EXTENSIVE ENTERPRISES CORPORATION, PETITIONER, VS. THE COMMISSIONER OF CUSTOMS, RESPONDENT.

From the decision of the Court of Tax Appeals (in CTA Case No.
860), dated 28 October 1963, affirming that of the Commissioner of Customs,
ordering the forfeiture of nine (9) cases of rubber balloons valued at
P1,945.80, which arrived in the port of Manila without the necessary release
certificate from the Central Bank, the claimant Extensive Enterprises
Corporation filed the present petition for review.

The facts of the case, as stipulated by the parties in the court
below, are as follows:

“1.  That the
merchandise claimed by petitioner under Customs Entry No. 95068-19 Series of
1954 consisting of nine (9) cases rubber balloons and twelve (12) cases rubber
nipples, subject of forfeiture in Seizure Identification No. 2397 were imported
into the Port of Manila on November 27, 1954;

“2.  That the said entry
covering the said merchandise was accompanied by a Central Bank release
certificate which specifies the shipment as ‘rubber nipples’ only un­der Code
No. 620915 EC;

“3.  That because the said
release certificate specifies the merchandise as rubber nipples, the release of
the twelve (12) cases rubber nipples was ordered by the Bureau of Customs while
the nine (9) cases rubber bal­loons falling under Code No. 890949 NEC were
seized on the ground that the same were imported in violation of Circular Nos.
44 and 45, in relation of Section 1363 (f) of the Revised Administrative Code
the same not being covered by the said release certificate;

“4.  That after the seizure
and detention of the said merchandise, the claimant thereof sought their
release under bond, which was authorized by the Collector of Customs for the
Port of Manila, upon the filing of a cash bond in the amount of Two Thousand
Seven Hundred Sixty-Nine Pesos (P2,769.00), Philippine currency;^[1]

“5.  That the claimant of the
seized commodities in this case contests the validity of the forfeiture
thereof, on the argument that Circulars Nos. 44 and 45 are null and void;

“6.  That Seizure
Identification No. 2397 was decided adversely against the importer with respect
to the nine (9) cases rubber balloons which were ordered forfeited in a
decision of May 31, 1960 copy of which he and his surety received on June 6,
1960; x x x.”

Petitioner does not here dispute that when the merchandise in
question arrived in the port of Manila
on November 27, 1954, and
were seized and made subject of seizure proceedings, Circular Nos. 44 and 45
were in force.  It is contended that with
the enactment on 10 September 1955 of Republic Act 1410, conferring authority
on the No-Dollar Import Office to license no-dollar importations, Circular No.
45 (giving like authority to the Central Bank) was impliedly repealed; that
Circular No. 44, on the other hand, was deemed repealed on 21 January 1962,
when Circular 133 lifted the controls on or the licensing of transactions in
foreign exchange.  In other words, it is
petitioner’s theory that the Court of Tax Appeals cannot validly order, in its
decision of 28 October 1963,
the forfeiture of the merchandise for violation of Circulars Nos. 44 and 45
which allegedly were no longer enforceable.

As raised by petitioner, the issues to be resolved in this case
are –

1.  Whether or not Central
Bank Circular Nos. 44 and 45 have been repealed by Republic Act 1410 and/or by
Circular No. 133;

2.  Whether or not the repeal
of said Circular Nos. 44 and 45 has abated the liabilities incurred thereunder;

3.  Whether or not an
estimated profit of thirty percent (30%) of the landed cost of the subject
importation shall be included in fixing the appraised value thereof; and

4.  Whether or not Section 34
of Republic Act 265 is applicable in this case and not the penal provision of
Sec­tion 1363 (f) of the Revised Administrative Code.

These issues are not novel ones. 
In connection with the first 2 questions, this Court, in a number of
cases,^[2]
definitively ruled that Circular Nos. 44 and 45, insofar as they require
release cer­tificates from the Central Bank before importations may be
withdrawn from customs authorities, were not repealed by Circular No. 133, but
incorporated in or made parts of the latter circular.

Republic Act 1410 cannot also be invoked by herein petitioner in
abatement of any liability incurred for violation of Circular No. 45.  As therein provided, goods and commodities in
transit or those previously imported under a no-dollar remittance basis at the
time of the approval of Republic Act 1410 shall not be affected by the operation
of that Act (Sec. 3.) The violation in this case, having taken place in 1954 or
prior to the effectivity of Republic Act 1410, this
Act has no application here.

Petitioner also questions the inclusion of the 30% estimated profit
in the computation of the appraised value of the forfeited goods, thus
increasing the amount the owner of the merchandise has to pay for its
redemption.  It asserts that the
appraised value, instead, should be determined in the manner provided in
Section 13(a) of the Philippine Tariff Act of 1909, as amended, in relation to
Section 1280 of the Revised Administrative Code, or based, among others, upon
the actual market value of the goods in the place of importation at the time
when such merchandise was bought and sold for exportation to the Philippines.

The contention cannot be sustained.  The provisions cited by petitioner govern the
appraisal of importations for the purpose of determining the collectible duties
upon their entry into the ports.  On the
other hand, the appraisal of importations in connection with seizure
proceedings is governed by Section 1377 of the Revised Administrative Code
which provides that the assessment shall be based on the value of the goods
“in the local market”.  The
inclusion of the estimated profit that the seized merchandise will bring to the
importer, in the fixing of their appraised value is, therefore, justified.^[3]

Finally, petitioner advances the argument that under Section 34
of Republic Act 265 (The Central Bank Act), any violation thereof or of any
instruction, rule or regulation by the Monetary Board is punishable by a fine
of not more than P20,000.00 and by imprisonment of not more than 5 years, and
of no other.  In short, it is being
alleged that forfeiture of merchandise as a penalty for violation of a Central
Bank circular is not warranted under the Central Bank Act, which should govern
the importation involved in this case.

It is true that neither Republic Act 265 nor Circulars 44 and 45
provide for the penalty of forfeiture. 
However, it cannot be disputed that said circulars, having been validly
issued, have the force and effect of law. 
As the subject-importation was made in violation of those circulars, the
goods clearly fall within the category of “merchandise of prohibited
importation” or importation effected “contrary to law”, and,
consequently, were proper subject of forfeiture proceedings.^[4]
The application of Section 1363(f) in the case at bar was proper.

WHEREFORE, the decision of the Court of Tax Appeals under
review is affirmed, with costs against the petitioner.

SO ORDERED.

Concepcion, C.J., Dizon,
Regala, Makalintal, Bengzon, J.P., Zaldivar, Sanchez,
and Castro, JJ., concur.

^[1]
The sum of P2,769.00 includes the appraised value of 12 cases of rubber
nipples.

^[2] Bombay
Department Store vs. Commissioner of Customs, G. R. Nos. L-20439, June
22, 1965; Bombay Department Store vs. Commissioner of Customs, G. R. No.
L-20460, Sept. 30, 1965; Lazaro vs. Commissioner of Customs, G. R. Nos.
L-21790 & L-21794, Dec. 24, 1965.

^[3] Lazaro vs. Commissioner of Customs, supra.

^[4]
Tan Tong Tek vs. Commissioner of Customs, G.
R. No. L-11947, June 30, 1959;
Pascual vs. Commissioner of Customs, G. R. No.
L-10979, June 30, 1959;
Commissioner of Customs vs. Pascual, G. R. No.
L-9836, Nov. 18, 1959;
Commissioner of Customs vs. Nepomuceno, G. R.
No. L-11126, March 31, 1962; Bombay Department Store vs. Commissioner of
Customs, G. R. No. L-20460, Sept. 30,
1965; Serree Investment Co. vs.
Commissioner of Customs, G. R. No. L-21217, Nov. 29, 1965.