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Taxation Law Review

47 Commissioner of Customs v. William Singson and Triton Shipping  CTA: the documents submitted were sufficient to prove that the 15,000 bags of
GR 181007, November 21, 2016 rice were locally sourced and that the rice was withdrawn from the NFA
(smuggled rice, 15,000 bags, there must be probable cause prior to instituting Zambales.
forfeiture/seizure proceedings, no probable cause shown here, cargo and vessel  CA: affirmed CTA; The certification issued by the PCG Station Commander in
should be released) Manila does not itself prove an alleged violation of the TCC
 The records clearly show that MV Gypsy Queen originated and sailed from
Facts: Manila to Cebu, and that the 15,000 bags of rice were locally sourced from the
A vessel was allegedly carrying smuggled rice NFA Zambales, and not imported. The NFA confirmed the authenticity of the said
 Triton Shipping owns the ship MV Gypsy Queen. Metro Star Rice Mill used the documents
ship MV Gypsy Queen to ship 15,000 bags of rice to William Singson.
 The Philippine Navy apprehended the ship MV Gypsy Queen on Sep. 5, 2001, ISSUE: SHOULD THE VESSEL AND THE RICE BE RELEASED? YES. CTA AND CA
because the ship was allegedly carrying smuggled rice DECISIONS AFFIRMED.
 In order to prove that the rice was not smuggled, MV Gypsy Queen presented  The certification issued by the PCG Station Commander in Manila does not
the following documents: suffice to prove that there was a violation of the TCC
o Master’s oath of Safe Departure (Aug. 14, 2001)  The questionable PCG certification does not reveal any kind of deception
o Coasting Manifest, that indicated the ship was carrying 15,000 bags committed by the respondents. Such certification is not adequate to support the
o Roll Book, that showed the ship was cleared by the Philippine Ports proposition sought to be established which is the commission of fraud.
Authority by a certain PO3 Fernandez  It is erroneous to conclude that the 15,000 bags of rice were smuggled simply
because of the said certification which is not conclusive and cannot overcome
A questionable PCG certification was issued the documentary evidence of the respondents showing that the subject rice was
 In response, the Philippine Coast Guard (PCG) Commander Jose Cabilo issued a produced and acquired locally.
certification that stated:  The TCC requires the presence of probable cause before any proceeding for
o There was no ship named MV Gypsy Queen that was logged in any Master’s seizure and/or forfeiture is instituted.
Oath of Safe Departure on Aug. 15, 2001  Section 2535 provides:
o There was no personnel named PO3 Fernandez detailed  Sec. 2535. Burden of Proof in Seizure and/or Forfeiture. - In all proceedings taken
for the seizure and/or forfeiture of any vessel, vehicle, aircraft, beast or articles
A Warrant of Seizure and Detention was issued based on the PCG certification under the provisions of the tariff and customs laws, the burden of proof shall lie
 Thus, the Bureau of Customs (BOC) special investigator Alejandro Bondoc upon the claimant: Provided, That probable cause shall be first shown for the
recommended the issuance of a Warrant of Seizure and Detention (WSD) against institution of such proceedings and that seizure and/or forfeiture was made
the ship and the 15,000 bags of rice. The District Collector of Customs (DCC) under the circumstances and in the manner described in the preceding sections
issued a WSD for the violation of the TCC of this Code.
 Forfeiture proceedings commenced, and the parties thus presented their  Before forfeiture proceedings are instituted, the law requires the presence of
evidence. probable cause which rests on the party who ordered the forfeiture of the
shipment of rice and its carrying vessel. Once established, the burden of proof is
District Collector of Customs orders the release of the ship and cargo shifted to the claimant.
 The DCC ruled that there was no evidence to establish a cause of action, and the  To warrant the forfeiture, there must be a prior showing of probable cause that:
ship and the cargo were ordered to be released  (1) the importation or exportation of the 15,000 bags of rice was effected or
attempted contrary to law, or that the shipment of the 15,000 bags of rice
Commissioner of Customs reverses DCC constituted prohibited importation or exportation; and
 Reversed the DCC decision, and ordered the forfeiture of MV Gypsy Queen and  (2) the vessel was used unlawfully in the importation or exportation of the rice,
the rice or in conveying or transporting the rice, if considered as contraband or smuggled
articles in commercial quantities, into or from any Philippine port or place.
CTA reverses Commissioner; CA affirms CTA; ship and cargo must be released  The records of the case shows that there was no probable cause to justify the
forfeiture of the rice cargo and its carrying vessel.
Taxation Law Review
 The respondents submitted the following pieces of evidence to support the
validity and regularity of the shipment:
 For the vessel:
o the Master's Oath of Safe Departure dated August 14, 2001
o the Roll Book showing that M/V Gypsy Queen was cleared by the PPA, North
Harbor Office Manila on August 14, 2001
o Official Receipt No. 44191451 issued by the PPA for payment of port and
other charges upon the said vessel dated August 14, 2001 in the amount of
o the Bill of Lading showing that the vessel loaded with 15,000 bags of rice
sailed from Manila to Cebu for the consignee, Singson
 For the cargo:
o Official Receipt No. 0703 issued by the Harbour Centre Port Terminal, Inc.
dated August 14, 2001 in the amount of P65,160.00, and another Official
Receipt evenly dated August 14, 2001 in the amount of P3,030.26 showing
that proper usage and other port charges upon the said cargo were duly paid
 Furthermore, the records showed that the 15,000 bags of rice were of local
origin, having been purchased from NFA Zambales pursuant to the Open Sale
Program of the NFA.
 Respondents had sufficiently established that the 15,000 bags of rice were of
local origin and there were no other circumstances that would indicate that the
same were fraudulently transported into the Philippines.
 As such, the release of the rice cargo and its carrying vessel is warranted.