Commissioner of Customs v. Unitrade
REITERATIONFacts
The Antecedents: On December 22, 1970, a shipment of 37,042 cartons of fresh apples arrived at the Port of Manila, consigned to respondent Unitrade, Inc. While a portion of the shipment was being unloaded, the Collector of Customs issued warrants of seizure and detention for allegedly violating Central Bank Circulars Nos. 289, 294, and 295, in relation to Section 2530(f) of the Tariff and Customs Code. Subsequently, the Collector ordered the return of already unloaded goods to the vessel. Unitrade, Inc. requested the discharge and release of the articles under bond, which was denied by the Collector and subsequently by the Commissioner of Customs, who sustained the Collector's decision that the importation was prohibited under the said Central Bank Circulars and Section 102(k) of the Tariff and Customs Code. Procedural History: Unitrade, Inc. appealed to the Court of Tax Appeals (CTA). The CTA initially denied Unitrade's motion for a preliminary injunction to release the goods under bond, stating it would prejudge the main issue. However, due to the perishable nature of the goods, the CTA later ordered their discharge and deposit in a customs bonded warehouse under conditions to prevent spoilage. After trial, the CTA rendered a decision on April 23, 1971, holding that the fresh apples were not absolutely prohibited but could be liable for forfeiture for failure to secure a Central Bank release certificate. It ordered the release of the apples under a P550,000.00 bond to guarantee payment of their appraised value in case of forfeiture. The Commissioner of Customs filed a petition for certiorari with the Supreme Court. The Petition: Petitioner Commissioner of Customs challenged the validity of the CTA's decision and resolution, arguing that the CTA acted in excess of its jurisdiction by ordering the release of prohibited importations under bond, contrary to law and established jurisprudence.
Issue(s)
Whether the Court of Tax Appeals correctly asserted jurisdiction over the case. Whether the fresh apples, imported without a Central Bank release certificate, constitute "articles of prohibited importation" under the Tariff and Customs Code. Whether the Court of Tax Appeals erred in ordering the release of the shipment under bond despite it being considered an article of prohibited importation.
Ruling
The Supreme Court granted the petition, annulling and setting aside the decision and resolution of the Court of Tax Appeals. The Court affirmed the decision of the Commissioner of Customs and dismissed the petition of Unitrade, Inc. in the lower court.
Ratio Decidendi
On the jurisdiction of the Court of Tax Appeals: The Court affirmed the CTA's jurisdiction. It held that the appeal involved a final decision declaring the articles as "articles of prohibited importation" and prohibiting their entry, not an interlocutory order pending seizure proceedings. The Court reiterated that the Collector's decision in cases involving seizure, detention, or release of property is appealable to the Commissioner of Customs, whose decision may be reviewed by the CTA under its exclusive appellate jurisdiction. On whether the fresh apples constitute "articles of prohibited importation": The Court ruled that the fresh apples are "articles of prohibited importation." It explained that Central Bank Circulars Nos. 289, 294, and 295, which prohibited the importation of goods classified as non-essential consumer (NEC) products without a release certificate, have the force and effect of law. The Court cited settled jurisprudence, including Tong Tek vs. Commissioner of Customs and Pascual vs. Commissioner of Customs, establishing that importations made without the required Central Bank release certificates are considered "merchandise of prohibited importation" under Section 2530(f) of the Tariff and Customs Code, even if not contraband in the absolute sense. The Court emphasized that Circular No. 295 explicitly stated that "no-dollar imports not covered by Circular No. 247 shall not be issued any release certificates and shall be referred to the Central Bank for official transmittal to the Bureau of Customs for appropriate seizure proceedings." On the release of prohibited importations under bond: The Court held that the CTA erred in ordering the release of the shipment under bond. It stressed that Section 2301 of the Tariff and Customs Code explicitly prohibits the release under bond of "articles the importation of which is prohibited by law." The Court found it fallacious to assume that releasing perishable prohibited goods under bond serves the interest of the government, as it would render the prohibition nugatory and encourage smuggling for profit. The Court also upheld Customs Administrative Order No. 19-70, which declared that importations seized and forfeited for violation of Central Bank circulars shall not be allowed release under bond or redemption, as a valid reiteration of the law's mandate.
Main Doctrine
Importations made in violation of Central Bank circulars, even if not absolutely prohibited, are considered "articles of prohibited importation" under the Tariff and Customs Code and are therefore subject to seizure and forfeiture, and cannot be released under bond.