| Between the importer-assembler
and buyer, who has the obligation to pay duties and taxes? (June 3, 2003) The
importer-assembler has. This is the story. Sometime June 1987, Happy
Motors Corporation, a known importer, assembler and manufacturer, assembled two
(2) trucks using imported component parts. The said trucks were subsequently sold
to JJ Lines, a franchise holder operating and maintaining a fleet of cargo trucks
in Luzon. But prior to the sale, Happy Motors Corporation represented to JJ Lines
that all the taxes and duties for the parts used on the two (2) trucks have been
paid. On 10 September 1987, the Bureau of Internal Revenue (BIR) and the
Land Transportation Office (LTO) entered into a Memorandum of Agreement which
provided that prior to registration in the LTO of any assembled or re-assembled
motor vehicle which used imported parts, a Certificate of Payment should first
be obtained from the BIR to prove payment of all taxes required under existing
laws.
On 12 October 1987, the Bureau of Customs (BOC) issued a Customs Memorandum
Order promulgating the rules, regulations and procedure for the voluntary payment
of duties and taxes on imported motor vehicles assembled by non-assemblers. Pursuant
to the MOA between the BIR and the LTO, the former issued a Revenue Memorandum
Order which provided the procedure governing the processing and issuance of the
Certificate of Payment of internal revenue taxes for purposes of registering motor
vehicles. On 16 June 1988, the BIR, BOC and LTO entered into a tripartite
MOA which provided that prior to registration in the LTO of any locally assembled
motor vehicle using imported component parts, a Certificate of Payment should
first be obtained from the BIR and the BOC to prove that all existing taxes and
customs duties have been paid. Unfortunately in December 1988, government
agents seized and detained the two (2) trucks of JJ Lines after discovering there
were still unpaid taxes and duties thereon. JJ Lines asked Happy Motors Corporation
to produce the receipts evidencing its payment of taxes and customs duties. But
Happy Motors Corporation refused to do so. JJ Lines paid the assessed BIR
taxes and customs duties but asked that it be reimbursed by Happy Motors Corporation.
When the latter ignored the demand letter, JJ Lines filed a complaint for a sum
of money with the Regional Trial Court. The trial court rendered a decision
ordering Happy Motors Corporation to reimburse JJ Lines . The Court of Appeals
subsequently sustained the trial court and the case reached the Supreme Court. In
the Supreme Court, Happy Motors Corporation argued that it was no longer obliged
to pay for the additional taxes and duties as the administrative regulations only
took effect after the execution of its contract of sale with JJ Lines. Moreover,
it claimed that it did pay all taxes and duties. Otherwise, it would not have
been able to secure the release of the spare parts from the BOC and register the
vehicles with the LTO. The Supreme Court ruled in the following tenor: "Thus,
although private respondent (JJ Lines) is the one required by the administrative
regulations to secure the Certificate of Payment for the purpose of registration,
petitioner (Happy Motors Corporation) as the importer and assembler/manufacturer
of the two (2) Elf trucks is still the one liable for payment of revenue taxes
and customs duties. Petitioner's obligation to pay does not arise from the administrative
regulations but from the tax laws existing at the time of importation. x x x. It
is also quite obvious that as between petitioner, who is the importer-assembler/manufacturer,
and private respondent, who is merely the buyer, it is petitioner, which has the
obligation to pay taxes to the BIR and BOC. x x x Imposing the tax burden on private
respondent would only encourage the proliferation of smugglers whose scheme to
evade taxes by passing on their tax obligations to the unsuspecting buyers. Non-sequitor.
The fact that petitioner was able to secure the release of the parts from customs
and register the assembled trucks with the LTO does not necessarily mean that
all taxes and customs duties were legally settled. x x x".
It
is therefore always best for the buyer to ask the importer-assembler to provide
receipts evidencing its payment of BIR taxes and customs duties before the consummation
of the sale.
For comments or inquiries, email the author at jtb@pac-atlantic.com.ph. Back
to Top Can
the shipowner invoke the right of abandonment if he is at fault? (May 19, 2003)No. On
the evening of 6 July 1983, the "MV Asilda" left the port of Zamboanga
for Cebu City carrying 7,500 cases of one-liter softdrink bottles stowed on deck.
At around four o'clock in the morning of the next day, the vessel hit a floating
log. At that time, the weather had deteriorated with strong southeast winds inducing
big waves. The vessel listed to starboard, then listed dangerously to portside.
The ship captain ordered his crew to stop the engine and shift the cargo to the
starboard. Before the captain could decide on his next move, some of the cargoes
were thrown overboard and seawater entered the engine room and cargo holds of
the vessel. The captain ordered his crew to abandon ship. The "MV Asilda"
then capsized and sank. Thereafter, the shipowner filed a notice of abandonment. The
case reached the Supreme Court. The shipowner contended that
the filing of the notice of abandonment had absolved him from any liability. But
the insurer-petitioner alleged that the sinking and total loss of the "MV
Asilda" and its cargo were due to the vessel's unseaworthiness as she was
put to sea in unstable condition. It further alleged that the vessel was improperly
manned and its officers were grossly negligent in failing to take appropriate
measures to proceed to a nearby port or beach the vessel. The
Supreme Court ruled in the following tenor: "x x x the
ship agent is liable for the negligent acts of the captain in the care of goods
loaded on the vessel. This liability however can be limited through abandonment
of the vessel, its equipment and freightage as provided in Article 587 (Code of
Commerce). Nonetheless, there are exceptional circumstances wherein the ship agent
could still be held answerable despite the abandonment, as where the loss or injury
was due to the fault of the shipowner and the captain. The international rule
is to the effect that the right of abandonment of vessels, as a legal limitation
of a shipowner's liability, does not apply to cases where the injury or average
was occasioned by the shipowner's own fault. It must be stressed at this point
that Art. 587 speaks only of situations where the fault or negligence is committed
solely by the captain. Where the shipowner is likewise to be blamed, Art. 587
will not apply, and such situation will be covered by the provisions of the Civil
Code on common carriers. It was also established at the outset
that the sinking of the "MV Asilda" was due to its unseaworthiness even
at the time of its departure from the port of Zamboanga. It was top-heavy as an
excessive amount of cargo was loaded on deck. Closer supervision on the part of
the shipowner could have prevented this fatal miscalculation. As such, it was
equally negligent. It cannot therefore escape liability through the expedient
of filing a notice of abandonment of the vessel by virtue of Art. 587 of the Code
of Commerce." Thus, let us always remember that the shipowner
can only invoke his right of abandonment if he is not at fault. For
comments or inquiries, contact the author at jtb@pac-atlantic.com.ph. Back
to Top How
soon should a claim be filed with the arrastre operator? (April 21, 2003)
It should be filed within fifteen (15) days from the date of discharge of the
last package from the carrying vessel. Sometime in April 1990,
the MV "TAO HE" loaded and received on board in San Francisco, California,
a shipment of five (5) lots of canned foodstuff complete and in good order condition
for transport to Manila in favor of Food Enterprises as the consignee. The consignee
insured the said shipment. The shipment arrived at the Port
of Manila and was discharged in favor of the arrastre operator for safekeeping.
The customs broker withdrew the shipment and delivered the same to the consignee.
On 4 June 1990, it was discovered that 161 cartons were missing. On 4 October
1990, the consignee filed a claim for loss with the arrastre operator. Claim
for indemnification of the loss having been denied by the arrastre operator and
the customs broker, the consignee sought payment from its insurer under the marine
cargo policy. The consignee received a compromised sum from
the insurer. As subrogee, the insurer filed a complaint against the vessel, customs
broker and the arrastre operator. The arrastre operator interposed
the defense that the consignee failed to file a formal claim within the 15-day
prescriptive period.
The trial court rendered a decision dismissing the complaint
based on the failure of the consignee to file a timely claim. However,
the appellate court found the arrastre operator negligent in its duty to exercise
due diligence over the shipment. It concluded that the shortage was due to pilferage
while the sea vans were stored at the container yard of the arrastre operator. But
the Supreme Court reversed the ruling of the appellate court. It held: "In
order to hold the arrastre operator liable for lost or damaged goods, the claimant
should file with the operator a claim for the value of the said goods "within
fifteen days from the date of discharge of the last package from the carrying
vessel x x x". The filing of the claim for loss within the 15-day period
is in the nature of a prescriptive period for bringing an action is a condition
precedent to holding the arrastre operator liable. This requirement is a defense
made available to the arrastre operator, who may use it or waive it as a matter
of personal discretion. The said requirement is not an empty
formality. It gives the arrastre contractor a reasonable opportunity to check
the validity of the claim, while the facts are still fresh in the minds of the
persons who took part in the transaction, and while the pertinent documents are
still available. Such period is sufficient for the consignee to file a provisional
claim after the discharge of the goods from the vessel. For this reason, we believe
that the 15-day limit is reasonable." It should be noted
the Supreme Court has chosen to interpret that the 15-day period for filing claims
should be counted from the date the consignee learns of the loss, damage or misdelivery
of goods. Thus, let us always remember to file with the arrastre
operator within 15 days from the time of the discovery of the loss even a provisional
claim in order not to bar a subsequent action in court. For
comments or inquiries, contact Atty. Banday at jtb@pac-atlantic.com.ph.
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