Commissioner of Customs v. Nielsen

THIRD DIVISION [CA-G.R. SP No. 24039. July 10, 1991.] (C.T.A. Case No. 4307) COMMISSIONER OF CUSTOMS , petitioners , vs . ROBERT WARREN NIELSEN and THE COURT OF TAX APPEALS , respondents . D E C I S I O N CHUA , J p : This petition for review seeks to set aside the decision of respondent Court of Tax Appeals dated December 14, 1990 in C.T.A. Case No. 4307 entitled "Robert Warren Nielsen, petitioner, vs. Commissioner of Customs, respondent", the dispositive portion of which reads: "WHEREFORE, finding the petition well taken, the same is granted and the order of forfeiture against the confiscated currency is hereby set aside and cancelled. No costs." The facts of this case are not disputed. The controversy principally stems from the proper interpretation and application of the "Notice" printed at the back or reverse side of CB Form 6-22-42, which is a standard currency declaration, with the following injunctions: "(1) Keep your copy of this currency declaration and surrender the same to the representative of either the Bureau of Customs or Central Bank at the departure area, and "(2) This declaration is valid for this particular trip only." As found by respondent court, the operative facts are the following: Respondent Robert Warren Nielsen, "an American citizen, is a Director of the China Pacific Exploration Ltd., a HongKong-based company undertaking jointly with the Worldwide First Co. and the Philippine National Museum underwater research, exploration, and excavation of sunken ships and vessels in the Philippines. His work requires him to bring in funds from his HongKong office for use in the project which needs substantial capital to acquire needed equipment, devices, gadgets, machineries, vessels, and highly skilled and trained personnel. "On October 31, 1986, petitioner came from HongKong and accomplished Central Bank form 6-22-42, otherwise known as currency declaration Currency Declaration No. 09398). He declared therein that he was bringing in with him foreign currencies, namely: (1) $120,000 US Dollars, (2) 50 Deutsche Marks, (3) 30 Pond Sterling, (4) 5,000 Swiss Francs, (5) 50 Belgian Francs and 200 Philippine Pesos. "On November 8, 1986, petitioner left the Philippines for HongKong without surrendering Currency Declaration No. 09398, but declared when asked by the customs authorities that he was not carrying any foreign currency. He was cleared for boarding but only after a body search. "On November 14, 1986, petitioner came back to the Philippines. Since he brought in with him $9,000 US Dollars he declared it under Currency Declaration No. 9701. "On November 24, 1986, petitioner again departed for HongKong without surrendering Currency Declaration No. 9784 as he was not carrying then any foreign currency. He was bodily searched before allowed to board the plane. He came back the same day bringing in $4,000 US Dollars, which he declared under Currency Declaration No. 10140. "On December 17, 1986, for the third time, petitioner was booked for HongKong. He advised the customs personnel that he carried with him $56,000 US Dollars and presented Currency Declaration No. 09398, accomplished on October 31, 1986 when he first arrived in the Philippines. The currency declaration was duly verified and confirmed by the Central Bank Office (Airport) that the same was indeed authentic and the petitioner was accordingly cleared. "Later the petitioner was to be accosted by government authorities at the passenger terminal who informed him that he 'violated the foreign exchange rules of the Central Bank by departing the Philippines twice before, on November 8, 1986 and November 24, 1986, without surrendering his currency declaration dated October 31, 1986'. Thereupon the District Collector of Customs (Airport) confiscated his foreign currency amounting to $53,000 US Dollars, leaving petitioner $3,000 US Dollars, the maximum allowed by the Central Bank to be brought in without the need of any currency declaration. "Seizure proceeding was accordingly instituted against the confiscated foreign currency pursuant to Section 2530(f) of the Tariff and Customs Code, which provides: "'SEC. 2530. Property Subject to Forfeiture Under Tariff and Customs Law . . . . . '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 importation or exportation of the former. xxx xxx xxx "After due hearing the Collector of Customs decreed the forfeiture of US$53,000 on February 5, 1987. A motion for reconsideration proved to no avail and on appeal, the Commissioner of Customs affirmed the Collector's decision on July 28, 1988, a copy of which was secured through the efforts of petitioner's counsel on September 27, 1988." (Rollo, pp. 23-26). Petitioner ascribes two errors to the respondent court, viz: "I "Respondent Court erred in not finding that failure to surrender Currency Declaration No. 09398 when respondent Nielsen first departed the Philippines rendered the same invalid. "II "Respondent Court erred in not holding that Currency Declaration No. 09398 is valid only from the time of arrival up to the time of departure of respondent Nielsen from the Philippines." (Rollo, p. 11) We find the petition bereft of merit. On the first assigned error, it is contended that because private respondent did not surrender Currency Declaration No. 09398 when he first departed the Philippines (i.e., on November 8, 1986), said currency declaration ipso facto became null and void. We disagree. In Our considered judgment, the currency declaration which has been required by the Central Bank to monitor the inflow and outflow of US Dollars and other foreign currencies in the country, is to be surrendered only whenever the declarant concerned leaves the Philippines bringing with him any amount of such declared foreign currency. If said declarant departs empty-handed, there is no reason at all why he should surrender any currency declaration. And having surrendered none, the currency declaration in his possession stands as proof that the amount of foreign currency previously declared by him has remained in the country. Thus, the CB objective of monitoring the presence and availability or otherwise of any foreign currency in the country is attained. This explains why departing passengers. Filipinos and foreigners alike, are thoroughly searched, even bodily, by customs officers prior to departure to prevent smugglers and other unscrupulous characters from illegally spiriting money out of the country. The second assigned error, which faults respondent court for not holding that Currency Declaration No. 09398 is valid only from the time of arrival up to the time of departure of respondent Nielsen, is untenable. Petitioner would lean for support upon the words of the "Notice" aforementioned found at the back of the currency declaration. We find the words contained in said "Notice" to be very clear in import and significance. The first injunction merely directs the declarant to surrender the currency declaration to the proper government official at the departure area that is to say, if and when he departs and if and when he brings out with him any foreign currency which he had previously declared. The second injunction states without qualification that "this declaration is valid for this particular trip only." Of course, the currency declaration that one fills up stating that he brought into the country on a certain date, say, $25,000.00 is valid only on said date and for the stated amount precisely because he cannot use or avail of said currency declaration to cover the bringing in or out of another $25,000.00 on a subsequent trip to the Philippines. The law and regulations cited by petitioner as having been violated by private respondent justifying the seizure proceeding against him do not inspire concurrence and acceptance on our part. To begin with, petitioner cites the basic policy enunciated in CB Circular No. 960 which reads: "Sec. 1 Basic Policy xxx xxx xxx "With the high balance of payments deficit in 1982, it is necessary for all agencies of government to adopt all possible measures to see to it that foreign exchange receipts are maximized and foreign exchange outflows are minimized and to keep international debt to a minimum, thus ensuring the attainment of structural adjustment program objectives and the preservation of the country's international credit standing.' (Emphasis ours) Section 39 of Central Bank Circular No. 960 provides: "SEC. 39. Illegal exportation/transmittal of foreign exchange . No person, firm association or corporation shall take or transmit or attempt to take or transmit foreign exchange, in any form, in any manner, out of the Philippines directly or through other person, through the mails, or through international carriers unless specifically authorized by the Central Bank or allowed under existing international agreements or Central Bank regulations' Provided, That this prohibition shall not apply to tourists and non-resident temporary visitors who are taking or sending out of the Philippines foreign exchange in amounts not exceeding such amounts of foreign exchange brought in and declared by them. "For purposes of establishing the amount of foreign exchange brought by them into the Philippines, tourists and non-resident temporary visitors bringing with them more than US$3,000.00 or its equivalent in other foreign exchange which includes foreign currency, notes, checks and other transfer instruments denominated in freely convertible foreign currency, shall declare their foreign exchange at points of entries upon arrival in the Philippines in a form prescribed by the Central Bank. ' (Emphasis ours)" (Rollo, pp. 12-13). It is contended that the foregoing provision is in pari materia with Section 6 of the same Central Bank Circular No. 960 which provides: "SEC. 6. Export, import of foreign exchange; exceptions . No person shall take out or transmit or attempt to take out or transmit foreign exchange, in any form, out of the Philippines directly, through other persons, through the mails or through international carriers except when specifically authorized by the Central Bank or allowed under existing international agreements or Central Bank regulations. "Tourists and non-resident visitors may take out or send out from the Philippines foreign exchange in amounts not exceeding such amounts of foreign exchange brought in by them. For purposes of establishing the amount of foreign exchange brought in or out of the Philippines, tourists and non-resident temporary visitors bringing with them more than US$3,000.00 or its equivalent in other foreign currencies shall declare their foreign exchange in the form prescribed by the Central Bank at points of entries upon arrival in the Philippines .'" (Rollo, pp. 13-14) Finally, petitioner cites Section 2530(f) of the TCCP which provides: "'SEC. 2530. Property Subject to Forfeiture Under Tariff and Customs Law . . . . '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 importation or exportation of the former. . . '" (Rollo, p. 19) Petitioner caps the petition with the Supreme Court ruling in Commissioner of Customs vs. Capistrano , 108 Phil. 694 which, to Our mind, merely interpreted the law applicable and held that under Section 1363(f) of the Revised Administrative Code, the Philippine peso bills come within the concept of "merchandise" subject to importation or exportation'; that money is a commodity, an object of trade, and may be forfeited when exported contrary to law. We do not find any of the regulations and law cited above to have been violated, directly or indirectly, by private respondent, and We agree with respondent court when it ruled that: "'Respondent [Commissioner of Customs] has overplayed his understanding of the simple 'Notice' in the currency declaration, which constitutes neither law nor regulations, and could not have been intended to supplant the purpose in Sec. 39 supra . He has fumbled into a reversible error." (Rollo, p. 56) WHEREFORE, for lack of merit, the instant petition for review is hereby DISMISSED. No costs. SO ORDERED. Kapunan and Victor, JJ., concur.