F. SARE ENTERPRISES, PETITIONER, VS. THE COMMISSIONER OF CUSTOMS, RESPONDENT.

F. Sare Enterprises versus Commissioner of Customs

The Case

This is a petition for review brought by F. Sare Enterprises against the Commissioner of Customs, asking the Supreme Court to overturn the affirmance of a customs forfeiture. The petitioner imported foodstuffs from Hongkong without the Central Bank release certificates required by Central Bank Circulars 44 and 45, and the Collector of Customs ordered it and its surety to pay the full amounts of the bonds posted to secure the release of the goods. The case matters because it settles, and then confirms as settled law, three propositions every customs and administrative law candidate must know: that goods imported in violation of Central Bank circulars are subject to forfeiture under the Administrative Code even though the circulars themselves do not expressly provide for forfeiture; that such goods fall within the category of merchandise imported "contrary to law"; and that the later Circular 133 did not repeal but effectively reenacted the earlier circulars.

Procedural History

The Collector of Customs rendered a decision against the petitioner on the first of April, 1955, ordering the petitioner and its surety to pay jointly and severally to the Bureau of Customs the full amounts of the three bonds. The petitioner appealed, and the Commissioner of Customs affirmed the Collector's decision on the fourteenth of December, 1959. The petitioner then went to the Court of Tax Appeals, which likewise affirmed on the third of July, 1963. From that judgment the petitioner filed the present petition for review before the Supreme Court, raising three assigned errors.

Facts

In December 1954, three shipments of foodstuffs belonging to F. Sare Enterprises arrived in Manila from Hongkong. The shipments consisted of dried fish, smoked ham, pears, chestnuts, waternuts, dates, oranges, apples, and other foodstuffs. The petitioner failed to present the corresponding Central Bank release certificates required by Central Bank Circulars 44 and 45, and customs authorities seized the goods.

The goods were subsequently delivered to the petitioner only upon its posting of three bonds in the amounts of 11,760 pesos, 11,455 pesos, and 10,344 pesos.

After appropriate proceedings, the Collector of Customs rendered a decision against the petitioner, ordering it and its surety to pay jointly and severally to the Bureau of Customs the full amounts of the bonds given to secure the release of the goods. That decision was affirmed by the Commissioner of Customs and then by the Court of Tax Appeals, prompting the petition for review.

Issues

• Whether or not the forfeiture of goods imported in violation of Central Bank Circulars 44 and 45 may be ordered even though neither circular expressly provides for forfeiture.
• Whether or not the goods in question may be considered merchandise of prohibited importation, or goods imported contrary to law, within the meaning of section 1363(f) of the Administrative Code.
• Whether or not Circulars 44 and 45 were repealed by Circular 133, such that the importation must now be deemed lawfully made.

Applicable Provisions

Section 1363(f) of the Administrative Code, now section 2530(f) of the Tariff and Customs Code, provides:

Any merchandise of prohibited importation or exportation, the importation or exportation of which is effected or attempted contrary to law.

This is the forfeiture provision on which the entire case turns, for it supplies the statutory basis for forfeiture that the circulars themselves do not expressly state.

Ruling

On the first issue, the Court held that although Circulars 44 and 45 do not expressly provide for forfeiture, forfeiture of goods imported in violation of those circulars may nevertheless be justified on the basis of section 1363(f) of the Administrative Code. The circulars should be correlated to section 1363 of the Administrative Code.

On the second issue, the Court held that while goods imported in violation of the circulars may not be considered merchandise of prohibited importation, they nevertheless fall within the other category of merchandise imported contrary to law, because regulations issued pursuant to customs laws form part of those laws, so that a violation of the regulations comes within the purview of section 1363(f).

On the third issue, the Court adopted its ruling in Capulong against Aseron, quoting it with approval:

Central Bank Circular 133 has not exactly repealed Central Bank Circulars Nos. 44 and 45 but rather it reenacted them when it provided therein that all existing regulations not inconsistent with the circular are deemed incorporated and made integral parts thereof by reference.

The Court further noted, again through the Capulong ruling, that even assuming Circular 133 had impliedly repealed the earlier circulars, such repeal could not abate the forfeiture case, because forfeiture proceedings are civil in nature and not criminal, and in that sense the repeal cannot be given retroactive effect. The Court observed that the issues, though perhaps fresh and novel when raised, had since been resolved squarely, and that the Capulong ruling had been reiterated and reaffirmed in numerous decisions. It was, the Court said, late in the day to suggest that Capulong should be reexamined, which the petitioner did not even ask.

Doctrine

First, the forfeiture of goods imported in violation of Central Bank Circulars 44 and 45 is justified under section 1363(f) of the Administrative Code, even though the circulars do not expressly provide for forfeiture; the circulars are read together with the statute.

Second, goods imported without the required Central Bank release certificates are not merchandise of prohibited importation, but they are merchandise imported contrary to law, because regulations issued pursuant to customs laws form part of those laws.

Third, Circular 133 did not repeal Circulars 44 and 45; it reenacted them by deeming all existing consistent regulations incorporated and made integral parts thereof by reference. And even if there had been an implied repeal, it would not abate a forfeiture proceeding, which is civil rather than criminal and therefore not subject to retroactive repeal.

Disposition

The decision appealed from was affirmed, at the petitioner's cost. The Commissioner of Customs prevailed.

Remember This

Memorize the line that violation of Central Bank circulars, though not expressly punishable by forfeiture in the circulars themselves, is caught by section 1363(f) of the Administrative Code as an importation contrary to law. Examiners use this case to test the correlation of administrative regulations with the forfeiture statute, and the rule that a civil forfeiture proceeding is not abated by the repeal of the regulation violated.