BAR EXAMINATION QUESTIONS AND ANSWERS IN TAXATION

JURISDICTION COLLECTOR OF CUSTOMS

Question No. 13: (1991)

Sometime in 15 September 1990, a shipment of 150 packages of imported goods and

personal effects arrived and was unloaded at the Port of Manila. After the amount of P15,887.00
was paid by the consignee as customs duties, internal revenue taxes, fees and other charges, the
packages were released from the Customs house. As the packages were being transported from
the Customs area to their destination, the truck carrying them was intercepted at T.M. Kalaw St.,
Ermita, manila by agents of the Economic Intelligence & Investigation Bureau (EIIB). In a
formal communication, EIIB informed the Collector of Customs that the packages were released
from the customs zone without proper appraisal to the damage of the Government and requested
for the issuance of the necessary warrant of seizure. Seizure proceedings (S.I No. 796) was then
instituted and the Collector of Customs issued a warrant of seizure and detention.

During the progress of the search and seizure, and while the goods were being removed
by the Customs agents from the bodegas where they were stored, the consignee filed a Petition
(Civil Case No. 234) with the Regional Trial Court of Manila asking that the Collector of
Customs and all his agents be restrained from further enforcing the aforesaid warrant and from
proceeding with the trial of S.I. 796, and that said warrant de declared null and void since the
Collector no longer had jurisdiction to issue the same considering that the customs duties and
taxes had already been paid and the goods had left the control and jurisdiction of the Bureau of
Customs.

1) Did the Collector of Customs have jurisidiction to issue the warrant of seizure and
detention?
Answer:

On the assumption that the goods were released from Customs custody without proper appraisal
as contended by EIIB, the Collector of Customs had jurisdiction to issue the warrant of seizure
and detention. This remedy is generally available in importations tainted with irregularity (Sec.
2531, TCC: Viduya vs. Berdiago, 73 SCRA 553).

2) Did the payment of the customs duties, taxes , etc. render illegal and improper the
issuance of said warrant?

Answer:

In seizure and forfeiture, the payment of customs duties, taxes, etc., does not necessarily render
as irregular and improper the issuance of a warrant of seizure and detention. What is legally
consenquential is whether there was , in fact an irregularity committed in the importation of the
articles and their release from customs.
 BAR EXAMINATION QUESTIONS AND ANSWERS IN TAXATION

3) Has the Regional Trial Court jurisdiction to hear and decide Civil Case No. 234?

Answer:

No, the RTC has no jurisdiction. In the case of seizures and forfeitures, an ordinary court
may not take cognizance of the case and, therefore, said courts would be bereft of jurisdiction to
hear and decide the same. The jurisdiction of the Collector of Customs in seizure and forfeiture
proceedings is exclusive of all other courts. The proper remedy would be to go through with
the hearing of the case with the Collector of Customs from whose decision an appeal may be
made to the Commissioner of Customs and, thereafter, if the taxpayer still feels aggrieved, to the
Court of Tax Appeals.

Observations:

The problem does not indicate that the claim of EIIB was in fact the case. Since the
factual settings did not state categorically that the importation was irregular, it is possible that an
examinee would have considered the importation as falling under the administrative remedy of
enforcement of tax lien. In this remedy, the collector’s jurisdiction lies only while the goods are
in customs custody; hence, upon the release of the goods from customs custody a warrant of
seizure and forfeiture would not be justified. The problem did not indicate that there was any
intention to smuggle or even an attempt to smuggle the imported goods.