G.R. No. 84111 - Yaokasin vs. Commissioner of Customs

On May 27, 1988, the Philippine Coast Guard seized 9,000 bags/sacks of refined sugar being unloaded from the M/V Tacloban and turned them over to the Bureau of Customs.
Petitioner Jimmy O. Yaokasin presented a sales invoice from Jordan Trading of Iloilo to prove that the sugar was purchased locally.
Despite the invoice, the District Collector of Customs proceeded with the seizure of the sugar.

Show-cause hearings were conducted on June 3 and 6, 1988.
On June 7, 1988, the District Collector issued a decision ordering the release of the sugar to Yaokasin, instructing the withdrawal of the Customs Guard from the premises.
The decision and associated case records were transmitted to and received by the Commissioner of Customs on June 10, 1988.

On June 14, 1988, without modifying his original decision, the District Collector ordered the sealer of the warehouse where the sugar was stored.
On June 19, 1988, the Economic Intelligence and Investigation Board (EIIB) filed a Motion for Reconsideration based on evidence that the sugar was actually of foreign origin.
Petitioner opposed the motion on the grounds that it was merely pro forma and functioned effectively as a motion for a new trial.
A hearing was set for the motion on July 13, 1988 by Hearing Officer Paul A. Alcazaren.

Prior to the EIIB hearing, on or before July 4, 1988, the Commissioner of Customs, through a "2nd Indorsement," returned the case folder along with the proposed decision to the District Collector for further resolution regarding the government's motion for reconsideration.
On the same day, petitioner secured a writ of replevin from the Regional Trial Court of Leyte.
The District Collector, on July 15, 1988, reconsidered his June 7 decision by reversing it, now declaring the sugar to be of foreign origin, smuggled, and consequently forfeited in favor of the government.
The reversal was grounded on the automatic review power of the Commissioner as stated in Customs Memorandum Order (CMO) No. 20-87.

CMO No. 20-87, issued on May 18, 1987, directed that decisions of the Collector of Customs in seizure and protest cases that were adverse to the government would automatically be subject to review by the Commissioner.
The memorandum order was issued under the authority of Section 12 of the Integrated Reorganization Plan (Plan) promulgated under P.D. No. 1, which was adopted as part of the law of the land.
This measure was intended to safeguard the government's interest in collecting taxes and customs duties, preventing the possibility that a favorable decision to the owner (and unfavorable to the government) could become final without governmental review.

Petitioner contended that the initial June 7 decision, not being appealed within the 15-day period provided under Sec. 2313 of the Tariff and Customs Code, should have become final and thus would mandate the release of the sugar.
The District Collector and the Commissioner of Customs argued that, since the decision was adverse to the government, it was automatically subject to the Commissioner’s review as per CMO No. 20-87 and Section 12 of the Plan.
The majority decision upheld the automatic review power as valid; however, dissenting opinions, notably by Justice Medialdea, contested this view based on a different interpretation of the relevant provisions and case precedents such as Sy Man v. Jacinto.

Does the Commissioner of Customs have the power to automatically review decisions of the Collector in seizure and protest cases solely because the decision is adverse to the government?
Whether Section 12 of the Integrated Reorganization Plan (as incorporated in P.D. No. 1) and the accompanying CMO No. 20-87 validly implement an automatic review procedure, notwithstanding the established appeal mechanism provided in Sec. 2313 of the Tariff and Customs Code.

How does the provision for automatic review in Section 12 (as applied through CMO No. 20-87) reconcile or conflict with the appeal mechanism provided by Section 2313 of the Tariff and Customs Code?
Is the automatic review measure a legitimate extension of the Commissioner’s supervisory authority, or does it improperly modify the rights provided to the aggrieved party under the Code?

Whether the failure to publish CMO No. 20-87 in the Official Gazette (as required for certain executive issuances) affects its legal effect.
Whether the non-compliance with the requirements of Section 551 of the Revised Administrative Code renders the automatic review mechanism void.