Extensive Enterprises Corp. v. Commissioner of Customs
REITERATIONFacts
The Antecedents: Nine (9) cases of rubber balloons and twelve (12) cases of rubber nipples were imported into the Port of Manila on November 27, 1954. The importation was accompanied by a Central Bank release certificate that specified only "rubber nipples." The Bureau of Customs seized the nine (9) cases of rubber balloons on the ground that they were imported in violation of Circular Nos. 44 and 45, in relation to Section 1363(f) of the Revised Administrative Code, as they were not covered by the release certificate. Procedural History: The claimant, Extensive Enterprises Corporation, sought the release of the seized merchandise under bond, which was authorized. Subsequently, the Collector of Customs ordered the forfeiture of the nine (9) cases of rubber balloons. The claimant contested the validity of the forfeiture, arguing that Circular Nos. 44 and 45 were null and void. The Court of Tax Appeals affirmed the decision of the Commissioner of Customs, ordering the forfeiture. The Petition: Extensive Enterprises Corporation filed a petition for review, arguing that Circular Nos. 44 and 45 were impliedly repealed by Republic Act 1410 and later by Circular 133, rendering them unenforceable at the time of the forfeiture decision. Petitioner also questioned the inclusion of a 30% estimated profit in the appraised value and argued that Section 34 of Republic Act 265, not Section 1363(f) of the Revised Administrative Code, should apply.
Issue(s)
Whether Central Bank Circular Nos. 44 and 45 have been repealed by Republic Act 1410 and/or Circular No. 133. Whether the repeal of said Circular Nos. 44 and 45 has abated the liabilities incurred thereunder. Whether an estimated profit of thirty percent (30%) of the landed cost of the subject importation shall be included in fixing the appraised value thereof. Whether Section 34 of Republic Act 265 is applicable in this case and not the penal provision of Section 1363(f) of the Revised Administrative Code.
Ruling
The Supreme Court affirmed the decision of the Court of Tax Appeals, ordering the forfeiture of the nine (9) cases of rubber balloons. The Court ruled that the forfeiture was proper and that the petitioner's arguments regarding the repeal of the circulars, the abatement of liabilities, the inclusion of profit in the appraised value, and the applicability of Section 34 of Republic Act 265 were without merit.
Ratio Decidendi
On whether Central Bank Circular Nos. 44 and 45 have been repealed: The Court held that Circular Nos. 44 and 45, requiring Central Bank release certificates for importations, were not repealed by Circular No. 133 but were incorporated into or made parts of the latter. Furthermore, Republic Act 1410 did not affect goods in transit or previously imported under a no-dollar remittance basis at the time of its approval. Since the violation occurred in 1954, prior to Republic Act 1410's effectivity, the Act had no application. On whether the repeal of said Circular Nos. 44 and 45 has abated the liabilities incurred thereunder: The Court found that the circulars were in force at the time of the importation and seizure. Even if the circulars were later repealed or amended, this did not abate liabilities incurred under them. The forfeiture proceedings were initiated based on violations that occurred while the circulars were valid and enforceable, thus the liabilities remained. On whether an estimated profit of thirty percent (30%) of the landed cost shall be included in fixing the appraised value: The Court sustained the inclusion of the estimated profit in the appraised value. It clarified that the provisions cited by the petitioner govern the appraisal for duties, whereas the appraisal for seizure proceedings is governed by Section 1377 of the Revised Administrative Code, which bases the assessment on the value of the goods "in the local market." This local market value can legitimately include the anticipated profit. On whether Section 34 of Republic Act 265 is applicable and not Section 1363(f) of the Revised Administrative Code: The Court ruled that while Republic Act 265 and the circulars themselves did not explicitly provide for forfeiture, the circulars, having been validly issued, had the force and effect of law. Importations made in violation of these circulars were considered "merchandise of prohibited importation" or importation effected "contrary to law." Consequently, these goods were proper subjects of forfeiture proceedings under Section 1363(f) of the Revised Administrative Code. The application of Section 1363(f) was therefore deemed proper.
Main Doctrine
Importations made in violation of valid Central Bank circulars, even if subsequently repealed, are subject to forfeiture proceedings as merchandise of prohibited importation or importation effected contrary to law. The appraised value for seizure proceedings is based on the local market value, which may include estimated profit.