G.R. No. L-23803 February 26, 1968
C. F. SHARP & COMPANY, INC., petitioner, vs. COMMISSIONER OF CUSTOMS, respondent.

FACTS

On April 1, 1962, the M/L Cheton, owned by C.F. Sharp & Co., Inc., was apprehended by a customs water patrol while passing through the Manila breakwater loaded with 1,865 cartons of untaxed blue seal cigarettes. The vessel was seized for violating Section 2530(a) of the Tariff and Customs Code. The Collector of Customs of Manila initially imposed a fine of P10,000. Upon appeal, the Commissioner of Customs modified the decision and ordered the forfeiture of the vessel. The Court of Tax Appeals affirmed the Commissioner’s decision. The petitioner claimed the vessel was loaded under duress by armed men and that it was not used to transport the cigarettes from a foreign port into the Philippines.

ISSUE

Whether or not the M/L Cheton is subject to forfeiture under paragraph a, Section 2530 of the Tariff and Customs Code.

RULING

Yes, the M/L Cheton is subject to forfeiture. The Supreme Court affirmed the decision of the Court of Tax Appeals. The Court found no reason to overturn the lower tribunals’ findings, which did not give credence to the affidavits claiming duress. The vessel was caught carrying untaxed cigarettes of foreign origin without lawful import documents, leading to the inevitable conclusion that it was used in connection with unlawful importation. The burden to prove lawful carriage shifted to the owner, who failed to do so. The Court also held that the Commissioner of Customs was not required to hold a formal hearing on appeal, as review is based on the records, and the subsequent trial de novo before the Court of Tax Appeals provided sufficient opportunity to present evidence. The acquittal of the vessel’s patron and crew in a separate criminal case does not affect the forfeiture proceeding.