G.R. No. L-8811 - Acting Collector of Customs vs. Court of Tax Appeals

In October 1953, Philippine Education Co., Inc. imported 1,463 copies of the October 1953 issue of the magazine "Pageant" by mail from Hillman Periodicals, Inc. of New York, USA.
The magazine contained an article entitled “Check Your Sex-Life Against the New Kinsey Report” by Laura Berquist, which included quotations and excerpts from Dr. Alfred Kinsey’s treatise “The Sexual Behavior of the Human Female.”

On the recommendation of the Board of Censors of the Bureau of Customs, the Acting Collector of Customs in Manila, in a decision dated March 4, 1954 (Manila Seizure Identification Case No. 1307), declared that the article violated Section 3-(b) of the Philippine Tariff Act of 1909 by containing obscene and indecent material.
Based on that finding, the Collector of Customs ordered the seizure, forfeiture, and burning of all 1,463 copies of the magazine.

Philippine Education Co., Inc., as the importer, appealed the Collector’s decision in accordance with Section 1380 of the Administrative Code.
On August 28, 1954, the Commissioner of Customs reversed the Collector’s order by holding that the magazine did not contain any obscene or indecent article and directed the release of the seized copies.

Upon receipt of the Commissioner’s decision, the Secretary of Finance instructed the Commissioner of Customs on September 15, 1954, to transmit the complete record of the seizure case to the CTA for review.
The CTA, on September 24, 1954, returned the records, stating that under Republic Act No. 1125 the court is not empowered to review motu proprio decisions of officials such as the Collector of Customs unless a formal petition for review is filed by a person or entity adversely affected by the decision.

On September 27, 1954, the Acting Collector of Customs filed a notice of appeal from the Commissioner's decision and simultaneously filed a petition for review, docketed as C.T.A. Case No. 17.
The petitioner alleged errors including:

The incorrect classification of the magazine as not obscene or indecent under Section 3-(b) of the Tariff Act.
Misinterpretation of the public reaction—asserting that protests were directed against the underlying Kinsey Report rather than the magazine itself.
Adoption of an erroneous criterion for determining obscenity (i.e., evaluating isolated paragraphs rather than the work in its entirety).

Intervenor Philippine Education Co., Inc. moved to dismiss the petition on the ground that the Acting Collector lacked legal capacity to prosecute the appeal and that the CTA had no jurisdiction over the matter, as it did not involve disputed customs duties or assessments.

On January 22, 1955, the CTA issued a resolution dismissing the petition for review.
The CTA held that:

Under Section 7 of Republic Act No. 1125, its exclusive jurisdiction covers only those cases involving liabilities for customs duties, fees, and other monetary charges or related penalties.
Only parties whose pecuniary or proprietary interests are adversely affected by an action of a customs official may file an appeal.
The administrative mechanism under Section 1380 of the Revised Administrative Code (allowing the Commissioner to review decisions of subordinate officials) renders the appeal improperly taken by a subordinate (the Acting Collector of Customs) against his superior (the Commissioner of Customs).
The provisions for removal of records to the courts for review (Section 1386 of the Administrative Code) were effectively abrogated by the creation of the CTA through Republic Act No. 1125.

The case consolidated issues regarding whether the CTA may review decisions by the Commissioner of Customs that do not involve tax or money-charge issues.
It also questioned whether a subordinate customs official (the Acting Collector) could validly appeal his superior’s decision on behalf of the Government, even if directed by the Secretary of Finance.

Does the CTA have appellate jurisdiction to review decisions of the Commissioner of Customs that do not involve disputed assessments, payment of customs duties, fees, or other money charges?
Is the review limited solely to cases involving pecuniary interests, as enumerated in Republic Act No. 1125?

Can the Acting Collector of Customs, in his official capacity, validly institute an appeal from the decision of the Commissioner of Customs?
Does his appeal serve as a technical mechanism for the Government to challenge a decision, or does it lack proper legal standing under the provisions of Republic Act No. 1125 and the Administrative Code?

Can the Government, through the Secretary of Finance’s directive, appeal a decision rendered by a customs official when no tax or pecuniary charge is involved?
Should appeals from decisions regarding the seizure and forfeiture of allegedly obscene material be remanded for administrative rather than judicial review?