Search Conducted on the SS "LUZON" Vessel

April 21, 1960 BIR RULING NO. 184-60 The Regional Director BIR Regional District No. 3 M a n i l a S i r : This refers to the search conducted by our agents on the vessel SS "LUZON" on February 2, 1959. LLphil According to the report of our agents, the search yielded thirty-nine (39) cartons of Lucky Strike cigarettes which where found in the mess hall of the SS "LUZON". Inasmuch as nobody claimed ownership of the cigarettes, the same were turned over to the Officer-in-charge of the Bureau of Customs. Inquiry was made from Messrs. Eduardo Mateo and Antonio Castillo, captain and purser, respectively, of the SS "LUZON". According to them the cigarettes in question were loaded on the vessel without their knowledge and consent and that the same were not declared nor included in the manifest and, therefore, they had no means of knowing the owners thereof. An affidavit was executed by both officials reiterating these allegations. Under the provisions of Section 174 of the National Internal Revenue Code, any person who is found in possession of articles subject to specific tax, the tax on which has not been paid in accordance with law, shall be punished by a fine of not less than three times the amount of the specific tax due on the articles found but not less than two hundred pesos nor more than five thousand pesos or by imprisonment of from four months and one day to four years and two months, or both. Section 2530 of the Tariff and Customs Code provides as follows: "SEC. 2530. Property subject to Forfeiture Under Tariff and Customs Laws . Any vessel or aircraft, cargo, articles and other objects shall, under the following conditions, be subject to forfeiture: xxx xxx xxx "b. Any vessel engaging in the coastwise trade which shall have on board any article of foreign growth, product or manufacture in excess of the amount necessary for sea stores, without such article having been properly entered or legally imported. . . ." Pursuant to the above provisions of the Tariff and Customs Code, the vessel SS "LUZON", may be forfeited for carrying articles subject to specific tax which are in excess of the amount necessary for sea stores, and on which the specific tax has not been paid. Moreover, in the case of "U.S. vs. Islas Filipinas" 28 Phil. pp. 291-299, the Supreme Court in affirming the decision of the lower court held that the fine of P1,000.00 may be imposed on the steamship Islas Filipinas under the provisions of section 77 and section 313 as amended of Act No. 355, for failure to have on hand a complete manifest in the prescribed form of all her cargo. It appears that the SS "Islas Filipinas" arrived at the port of Manila from the foreign port of Hongkong with 918 tins of prepared opium which did not appear on the ship manifests. The steamship Islas Filipinas was seized by the customs authorities. After hearing the evidence, the Insular Collector of Customs imposed a fine of P1,000.00 upon the vessel under the provisions of section 77 of Act No. 355. The Court ruled that "lack of knowledge or consent on part of the owners of a vessel of a violation of Section 77 of Act No. 355, in no wise relieves the vessel of her liability for the penalties prescribed therefor." In accordance with the abovequoted provisions of law and jurisprudence on the matter, the vessel of the owner thereof can be held liable for violation of section 174 of the National Internal Revenue Code. In view thereof, this Office is of the opinion that the penalty prescribed in section 174 of the Tax Code can be imposed on the owner of SS "LUZON". cdll Very truly yours, (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue