Title
Yaokasin vs. Commissioner of Customs
Case
G.R. No. 84111
Decision Date
Dec 22, 1989
Customs seized sugar; petitioner claimed local purchase. Collector released sugar, later reversed after EIIB motion. Court upheld Commissioner’s automatic review power under CMO No. 20-87, protecting government revenue interests.

Case Summary (G.R. No. 224162)

Key Dates and Procedural Milestones

Relevant operational dates appearing in the record: seizure and turnover to Customs (May 27); show-cause hearings (June 3 and 6); District Collector’s initial order releasing the sugar (June 7); transmission of records to the Commissioner (June 10); sealing of warehouse (June 14); EIIB motion for reconsideration (June 19); Commissioner’s 2nd indorsement returning the records for hearing (July 4); petitioner’s application for writ of replevin to the RTC (July 4); hearing set for the Motion for Reconsideration (July 13); District Collector’s reconsideration reversing the release and declaring forfeiture (July 15); Court of Appeals granting due course and restraining further RTC proceedings (July 15). (The decision text supplied by the parties contains further dates and procedural steps reflected in the chronology above.)

Applicable Law and Administrative Instruments

Primary statutory and administrative materials invoked in the case include: provisions of the Tariff and Customs Code (notably Section 2313 and Section 2315 as discussed in the record); Customs Memorandum Order (CMO) No. 20-87 (issued May 18, 1987 by Acting Commissioner Alexander A. Padilla, directing automatic review by the Commissioner of Collectors’ decisions adverse to the government and requiring written confirmation before release); Section 12 of the Integrated Reorganization Plan (adopted as part of P.D. No. 1, which was promulgated and published as law); and constitutional direction that existing laws, decrees and executive issuances not inconsistent with the Constitution remain operative (Section 3, Article XVIII, referenced in the decision). Precedents and administrative orders referenced in the opinions include Sy Man v. Jacinto and earlier Customs Administrative Orders.

Facts — Seizure, Initial Collector Decision, and Subsequent Actions

The Coast Guard seized 9,000 bags of refined sugar from the M/V Tacloban and turned them over to Customs custody. Petitioner produced a local sales invoice purportedly showing local purchase. After show-cause hearings the District Collector of Tacloban ordered release of the sugar to petitioner. The records and the Collector’s decision were transmitted to the Commissioner. The EIIB later filed a motion for reconsideration alleging foreign origin of the sugar. The Commissioner issued a 2nd indorsement returning the case folder with a proposed decision for hearing/resolution of the government’s motion. Petitioner sought judicial relief by obtaining a writ of replevin from the RTC and sought certiorari/prohibition with damages; the Collector and Commissioner sought relief in the Court of Appeals to annul the RTC’s replevin order. Before the scheduled hearings, the Collector reconsidered and reversed his initial release order, declared the sugar forfeited to the Government, and sought transfer and custody arrangements.

Procedural Posture and Primary Legal Question

The case challenges the authority of the Commissioner of Customs to undertake automatic review of a Collector’s decision in seizure and protest cases that are adverse to the government, thereby permitting reversal of a Collector’s decision that the owner/importer did not appeal within the statutorily prescribed period. The core legal question presented is whether the Commissioner’s automatic review power as implemented by CMO No. 20-87 (and grounded in Section 12 of the Integrated Reorganization Plan / P.D. No. 1) is valid and may displace the finality of an unappealed Collector decision under Section 2313 of the Tariff and Customs Code.

Majority Reasoning — Basis for Upholding Automatic Review

The majority concludes that Section 12 of the Integrated Reorganization Plan, adopted by P.D. No. 1 and published in the Official Gazette, remains operative and valid and that CMO No. 20-87 implements that provision. The majority reasons that Section 12’s express proviso authorizes automatic review by the Commissioner of Collectors’ decisions in seizure and protest cases that are adverse to the government, and further elevates affirmed decisions to the Secretary of Finance. The majority views Section 12 and Section 2313 as addressing different situations: Section 2313 governs the procedure when the aggrieved party (importer/owner) files an appeal within the statutory 15-day period, while Section 12 supplies a protective mechanism for government interests by permitting automatic review where a Collector’s decision is adverse to the Government and is not appealed by the owner. The majority emphasizes the governmental interest in tax collection and protection against possible collusion or error by local collectors in far-flung ports, noting that unreviewed release decisions favorable to importers would otherwise escape administrative scrutiny. On publication, the majority holds that the Plan was published as part of P.D. No. 1 and that CMO No. 20-87 is an internal administrative circular addressed to specific subordinates (collectors) and thus need not be published in the Official Gazette to be effective.

Majority Holding and Disposition

The petition is denied for lack of merit; the majority upholds the Commissioner’s automatic review authority as embodied in Section 12 of the Plan and implemented by CMO No. 20-87. The temporary restraining order previously issued is made permanent and costs are assessed against petitioner.

Dissenting Reasoning — Grounds for Invalidating Automatic Review

The dissenting opinion, authored by a member of the Court, reaches the opposite conclusion and would grant the petition. The dissent rests its analysis primarily on the Tariff and Customs Code (Section 2313) and on the historical legislative and executive amendments to the customs laws. It emphasizes that Section 2313 consistently vests the right of review in the Commissioner only upon timely appeal by the aggrieved party, and that successive amendments and codifications (including P.D. No. 34 and the Tariff and Customs Code consolidations) did not incorporate the Plan’s automatic-review proviso into the Code’s procedural scheme. The dissent argues that the Plan’s purported grant of automatic review was not implemented through the necessary “Letters of Implementation” required by P.D. No. 1 and that the operational amendments to customs law instead reflect a legislative choice to limit automatic supervisory intervention to assessment-of-duties cases (Section 2315), not to seizure cases governed by Section 2313. The dissent also contends that CMO No. 20-87 improperly enlarges the Commissioner’s power beyond the statutory scheme, and further faults the memorandum for lacking the formal approval/publication required under the administrative-law regime in force at the time (Section 551 of the Revised Administrative Code), rendering CMO No. 20-87 ineffective as a binding directive that alters third-party rights. For these reasons the dissent would find CMO No. 20-87 void and would declare the Collector’s unappealed release final and executory.

Comparative Legal Analysis of Competing Provisions

The dispute turns on statutory interpretation and administrative-authority limits: Section 2313, as presented in the record, provides that the aggrieved person must give written notice within 15 days to elevate the Collector’s decision to the Commissioner; absent such elevation, the Collector’s decision becomes final. By contrast, Section 12 of the Plan and the implementing CMO would impose a parallel supervisory mechanism enabling the Commissioner to review automatically decisions adverse to the government and to elevate affirmed decisions to the Secretary of Finance. The majority treats Section 12 as a continuing law that complements rather than conflicts with Section 2313 by addressing a different governmental interest (automatic protection of revenue). The dissent treats the Code as the specific controlling statute, argues that the Plan’s automatic-review scheme was never effectuated into the Code, and therefore that the administrative circular cannot lawfully override the Code’s allocation of review rights to the aggrieved party. The diss

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