Commissioner of Customs v. Court of Tax Appeals

FIRST DIVISION [CA-G.R. SP No. 45448. March 3, 1998.] COMMISSIONER OF CUSTOMS , petitioner , vs . COURT OF TAX APPEALS and PHILIPPINE CASINO OPERATORS CORPORATION , respondents . D E C I S I O N VIDALLON-MAGTOLIS , J p : Assailed in this petition for certiorari under Rule 65 of the Rules of Court is the Decision dated May 28, 1997 of the respondent court, which declared as illegal the seizure of imported articles and ordered their release, as well as its Resolution of August 14, 1997 denying the petitioner's Motion for Reconsideration of such decision and granting the private respondent's Motion for Entry of Judgment. The petitioner in its petition alleges the following antecedent facts: The Philippine Amusement and Gaming Corporation (PAGCOR for brevity) granted to private respondent Philippine Casino Operators Corporation (PCOC), as concessionaire, the sole and exclusive right to manage, administer and supervise the gambling casinos. Under its franchise, PAGCOR was authorized to import duty-free and tax-free, equipment and other items for the sole and exclusive use in the casino operations. The Customs Intelligence and Investigating Services, however, received information from private persons that the articles imported by PAGCOR actually belonged to respondent PCOC. Thus, an investigation was conducted which resulted in the issuance of Warrant of Seizure and Levy No. 89-092. On March 6, 1989, the Bureau of Customs operatives seized various imported articles consisting of building materials, heavy equipment, auto parts, escalators, elevators, kitchen equipment and power systems, found inside the Provident International Resource Corporation (PIRC) Building owned by PCOC, where the PAGCOR casinos were previously located. On February 22, 1990, District Collector of Customs Titus B. Villanueva of the Port of Manila, issued a decision directing the forfeiture of the articles subject of the seizure. A Motion for Reconsideration filed by PCOC was denied by the same official on August 28, 1990. On appeal to the petitioner Commissioner of Customs (then Salvador M. Mison), the latter upheld the District Collector's decision and affirmed the decree of forfeiture through its decision dated February 12, 1991. Thus, the PCOC elevated the case through a petition for review before the respondent court. On May 28, 1997, the respondent court issued the assailed decision, reversing the petitioner's judgment and directing the release of the seized imported articles. A copy of the assailed decision was served upon the Legal Services Division of the Bureau of Customs on May 30, 1997, and upon the Office of the Solicitor General (OSG) on June 5, 1997. On June 20, 1997, the OSG filed by registered mail a Motion for Reconsideration, which was denied through the assailed resolution of August 14, 1997 and received by the OSG on August 18, 1997. In the meantime, the PCOC filed on July 8, 1997 a Motion for Entry of Judgment, alleging that the OSG's Motion for Reconsideration was filed beyond the reglementary period from receipt by the Bureau of Customs' Legal Services Division of a copy of the decision. Despite the petitioner's opposition thereto, the respondent court granted the Motion for Entry of Judgment on the ground that the petitioner's Motion for Reconsideration was filed twenty-one (21) days after receipt by the Legal Services Division of the Bureau of Customs of a copy of the assailed decision. In this petition, the petitioner imputes grave abuse of discretion to the respondent court in issuing the assailed decision, premised on the fact that the subject importation was obviously illegal. On November 5, 1997, after the petitioner's compliance with certain requirements, We directed the respondents to file their Comment (not a Motion to Dismiss). In the same resolution, in order not to render the petition moot and academic. We likewise ordered the issuance of a temporary restraining order to restrain the enforcement of the assailed decision. LLjur The private respondent filed its Comment by Mail on November 17, 1997 which was received by the Court on December 29, 1997. In said comment, the private respondent avers that the computation of the period to appeal should be reckoned from May 30, 1997 the date when a copy of the assailed decision was served upon the Legal Services Division of the Bureau of Customs, and not when the OSG received a copy of the said decision. The lawyers from the Legal Services Division, according to the private respondent, were deputized as Special Attorneys of the OSG, and they were the ones personally appearing during the proceedings before the respondent court; hence, according to cited jurisprudence, service upon them binds the OSG. Thus, the mandatory 15-day period had already expired when the OSG filed its Motion for Reconsideration. Moreover, the private respondent maintains that, if ever any error was committed by the respondent court, it is only an error of judgment correctible by appeal and not certiorari. In any case, the subject importations were legal and valid, as they were made for the exclusive use of the casino operations, with prior authority of PAGCOR, and with proper clearance from the Ministry of Finance. We agree with private respondent in its contentions. First , the Motion for Reconsideration was filed beyond the reglementary period, it being undisputed that the Legal Services Division of the Bureau of Customs received its copy of the assailed decision on May 30, 1997, while, the said motion was filed by the OSG on June 20, 1997. The lawyers of such division have been deputized as special counsels of the OSG; hence service to said lawyers is service to the OSG. In the cases aptly cited by the private respondent, the Hon. Supreme Court held: "The petitioner's contention that service of the questioned Orders to a deputized special attorney of the OSG would not bind the OSG so that the Orders did not attain their finality when the Motion was filed, does not have a leg to stand on. It is a well-settled principle that the acts of the authorized Deputy is service on the OSG. "Moreover, the records will disclose that Atty. Fidel Evangelista, who is a deputized attorney was the one who appeared for the petitioner in the lower court. It is not only lawful but also in accordance with the normal and standard practice that notices be sent to said special Attorney to avoid delays and complications. Precisely, the OSG has no time and manpower to handle all the cases of multifarious government entities such that deputization is authorized by law to cope with such contingencies." ( Republic vs . Soriano , 168 SCRA 560, 567). This ruling was reiterated in the more recent case of National Irrigation Administration vs . Regino (192 SCRA 42), where the High Court also held: "Furthermore, even granting that Atty. Basuil is only a special attorney, his receipt of the said Order of August 2, 1988 is binding both on the OSG and the petitioner. . . ." ( supra , at p. 50). Second , there is no question of jurisdiction involved in this petition. The issue before the respondent court was whether or not the importations were legally exempt from payment of taxes and dues. The respondent court ruled that the tax-exemption privileges of PAGCOR as provided for in its franchise extends to the private respondent, being a corporation having contractual relations with PAGCOR and its importations are solely and exclusively used in the operations of the casinos. Granting that the respondent court erroneously applied to the facts of the case the provisions of P.D. 1067-B, as amended by P.D. 1399 the same could only be an error of judgment, committed in the exercise of its jurisdiction. Now, since the special civil action for certiorari under Rule 65 of the Rules of Court is limited only to challenges against errors of jurisdiction, this petition will not lie. "As a rule, errors of judgment or of procedure, not relating to the court's jurisdiction nor involving grave abuse of discretion, are not reviewable by certiorari under Rule 65 of the Revised Rules of Court." ( Rodriguez vs . Court of Appeals , 245 SCRA 150. Pls. see also Commissioner of Internal Revenue , 257 SCRA 200). Third , appeal is the proper remedy to correct errors of judgment. In the instant case, the petitioner allowed its period to lapse without appealing the assailed decision within the 15-day period provided for in Section 4, Rule 43, 1997 Rules of Civil Procedure. The special civil action of certiorari should not be allowed as a substitute for an ordinary appeal ( Felizardo vs . Court of Appeals , 233 SCRA 220, 224). Where appeal is the proper remedy, certiorari will not lie ( Ongsitco vs . Court of Appeals , 255 SCRA 703). WHEREFORE, the petition is DENIED , and the assailed decision and order are AFFIRMED . SO ORDERED. Montoya and Cosico , JJ ., concur.