REPUBLIC OF THE PHILIPPINES, PETITIONER, VS. COURT OF FIRST INSTANCE OF MANILA (BR. XXII), AND MAYER STEEL PIPE CORPORATION, RESPONDENTS.

The stress in this petition is on jurisdictional issue. It seeks to nullify and set aside the orders
of respondent Court of First Instance of Manila, Branch XXII, in Civil Case No.
99524, entitled “Mayer Steel Pipe Corporation v. Acting Collector of Customs,
Port of Manila.” These orders are as follows:

(a) Order dated
November 13, 1975 which denied the Motion to Dismiss the petition and
authorizing the issuance of a writ of preliminary injunction, without bond, and
the benefit of a prior hearing, the dispositive portion of which reads:

“WHEREFORE:

“1. The motion
to dismiss filed by respondent under date of October 17, 1975 and filed with
the Court on October 20, 1975 is hereby
denied;

“2. Let a writ of preliminary injunction issue, without bond, commanding the
respondent or any person acting in his stead or behalf or under his direction
or authority or under the direction of any person acting in his stead or behalf
from enforcing the order dated August 19, 1975, issued in Seizure
Identification No. 14665 until otherwise ordered by this Court or any other
competent authority; and

“3. The respondent is directed to answer
the main petition within ten (10) days from notice hereof.”^[1]

(b) Order dated
April 27, 1976, denying the Motion for Reconsideration to the aforecited Order
of November 13, 1975 of the same court.

The facts of this case relates back to Seizure Identification No.
14665, entitled “Republic of the Philippines v. Eleven (11) Packages of
Machinery Parts for Steel Pipe Manufacturing, Mayer Steel Pipe Corporation,
Claimant.” A shipment of one
standard basic spiral pipe mill, contained in eleven (11) packages arrived at
the Port of Manila on March 23, 1975 on board “Puerto Princessa,”
under Reg. No. 580. The articles were
declared as machinery for steel pipe manufacture, including decoiler forming
cut-off equipment under Import Entry No. 26946, series of 1975, with a home
consumption value of £76,600.00 under Tar. Heading No. 84.45 at 10% ad
valorem, by Mayer Steel Pipe Corporation, consignee of the shipment.

The import papers were duly processed and upon payment of
P267,028.00 the shipment was released to Mayer Steel Pipe Corporation on April
3, 1975. However, upon representation
of the Anti-Smuggling Action Center (ASAC) to the effect that the shipment was
grossly misdeclared, misclassified and undervalued, the Collector of Customs
issued a warrant of seizure and detention against the subject machinery. The shipment was seized and the
corresponding return made to the Collector of Customs, who docketed the same as
S.I. No. 14665.

In the course of the proceeding of S.I. No. 14665 respondent
corporation repeatedly requested with petitioner Collector of Customs to allow
the installation of the machineries at its factory premises to put it “in
operation” under Customs guard. And should the machineries be forfeited and the Collector of Customs
order their removal, respondent was willing to pay for all the expenses
incident thereto.^[2]
Because of these representations, the Collector of Customs issued an order
dated July 31, 1975 allowing the provisional release of the machineries, and
not a complete and permanent relinquishment of the shipment as contemplated in
Section 2301 of the Tariff and Custom’s Code,^[3] pending
the seizure proceeding, on the condition that:

“1. (The machineries will be under) continuous
guarding by designated Customs Guards until otherwise directed by this office;
and

“2. Filing of a surety bond in an amount
equivalent to one and one-half times the appraised value of the subject
importation, conditioned either for the dismantling of the machinery at the
claimant’s expense and delivery thereof to this Bureau, for the payment of the
appraised value thereof and/or any fine, expenses and costs which may be
adjudged in the case, in the event that the shipment is finally declared
forfeited in favor of the Government.^[4]

Upon filing by the ASAC of a Motion for Reconsideration of the
above order, the Collector of Customs,
on August 19, 1975, issued another order clarifying the nature and extent of the
previous order of release dated July 31, 1975, and We quote:

“It is apparent that the ASAC is questioning the said Order of
this Office because of the possibility that it might be interpreted as allowing
the claimant (Mayer Steel) to use or operate the machines for making
pipes. It should be stressed, however,
that this Office allowed the provisional release of the machines merely for
purposes of installation in view of the representations of the claimant’s
lawyer that ‘the metallurgical engineer authorized by the supplier Byard
Kenwest Ltd. of England to supervise the installation of the machineries has
been here for quite sometime, and the company (Mayer Steel) is shouldering all
expenses for his prolonged stay here’ and that ‘the Central Bank also requires
the claimant company to install the machineries so as to make it function and
thus enable its designated Engineer Consultants to evaluate the same for
purposes of the approved deferred payment scheme.’ Clearly, the Order of July
31, 1975, was not intended to allow the claimant to operate the subject
machines pending this seizure proceeding, since this Office was aware of
the issue raised by the ASAC concerning the ‘prohibited’ character of this
importation and of the fact that it would be wrong to allow the claimant to
profit or benefit from the use of the machines if it had no right to import
them in the first place. As plainly
spelled out in the bond filed by the claimant and approved by this Office,
Mayer Steel Corporation ‘was authorized to secure the provisional release of
said shipment in order that the same may be installed and test run for
evaluation by Engineers of Byard Kenwest Ltd. of England, suppliers of the
said machinery.”^[5]

After trial and hearing the Collector of Customs rendered a decision
dated September 25, 1975 directing the forfeiture of the machinery for having
been imported in violation of the implementing rules and regulations on
overcrowded industries concomittant with the power vested to the Collector of
Customs under Section 2312 of the Tariff and Customs Code.^[6]

On September 29, 1975, respondent corporation filed a petition
with the respondent court, docketed as Civil Case No. 99524, entitled
“Mayer Steel Pipe Corporation v. Alfredo Francisco, etc.” asking for
the annulment of herein petitioner’s order dated August 19, 1975 and September 8, 1975, and an order restraining
petitioner from enforcing them.

It is the contention of respondent company that the questioned
orders dated August 19 and September 8, 1975 of petitioner were unjust and
rendered with grave abuse of discretion. This was premised on respondent’s allegation that it was not given
notice of the Motion for Reconsideration of ASAC of petitioner’s order dated
July 31, 1975.

The respondent court in its order dated November 13, 1975, in
denying the Motion to Dismiss of herein petitioner, observed that after the
civil case was filed, petitioner, on September 25, 1975 rendered a decision
forfeiting the subject machineries, when in fact on September 22, 1975, on
motion of counsel for herein respondent, the case was postponed supposedly for
October 7, 1975.^[7]

Thus, the trial court said:

“It should be obvious, however, that the decision what (sic)
would remove the case from the jurisdiction of this court cannot refer to any kind of decision. The
decision rendered by the respondent with which he would now want to defeat the
jurisdiction of the Court was rendered before the termination of the hearing it
is supposed to decide, its existence as of the date it was supposed to have
been rendered was not shown in the logbookin (sic) the office of the
respondent, and was released only to the petitioner several days after this
petition was filed and after respondent has received the order of the Court to
answer. . . Certainly, this Court would not want its jurisdiction to be
defeated by a decision rendered under circumstances open to suspicion that
would even subject its very existence suspect.”^[8]

The petitioner in the present petition, thus, raises the
following issues:

I

The respondent court erred in arbitrarily taking cognizance of the
petition in Civil Case No. 99524 entitled “Mayer Steel Pipe Corporation,
petitioner vs. Alfredo Francisco, in his capacity as Acting Collector of
Customs for the Port of Manila, respondent,” despite the fact that
jurisdiction belongs to another forum.

II

Granting, without admitting, that the respondent court acquired
jurisdiction over the petition in Civil Case No. 99524, the decision in S.I.
No. 14665 on September 25, 1975, rendered Civil Case No. 99524 moot and
academic;

III

The respondent court erred in declaring that the respondent
corporation was deprived of the right to due process with the promulgation of
August 19, 1975 order of the petitioner Collector of Customs in S.I. No. 14665,
when the same order was issued for the mere clarification of the petitioner’s
July 31, 1975 order which came into being at the behest of the respondent
corporation.

IV

The respondent court erred in issuing a writ of preliminary
injunction against the petitioner Collector of Customs, his agents and counsel,
without first conducting a hearing thereon.

V

Granting, arguendo, that the hearing conducted by the
respondent court in Civil Case No. 99524 on October 10 and 24, 1975 pertained
also to the prayer in the petition for the issuance of a writ of preliminary
injunction, the respondent court erred in issuing the writ of preliminary
injunction in the absence of: (a) a
clear legal right on the part of the respondent corporation to the issuance
thereof; and (b) an irreparable injury which the respondent corporation is to
suffer by the issuance of August 19, 1975 order of the petitioner Collector of
Customs.

It would not require too much of an effort to determine the
applicable principles that should govern. The inescapable conclusion is that the petition possesses merit.

The mandate of the law is specific. Section 2312 of the Tariff and Customs Code provides:

“SEC. 2312. Decision or Action by
Collector in Protest And Seizure Cases. – When a protest in proper form is
presented in a case where protest is required, the Collector shall issue an
order for hearing within fifteen (15) days from receipt of the protest and hear the matter thus presented. Upon the termination of the hearing, the
Collector shall render a decision within thirty (30) days, and if the protest
is sustained, in whole or in
part, he shall make the appropriate order, the entry reliquidated if
necessary.”

On the other hand, Section 2313 of the
same law states:

“SEC 2313. Review by Commissioner. – The person aggrieved by the decision or
action of the Collector in any matter presented upon protest or by his
action in any case of seizure may, within
fifteen (15) days after notification in writing by the Collector of his action
or decision, give written notice to the Collector and one copy furnished to the
Commissioner of his desire to have the matter reviewed by the Commissioner. Thereupon the Collector shall forthwith transmit all the records
of the proceedings to the Commissioner, who shall approve, modify or reverse
the action or decision of the Collector and take such steps and make such
orders as may be necessary to give effect to his decision.” (underscoring
supplied)

While Section 7 of R.A. 1125 declares,
thus:

“Jurisdiction – The Court of Tax Appeals
shall exercise exclusive appellate jurisdiction to review by appeal, as herein
provided –

x        x         x

“(2) Decisions
of the Commissioner of Customs in cases involving liability for customs duties,
fees or other money charges; seizure, detention or release of property
affected; fines forfeitures or other penalties imposed in relation thereto; or
other matters arising under the Customs Law or other law or part of the law
administered by the Bureau of Customs.”

Clearly then, the question of seizure and forfeiture is for the
Collector of Customs to determine in the first instance and then the
Commissioner of Customs. This is a
field where the doctrine of primary jurisdiction controls. Thereafter an appeal may be taken to the Court of Tax Appeals. A court of first instance is thus devoid of
competence to act on the matter.

A long line of cases, which goes as far back as 1913^[9]
have adopted the doctrine that the Collector of Customs when sitting in forfeiture proceedings, constitutes
a tribunal upon which the law confers jurisdiction to hear and determine all
questions touching the forfeiture and further disposition of the subject
matter.^[10]

In the more recent case of Enrile v. Vinuya,^[11] this Court held that “the prevailing
doctrine is that the exclusive jurisdiction in seizure and forfeiture cases
vested in the Collector of Customs precludes a court of first instance from
assuming cognizance over such a matter.” It went on to quote Justice
Zaldivar in Papa v. Mago^[12] who
enunciated that “it is the settled rule, therefore, that the Bureau of
Customs acquires exclusive jurisdiction over imported goods, for the purposes
of enforcement of the customs laws, from the moment the goods are actually in
its possession or control, even if no warrant of seizure or detention had
previously been issued by the Collector of Customs in connection with seizure
and forfeiture proceedings.”

Neither do We find merit to the allegation that petitioner
ignored the due process aspect in the seizure proceedings which appeared to
have bothered the respondent court. A
hearing was conducted and no less than six (6) witnesses were presented by the
respondent company before a decision dated September 25, 1975 was rendered. The fact that respondent company was not given
a copy of the motion for reconsideration of the July 31, 1975 order of
petitioner filed by ASAC, or even if a decision was supposedly promulgated
prior to the termination of the
hearing, would not suffice to vest on the regular court jurisdiction over the case. The remedy of the respondent company is to go to the Commissioner of Customs who
supervises all the proceedings before the Collector.^[13]

Even assuming arguendo that the civil court acquired
jurisdiction, we are inclined to agree with petitioner that the decision of
September 25, 1975, has rendered the civil case moot and academic, and that the
judge should have dismissed the petition before him.

At this juncture it is inconsequential to discuss the other
errors raised by the petitioner. Since
the respondent court did not acquire jurisdiction over the petition of the
respondent company it follows that the court has no authority to issue an
injunction against the petitioner.

WHEREFORE, finding the petition meritorious, the orders of
the respondent court dated November 13, 1975 and April 27, 1976 are hereby
annulled and set aside, thereby permanently and perpetually enjoining the court
a quo from further proceeding in the case. The respondent corporation is hereby ordered to turn over to the
government, through the Collector of Customs, all proceeds which may now or
hereafter be realized, from the sale of spiral pipes produced and manufactured
through the operation of subject machinery. It is further ordered that the machinery be, as it is hereby ordered
forfeited in favor of the Government to be disposed of in the manner provided
for by law. Cost for removing,
dismantling and crating the machineries in its former casing shall be at the
expense of Mayer Steel Pipe Corporation. Costs against respondent.

SO ORDERED.

Narvasa, C.J., (Chairman), Padilla, and Regalado, JJ., concur.

Melo, J., no part.

^[1]
Rollo, p. 82.

^[2]
Rollo, p. 39.

^[3]
Annex G, p.3; Rollo, p. 182.

^[4]
Rollo, p. 38

^[5]
Rollo, p. 41.

^[6]
Rollo, p. 43.

^[7]
Annex A, p. 7; Rollo, p. 74.

^[8]
Annex A, pp. 10-11.

^[9]
Government vs. Gale, 24 Phil. 95.

^[10]
Commissioner of Customs v. Cloribel, L-20266, 19 SCRA 234 (1967); Auyong
Hian v. Court of Appeals, L-­25181, 19 SCRA 10 (1967) and L-28782, 59
SCRA 110 (1974).

^[11]
L-29043, 37 SCRA 381 (1971).

^[12]
L-27360, 22 SCRA 857 (1968).

^[13]
Section 2313, Tariff and Customs Code.