LUZ M. GIGARE, PETITIONER, VS. THE COMMISSIONER OF CUSTOMS, RESPONDENT.

Petition for review of a decision of the Court of Tax Appeals
affirming that of the Commissioner of Customs, decreeing the
forfeiture, in favor of the Government, of 519 cartons of
“Chesterfield” cigarettes with blue seals, but without internal revenue
stamps.

As set forth in the decision appealed from:

“It appears that at high noon on April 19, 1957
several customs agents conducted a search on board the Vessel F/S
‘Bais’ while said vessel was docked at the port of Jolo. The search
party discovered several cartons of ‘Chesterfield’ cigarettes, which
bore blue seals, but not internal revenue strip stamps concealed in
different parts of the vessel. The wrappers of the cigarettes indicated
that the same were manufactured in the United States of America. Said
cigarettes were seized by the customs agents, allegedly for violation
of Section 1363 (m-1) of the Revised Administrative Code and Section
174 of the National Internal Revenue Code, after issuing a receipt
therefor to petitioner, who purchased them in the open market of Jolo.

“Later,
in the office of the patrol division of the Collector of Customs of
Jolo, petitioner, fearing detention, denied ownership of the 519
cartons of ‘Chesterfield’ cigarettes. However, in a communication dated
May 15, 1957, she claimed ownership over the same.

“At the
time the cigarettes in question were seized, petitioner was a transient
in Jolo, She was neither an agent nor an importer in either Jolo or
Manila.”

Based upon the foregoing facts, the Court of Tax Appeals concluded
that the cigarettes in question had been illegally imported into the
Philippines and, accordingly, affirmed the order of forfeiture issued
by the Commissioner of Customs. Hence this petition for review by
petitioner Luz M. Gigare, who had admittedly purchased the
aforementioned cigarettes in the open market in Jolo.

She maintains that said commodities are “not merchandise of
prohibited importation, the importation of which is contrary to law”,
and that, in any event, they are not liable to forfeiture, because: (a)
our laws permit the importation of foreign cigarettes, provided that
the corresponding tax thereon is paid; (b) the foreign character of the
cigarettes in question and the alleged importation thereof have not
been, it is claimed, established; and (c) appellant’s knowledge of said
importation and of the non-payment of aforementioned tax has not been
sufficiently proven. This pretense is clearly untenable.

Since, admittedly, the internal revenue tax on the cigarettes in
dispute has not been paid, it is clear that the importation thereof is
prohibited by law, and that said cigarettes fall within the category of
“merchandise of prohibited importation”, the importation of which is
contrary to law and may justify its forfeiture, as provided in Sections
1363 and 1364 of the Revised Administrative Code, ^[1] and repeatedly held by this Court. ^[2]

Moreover, the blue seals affixed on said commodities prove
satisfactorily that they are foreign products. Again, the importation
thereof into the Philippines is attested by the presence of said
products within our jurisdiction.

As regards appellant’s knowledge of these facts, the Court of Tax Appeals, has aptly observed:

“Were the cigarettes in question illegally imported
into the Philippines? We are of the opinion that the Commissioner of
Customs should be sustained in his finding that the cigarettes in
question were imported illegally. The absence of Philippine internal
revenue strip stamps on cigarettes indicates that they are either
manufactured clandestinely within the Philippines or imported
illegally into the country. In the case at bar, concomitant
circumstances militate against the clandestine manufacture within the
Philippines of the cigarettes. The affixture of blue seals on the packs
of cigarettes, the wrappers, the purchase of the cigarettes in the open
market of Jolo, a place where American and other foreign-made
cigarettes are, of common knowledge, frequently smuggled from Borneo
(Lim Bak vs. Collector of Customs, BTA Case No. 180, August 28, 1954),
and the failure of petitioner to show that the cigarettes in question
were locally manufactured rule out the possibility that the cigarettes
in question were manufactured in the Philippines. Consequently, we are
constrained to conclude that these cigarettes were foreign (American)
made. They were merchandise of prohibited importation, the importation
of which was contrary to law, and should be forfeited under Section
1363 (f) of the Revised Administrative Code.

“The ‘blue seal’
cigarettes at bar having been illegally brought into the country, they
are likewise subject to forfeiture under Section 1363 (m-1) of the
Revised Administrative Code for the reason that they were imported into
the country without going through a customhouse. Our conclusion may
seem harsh on petitioner, considering that she is being deprived of her
property although she is merely the buyer, and not the illegal
importer, of the cigarettes. ‘Revenue laws are of a harsher nature than
any others, and necessarily so; for, the devices of ingenious men
render it indispensable for the legislature to meet their illicit
practices with severer penalties’ (United States vs. the SS ‘Islas
Filipinas’, 28 Phil. 291, 296).

“The fact that petitioner is
merely a buyer of the cigarettes in the open market of Jolo does not
render the cigarettes immune from the penalty of forfeiture. This is so
because forfeiture proceedings are instituted against the res
(cigarettes) (Origet vs. U.S., 125 U.S. 240, 31 Lued 743; Coffey vs.
United States, 116 U.S. 436, 29 Lued 684, 687: The Palmyra, Escurra,
Master, 12 Wheaton 1, 6 Lued 531, 537) and, by express provision of
Section 1364 of the Revised Administrative Code, the forfeiture shall
also occur while the merchandise is in the hands or subject to the
control of some person who shall receive, conceal, buy, sell, or
transport the same with knowledge that the merchandise was imported
contrary to law. Petitioner cannot but be charged with the knowledge
that the cigarettes in question were imported contrary to law, for if
it were otherwise, why were these cigarettes concealed on board the
vessel F/S ‘Bais’? Why did she deny ownership over said cigarettes? For
what plausible reason was she afraid of detention? What impelled her to
believe that she would be detained by the customs authorities? To
uphold the claim of petitioner and forego the forfeiture would be
giving a chance to accessories after the fact of smugglers of foreign
cigarettes to ply their trade with impunity and with the sanction of
the courts. What the executive department could not then curb, that is,
rampant smuggling of foreign cigarettes, the courts should not tolerate
(Republic of the Philippines vs. Goco, 50 O. G. 1662, 1667).”

WHEREFORE, the decision appealed from should be, as it is hereby affirmed, with costs against petitioner-appellant, Luz M. Gigare.

IT IS SO ORDERED.

Reyes, Barrera, Dizon, Makalintal, Bengzon, Zaldivar, Sanchez, and Castro, JJ., concur.
Regala, J., on leave.

 

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^[1] Section No. 1363. Property subject to forfeiture under customs laws.
– Vessels, cargo, merchandise, and other objects and things, shall
under the conditions hereinbelow specified, be subject to forfeiture.

x x x x x

(f) Any merchandise of prohibited importation or exportation, the
importation or exportation of which is effected or attempted contrary
to law, and all other merchandise which, in the opinion of the
collector, have been used, are or were intended to be used as
instrument in the importation or exportation of the former.

x x x x x

(m) Any merchandise the importation or exportation of which is
effected or attempted in any of the ways or under any of the conditions
hereinbelow described.

1. Upon importation or exportation, either consummate or frustrate, without going through a customhouse.

Section 1364. Conditions affecting forfeiture of merchandise.
– As regards imported and exported merchandise, or merchandise whereof
the importation or exportation is merely attempted, the forfeiture
shall occur only when and while the merchandise is in the custody of
the customs authorities or in the hands or subject to the control
of the importer, exporter, original owner, consignee, agent or other
persons effecting the importation, entry or exportation in question, or
in the hands or subject to the control of some person who shall
receive, conceal, buy, sell or transport the same or aid in any such
acts, with knowledge that the merchandise was imported, or was subject
of an attempt at importation or exportation, contrary to law. (Underscoring ours.)

^[2] Rubic vs. Auditor
General, 53 Off. Gaz. 2141; Roxas vs. Sayoc, 53 Off. Gaz. 5642; Choik
Cun vs. Comm. of Customs, L-12519, Apr. 29, 1959; Sanchez vs. Comm. of
Customs, 54 Off. Gaz. 361; Bombay Dept. Store vs. Comm. of Customs,
L-20489, June 22, 1965; Leuterio vs. Comm. of Customs, 53 Off. Gaz.
6520; Chan Kian vs. Collector of Customs of Manila, L-20803, Jan. 30,
1966; Lazaro vs. Comm. of Customs, L-21790, & L-21794, Dec. 24,
1965; Serree Investment Co. vs. Comm. of Customs, L-20847-9, June 22,
1965; Comm. of Customs vs. Nepomuceno, L-11126, Mar. 31, 1962;.Comm. of
Customs v. Santos, L-11911, Mar 30, 1962;.Comm. of Customs v. Eastern
Sea Trading, L-14279, Oct. 31, 1961; Pascual v. Comm. of Customs,
L-9836, Nov. 18, 1959; Actg. Comm. of Customs v. Leuterio, L-9142, Oct.
17, 1959; Pascual v. Comm. of Customs, L-10979, June 30, 1959; Tong Tek
v. Comm. of Customs, L-11947, June 30, 1959; and People v. Que Po Lay,
50 OG 4850.