Feeder International Line, Pte, Ltd. v. Court of Tax Appeals

FOURTEENTH DIVISION [CA-G.R. SP No. 20470. May 8, 1990.] (C.T.A. Case No. 4166) FEEDER INTERNATIONAL LINE, PTE, LTD., by its agent, FEEDER INTERNATIONAL (PHILS) INC. , petitioner , vs . COURT OF TAX APPEALS and THE COMMISSIONER OF CUSTOMS , respondent . D E C I S I O N LIMCAOCO , J p : This is a petition seeking the review and reversal of the decision of the Court of Tax Appeals, dated December 14, 1988, in C.T.A. Case No. 4166 entitled, "FEEDER INTERNATIONAL LINE, PTE, LTD., by its agent FEEDER INTERNATIONAL (PHILS), INC. VS. THE HONORABLE COMMISSIONER OF CUSTOMS," affirming the decision of the respondent Commissioner of Customs dated May 13, 1987, finding the vessel M/T "ULU WAI" liable under Section 2530(a) of the Tariff and Customs Code of the Philippines (P.D. 1464), as amended, and its cargo of 1,100 metric tons of Gas Oil and 1,000 metric tons of Fuel Oil liable under Section 2530(a), (f), and (1)-1 of the same Code and ordering the forfeiture of the said vessel and its cargo. We adopt the correct statement of facts presented by the public respondent, thus: "The M/T "ULU WAI" a foreign vessel of Honduran registry, owned and operated by Feeder International Shipping Lines of Singapore, left Singapore on May 6, 1986 carrying 1,100 metric tons of gas oil and 1,000 metric tons of fuel oil consigned to Far East Synergy Corporation of Zamboanga, Philippines. On May 14, 1986, the vessels anchored at the vicinity of Guiuanon Island in Iloilo, without notifying the Iloilo customs authorities. The presence of the vessel only came to the knowledge of the Iloilo authorities by information of the civilian informer in the area. Acting on said information, the Acting District Collector of Iloilo dispatched a Customs team on May 19, 1986 to verify the report. The Customs team found out that the vessel did not have on board the required ship and shipping documents, except for a clearance from the port authorities of Singapore clearing the vessel for Zamboanga.' In view thereof, the vessel and its cargo were held and Warrant of Seizure and Detention over the same was issued after due investigation. The petitioner then filed its Motion to Dismiss and to Quash the Warrant of Seizure and Detention which the District Collector denied in his Order dated December 12, 1986. In the course of the forfeiture proceedings, the parties, through their respective counsel, agreed on a stipulation of facts, to wit: '1. That the existence and identity of M/T "ULU WAI" subject of Sl-2-86, herein identified as Exh. "A", is admitted; 2. That the existence and identity of 1,100 metric tons of gas oil, subject of Sl-2-86-A, herein identified as Exh. "B", is admitted; 3. That the existence and identity of 1,000 metric tons of fuel oil, subject of Sl-2-86 herein identified as Exh. "B-1", is admitted; 4. That M/T "ULU WAI" left Singapore May 6, 1986 and was cleared by Singapore customs authorities for Zamboanga, Philippines; 5. That subject vessel arrived at Guiwanon Island, Municipality of Nueva Valencia, sub-province of Guimaras, Province of Iloilo, Philippines, about 1120 HRS, May 14, 1986; 6. That subject vessel was boarded by Customs and Immigration authorities for the first time in the afternoon of May 19, 1986, at about 1600 HRS; 7. That an apprehension report dated May 21, 1986, submitted by the Team Leader of the Customs and Immigration Team, Roberto Intrepido, marked and identified as Exh. "C", is admitted; 8. That at the time of boarding, the Master of subject vessel could not produce any ship and/or shipping documents regarding her cargo except the Port Clearance Certificate No. 179999 issued by the Port of Singapore Authority dated May 4, 1986, marked as Exh. "D", which is hereby admitted; 9. That on May 26, 1986, the Master of M/T "ULU WAI", Capt. Romeo E. Deposa filed a Marine Protest dated same date, which Marine Protest, marked and identified as Exh. "E", is hereby admitted; 10. That the sworn statement of said Capt. Romeo E. Deposa, marked and identified as Exh. "F", given on May 26, 1986 before Atty. Hernando Hinojales, Customs Legal Officer, is admitted; 11. That the sworn statement of Mr. Antonio Torres, Owner's representative of M/T "ULU WAI", marked and identified as Exh. "G" given before Atty. Hernando Hinojales on May 28, 1986, is admitted; 12. That the sworn statement of Wilfredo Lumagpas, Master of M/T "CATHEAD" given before it. Dennis Azarraga on June 4, 1986, marked and identified as Exh. "H", is admitted; 13. That the existence of Fixture Note No. FN-M-86-05-41 entered into by and between the National Stevedoring & lighterage Corporation and the Far East Synergy Corporation, marked and identified as Exh. "I", is admitted; and 14. That the Preliminary Report of Survey Sounding Report dated June 17, 1986, signed by J.P. Piad, Surveyor of Interport Surveying Services, Inc. and duly attested by Ernesto Cutay, Chief of the M/T "ULU WAI" marked and identified as Exh. "J", is also admitted.' After the hearing, the District Collector issued his Decision dated March 17, 1987, the dispositive part of which reads: 'WHEREFORE, premises considered, the M/T "ULU WAI" is hereby found guilty of violation Section 2530(a) of the Tariff and Customs Code of the Philippines (P.D. 1464), as amended, while her cargo of 1,100 M/T Gas Oil and 1,000 M/T Fuel Oil are hereby found guilty of violating Section 2530(a), (f), and (1-1) under the same Code and are hereby forfeited in favor of the Republic of the Philippines. SO ORDERED. The decision a quo was appealed to the Commissioner of Customs, who ruled: 'WHEREFORE, premises considered, the decision dated March 19, 1987 of the District Collector of Customs of Iloilo ordering the forfeiture of M/T "ULU WAI" and its cargo of 2,100 metric tons of gas and fuel oil is hereby affirmed in toto . SO ORDERED.' On June 25, 1987, the petitioner filed a Petition for Review of the decisions of the Collector and the Commissioner of Customs with the Court of Tax Appeals, praying for the issuance of preliminary injunction and/or restraining order to enjoin the Commissioner from implementing his Decision. The Court of Tax Appeals issued a temporary restraining order on July 14, 1987. Later after hearing, the prayer for a writ of preliminary injunction was granted conditioned upon the filing of a P500,000 surety bond (Resolution of July 3, 1987). The Commissioner then filed a Motion for Reconsideration from the Resolution issuing the writ of preliminary injunction, which was denied in the respondent court's Resolution dated October 8, 1987. On December 14, 1988, the Court of Tax Appeals issued its Decision, the decretal part of which reads: 'WHEREFORE, the decision of respondent Commissioner of customs dated May 13, 1987, ordering the forfeiture of the vessel M/T "ULU WAI" for violation of Section 2530(a) of the Tariff and Customs Codes (sic), as amended, and its cargo of 1,100 metric tons of Gas Oil and 1,000 metric tons of Fuel Oil for violation of Section (a) and (f), and (1-1) of the same Code, is hereby affirmed. With costs. SO ORDERED.'" The petitioner assigns the following errors: "I RESPONDENT COURT IN HOLDING AN ILLEGAL IMPORTATION OR AT LEAST AN ATTEMPT THEREOF HAS BEEN COMMITTED WITH THE USE OF M/T "ULU WAI" II RESPONDENT COURT ERRED IN HOLDING THAT THERE WAS AN INTENT TO UNLOAD OR TRANSFER THE OIL FROM THE VESSEL M/T "ULU WAI" TO THE BARGE AND TO BRING THE SAME TO MANILA. III THE HONORABLE RESPONDENT COURT ERRED IN HOLDING THAT AN INTENT TO UNLOAD IS AN ATTEMPT TO SMUGGLE. IV THE HONORABLE RESPONDENT COURT ERRED IN HOLDING THAT THE SHIPPING DOCUMENTS ARE OF DOUBTFUL CREDIBILITY. V THE HONORABLE RESPONDENT COURT ERRED IN AFFIRMING THE FORFEITURE OF THE VESSEL M/T "ULU WAI" AND ITS CARGO ON MERE PRESUMPTIONS, CONJECTURES AND GUESSWORK'S (SIC) THAT THERE WAS AN INTENT TO UNLOAD AND THEREFORE AN ATTEMPT TO SMUGGLE (Comment, p. 228, Rollo). The assigned error, being intertwined with one another, will be discussed jointly. We agree with the court a quo that an illegal importation has been committed with the use of M/T "ULU WAI" thus, warranting forfeiture under Section 2530 of the Tariff and Customs Code. Appellant argues that the vessel entered the jurisdiction of the Philippines "in distress" and that there was no intent to unload. It allegedly passed through Guiuanon Island, Guimaras, Iloilo, only because of the break-down of its auxiliary generator and radio facilities. That not a drop of oil was unloaded allegedly shows the absence of intent to import said oil cargo to the Philippines. Section 1202 of the Tariff and Customs Code provides: "Importation begins when the carrying vessel or aircraft enters the jurisdiction of the Philippines with intention to unload therein." It is undisputed that the vessel M/T "ULU WAI" entered the jurisdiction of the Philippines. The issue that calls for Our resolution is whether or not there was an intention to unload. The facts and circumstances borne by the evidence us that there was intent to unload. The following circumstances unmistakably point to this conclusion. 1. Considering that the vessel came from Singapore, the route to Zamboanga was shorter and Iloilo lies further north. It is not logical for the sailing vessel to travel a longer distance to get the necessary repairs. 2. When the vessel M/T "ULU WAI" anchored at Guiuanon Island, Guimaras, Iloilo, it did not notify the Iloilo port or Customs authorities of its arrival. The master of the vessel did not file a marine protest until 12 days after it had anchored, despite the supposed urgency of the repairs needed and notwithstanding the provision (Sec. 1016) of the Code requiring the master to file protest within 24 hours. 3. At the time of boarding by the customs personnel, the required ship's and shipping documents were not on board except the clearance from Singaporean port officials clearing the vessel for Zamboanga. Petitioner claims that these were turned over to the shipping agent who boarded the vessel on May 15, 1986. However, this claim is belied by the sworn marine protest (Exhibit "E") of the master of M/T "ULU WAI," Mr. Romeo Deposa. "It was only on or about the 20th of May when I instructed one of the crew to: get down of (sic) the vessel and find means and ways to contract the vessel's representative." Moreover, in such Sworn Statement (Exhibit "G"), ship agent, Antonio Torres, stated that he did not know the buyer of the oil, which is impossible if he had the Local Purchase Order of the alleged buyer, Pogun Construction SDN. Torres also swore that his knowledge came from the vessel's owner, without mentioning the shipping documents which indicate such data. He also said that he did not know the consignee of the oil which would have been patent from documents. Lastly, as also pointed out by the court a quo , the captain of the vessel M/T "ULU WAI", Romeo Deposa, in his sworn statement to customs authorities on May 26, 1986, enumerated the documents he allegedly gave to Mr. Antonio Torres, but did not mention among them the Local Purchase Order of Pogun Construction SDN and the Bill of Lading. 4. When the vessel was inspected, the tugboat M/T "CATHEAD", and the barge M/T "SEMIRANO NO. 8109" were alongside it. A fixture note revealed that the barge and the tugboat were contracted by Consignee Far East synergy to load the cargo of the vessel into the waiting barge and to discharge the same to Manila (Exhibits "I" and "I-1"). It is of no moment that the fixture note did not expressly mention the vessel M/T "ULU WAI". Government witnesses, Asencio and Lumagpas, testified that it was the vessel's cargo which was to be unloaded and brought to Manila by them. Petitioner points out the following factors as indicative of a lack of intent: (1) the vessel's cargo was intact when inspected by the Customs authorities; (2) the vessel could have met another ship immediately if it wanted to smuggle cargo; and, (3) the tugboat and barge were not seized and detained. Anent the first contention, We repeat, as similarly stressed by the Solicitor General, that unloading the cargo is not necessary for the crime of smuggling to be committed. A mere intent to unload suffices to give rise to liability. Moreover, it was established in the testimony of Lumagpas and Asencio that the unloading could not be effected immediately because of the presence of water in the barge. As regards the second contention, it is not for Us to strategize for petitioner. While it is true that the vessel could have rendezvoused with another vessel to smuggle said goods, the law does not rule out other means to accomplish the same end. Anent the non-seizure of the barge and the tugboat, We agree with the comment of the Solicitor General that whatever offense imputable to the barge and the tugboat would be separate and distinct from the offense committed by the vessel M/T "ULU WAI." As further observed by the Solicitor General, the master of the tugboat was utilized as a government witness. Such would not have been possible if the barge and tugboat were also proceeded against. Petitioner also argues that the cargo, fuel oil and gas oil, are not contraband, but are merely relatively prohibited articles. We affirm the position of respondent court that while oil is not per se prohibited, its importation is regulated under Central Bank Circular No. 1029, requiring as a pre-requisite a permit or clearance from the appropriate agency. In the case of Pascual vs. Commissioner of Customs , No. L-10979, June 30, 1959; 56 O.G. 7169, the Court upheld the forfeiture of importations made without the necessary import license issued by the Monetary Board pursuant to Circular No. 45, and the release certificates issued by the Central Bank pursuant to Circular No. 44. The Supreme Court held that ". . . they fall within the class of merchandise of prohibited importation or merchandise the importation . . . of which is effected . . . contrary to law that the Commissioner of Customs may seize and order forfeiture." The same ruling is enunciated in Commissioner of Customs vs. Serree Investment Co ., No. L-12007, May 19, 1960; 58 O.G. 5413, and Po Eng Trading vs. Commissioner of Customs , No. L-10508, Nov. 29, 1960. Petitioner theorizes that such relatively prohibited articles should not be included in the list of items subject to forfeiture. To sustain this theory would render nugatory the aim and purpose of the law when it authorizes a particular agency of the Philippine government to regulate and restrict the entry of such merchandise for whatever beneficial purposes contemplated. The vessel and its cargo are clearly subject to forfeiture under Section 2530 of the Tariff and Customs Code, to wit: "Sec. 2530. Property Subject to Forfeiture under the Tariff and Customs Law . Any vehicle, vessel or aircraft, cargo . . . shall, under the following conditions be subject to forfeiture: a). Any vehicle, vessel or aircraft including cargo, which shall be used unlawfully in the importation of articles or the conveying and/or transporting contraband or smuggled articles in commercial quantities to or from any port or place; xxx xxx xxx f). Any article the importation or exportation of which is effected or attempted contrary to law, or any article of prohibited importation or exportation." WHEREFORE, premises considered, this petition is hereby DISMISSED, for lack of merit. The decision of the Court of Tax Appeals affirmed in toto , with costs against petitioner. SO ORDERED. Buena and Liwag, JJ ., concur.