G.R. No. 247651 - People vs. Libunao y Mariano

On October 27, 1907, Behn, Meyer & Co., Limited imported fifty cases of faience plates into the Philippine Islands.
The merchandise was appraised for duty at a value of $1,291.15, which matched the value stated in the original consular invoice.
The consular invoice was dated August 29, 1907, and prepared at Hamburg, Germany. It indicated that the plates were purchased from one Arnold Otto Meyer of Hamburg, with the goods being loaded at Antwerp, Belgium.
The invoice included a statement on its back declaring that Arnold Otto Meyer was the agent of the importer rather than the actual seller.

The importer filed a protest against the liquidation of the entry, alleging that there was a clerical error in the consular invoice – the preparer mistakenly converted the manufacturer’s invoice currency, originally in francs, into marks at a rate appropriate for Dutch florins.
The importer offered to produce a corrected invoice from Europe; however, he did not file the required bond for the production of such corrected consular invoice under the law and established Bureau of Customs procedures.
Subsequent attempts at corrections included:

A second consular invoice issued at Antwerp, Belgium, which stated the currency in francs and identified Antwerp as the port of shipment.
A third invoice issued at Hamburg, dated April 22, 1908, which reverted to the Hamburg consular procedure but still showed the conversion error.

Both the second and third invoices were rejected by the Bureau of Customs on grounds of:

Being consulated in a different country or by a different consul from the one who certified the original invoice.
The irregularity of using a seller’s invoice where Arnold Otto Meyer declared himself as the purchaser’s agent, creating ambiguity, and lacking the original invoice evidencing the source and price of the goods as legally required.

The requirements for consular invoices were set forth in sections 2, 3, and 4 of the Customs Administrative Act of the United States (Act of Congress of June 10, 1890, as amended), which mandate that:

Invoices be made out in the currency of the place of manufacture or purchase.
Invoices must contain a correct description of the merchandise and be made in triplicate or quadruplicate.
A declaration must accompany the consular invoice confirming its accuracy.
For merchandise exceeding a certain value, a bond must be filed when an invoice is presented by affidavit if a correct consular invoice is not immediately available.

These statutory provisions were applied to the Philippine Islands pursuant to section 20 of Act No. 355, known as the Philippine Customs Administrative Act.
Further definitions regarding the determination of the “market value” for tariff purposes were set out in sections 174 and 177 of Act No. 355, which required that the actual market value be based on the place of export—in this case, Hamburg, Germany—and not on the market value in the country of manufacture or alleged purchase (i.e., France).

The decision referenced other cases for guidance, including United States vs. Passavant, where the inclusion of a “German duty” in the dutiable value was challenged.
In that case, the Supreme Court held that the duty must be assessed on the actual market value as established in the exporting country.
Precedents established that an importer must strictly comply with the statutory requirements by either using a correct consular invoice or treating an incorrect invoice as pro forma with a corresponding bond for its correction.

Whether the first consular invoice, despite the alleged clerical error in currency conversion, could serve as the valid basis for duty assessment.
Whether the subsequent invoices (the second from Antwerp and the third from Hamburg) constituted acceptable corrections under the law.

Whether the importer complied with the mandatory requirement to file a bond for the presentation of a corrected consular invoice.
Whether the failure to produce a conforming invoice demonstrating the value from the actual country of sale (Hamburg) invalidated the protest against the duty assessment.

Whether the market value for tariff purposes should be determined based on the value in Hamburg, the place of consular attestation, or based on the prices in France as testified by the manufacturer’s evidence.
Whether the inclusion of additional charges such as transportation, duties for entry into another country, and a reasonable profit margin should have been considered to adjust the market value.