Case Summary (G.R. No. 208318)
Petitioner
Commissioner of Customs and Undersecretary of the Department of Finance
Respondent
Gold Mark Sea Carriers, Inc. (owner of barge “Cheryl Ann”)
Key Dates
– August 23, 2006: Barge towed into Surigao for emergency bunkering.
– December 18, 2006: District Collector orders release of barge and tug.
– April 13, 2007: Customs Commissioner issues Disposition Form recommending forfeiture of barge.
– May 2007: Undersecretary Mendoza and Commissioner Morales indorse forfeiture.
– February 17, 2011: CTA Third Division orders release of barge.
– December 20, 2012: CTA En Banc affirms release.
– June 30, 2021: Supreme Court decision reversing CTA En Banc.
Applicable Law
– 1987 Philippine Constitution (post-1990 decision)
– Tariff and Customs Code of the Philippines (TCCP), Sections 1202 and 2530, as amended
– Republic Act No. 6969 (Toxic Substances and Nuclear Wastes Control Act of 1990)
Issue
Whether the CTA En Banc erred in ruling that the barge “Cheryl Ann” was not subject to forfeiture for illegal importation of used oil.
Facts
- OSM Shipping towed the foreign-loaded barge containing used oil from Palau to Surigao and sought clearance to proceed to Manila.
- Philippine Coast Guard, on Customs authority, seized barge and tug for carrying used oil without import permits.
- Gold Mark did not participate in seizure proceedings; OSM presented evidence.
Procedural History
– District Collector: Ordered release of both vessels for lack of basis.
– Customs Commissioner and DOF Undersecretary: Recommended and indorsed continued detention and forfeiture of the barge.
– CTA Third Division: Granted Gold Mark’s petition, ordering immediate release of the barge as an accessory to the released tug.
– CTA En Banc: Affirmed release, finding the barge a common carrier exempt from forfeiture and barred the government’s RA 6969 theory as belated.
Findings of the Court of Tax Appeals
– Barge served as accessory to the tug and shared in its exemption from forfeiture (accessory follows principal).
– Time-charter did not convert the barge into a private carrier; it remained a common carrier exempt under TCCP.
– Government’s invocation of RA 6969 for hazardous cargo was raised too late and thus barred.
Ruling on Petition
Supreme Court holds that CTA En Banc disregarded substantial evidence showing clear intent to import used oil into the Philippines without permits, warranting forfeiture under the 1987 Constitution and the TCCP.
Legal Analysis
- Section 1202 TCCP defines importation as beginning upon entry with intent to unload; intent is inferred from agreements and permits.
- Charter Agreement and MARINA special permit unambiguously specify discharge point as “Philippines” or “Manila.”
- Substantial evidence standard met: barge entered jurisdiction with used oil, lacking import clearance—constitutes prima facie illegal importation.
- Section 2530(a) & (k) TCCP provide for forfeiture of any vessel used to transport contraband unless it is a common carrier that is not chartered or leased.
- Barge was under a time charter; TCCP’s proviso unambiguously excludes chartered vessels from the common-carrier exemption
Case Syllabus (G.R. No. 208318)
Antecedents
- OSM Shipping Phils., Inc. (“OSM”) entered into a Tow Hire Agreement with Fuel Zone Filipinas Corporation (“Fuel Zone”) for the barge “Cheryl Ann,” loaded with used oil for discharge in Manila.
- Gold Mark Sea Carriers, Inc. (“Gold Mark”) was the registered owner of the barge, which Fuel Zone chartered from Gold Mark.
- On August 23, 2006, M/T Jacob 1 (tugboat owned by OSM) towed the barge from the Republic of Palau toward Manila, stopping at the Port of Surigao for emergency bunkering and mechanical repairs.
- OSM secured clearance from Surigao City Immigration Officer, Bureau of Quarantine, and other agencies to depart for Manila or Cebu for repairs.
Seizure Proceedings
- Upon report that the barge carried prohibited used oil without an importation permit, the District Collector of Surigao, through the Philippine Coast Guard, detained M/T Jacob 1 and the barge.
- A Warrant of Seizure and Detention (S.I. No. 01-2006) covered the barge and its cargo; a Supplemental Warrant (S.I. No. 01-2006-A) covered the tugboat under Section 2530 of the Tariff and Customs Code of the Philippines (TCCP).
- The parties agreed to separate proceedings for the tugboat and the barge. Only OSM participated. Gold Mark did not appear or present evidence.
District Collector’s and Commissioner’s Orders
- By Order dated December 18, 2006, the District Collector dismissed the supplemental warrant for both vessels and ordered their release to registered owners—OSM for M/T Jacob 1 and Gold Mark for barge “Cheryl Ann”—subject to compliance and final approval by the Commissioner of Customs (Section 2313, TCCP).
- On April 13, 2007, Commissioner Napoleon L. Morales issued a Disposition Form affirming with modification the District Collector’s dismissal but recommending continued detention and immediate forfeiture of the barge. He found prima facie violation of Section 2530, TCCP, due to importation of used oil without clearances and Gold Mark’s failure to rebut the presumption.
- Undersecretary Gaudencio A. Mendoza, Jr., of the Department of Finance affirmed the recommendation on May 9,