Tong Tek v. Commissioner of Customs
REITERATIONFacts
The Antecedents: On October 8, 1954, Venancio Carreon Tong Tek and Juanito Tong, possessing passes, entered Pier 9, Manila, to visit a docked vessel. Later, attempting to leave, their suspicious gait led a Port Policeman to search them. The search revealed 138 gold bars (valued at P470,760.00) tied around their waists. These bars were confiscated, and seizure proceedings were initiated, alongside a criminal action for attempted violation of Central Bank Circular Nos. 21 and 42. Procedural History: The Acting Collector of Customs ordered the forfeiture of the gold bars. This was affirmed by the Acting Commissioner of Customs. Subsequently, the Court of Tax Appeals (CTA) upheld the forfeiture, ruling that the gold bars were validly forfeited under Section 1363(f) and (m-1) of the Revised Administrative Code. The criminal case resulted in a conviction by the lower court, but the Court of Appeals reversed the decision, holding that only consummated offenses were punishable under the said Circulars. The Petition: Petitioners sought a review of the CTA decision, raising issues regarding the validity of Central Bank Circulars, the applicability of Section 1363 of the Revised Administrative Code to gold bars, the correctness of the CTA's upholding the forfeiture, and whether the acquittal in the criminal case barred the forfeiture proceedings.
Issue(s)
Whether Central Bank Circular Nos. 20, 21, and 42 are valid. Whether gold bars are subject to forfeiture under Section 1363 of the Revised Administrative Code. Whether the Court of Tax Appeals erred in upholding the validity of the order of forfeiture of the 138 gold bars. Whether the petitioners' acquittal in the criminal action bars the forfeiture of the merchandise in another proceeding.
Ruling
The Supreme Court affirmed the decision of the Court of Tax Appeals, upholding the validity of the forfeiture order for the 138 gold bars in favor of the Government. Costs were against the petitioners.
Ratio Decidendi
On the validity of Central Bank Circular Nos. 20, 21, and 42: The Court held that the Presidential approval of Circular No. 20, which subjected all transactions in gold and foreign exchange to licensing, extended to subsequent regulations issued in its implementation, such as Circular Nos. 21 and 42. The law requires the Monetary Board's decision to license such transactions to be approved by the President, but not necessarily the detailed regulations that follow. Therefore, the circulars were deemed validly issued and implemented. On whether gold bars are subject to forfeiture under Section 1363 of the Revised Administrative Code: The Court ruled that the term "merchandise of prohibited exportation" in Section 1363(f) of the Revised Administrative Code is broad enough to include goods subject to activities undertaken in violation of subsequent laws, such as Central Bank circulars. Since the Central Bank circulars have the force and effect of law, engaging in transactions without complying with their requirements makes the articles involved prohibited and subject to forfeiture. The Court rejected the argument that it only referred to items specifically listed in the Philippine Tariff Act of 1909. On whether the Court of Tax Appeals erred in upholding the validity of the order of forfeiture: The Court found that the actions of the petitioners constituted an attempt to export gold bars without the required Central Bank license. They boarded the vessel, searched for a place to hide the gold, and were apprehended while leaving with the gold. These overt acts commenced the commission of the felony, and their failure to complete the act of exportation was due to the absence of a suitable hiding place, not spontaneous desistance. Therefore, the forfeiture was validly upheld. On whether the petitioners' acquittal in the criminal action bars the forfeiture of the merchandise: The Court held that acquittal in the criminal case does not bar forfeiture proceedings. While the acts might be the same, the forfeiture proceedings were based on Section 1363 of the Revised Administrative Code, which specifically includes attempts, unlike the Central Bank circulars under which the criminal case was filed, which were interpreted by the Court of Appeals to punish only consummated offenses. Thus, the elements required for forfeiture under the Administrative Code were met, even if not for the criminal charge.
Main Doctrine
Gold bars, when subject to attempted exportation without the required license from the Central Bank, are subject to forfeiture under Section 1363(f) and (m-1) of the Revised Administrative Code, even if the act does not constitute a consummated offense under Central Bank Circulars, and acquittal in a criminal case for violation of said circulars does not bar forfeiture proceedings.