Compania General De Tabacos De Filipinas v. Court of Tax Appeals

FOURTH DIVISION [CA-G.R. SP No. 24476. March 31, 1993.] * (C.T.A. Case No. 2699) COMPANIA GENERAL DE TABACOS DE FILIPINAS , petitioner , vs . THE COURT OF TAX APPEALS AND THE COMMISSIONER OF CUSTOMS , respondents . D E C I S I O N MARTIN , JR ., J p : The instant petition for review seeks a reversal of the decision of the Court of Tax Appeals in C.T.A. Case No. 2699 entitled "Compania General de Tabacos De Filipinas vs. The Commissioner of Customs, affirming in toto the decision of the Collector of Customs of Manila holding said petitioner's vessel, M/S "Cecilie Maersk", liable for an administrative fine in the sum of P5,000.00 for violation of Section 1005 in relation to Section 2521 of the Tariff and Customs Code of the Philippines, as amended. The antecedent facts of the case are as follows: The controversy stemmed from the nineteen (19) cases of sodium sulphate compound, marked as "PHILUSA 154, SHAW, PHILIPPINES", which were unloaded from the vessel M/S "Cecilie Maersk" upon its arrival on December 29, 1993 at the port of Manila from New York, U.S.A. (p. 3, Petition; pp. 1-2, Brief of Petitioner-Appellant, p. 63, Rollo). Alleging that the aforedescribed cargo was not listed in the Inward Foreign Manifest, the Collector of Customs filed an administrative case against the petitioner Compania General De Tabacos De Filipinas (Compania for short) in its capacity as the Philippine agent of M/S "Cecilie Maersk" (Annex A, Petition; p. 2, Brief of Petitioner-Appellant; p. 2, Brief of Respondent-Appellees). On January 22, 1974, or 24 days from the date of the vessel's arrival, petitioner Compania filed an amendment to the Inward Foreign manifest covering the same cargo in order to effect the release of such unmanifested shipment (p. 3, Brief of Petitioner-Appellant; p. 3, Brief of Respondents-Appellees; p. 63, ibid .). At the administrative hearing, the contending parties stipulated on the following facts: "1. That the Maersk Line is the shipping company that owned and operated the M/S 'Cecilie Maersk' with Cia GRAL DE TABACOS DE FILIPINAS, as their local shipping agent in Manila; 2. That an amendment to the Inward Cargo Manifest was made and applied for by the shipping agent, in connection with the 19 cases unmanifested cargo and was approved with a condition that such approval was without prejudice to an administrative action against the vessel; 3. That the shipment was originally scheduled to be loaded on the M/S 'Lexa Maersk', and was as a matter of fact manifested on the 'Lexa Maersk', but through stevedoring error, was actually loaded aboard the 'Cecilie Maersk'; and 4. That the error resulting to an unmanifested cargo was already noted at the port of origin, and the addendum to that effect was prepared and airmailed to the Manila Office, but was delayed on its way arriving only after the vessel has left the port of Manila." (p. 3, Petition; pp. 15-16; p. 21; pp. 33-34, id .) On October 17, 1974, the Collector of Customs handed down a decision, the pertinent portions of which read as follows: "Consequently, a careful perusal of section 1005 shows that there is no exception whatsoever mentioned in the law. On the other hand, the provision is explicit in its term and language, making it mandatory 'upon the master or captain of the vessel or aircraft "to have on board a complete manifest of all her cargo on board."' Neither the provision of Section 2521 of said law, imposing fine for vessels conveying cargo without manifest, provides the exception. This no-exception, rule, in several instances, e.g., in the case of 'Smith Bell & Co., in its capacity as agent of the S/S Adratus vs. Commissioner of Customs, CTA Case No. 1728, and 1921, July 22, 1969,' the Court did not hesitate to rule in declaring 'that any attempt to read into the statute any exception, such as 'misshipment of goods' would be contrary to the pervasive spirit as well as to the clear language of its provisions'. Similarly, in the case of 'Manila Star Ferry, Inc., vs. Commissioner of Customs. CTA case No. 1836, Sept. 30, 1969; United Navigations and Transport Corporation vs. Commissioner of Customs, CTA Case No. 1837, Sept. 30, 1969; Ceaba Shipping Agency Inc. vs. Commissioner of Customs, CTA Case No. 1839, Sept. 30, 1939'. the enforcement of Section 1005 of said law has been upheld by imposing fine upon the vessel in its failure to have a manifest without exception for all its cargo on board. In the instant case, it has been clearly established in the proceedings that the M/S 'Cecilie Maersk', in her voyage out No. 20, Registry No. 2280, on December 29, 1973, has conveyed and discharged at the Port of Manila, under B/L No. 59, the subject cargo which was unmanifested, and is therefore answerable for the liability imposed under the provision of Section 1005 in relation to Section 2521 of the Tariff and Customs Code. Section 2521 of the Tariff and Customs code provides a penalty of a fine not exceeding ten thousand pesos, without providing thereon the minimum. This could be interpreted to mean that the imposition of fine is to be mitigated or aggravated as the case may be depending on the value of the cargo involved and/or the frequency of the infraction or omission. In the instant case the fact that no value of the article in question has been ascertained [sic] during the proceedings could inure to the benefit of the respondent vessel, unfortunately however, as above enumerated this is not the first but the fourth time that this vessel has been charged and fined for committing the same if not similar offense under this provision of law, and therefore an administrative fine in the sum of FIVE THOUSAND (P5,000.00) PESOS, Philippine Currency is hereby imposed as penalty for the violation as imputed. WHEREFORE, by virtue of the authority vested in this Office under Section 2312 of the Tariff and Customs Code, it is hereby ordered and decreed that an administrative fine against the M/S 'Cecilie Maersk' in the amount of FIVE THOUSAND (P5,000.00) PESOS, Philippine Currency be, as it is hereby declared imposed and failure to remit the said amount within fifteen (15) days after this decision shall have become final and executory will subject the vessel involved to seizure pursuant to Section 2533 of the Tariff and Customs Code. Let copies of this Decision be furnished all parties and offices concerned for their information and guidance. SO ORDERED." (Annex A, Petitioner; pp. 15-19, id .) Petitioner Compania appealed the above decision to the respondent Commissioner of Customs who, in his judgment dated May 12, 1975, affirmed the same in toto (Annex B, Petitioner, p. 3; p. 23, id .). Dissatisfied with the judgment, petitioner Compania filed with the respondent Court of Tax Appeals a petition for review claiming, among others, that since the loading of the subject cargo on the M/S "Cecilie Maersk" instead of on the M/S "Lexa Maersk" where it was manifested was due to stevedoring error, there could have been no fraudulent intent on its part and therefore it should be absolved from liability under Section 1005 of the Tariff and Customs Code of the Philippines (Annex C, Petition; p. 4, Brief of Petitioner-Appellant; p. 3, Brief of Respondents-Appellees; p. 65, id .). Respondent Commissioner of Customs, in his answer, admitted that there appeared to have been a stevedoring error in its failure to manifest the cargo but denied the petitioner's allegation of absence of fraudulent intent (Annex D, Petition; p. 65, id .). Subsequently, the respondent Court of Tax Appeals affirmed in toto the decision of respondent Commissioner of Customs (pp. 32-38, id .). On February 21, 1980, petitioner Compania filed with the Supreme Court a petition for review by writ of certiorari which was referred to this Court pursuant to its resolution dated March 13, 1991 (pp. 117-118, Rollo). Hence, the instant petition on the lone assignment of error that respondent Court of Tax Appeals erred: ". . . In holding that when a vessel fails to include in its manifest an item that it carries abroad, said vessel and/or its Philippine agent must be severely fined even though the Commissioner of Customs admits that the failure to include the missing item in the manifest was done without any fraudulent intent whatever ." (p. 1, Petition; p. 2, id .). The petition is devoid of merit. The pertinent provisions of the Tariff and Customs Code are quoted, to wit: "SEC. 1005. Manifest Required of Vessel from Foreign Port . Every vessel from a foreign port must have on board a complete manifest of all her cargo. All of the cargo intended to be landed at a port in the Philippines must be described in separate manifests for each port of call therein. Each manifest shall include the port of departure and the port of delivery with the marks, numbers, quantity and description of the packages and the names of the consignees thereof. Every vessel from a foreign port must have on board complete manifests of passengers and their baggage, in the prescribed form, setting forth their destination and all particulars required by the immigration laws; and every such vessel shall have prepared for presentation to the proper customs official upon arrival in ports of the Philippines a complete list of all sea stores then on board. It must show that no cargo or passenger, as the case may be, is carried from the port of departure to the port of destination in the Philippines. A cargo manifest shall in no case be changed or altered after entry of the vessel, except by means of an amendment by the master, consignee or agent thereof, under oath, and attached to the original manifest. Provided, however, that after the invoice and/or entry covering an importation have been received and recorded in the office of the appraiser, no amendment of the manifest shall be allowed, except when it is obvious that a clerical error or any other discrepancy has been committed in the preparation of the manifest, without any fraudulent intent, discovery of which could not have been made until after examination of the importation has been completed." "SEC. 2521. Failure to Supply Requisite Manifests . If any vessel or aircraft enters or departs from a port of entry without submitting the proper manifest to the customs authorities, or shall enter or depart conveying unmanifested cargo other than as stated in the next preceding section hereof, such vessel or aircraft shall be fined in a sum not exceeding ten thousand pesos. The same fine shall be imposed upon any arriving or departing vessel or aircraft if the master or pilot in command shall fail to deliver or mail to the Auditor General a true copy of the manifest of the incoming or outgoing cargo, as required by law." Section 1005 clearly shows that what is required is a "manifest of all the vessel's cargo". Cargo is what is intended to be unloaded and landed at the port and the manifest contains the port of departure and the port of delivery, with the marks, numbers, quantity, and description of the packages and the names of the consignees thereof. The language of the statute is mandatory which does not mention any exceptions whatsoever (Commentaries on the Revised Tariff and Customs Code of the Philippines, Montano A. Tejam, Volume IV, 1978 Edition, pp. 2443-2444). Well-entrenched is the rule that where the law does not make any exception, courts may not except something unless compelling reasons exist to justify it (De Villa vs. Court of Appeals, 195 SCRA 722; Philippine British Assurance Co., Inc. vs. Intermediate Appellate Court, 150 SCRA 520). Moreover, the requirement that all cargoes on board a vessel except provisions for its crew must be manifested stems from marine experience and appears to be worldwide. When a cargo is manifested, its nature is placed beyond doubt. The prescription therefore is not only for the collection of duties but also for effective regulation. As was said in a relevant case: ". . . A government wants to know, without being put to a search, what articles are brought into the country, and to make up its own mind not only what duties it will demand, but whether it will allow the goods to enter at all. . . . " (Commissioner of Customs vs. Lt. Col. Relunia, 105 Phil. 875, 880, citing U.S. vs. Sischo, 262 U.S. 165) In the case under consideration, it has been clearly established that M/S "Cecilie Maersk" conveyed and discharged at the port of Manila unmanifested cargo and since there was a failure to have them reflected in the Inward Foreign Manifest, it necessarily follows that the petitioner-appellant Compania in its capacity as the Philippine agent of the said vessel would be subject to the penalty of fine imposed in Section 2521 of the Code. On this point, we quote with approval the conclusion of the respondent-appellee Court of Tax Appeals, thus: "This Court in previous cases has consistently and repeatedly ruled that the law makes it an imperative obligation of every vessel coming from a foreign port to have on board a complete and proper manifest of all her cargo, and to this mandatory requirement no exception is allowed by law. In the case of Compania General de Tabacos de Filipinas vs. the Commissioner of Customs, CTA Case No. 2559 dated December 28, 1979, this Court rules as follows: The Court agrees with the stand of respondent. In previous cases involving similar or identical issues, this Court has consistently and repeatedly ruled that the law makes it an imperative obligation of every vessel coming from a foreign port to have on board a complete and proper manifest of all her cargo, and to this mandatory requirement no exception is allowed by the statute. Under Section 1005 of the Tariff and Customs Code, it is an imperative obligation of every vessel from a foreign port to have on board a complete manifest of all her cargo. No exception is mentioned in the statute. Neither is there mention of any is there mention of any exception in Section 2521 of said Code providing for a fine for vessels without proper manifests nor in Section 2530 thereof providing the confiscation of unmanifested goods. The recognition by the Court of any attempt to read into the statute any exception such as misshipment of goods, would be contrary to the pervasive spirit as will as the clear language of the aforesaid provisions . (Smith Bell and Co. (Phil.) Inc. vs. Comm. of Customs, CTA Cases Nos. 1728 & 1921, July 22, 1969; Compania General de Tabacos de Filipinas vs. Comm. of Customs, CTA Case No. 2143, June 30, 1972; Macondray & Co., Inc. vs. Comm. of Customs, CTA Case No. 2082, Sept. 17, 1974; Macondray & Co., Inc., vs. Comm. of Customs, CTA Case No. 2484, Jan. 1, 1976; Compania General de Tabacos de Filipinas vs. Comm. of Customs, CTA Case No. 2144, Jan. 5, 1976). ( Emphasis supplied ) The fact that the omission to manifest a cargo was due to clerical error or shortshipment committed in good faith or without fraudulent intent or that the vessel's manifest was amended or corrected with the approval of the Bureau of Customs will not constitute a valid defense and relieve the vessel from liability. (See Macondray & Co., Inc. vs. Comm. of Customs, CTA Case No. 2079, Sept. 29, 1972; Macondray & Co., Inc. vs. Comm. of Customs, CTA Case No. 2067, Oct. 6, 1972; Everett Steamship Corp. vs. Comm. of Customs, CTA Case No. 1968, Aug. 25, 1971, Certiorari denied in G.R. No. L-34146, Oct. 7, 1971; Compania General de Tabacos de Filipinas vs. Comm. of Customs, CTA Case No. 1939, Feb. 26, 1971; Macondray & Co., Inc. vs. Comm. of Customs, CTA Case No. 1911, April 20, 1970; Macondray & Co., Inc. vs. Comm. of Customs, CTA Case No. 1930, Dec. 27, 1969, Certiorari denied in G.R. No. L-31599, Feb. 10, 1970). And as clearly and explicitly stated by the Supreme Court in the case of U.S. vs. the Steamship 'Rubi', 32 Phil. 228, the evident intent and object of these requirements for the submission of manifests by all vessels from foreign ports is to impose upon the owners and officers of such vessels an imperative obligation to submit lists of the entire lading of the ship in the prescribed form, in order to facilitate the labors of the Customs and Immigration Officers, and to defeat any attempt to make use of such vessels to secure the unlawful entry of persons or things into the country. No exemption is made in the statute, and the recognition of any attempt to read an exception into the law could hardly fail to defeat the purpose of the enactment. (American Steamship Agencies, Inc. vs. Comm. of Customs, CTA Case No. 1851, May 3, 1977). Consequently, the fact that the failure or omission to manifest the vessel's cargo was due to a clerical error (Macondray & Co., Inc. vs. Comm. of Customs, CTA Case No. 2503, July 31, 1978), cross-loading (Compania General de Tabacos de Filipinas vs. Comm. of Customs, CTA Case No. 2781, September 30, 1977) misshipment or delay in the mails of the original manifest sent from the port of loading (See Compania General de Tabacos de Filipinas vs. Comm. of Customs, CTA Case No. 2742, September 16, 1977), will not exculpate the vessel from the penalty of fine prescribed under Section 2521 of the Tariff and Customs Code. We see no valid reason to depart from this ruling." It s a cardinal rule in statutory construction that the construction given by administrative bodies, in the case at bar the respondents-appellees, charged with the application and enforcement of special statutes should be accorded great weight unless such construction is clearly shown to be in conflict with the Constitution and other laws (Nestle Philippines, Inc. vs. Court of Appeals, 203 SCRA 504). Therefore, the respondent-appellee Court of Tax Appeals' decision upholding the factual findings of and determination by customs and revenue officials is entitled to respect (Nasiad and Lozada vs. Court of Tax Appeals, 61 SCRA 238; CIR vs. Ayala Securities Corporation and C.T.A., 70 SCRA 204) and its findings of facts are well-nigh conclusive upon this Court supported as they are by substantial evidence (Parag. No. 8, Supreme Court Circular No. 1-91). It is petitioner's contention that the doctrine laid down in U.S vs. Rubi is no longer applicable because the statute on which it was based has already been repealed. The argument merits no consideration. The violation in the case at bar took place on December 29, 1973 and the provision of law in point is Section 1005 in relation to Section 2521 of the Tariff and Customs Code, as amended by P.D. No. 34. As earlier discussed, both provisions of the Code share the common purpose of requiring every vessel to have a complete manifest of its cargo as an absolute obligation. Hence, we find that respondents-appellees committed no error in recognizing such evident purpose of complying with the manifest requirement because even under the repealed provisions of law the same prescription is likewise observed. Neither do we find merit in the petitioner's argument that it should be exonerated from liability under Section 2521 of the Code absent any showing of fraudulent intent on its part because the unmanifested cargo was admittedly due to stevedoring error. It is borne by evidence on record that petitioner-appellant had been previously charged and fined thrice for violations committed under similar provisions of law (p. 2 of Annex B, Petition). These prior repeated violations, we believe, negate its assertion of good faith. Mere admission of the respondents-appellees that the unmanifested cargo was due to stevedoring error does not necessarily prove that the petitioner-appellant had no fraudulent intent whatsoever. As the Solicitor General in his appellees' brief observed: ". . . Petitioner admits in its supplemental petition that there are presently 'thousands of cases' of unmanifested cargoes due to, among other things, stevedoring error. It is precisely in response to the growing number of unmanifested cargoes being shipped into the country that the government has increased the fine for failure to include an item in the ship's cargo manifest . . .." (p. 12, Brief from Respondent-Appellees) In the case under consideration, the imposition of administrative fine under Section 2521 of the Code is but just and reasonable if only to deter smuggling or illegal importation in our country. Even if we concede the petitioner's contention that there was already an amendment made in the Inward Foreign Manifest albeit twenty-four (24) days late from the date of vessel's arrival (pp. 16 and 21, id .); still it should not be relieved from liability because the approval of the Collector of Customs was without prejudice to the filing of administrative action against the petitioner-appellant, and furthermore, no evidence was presented to prove that the amendment was necessary since the same is allowed only in case of clerical error or other discrepancy in the manifest, meaning such error as is visible to the eyes or obvious to the understanding (Black, et al. vs. Republic, 104 Phil. 848, 849). To allow such error of cross-lading or shortshipment as what happened in the case at bar to be an exception to the mandatory provision set-forth in Section 1005 of the Code would serve as subterfuge to circumvent the law and permit a situation where the vessel owners, stevedores, customs personnel and officers connive among themselves to take advantage of such exception in order to defeat the primordial objective of the law. WHEREFORE, finding that no error of fact or law was committed by the respondents-appellees that will warrant a reversal or modification of the decision sought to be reviewed, the petition of the decision sought to be reviewed, the petition for review is DENIED DUE COURSE and i DISMISSED for lack of merit. No pronouncement as to costs. SO ORDERED. Camilon and Benipayo, JJ ., concur. Footnotes * originally filed with the Supreme Court as G.R. No. 52721 but later transferred to this Court for disposition.