Del Rosario Rice Mill v. Guerrero
REITERATIONFacts
1. The Antecedents: Victor R. Del Rosario Rice Mill Corporation (Del Rosario Rice Mill) imported rice under the 2017-2018 Minimum Access Volume (MAV) Rice Importation Program of the National Food Authority (NFA). As a prerequisite for import permits, the corporation made advance payments of customs duties and taxes remitted to the Bureau of Customs (BOC) via LandBank of the Philippines. Between March and October 2018, the corporation filed import entries for the shipments. On January 12, 2019, the Manila International Container Port (MICP) sent a Notice to Pay via electronic mail, indicating that the shipments were assessed but unpaid, and recommending an Order of Abandonment under Section 1129 (c) of the Customs Modernization and Tariff Act (CMTA). Del Rosario Rice Mill denied receiving the email and only discovered the Decrees of Abandonment on January 24, 2019, while following up on the shipments' release. 2. Procedural History: Del Rosario Rice Mill filed Letter-Appeals and motions to set aside the abandonment. On February 27, 2019, the MICP District Collector affirmed the decrees. On April 1, 2019, Customs Commissioner Rey Leonardo Guerrero issued a Consolidated Order affirming the District Collector's decision. On May 2, 2019, the Commissioner approved the public auction of the shipments, which the petitioner received on May 8, 2019. The corporation then filed a Petition for Review with the Court of Tax Appeals (CTA). The CTA Special Second Division dismissed the petition for lack of jurisdiction, ruling that the Consolidated Order was not a final decision appealable to the CTA and that the petitioner failed to exhaust administrative remedies. The CTA En Banc affirmed the dismissal, noting that the advance payments to the NFA did not constitute actual payment of duties to the BOC. 3. The Petition: Petitioner Del Rosario Rice Mill filed the instant Petition for Review on Certiorari under Rule 45, challenging the CTA En Banc's decision. The petitioner argues that the CTA has jurisdiction under Republic Act (RA) No. 9282 because the Commissioner's approval of the auction constitutes 'other matters arising under the Customs Law.' It further contends that the rule on exhaustion of administrative remedies is inapplicable due to exceptions such as violation of due process, patent illegality of the administrative act, and the alleged futility of an administrative appeal to the same Commissioner who issued the Consolidated Order.
Issue(s)
Whether the Court of Tax Appeals (CTA) has jurisdiction over the petition for review despite the petitioner's failure to file an administrative appeal of the Consolidated Order to the Commissioner of Customs. Whether the petitioner's right to due process was violated by the Bureau of Customs' (BOC) use of electronic mail for the Notice to Pay.
Ruling
The Petition is DENIED. The Decision of the Court of Tax Appeals En Banc is AFFIRMED.
Ratio Decidendi
On Issue 1: The Court ruled that the Court of Tax Appeals (CTA) lacked jurisdiction because the petitioner failed to exhaust administrative remedies. Under Section 7 of Republic Act (RA) No. 1125, as amended by RA No. 9282, the CTA has exclusive appellate jurisdiction over 'decisions' of the Commissioner of Customs. However, Customs Memorandum Order (CMO) No. 17-2019 specifies that a District Collector's decision confirmed by the Commissioner becomes final and executory unless appealed to the Commissioner within fifteen (15) days. In this case, the Consolidated Order dated April 1, 2019, was received by the petitioner on May 3, 2019, but instead of filing an administrative appeal to the Commissioner, the petitioner went directly to the CTA on May 21, 2019. Consequently, the Consolidated Order became final and executory, and the CTA correctly dismissed the petition for lack of jurisdiction. The principle of exhaustion of administrative remedies is a condition precedent for judicial review, and the Court found that none of the recognized exceptions, such as patent illegality or lack of a plain and speedy remedy, applied to the petitioner's circumstances. On Issue 2: The Court held that there was no violation of the petitioner's right to due process. Section 1129 (c) of the Customs Modernization and Tariff Act (CMTA) and Customs Administrative Order (CAO) No. 17-2019 expressly allow for the service of notice through electronic mail for regular importers. The records established that a Notice to Pay was successfully transmitted via electronic mail on January 12, 2019, which constitutes substantial compliance with the due notice requirement. As a seasoned and veteran importer, Del Rosario Rice Mill is presumed to be familiar with customs procedures and the arrival of its own shipments, making personal notice unnecessary. The corporation's failure to pay the required duties and taxes within the prescribed period after such electronic notice justified the issuance of the Decrees of Abandonment. Therefore, the administrative actions taken by the Bureau of Customs (BOC) were consistent with the law and did not infringe upon constitutional due process.
Main Doctrine
The doctrine of exhaustion of administrative remedies requires that where a remedy before an administrative device is provided by law, relief must be sought by exhausting this remedy before the courts' help is successively invoked. In customs cases, a Consolidated Order issued by the Commissioner of Customs affirming a District Collector's decree of abandonment is not the 'final decision' appealable to the CTA; rather, it must be further appealed to the Commissioner within fifteen (15) days as prescribed by CMO No. 17-2019. Judicial intervention is premature and the CTA is bereft of jurisdiction if the importer fails to utilize this internal administrative appellate process.