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Reliquidation, defined
A reliquidation is a new liquidation, made for the purpose of correcting
mistakes or errors of fact or law. It constitutes an abandonment of all prior
liquidations and becomes in their stead the final decision of the collector,
having all the validity of the original liquidation.
III ABATEMENTS AND REFUNDS
General rule: It is the general rule that customs revenue may be collected only
on the quantity of the taxable subject matter which is actually imported and
received by the importer, so as to come into the consumption of the country.
Duties are not to be estimated on goods, which never arrived in port, merely
because they are included in the invoice, regardless of whether the shortage is
due to theft, evaporation, destruction or other loss on the voyage, or to short
shipment.
Duties assessed on goods entered at customhouse
Duties are required by law to be assessed on the goods, and the
assessment is uniformly made on the quantity entered at customhouse,
without any allowance for ordinary leakage and deterioration during delay in
completing the appraisement.
Except those specially provided for in the Tariff and Customs code of the
Philippines, no abatement of duties shall be made on account of damage
incurred or deterioration suffered during the voyage of importation. Duties will
be assessed on the actual quantity imported, as shown by the return of the
weighers, gauges, measurers, examiners or appraisers, as the case may be.
Abatement, defined
Diminution or decrease in the amount of tax imposed. Abatement of
taxes relieves property of its share of the burdens of taxation after the
assessment has been made and tax levied. Blacks Law Dictionary, 6tg ed.
Refund, defined
Money received by the government or its officers which, for any cause,
are to be refunded or restored to the parties paying them; such as excessive
duties or taxes, duties paid on goods destroyed by accident, duties received on
goods which are re-exported.
Is there a difference between a tax refund or tax credit?
Ans: it may be that there is no essential difference between a tax refund and a
tax credit since both are modes of recovering taxes erroneously or illegally paid
to the government. Yet, there are unmistakable formal and practical differences
between the two modes.
Formally, a tax refund requires a physical return of the sum erroneously
paid by the taxpayer, while a tax credit involves the application of the
reimbursable amount against any sum that may be due and collectible from
the taxpayer. On the practical side, the tax payer to whom the tax is refunded
would have the option, among others, to invest for profit the returned sum, an
option not proximately available if the taxpayer chooses instead to receive a tax
credit.
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domestic market value of the seized article as provided for under Sec.
2307 of the TCC.
5. Abandonment of articles imported
Except in criminal liability, the taxpayer-importer may relieve himself for
the burden of paying duties and taxes by simply abandoning his articles
either expressly or impliedly under Secs. 1801 and 1802 of the TCC, as
amended.
B. Judicial
1. Appeal by Certiorari to the CTA
By petition for review within 30 days from the date of receipt of the
adverse decision of the Commissioner of Customs or the Secretary of
Finance as the case maybe.
2. Appeal by Certiorari to the Supreme Court
By petition for review on certiorari under Rule 45 of the 1997 Rules of
Civil Procedure, within 15 days from the date of receipt of the adverse
decision of the Court of Tax Appeals.
SUMMARY OF GOVERNMENTS REMEDIES UNDER THE CUSTOM LAW
A. Extrajudicial/Administrative
1. By enforcement of tax lien
Tax lien is enforce while the imported articles are in the custody or
subject to the control of the government. Proceeds of the sale of the
forfeited articles are applied to the tax liability of the importer and
other fees and costs of the sale, the excess goes to the
importer/taxpayer.
- Beyond the reach of regular courts.
- Applicable when importation is not prohibited or neither irregular.
2. Seizure of the articles imported
This remedy is applied when the imported articles are subject to
seizure by customs for violation of the Tariff and Customs Code and
all other laws enforced by the Bureau of Customs and the penalty
imposed is either fine or the forfeiture of the goods itself.
- Applied if importation is prohibited or irregular (e.g., smuggle
goods, failure to file import entry)
B. Judicial
1. Can be availed of when the goods are released and the tax lien is lost, in
order to collect the taxes.
2. Smuggling case will be filed if prohibited and irregular and seizure
proceeding is not available.
V PROCEEDINGS IN THE BUREAU OF CUSTOMS
A.
SEIZURE/FORFEITURE PROCEEDINGS
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3.
4.
5.
6.
7.
8.
presumed under Sec. 2503 of the TCCP and those under Sec. 2530 of
the same Code;
Upon abandonment of articles under Sec. 1801 of the TCCP;
Under the visitorial power of the Bureau of Customs on imported
articles openly offered for sale at under Sec. 2536 of the TCCP;
Upon failure to withdraw articles from the Customs Bonded
Warehouse under Sec. 1908 of the TCCP and thru those audit reports
and violations of Customs Bonded Warehouses;
Violation of Intellectual Property Rights under the Intellectual
Property law and pursuant to CA0 6-2002;
Derogatory information and alerts from the Intelligence and
Enforcement group of the Bureau of Customs; and
Other violation of the tariff and customs laws and the rules and
regulations issued thereto.
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Issuance of Warrant
Upon making any seizure, the Collector shall issue a warrant for the
detention of the property.
Upon probable cause, that the articles were imported or attempted to be
exported contrary to tariff and customs laws, the Collector of Customs shall
issue a Warrant of Seizure and Detention (WSD) in customs form W7651.
Who has the burden of proof in seizure and/or forfeiture case?
Ans: In all proceedings taken for the seizure and/or forfeiture of any vessel,
vehicle, aircraft, beast or articles under the provisions of the tariff and customs
laws, the burden of proof shall lie upon the claimant. However, the government
must first show probable cause before seizure/forfeiture proceedings may be
instituted.
Has the Bureau of Customs jurisdiction even if no WSD was issued?
Ans: 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.
Note: Despite the above pronouncement by the Supreme Court in the above
case, the following C.T.A. Case explains the necessity of the issuance of the
WSD for purposes of validity of the seizure/forfeiture proceedings conducted by
customs:
What is the remedy of the owner/importer to secure immediate release of
his seized property?
Ans: Upon showing of a reasonable ground for legitimate use, by posting a
sufficient cash bond, subject to the following conditions:
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1. That the amount of the cash bond shall not in any case be less than
the appraised value of the article plus fine, expenses and costs that
may be adjudged in the case;
2. That there is no prima facie evidence of fraud attendant to the
importation;
3. That the importation of the article is not prohibited by law; and
4. That the release under cash bond has been approved by the
Commissioner.
Note: In one CTA and CA case, the posting of a surety bond was allowed
instead of a cash bond. Also, under R.A. 9135, posting of surety bond and
other sufficient instrument is permitted.
Give examples of reasonable grounds for the provisional release under
cash bond of the seized property.
Ans: 1. Articles are perishables;
2. Immediate installation of the articles to the consignees premises and
the engineer- installer from abroad has already arrived, and the company has
incurring expenses for his prolonged stay; and
3. Government or any of its agency requires that the article be released
for practical and lawful reasons as provided for in the government contract.
Prohibited Importation not be released under Bond
The importer of the subject tobacco, the importation of which is
prohibited by law, has no right that the tobacco be released to him even if he
puts up a bond to be determined by the Collector.
Appraised value, defined
Shall mean the dutiable value of the article plus duties, taxes and other
customs charges.
Is the release of the property relieves the owner of any liability?
Ans: No. The release of the property under cash bond shall not relieve the
owner or importer of the goods from criminal liability arising from the
importation/exportation of the shipment.
Application and Return of Warrants of Seizure and Detention
CMO 8-1984 provides for the guidelines in the application and return of
warrants of seizure and detention to be strictly complied with by the person
empowered under the law to effect customs searches, seizures and arrests.
What is the difference between a warrant of seizure and detention (WSD)
issued by the Collector of Customs and a search warrant issued by the
court?
Ans: A warrant of seizure and detention issued by the collector of Customs is
directed to any person authorized under the customs law to effect search and
seizure of any merchandise upon which duties have not been paid, or which
have been imported contrary to law or released irregularly from the customs
custody.
On the other hand, a judicial search warrant is nothing more than an
order in writing issued in the name of the People of the Philippines, signed by a
judge or a justice of the peace (Municipal Judge) and directed to a peace officer,
commanding him to search for personal property and bring it before the Court.
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May the WSD issued by the Collector of Customs be enforced outside the
Customs Zone?
Ans: From the following authorities, it would seem that this question would
call for an affirmative answer:
Any officer of the Customs is authorized by statute to go on board any
vessel or vehicle at any time and at any place in the United States or within the
customs waters, or as he may be authorized, within a custom-enforcement are
established by law, or at any other authorized place, without as well as within
his district, and examine the manifest and other documents and papers and
examine, inspect, and search the vessel or vehicle and every part thereof and
any person, trunk, package, or cargo on board, and to this end to hail and stop
such vessel or vehicle, and to use all necessary force to compel compliance.
Return of WSD by Customs Agents
The officer directed to serve the WSD shall, within ten (10) days after
receipt thereof, make a return of service to the Collector concerned in the form
of endorsement to the warrant. It shall state the relevant details of the service,
inventory and turn over of the seized articles.
Description, Appraisal and Classification of Seized Articles
The collector shall prepare a list and description, clarification and/or
appraisal of the property seized in accordance with the existing customs
valuation.
Notification of the Seizure
a. Known owner/importer
The Collector shall give the owner or importer of the property or his agent
a written notice of the seizure and shall give him an opportunity to be heard in
reference to the delinquency which was the occasion of such seizure.
Importer, consignee, person holding the bill of lading or his agent
whether in fact or otherwise shall be deemed to be the owner of the article
seized for the purpose of giving above notice.
b. Unknown owner
1. By posting for fifteen (15) days in the public corridor of the
customhouse of the district in which the seizure was made; and
2. By publication in a newspaper; or
3. By such other means in the discretion of the Commissioner of
Customs.
Elementary rule of due process requires notice and hearing
This Court need not emphasize the constitutionally enshrined right to
procedural due process of any person under investigation especially if it will
cause the person his life or property. Sections 2301 and 2303 clearly lay down
the procedure to be observed in as seizure case, that is, a WSD must be issued
upon making any seizure and that written notice of such seizure be served
upon the owner or importer or his agent.
We agree with the petitioner that a notice of hearing posted on the
bulletin board of the public respondent in a forfeiture proceeding where owner
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The party aggrieved by the decision or action of the Collector may within
fifteen (15) days after receipt of the notice of the decision of the Collector, file a
motion for reconsideration (MR) to the Collector or a written notice to the
Collector with a copy furnished to the Commissioner of his intention to appeal
the decision or action of the Collector to the Commissioner.
Note: If the claimant did not appeal or file an MR, the decision becomes final.
1.2 If the Commissioner decides in favor of the claimant or reverses the
appealed decision of the Collector, his decision becomes final and
executory.
1.3 If the Commissioner affirms the appealed decision of the Collector,
the claimant has 30 days from receipt of the decision within which to file
an MR to the Commissioner or a petition for review to the Court of Tax
Appeals (CTA).
Note: If no decision from the Commissioner, the decision of the Collector is
deemed affirmed. So that the claimant should file a petition for review to the
CTA.
Mandatory Service of Notices of Orders, Decision and other Proceedings
In all adversarial proceedings, to comply with the mandate and
requirements of due process of law, particularly in seizure cases, which
required submission of controverting evidence by the parties therein and
pending resolution and decision by the Collector of Customs, it shall be the
mandatory duty of the District Collector or the concerned Law Division to
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PROTEST PROCEEDINGS
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May the Collector of Customs be held liable for any decision or ruling in
customs cases?
Ans: No Collector or other official of customs shall be in any way personally
liable for on account of any official ruling or decision as to which the person
claiming to be aggrieved has the right to obtain either an administrative or
judicial review, and except for misdelivery or articles, a Collector shall not, in
the absence of abuse of authority, be liable to any person for a loss occasioned
either by his own act or the acts of his subordinates.
Form and Scope of Protest
Every protest shall be filed in accordance with the prescribed rules and
regulations promulgated under this section and shall point out the particular
decision or ruling of the Collector to which exception is taken or objection
made, and shall indicate with reasonable precision the particular ground or
grounds upon which the protesting party bases his claim for relief. The scope of
a protest shall be limited to the subject matter of a single adjustment or other
independent transaction, but any number of issue may be raised in a protest
with reference to the particular item or items constituting the subject matter of
the protest.
Multifariousness; Alternative Protest
It is well settled that a protest of a decision of the Collector of Customs
otherwise sufficient is void if multifarious, and therefore a protest alternative in
form is unobjectionable, and, where one of the claims is correct, the protestant
is entitled to have the erroneous classification corrected.
In the case of an alternative protest, the fact of the protest on one ground
does not estop the protestant to insist on the other ground of protest.
Nevertheless, so-called blanket protests, enumerating a long list of
paragraphs, many of which are entirely remote, with the purpose of veering
everything, do not comply with the law.
Assignment of Grounds or Reasons
It has been uniformly prescribed that the importers protest of the
collectors decision should set forth distinctly and specifically his objections to
the decision in question and his reasons for such objections.
Although there is lack of uniformity found in the expressions of the
courts with respect to the sufficiency of protests, it is agreed that no technical
precision in form or statement is necessary.
Issues not raised by the protest may not be considered or in other words,
since the protest is in the nature of a pleading, the protestant will be confined
to the claims made therein. If the protest is lacking specificness the decision
complained of must stand, even though incorrect, but without approval, and
the fact that another protest contained claims not made in the one under
consideration has no influence on the construction of the latter.
The rule provides that the importer shall state in his formal protest the
reasons therefore, and shall pay the corresponding docket fee.
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The Collector shall form a panel of experts to hear the case. The panel
shall be composed of a hearing officer from the Law Division, a COV and a
COIII from the assessment unit. It shall hear the parties of the case, receive
evidence and authorized to issue the necessary notices, subpoenas and other
interlocutory orders. Within 30 days from the first hearing, the panel shall
terminate the proceedings and recommend through the Chief of the Law
Division a decision to the Collector of Customs for approval.
D.
Upon the termination of the hearing, the Collector shall render a decision
within 30 days (Sec. 2312, TCCP). However, Sec. 8 of the rule provides that the
Collector of Customs shall render a final decision on the Protest within 15 days
from receipt of the recommended decision (from the hearing officer).
1.0
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Note: The protestant has to file a petition for review to the CTA, since there is
no decision.)
1.3 If the adverse decision of the Collector under review is reversed by
the Commissioner, decision becomes final in favor of the protestant.
1.4 If the adverse decision of the Collector under review is affirmed by
the Commissioner, appellant has 30 days from receipt of the decision to
file an MR to the Commissioner or petition for review with the Court of
Tax Appeals, otherwise decision becomes final and executory.
2.0
2.2.1
If within 30 days from receipt of the record of the case no
decision is rendered by the Secretary, or affirms decision of the
Commissioner, the adverse decision under review shall be final and
executory.
2.2.2
If the adverse decision of the Commissioner is reversed by the
Secretary, the appellant has within 30 days to file a MR to the Secretary
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or petition for review with the Court of Tax Appeals, otherwise the
decision becomes of the Secretary becomes final and executory.
Secretary of Finance cannot review decisions of Commissioner in matters
appealable to CTA
Note: Limited only to decision of collector adverse to the government.
What is the extent of the supervisory authority of the Secretary Finance
over the Bureau of Customs?
Ans: Except as provided in Section 2315 of the Tariff and Customs Code, the
supervisory authority of the Secretary of Finance over the Bureau of Customs
shall not extend to the administrative review of the ruling or decision of the
Commissioner in matters appealed to the Court of Tax Appeals.
Commissioner to control Judicial proceedings; Supervision and Control by
the commissioner over Criminal and Civil Proceedings
Civil and criminal actions and proceeding instituted in behalf of the
government under the authority of this Code (TCCP) or other law enforced by
the Bureau shall be brought in the name of the government of the Philippines
and shall be conducted by customs officers but no civil or criminal action for
the recovery of duties or the enforcement of any fine, penalty or forfeiture
under the Tariff and Customs Code shall be filed in court without the approval
of the Commissioner.
Delegated authority of the Deputy Commissioner (Revenue Collection
Group) and the District Collectors of Customs to initiate, file, sign and
prosecute criminal complaints of smuggling under CM0 30-2004
In order to expedite the filing and prosecution of criminal
complaints/cases of smuggling all over the country, all District Collectors are
authorized under by virtue of CM0 4-2004, to initiate, file, sign and prosecute
criminal cases in behalf of the Bureau of Customs for violation of Secs. 3601,
3602, 3604 and other pertinent provision of the Tariff and Customs Code
committed within their respective areas of jurisdiction.
The prosecution of such complaints shall be conducted under the direct
supervision of the Deputy Commissioner RCMG, who shall be furnished with
all the pleadings, motions and other processes filed and/or issued in
connection with the said cases. All pleadings, including affidavits-of-complaint
must be submitted to the Deputy Commissioner, RCMG for approval but in no
case shall such affidavit be filed before any courts, departments or agencies
without such approval of the Commissioner of Customs. All complaints shall be
filed and prosecuted in the name of the Bureau of Customs.
However, above order shall be understood to cover only criminal cases
filed and initiated by the District Collectors pursuant thereto and shall not
include those initiated by the Commissioner of Customs as the case may be.
The investigation and prosecution of all other cases emanating from the
Internal Inquiry and Prosecution Division and the Investigation and
Prosecution Division of the CIIS, the Enforcement and Security Service and
other divisions and units shall remain to be under the direct supervision of the
Deputy Commissioner, Intelligence and Enforcement Croup.
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COMPARISON
Comparison of Remedies under the NIRC and TCC:
The taxpayers remedies under the National Internal Revenue Code may
be categorized into remedies before payment and remedies after payment. The
remedy before payment consists of administrative remedy which is the filing of
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protest within 30 days from receipt of assessment, and judicial remedy which
is the appeal of the adverse decision of the Commissioner on the protest with
the Court of Tax Appeals, thereafter to the Court of Appeals (can now be filed
directly to CTA under R.A. 9282) and finally with the Supreme Court.
The remedy after payment is availed of by paying the assessed tax within
30 days from receipt of assessment and the filing of a claim for refund or tax
credit of these taxes on grounds that they are erroneously paid within two
years from date of payment. If there is a denial of the claim, appeal to the CTA
shall be made within thirty days from denial but within two years from date of
payment. If the Commissioner fails to act on the claim for refund or tax credit
and the two year period is about to expire, the taxpayer should consider the
continuous inaction of the Commissioner as a denial and elevate the case to
the CTA before the expiration of the two year period.
Under the Tariff and Customs Code, taxpayers remedies arise only after
payment of duties. The administrative remedies consists of filing a claim for
refund which may take the form of abatement or drawback. The taxpayer can
also file a protest within 15 days from payment if he disagrees with the ruling
of decision of the Collector of Customs regarding the legality or correctness of
the assessment of customs duties. If the decision of the Collector is adverse to
the taxpayer, he can notify the Collector within 15 days from receipt of said
decision of his desire to have his case reviewed by the Commissioner. The
decision of the Collector on the taxpayers protest, if adverse to the government,
is automatically elevated to the Commissioner for review; and if such decision
is affirmed by the Commissioner, the same shall be automatically elevated to
and finally reviewed by the Secretary of Finance.
Resort to judicial relief can be had by the taxpayer by appealing the
decision of the Commissioner or of the Secretary of Finance (for cases subject
to automatic review) within 30 days from the promulgation of the adverse
decision to the CTA.
Collector of Customs cannot appeal from decision of Commissioner of
Customs
All members of this Court agree that, as an officer of the Bureau of
Customs, the Collector of Customs for the Port of Manila may not appeal from
a decision of his superior officer and head of said Bureau, the Commissioner of
Customs.