to returQ back the records and ordered the Le_!@_l Ser~v i ~~ --____1_Q ___ j _s s~_e _ _ g_ forfeit Lwe ot~d . et ~ .

So, 1-1hat we did, is to finally issue a seizur e order.

Agai n, Mr .

Gaz2:ingan appea l to th e c otn' t. 901

DECISION -

C.T.A. CASE NO.

4428 - 8 - U.

Yes, and dLw1ng that appeal Mt~ .

Gazzingan was able to show that contrary to the finding of the Commissioner of Customs, he may not have the financial capacity to purchase it at all for it was donated to him by his son in law.

Is it not what transp1red during that hear1ng conducted by you?

Is it not correct?

A.

You know, one of the requirements of an importer 1s that, he must have the capacity to import for the program, the beneficiaries of the program are the bali kbayan, OJ' wot•kers abt'oad for 1t does not 1nvoJve dollars output out of the country.

So, that is one of the requirements. Now, l honestly believe that ~..!2.­ Ga ~~.!.!!!l~n.?_ .. ~----Qf fe~:__ t o set t 1 e is a substitute to the ab!::.t?nce of the requirement but at any rate.

He w a s a b 1 e . _tQ__ ___ _Q_CQ.Y.L_ t hat. h 1 s d a ~gb t e r i s marT i e d t ~!..___ib .. L~­ German national ~ho owns th1s £~ ___ _§_Q.1 ____ .!tHL_t!~ !!l-~D. .. L~gg __ t h e __ !i!Y! on that aspect~ 1 recommended to the legal that it is still the Cummtss1oner who ha s the final say btAt did deny my recommendation.

I cannot do anything except to follow the Co m m i s s i o n e r·· • <T. S. N.

pp.

10-14, Sept.

'3, 1':.1'33;

underscoring supplied) From the fot-egoing test imony , it can be deduced that the Respondent indeed whimsically and capt'iciously e><ercised his powet' o f f OJ' f e i t tw e • And thi s is not the timE' that We have taken notice and in fact, admonished herein Respondent, then Commi ssionet' of Customs Sal vadot' Ni son, regarding his de s poti c manne r of forfeit1ng goods and ves se ls.

F o t ' f e i t u r e i s a 902

DECISION -

C.T.A. CASE NO.

442 8 - 9 - measur·e and should to only w1th extra care. Rivera vs.

Custo111s, C.l. A. Case No. 4479, Dec. 24, 1993.>.

Under the,c1rcumstance, We agree w1th the Petitioner that it is more in accord with justice and equity if Respondent would just impose taxes, duties and penalties on the old imported vehicle of Petit i onet~ who in good faith a donated old vehicle his own domest1 c use.

1'-l slight and r egulation done in good faith would the Respondent f t~ o m wh i m s i c a 1 1 y and capriciously ex e 1 ~ c i s i n g his authority.

Hence, Petitioner· should have been allowed to set t 1 e the case p•.wsuant t. o No. 38, as amended.

regard to the fact that the subject vehicle can no longer be recovered after Respondent, deliberately or not, so ld the same in an auction sale, such should not pr-ejudice the interest of the Petitioner.

Hence, the amount pa1d by the buy er 1n good taith to the Respondent after deduction of the duties and taxes due ther-eon and fine ther·eo f amounting to P123,641.00 be turned over to the Petitioner 1n replacement of his motor vehicle.

WHEREFORE, in a 11 the decision of Respondent dated December 18, 1989 is hereby REVERSED and SET him to DELIVER to the Petitioner the 903 . '

DECISION -

C.T.A. CASE NO.

44~8 - 10 - amount paid by the buyel~ in good faith, in that auction sale minus the dut1es and taxes due thereon and fine <amounting to P123,641.00), 1n replacement of his motot~ vehicle.

WE CONCUR:

ociatE' Judge ~ ~Jvfr.:

RAMON 0. DE VE A Associate Jud e I I hereby certify that ~~~ ERNESTO D. ACOSTA Pr~esidlng Judge this decision was reached after due consultation among the member· s of the Court of Tax Appeals in accordance with Section 13 Arti c le VIII of the Constitution.

90 ~ ~Q ,~ EHNESTO D. ACOSTA Pl~es:iding Judge Court of Tax Appeals