Remedies Under the Tariff and Customs Code

8/3/2019 Remedies Under the Tariff and Customs Code

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REMEDIES UNDER THE TARIFF AND CUSTOMS CODE

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A. SEIZURE AND FORFEITURE OF GOODS AND COMMODITIES1. SEARCH, SEIZURE AND ARREST Sec. 2201. Obstruction of Customs Premises. No person shall obstruct a customhouse,warehouse, office, wharf, street or other premises under the control of the Bureau of Customs,or any of the approaches to such house or premises.

Sec. 2202. Special Surveillance for Protection of Customs Revenue and Prevention of Smuggling. In order to prevent smuggling and to secure the collection of the legal duties, taxes

and other charges, the customs service shall exercise surveillance over the coast, beginningwhen a vessel or aircraft enters Philippine territory and concluding when the article importedtherein has been legally passed through the customhouse.

Sec. 2203. Persons Having Police Authority. For the enforcement of the customs and tariff laws, the following persons are authorized to effect searches, seizures and arrests comformablywith the provisions of said laws:a. Officials of the Bureau of Customs, collectors, assistant collectors, deputy collectors,surveyors, security and secret-service agents, inspectors, port patrol officers and guards of theBureau of Customs.b. Officers of the Philippine Navy when authorized by the Commissioner.c. Any person especially authorized in writing by the Commissioner .d. Officers generally empowered by law to effect arrests and execute processes of courts,when acting under direction of the Collector.e. Any person especially authorized by a Collector , subject to the restrictions stated in the

next succeeding section.

Persons exercising the powers hereinabove conferred shall, in the exercise thereof,have thesame authority, be entitled to the proper protection, and shall be governed by the same law , notinconsistent with the provisions of this section, as other officers exercising police authority ingeneral.

Sec. 2204. Place Where Authority May Be Exercised. Persons acting under authorityconferred pursuant to subsection (e) of the preceding section may exercise their authority *withinthe limits of the collection district only and *in or upon the particular vessel or aircraft, or *in the particular place, or in respect to the particular article specified in the appointment. All suchappointments shall be in writing, and the original shall be filed in the customhouse of the districtwhere made.

All other persons exercising the powers hereinabove conferred may exercise the same at any

place within the jurisdiction of the Bureau of Customs.

Sec. 2205. Exercise of Power of Seizure and Arrest. It shall be within the power of acustoms official or person authorized as aforesaid, and it shall be his duty, to make seizure of any vessel, aircraft, cargo, articles, animal or other movable property when the same is subjectto forfeiture or liable for any fine imposed under customs and tariff laws, and also to arrest anyperson subject to arrest for violation of any customs and tariff laws, such power to be exercisedin conformity with the law and the provisions of this Code.

Sec. 2206. Duty of Officer or Official to Disclose Official Character. It shall be the duty of any person exercising authority as aforesaid, upon being questioned at the time of the exercisethereof, to make known his official character as an officer or official of the Government, and if hisauthority is derived from special authorization in writing to exhibit the same for inspection, if demanded.

Sec. 2207. Authority to Require Assistance. Any person exercising police authority under the customs and tariff laws may demand assistance of any police officer when such assistanceshall be necessary to effect any search, seizure or arrest which may be lawfully made or attempted by him. It shall be the duty of any police officer upon whom such requisition is madeto give such lawful assistance in the matter as may be required.

Sec. 2208. Right of Police Officer to Enter Inclosure. For the more effective discharge of hisofficial duties, any person exercising the powers herein conferred, may at anytime enter, pass

through, or search any land or inclosure or any warehouse, store or other building, not being adwelling house.

A warehouse, store or other building or inclosure used for the keeping of storage of articles doesnot become a dwelling house within the meaning hereof merely by reason of the fact that aperson employed as watchman lives in the place, nor will the fact that his family stays there withhim alter the case.

Sec. 2209. Search of Dwelling House. A dwelling house may be entered and searched only upon warrant issued by a judge or justice of the peace, upon sworn application showingprobable case and particularly describing the place to be searched and person or thing to beseized.

Sec. 2210. Right to Search Vessels or Aircrafts and Persons or Articles ConveyedTherein. It shall be lawful for any official or person exercising police authority under theprovisions of this Code to go abroad any vessel or aircraft within the limits of any collection to goaboard any vessel or aircraft within the limits of any collection district, and to inspect, search and examine said vessel or aircraft and any trunk, package, box or envelope on board, and to searchany person on board the said vessel or aircraft and to this end to hail and stop such vessel or aircraft if under way, to use all necessary force to compel compliance; and if it shall appear thatany breach or violation of the customs and tariff laws of the Philippines has been committed,whereby or in consequence of which such vessels or aircrafts, or the article, or any part thereof,on board of or imported by such vessel or aircraft, is liable to forfeiture, to make seizure of thesame or any part thereof.

The power of search hereinabove given shall extend to the removal of any false bottom,partition, bulkhead or other obstruction, so far as may be necessary to enable the officer todiscover whether any dutiable or forfeitable articles may be concealed therein.No proceeding herein shall give rise to any claim for the damage thereby caused to article or vessel or aircraft.

Sec. 2211. Right to Search Vehicles, Beasts and Persons. It shall also be lawful for aperson exercising authority as aforesaid to open and examine any box, trunk, envelope or other container, wherever found where he has reasonable cause to suspect the presence therein of dutiable or prohibited article or articles introduced into the Philippines contrary to law, andlikewise to stop, search and examine any vehicle, beast or person reasonably suspected of holding or conveying such article as aforesaid.

Sec. 2212. Search of Persons Arriving From Foreign Countries. All persons coming intothe Philippines from foreign countries shall be liable to detention and search by the customsauthorities under such regulations as may be prescribed relative thereto.Female inspectors may be employed for the examination and search of persons of their ownsex.

2. ADMINISTRATIVE PROCEEDINGS





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Sec. 2301. Warrant for Detention of Property Bond. Upon making any seizure, the Collector shall issue a warrant for the detention of the property; and if the owner or importer desires tosecure the release of the property for legitimate use, the Collector may surrender it upon thefiling of a sufficient bond, in an amount to be fixed by him, conditioned for the payment of theappraised value of the article and/or any fine, expenses and costs which may be adjudged in thecase: Provided, That articles the importation of which is prohibited by law shall not be releasedunder bond.

Sec. 2302. Report of Seizure To Commissioner and Auditor. When a seizure is made for any cause, the Collector of the district wherein the seizure is effected shall immediately makereport thereof to the Commissioner and to the Auditor General.

Sec. 2303. Notification to Owner or Importer. The Collector shall give the owner or importer of the property or his agent a written notice of the seizure and shall give him an opportunity to beheard in reference to the delinquency which was the occasion of such seizure.

For the purpose of giving such notice and of all other proceedings in the matter of such seizure,the importer, consignee or person holding the bill of lading shall be deemed to be the "owner" of the article included in the bill.

For the same purpose, "agent" shall be deemed to include not only any agent in fact of theowner of the seized property but also any person having responsible possession of the propertyat the (missing) of the seizure, if the owner or his agent in fact is unknown or cannot be reached.

Sec. 2304. Notification to Unknown Owner. Notice to an unknown owner shall be effectedby posting a notice for fifteen days in the public corridor of the customhouse of the district inwhich the seizure was made, and, in the discretion of the Commissioner, by publication in anewspaper or by such other means as he shall consider desirable.

Sec. 2305. Description and Appraisal and Classification of Seized Property. The Collector shall also cause a list and particular description of the property seized to be prepared and anappraisement or classification of the same at its wholesale value in the local market in the usualwholesale quantities to be made by at least two appraising officials, if there are such officials ator near the place of seizure; in the absence of such officials, then by two competent anddisinterested citizens of the Philippines, to be selected by him for that purpose, residing at or near the place of seizure, which list and appraisement shall be properly attested to by suchCollector and the persons making the appraisal.

Sec. 2306. Proceedings in Case of Property Belonging to Unknown Parties. If, withinfifteen days after the notification prescribed in section twenty-three hundred and four of thisCode, no owner or agent can be found or appears before the Collector, the latter shall declarethe property forfeited to the government to be sold at auction in accordance with law.

Sec. 2307. Settlement of Case by Payment of Fine or Redemption of Forfeited Property.If, in any seizure case, the owner or agent shall, while the case is yet before the Collector of thedistrict of seizure, pay to such Collector the fine imposed by him or, in case of forfeiture, shallpay the appraised value of the property, or, if after appeal of the case, he shall pay to theCommissioner the amount of the fine as finally determined by him, or, in case of forfeiture, shallpay the appraised value of the property, such property shall be forthwith surrendered, and allliability which may or might attach to the property by virtue of the offense which was theoccasion of the seizure and all liability which might have been incurred under any bond given bythe owner or agent in respect to such property shall thereupon be deemed to be discharged.

Redemption of forfeited property shall not be allowed in any case where the importation isabsolutely prohibited or where the surrender of the property to the person offering to redeem thesame would be contrary to law.

Sec. 2308. Protest and Payment upon Protest in Civil Matters. When a ruling or decision of the Collector is made whereby liability for duties, fees, or other money charge is determined,except the fixing of fines in seizure cases, the party adversely affected may protest such rulingor decision by presenting to the Collector at the time when payment of the amount claimed to be

due the Government is made, or within thirty days thereafter, a written protest setting forth hisobjections to the ruling or decision in question, together with the reasons therefor. No protestshall be considered unless payment of the amount due after final liquidation has first been made.

Sec. 2309. Protest Exclusive Remedy in Protestable Case. In all cases subject to protest,the interested party who desires to have the action of the Collector reviewed, shall make aprotest, otherwise, the action of the Collector shall be final and conclusive against him, except asto matters correctible for manifest error in the manner prescribed in section one thousand sevenhundred and seven hereof.

Sec. 2310. Form and Scope of Protest. Every protest shall be filed in accordance with theprescribed rules and regulations promulgated under this section and shall point out the particular decision or ruling of the Collector to which exception is taken or objection made, and shallindicate with reasonable precision the particular ground or grounds upon which the protestingparty bases his claim for relief.

The scope of a protest shall be limited to the subject matter of a single adjustment or other independent transaction; but any number of issue may be raised in a protest with reference tothe particular item or items constituting the subject matter of the protest."Single adjustment", as hereinabove used, refers to the entire content of one liquidation,including all duties, fees, surcharges or fines incident thereto.

Sec. 2311. Samples to be Furnished by Protesting Parties. If the nature of the articlespermit, importers filing protests involving questions of fact must, upon demand, supply theCollector with samples of the articles which are the subject matter of the protests. Such samplesshall be verified by the custom official who made the classification against which the protest arefiled.

Sec. 2312. Decision or Action by Collector in Protest and Seizure Cases. When a protestin proper form is presented in a case where protest in required, the Collector shall reexamine thematter thus presented, and if the protest is sustained, in whole or in part, he shall enter theappropriate order, the entry reliquidated if necessary.

In seizure cases, the Collector, after a hearing, shall in writing make a declaration of forfeiture or fix the amount of the fine or take such other action as may be proper.

Sec. 2313. Review by Commissioner. The person aggrieved by the decision or action of theCollector in any matter presented upon protest or by his action in any case of seizure may,within fifteen days after notification in writing by the Collector of his action or decision, givewritten notice to the Collector of his desire to have the matter reviewed by the Commissioner.Thereupon the Collector shall forthwith transmit all the records of the proceedings to theCommissioner, who shall approve, modify or reverse the action or decision of the Collector andtake such steps and make such orders as may be necessary to give effect to his decision.





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Sec. 2314. Notice of Decision of Commissioner. Notice of the decision of the Commissioner shall be given to the party by whom the case was brought before him for review, and in seizurecases such notice shall be effected by personal service if practicable.

Sec. 2315. Supervisory Authority of Commissioner And of Department Head in CertainCases. If in any case involving the assessment of duties the importer shall fail to protest theruling of the Collector, and the Commissioner shall be of the opinion that the ruling waserroneous and unfavorable to the Government, the latter may order a reliquidation; and if the

ruling of the Commissioner in any unprotested case should, in the opinion of the departmenthead, be erroneous and unfavorable to the Government, the department head may require theCommissioner to order a reliquidation.

Except as in the preceding paragraph provided, the supervisory authority of the departmenthead over the Bureau of Customs shall not extend to the administrative review of the ruling of the Commissioner in matters appealed to the Court of Tax Appeals.

Customs Administrative Order No. 10-2007 (November 28, 2007): Rules and Regulations in the Conduct of Public Auction and Negotiated Sale[s1]: cover the disposition of articles under customs custody (Sec2601, TCCP) through public auction or negotiatedsale[S2]: articles under customs custody shall be disposed through sale by public auction (UNLESS: special provision of law)[S3]: Floor Price in Auction Sale: not less than the wholesale value of the canvassed domestic wholesale price of thesame, like or similar articles and in the usual wholesale quantities and in the ordinary course of trade (determined bythe concerned examiners/appraisers + subject to approval of the Chief, ACDD and District Collector)-not be less than the sum of the total landed cost based on the published/circularized VRIS-OCOM test value + taxes-take into consideration: obsolence + condition + reasonable depreciation[S4]: Notice of public auction: prepared by the Chief ACDD or ist equivalent unit-approved by the District Collector -contains:a. specific time, date and place for the auction saleb. Lot No. per sale lot; names of consigneec. specific description of goods…d. floor price per sale lote. specific date, time and place for the inspection of all the items/lots which shall be 2 days before auction datef. terms and conditions of the public auction[s5]: Submission of the Notice of Sale to the Commissioner for Monitoring Purposes: Chief, ACDD shall furnish theCommissioner of Customs a copy of the Notice and submit the ff: documents: inventory + certificate of finality of forfeiture/declaration of abandonment/order of the District Collector +certification from the assignedexaminer/appraiser attesting that goods are perishable[s6]: publication and posting notice of sale[s7]: conditions for registration and participation in public bidding[s8]: Sealed bid system[s9] Clustering system: occurs when the difference between the highest and the second highest bid is within 10% of the highest bid. Opening bidding shall be conducted among the bidders of the particular sale lot who are present withthe highest bid serving as new floor price…[s10] awarding of sale[s11]failed bidding[s12] 2nd bidding[s13] negotiated sale[s14] mandatory reporting of the 2nd failed bidding[s15] committee on negotiated sale[s16] requirements and procedure in negotiated sale…

3. COMPULSORY ACQUISITIONCUSTOMS ADMINISTRATIVE ORDER NO. 5-2001: IMPLEMENTING RA 9135: AN

ACT AMENDING CERTAIN PROVISIONS OF PD 1464 (TCC)AS AMENDED BY…CUSTOMS ADMINISTRATIVE ORDER NO. 4-2004 (BUT I DON’THAVE A COPY OF THIS CAO)Section 18

[S1] Objectives[s2] Dutiable ValueII. Administrative provisions

A. Reference Value as Risk Management Tool – use custom value or any other value reference to establishdoubt or alert Customs to do a value verification check

B. Currency Conversion: rate of exchange shall be the duly published rates published by BSP + reflect aseffectively as possible the current value of currency in commercial transactions

C. Release under Sufficient Guarantee –

…V. Compulsory Acquisition-in order to protect the Government’s revenues against undervaluation of goods subject to ad valorem duty …Commissioner of Customs may acquire grossly undervalued goods for a price equal to the declared Customsvalue + any duties already paid on the goods-payment made within 10 working days from issuance of a warrant sighned by Commissioner for acquisition of goodsGROSS UNDERVALUATION: when the discrepancy between the declared Customs value and any of the test values

is 200% or higher:

Difference between the test value and declared value/declared value x 100

B. JUDICIAL ACTION AGAINST THE TAXPAYERSec. 2401. Supervision and Control over Judicial Proceedings. In the absence of specialprovision, judicial action and proceedings instituted on behalf of the Government pursuant to theprovisions of this Code shall be subject to the supervision and control of the Commissioner.

Sec. 2402. Review by Court of Tax Appeals. The party aggrieved by a ruling of theCommissioner in any matter brought before him upon protest or by his action or ruling in anycase of seizure may appeal to the Court of Tax Appeals, in the manner and within the periodprescribed by law and regulations.

Unless an appeal is made to the Court of Tax Appeals in the manner and within the periodprescribed by laws and regulations, the action or ruling of the Commissioner shall be final and conclusive.

C. POST ENTRY AUDITSec. 3514. Requirement to Keep Records. - All importers are required to keep at their principal place of business, in the manner prescribed by regulations to be issued by theCommissioner of Customs and for a period three (3) years from the date of importation, all therecords of their importations and/or books of accounts, business and computer systems and allcustoms commercial data including payment records relevant for the verification of the accuracyof the transaction value declared by the importers/customs brokers on the import entry.chanrobles virtual law libraryAll brokers are required to keep at their principal place of business, in the manner prescribed byregulations to be issued by the Commissioner of Customs and for a period of three (3) yearsfrom the date of importation copies of the above mentioned records covering transactions that

they handle."





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Section 3515. Compliance Audit or Examination of Records. - The importers/customsbrokers shall allow any customs officer authorized by the Bureau of Customs to enter duringoffice hours any premises or place where the records referred to in the preceding section arekept to conduct audit examination, inspection, verification and/or investigation of those recordseither in relation to specific transactions or to the adequacy and integrity of the manual or electronic system or systems by which such records are created and stored. For this purpose. Aduty authorized customs officer shall be full and free access to all books, records, anddocuments necessary or relevant for the purpose of collecting the proper duties and taxes.

In addition, the authorized customs officer may make copies of, or take extracts from any suchdocuments. The records or documents must, as soon as practicable after copies of such havebeen taken, be returned to the person in charge of such documents.A copy of any such document certified by or on behalf of the importer/broker is admissible inevidence in all courts as if it were the original.An authorized customs officer is not entitled to enter any premises under this Section unless,before so doing, the officer produces to the person occupying or apparently in charge of thepremises written evidence of the fact that he or she is an authorized officer. The personoccupying or apparently in charge of the premises entered by an officer shall provide the officer with all reasonable facilities and assistance for the effective exercise of powers under thisSection.Unless otherwise provided herein or in other provisions of law, the Bureau of Customs may, incase of disobedience, invoke the aid of the proper regional trial court within whose jurisdictionthe matter falls. The court may punish contumacy or refusal as contempt. In addition, the factthat the importer/broker denies the authorized customs officer full and free access to importationrecords during the conduct of a post-entry audit shall create a presumption of inaccuracy in thetransaction value declared for their imported goods and constitute grounds for the Bureau of Customs to conduct a re-assessment of such goods.This is without prejudice to the criminal sanctions imposed by this Code and administrativesanctions that the Bureau of Customs may impose against contumacious importers under existing laws and regulations including the authority to hold delivery or release of their importedarticles.

Section 3516. Scope of the Audit. –(a) The audit of importers shall be undertaken:(1) When firms are selected by a computer-aided risk management system, the parameters of which are to be based on objective and quantifiable data and are to be approved by theSecretary of Finance upon recommendation of the Commissioner of Customs. The criteria for selecting firms to be audited shall include, but not be limited to, the following:

(a) Relative magnitude of customs revenue from the firm;(b) The rates of duties of the firm's imports;(c) The compliance tract records of the firm; and(d) An assessment of the risk to revenue of the firm's import activities.

(2) When errors in the import declaration are detected;(3) When firms voluntarily request to be audited, subject to the approval of the Commissioner of Customs.

(b) Brokers shall be audited to validate audits of their importer clients and/or fill information gapsrevealed during an audit of their importers clients.

Section 3517. Documents in Foreign Language. - Where a document in a foreign language ispresented to a customs officer in relation to the carrying out of any duty or the exercise of anypower of the Bureau of Customs under this Code, said document in a foreign language must beaccompanied with a translation in the official language of this country."

Sec. 3518. Records to Be Kept by Customs. – The Bureau of Customs shall likewise keep arecord of audit results in a database of importer and broker profiles, to include but not be limitedto:

(a) Articles of Incorporation;(b) The company structure, which shall include but not be limited to:

(1) Incorporators and Board of Directors;(2) Key officers; andchan robles virtual law library(3) Organizational structure;

(c) Key importations;(d) Privileges enjoyed;(e) Penalties; and(f) Risk category(ies).

…CAO 5-2001B. Compliance Audit1. Importers/Customs broker shall allow any Customs officer authorized by the Commissioner of Customs to enter during office hours any premises or place where the records are kept to conduct audit, examination, inspection,verification and/or investigation of:a. document flow

b. financial flowc. goods inventoryd. other business processes

Necessary/relevant in determining the adequacy and integrity of the manual/electronic system/s by which suchrecords are created and stored and to ensure compliance with Customs laws and existing rules and regulations…?

2. Authorized Customs officer may require importer and/or broker to make certified copies of any suchdocuments/extracts-any record must be returned to custodian within 24 hours

3. copy of such document certified by/on behalf of the importer/broker: admissible in evidence in all courts as if it wereoriginal

4. authorized customs officer shall not enter any premises UNLESSbefore doing so, the officer produces to the

person in charge of the premises the ff:a. duplicate original of the AUDIT NOTIFICATION LETTERb. official customs ID

5. Unless otherwise provided, the BOC may, in case of disobedience, invoke the aid of the proper RTC w/n whose jurisdiction the matter falls

6. w/o prejudice to criminal sanctions imposed by laws and administrative sanctions that the BOC may imposeagainst contumacious importers, including authority to hold delivery or release of their imported articles

C. Scope of the Compliance Audit1. Audit undertaken when:a. firms are selected by a computer-aided risk management system, parameters of which based on objective andquantifiable data which shall include (not exclusive):…relative magnitude of customs revenue from the firm…rates of duties of the firm’s imports





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…compliance track record of the firm…assessment fo the risk to revenue of the firm’s import activitiesb. when errors in the import declaration are detected, if uncorrected would result insubstantial revenue loss/gravedistortion of relevant statistical datac. firms voluntary requests

2. Brokers shall be audited only to validate audits of their importers/ fill in information gaps revealedduringaudit of importer clients

D. Conduct of Compliance Audit

AmendmentsCAO no. 2-2002

IV. Compliance Audit OperationsPending the creation of Post Entry Audit Office, the post entry audit system shall be initially handled by the interimPost Entry Audit Unit as defined under Customs Special Order No. 50-2001

PEA Process: A. Selecting Firms for Audit using Risk Management Approach: 2 types of audit1. VOLUNTARY COMPLIANCE AUDIT: conducted under BOC’s Compliance Program, developed to make compliantthose firms that contribute up to 80% of customs revenue-voluntary-successful applicant firms shall be chosen using criteria that determine their respective risk levels-focus on determining whether the firm’s systems and procedures, particularly its inventory, financial and record-keeping systems, all lead to the generation of compliant customs declarations2. Enforced compliance audit: conducted on firms that are not included in the compliance program + have been foundto have compliance issues-chosen from among those tagged for audit:a. by the collectors of customs as a result of VCRC reviewb. by TIRAU created under CSO 50-2001 as a result of its periodic analysisc. as a result of enforcement operations

B. Profiling and Information Analysisa. gathering information by downloading customs data on the targeted importer, collating information from other sources both internally and externallyb. profiling the company’s activities on the basis of the captured datac. identifying risk shipments according to issues involved for verification purposes

d. sampling of exception reports according to nature of variancese. reviewing of past decisions of BOC vis-à-vis the selected shipmentsf. preparing a report for the Commissioner to serve as basis for the grant of authority to serve as basis for the grant of authority to conduct field audit

C. Audit NotificationD. Audit Preparation/Audit PlanE. Pre-Audit Conference with AuditeeF. Conduct of Audit Proper – Field AuditG. Exit ConferenceH. Audit ReportingI. Audit Monitoring and Implementation

D. Jurisdiction of the Collector of Customs over importation of Artiles

Section 1206. Jurisdiction of Collector Over Importation of Articles-Collector shall:…cause all articles entering the jurisdiction of his district and destined for importation through hisport to be entered at the custom house…cause all articles to be appraised and classified…assess and collect duties, taxes and other charges theron…hold possession of all imported articles upon which duties, taxes and other charges have notbeen paid or secured

Section 1207. Jurisdiction of Collector Over Articles of Prohibited Importation-duty of collector to exercise such jurisdiction in respect thereto as will prevent importation or otherwise secure compliance with all legal requirements

JAO V CAFACTS:The Office of the Director, Enforcement and Security Services (ESS), Bureau of Customs, received information regarding the presence of untaxed vehicles and partsin the premises owned by Pat Hao located along Quirino Avenue, Paranaque and Honduras St., Makati. After conducting a surveillance of the two places, respondentMajor Jaime Maglipon, Chief of Operations and Intelligence of the ESS, recommended

the issuance of warrants of seizure and detention. District Collector of CustomsTitus Villanueva issued the warrants of seizure and detention .

Maglipon coordinated with the local police to assist in the execution of the respective warrants of seizure and detention.The team searched the two premises. They werebarred from entering the place, but some members of the team were able to forcethemselves inside and were able to inspect the premises and noted that some articleswere present which w ere not included in the list contained in the warrant . Amended warrants of seizure and detention were subsequently issued by Villanueva.

Consequently customs personnel started hauling the articles pursuant to the amended warrants.

Narciso Jao and Bernardo Empeynado filed a case for Injunction and Damageswithprayer for Restraining Order and Preliminary Injunction before RTC Makati Branch56 on August 27, 1990 against respondents. On the same date, the trial court issueda Temporary Restraining Order.Respondents filed a Motion to Dismiss on the ground that RTC has no jur isdiction overthe subject matter, claiming that it was the Bureau of Customs that had exclusivejurisdiction over it. RTC denied motion to dismiss.Respondents filed MFR . MFR was denied. CA set aside the questioned orders of the trial court and enjoined it from furtherproceeding with the Case. The appellate court also dismissed the said civil case.





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ISSUE:WON the RTC has jurisdiction over cases questioning the validity of seizure andforfeiture proceedings conducted by the Bureau of Customs

HELD:The RTC is devoid of any competence to pass upon the validity or regularity ofseizure and forfeiture proceedings conducted by the Bureau of Customs and to enjoinor otherwise interfere with these proceedings .The Collector of Customs sitting inseizure and forfeiture proceedings has exclusive jurisdiction to hear and determine allquestions touching on the seizure and forfeiture of dutiable goods. The Regional TrialCourts are precluded from assuming cognizance over such matters even throughpetitions of certiorari, prohibition or mandamus.It is likewise well-settled that the provisions of the Tariff and Customs Code and RA1125 "An Act Creating the Court of Tax Appeals," specify the proper fora andprocedure for the ventilation of any legal objections or issues raised concerning theseproceedings.

Actions of the Collector of Customs are appealable to the Commissioner of Customs,whose decision, in turn, is subject to the exclusive appellate jurisdiction of the Courtof Tax Appeals and from there to the Court of Appeals.The rule that Regional Trial Courts have no review powers over such proceedings isanchored upon the policy of placing no unnecessary hindrance on the government'sdrive, not only to prevent smuggling and other frauds upon Customs, but moreimportantly, to render effective and efficient the collection of import and exportduties due the State, which enables the government to carry out the functions it hasbeen instituted to perform.

The illegality of a seizure by the Collector of Customs does not deprive the Bureau of Customs of jurisdiction thereon.

The allegations of petitioners regarding the propriety of the seizure should properlybe ventilated before the Collector of Customs. We have had occasion to declare:The Collector of Customs when sitting in forfeiture proceedings constitutes a tribunal expressly vested by law with jurisdiction to hear and determine the subject matter of such proceedings without any interference from the Court of First Instance. (Auyong Hian v. Court of Tax Appeals, et al., 19 SCRA 10).

ENRILE vs VINUYANATURE

Certiorari and prohibition proceeding

FACTS- The then Collector of Customs of the Port of Manila issued a warrant of seizureand detention against the Cadillac car involved in this case, the owner-claimant beinga certain Rodolfo Ce za, as the taxes and duties had not been paid. l h /CITE> The

warr- It was moreover shown in the petition that the owner, Rodolfo Ce za, had sold

such car to one Francisco Dee from whom respondent Vinuya acquired the same.- Vinuya filed a complaint for replevin in the sala of respondent Judge on the groundof alleged illegality of the seizure which, in the opinion of respondents, did not conferjurisdiction on the Collector of Customs.- Petitioners filed a motion to dismiss on the ground that forfeiture proceedings hadalready been instituted before the Collector of Customs who has the sole jurisdictionto determine questions affecting the disposition of property under seizure as well asthe absence of a cause of action. This was denied for lack of merit. Thus thispetition.

ISSUEWON the court of first instance is vested with jurisdiction to entertain a complaintfor replevin for the recovery of a Cadillac car, subject of a seizure and forfeitureproceeding in the Bureau of Customs

HELDNO. The prevailing doctrine is that the exclusive jurisdiction in seizure and forfeiturecases vested in the Collector of Customs precludes a court of first instance fromassuming cognizance over such a matter. This has been so, as noted, since Pacis v.Averia.

Reasoninga. The existence of the power and the regularity of the proceeding taken under it aredistinct from each other. The governmental agency concerned, the Bureau of Customs, is vested with exclusive authority. Even if it be assumed that in the exerciseof such exclusive competence a taint of illegality may be correctly imputed, the mostthat can be said is that under certain circumstances the grave abuse of discretionconferred may oust it of such jurisdiction. It does not mean however thatcorrespondingly a court of first instance is vested with competence when clearly inthe light of the above decisions the law has not seen fit to doso.l h /CIJFOAJOJbefore th

b. "the Court of First Instance should yield to the jurisdiction of the Collector of Customs. The jurisdiction of the Collector of Customs is provided for in Republic Act





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1937 which took effect on July 1, 1957, much later than the Judiciary Act of 1948. Itis axiomatic that a later law prevails over a prior statute.c. Moreover, on grounds of public policy, it is more reasonable to conclude that thelegislators intended to divest the Court of First Instance of the prerogative toreplevin a property which is a subject of a seizure and forfeiture proceedings forviolation of the Tariff and Customs Code. Otherwise, actions for forfeiture of

property for violation of Customs laws could easily be undermined by the simple deviseof replevin."d. Section 2303 of the Tariff and Customs Code requires the Collector of Customs to give to the owner of the property sought to be forfeited written notice of theseizure and to give him the opportunity to be heard in his defense. This provisionclearly indicates the intention of the law to confine in the Bureau of Customs thedetermination of all questions affecting the disposal of property proceeded against ina seizure and forfeiture case. The judicial recourse of the property owner is not inthe Court of First Instance but in the Court of Tax Appeals, and only afterexhausting administrative remedies in the Bureau of Customs."e Collector of Customs is not final. An appeal lies to theDISPOSITIONThe writ of certiorari prayed for is granted, respondent Judge being clearly withoutjurisdiction.

ASIAN TERMINALS, INC. V RICAFORT ET AL

FACTS-Section 1, RA No. 8506 provides that it shall be unlawful for any person to import,cause the importation of, register, cause the registration of, use or operate right-hand drive vehicles-Noel Tabuelog et al are duly-licensed importers of vehicles, who, between April andMay 1998, imported 72 secondhand right-hand drive buses-When the shipment arrived at the Port of Manila, the District Collector of Customsimpounded the vehicles and ordered them stored at the warehouse of the AsianTerminals, Inc. (ATI)-Conformably with Section 2607 of the Tariff and Customs Code, the District Collector of Customs issued Warrants of Distraint against the shipment and set thesale at public auction-On October 28, 1998, the Secretary of Justice rendered an opinion stating thatshipments of right hand wheel vehicles loaded and exported at the port of originbefore February 22, 1998 were not covered by RA No. 8506 unless the same wereloaded and imported after said date.

-On November 11, 1998, the importers, filed a complaint with the RTC of Parañaque

City, against the Secretary of Finance, Customs Commissioner, et al for replevin-The RTC granted the application for a writ of replevin on a bond of P12,000,000.00.-The Chief of Customs Police and four (4) customs policemen prevented the Sheriffand the policemen assisting him from taking custody of the vehicles, claiming that theDistrict Collector of Customs had jurisdiction over the vehicles.-On motion of the plaintiffs, the court issued an order directing the PNP Director to

assist the Sheriff in implementing the writ it issued-The District Collector of Customs agreed to transfer the custody of the vehicles tothe RTC, on the condition that the required taxes, dues, and other charges be paid.-On November 27, 1998, the defendants, through the OSG, filed a motion seeking thereconsideration of the RTC Order on the ground that the RTC has no jurisdiction overthe vehicles subject of seizure and detention before the Bureau of Customs. The ATIfiled a motion for the court to allow the vehicles to remain in its warehouse.-On December 1, 1998, the ATI filed a Third-Party Claim over the shipment, allegingthat it had a lien over the vehicles for accumulated and unpaid storage and arrastrecharges, and wharfage dues-Before the court could resolve the motions, plaintiffs filed a "Motion/Notice toDismiss/Withdraw Complaint" against the defendants on the ground that they had

agreed to the implementation of the writ of replevin-ATI filed a Motion for Intervention and for Admission of its Complaint-in-Intervention, alleging that it had a lien on the vehicles for accumulated storage andarrastre charges and wharfage dues.-On April 27, 1999, the court issued an Order d ismissing the complaint-The OSG filed a motion for reconsideration. For its part, ATI filed a motion forclarification of the order, and also pleaded for the court to admit its Complaint-in-Intervention-On September 23, 1999, the RTC issued its Order dismissing the Complaint-in-Intervention-ATI filed a motion for reconsideration, which the court denied on July 31, 2000.-ATI filed a Petition for Certiorari under Rule 65 before the CA-On November 30, 2004, the CA rendered judgment dismissing the petition for lack ofmerit. The appellate court ruled that the RTC had no jurisdiction over the complaintfiled by respondents, since the Collector of Customs sitting in seizure and forfeitureproceedings had the exclusive jurisdiction to hear and determine all questions relatingon the seizure and forfeiture of dutiable goods. Since the RTC had no jur isdiction overthe main case, it was also bereft of authority to hear the third-party claim or thecomplaint-in-intervention filed by ATI.-ATI filed a motion for reconsideration, which the CA denied, hence, this petition

ISSUE WON the lower courts erred in dismissing ATI's petition





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HELD No.-Section 602 of the TCC provides that the Bureau of Customs shall exerciseexclusive jurisdiction over seized and forfeited cars. It is tasked to enforce tariff,and supervise and control customs law and all other laws, rules and regulationsrelating to the tariff and customs administration; and to supervise and control all

import and export cargoes, loaded or stored in piers, terminal facilities, includingcontainer yards and freight stations, for the protection of government revenues.Under Section 2301 of the TCC, the Collector of Customs is empowered to make aseizure of cargoes and issue a receipt for the detention thereof-Section 2530. Property Subject of Forfeiture Under Tariff and Customs Laws. Anyvehicle, vessel or aircraft, cargo, article and objects shall, under the followingconditions be subject to forfeiture: (f) Any article the importation or exportation of which is effected or attempted contrary to law, or any article of prohibitedimportation or exportation, and all other articles which, in the opinion of the Collector,have been used, are or were entered to be used as instruments in the importation orexportation of the former.-In Jao v. Court of Appeals, it was held that the Regional Trial Courts are devoid of

any competence to pass upon the validity or regularity of seizure and forfeitureproceedings conducted by the Bureau of Customs and to enjoin or otherwise interfere with these proceedings. It is the Collector of Customs, sitting in seizure andforfeiture proceedings, who has exclusive jurisdiction to hear and determine all questions touching on the seizure and forfeiture of dutiable goods. Actions of the Collector of Customs are appealable to the Commissioner of Customs, whose decision,in turn, is subject to the exclusive appellate jurisdiction of the Court of Tax Appealsand from there to the Court of Appeals.-The rule that Regional Trial Courts have no review powers over such proceedings isanchored upon the policy of placing no unnecessary hindrance on the governmentsdrive, not only to prevent smuggling and other frauds upon Customs, but moreimportantly, to render effective and efficient the collection of import and exportduties due the State, which enables the government to carry out the functions it hasbeen instituted to perform.-The RTC had no jurisdiction to take cognizance of the petition for replevin byrespondents herein, issue the writ of replevin and order its enforcement. The RTCshould have dismissed the petition for replevin at the outset.-While it is true that the District Collector of Customs allowed the release of thevehicles and the transfer thereof to the custody of the RTC upon the payment by theprivate respondents of the required taxes, duties and charges, he did not therebylose jurisdiction over the vehicles; neither did it vest jurisdiction on the RTC to takecognizance of and assume jurisdiction over the petition for replevin.-The RTC cannot be faulted for dismissing petitioners complaint-in-intervention.

Considering that it had no jurisdiction over respondents action and over the shipment

subject of the complaint, all proceedings before it would be void. The RTC had nojurisdiction to take cognizance of the complaint-in-intervention and act thereonexcept to dismiss the same. Moreover, considering that intervention is merelyancillary and supplemental to the existing litigation and never an independent action,the dismissal of the principal action necessarily results in the dismissal of thecomplaint-in-intervention. Likewise, a court wh ich has no jurisdiction over the

principal action has no jurisdiction over a complaint-in-intervention.

1 Section 44(c) of the Judiciary Act of 1948 lodges in the Court of First Instance original jurisdiction in all cases in which the value of the property in controversy amounts to more than ten thousand pesos. This original jurisdiction of the Court of First Instance, when exercised in an action for recovery of personal property which isa subject of a forfeiture proceeding in the Bureau of Customs, tends to encroach upon, and to render futile, the jurisdiction of the Collector of Customs in seizure and forfeiture proceedings. This is precisely what took place in this case.l h

BOAC V PEOPLENATUREAppeal by certiorari under Rule 45

FACTS- Raul Basilio Boac, Ramon Betuin Golong, Cesar Fantone Beltran, Roger AlcantaraBasadre, and Benjamin Castaneda Alfonso are members of the PNP-CIDG.- They were charged with violation of Sec. 2203 in relation to Sec. 3612 of the Tariffand Customs Code in that without lawful authority or delegation from the Collector of Customs, they flagged down, searched and seized three (3) container vans consignedto Japan Trak surplus (Kakiage Surplus).- Atty. Lourdes V. Mangaoang, then Customs District Collector of Cagayan de Oro City, testified that the CIDG operatives (herein petitioners) did not have a writtenauthority from the Commissioner of Customs or the District Collector. According to

her, Golong claimed that they had clear orders from Boac to open and search thevans. She instructed her personnel to open the vans only to show that there was

nothing illegal in their contents. She prepared a letter of protest addressed to Boac

but it was ignored; hence, she filed the instant case.- For the defense, Boac testified that on July 27, 2004, he was in Manila on leave.

Beltran allegedly informed him that three container vans with contrabands werereleased by the BOC; thus, Boac instructed Golong and his team to flag down the

subject vans. After the inspection of the vans and without finding any contraband,





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Boac directed Golong to leave the premises. - The Sandiganbayan convicted the petitioners. The anti-graft court ruled thatpetitioners belong to the category of officers in Sec. 2203(d); thus, they needed a written authority from the Commissioner of Customs or District Collector in order toconduct searches, seizures and arrests. In this case, the court said, the prosecution

established the lack of said written authority; even Beltran and Golong admitted that

they did not have any authorization to search the vans. - Petitioners assert that they did not conduct any search, seizure, or arrest; hence,there was no violation of the Tariff and Customs Code. During the search conducted

in the consignee’s warehouse on July 28, 2004, the employees of the owner of theshipment unloaded the goods under BOC personnel supervision. Petitioners allege thatthey only witnessed the search; they did not make any seizures or arrests. After

searching the first van and half of the second van without any contraband beingfound, Customs Police Yamit and Godoy decided to stop the search despite therequest of petitioners to continue. Since the Customs Police were already leaving thearea, Boac instructed his team to leave the vicinity.- Petitioners further claim that the police’s authority to stop, search, and effect

seizure and arrest, if necessary, is no longer exclusively vested on the Collector of Customs. Regular PNP members are generally empowered by law to effect arrests in

accordance with Republic Act No. (RA) 6975.- Petitioners contend that they were investigating a possible connivance of smugglers with some corrupt customs personnel. They maintained that their act of flagging

down the container vans was not connected with the enforcement of the tariff andcustoms laws, smuggling being a form of economic sabotage which is within the powersof the PNP-CIDG to monitor and investigate. Thus, according to them, no priorauthority from the Collector of Customs is required in performing their duties aspolice officers. Besides, they said they immediately coordinated with the Customs

Police for the latter to conduct the actual search of the container vans; hence,

there was no violation of Sec. 2203.

ISSUEWON petitioners are guilty of the crime charged

HELDNOReasoning- Petitioners should be acquitted of the charge. The prosecution has the burden ofproving the guilt of the accused beyond reasonable doubt. In this case, it is clear

that petitioners neither searched the container vans nor effected seizure andarrest.

- It should be noted that the container vans were brought to the consignee’s warehouse and not to the CIDG headquarters. On July 28, 2004, the container vans

were searched but not by petitioners. The search was actually conducted by Customs Police Yamit and Godoy on July 28, 2004. The Customs Police held the keys

of the vans. Furthermore, the vans were opened without the presence of the PNP- CIDG’s team leader, Inspector Golong. The search was under the direction of the

Customs Police because when the Customs Police decided to stop the search,petitioners acceded and left the premises. - The foregoing testimony, which Golong corroborated, was not disputed by theprosecution. It is thus very clear that the search was not done by petitioners but by

the Customs Police. Petitioners did not seize anything nor arrested anybody. They

merely observed the search which they requested to be undertaken to check forcontrabands. Notably, the consignee did not file any complaint against petitioners.- The information charged petitioners for illegally flagging down, searching, and seizingthe three container vans on July 27, 2004. Petitioners, however, could not also beheld liable for these acts. It is a fact that no search and seizure of the vans was

done on the night of July 27, 2004. The act of flagging down the vehicles is not among

those proscribed by Sec. 2203 of the Tariff and Customs Code. Mere flagging downof the container vans is not punishable under the said law.- As regards the second issue, there is no conflict between the aforequotedprovisions of the Tariff and Customs Code and RA 6975, as amended. The jurisdiction

of the Commissioner of Customs is clearly with regard to customs duties. Should the

PNP suspect anything, it should coordinate with the BOC and obtain the writtenauthority from the Collector of Customs in order to conduct searches, seizures, orarrests.

Disposition Decision reversed and set aside.

II. REMEDIES AVAILABLE TO THE TAXPAYERSec. 2308. Protest and Payment upon Protest in Civil Matters. — When a ruling or decisionof the Collector is made whereby liability for duties, fees, or other money charge is determined,except the fixing of fines in seizure cases, the party adversely affected may protest such rulingor decision by presenting to the Collector at the time when payment of the amount claimed to bedue the Government is made, or within thirty days thereafter, a written protest setting forth hisobjections to the ruling or decision in question, together with the reasons therefor. No protestshall be considered unless payment of the amount due after final liquidation has first beenmade.

Sec. 2309. Protest Exclusive Remedy in Protestable Case. — In all cases subject to protest,the interested party who desires to have the action of the Collector reviewed, shall make aprotest, otherwise, the action of the Collector shall be final and conclusive against him, except asto matters correctible for manifest error in the manner prescribed in section one thousand sevenhundred and seven hereof.





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Sec. 2310. Form and Scope of Protest. — Every protest shall be filed in accordance with theprescribed rules and regulations promulgated under this section and shall point out the particular decision or ruling of the Collector to which exception is taken or objection made, and shallindicate with reasonable precision the particular ground or grounds upon which the protestingparty bases his claim for relief.

The scope of a protest shall be limited to the subject matter of a single adjustment or other independent transaction; but any number of issue may be raised in a protest with reference tothe particular item or items constituting the subject matter of the protest.

"Single adjustment", as hereinabove used, refers to the entire content of one liquidation,including all duties, fees, surcharges or fines incident thereto. chan robles virtual law l ibrary

Sec. 2311. Samples to be Furnished by Protesting Parties. — If the nature of the articlespermit, importers filing protests involving questions of fact must, upon demand, supply theCollector with samples of the articles which are the subject matter of the protests. Such samplesshall be verified by the custom official who made the classification against which the protest arefiled.

Sec. 2312. Decision or Action by Collector in Protest and Seizure Cases. — When a protestin proper form is presented in a case where protest in required, the Collector shall reexamine thematter thus presented, and if the protest is sustained, in whole or in part, he shall enter theappropriate order, the entry reliquidated if necessary.

In seizure cases, the Collector, after a hearing, shall in writing make a declaration of forfeiture or fix the amount of the fine or take such other action as may be proper.

CAO No. 3-2002: Amendment of CMO 27-99 on the Procedure in Protest Cases Againstthe Determination of Customs Value and Tariff Classification of Imported Goods Under the WTO Valuation RegimeI. Objective: provide clear and transparent procedures for the resolution of formal protest casesarising from valuation and classification issues resolved by the Valuation and ClassificationReview Committee (VCRC) pursuant to CMO on New Cargo Clearance ProcedureII. Procedural FlowCollector of Customs1. upon final determination of the Customs Value and/or the tariff classification by the VCRC,importer adversely affected may file a formal protest with the OFFICE OF THE COLLECTOROF CUSTOMS through the LAW DIVISION of the port concerned or its equivalent unit in order

to dispute the assessment…at the time when payment of the amount claimed to be due the government is madeOr …within 15 days thereafter 2. importer shall… state: reasons for protest…pay docket fees – rate fixed by CAO No. 1-96A3. Collector form panel of experts to hear the case: hearing officer from law division + COO Vand COO III from assessment unit4. Collector ensure that those involved in the initial assessment shall not be chosen as membersof the expert’s panel5. panel shall hear all parties: authorized to issue necessary notice of hearings, subpoenas andother interlocutory orders, receive evidence6. panel terminate proceedings, recommend decision to the Collector of Customs for approvalwithin 30 d from the 1

sthearing

7. protest cannot be resolved for meritorious reason within 30d: panel shall request additionaltime not exceeding 30d within which to resolve case8. Collector render FINAL decision within 15 days from receipt of recommended decision + shallnotify importer in writing of deci9. Collector renders deci ADVERSE TO GOVERNMENT: deci + entire records of the case =automatically elevated to Commissioner for AUTOMATIC REVIEW within 5 days frompromulgation10. If importer not satisfied with Collector’s deci (ADVERSE TO IMPORTER): notice of appealwith collector …within 15 days after notification in writing by Collector …with a copy of the notice furnished to the Commissioner of Customs11. Collector shall immediately transfer all the records of the protest + assailed deci toCommissioner …Commissioner shall approve/modify/reverse the action or deci of Collector …take steps and make such orders as may be necessary to give effect to his deciCOMMISSIONER OF CUSTOMS12. Appeal to Commissioner of Customs: perfected upona. filing of notice of appealsb. payment of appeal docket fee in accordance with prescribed ratesc. Memorandum of appeal at option of appellant (within 15 days from receipt of notice of deci)13. Appeal (regular/ automatic): Deliberated on by a permanent board of 3 created byCommissioner …board: chaired by lawyer from the appellate division,Mems: legal service and 2 valuation experts from import and assessment service14. board shall recommend deci of Commissioner through proper channels15. Commissioner shall render a decision w/n 30 d from receipt of the records of the case fromthe Collector …shall noticy the appellant/aggrieved party in writing16. w/n 30d from receipt of the record of the case: no decision by Commissioner is rendered =deemed that Commissioner upheld the Collector’s decision…if deci adverse to gov’t: case shall likewise be elevated to SoF for automatic review17. Commissioner decides in favor of Gov’t + no appeal perfected w/n reglementary periodw/CTA = deci of Commissioner shall become final and executorySECRETARY OF FINANCE18. Commissioner renders a decision adverse to gov’t: elevated to SoF for automatic review +records of proceedings forwarded to SoF w/n 5d from promulgation of decision19.w/n 30d from receipt of the record of the case by SoF no deci rendered: deci under reviewFINAL AND EXECUTORY20. DECI OF SOF: final and executory if no appeal to CTA

COURT OF TAX APPEALS21. Importer not satisfied with Commissioner of Customs/SoF deci: file an appeal with CTAw/n30d from receipt of a notice of such deci

2. SEIZURE/FORFEITURE CASESSEC. 2530. Property Subject to Forfeiture Under Tariff and Customs Laws. - Any vehicle,vessel or aircraft, cargo, article and other objects shall, under the following conditions besubjected to forfeiture:a. Any vehicle, vessel or aircraft, including cargo, which shall be used unlawfully in theimportation or exportation of articles or in conveying and/or transporting contraband or smuggledarticles in commercial quantities into or from any Philippine port or place. The mere carrying or holding on board of contraband or smuggled articles in commercial quantities shall subject suchvessel, vehicle, aircraft, or any other craft to forfeiture: Provided, That the vessel, or aircraft or any other craft is not used as duly authorized common carrier and as such a carrier it is notchartered or leased;





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b. Any vessel engaging in the coastwise which shall have on board any article of foreign growth,produce, or manufacture in excess of the amount necessary for sea stores, without such articlehaving been properly entered or legally imported;c. Any vessel or aircraft into which shall be transferred cargo unladen contrary to law prior to thearrival of the importing vessel or aircraft at her port of destination;d. Any part of the cargo, stores or supplies of a vessel or aircraft arriving from a foreign portwhich is unladen before arrival at the vessel's or aircraft's port of destination and withoutauthority from the customs officials; but such cargo, ship or aircraft stores and supplies shall notbe forfeited if such unlading was due to accident, stress of weather or other necessity and issubsequently approved by the Collector;e. Any article which is fraudulently concealed in or removed contrary to law from any public or private warehouse, container yard or container freight station under customs supervision;f. Any article the importation or exportation of which is effected or attempted contrary to law, or any article of prohibited importation or exportation, and all other articles which, in the opinion of the Collector, have been used, are or were entered to be used as instruments in the importationor the exportation of the former;g. Unmanifested article found on any vessel or aircraft if manifest therefore is required;h. Sea stores or aircraft stores adjudged by the Collector to be excessive, when the dutiesassessed by the Collector thereon are not paid or secured forthwith upon assessment of thesame,i. Any package of imported article which is found by the examining official to contain any articlenot specified in the invoice or entry, including all other packages purportedly containing importedarticles similar to those declared in the invoice or entry to be. the contents of the misdeclaredpackage; Provided, That the Collector is of the opinion that the misdeclaration was contrary tolaw; j. Boxes, cases, trunks, envelopes and other containers of whatever character used asreceptacle or as device to conceal article which is itself subject to forfeiture under the tariff andcustoms laws or which is so designed as to conceal the character of such articles;k. Any conveyance actually being used for the transport of articles subject to forfeiture under thetariff and customs laws, with its equipage or trappings, and any vehicle similarly used, together with its equipage and appurtenances including the beast steam or other motive power drawingor propelling the same. The mere conveyance of contraband or smuggled articles by such beastor vehicle shall be sufficient cause for the outright seizure and confiscation of such beast or vehicle but the forfeiture shall not be effected if it is established that the owner of the means of conveyance used as aforesaid, is engaged as common carrier and not chartered or leased, or his agent in charge thereof at the time, has no knowledge of the unlawful act;1. Any article sought to be imported or exported (1) Without going through a customhouse,whether the act was consummated, frustrated or attempted; (2) By failure to mention to acustoms official, articles found in the baggage of a person arriving from abroad; (3) On the

strength of a false declaration or affidavit executed by the owner, importer, exporter or consignee concerning the importation of such article; (4) On the strength of a false invoice or other document executed by the owner, importer, exporter or consignee concerning theimportation or exportation of such article; and (5) Through any other practice or device contraryto law by means of which such articles was entered through a customhouse to the prejudice of the government.SEC. 2531. Properties Not Subject to Forfeiture in the Absence of Prima Facie Evidence. –The forfeiture of the vehicle, vessel, or aircraft shall hot be effected if it is established that theowner thereof or his agent in charge of the means of conveyance used as aforesaid has noknowledge of or participation in the unlawful act: Provided, however, That a prima faciepresumption shall exist against the vessel, vehicle or aircraft under any of the followingcircumstances:1. If the conveyance has been used for smuggling at least twice before;2. If the owner is not in the business for which the conveyance is generally used; and3. If the owner is not financially in a position to own such conveyance.

SEC. 2532. Conditions Affecting Forfeiture of Article. - As regards imported or exportedarticle or articles whereof the importation or exportation is merely attempted, the forfeiture shallbe effected only when and while the article is in the custody or within the jurisdiction of thecustoms authorities or in the hands or subject to the control of the importer, exporter, originalowner, consignee, agent of other person effecting the importation, entry or exportation inquestion, or in the hands or subject to the control of some persons who shall receive, conceal,buy, sell or transport the same or aid in any such acts, with knowledge that the article wasimported, or was the subject of an attempt at importation or exportation, contrary to law.SEC. 2533. Enforcement of Lien, Administrative Fines, and Forfeitures. - Administrativefines and forfeitures shall be enforced by the seizure of the vehicle, vessel or aircraft or other property subject to the fine or forfeiture and by subsequent proceedings in conformity with theprovisions of Parts 2 and 3, Title VI, Book 11, of this Code. For the purpose of enforcing the lienfor customs duties, fees and other charges on any seized or confiscated article in the custody of the Bureau of Internal Revenue., the Bureau of Internal Revenue is hereby authorized to imposeand enforce the said lien.SEC. 2534. Seizure of Vessel or Aircraft for Delinquency of Owner or Officer . - When theowner, .agent, master, pilot in command or other responsible officer of any vessel or aircraftbecomes liable to be fined under the tariff and customs laws on account of a delinquency in thedischarge of a duty imposed upon him with reference to the said vessel or aircraft, the vessel or aircraft itself may be seized and subjected in an administrative proceeding for the satisfaction of the fine for which such person would have been liable. SEC. 2535. Burden of Proof in Seizureand/or Forfeiture. - In all proceedings taken for the seizure and/or forfeiture of any vessel,vehicle, aircraft, beast or articles under the provisions of the tariff and customs laws, the burdenof proof shall lie upon the claimant: Provided, That probable cause shall be first shown for theinstitution of such proceedings and that seizure and/or forfeiture was made under thecircumstances and in the manner described in the preceding sections of this Code.SEC. 2536. Seizure of Other Articles. - The Commissioner of Customs and Collector of Customs any other customs officer, with the prior authorization in writing by the Commissioner,may demand evidence of payment of duties and taxes on foreign articles openly offered for saleor kept in storage, and if no such evidence can be produced, such articles may be seized andsubjected to forfeiture proceedings: , however, That during such proceedings the person or entity for whom such articles have been shall be given the opportunity to prove or show thesource of such articles and the payment of duties and taxes thereon.

CAO No. 9-93: Rules and Regulations Governing the Issuance of Warrants of Seizure and Detention, theConduct of Seizure Proceedings and Procedure in Appeals to the Commissioner of Customs and to theSecretary of Finance…

Title ITitle and ConstructionTitle IIGeneral Provisions[Sec3] Collector of Customs upon making any seizure shall issue a warrant for the detention of the property[Sec4] Owner/importer desires to secure the release of the property under seizure for legitimate use, Collector of Customs shall surrender it upon filling of a sufficient cash bond in an amount to be fixed by the Collector of Customs,subject to the following conditions:a. amount of cash bond shall not in any case be less than the appraised value of the article plus fine, expenses andcosts that may be adjudged in the case.

APPRAISED VALUE: dutiable value of article + duties, taxes, and other customs chargesb. no prima facie evidence of fraud attendant to importationc. not prohibited importationd. release under cash bond approved by the Commissioner [Sec5] release of property under cash bond: SHALL NOT RELIEVE THE OWNER OR IMPORTER of the goods fromCRIMINAL LIABILITY arising from the importation/exportation of the shipment





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Title IIIGrounds for the issuance of warrant of seizure and detention proceedings before hearing officers[Sec6] probable cause that articles were imported/exported contrary to TCC: the Collector of Customs shall issue aWarrant of Seizure and Detention in Customs[Sec7] Formal Hearing: uncontroverted facts shall be stipulated on and issues to be heard shall be agreed upon inorder to abbreviate the proceedings…determine WON there is a violation of law…District Collector of Customs shall render deciTitle IVReview by Commissioner [Sec8] Appeal: person/party aggrieved by the decision/action of Collector in any case of SEIZURE…may file a written notice to Collector of Customs…w/n 15d after receipt of the notice in writing of action/decision of the Collector of Customs…copy furnished with Commissioner of Customs of intention to appeal…upon perfection of appeal: Collector shall immediately transmit all the records of the proceedings to Commissioner …Appeal filed beyond 15d: deemed dismissed…Commissioner shall approve/modify/reverse the Collector of Customs deci/action + take such steps and makeappropriate orders[Sec9] Automatic Review by the Commissioner on Action or Decision of the Collector of Customs adverse togovernment…records of the case: elevated w/n 5 days from promulgation of deci of collector of customs…from receipt of the records of the case: Commissioner render deci on automatic review w/n 30d…deci of Commissioner REVERSING THE ADVERSE DECI of Collector, on automatic review, shall be FINAL ANDEXECUTORY

[Sec10] Commissioner AFFIRMS Adverse decision of Collector: records of the proceedings shall be elevated to SoFw/n 5d from promulgation of the deci by Commissioner …Commissioner fails to render a deci on automatic review w/n 30d from receipt of records: deemed automaticallyappealed to SoF; records of the proceedings shall be elevated by Commissioner to the SoF w/n 5d after the lapse of 30d…adverse deci of Collector AFFRIMED by SoF: affirmed deci final and executory…value of the imported article under seizure: P5k+: adverse deci of Collector deemed automatically appealed to SoF…w/n 30d from receipt of the records of the proceedings by SoF, no deci is rendered by him:Commissioner/Collector’s deci under appeal shall be final and executory[Sec11] deci of Collector on the merits which fully or partially releases the shipment under seizure = adverse decisionsubject to automatic review[Sec12] seizure proceeding: release of imported articles shall not be allowed unless and until a decision of theCollector has been affirmed in writing by the commissioner …

Pacis v. PamaranFactsPacis is the Acting Collector of Customs for the Port of Manila. The case is prohibitionproceeding against Assistant City Fiscal of Manila, Manuel R. Pamaran.Respondent Ricardo Santos is the owner of a Mercury automobile, model 1957. It wasbrought into this country without the payment of customs duty and taxes, its ownerDonald James Hatch being tax-exempt. It was from him that respondent Santosacquired said car. He paid P311.00 for customs duty and taxes. Land Transportation Commissionreported that such automobile was a "hot car." By virtue thereof, petitioner Pacis,ascertained that although the amount of P311.00 was already paid for customs duty,the amount collectible on said car should be P2,500.00, more or less. Pacis instituted

seizure proceedings and issued a warrant of seizure and detention. Ricardo Santos

filed a criminal complaint for usurpation of judicial functions with the City Fiscal ofManila handled by Pamaran.

IssueWON the Collector of Customs has the authority to issue the warrant of seizure

HeldYes, as Acting Collector of Customs for the Port of Manila, he had the requisiteauthority for the issuance of the contested warrant of seizure and detention for theautomobile owned by respondent Ricardo Santos. It is to be admitted that theconstitutional right to be free from unreasonable search and seizure must not beeroded or emasculated. The right to privacy so highly valued in civilized society mustnot be diluted. Only upon compliance then with the proper requisites mandated by lawshould one's possessions be subject to seizure. That much is clear. Under the 1935 Constitution the intervention of a judge was well-nigh indispensable. So it was underthe Philippine Bill of 1902 and the Philippine Autonomy Act of 1916. Even then, however,as shown by the leading case of Uy Kheytin v. Villareal, a 1920 decision, it was theaccepted principle following the landmark case of Boyd v. United States that theseizure of goods concealed to avoid the duties on them is not embraced within theprohibition of this constitutional guarantee. More to the point. In a recent decision ofthis Court, Papa v. Mago, where the seizure of alleged smuggled goods was effectedby a police officer without a search warrant, this Court, through Justice Zaldivar,stated: "Petitioner Martin Alagao and his companion policemen had authority toeffect the seizure without any search warrant issued by a component court. TheTariff and Customs Code does not require said warrant in the instant case. The Codeauthorizes persons having police authority under Section 2203 of the Tariff andCustoms Code to enter, pass through or search any land, inclosure, warehouse, storeor building, not being a dwelling house; and also to inspect, search and examine anyvessel or aircraft and any trunk, package, box or envelope or any person on board, orstop and search and examine any vehicle, beast or person suspected of holding orconveying any dutiable or prohibited article introduced into the Philippines contrary tolaw, without mentioning the need of a search warrant in said cases. But in the searchof a dwelling house, the Code provides that said 'dwelling house may be entered andsearched only upon warrant issued by a judge or justice of the peace . . . .' It is ourconsidered view, therefore, that except in the case of the search of a dwelling house,persons exercising police authority under the customs law may effect search andseizure without a search warrant in the enforcement of customs laws." The plenitude of the competence vested in customs officials is thus undeniable. No suchconstitutional question then can possibly arise. So much is implicit from the verylanguage of Section 2205 of the Tariff and Customs Code. It speaks for itself. It isnot susceptible of any misinterpretation. The power of petitioner is thus manifest. It

being undeniable then that the sole basis for an alleged criminal act performed by him





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was the performance of a duty according to law, there is not the slightestjustification for respondent Assistant City Fiscal to continue with the preliminaryinvestigation after his attention was duly called to the plain and explicit legal provisionthat did not suffer at all from any constitutional infirmity. The remedy of prohibitionlies.

What was done by petitioner was strictly in accordance with settled principles of law.No doubt need be entertained then as to the validity of the issuance of the warrantof seizure and detention. His liability for any alleged usurpation of judicial function isnon-existent. Such imputation was definitely unfounded. Even if however the matter were less clear, the claim that the search and seizure clause was in effect nullified ishardly impressed with merit. Considering that what is involved is an alleged evasion ofthe payment of customs duties.

DispositionWHEREFORE, the writ of prohibition prayed for is granted and the successor ofrespondent Manuel R. Pamaran, now a criminal circuit court judge, or any one in the City Fiscal's Office of the City of Manila to whom the complaint against petitioner for

usurpation of judicial functions arising out of the issuance of the warrant of seizureand detention, subject-matter of this litigation, has been assigned, is perpetuallyrestrained from acting thereon except to dismiss the same. No costs.

3. REVIEW OF PROTEST/SEIZURE CASES BY COMMISSIONER OFCUSTOMS/SECRETARY OF FINANCEA. REVIEW UPON REQUEST OF TAXPAYER SEC. 2309. Protest Exclusive Remedy in Protestable, Case. - In all cases subject to pr interested party who desires to have the action of the Collector reviewed, shall make a protest,other action of the Collector shall be final and conclusive against him, except as to matterscollectible for error in the manner prescribed in section one thousand seven hundred and sevenhereof.SEC. 2310. Form and Scope of Protest. - Every protest shall be filed in accordance prescribedrules and regulations promulgated under this section and shall point out the particular de ruling,of the Collector to which exception is taken or objection made, and shall indicate with reprecision the particular ground or grounds upon which the protesting party bases his claim for relief. The scope of a protest shall be limited to the subject matter of a single adjustmentindependent transaction, but any number of issue may be raised in a protest with reference tothe particular item or items constituting the subject matter of the protest.SEC. 2311. Samples to be Furnished by Protesting Parties. - If the nature of the articlespermit, importers filing protests involving questions of fact must, upon demand, supply theCollector with samples of the articles which are the subject matter of the protest. Such samplesshall be verified by the customs official who made the classification against which the protest arefiled.SEC. 2312. Decision or Action of Collector in Protest and Seizure Cases. - When a protestin proper form is presented in a case where protest is required, the Collector shall issue an order for hearing within fifteen (15) days from receipt of the protest and hear the matter thuspresented. Upon the termination of the hearing, the Collector shall render a decision within thirty(30) days, and if the protest is sustained, in whole or in part, he shall make the appropriate

order, the entry reliquidated necessary. In seizure cases, the Collector, after a hearing shall inwriting make a declaration of forfeiture amount of the fine or take such other action as may beproper.SEC. 2313. Review of Commissioner . - The person aggrieved by the decision or Collector inany matter presented upon protest or by his action in any case of seizure may, within days after notification on writing by the Collector of his actions or decisions, file a written notice to theCollector with a copy furnished to the Commissioner of his intention to appeal the action or decision of the Collector to the Commissioner. Thereupon the Collector shall forthwith transmitall the recc, proceedings to the Commissioner, who shall approve, modify or reverse the actionor decision of t~~ and take such steps and make such orders as may be necessary to give effectto his decision: Provided, That when an appeal is filed beyond the period herein prescribed, thesame shag be deemed dismissed. If in any seizure proceedings, the Collector renders adecision adverse to the Government, such decision shall be automatically reviewed by theCommissioner and the records of the case elevated (5) days from the promulgation of thedecision of the Collector. The Commissioner shall render a decision on the automatic appealwithin thirty (30) days from receipts of the records of the case. If the Collector'~ is reversed bythe Commissioner, the decision of the Commissioner shall be final and executory: K theCollector's decision is affirmed, or if within thirty (30) days from receipt of the record of the ca~Commissioner no decision is rendered or the decision involves imported articles whosepublished value is five million pesos (P 5,000,000.00) or more, such decision shall be deemedautomatically appealed to the Secretary of Finance and the records of the proceedings shall beelevated within five (5) days promulgation of the decision of the Commissioner or of the Collector under appeal, as the case may be, i s affirmed by the Secretary of Finance, or within thirty (30)days from receipt of the proceedings by the Secretary of Finance, no decision is rendered, the

decision of the Secretary of Finance, or of the Commissioner, or of the Collector under appeal,as the case may be, shall become final and executory.In any seizure proceeding, the release of imported articles shall not be allowed unless apd untila decision of the Collector has been confirmed in writing by the Commissioner of Customs (R.A.7651, June 04, 1993).

B. AUTOMATIC REVIEW BY THE COMMISSIONER AND THE SECRETARY OF FINANCE SEC. 2313. Review of Commissioner . SupraSEC. 2315. Supervisory Authority of Commissioner and Secretary of Finance in CertainCases. - If any case involving the assessment of duties, the Collector renders a decisionadverse to the Government, such decision shall be automatically elevated to, and reviewed by,the Commissioner; and if the Collector's decision would be affirmed by the Commissioner, suchdecision shall he automatically elevated to, and be finally reviewed by, the Secretary of Finance:Provided, however, That if within thirty (30) days from receipt of the record of the case by the

Commissioner or by. the Secretary of Finance, as the case may be, no decision is rendered byeither of them, the decision under review shall be final and executory: Provided, further, Thatany party aggrieved by either the decision of the Commission or of the Secretary of Finance mayappeal to the Court of Tax Appeals within thirty (30) days from receipt of a copy of suchdecision. For this purpose, Republic Act numbered eleven hundred and twenty -five is herebyamended accordingly. Except as provided in the preceding paragraph, the supervisory authorityof the Secretary of Finance over the Bureau of Customs shall not extend to the administrativereview of the ruling or decision of the Commissioner in matters appealed to the Court of TaxAppeals.

B. Judicial Remedies1. SUPERVISION AND CONTROL OVER JUDICIAL PROCEEDINGS SEC. 2401. Supervision and Control Over Criminal and Civil Proceedings. - Civil andcriminal actions and proceedings instituted in behalf of the government under the authority of this Code or other law enforced by the Bureau shall be brought in the name of the government of





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the Philippines and shall be conducted by customs officers but no civil or criminal action for therecovery of duties or the enforcement of any fine, penalty or forfeiture under this Code shall befiled in court without the approval of the Commissioner." (R.A. 9135, April 27, 2001)

2. REVIEW BY CTASEC. 2402. Review by Court of Tax Appeals. - The party aggrieved by the ruling of theCommissioner in any matter brought before him upon protest or by his action or ruling in anycase of seizure may appeal to the Court of Tax Appeals, in the manner and within the period

prescribed by law and regulations. Unless an appeal is made to the Court of Tax Appeals in themanner and within the period prescribe by laws and regulations, the action or ruling of theCommissioner shall be final and conclusive.…SEC. 2315. supra

RA 9282: AN ACT EXPANDING THE JURISDICTION OF THE COURT OF TAX APPEALS(CTA), ELEVATING ITS RANK TO THE LEVEL OF A COLLEGIATE COURT WITH SPECIALJURISDICTION AND ENLARGING ITS MEMBERSHIP, AMENDING FOR THE PURPOSECERTAIN SECTIONS OR REPUBLIC ACT NO. 1125, AS AMENDED, OTHERWISE KNOWNAS THE LAW CREATING THE COURT OF TAX APPEALS, AND FOR OTHER PURPOSESSec. 7. Jurisdiction. – The CTA shall exercise:a. Exclusive appellate jurisdiction to review by appeal, as herein provided:1. Decisions of the Commissioner of Internal Revenue in cases involving disputed assessments,refunds of internal revenue taxes, fees or other charges, penalties in relation thereto, or other

matters arising under the National Internal Revenue or other laws administered by the Bureau of Internal Revenue;2. Inaction by the Commissioner of Internal Revenue in cases involving disputed assessments,refunds of internal revenue taxes, fees or other charges, penalties in relations thereto, or other matters arising under the National Internal Revenue Code or other laws administered by theBureau of Internal Revenue, where the National Internal Revenue Code provides a specificperiod of action, in which case the inaction shall be deemed a denial;3. Decisions, orders or resolutions of the Regional Trial Courts in local tax cases originallydecided or resolved by them in the exercise of their original or appellate jurisdiction;4. Decisions of the Commissioner of Customs in cases involving liability for customs duties, feesor other money charges, seizure, detention or release of property affected, fines, forfeitures or other penalties in relation thereto, or other matters arising under the Customs Law or other lawsadministered by the Bureau of Customs;5. Decisions of the Central Board of Assessment Appeals in the exercise of its appellate jurisdiction over cases involving the assessment and taxation of real property originally decided

by the provincial or city board of assessment appeals;6. Decisions of the Secretary of Finance on customs cases elevated to him automatically for review from decisions of the Commissioner of Customs which are adverse to the Governmentunder Section 2315 of the Tariff and Customs Code;7. Decisions of the Secretary of Trade and Industry, in the case of nonagricultural product,commodity or article, and the Secretary of Agriculture in the case of agricultural product,commodity or article, involving dumping and countervailing duties under Section 301 and 302,respectively, of the Tariff and Customs Code, and safeguard measures under Republic Act No.8800, where either party may appeal the decision to impose or not to impose said duties.b. Jurisdiction over cases involving criminal offenses as herein provided:1. Exclusive original jurisdiction over all criminal offenses arising from violations of the NationalInternal Revenue Code or Tariff and Customs Code and other laws administered by the Bureauof Internal Revenue or the Bureau of Customs: Provided, however, That offenses or feloniesmentioned in this paragraph where the principal amount o taxes and fees, exclusive of chargesand penalties, claimed is less than One million pesos (P1,000,000.00) or where there is no

specified amount claimed shall be tried by the regular Courts and the jurisdiction of the CTA

shall be appellate. Any provision of law or the Rules of Court to the contrary notwithstanding, thecriminal action and the corresponding civil action for the recovery of civil liability for taxes andpenalties shall at all times be simultaneously instituted with, and jointly determined in the sameproceeding by the CTA, the filing of the criminal action being deemed to necessarily carry with itthe filing of the civil action, and no right to reserve the filling of such civil action separately fromthe criminal action will be recognized.2. Exclusive appellate jurisdiction in criminal offenses:a. Over appeals from the judgments, resolutions or orders of the Regional Trial Courts in taxcases originally decided by them, in their respected territorial jurisdiction.b. Over petitions for review of the judgments, resolutions or orders of the Regional Trial Courts inthe exercise of their appellate jurisdiction over tax cases originally decided by the MetropolitanTrial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts in their respective jurisdiction.c. Jurisdiction over tax collection cases as herein provided:1. Exclusive original jurisdiction in tax collection cases involving final and executoryassessments for taxes, fees, charges and penalties: Provided, however, That collection caseswhere the principal amount of taxes and fees, exclusive of charges and penalties, claimed isless than One million pesos (P1,000,000.00) shall be tried by the proper Municipal Trial Court,Metropolitan Trial Court and Regional Trial Court.2. Exclusive appellate jurisdiction in tax collection cases:a. Over appeals from the judgments, resolutions or orders of the Regional Trial Courts in taxcollection cases originally decided by them, in their respective territorial jurisdiction.b. Over petitions for review of the judgments, resolutions or orders of the Regional Trial Courts inthe Exercise of their appellate jurisdiction over tax collection cases originally decided by the

Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts, in their respective jurisdiction."

3. APPEAL FROM THE CTA DIVISION TO CTA EN BANC

4. APPEAL TO SC

III. CLAIM FOR REFUNDSEC. 1707. Correction of Errors. - Refund of Excess Payments. - Manifest clerical errors madein an invoice or entry, errors in return of weight, measure and gauge, when duly certified to,under penalties of falsification or perjury, by the surveyor or examining official (when there aresuch officials at the port), and errors in the distribution of charges on invoices not involving anyquestion of law and certified to, under penalties of falsification or perjury, by the examining

official, may be corrected in the computation of duties, if such errors be discovered before thepayments of duties, or if discovered within one year after the final liquidation, upon writtenrequest and notice of error from the importer, or upon statement of error certified by theCollector. For the purpose of correcting errors specified in the next preceding paragraph theCollector is authorized to reliquidate entries and collect additional charges, or to make refundson statement of errors within the statutory time limit.SEC. 1708. Claim for Refund of Duties and Taxes and Mode of Payment. - All claims for refund of duties shall be made in writing and forwarded to the Collector to whom such duties arepaid, who upon receipt of such claim, shall verify the same by the records of his Office, and if found to be correct and in accordance with law, shall certify the same to the Commissioner withhis recommendation together with all necessary papers and documents. Upon receipt by theCommissioner of such certified claim he shall cause the same to be paid if found correct. If aresult of the refund of customs duties there would necessarily result a corresponding refund of internal revenue taxes on the same importation, the Collector shall likewise certify the same tothe Commissioner who shall cause the said taxes to be paid, refunded, or tax credited in favor of

the importer, with advice to the Commissioner of Internal Revenue.