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.
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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. Thus,
we should extend our wholehearted support to the said law.
For comment or
inquiries, contact the writer at jtb@pac-atlantic.com.ph.
2005 Q4 | 2005 Q3 | 2005 Q2 | 2005 Q1
2004
Q4 | 2004 Q3 | 2004
Q2 | 2004 Q1
2003
Q4 | 2003 Q3 | 2003
Q2 | 2003 Q1
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