Chan Kian v. Collector of Customs
REITERATIONFacts
The Antecedents: Appellee Chan Kian, doing business as "Shanghai Ting Ting Soy Factory," imported several bales and bundles of old newspapers. These goods were seized by the Bureau of Customs for non-compliance with Central Bank Circulars 44 and 45, specifically for the absence of release certificates or discrepancies between the goods and the certificates presented. The Collector of Customs ordered the forfeiture of the goods, and since they had been delivered under bond, ordered the appellee and his sureties to pay the aggregate sum of P65,104.00. Procedural History: The appellee's appeal to the Commissioner of Customs was dismissed for being out of time. This dismissal was affirmed by the Court of Tax Appeals and subsequently by the Supreme Court. Despite this, the Collector demanded payment. Instead of paying, the appellee filed a petition for prohibition with the Court of First Instance of Manila, assailing the validity of Central Bank Circulars 44 and 45. The Petition: The appellee contended that Central Bank Circulars Nos. 44 and 45 were null and void. The Collector argued that the issue was res judicata due to prior rulings and that the circulars had been consistently upheld by the Supreme Court. The Court of First Instance declared the circulars void and made the preliminary injunction permanent.
Issue(s)
Whether Central Bank Circulars Nos. 44 and 45 are valid and enforceable. Whether the expiration of Republic Act No. 650 deprived the Commissioner of Customs of jurisdiction over the forfeiture proceedings. Whether goods imported in violation of Central Bank circulars are considered 'merchandise of prohibited importations' under the Revised Administrative Code.
Ruling
The Supreme Court reversed the decision of the Court of First Instance, dismissed the appellee's petition for prohibition, and declared the Collector's order of forfeiture valid. The Court found that the validity of Central Bank Circulars Nos. 44 and 45 had been repeatedly upheld and that the issue was res judicata. It also affirmed the Collector's authority to order forfeiture and noted that seizure cases are exclusively reviewable by the Court of Tax Appeals.
Ratio Decidendi
On Issue 1: The Supreme Court held that the authority of the Central Bank to issue Circulars Nos. 44 and 45, and the legality thereof, have been repeatedly upheld in a long line of decisions, including Bombay Department Store v. Commissioner of Customs. These circulars were not rendered obsolete by the subsequent issuance of Central Bank Circular No. 133, as the latter specifically incorporated all existing regulations not inconsistent with its provisions. The requirement for a 'release certificate' remains a consistent policy of the Central Bank to regulate foreign exchange and trade. By failing to provide valid certificates that tallied with the actual imported goods, the importer committed a clear violation of these valid administrative rules. Thus, the CFI erred in declaring the circulars null and void, as they are part of the established regulatory framework of the Philippines. On Issue 2: The Court ruled that the expiration of Republic Act (RA) No. 650 did not deprive the Commissioner of Customs of the jurisdiction to act on cases of forfeiture pending before him. Relying on the doctrine in Roxas v. Sayoc and Golay-Buchel & Cie v. Commissioner of Customs, the Court emphasized that forfeiture proceedings are in the nature of proceedings in rem. Because the Bureau of Customs acquired jurisdiction over the specific merchandise prior to the expiration of the law, that jurisdiction remains intact until the proceedings are resolved. The expiration of a statute does not provide a 'pardon' for violations committed during its effectivity if the proceedings were already underway. Therefore, the Collector’s decision to order the payment of the bonds remained legally enforceable. On Issue 3: The Court clarified that merchandise imported in violation of Central Bank Circulars Nos. 44 and 45 acquires the status of 'merchandise of prohibited importations.' This classification is based on Section 1363 (f) and (m) of the Revised Administrative Code. The Court cited Tong Tek v. Commissioner of Customs to affirm that such goods are subject to the forfeiture proceedings prescribed by the Code. Even if the goods themselves are not 'contraband' in the traditional sense, the procedural violation regarding the Central Bank release certificates places them in the prohibited category. Consequently, the Collector of Customs acted strictly within his statutory powers when he ordered the forfeiture and subsequent payment from the sureties.
Main Doctrine
The Collector of Customs acted within his powers in ordering the forfeiture of importations made in violation of Central Bank Circulars Nos. 44 and 45, and the issue of the validity of these circulars was already rendered res judicata by prior Supreme Court decisions. Furthermore, the Court of Tax Appeals has exclusive appellate jurisdiction over seizure cases, precluding the Court of First Instance from taking cognizance of a petition for prohibition in such matters.