CHAN KIAN, DOING BUSINESS UNDER THE NAME AND STYLE SHANGHAI TING TING SOY FACTORY, PETITIONER, VS. THE COURT OF TAX APPEALS AND THE COLLECTOR OF CUSTOMS, RESPONDENTS.

Chan Kian versus Court of Tax Appeals

The Case

This is a petition for review brought by Chan Kian, doing business under the name and style Shanghai Ting Ting Soy Factory, against the Court of Tax Appeals and the Collector of Customs. The petitioner asks the Supreme Court to set aside the resolution of the Court of Tax Appeals dismissing its appeal from an order of seizure and forfeiture issued by the Collector of Customs of Manila. The case matters because it fixes the character of the fifteen-day period for appealing a customs forfeiture: it is not a mere rule of procedure that courts may overlook, but a mandatory period fixed by law that even the Commissioner of Customs cannot waive.

Procedural History

The Collector of Customs of Manila issued an order of forfeiture in favor of the Government. A copy of that decision was furnished the Shanghai Ting Ting Soy Factory on October 24, 1955. No appeal to the Commissioner of Customs was presented within fifteen days, so the Collector required the importer to pay the amounts of the surety bonds filed to secure the release of the merchandise. The importer moved to reconsider the order demanding payment, explaining that its failure to appeal within fifteen days was caused by its belief that a full period of thirty days was granted for the appeal. The Collector of Customs denied the motion for reconsideration. The importer appealed to the Commissioner of Customs, who also denied and dismissed the appeal. The importer then filed a petition for review with the Court of Tax Appeals, which, in a resolution dated January 4, 1957, dismissed the petition on the ground that it had no jurisdiction because the petitioner failed to appeal within the time provided by law. It is against this resolution that the present petition for review was presented to the Supreme Court.

Facts

On September 19, 1955, the Collector of Customs of Manila ordered the forfeiture in favor of the Government of 7,166 bales and bundles of old newspaper consigned to the Shanghai Ting Ting Soy Factory. The forfeiture was ordered for the failure of the importers to secure a release certificate for the merchandise in accordance with Circulars Numbered 44 and 45 of the Central Bank. Because the merchandise had already been released to the consignee under surety bonds, the order directed the forfeiture of the bonds themselves.

A copy of the decision was furnished the Shanghai Ting Ting Soy Factory on October 24, 1955. No appeal to the Commissioner of Customs was presented within fifteen days. The Collector of Customs therefore required the importer to pay the amount of the surety bonds filed to secure the release of the merchandise.

On December 5, 1955, the importer moved to reconsider the order demanding payment, explaining that its failure to appeal within fifteen days was caused by its belief that the full period of thirty days was granted for the appeal. The Collector denied the motion, and the Commissioner of Customs likewise denied and dismissed the appeal. The Court of Tax Appeals then dismissed the petition for review for lack of jurisdiction, and the matter reached the Supreme Court.

Issues

• Whether or not the fifteen-day period for appealing a decision of the Collector of Customs in a forfeiture case may be overlooked on the ground of an honest mistake, as a mere rule of procedure.
• Whether or not the letter of the Commissioner of Customs giving due course to the appeal amounted to a waiver of the fifteen-day period fixed by law.

Applicable Provisions

The decision does not quote a specific section of the customs law, but it treats the fifteen-day period for appeal in forfeiture cases as fixed by law and mandatory. The Court states the governing rule in these words:

The period of 15 days prescribed by law for an appeal in cases of forfeiture is not a matter of procedure which courts may ignore.

This is the provision the case turns on: it makes the fifteen-day period jurisdictional in effect, so that neither the Commissioner of Customs nor the courts may extend it.

The Court also states the character of the customs law as a whole:

The provisions of the customs law, like those of the internal revenue code, are not directory merely but mandatory.

This bears on the case because it removes the period from the realm of rules a court may relax for honest mistake or unforeseen events.

Ruling

On the first issue, the Court held that there is no merit in the argument that a rule of procedure may be overlooked when it does not involve public policy and the lapse arises from an honest mistake. The fifteen-day period prescribed by law for an appeal in cases of forfeiture is not a matter of procedure which courts may ignore. The provisions of the customs law, like those of the internal revenue code, are not directory merely but mandatory. The period is fixed by law at fifteen days in order that penalties for violation of the laws or rules on importation may be promptly enforced. Questions involving forfeiture should be decided promptly and expeditiously, as delays may result in the clogging of customs warehouses with merchandise illegally imported. It is beyond the power of the courts to extend the period for appeal. The Commissioner of Customs and the Court of Tax Appeals therefore acted correctly in dismissing the appeal, as it was not filed within the fifteen-day period prescribed by law.

On the second issue, the Court held that the letter of the Commissioner of Customs of March 19, 1956, stating that the appeal was considered meritorious and would be given due course, did not waive the period. All that the Commissioner meant was that he would allow the appeal to be prosecuted to the Court of Tax Appeals. Appeal to the Court of Tax Appeals is a matter of right on the part of any party who claims to have been prejudiced. The right to appeal is granted by law and does not depend upon the correctness of the order appealed from. It is in this sense that the Commissioner allowed the appeal and permitted the petition for review to be filed. That order cannot have the effect of waiving the provision of law requiring that an appeal from the decision of the Collector of Customs on forfeiture must be filed within fifteen days.

Doctrine

The fifteen-day period for appealing a decision of the Collector of Customs in a forfeiture case is mandatory and jurisdictional, not a mere rule of procedure. The customs law, like the internal revenue code, is not directory merely but mandatory, and it is beyond the power of the courts to extend the period for appeal. Honest mistake or a belief that thirty days was granted does not excuse a late appeal. The Commissioner of Customs cannot waive the period by giving due course to an appeal, because the right to appeal is granted by law and does not depend on the correctness of the order appealed from.

Disposition

The Court affirmed the resolution of the Court of Tax Appeals dismissing the appeal, with costs against the appellant.

Remember This

The one line to memorize: the fifteen-day period to appeal a customs forfeiture is mandatory, not procedural, and courts cannot extend it. Examiners use this case to test whether a late appeal can be excused by honest mistake or saved by the Commissioner's grant of due course — the answer is no on both counts.