Commissioner of Customs v. Evergood Merchandising Co., Inc.

TENTH DIVISION [CA-G.R. SP No. 51213. July 31, 2001.] COMMISSIONER OF CUSTOMS , petitioner , vs . EVERGOOD MERCHANDISING CO., INC. , respondent . D E C I S I O N CARPIO MORALES , J p : The Commissioner of the Bureau of Customs (BOC) appeals by petition for review under Rule 43 of the 1997 Rules on Civil Procedure the Decision of October 9, 1998 of the Court of Tax Appeals (CTA) lifting his Order of forfeiture dated November 18, 1994. On August 5, 1992, TWENTY TWO THOUSAND AND FIVE HUNDRED AND SIXTY (22,560) bags or about 564 metric tons of "polypropylene and polyethylene resins" (the goods or the importation) coming from HYUNDAI PETROCHEMICAL CO., LTD. of Seoul, Korea (HYUNDAI) and consigned to EVERGOOD MERCHANDISING CO. (EVERGOOD), a Philippine corporation engaged in the import and export business, arrived at the Manila South Harbor aboard the MV UNI-Summit under Registry No. MIP-TS-060. Commercial Invoice No. NP 40093 dated June 29, 1992 issued by the shipper/exporter HYUNDAI (P. 43, Rollo ) shows that payment of the goods, which was valued at US$378,890.00 was drawn against Letter of Credit (LC) No . H-016863 dated June 26, 1992 issued by a Hongkong Bank its correspondent bank of which was Prudential Bank Corporation-Makati Branch where domestic LC No. P-4745-92 was opened. A deposit in advance in the amount of P1,000,270.00 was made on June 1, 1992 under OR No. 24903207 and Import Entry Declaration Serial No. 08130516. Said amount of deposit was to answer for whatever customs duties, value added tax, and other charges due on the importation. For purposes of Philippine customs clearance, the Societe Generale de Surveillance (SGS) inspected the importation. Like HYUNDAI Commercial Invoice No. HP 40093, the SGS Clean Report of Findings referred to LC No. P-4745-92 as the domestic letter of credit covering the importation. A day after the arrival of the goods or on August 6, 1992, Import Entry and Internal Revenue Declaration (Import Entry) was accomplished at the BOC wherein Isidoro Balaoro of Producers Bank Bldg . Manila appeared as EVERGOOD's broker-representative. Pursuant to the established immediate payment system in the Port of Manila, collection of import duties and taxes is coursed through banks. Named in the Import Entry (accomplished for EVERGOOD) as agent bank to receive payment of customs duties due on the importation was the PNB. The domestic LC answerable for the customs duties due on the goods was not however, specified therein . Tacked Accompanying the Import Duty were, among other things, the following documents : (1) Packing List, (2) IVY Company Commercial Invoice dated July 2, 1992 issued by its Export Manager Elaine Yap, (3) BOC Order of Payment No. 14354103 directing PNB to collect from EVERGOOD P1,246,791.00 and referring to LC No . 213-S92-025 [PNB West Avenue Branch] WAB , (4) Importer's Affidavit dated August 6, 1992 accomplished by EVERGOOD's Manager Josephine Yap, (5) Certificate of Origin, (6) Bill of Lading, and SGR Clean Report Findings. On the basis of the documents presented, the BOC Entry Processing Division imposed customs duties and charges in the total amount of P2,299,600 . 00 . EVERGOOD's Importer's Affidavit, which was submitted in accordance with Section 1301 of the Tariff Customs Code of the Philippines, as amended, is reproduced as follows: "I/We EVERGOOD MERCHANDISING. . . Bo. Mayamot, Antipolo, Rizal of the shipment described below which arrived at the port of Manila on August/92 ex. S.S. Uni Summit Reg. No. MIP-DTS-do hereby declare: THAT the herein attached Customs Import Entry contains a full and true statement of all the article which are the subject thereof: THAT the said shipment described in the attached Customs Import Entry has an entered value of US$400,240 . 00 . THAT the attached invoices and import entry contain a just and truthful account of the actual cost of said articles including the value of all containers or coverings, and that nothing has been submitted therefrom or concealed whereby the Government of the Republic of the Philippines might be defrauded of any part of the duties lawfully due on the articles: THAT to the best of our information and belief, the consular and commercial invoices, bill of lading, export declaration certificates or its equivalent and all other supporting documents of said importation, are the only ones in existence relating thereto and that they are in the state in which they were actually received by us and furthermor e. THAT to the best of our information and belief, the import entry, consular and commercial invoice, bill of lading, export declaration certificate or its equivalent and all other supporting documents and declaration thereon are in all respects genuine and true, and were made by the person by whom the same purport to have been made, respectively . MARKS & QUANTITY DESCRIPTION OF NUMBERS MERCHANDISE PER B/L 37 Conts. Polypropylene Homopolymer Polythyen SF 414 RA, 9B410, PH 350 Ever Good Merchandising IMPORTER Josephine Yap SIGNATURE Manager DESIGNATION" (Emphasis and Underscoring supplied) The importation's "entered value" appearing in paragraph 3 of above-quoted Importer's Affidavit, US$400,240 . 00, is the same as that stated in IVY Company Invoice No . 40093 dated June 29, 1992 issued by IVY company Export Manager Elaine Yap . Parenthetically, the Commercial Invoice issued on June 29, 1992 by shipper HYUNDAI showed that the value of the goods is US$378,890 . 00 . A scrutiny of IVY Company Invoice dated June 29, 1992 submitted along with the Import entry shows that the importation was to be drawn against PNB under L.C. No . 213-S92-025 WAB , the same LC indicated in the BOC Order of Payment. On August 11, 1992, Rafael Bautista, PNB WAB messenger, and Arturo Bonifacio of the Morong Star Customs Brokerage attempted to secure the release of the importation by presenting above-stated documents and BOC Official Receipts (OR) Nos. 25445077 and 25445147 in the amounts of P1,052,809.00 and P1,246,791.00, respectively. As the LC appearing in the Order of Payment differed from that appearing in the SGS Clean Report Findings, Merlita Tomas, Chief of the Collection Office of the Manila International Container Port (MICP) made a verification from the PNB WAB and found out that LC No. 213-S92-025 [PNB] WAB indicated in the Order of Payment, which was reflected in BOC OR Nos. 25445077 and 25445147, was not actually opened nor were such receipts issued by said bank acting as agent of the BOC and, therefore, the amounts appearing in said ORs were not actually paid. Bautista and Bonifacio were thus apprehended. Since the customs duties, value added tax, and other charges amounted to P2,299,600.00 and P1,000,270.00 had been deposited in advance by EVERGOOD at Prudential Bank, there was a remaining balance of P1,299,330.00 still outstanding and unpaid when the attempt to secure the release of the goods was made. Forfeiture proceedings, under paragraphs f and l, subparagraphs (3), (4), and (5), Section 2530 of the Tariff and Customs Code, were thereupon initiated by the MICP against the goods, docketed as SEIZURE IDENTIFICATION No. 92-249 (MICP). Getting wind of the forfeiture proceedings, EVERGOOD's General Manager Antonio Sanchez submitted to the BOC his affidavit attesting that his company was on its first importation, the release of which was supposedly going to be facilitated by a broker. The "broker", ROBERTO SANCHEZ, turned out to be EVERGOOD's employee. During the proceedings before the MICP District Collector, EVERGOOD could not present ROBERTO SANCHEZ, he having allegedly disappeared with P1,248,891.00 (sic) representing the balance of the amount of duties and other charges due on the importation. On June 4, 1993, the MICP District Collector cleared EVERGOOD of any responsibility and recommended the "released of the subject shipment . . . upon payment of the taxes and duties" which recommendation was, however, disapproved by BOC Deputy Commissioner Licerio Evangelista who held that EVERGOOD was responsible for the use of spurious documents and the attempted withdrawal of the goods without full payment of the appropriate customs duties. Acting on EVERGOOD's motion for reconsideration, Deputy Commissioner Evangelista referred it, along with SEIZURE IDENTIFICATION No. 92-249 (MICP)'s case folder, to the MICP for comment. The MICP District Collector, still finding that EVERGOOD was not responsible for the attempted withdrawal of the shipment, reiterated his recommendation that the goods be released to it upon payment of the deficiency customs duties. By Order of November 18, 1994, the BOC Commissioner, disregarding the MICP District Collector's recommendation ordered the goods' forfeiture in favor of the government, ratiocinating that "ROBERTO SANCHEZ, the person who was given full authority to effect the release of th[e] shipment was an employee of consignee and by the action of its manager Antonio Sanchez has been constituted as agent thereof insofar as this transaction is concerned." Aggrieved by the BOC Commissioner's Order, EVERGOOD appealed to the CTA. In reversing the BOC Commissioner's order of forfeiture, the CTA pointed out in the assailed decision at bar that the BOC's theory of conspiracy was untenable because (1) the spurious documents in Bautista and Bonifacio's possession were bank documents with which EVERGOOD had no hand in making, and (2) there was no evidence of the existence of a "principal-agent" relationship between EVERGOOD and BALAORO and his cohorts. The BOC's Motion for Reconsideration of the CTA Decision having been denied by Resolution of January 25, 1999, BOC filed the present petition for review. The BOC asseverates that it has no obligation to establish the principal agent relationship between EVERGOOD and Bautista and Bonifacio, it being sufficient that there was an attempt by the two to import the goods into the Philippines in a manner contrary to law through the use of spurious documents. EVERGOOD did not file its comment to the petition despite notice to file one . From the CTA Decision of October 9, 1998 and its Resolution of January 25, 1999, the Court gathers that EVERGOOD disowned Balaoro, the one who accomplished the Import Entry for it, as its customs broker after its goods were already seized by the MICP officers; and that it did not file a new import entry in replacement of that filed by Balaoro nor establish the circumstances surrounding the disappearance of ROBERTO SANCHEZ, its alleged agent and employee. Since in the Importer's Affidavit dated August 6, 1992 accomplished by EVERGOOD's Manager Josephine Yap it was stated that the "entered value" of the goods was US$400,240.00, the same amount appearing in the IVY company Commercial Invoice dated June 29, 1992 whereon was indicated an inexistent PNB letter of credit, EVERGOOD could not have not known the falsity of such letter of credit. EVERGOOD's mere disavowal of knowledge as to the circumstances surrounding the use of the spurious documents does not suffice to overturn the prima facie case against it under Section 1301 of the Tariff and Customs Code of the Philippines which reads: SECTION 1301. Persons Authorized to Make Import Entry . Imported articles must be entered in the customhouse at the port of entry within five (5) days from the date of discharge of the last package from the vessel either (a) by the importer, being holder of the bill of lading, (b) by a duly licensed customs broker acting under authority from a holder of the bill or (c) by a person duly empowered to act as agent or attorney-in-fact; . . . Provided, further, That where the entry is filed by a party other than the importer, and importer shall himself be required to declare under oath and under the penalties of falsification or perjury that the declarations and statements contained in the entry are true and correct; Provided, finally, that such statements under oath shall constitute prima facie evidence of knowledge and consent of the importer of violation against applicable provision of this Code should the importation turn out to be unlawful or irregular. (Emphasis and Underscoring supplied). nor to discharge its burden of proving that it is was not a party to the fraud, as mandated under Section 2535 of the same Code which reads: SECTION 2535. Burden of Proof in Seizure and/or Forfeiture . In all proceedings taken for the seizure and/or forfeiture of any vessel, vehicle, aircraft, boat or articles under the provisions of the tariff and customs laws, the burden of proof shall lie upon the claimant ; Provided, That probable cause shall be first shown for the institution of such proceedings and that seizure and/or forfeiture was made under the circumstances and in the manner described in the preceding sections of this Code. (Emphasis supplied) Good faith cannot be invoked to avoid forfeiture, for forfeiture proceedings are in rem and directed against the res , not the persona , ( Vide Vierneza v. Commissioner of Customs , 24 SCRA 394; Commissioner of Customs v. Manila Star Ferry, Inc ., 227 SCRA 317; Commissioner of Customs v. CTA , 138 SCRA 581). WHEREFORE, the Decision of October 9, 1998 and Resolution of January 25, 1999 of the Court of Tax Appeals are hereby SET ASIDE and the November 18, 1994 Order of the then Bureau of Customs Commissioner Guillermo Parayno forfeiting subject importation in favor of the government is hereby REINSTATED . The shipment having been released upon EVERGOOD's posting of surety bond under Bond No. G (16) 02411 issued by Western Guaranty Corporation on February 13, 1996 in the amount of P18,126,613.00, the same is hereby forfeited in favor of the government. SO ORDERED. Rivera and De Guia-Salvador, JJ ., concur.