PO ENG TRADING, PETITIONER VS. COMMISSIONER OF CUSTOMS, RESPONDENT.

Po Eng Trading versus Commissioner of Customs

The Case

This is a customs seizure case: Po Eng Trading, an importer, against the Commissioner of Customs, over thirteen cases of rubber boots for ladies and children that arrived at the Port of Manila under a Central Bank release certificate issued for rubber boots for miners only. The importer admits the goods are not the goods authorized, but argues they are not a prohibited importation and so cannot be forfeited. The case matters because it settles the force of Central Bank Circular No. 44 as a customs law, and the power of the Collector of Customs to seize and forfeit merchandise that does not match the release certificate.

Procedural History

After the shipment was examined, thirteen cases were seized. In the seizure proceedings in the Manila Custom House, the Commissioner of Customs rendered a decision ordering the forfeiture of the thirteen cases and releasing the others. Po Eng Trading moved for reconsideration, which was denied. It then filed a petition for review with the Court of Tax Appeals, which affirmed the decision of the Commissioner of Customs. The importer appealed to the Supreme Court, which decided the case on November 29, 1960.

Facts

On May 25, 1954, Po Eng Trading opened a letter of credit for the importation of forty two cases of rubber boots from Hongkong. On July 14, 1954, the forty two cases arrived at the Port of Manila on board the SS Schwabenstein, shipped by Tick Yau of Hongkong. The shipment was declared in the entry as forty two cases of rubber boots for miners, and every supporting document described the goods the same way. The Central Bank release certificate classified the goods under Commodity Code No. 850112.

On July 23, 1954, Customs examiner Magno Joves examined the shipment and found that thirteen of the cases contained rubber boots for ladies and children. Those thirteen cases were ordered seized because their attempted importation violated Central Bank Circular No. 44, in relation to Section 1363, paragraph f, of the Revised Administrative Code.

The importer paid the estimated duties and sales tax on the whole shipment and posted a surety bond to secure the release of the thirteen cases. In the seizure proceedings, the Commissioner of Customs ordered the forfeiture of the thirteen cases and released the rest, on the ground that rubber boots for ladies and children did not fall under Commodity Code No. 850112, which authorized the importation of rubber boots for miners only.

Issues

• Whether or not the rubber boots for ladies and children, which the importer admits do not fall within Commodity Code No. 850112, are of prohibited importation.
• Whether or not those boots may be forfeited under Central Bank Circular No. 44, in relation to Sections 1363, paragraph f, and 1419 of the Revised Administrative Code.

Applicable Provisions

Section 1419 of the Revised Administrative Code, whose last paragraph the Court uses to give Circular No. 44 the effect of a customs law, provides:

Customs laws. The term customs laws means the laws providing for the classification, appraisal, and collection of duties upon imported or exported merchandise, and the laws relative to commerce and navigation and the administration of customs, including the registration and admeasurement of vessels.

This is the provision that makes the Circular enforceable by the customs authorities as if it were a customs statute.

Section 1250 of the Revised Administrative Code, which the Court cites for the jurisdiction of the Collector of Customs, provides:

Collectors of customs to enforce the customs laws and other laws. Collectors of customs shall have jurisdiction to prevent and suppress smuggling and other frauds upon the customs, and to enforce the customs laws and all other laws, rules and regulations subject to their enforcement, and for this purpose they may exercise the powers conferred upon them by law.

This is the source of the Collector's jurisdiction and duty to prevent the importation of prohibited merchandise.

Section 1363, paragraph f, of the Revised Administrative Code, the forfeiture provision applied to the thirteen cases, provides:

Vessels and cargoes subject to forfeiture. The following shall be subject to forfeiture: (f) Cargoes and other objects of prohibited importation or exportation.

This is the provision under which the thirteen cases were ordered forfeited.

Ruling

On the first issue, the Court held that the boots are of prohibited importation. Commodity Code No. 850112 specifically authorizes the importation of rubber boots for miners only, and the boots for women and children are beyond its scope, not being boots for miners at all. The importer argued that the goods fall under no code number in the Statistical Classification of Commodities, but the Court found they fall under the unclassified list category, whose importation is completely banned. Even assuming the importer were right, the Court said, that would not justify its conclusion, because the Central Bank issued the Circular and the classification in the exercise of its power to control foreign exchange. Goods not included in the classification are therefore not subject to importation, upon the principle that the inclusion of one thing is the exclusion of another.

On the second issue, the Court held that the boots may be forfeited. Central Bank Circular No. 44, implementing Republic Act 265, has the effect of a customs law as defined in the last paragraph of Section 1419 of the Revised Administrative Code. Under Section 1250, the Collector of Customs has jurisdiction, indeed the duty, to prevent importation or otherwise secure compliance with all legal requirements in the case of merchandise of prohibited importation. In the exercise of that jurisdiction, he may subject to forfeiture cargoes and other objects of prohibited importation in accordance with Section 1363, paragraph f. The Court also held that the Circular, approved on June 18, 1953, and published in the Official Gazette on June 19, 1953, has the force and effect of law. It provides that no merchandise shall be released by the Bureau of Customs without the presentation of a Central Bank release certificate. Since the certificate issued called only for rubber boots for miners, and boots for women and children do not fall within Commodity Code No. 850112, their importation is prohibited and they are clearly subject to forfeiture.

Doctrine

Central Bank Circular No. 44, implementing Republic Act 265, has the effect of a customs law under the last paragraph of Section 1419 of the Revised Administrative Code, and, having been approved and published in the Official Gazette, it has the force and effect of law. The Collector of Customs has jurisdiction and the duty, under Section 1250, to prevent the importation of prohibited merchandise, and may forfeit cargoes and other objects of prohibited importation under Section 1363, paragraph f. Goods not included in the Statistical Classification of Commodities are not subject to importation, upon the principle that the inclusion of one thing is the exclusion of another. An importation that does not match the commodity authorized in the Central Bank release certificate is a prohibited importation and is subject to forfeiture.

Disposition

The Supreme Court affirmed the decision appealed from, with costs, so the Commissioner of Customs prevailed and the forfeiture of the thirteen cases stood.

Remember This

The one line to memorize: Central Bank Circular No. 44 has the effect of a customs law, and goods outside the commodity authorized in the release certificate are of prohibited importation and subject to forfeiture. Examiners use this case to test the force of Central Bank circulars as customs laws and the forfeiture power of the Collector of Customs over prohibited importations.