G.R. No.
195876 The absence of fraud and its effects on the one-year prescriptive
PILIPINAS SHELL PETROLEUM CORPORATION, Petitioner
vs.
COMMISSIONER OF CUSTOMS, Respondent
Acting on the Omnibus Motion (For Reconsideration and Referral to
the Court En bane) dated January 20, 2017 filed by public respondent
Commissioner of Customs, the Court DENIES the same for lack of
merit. The arguments raised by respondent in this pending incident are
the very same arguments raised in the petition, which have already
been evaluated, passed upon, and considered in the assailed
December 5, 2016 Decision. Ergo, the Court rejects these arguments
on the same grounds discussed in the challenged Decision, and
denies, as a matter of course, the pending motion.
Unlike in Chevron, petitioner herein is not guilty of fraud.
The Omnibus Motion is anchored primarily on the alleged applicability
of Chevron Philippines, Inc. v. Commissioner of the Bureau of
Customs 1 (Chevron) to the case at bar. However, the Court desisted
from applying the doctrine laid down in Chevron considering that the
facts and circumstances therein are not in all fours with those obtaining
in the instant case. Thus, Chevron is not a precedent to the case at
bar. A "precedent" is defined as a judicial decision that serves as a rule
for future determination in similar or substantially similar cases. Thus,
the facts and circumstances between the jurisprudence relied upon
and the pending controversy should not diverge on material points. But
as clearly explained in the assailed December 5, 2016 Decision, the
main difference between Chevron and the case at bar lies in the
attendance of fraud.
In Chevron, evidence on record established that Chevron committed
fraud in its dealings. On the other hand, proof that petitioner Pilipinas
Shell Petroleum Corporation (Pilipinas Shell) was just as guilty was
clearly wanting. Simply, there was no finding of fraud on the part of
petitioner in the case at bar. Such circumstance is too significant that it
renders Chevron indubitably different from and cannot, therefore, serve
as the jurispn1dential foundation of the case at bar.
In his dissent, Associate Justice Diosdado M. Peralta (Justice Peralta)
claims that fraud was committed by Pilipinas Shell when it allegedly
deliberately incurred delay in filing its Import Entry and Internal
Revenue Declaration in order to avail of the reduced tariff duty on oil
importations, from ten percent (10%) to three percent (3%), upon the
effectivity of Republic Act No. 8180 (RA 8180), otherwise known as the
Oil Deregulation Law. Justice Peralta cites the February 2, 201 I
Memorandum to support the allegation of fraud, but as exhaustively
discussed in Our December 5, 2016 Decision, the document was
never formally offered as evidence before the Court of Tax
Appeals, and is, therefore, bereft of evidentiary value. Worse, it
was not even presented during trial and no witness identified the
same.
What value can the Court then accord to the document? The Court
finds its answer in Heirs of Pasag v. Sps. Parocha, 2 which teaches
that:
x x x Documents which may have been identified and marked as
exhibits during pre-trial or trial but which were not formally offered in
evidence cannot in any manner be treated as evidence. Neither can
such unrecognized proof be assigned any evidentiary weight and
value. It must be stressed that there is a significant distinction between
identification of documentary evidence and its formal offer. The former
is done in the course of the pre-trial, and trial is accompanied by the
marking of the evidence as an exhibit; while the latter is done only
when the party rests its case. The mere fact that a particular document
is identified and marked as an exhibit does not mean that it has
already been offered as part of the evidence. It must be emphasized
that any evidence which a party desires to submit for the consideration
of the court must formally be offered by the party; otherwise, it is
excluded and rejected.
Resultantly, no scintilla of proof was ever offered in evidence by
respondent Commissioner of Customs to substantiate the claim that
Pilipinas Shell acted in a fraudulent manner. At best, the allegation of
fraud on the part of Pilipinas Shell is mere conjecture and purely
speculative. Settled is the rule that a court cannot rely on speculations,
conjectures or guesswork, but must depend upon competent proof and
on the basis of the best evidence obtainable under the circumstances.
We emphasize that litigations cannot be properly resolved by
suppositions, deductions, or even presumptions, with no basis in
evidence, for the truth must have to be determined by the hard rules of
admissibility and proof.
period, and on the due notice requirement prior to ipso
facto abandonment.
As extensively discussed in the assailed Decision, whether or not
petitioner Pilipinas Shell defrauded the public respondent becomes
pivotal because of Section 1603 of the Tariff and Customs Code of the
Philippines (TCC), which reads:
Section 1603. Finality of Liquidation. When articles have been entered
and passed free of duty or final adjustments of duties made, with
subsequent delivery, such entry and passage free of duty or
settlements of duties will, after the expiration of one (1) year, from the
date of the final payment of duties, in the absence of fraud or protest or
compliance audit pursuant to the provisions of this Code, be final and
conclusive upon all parties, unless the liquidation of the import entry
was merely tentative.
Pursuant to the above-quoted provision, the attendance of fraud would
remove the case from the ambit of the statute of limitations, and would
consequently allow the government to exercise its power to assess
and collect duties even beyond the one-year prescriptive period,
rendering it virtually imprescriptible.
In the case at bar, petitioner Pilipinas Shell filed its Import Entry and
Internal Revenue Declaration (IEIRD) and paid the import duty of its
shipments in the amount of P 11,231, 081 on May 23, 1996. However,
it only received a demand letter from public respondent on July 27,
2000, or more than four (4) years later. By this time, the one-year
prescriptive period had already elapsed, and the government had
already been barred from collecting the deficiency in petitioner's import
duties for the covered shipment of oil.
In an attempt to remove the instant case from the purview of the
provision, Justice Peralta and the respondent claim that the
government is no longer collecting tariff duties. Rather, it is exercising
its ownership right over the shipments, which were allegedly deemed
abandoned by petitioner because of the latter's failure to timely file the
IEIRD. It is their postulation then that Sec. 1603 cannot find application
in the case at bar.
We respectfully disagree.
The absence of fraud not only allows the finality of the
liquidations, it also calls for the strict observance of the
requirements for the doctrine of ipso facto abandonment to apply.
Sec. 1801 of the TCC pertinently provides:
Section 1801. Abandonment, Kinds and Effect of - An imported article
is deemed abandoned under any of the following circumstances:
x x xx
b. When the owner, importer, consignee or interested party after due
notice, fails to file an entry within thirty (30) days, which shall not be
extendible, from the date of discharge of the last package from the
vessel or aircraft, or having filed such entry, fails to claim his
importation within fifteen (15) days, which shall not likewise be
extendible, from the date of posting of the notice to claim such
importation.
As expressly provided in Sec.1801(b) of the TCC, the failure to file the
IEIRD within 30 days from entry is not the only requirement for the
doctrine of ipso facto abandonment to apply. The law categorically
requires that this be preceded by due notice demanding compliance.
To recapitulate, the notice in this case was only served upon petitioner
four (4) years after it has already filed its IEIRD. Under this
circumstance, the Court cannot rule that due notice was given, for
when public respondent served the notice demanding payment from
petitioner, it no longer had the right to do so. By that time, the
prescriptive period for liquidation had already elapsed, and the
assessment against petitioner's shipment had already become final
and conclusive. Consequently, Sec. 1801(b) failed to operate in favor
of the government for failure to demand payment for the discrepancy
prior to the finality of the liquidation. The government cannot deem the
imported articles as abandoned without due notice.
Public respondent cannot harp on the Chevron ruling to excuse
compliance from the due notice requirement before the imported
articles can be deemed abandoned, for to do so would only downplay
the Court's finding anent the non-attendance of fraud. To be clear, the
element of fraud in Chevron was a key ingredient on why notice was
deemed unnecessary:
Under the peculiar facts and circumstances of this case, due notice
was not necessary. The shipments arrived in 1996. The IEDs and
IEIRDs were also filed in 1996. However, respondent discovered the
fraud which attended the importations and their subsequent release
from the BOC's custody only in 1999. Obviously, the situation here was
not an ordinary case of abandonment wherein the importer merely
decided not to claim its importations. Fraud was established against
petitioner; it colluded with the former District Collector. Because of this,
the scheme was concealed from respondent. The government was
unable to protect itself until the plot was uncovered. The government
cannot be crippled by the malfeasance of its officials and employees.
Consequently, it was impossible for respondent to comply with the
requirements under the rules. By the time respondent learned of the
anomaly, the entries had already been belatedly filed and the oil
importations released and presumably used or sold. It was a fait
accompli. Under such circumstances, it would have been against all
logic to require respondent to still post an urgent notice to file entry
before declaring the shipments abandoned.
Hence, it does not suffice that petitioner is a multinational, large scale
importer presumed to be familiar with importation rules and procedures
for the ipso facto abandonment doctrine to apply. Under the peculiar
facts and circumstances of Chevron, the existence of fraud was the
primary element established to warrant the application of the doctrine.
Without this element, Chevron cannot be treated at par with the case
at bar. The statutorily required due notice should still have been timely
served upon petitioner before the imported oil shipments could have
been deemed abandoned.
Under public respondent's Customs Memorandum Order No. (CMO)
15-94, otherwise known as the Revised Guidelines on Abandonment in
force at that time, due notice is served upon the importer through the
following measures:
SUBJECT: REVISED GUIDELINES ON ABANDONMENT
xxxx
B. ADMINISTRATIVE PROVISIONS
xxxx
B.2 Implied abandonment occurs when:
B.2.1 The owner, importer, consignee, interested party or his
authorized broker/representative, after due notice, fails to file an entry
within a nonextendible period of thirty (30) days from the date of
discharge of last package from the carrying vessel or aircraft.
xxxx
Due notice to the consignee/importer/owner/interested party shall be
by means of posting of a notice to file entry at the Bulletin Board seven
(7) days prior to the lapse of the thirty (30) day period by the Entry
Processing Division listing the consignees who/which have not filed the
required import entries as of the date of the posting of the notice and
notifying them of the arrival of their shipment, the name of the carrying
vessel/aircraft, Voy. No. Reg. No. and the respective BIL No./AWB
No., with a warning, as shown by the attached form, entitled: URGENT
NOTICE TO FILE ENTRY which is attached hereto as Annex A and
made an integral part of this Order.
x x xx
C. OPERATIONAL PROVISIONS
xxxx
C.2 On Implied Abandonment:
C.2.1 When no entry is filed
C.2.1.1 Within twenty-four (24) hours after the completion of the
boarding formalities, the Boarding Inspector must submit
the manifests to the Bay Service or similar office so that the Entry
Processing Division copy may be put to use by said office as soon as
possible.
C.2.1.2 Within twenty-four (24) hours after the completion of the
unloading of the vessel/aircraft, the Inspector assigned in the
vessel/aircraft, shall issue a certification addressed to the Collector of
Customs (Attention: Chief, Entry Processing Division), copy furnished
Chief, Data Monitoring Unit, specifically stating the time and date of
discharge of the last package from the vessel/aircraft assigned to him.
Said certificate must be encoded by Data Monitoring Unit in the
Manifest Clearance System.
C.2.1.3 Twenty-three (23) days after the discharge of the last
package from the carrying vessel/aircraft, the Chief, Data Monitoring
Unit shall cause the printing of the URGENT NOTICE TO FILE
ENTRY in accordance with the attached form, Annex A hereof, sign
the URGENT NOTICE and cause its posting continuously for
seven (7) days at the Bulletin Board for the purpose until the
lapse of the thirty (30) day period.
C.2.1.4 The Chief, Data Monitoring Unit, shall submit a weekly
report to the Collector of Customs with a listing by vessel, Registry
Number of shipments/ importations which shall be deemed abandoned
for failure to file entry within the prescribed period and with
certification that per records available, the thirty (30) day period within
which to file the entry therefore has lapsed without the
consignee/importer filing the entry and that the proper posting of notice
as required has been complied with.
xxxx
C.2.1.5 Upon receipt of the report, the Collector of Customs shall issue
an order to the Chief, Auction and Cargo Disposal Division, to
dispose of the shipment enumerated in the report prepared by the
Chief, Data Monitoring Unit on the ground that those are abandoned
and ipso facto deemed the property of the Government to be disposed
of as provided by law. (emphasis supplied)
CMO 15-94 is an executive edict that implements Section 180l (b) of
the TCC. It is an interpretation given to a statute by those charged with
its execution, and is intended for the guidance of subordinate executive
officials to promote a more efficient and cost effective administration of
the BOC. Unless the rule appears to be clearly unreasonable or
arbitrary, it is entitled to the greatest weight by the Court, 6 if not
accorded the similar force and binding effect of law. 7
Coupled with the earlier quotation from Chevron, it becomes
abundantly clear that the notice requirement as mandated in CMO
15-94 cannot be excused unless fraud is established. Resultantly,
fraud being absent on the part of petitioner Pilipinas Shell, the ipso
facto abandonment doctrine cannot operate within the factual milieu of
the instant case. Be that as it may, in view of the substantial
differences between the facts of Chevron and the peculiarities of the
instant case, and just as Chevron was justified "under the peculiar
facts and circumstances" obtaining therein, the Decision dated
December 5, 2016 in the case at bar ought to be considered as a
judgment pro hac vice.
WHEREFORE, premises considered, the Court DENIES WITH
FINALITY the Omnibus Motion (For Reconsideration and Referral to
the Court En bane) dated January 20, 2017 filed by public respondent
Commissioner of Customs for lack of merit.
G.R. No. 181007, November 21, 2016
COMMISSIONER OF CUSTOMS, Petitioner, v. WILLIAM SINGSON
AND TRITON SHIPPING CORPORATION, Respondents.
FACTS: Triton Shipping Corporation (TSC) is the owner of M/V Gypsy
Queen. The vessel was loaded with 15,000 bags of rice shipped by
Metro Star Rice Mill (Metro, Star) of Bocaue, Bulacan and consigned to
William Singson. On September 5, 2001, the elements of the Philippine
Navy apprehended and seized the vessel and its entire rice cargo
somewhere in Caubayan Island, Cebu, for allegedly carrying
suspected smuggled rice. Accordingly, on September 18, 2001, the
District Collector Customs of Port of Cebu, issued a WSD against M/V
Gypsy Queen and the 15,000 bags of rice for violating the Tariff and
Customs Code (TCC). Afterwards, forfeiture proceedings were
conducted where both parties submitted their respective evidence.
On December 18, 2001, the DCC rendered a Decision in favor of TSC
and Singson (respondents) and ordered the release of M/V Gypsy
Queen and the said cargo on the ground that there was no evidence to
establish a cause of action. On December 19, 2001, the DCC issued a
1st Indorsement of the said decision and forwarded the entire records
of the case to the Commissioner of Customs (petitioner), through its
Legal Service, BOC, Manila. On March 11, 2002, the petitioner issued
the 2nd Indorsement reversing and setting aside the decision of the
DCC and ordered the forfeiture of M/V Gypsy Queen and its cargo. On
November 8, 2003, the CTA reversed and set aside the 2nd
Indorsement issued by the petitioner and adopted the findings of the
DCC. On November 16, 2006, the CA affirmed the CTA's decision.
ISSUE: Whether or not the CA erred in affirming the CTA's decision
ordering the release of the 15,000 bags of rice and its carrying vessel.
Ruling: NO. At the time the vessel and its cargo were seized on
September 25, 2001, the elements of the PN never had a probable
cause that would warrant the filing of the seizure proceedings. In fact,
the petitioner ordered the forfeiture of the rice cargo and its carrying
vessel on the mere assumption of fraud. Notably, the 2nd Indorsement
issued by the petitioner failed to clearly indicate any actual commission
of fraud or any attempt or frustration thereof. Nonetheless, the TCC
requires the presence of probable cause before any proceeding for
seizure and/or forfeiture is instituted. The relevant provision governing
the present case is Section 2535 which provides as follows:
Sec. 2535. Burden of Proof in Seizure and/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 burden of proof shall lie upon the claimant:
Provided, That probable cause shall be first shown for the institution of
such proceedings and that seizure and/or forfeiture was made under
the circumstances and in the manner described in the preceding
sections of this Code
Based on the afore-quoted provision, before forfeiture proceedings are
instituted, the law requires the presence of probable cause which rests
on the petitioner who ordered the forfeiture of the shipment of rice and
its carrying vessel. Once established the burden of proof is shifted to
the claimant.
Guided by the foregoing provision, to warrant the forfeiture of the
15,000 bags of rice and its carrying vessel, there must be a prior
showing of probable cause that: (1) the importation or exportation of
the 15,000 bags of rice was effected or attempted contrary to law, or
that the shipment of the 15,000 bags of rice constituted prohibited
importation or exportation; and (2) the vessel was used unlawfully in
the importation or exportation of the rice or in conveying or transporting
the rice, if considered as contraband or smuggled articles in
commercial quantities, into or from any Philippine port or place.
Still, the petitioner contends that the probable cause was established
by the said certification that no vessel by the name of MN Gypsy
Queen logged in or submitted a Master's Oath of Safe Departure on
August 15, 2001.
This assertion is erroneous and irrational. It was heedless on the part
of the petitioner to institute forfeiture proceeding on the basis of that
certification alone. A review of the records of the case shows that there
was no probable cause to justify the forfeiture of the rice cargo and its
carrying vessel. To prove that the rice shipment was imported, the
respondents submitted the following pieces of evidence supporting the
validity and regularity of the shipment. Besides, the records showed
that the 15,000 bags of rice were of local origin, having been
purchased from NFA Zambales pursuant to the Open Sale Program of
the NFA.
CHEVRON PHILIPPINES, INC., VS. COMMISSIONER OF THE
BUREAU OF CUSTOMS, [G.R. No. 178759, August 11, 2008]
TOPIC: TAX and Custom Duties
FACTS: Chevron Phils. Inc., is engaged in the business of importing,
distributing and marketing of petroleum products in the Philippines. In
1996, the importations subject of this case arrived and were covered
by 8 bills of lading. The shipments were unloaded from the carrying
vessels onto petitioner’s oil tanks over a period of 3 days from the date
of their arrival. Subsequently, the import entry declarations (IEDs) were
filed and 90% of the total customs duties were paid. The import entry
and internal revenue declarations (IEIRDs) of the shipments were
thereafter filed.
The importations were appraised at a duty rate of 3% as provided
under RA 8180 and petitioner paid the import duties amounting to
P316,499,021. Prior to the effectivity of RA 8180 on April 16, 1996, the
rate of duty on imported crude oil was 10%.
Three years later, then Finance Secretary received a letter denouncing
the deliberate concealment, manipulation and scheme employed by
petitioner in the importation of crude oil, thereby resulting in huge
losses of revenue for the government. This letter was endorsed to the
Bureau of Customs (BOC) for investigation.
On August 1, 2000, petitioner received a demand letter from the
District Collector requiring the immediate settlement of the amount of
P73,535,830 representing the difference between the 10% and 3%
tariff rates on the shipments. Petitioner objected to the using of the
10% duty rate and insisted that the 3% tariff rate should instead be
applied. Furthermore it raised the defense of prescription against the
assessment pursuant to Section 1603 of the Tariff and Customs Code
(TCC). Thus, it prayed that the assessment for deficiency customs
duties be cancelled and the notice of demand be withdrawn.
The Special Investigator found that there was an irregularity in the filing
and acceptance of the import entries beyond the 30-day non-
extendible period prescribed under Section 1301 of the TCC and in the
release of the shipments after the same had already been deemed
abandoned in favor of the government. Petitioner was then ordered to
pay P1,180,170,769.21 representing the total dutiable value of the
importations.
The CTA en banc held that it was the filing of the IEIRDs that
constituted entry under the TCC. Since these were filed beyond the 30-
day period, they were not seasonably "entered" in accordance with
Section 1301 in relation to Section 205 of the TCC. Consequently, they
were deemed abandoned under Sections 1801 and 1802 of the TCC. It
also ruled that the notice required under Customs Memorandum Order
was not necessary in view of petitioner's actual knowledge of the
arrival of the shipments. It likewise agreed with the CTA Division's
finding that petitioner committed fraud when it failed to file the IEIRD
within the 30-day period with the intent to "evade the higher rate."
Petitioner was ordered to pay respondent the total dutiable value of the
oil shipments amounting to P893,781,768.21.
ISSUES:
1. Whether or not “entry” under Section 1301 in relation to
Section 1801 of the TCC refers to the IED or the IEIRD;
2. Whether or not "entry" under Section 1301 in relation to
whether fraud was perpetrated by petitioner and
3. Whether or not the importations can be considered
abandoned under Section 1801.
RULING:
1. The position of petitioner, that the import entry to be filed
within the 30-day period refers to the IED and not the IEIRD,
has no legal basis. Under the relevant provisions of the TCC,
both the IED and IEIRD should be filed within 30 days from
the date of discharge of the last package from the vessel or
aircraft. The IED serves as basis for the payment of advance
duties on importations whereas the IEIRD evidences the
final payment of duties and taxes. The operative act that
constitutes "entry" of the imported articles at the port of entry
is the filing and acceptance of the "specified entry form"
together with the other documents required by law and
regulations. The "specified entry form" refers to the IEIRD.
The word "entry" refers to the regular consumption entry (the
IEIRD) and not the provisional entry (the IED).
2. Evidence showed that petitioner bided its time to file the
IEIRD so as to avail of a lower rate of duty. A clear indication
of petitioner's deliberate intention to defraud the government
was its non-disclosure of discrepancies on the duties
declared in the IEDs (10%) and IEIRDs (3%) covering the
shipments.
Due to the presence of fraud, the prescriptive period of the
finality of liquidation under Section 1603 was inapplicable.
3. Petitioner's failure to file the required entries within a non-
extendible period of thirty days from date of discharge of the
last package from the carrying vessel constituted implied
abandonment of its oil importations. This means that from
the precise moment that the non-extendible thirty-day period
lapsed, the abandoned shipments were deemed the property
of the government.
Therefore, when petitioner withdrew the oil shipments for
consumption, it appropriated for itself properties which
already belonged to the government. Accordingly, it became
liable for the total dutiable value of the shipments of imported
crude oil amounting to P1,210,280,789.21 reduced by the
total amount of duties paid amounting to P316,499,021.00
thereby leaving a balance of P893,781,768.21.
Due notice was not necessary in this case. The purpose of posting an
"urgent notice to file entry" is only to notify the importer of the "arrival of
its shipment" and the details of said shipment. Since it already had
knowledge of such, notice was superfluous. Notice to petitioner was
unnecessary because it was fully aware that its shipments had in fact
arrived. The oil shipments were discharged from the carriers docked in
its private pier or wharf, into its shore tanks. From then on, petitioner
had actual physical possession of its oil importations. It was thus
incumbent upon it to know its obligation to file the IEIRD within the 30-
day period prescribed by law. As a matter of fact, importers such as
petitioner can, under existing rules and regulations, file in advance an
import entry even before the arrival of the shipment to expedite the
release of the same. However, it deliberately chose not to comply with
its obligation under Section 1301.
Petition DENIED. Petitioner Chevron Philippines, Inc. is ORDERED to
pay P893,781,768.21 plus six percent (6%) legal interest per annum
accruing from the date of promulgation of this decision until its finality.
Upon finality of this decision, the sum so awarded shall bear interest at
the rate of twelve percent (12%) per annum until its full satisfaction.
THE BUREAU OF CUSTOMS HAS EXLUSIVE JURISDICTION
OVER SEIZURE CASES WITHIN THE SUBIC FREEPORT ZONE.
AGRIEX CO. LTD. V. HON TITUS B. VILLANUEVA, ET AL.
G.R. No. 158150; September 10, 2014
Section 602 (g) of Republic Act No. 1937, otherwise known as the
"Tariff and Customs Code of the Philippines," provides the general
duties, powers and jurisdiction of the bureau shall include:
xxx g. Exercise exclusive original jurisdiction over seizure and
forfeiture cases under the tariff and customs laws xxx
It is well settled that the Collector of Customs has exclusive jurisdiction
over seizure and forfeiture proceedings, and regular courts cannot
interfere with his exercise thereof or stifle or put it at naught. The
Collector of Customs sitting in seizure and forfeiture proceedings has
exclusive jurisdiction to hear and determine all questions touching on
the seizure and forfeiture of dutiable goods.
Moreover, any prohibited or excluded articles found upon search, or
through any examination, audit or check of articles in the Zone by
Customs may be seized by Customs for violations of Tariff and
Customs Code of the Philippines as amended and disposed of in
accordance with law.
Furthermore, as a rule, from the moment imported goods are actually
in the possession or control of the Customs authorities, even if no
warrant for seizure or detention had previously been issued by the
Collector of Customs in connection with the seizure and forfeiture
proceedings, the BOC acquires exclusive jurisdiction over such
imported goods for the purpose of enforcing the customs laws, subject
to appeal to the Court of Tax Appeals whose decisions are appealable
to the Supreme Court. This is to render effective and efficient the
collection of import and export duties due to the State.

FACTS: Agriex Co., Ltd., a foreign corporation with principal office Therefore, the Bureau of Customs committed no grave abuse of
based in Bangkok, Thailand, entered into a contract of sale with PT. discretion when it acquired jurisdiction over the seizure proceedings as
Gloria Mitra of Indonesia and R&C Agro Trade of Cebu City for the same is well within its exclusive jurisdiction as provided by law.
180,000 and 20,000 bags of Thai white rice, respectively. Vessel MV
Hung Yen was chartered to transport the cargo to the Subic Free Port
for transhipment to Fiji Islands and Indonesia, and Cebu City.

When the petitioner requested permission from the Bureau of Customs

to unload the entire shipment of 200,000 bags of Thai white rice
because the MV Hung Yen must return to Vietnam, Commissioner
Titus B. Villanueva issued his 1st Indorsement directing Collector of
Customs Billy C. Bibit to issue a Warrant of Seizure and Detention
(WSD) against the 20,000 bags consigned to R&C Agro. The WSD
issued was later amended to include the vessel and the 180,000 bags
intended for transhipment. The issuance was based on the After
Mission Report that the alleged consignees in Indonesia are not
actually existing and that B.I. Naidu and Sons, Ltd. of Fiji Island is not
engaged in the importation of rice.

Petitioner filed a motion to quash the WSD but Collector Bibit denied
the same. The WSD issued against the 20,000 bags consigned to R&C
Agro was lifted by virtue of Commissioner Villanueva’s Order following
the payment of the settlement value. Petitioner filed a petition for
certiorari and prohibition in the CA alleging grave abuse of discretion
on the part of the respondents on the ground that they had no
jurisdiction over the 180,000 bags intended to be transported to foreign
countries. The respondents alleged that the petition should be
dismissed on the ground that the proper remedy was to file the petition
with the CTA and not with the CA.

The CA ruled in favor of the respondents stating that since the

jurisdiction to determine the validity or regularity of the seizure and
forfeiture proceedings is lodged or vested on the Collector of Customs
and then, to the Commissioner of Customs, which has already been
done in the case at bar, the next move of the petitioner should have
been to file an appeal to the CTA, and if unsatisfied, to the CA.

ISSUE: Whether or not the Bureau of Customs has exclusive original

jurisdiction over seizure and detention cases in Subic Bay Freeport of
dutiable goods.

HELD: Yes, the Bureau of Customs has exclusive original jurisdiction

over seizure and detention cases in Subic Bay Freeport of dutiable
goods. The Subic Bay Freeport as a separate customs territory shall
not divest the government to intervene especially in cases when there
are violations of tariff and customs laws.