Roumeliotes v. Court of Tax Appeals

TENTH DIVISION [CA-G.R. SP No. 28207. December 21, 1992.] (C.T.A. Case No. 4387) DEMETRIOS ROUMELIOTES , petitioner-appellant , vs . COURT OF TAX APPEALS , respondent-appellee . D E C I S I O N AUSTRIA-MARTINEZ , J p : Petition for review of the decision dated February 5, 1992 and of the Resolution dated June 2, 1992 denying herein petitioner's motion for reconsideration issued by the Court of Tax Appeals in C.T.A. Case No. 4387. The antecedent facts that led to the filing of herein petition are narrated by respondent court in its Decision: "It appears from the records of this case that on March 1, 1986, petitioner, a Greek born American citizen, obtained from the Philippine Airlines Inc. (PAL) office in San Francisco, USA through his travel agent, PAL tickets for his business trip to HongKong. His itinerary was set as follows: San Francisco to Manila on PAL Flight No. 101 on March 1, 1986; Manila to HongKong (his business destination), open dated on board Cathay Pacific; and HongKong to San Francisco on North Western Airlines, likewise open dated. "He arrived in Manila on March 3, 1986 and took the plane for HongKong the following day, March, 4, 1986. On March 7, 1986, he came back from HongKong and presented to the Customs authorities baggage and currency declaration No. CX-826842 showing only "personal effects". On March 9, 1986, he went to the Manila International Airport to board a plane for HongKong from which he would use his North Western Airlines sequence of his ticket back to San Francisco, California, USA. However, in the course of conducting routine examination of the luggage of outgoing passengers in the departure level of the International Passenger Terminal, the Customs Examiners discovered from the luggage of petitioners, six (6) big yellow brown envelope containing sixty (60) pieces of jewelry with appraised value of P104,934,750.00. "Petitioner was apprehended because he had no written authority to export said jewelry from the Central Bank of the Philippines. For which reason the subject jewelry was seized by the Collector of Customs of MIA under a Warrant of Seizure and Detention dated March 10, 1986 for alleged violation of Central Bank Circular Nos. 808 and 809 in relation to Section 2530(f) of the Tariffand CustomsCode and Central Bank Circular No.960 in relation to the same section of the said code, more specifically exporting or importing of jewelry, gold and silver without prior permit from the Central Bank. "After due hearing, the Collector of Customs on November 9, 1986 promulgated a decision ordering the forfeiture of the jewelry in favor of the government. "On December 23, 1986, petitioner filed a Notice of Appeal from the decision of the Collector of Customs. On September 7, 1989 the Commissioner of Customs affirmed the decision of forfeiture considering the failure of petitioner to declare the jewelry upon "arrival in violation of Section 2505 and 2530(1)(2) of the Tariff andCustomsCode, and for attempted exportation of the same jewelry in violation of Section 2530(f) of the same code in relation to Central Bank regulation." (pp. 24 26, 26, Rollo) Hence, the present petition on the following grounds: "I. The Court of Tax Appeals has decided a question of substance in a way probably not in accord with law or applicable decision of the Supreme Court. (p. 7, Rollo) "II. The Court of Tax Appeals has so far departed from the accepted and usual course of judicial proceedings, or so far sanctioned such departure by the Collector of Customs. (p. 12, id .) "III. Petitioner-appellant has not been accorded due process in the examination, seizure, and forfeiture of the subject jewelry items." (p. 18, id .) Respondent filed its comment pursuant to the Resolution of this Court promulgated by the Eighth Division on June 29, 1992. * We shall first determine whether or not petitioner was deprived of his right to due process of law. He complains that "his apprehension by Customs authorities was unwarranted, being a mere transiting passenger and foreigner, with no knowledge of and not having been informed or any law or regulation of a required 'authority' or 'license' or previous declaration of the jewelry items, neither concealed nor unpacked from their original packaging in HongKong, destined for the United States and not the Philippines, and definitely not imported articles." This is bereft of merit. The applicable provision of law is Article 2505 of the Tariff and Customs of the Philippines (TCD for brevity) to wit: "SEC. 2505. Failure to Declare Baggage . Whenever any dutiable article is found in the baggage of any person arriving within the Philippines which is not included in the baggage declaration, such article shall be seized and the person in whose baggage it is found may obtain release of such article, if not imported contrary to any law upon payment of treble the appraised value of such article plus all duties, taxes and other charges due thereon unless it shall be established to the satisfaction of the Collector that the failure to mention or declare said dutiable article was without fraud. Nothing in this section shall preclude the bringing of criminal action against the offender." Petitioner cannot justify his failure to declare the jewelry items in question by insisting that he is a foreigner and did not know any law or regulation that required him to do so. He was given a baggage and currency declaration form to fill up, to be presented before the customs authorities. It is not controverted that he presented to the Customs authorities baggage and currency declaration No. CX-826842 stating therein that he only had "personal effects." Any rational person would not consider 60 items of jewelry worth P104,954,750.00 as mere personal effects. He had all the opportunity to declare said items but for reasons known only to him, he chose not to do so. Therefore, he assumed whatever risks of violating any existing laws. Accordingly, he should be made to suffer the consequence thereof. Section 2505 explicitly authorizes the Customs authorities to seize the undeclared articles and to bring criminal action against the offender. Thus, having been discovered to have violated the above-quoted provisions of the TCC, the immediate apprehension of petitioner is in accordance with law, and, the seizure of said jewelries was effected within the bounds of the law. Petitioner cites Sections 2302-2304 of the TCC. A mere perusal of said provisions of law, to wit: "SEC. 2302. Report of Seizure to Commissioner and Chairman, Commission on Audit . When a seizure is made for any cause, the Collector of the district wherein the seizures is effected shall immediately make report thereof to the Commissioner and Chairman of the Commission on Audit. "SEC. 2303. Notification to Owner or Importer . The Collector shall give the owner or importer of the property or his agent a written notice of the seizure and shall give him an opportunity to be heard in reference to the delinquency which was the occasion of such seizure. "SEC. 2304. Notification to unknown Owner . Notice to an unknown owner shall be effected by posting for fifteen days in the public corridor of the customhouse of the district in which the seizure was made, and, in the discretion of the Commissioner, by publication in a newspaper or by such other means as he shall consider desirable." readily reveals the ineptness of petitioner's claim that he was deprived of due process of law. Only Section 2303 is particularly applicable to herein petitioner. Yet, he has nothing to complain about. Notice to him was effected when the jewelries found in his possession were inventoried in his presence, with petitioner himself doing the listing [Proposed stipulation no. 5 not objected to by herein petitioner, pp. 4 and 7 of Decision of Commissioner of Customs, dated September 7, 1989, Exh. H, attached to petitioner's Complaint (p, 101, Rollo)] and Seizure Receipt No. 319, dated March 9, 1986, was issued to him (Stipulation no. 6 not objected to by herein petitioner, pp. 5 and 7, id ). Consequently, on March 10, 1986, a Warrant of Seizure and Detention was issued by the District Collector of Customs, MIA and the same is docketed as Seizure Identification No. 542-86; and on the same date, the District Collector of Customs reported the case to the Commissioner of Customs (Proposed stipulations nos. 11 and 12 not objected to by petitioner, pp. 5 and 7, id.) in compliance with Section 2302 quoted above. Thereafter, hearings ensued. Petitioner was given the opportunity to be heard in accordance with law. Petitioner's allegations that: "10. Said jewelry items cannot be deemed exportable from the Philippines as shown by the consignment receipt from Foo Hang Jewellery Ltd. of HongKong (Exhs. "J-1", "J-2", and "J-3" earlier cited; particularly Exh. "J-2" certifying that the jewelry items were on consignment destined for the United States as evidenced by document dated March 5, 1986 "attached thereto). Said jewelry items were "properly documented", pursuant to section 175, subparagraph (c) of CB CircularNo.960. "11. He did not import and/or export said jewelry articles into or out of Philippine territory. They were contained in the same packages they were packed in from HongKong . They were packed in the same way when he debarked from HongKong, when he was to board the air carrier that would bring him to his real destination, the United States. They were not disposed of in the Philippines." are all self-serving statements. An examination of the consignment receipt readily reveals that there is no mention whatsoever that the jewelry items therein enumerated were destined for the United States of America (Exh. J-3, part of Annex E, Petitioner's Compliance, p. 94, Rollo) contrary to the certification purportedly issued by a certain Kenneth Lo Hung Chenk (Exh. J-2, p. 93, id.) which appears to be a mere conclusion on the part of Chenk not borne out by the consignment receipt which is silent on this point. Exh. J-2 merely shows that the articles of jewelry were consigned to herein petitioner on March 5, 1986, nothing more. For whatever purpose or destination, it does not say. To say that the jewelry items were packed in the same package as they were brought in from HongKong is not only self-serving but also not credible. Petitioner did not declare them when he entered the Philippines and they were not shown to any of the customs authorities. The disputable presumption that official duty has been regularly enforced (Section 1 (m), Rule 131, Revised Rule on Evidence) applies. It is presumed that the customs authorities inspected his luggage upon petitioner's arrival from HongKong on March 7, 1987 and found no jewelries inside; otherwise, he would have been questioned about it as what happened when he tried to leave with them on March 9, 1986. The petition and petitioner's "Compliance" dated August 31, 1992 do not show that the customs authorities failed to perform their duty of inspecting the luggage of an incoming passenger. Based on petitioner's allegation that said jewelry items were in his possession when he arrived in the Philippines on March 7, 1986, the inevitable conclusion is that the there was an intention on the part of petitioner to conceal as in fact he succeeded to conceal these articles from the customs authorities when he entered the Philippines on said date. It may not be amiss to state here that the possibility that the seized articles were not really in possession of the petitioner when he flew in from HongKong to meet his wife in the Philippines is not remote. Otherwise, why should he travel with said items without a proper document or consignment receipt considering that the jewelries are worth more than one hundred million pesos? Why should he bring with them at all to the Philippines if he intended to return again to HongKong after two days in the Philippines before going back to the United States of America, the alleged destination of the jewelries? There are no plausible explanations given by herein petitioner. However, petitioner claims he had the jewelries with him when he entered the Philippines on November 7, 1986. Therefore, he is bound by the legal requirement that he should have declared the same when entering the Philippines by the mere expediency of filling up the declaration form truthfully. Had he declared said items, he would have been properly informed by the customs authorities that said items should be properly documented as provided for in Section 175 of the Central Bank Circular No. 960. Thus, when petitioner was bringing them out of the Philippines on March 9, 1986, he had no documents to present so as to be exempted from the requirements of said Section 175, to wit: "SEC. 175. Export of gold and silver "a. No person shall export or bring out, or attempt to export or bring out, of the Philippines directly, through other persons, through the mails, through international carriers or through any other means, gold and/or gold-bearing materials, including jewelry, in any shape, form and quantity without prior written authorization from the Central Bank." xxx xxx xxx "c. The above requirements shall not apply to the bringing out of the Philippines of : "1. Gold and or silver forming an integral or necessary part of one's personal effects or of items intended as gifts or souvenirs provided that such personal effects or gifts and souvenirs; Provided , That such personal effects or gifts and souvenir items shall not be brought out in commercial and value" as used herein, shall mean a quantity in excess of two (2) for each kind of such personal effect or item, but in not case shall the aggregate value of the gold or silver content of all said effects and items exceed P10,000.00. "2. Gold and/or silver brought in by tourists and non-residents; Provided, That the entry or importation thereof in the country is properly documented," (emphasis supplied) The above-quoted circular prohibits the bringing out of the Philippines any gold-bearing materials including jewelry, without prior written authorization from the Central Bank. When the jewelry item were discovered by the customs authorities in the luggage of herein petitioner, the latter could not present any document to show that indeed they were not intended for importation to the Philippines. The alleged consignment receipt was not presented by him to the customs authorities, if only to prove that the jewelries were consigned to him in HongKong. The items are worth more than P10,000.00. Thus, failing to show to the customs authorities that he falls within any of the exceptions enumerated above, the seizure and subsequent forfeiture were in order under Section 2530, par. f of the TCC, to wit: "SEC. 2530. Property Subject to Forfeiture Under Tariff and Customs Law . Any vehicle, vessel or aircraft, cargo, article and other objects shall, under the following conditions be subject to forfeiture. 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, 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." Petitioner theorizes that the articles in question should not have been seized and forfeited as they were not "imported" or "exported"; that there should be an intention to unload in order to bring the articles within the ambit of the term "importation". We find these arguments untenable. Why should petitioner bring with him from HongKong to the Philippines said jewelry items worth than one hundred million pesos if he had no purpose of unloading them in the Philippines, when as alleged by him, he would be going back to HongKong after two days stay in the Philippines with his wife, before bringing the said jewelries to its alleged place of destination, the United States of America. The fact that there was one jewelry item missing in that the consignment receipt showed 61 articles of jewelry but the inventory showed only 60 articles is an indication that petitioner unloaded the missing item in the Philippines between March 7, and 9, 1986. We will not however speculate as to whether or not it was actually sold. We find it hard to believe that he did not known why there were only 60 articles of jewelry when the consignment receipt listed 61 items. Any person receiving such expensive jewelry items for consignment to the U.S.A. will make sure that he is receiving the exact number of jewelries listed in the consignment receipt. Suffice it to be stated that Section 175 of Central Bank Circular No. 960 is explicit. Paragraph a thereof refers to the bringing out of or attempt to bring out gold/silver bearing articles. This contemplates any act bringing out of or attempting to bring out of the country any gold/silver bearing materials. It is immaterial whether or not the bearer has any intention to dispose of or sell any or all of the said materials. The same thing is true with the use of the phrase of "entry or importation" in paragraph c(2) of the said Section 175. Likewise, the Circular contemplates any kind of entry in the Philippines. Under paragraph a, the Central Bank's authority to bring out is a requirement before any person can bring out gold/silver bearing materials. Under paragraph c(2), proper documentation is necessary when said articles are brought in whether imported in its strict sense or not. As discussed earlier, petitioner failed to show proper documents. WHEREFORE, finding the petition to be without merit, We hereby DISMISS the same. SO ORDERED. Signed by the undersigned who certify further that this Decision was reached after due consultation among the members of the Division in accordance with the Constitution. Puno and Lapea, Jr., JJ., concur. Footnotes * Re-raffled to herein ponente on November 3, 1992 by reason of inhibition of Justice Eduardo Bengzon.