Commissioner of Customs v. Pascual
REITERATIONFacts
The Antecedents: Respondent Francisco Pascual imported 301 cartons of confectionery on a "no-dollar" remittance basis in 1954. The Manila Collector of Customs declared the shipment forfeited for lack of a release certificate required by Central Bank Circular Nos. 44 and 45. The shipment had been released upon filing of a surety bond, and respondent was ordered to pay P6,925.00, the amount covered by the bond. Procedural History: The Commissioner of Customs affirmed the forfeiture. However, the Court of Tax Appeals nullified the decree and ordered the cancellation of the surety bond, ruling that the Central Bank lacked the power to regulate "no-dollar" imports after the expiration of the Import Control Law (R.A. 650) on June 30, 1953. The Petition: The Commissioner of Customs filed a petition for review, contending that the Central Bank possesses the power to regulate such imports.
Issue(s)
Whether the Central Bank of the Philippines has the power to issue Circular Nos. 44 and 45 regulating imports that do not involve the remittance of dollars or foreign exchange. Whether importations made without the required release certificate or import license are subject to forfeiture under Section 1363(f) of the Revised Administrative Code.
Ruling
The decision of the Court of Tax Appeals is reversed, and the decision of the Commissioner of Customs declaring the forfeiture of the importation in question in favor of the Government is affirmed.
Ratio Decidendi
On the power of the Central Bank to regulate "no-dollar" imports: The Supreme Court held that the Central Bank, through its Monetary Board, has the power to issue Circular Nos. 44 and 45. These circulars were issued pursuant to Section 74 of Republic Act No. 265, which authorizes the Monetary Board, with the approval of the President, to temporarily suspend or restrict sales of exchange and to subject all transactions in gold and foreign exchange to licensing during a foreign exchange crisis. The Court reasoned that even if importations do not require an immediate sale of foreign exchange, their importation ultimately necessitates the demand for foreign exchange, as the currency of one country is not legal tender in another. Therefore, measures taken to check the unregulated flow of foreign exchange are within the powers of the Monetary Board. The Court reiterated this stance in Acting Commissioner of Customs vs. Estanislao Leuterio (G.R. No. L-9142, Oct. 17, 1959). On the forfeiture of importations made without the required certificates: The Supreme Court ruled that importations made without the necessary import license issued by the Monetary Board pursuant to Circular 45, and without the release certificates issued by the Central Bank or its authorized agent bank pursuant to Circular 44, fall within the class of "merchandise of prohibited importation" or merchandise "the importation . . . of which is effected . . . contrary to law." Such merchandise is subject to seizure and forfeiture under Section 1363(f) of the Revised Administrative Code. The Court emphasized that sustaining the appellant's theory would render nugatory the aim and purpose of the law in authorizing the Central Bank to regulate foreign exchange during a crisis to protect the international reserve.
Main Doctrine
The Central Bank of the Philippines, through its Monetary Board, has the power to issue circulars regulating imports even if they do not involve the remittance of dollars or foreign exchange, to protect the international reserve. Importations made without the necessary import license or release certificate are subject to forfeiture under Section 1363(f) of the Revised Administrative Code.