What is shipment 'under guard'?
SOMETIME November 1993, Milford
Industries (Milford) through its customs broker
filed with the Bureau of Customs (BOC) an Import
Entry Declaration and deposited the amount of
PHP1,863,598.00 representing the advance deposit
for customs duties and taxes due on its importation
of steel billets. The BOC issued the corresponding
official receipt.
When the shipment of steel billets
arrived at the Port of Manila, a representative
of Milford boarded the vessel and presented to
the customs guards a Permit to Discharge Shipside
(or Shipside Permit) which he obtained from the
BOC.
One of the customs guards, issued thirteen Boat
Notes on the entire shipment authorizing its transfer,
with the instruction that the same should be "under
guard". Thus, the cargo was loaded onto trucks
and transported to the warehouse of Milford in
Pampanga.
But the Customs Intelligence and
Investigation Division (CIID) found that the shipment
was transported without an Import Entry having
filed and without the payment of duties and taxes.
The CIID filed an application for the issuance
of warrant of seizure and detention against the
cargo with the District Collector of Customs,
Port of Manila. And the warrant of seizure and
detention was subsequently issued.
Prior to the return of the warrant,
Milford sent a letter to the BOC attaching the
required Import Entry and a check representing
the full payment of the duties and taxes. The
said check was received by the BOC and the corresponding
official receipt was issued to Milford.
Nonetheless, the District Collector rendered a
decision ordering that the shipment be forfeited
in favor of the government for it was discharged
from the vessel and taken to the warehouse of
Milford without legal documentation and without
payment of duties and taxes.
Milford appealed to the Office of the Commissioner
of Customs but the same was denied. Its motion
for reconsideration was likewise denied.Milford
elevated the case with the Court of Tax Appeals
(CTA). And the CTA reversed and set aside the
decision of the Commissioner of Customs ordering
the forfeiture of shipment.
The Court of Appeals sustained the decision of
the CTA. And the Commissioner of Customs had to
elevate the case with the Supreme Court.
The Supreme Court held:
"Petitioner's (Commissioner of Customs) contention
that when the shipment in question was transported
to respondent's (Milford) warehouse in Pampanga,
the same was "released" from the custody
of the Customs Authorities is misplaced. It bears
stressing that such transfer of the shipment was
made by virtue of the Boat Notes. The Customs
Guard made specific instruction in the Boat Notes
that the shipment should be under "continuous
guarding" by the Customs guard "until
released by the customs authorities", obviously
because the customs duties and taxes due thereon
have not yet been paid. Clearly, the physical
and legal custody over the shipment remained with
the Customs authorities.
It is likewise undisputed that respondent's payment
of the customs duties and taxes on the shipment
was duly accepted by the BOC. Hence, this legally
terminated the importation of goods or articles
as provided under Section 1202 of the Tariff and
Customs Code."
Let us always bear in mind that when a shipment
is released "under guard", the physical
and legal custody over the said shipment is still
with the Customs authorities.
back to top
CQ&A on the
Domestic Shipping Development Act of 2004
THE Maritime Industry Authority
(MARINA) recently came up with the rules and regulations
implementing R.A. 9295 (Domestic Shipping Development
Act of 2004). Here are some questions and answers:
1. Q. What are the investment incentives granted
to qualified domestic shipowners/operators?
A. These are Value-Added Tax (VAT) Exemption,
Net Operating Loss Carry Over and Accelerated
Depreciation.
2. Q. Which government agency issues the Certificate
of Public Convenience (CPC)?
A. The MARINA shall have the power and authority
to issue the CPC or any amendments/extensions/renewals
thereto.
3. Q. Are companies, associations or individuals
who operate ships for their own use but offering
their ships for hire or compensation occasionally
required to secure a CPC?
A. Yes.
4. Q. What is the validity of a CPC?
A. For domestic shipowners/operators of ships
whose hull is made of materials other than wood:
more than 10 years of operation - 25 years validity
more than 5 years up to 10 years - 15 years validity
5 years and below of operation - 10 years validity
For domestic shipowners/operators of wooden-hulled
ships, the CPC shall be valid for a period of
5 years. For domestic shipowners/operators operating
ships whose hull is made of wood, steel and/or
other materials, the CPC shall be valid for a
period of 5 years.
For domestic ship operators whose ships are chartered,
the CPC shall be valid for a period co-terminus
with the MARINA charter approval granted to the
ship with the longest charter period.
5. Q. What is the standard processing time in
the issuance of a CPC?
A. The MARINA shall issue the CPC
within 15 working days upon acceptance of the
application and after favorable evaluation of
the qualification and documentary requirements.
6. Q. Can a foreign ship transport passengers
or cargoes between ports or places within the
Philippine territorial waters?
A. Yes, provided she has secured a Special Permit
from the MARINA, when no domestic ship is available
or suitable to provide the needed shipping service
and public interest warrants the same.
7. Q. Do existing domestic shipowners/operators
have the right to fix their rates?
A. Yes. They are authorized to establish/fix their
own domestic shipping rates, passenger or cargo
rates or both, provided, that effective competition
is fostered and public interest is served.
8. Q. Are the domestic shipowners/operators required
to secure passenger insurance coverage?
A. Yes. They are required to secure insurance
coverage for each passenger in the amount of not
less than P200,000 per manifested passenger and
the total amount of such coverage shall be equivalent
to the total authorized number of passengers of
the ships.
9. Q. Is marine pollution insurance cover compulsory?
A. No. But the MARINA may require a domestic shipowner/operator
to secure a marine pollution insurance cover.
The objective of the law is to develop a strong,
modern, safe and competitive domestic merchant
fleet owned and controlled by Filipinos or by
corporations at least 60% of the capital of which
is owned by Filipinos and manned by qualified
Filipino officers and crew.
back to top
Thus, we should extend our wholehearted
support to the said law.
For comment or inquiries, contact the writer at
jtb@pac-atlantic.com.ph.
You are now in: Narrow
Channel Archive : 2005 Q1
back to top |
