Administrative Proceedings

in Abandonment, Seizure
and Protest Cases
Diploma Course – Series 38
March 27, 2021

Atty. Alex D. Calderon, LCB

LLAVE REVIEW AND TRAINING CENTER

Atty. Alex D. Calderon, LCB

Full Time Private Solo Practitioner

Trial Lawyer/Litigator

Legal Consultant
• Aduanas Business Club, Inc. (ABCI)

2006 CBLE Top 6

 “Vigilantibus, Non Dormientibus, Jura Subveniunt”

(The law serve the vigilant, not those who sleep on their rights)
PRELIMINARY DISCUSSIONS
Administrative Proceedings

- proceedings that take place before administrative agency

or agencies.
An administrative agency is an official governmental
body empowered with the authority to direct and
supervise the implementation of particular legislative
acts.

(Ex. BIR, BOC, SEC, Ombudsman, Napolcom, NLRC etc.)

Judicial Proceedings

– these are proceedings or actions on matters that are

brought before courts presided by a judge or judges.
The name given to a matter that is brought before a
judge who is exercising his judicial rites.

(Ex. MTC, RTC, SandiganBayan, CA, SC)

Salient Differences between Administrative
and Judicial Proceedings
• As to Issues/Controversies Involved
- in administrative proceedings, issues involve pertain solely to
matters covered by a specific law, rule or act enforced by an
administrative agency.

Ex. BIR on matters of internaltaxation only, all matters

covered by the NIRC; BOC on matters of importation and
exportation only, all matters covered by CMTA.

“Specific technical administrative expertise”

- In judicial proceedings, wide array of issues may involve
interpretation and application of laws even those matters
covered within the domain of administrative bodies or in
relation thereto. Courts, most specially RTC are deemed
courts of general jurisdiction.
• As to the Applicability of the Rules of Procedure

- Administrative Agencies has its own Rules of Procedure

governing its conduct and disposition of administrative
cases within its jurisdiction. The Rules of Court only
applies in suppletory manner.
- Judicial Proceedings in all courts are governed strictly by
the Rules of Court and other rules promulgated by the
Supreme Court.
• As to the Degree of Proof Required
- In administrative proceedings, only substantial evidence
(which is way lower than proof beyond reasonable doubt
and preponderance of evidence) is required to establish a
proof.
- In judicial proceedings most especially civil cases, the
degree of proof is preponderance of evidence which is way
higher than substantial evidence. In criminal cases, the
highest degree of proof is required which is “proof beyond
reasonable doubt”.
• As to the type of proceedings observed

- In administrative proceedings, trial-type proceedings are

not required. Proceedings are mostly summary in nature.
Motions/manifestations are generally prohibited.
Exchange of pleadings will do for rendition of judgment.
Very Important Doctrines on Administrative Proceedings
• Doctrine of Exhaustion of Administrative Remedy

- before a party is allowed to seek the intervention of the

courts, it is a pre-condition that he avail himself of all
administrative processes afforded him.
• Doctrine of Exhaustion of Administrative Remedy

Hence, if a remedy within the administrative machinery can

be resorted to by giving the administrative officer every
opportunity to decide on a matter that comes within his
jurisdiction, then such remedy must be exhausted first before
the court’s power of judicial review can be sought. The
premature resort to the court is fatal to one’s cause of action.
Cases in Point

*** Sampaguita Shoe & Slipper Factory vs. Commissioner of

Customs & CTA, G.R. No. L-10285, January 14, 1958
Cases in Point

– the importer, instead of appealing the decision of the

collector to the commissioner, directly filed a petition for
review with the Court of Tax Appeals. Said the CTA and
SC, the petition must be dismissed for failure to exhaust
administrative remedies.
Cases in Point

*** Silver Swan Manufacturing vs. Commissioner of Customs

& CTA, G.R. No. L-17435, June 29, 1963

*** Rufino Lopez & Sons, Inc. vs. Court of Tax Appeals, G.R.
No. L-9274, February 1, 1957; 53 O.G. No. 10, p. 3065
Reason Behind the Doctrine

The doctrine of exhaustion of administrative remedies as

formulated in Sections 1370, 1371, 1373, 1379 and 1380 of the
Revised Administrative Code (now Title IX of the CMTA) is a
condition sine qua non before one can resort to the Court
because it is "indeed a sound rule for it provides for a policy
of orderly procedure which ……
Reason Behind the Doctrine

…. favors a preliminary administrative sifting process, and

serves to prevent attempts to swamp the courts by a
resort to them in the first instance" (citing United States
vs. Sing Tuck, 194 U.S. 161, 48 L. Ed. 917, 24 St. Ct. 621;
Oklahoma Pub. Welfare Commission vs. State, 136 Okla.
654, 105 P(d) 547, 130 ALR 873).
• Doctrine of Primary Jurisdiction

- courts cannot or will not determine a controversy

involving a question which is within the jurisdiction of an
administrative tribunal, where the question demands the
exercise of sound administrative discretion requiring the
special knowledge, experience, and ….
• Doctrine of Primary Jurisdiction

…. services of the administrative tribunal to determine

technical and intricate matters of fact, and a
uniformity of ruling is essential to comply with the
purposes of the regulatory statute administered.
Case in Point.

*** Provident Tree Farms, Inc. versus Hon. Demetrio M.

Batario, Jr., Presiding Judge Branch 48, Regional
Trial Court Of Manila, Commissioner of Customs
and A. J. International Corporation, G.R. No. 92285
March 28, 1994
Case in Point.

- Petitioner filed with RTC Manila a complaint for

injunction and damages with prayer for a temporary
restraining order against respondents Commissioner
of Customs and AJIC to enjoin the latter from
importing matches and "wood-derivates" products,
and the Collector of Customs from allowing and
releasing the importations.
Case in Point.

- the Court reconsidered its 28 July 1989 order and

dismissed the case on the ground that it had "no
jurisdiction to determine what are legal or illegal
importations.
Case in Point.

- under the "sense-making and expeditious doctrine of

primary jurisdiction . . . the courts cannot or will not
determine a controversy involving a question which
is within the jurisdiction of an administrative
tribunal, . . .
Case in Point.

- where the question demands the exercise of sound

administrative discretion requiring the special
knowledge, experience, and services of the
administrative tribunal to determine technical and
intricate matters of fact, and a uniformity of ruling is
essential to comply with the purposes of the
regulatory statute administered.
ALERT ORDERS
Sec. 1111. Alert Orders.

– Alert orders are written orders issued by customs

officers as authorized by the Commissioner on the basis
of derogatory information regarding possible
noncompliance with this Act.
Sec. 1111. Alert Orders.

- An alert order will result in the suspension of the

processing of the goods declaration and the conduct of
physical or nonintrusive inspection of the goods within
forty-eight (48) hours from issuance of the order.
Sec. 1111. Alert Orders.

- Within forty-eight (48) hours or, in the case of perishable

goods, within twenty-four (24) hours from inspection, the
alerting officer shall recommend the continuance of
processing of goods in ease of a negative finding, . . .
Sec. 1111. Alert Orders.

. . . or issuance of a warrant of seizure and detention if a

discrepancy between the declaration and actual goods is
found. The Bureau's information system shall
immediately reflect the imposition or lifting of an alert
order.
Sec. 1111. Alert Orders.

Derogatory information shall indicate the violations

and other necessary specifics thereof. For this purpose,
the following shall not be considered derogatory
information:
Sec. 1111. Alert Orders.

(a) General allegations of undervaluation;

(b) General allegations of misclassification without

providing the appropriate tariff heading and duty of
the shipment to be alerted;
Sec. 1111. Alert Orders.

(c) General allegations of over-quantity without indicating the

source of information supporting the allegation;

(d) General allegations of misdeclaration in the entry without

indicating the suspected actual contents thereof; and

(e) General allegations of importations contrary to law without

indicating the specific law or rule to be violated.
Sec. 1111. Alert Orders.

No alert order shall be issued on account of allegations of

undervaluation unless said undervaluation is caused by the
submission to customs of forged or spurious invoice or other
commercial documents.
Sec. 1111. Alert Orders.

An alert order may be issued only after lodgement of the

goods declaration and prior to the release of goods from
customs custody. Under no circumstances shall, the
suspension of the processing of goods declaration be
allowed except through an alert order issued by an
authorized customs officer.
Sec. 1111. Alert Orders.

The costs of the physical inspection shall be borne by the

Bureau: Provided, that such cost shall be reimbursed by
the owner prior to the release of the goods if the physical
inspection results in the assessment of additional duties or
taxes or the issuance of a warrant of seizure.
Sec. 1111. Alert Orders.

The Commissioner shall be notified of the

recommendation by the alerting officer within twenty-
four (24) hours from the issuance of the alert order.
Sec. 1111. Alert Orders.

Alert orders shall be dated and assigned a unique

reference number in series which shall be the basis for
reporting to and monitoring by the Commissioner and
the Secretary of Finance.
Sec. 1111. Alert Orders.

The Bureau shall create a central clearing house for alert

orders and shall submit reports quarterly on the status
thereof.
Sec. 1112. Alert Orders on Perishable Goods.

– When the subject of the alert order are perishable

goods, the Bureau shall attach to the recommendation
a certificate stating that the goods are perishable.
Sec. 1112. Alert Orders on Perishable Goods.

- Alert orders are written orders issued by customs

officers as authorized by the Commissioner on the
basis of derogatory information regarding possible
noncompliance of the CMTA. (See Section 1111,
CMTA)
Derogatory Information

– shall refer to any information indicating that a certain

shipment is in high risk of probable violation of the
provision of the CMTA and related laws. Said
information shall indicate the violation and other
specifics thereof. (See Section 3.4 of CAO 7-2019)
What are “not” considered as Derogatory Information
(Section 1111, CMTA and Sec. 3.2 of CMO 7-2018)

(a) General allegations of undervaluation;

(b) General allegations of misclassification without

providing the appropriate tariff heading and duty of
the shipment to be alerted;
What are “not” considered as Derogatory Information
(Section 1111, CMTA and Sec. 3.2 of CMO 7-2018)

(c) General allegations of over-quantity without indicating the

source of information supporting the allegation;

(d) General allegations of misdeclaration in the entry without

indicating the suspected actual contents thereof; and

(e) General allegations of importations contrary to law without

indicating the specific law or rule to be violated.
Notes: If an alert order is issued on the basis of an alleged
“undervaluation”, by the very wordings of the law, it
must first be shown that undervaluation is caused by
the submission to customs of forged or spurious
invoice or other commercial documents.
(See Section 1111, CMTA)
If an alert order is issued on the ground of general
allegations, or if the alleged derogatory information does not
comply with Section 3.4 of CAO 7-2019, an importer or
broker can perfectly challenge that alert order.
Who issues Alert Orders?
(Sec. 1111, CMTA and Sec. 3.1 of CMO 7-2018)

1. Commissioner

2. District Collector having jurisdiction over the goods

3. Other customs officers duly authorized in writing by the

commissioner
******* Alert Matters worth Pondering For *****

No alert order shall be issued on account of allegations of

undervaluation unless said undervaluation is caused by the
submission to customs of forged or spurious invoice or other
commercial documents. (In this italicized and underlined
provision, customs must have at least probable cause that
an invoice or other importation documents submitted are
forged or falsified)
******* Alert Matters worth Pondering For *****

“An alert order may be issued only after lodgement of the goods
declaration and prior to the release of goods from customs
custody. Under no circumstances shall, the suspension of the
processing of goods declaration be allowed except through an alert
order issued by an authorized customs officer.” (Correlate this
with the Effect Once Importer’s Accreditation is
suspended not on the basis of an alert)
******* Alert Matters worth Pondering For *****

“The costs of the physical inspection shall be borne by the Bureau:

Provided, That such cost shall be reimbursed by the owner prior
to the release of the goods if the physical inspection results in the
assessment of additional duties or taxes or the issuance of a
warrant of seizure.” (Sec. 1111 CMTA & Sec. 4.5 CAO7-2019)
(Does this apply? Or, are importers and brokers invoking
this provision?)
Pre-Lodgement Control Order
– shall refer to a written order issued by the Commissioner, district
collector or other customs officers authorized in writing by the
commissioner, before the lodgement of goods declaration or
when no goods declaration is lodged, on the basis of the grounds
stated in Section 5.1.1 of CAO 7-2019 to prevent illegal
importation or their release. (This is almost absurd. This is more
beneficial to those individuals who are trying to run around the
provisions of CMTA and relevant laws)
SEIZURE AND FORFEITURE
Sec. 1113. Property Subject to Seizure and Forfeiture.

– Property that shall be subject to seizure and forfeiture include:

(a) Any vehicle, vessel or aircraft, including cargo, which shall

be used unlawfully in the importation or exportation of
goods or in conveying or transporting smuggled goods in
commercial quantities into or from any Philippine port or
place.
Sec. 1113. Property Subject to Seizure and Forfeiture.

– Property that shall be subject to seizure and forfeiture include:

(a) cont . . .

The mere carrying or holding on board of smuggled goods in

commercial quantities shall subject such vehicle, vessel, aircraft, or
any other craft to forfeiture: Provided, That the vehicle, vessel,
aircraft or any other craft is not used as a common carrier which has
been chartered or leased for purposes of conveying or transporting
persons or cargo;
(b) Any vessel engaging in the coastwise trade which shall
have on board goods of foreign growth, produce, or
manufacture in excess of the amount necessary for sea
stores, without such goods having been properly entered
or legally imported;
(c) Any vessel or aircraft into which shall be transferred
cargo unloaded contrary to law prior to the arrival of
the importing vessel or aircraft at the port of
destination;
(d) Any part of the cargo, stores, or supplies of a vessel or
aircraft arriving from a foreign port which is unloaded
before arrival at the vessel's or aircraft's port of destination
and without authority from the customs officer; but such
cargo, ship, or aircraft stores and supplies shall not be
forfeited if such unloading was due to accident, stress of
weather, or other necessity and is subsequently approved
by the District Collector;
(e) Goods which are fraudulently concealed in or removed
contrary to law from any public or private warehouse,
container yard, or container freight station under customs
supervision;
(f) Goods, the importation or exportation of which are
effected or attempted contrary to law, or any goods of
prohibited importation or exportation, and all other goods
which, in the opinion of the District Collector, have been
used, are or were entered to be used as instruments in the
importation or the exportation of the former;
(g) Unmanifested goods found on any vessel or aircraft if
manifest therefor is required

(h) Sea stores or aircraft stores adjudged by the District

Collector to be excessive, when the duties and taxes
assessed by the District Collector thereon are not paid or
secured forthwith upon assessment of the same.
(i) Any package of imported goods which is found upon
examination to contain goods not specified in the invoice
or goods declaration including all other packages
purportedly containing imported goods similar to those
declared in the invoice or goods declaration to be the
contents of the misdeclared package;
(j) Boxes, cases, trunks, envelopes, and other containers of
whatever character used as receptacle or as device to
conceal goods which are subject to forfeiture under this
Act or which are so designed as to conceal the character of
such goods;
(k) Any conveyance actually used for the transport of goods
subject to forfeiture under this Act, with its equipage or
trappings, and any vehicle similarly used, together with
its equipment and appurtenances.
(k) cont . . .

The mere conveyance of smuggled goods by such transport

vehicle shall be sufficient cause for the outright seizure and
confiscation of such transport vehicle but the forfeiture shall not
be effected if it is established that the owner of the means of
conveyance used as aforesaid, is engaged as common carrier and
not chartered or leased, or that the agent in charge thereof at the
time, has no knowledge of the unlawful act; and
Goods sought to be imported or exported:

(1) Without going through a customs office, whether the act

was consummated, frustrated, or attempted;

(2) Found in the baggage of a person arriving from abroad and

undeclared by such person;

(3) Through a false declaration or affidavit executed by the

owner, importer, exporter, or consignee concerning the
importation of such, goods;
Goods sought to be imported or exported:

(4) On the strength of a false invoice or other document

executed by the owner, importer, exporter, or consignee
concerning the importation or exportation of such goods;
or
Goods sought to be imported or exported:

(5) Through any other practice or device contrary to law by

means of which such goods entered through a customs
office to the prejudice of the government.
Sec.1114. Properties not Subject to Forfeiture in the
Absence of Prima Facie Evidence.

– The forfeiture of the vehicle, vessel, or aircraft shall not be

effected if it is established that the owner thereof or the
agent in charge of the means of conveyance used as
aforesaid has no knowledge of or participation in the
unlawful act:
Provided, That a prima facie presumption shall exist against
the vehicle, vessel, or aircraft under any of the following
circumstances:

(a) If the conveyance has been used for smuggling before;

(b) If the owner is not in the business for which the

conveyance is generally used; and

(c) If the owner is not financially in a position to own such

conveyance.
Sec. 1115. Conditions Affecting Forfeiture of Goods.

– The forfeiture shall be effected only when and

while the goods are in the custody or within the
jurisdiction of customs officers, or . . .
Sec. 1115. Conditions Affecting Forfeiture of Goods.

. . . in the possession or custody of or subject to the control of

the importer, exporter, original owner, consignee, agent of
another person effecting the importation, entry or
exportation in question, or . . .
Sec. 1115. Conditions Affecting Forfeiture of Goods.

. . . in the possession or custody of or subject to the control of

persons who shall receive, conceal, buy, sell, or transport
the same, or aid in any of such acts, with knowledge that
the goods were imported, or were the subject of an
attempt at importation or exportation contrary to law.
Sec. 1116. Seizure or Release of Goods.

– The District Collector shall issue an order of release or a

warrant of seizure within five (5) days, or two (2) days in
case of perishable goods, upon the recommendation of the
alerting officer or any other customs officer. The District
Collector shall immediately make a report of such seizure
or release to the Commissioner.
Sec. 1117. Warrant of Seizure or Order of Release.

– The District Collector shall have the authority to issue a

warrant of seizure of the goods upon determination of the
existence of probable cause and in case of nonexistence
thereof, . . .
Sec. 1117. Warrant of Seizure or Order of Release.

– The District Collector shall have the authority to issue a

warrant of seizure of the goods upon determination of the
existence of probable cause and in case of nonexistence
thereof, the issuance of order of release.
Sec. 1117. Warrant of Seizure or Order of Release.

- In case the District Collector issued an order of release, the

District Collector shall immediately transmit all the records
to the Commissioner who shall automatically review
within forty-eight (48) hours, or within twenty-four (24)
hours in case of perishable goods. When no decision is
made by the Commissioner within the prescribed period,
the imported goods shall be deemed released.
Sec. 1117. Warrant of Seizure or Order of Release.

- The lifting of the alert order shall be issued by the District

Collector only upon the affirmation of the decision of the
District Collector by the Commissioner, or after the lapse of
the period of review by the Commissioner, whichever is
earlier.
Sec. 1118. Sale of Perishable Goods During Forfeiture
Proceedings.

– Upon motion of the importer of the perishable goods, the

goods may be sold at a public auction during the
pendency of the forfeiture proceedings. The proceeds of
the auction shall be held in escrow until the final
resolution of the proceedings.
Sec. 1119. Service of Warrant of Seizure.

– The District Collector shall cause the service of warrant of

seizure to the owner or importer of the goods or the
authorized representative thereof. The owner or importer
shall be given an opportunity to be heard during the
forfeiture proceedings.
Sec. 1119. Service of Warrant of Seizure.

– For the purpose of serving the warrant, the importer,

consignee, or person holding the bill of lading or airway
bill shall be deemed the "owner" of the goods. For the
same purpose, "authorized representative" shall include
any agent of the owner and if the owner or the agent is
unknown, any person having possession of the goods at
the time of the seizure.
Sec. 1119. Service of Warrant of Seizure.

– Service of warrant to an. unknown owner shall be effected

by posting the warrant for fifteen (15) days in a public
place at the concerned district, and by electronic or
printed publication.
Sec. 1120. Description, Classification and Valuation of
Seized Goods.

– The District Collector shall cause the preparation of a list

and particular description, classification, and valuation of
the goods seized and valuation of identical or similar
goods.
Sec. 1121. Proceedings in Case of Property Belonging to
Unknown Parties.

– If, within fifteen (15) days after service of warrant, no

owner or agent can be found or appears before the District
Collector, the seized goods shall be forfeited ipso facto in
favor of the government to be disposed of in accordance
with this Act.
Sec. 1122. Seizure of Vessel or Aircraft for Delinquency of
Owner or Officer.

– When the owner, agent, master, pilot in command or

other responsible officer of any vessel or aircraft becomes
liable for any violation of this Act, the vessel or aircraft
may be seized and be subjected to forfeiture proceedings
for the settlement of any fine or penalty for which such
person is liable.
Sec. 1122. Seizure of Vessel or Aircraft for Delinquency of
Owner or Officer.

– In determining whether or not to seize a vessel or aircraft,

the Bureau shall take into account the amount of fine or
penalty in relation to the commercial impact that may be
caused to international trade by the seizure or detention as
well as the value of the vessel or aircraft.
Sec. 1123. Burden of Proof in Forfeiture Proceedings.

– In all proceedings for the forfeiture of any vehicle, vessel,

aircraft, or goods under this Act, the burden of proof shall
be borne by the claimant.
Sec. 1124. Settlement of Pending Seizure Case by Payment
of Fine or Redemption of Forfeited Goods.

– Subject to the approval of the Commissioner, the District

Collector may allow the settlement by payment of fine or
the redemption of forfeited goods, during the course of
the forfeiture proceeding.
Sec. 1124. Settlement of Pending Seizure Case by Payment of Fine
or Redemption of Forfeited Goods.

– However, the Commissioner may accept the settlement by

redemption of any forfeiture case on appeal. No
settlement by payment of fine shall be allowed when there
is fraud or when the discrepancy in duties and taxes to be
paid between what is determined and what is declared
amounts to more than thirty percent (30%).
Sec. 1124. Settlement of Pending Seizure Case by Payment of Fine
or Redemption of Forfeited Goods.

– In case of settlement by payment of fine, the owner, importer,

exporter, or consignee or agent shall offer to pay a fine
equivalent to thirty percent (30%) of the landed cost of the
seized goods. In case of settlement by redemption, the owner,
importer, exporter, or consignee or agent shall offer to pay the
redeemed value equivalent to one hundred percent (100%) of
the landed cost.
Sec. 1124. Settlement of Pending Seizure Case by Payment of Fine
or Redemption of Forfeited Goods.

- Upon payment of the fine or payment of the redeemed

value, the goods shall be released and all liabilities which
may attach to the goods shall be discharged without
prejudice to the filing of administrative or criminal case.
Sec. 1124. Settlement of Pending Seizure Case by Payment of Fine
or Redemption of Forfeited Goods.

- Settlement of any seizure case by payment of the fine or

redemption of forfeited goods shall not be allowed when
there is fraud, or where the importation is prohibited or
the release of the goods is contrary to law.
Sec. 1125. Decision in Forfeiture Cases.

- In forfeiture cases, the District Collector shall issue an

order for hearing within fifteen (15) days, or five (5) days
in case of perishable goods, from issuance of the warrant.
Sec. 1125. Decision in Forfeiture Cases.

- The District Collector shall render a decision within thirty

(30) days upon termination of the hearing, or within ten
(10) days in case of perishable goods. The decision shall
include a declaration of forfeiture, the imposition of a fine
or such other action as may be proper.
 SEIZURE AND FORFEITURE

Notes: Warrant of Seizure is different from Decree of

Forfeiture. The former is preparatory to the latter.
It is the collector of customs who issues Warrant of Seizure
and/or Decree of Forfeiture. (See Sec. 1117, CMTA)

See CAO 10-2020 “Seizure and Forfeiture Proceedings and

Appeals Process” and correlate to Section 3.6 of CMO 4-2018-A or
the “Manual of Procedure for Forfeiture Cases”
Properties that are subject of seizure and or

forfeiture under the CMTA

(a) Any vehicle, vessel or aircraft, including cargo, which

shall be used unlawfully in the importation or
exportation of goods or in conveying or transporting
smuggled goods in commercial quantities into or from
any Philippine port or place.
Properties that are subject of seizure and or forfeiture under the CMTA

(a) cont . . . .

The mere carrying or holding on board of smuggled

goods in commercial quantities shall subject such
vehicle, vessel, aircraft, or any other craft to
forfeiture:
Properties that are subject of seizure and or forfeiture under the CMTA

(a) cont . . . .

Provided, That the vehicle, vessel, aircraft or any other craft

is not used as a common carrier which has been chartered or
leased for purposes of conveying or transporting persons or
cargo;
Case in Point:

M/V "DON MARTIN" VOY 047 AND ITS CARGOES OF 6,500

SACKS OF IMPORTED RICE, PALACIO SHIPPING, INC., AND
LEOPOLDO "JUNIOR" PAMULAKLAKIN, Petitioners, versus

HON. SECRETARY OF FINANCE, BUREAU OF CUSTOMS,

AND THE DISTRICT COLLECTOR OF CAGAYAN DE ORO
CITY, Respondents, G.R. No. 160206, July 15, 2015.
For patent failure on the part of the BOC to prove that the
6,500 bags of rice loaded unto MV Don Martin were indeed
imported, there was no probable cause to seize, much for
forfeit the vessel and the subject rice cargo.
Properties that are subject of seizure and or forfeiture under the CMTA

(b) Any vessel engaging in the coastwise trade which shall have
on board goods of foreign growth, produce, or manufacture
in excess of the amount necessary for sea stores, without
such goods having been properly entered or legally
imported;
Properties that are subject of seizure and or forfeiture under the CMTA

(c) Any vessel or aircraft into which shall be transferred cargo

unloaded contrary to law prior to the arrival of the
importing vessel or aircraft at the port of destination;
 Case in Point:

Commissioner of Customs, versus Manila Star

Ferry, et. al., G.R. Nos. L-31776-78 October 21, 1993.
Agents of Philippine Navy caught the crew of the S/S Argo in the act
of unloading foreign-made goods onto the UN-L-106, which was towed
by the Orestes and escorted by the two wooden bancas. The goods of
330 cases of foreign-made cigarettes, assorted ladies' wear, clothing
material and plastic bags, all of which were not manifested and
declared by the vessel for discharge in Manila. No proper notice of
arrival of the S/S Argo was given to the local customs authorities.
Properties that are subject of seizure and or forfeiture under the CMTA

(d) Any part of the cargo, stores, or supplies of a vessel or aircraft

arriving from a foreign port which is unloaded before arrival
at the vessel's or aircraft's port of destination and without
authority from the customs officer; . . .
Properties that are subject of seizure and or forfeiture under the CMTA

(d) cont. . .
but such cargo, ship, or aircraft stores and supplies shall not be
forfeited if such unloading was due to accident, stress of weather, or
other necessity and is subsequently approved by the District
Collector;
Note: Correlate to Sec. 1408. Unloading of Cargo Before Arrival at Port
of Entry; and, Sec. 1409. Unloading of Cargo at Improper Time or
Place After Arrival.
Properties that are subject of seizure and or forfeiture under the CMTA

(e) Goods which are fraudulently concealed in or removed

contrary to law from any public or private warehouse,
container yard, or container freight station under customs
supervision;
Properties that are subject of seizure and or forfeiture under the CMTA

(f) Goods, the importation or exportation of which are effected

or attempted contrary to law, or any goods of prohibited
importation or exportation, and all other goods which, in the
opinion of the District Collector, have been used, are or were
entered to be used as instruments in the importation or the
exportation of the former;
Examples:

Importation of Illegal Drugs and precursors (violation of RA 9165)

Importation of articles in violation of Intellectual Property Code

Importation or Exportation of Wildlife

Importations of Used Clothing

Properties that are subject of seizure and or forfeiture under the CMTA

(g) Unmanifested goods found on any vessel or aircraft if

manifest therefor is required;

(h) Sea stores or aircraft stores adjudged by the District

Collector to be excessive, when the duties and taxes assessed
by the District Collector thereon are not paid or secured
forthwith upon assessment of the same;
Properties that are subject of seizure and or forfeiture under the CMTA

(i) Any package of imported goods which is found upon

examination to contain goods not specified in the invoice or
goods declaration including all other packages purportedly
containing imported goods similar to those declared in the
invoice or goods declaration to be the contents of the
misdeclared package;
Note: Correlate to Section 6.2 of CAO 10-2020 on partial
seizure of shipment. Will this justify segregation
and the release of the unaffected shipments?
Properties that are subject of seizure and or forfeiture under the CMTA

(j) Boxes, cases, trunks, envelopes, and other containers of

whatever character used as receptacle or as device to
conceal goods which are subject to forfeiture under this
Act or which are so designed as to conceal the character of
such goods;
Properties that are subject of seizure and or forfeiture under the CMTA

(k) Any conveyance actually used for the transport of goods

subject to forfeiture under this Act, with its equipage or
trappings, and any vehicle similarly used, together with
its equipment and appurtenances.
(k) cont. . . .
The mere conveyance of smuggled goods by such transport
vehicle shall be sufficient cause for the outright seizure and
confiscation of such transport vehicle but the forfeiture shall not
be effected if it is established that the owner of the means of
conveyance used as aforesaid, is engaged as common carrier and
not chartered or leased, or that the agent in charge thereof at the
time, has no knowledge of the unlawful act; and
 Case in Point:

El Greco Ship Manning versus Commissioner of Customs,

G.R. No. 177188, December 4, 2008
35,000 bags of imported rice left from Port of Manila to Port
of Legaspi on board a vessel named M/V Criston without
the necessary clearance from the Philippine Coast Guard.
Seizure proceedings were conducted both against the
carrying vessel and the cargo.
However in view of the occurrence of a typhoon, the vessel
was allowed to sail and anchor at a safe anchorage.

However, after the typhoon, subject vessel was nowhere to

be found which compelled the Philippine Navy and Air
Force to conduct an extensive.
The vessel was found somewhere in Bataan, flying under
the name of M/V Neptune Breeze.

The case reaches all the way to the Supreme Court where it
was finally decreed that based on overwhelming evidence it
was established that M/V Criston and M/V Neptune
Breeze are one and the same. The Supreme Court affirmed
the CTA’s decision to have M/V Neptune Breeze forfeited
in favor of the government.
Goods sought to be imported or exported:

(1) Without going through a customs office, whether the act was
consummated, frustrated, or attempted;

(2) Found in the baggage of a person arriving from abroad and

undeclared by such person;

(3) Through a false declaration or affidavit executed by the

owner, importer, exporter, or consignee concerning the
importation of such, goods;
Goods sought to be imported or exported:

(4) On the strength of a false invoice or other document executed

by the owner, importer, exporter, or consignee concerning the
importation or exportation of such goods; or

(5) Through any other practice or device contrary to law by

means of which such goods entered through a customs office
to the prejudice of the government.
Properties not Subject to Forfeiture in the

Absence of Prima Facie Evidence.

(See Section 1114, CMTA)

Condition:
It must be established that the owner thereof or the agent
in charge of the means of conveyance used has no
knowledge of or participation in the unlawful act.
However, a prima facie presumption shall exist against the
vehicle, vessel, or aircraft under any of the following
circumstances:
(a) If the conveyance has been used for smuggling before;

(b) If the owner is not in the business for which the

conveyance is generally used; and

(c) If the owner is not financially in a position to own

such conveyance.
*** In case of an alert order, the collector must either issue
an order of release or a warrant of seizure within five
(5) days, or two (2) days in case of perishable goods.
*** In case of order of release, the collector must
immediately transmit all the records to the
Commissioner who shall automatically review
within forty-eight (48) hours, or within twenty-four
(24) hours in case of perishable goods.
*** When no decision is made by the Commissioner
within the prescribed period, the imported goods
shall be deemed released.

(See Sec. 1116 and 1117, CMTA)

Mode of Settlement of Pending Seizure Cases
(See Sec. 1124, CMTA)
1. By Payment of Fine

– equivalent to 30% of the landed cost of the seized

goods. Must be approved by the Commissioner. Not
allowed if there is fraud or when the discrepancy in
duties and taxes to be paid between what is
determined and what is declared amounts to more
than thirty percent (30%)
2. Settlement by redemption

– the owner, importer, exporter, or consignee or agent

shall offer to pay the redeemed value equivalent to
one hundred percent (100%) of the landed cost. This
presupposes that a decree of forfeiture is already final.
Not allowed when there is fraud or where the
importation is prohibited or the release of the goods is
contrary to law.
APPEAL IN PROTEST AND FORFEITURE CASES
Sec. 1126. Appeal to the Commissioner.

– In forfeiture cases, the person aggrieved by the

decision of a District Collector may, within fifteen (15)
days or five (5) days in case of perishable goods, from
receipt of the decision, file a written notice of appeal,
together with the required appeal fee to the District
Collector, furnishing a copy to the Commissioner.
– The District Collector shall immediately transmit all
the records of the proceedings to the Commissioner,
who shall review and decide on the appeal within
thirty (30) days from receipt of the records, or fifteen
(15) days in the case of perishable goods: . . .
– Provided, That if within thirty (30) days, no decision
is rendered, the decision of the District Collector
under appeal shall be deemed affirmed. An appeal
filed beyond the period herein prescribed shall be
dismissed.
Appeals to protest cases shall be governed by Section 114 of this Act.

The decision of the Commissioner may be served through the

recognized modes of service under existing law.
Sec. 1127. Automatic Review in Forfeiture Cases.

– The Commissioner shall automatically review any

decision by the District Collector adverse to the
government. The entire records of the case shall be
elevated within five (5) days from the promulgation
of the decision.
Sec. 1127. Automatic Review in Forfeiture Cases.

– The Commissioner shall decide on the automatic

review within thirty (30) days, or within ten (10) days
in the case of perishable goods, from receipt of the
records.
Sec. 1127. Automatic Review in Forfeiture Cases.

– When no decision is rendered within the prescribed period

or when a decision adverse to the government is rendered
by the Commissioner involving goods with FOB or FCA
value of ten million pesos (P10,000,000.00) or more, the
records of the decision of the Commissioner, or of the
District Collector under review, as the case may be, shall
be automatically elevated within five (5) days for review
by the Secretary of Finance.
Sec. 1127. Automatic Review in Forfeiture Cases.

– The decision issued by the Secretary of Finance,

whether or not a decision was rendered by the
Commissioner within thirty (30) days, or within ten
(10) days in the case of perishable goods, from
receipt of the records, shall be final upon the Bureau.
Sec. 1128. Automatic Review by the Secretary of Finance
in Other Cases.

– In cases not involving protest or forfeiture, the

Commissioner shall automatically review any
decision by the District Collector that is adverse to
the government.
Sec. 1128. Automatic Review by the Secretary of Finance in Other Cases.

– The records of the case shall be elevated to the

Commissioner within five (5) days from the
promulgation of the decision. The Commissioner
shall decide on the automatic review within thirty
(30) days from receipt of the records, or within ten
(10) days in the case of perishable goods.
Sec. 1128. Automatic Review by the Secretary of Finance in Other Cases.

– When no decision is rendered within the prescribed

period or when any decision rendered by the
Commissioner is adverse to the government, the
records of the ease under review shall be
automatically elevated within five (5) days for the
review of the Secretary of Finance.
Sec. 1128. Automatic Review by the Secretary of Finance in Other Cases.

– The decision issued by the Secretary of Finance,

whether or not a decision was rendered by the
Commissioner within thirty (30) days from receipt of
the records, or within ten (10) days in the case of
perishable goods, shall be final upon the Bureau.
Kinds of Appeals

1. Appeals in Forfeiture Cases.

– Appealable to the Commissioner by filing a written
notice of appeal, together with the required appeal fee
to the District Collector within fifteen (15) days or five
(5) days in case of perishable goods, from receipt of
the decision. (See Sec. 1126, CMTA and CAO 10-2020 in relation
to CMO 4-2018-A)
2. Appeals in Protest Cases.

– Under Sec. 1126 of the CMTA, appeals to protest cases

shall be governed by Section 114.
Section 114. Any party adversely affected by a decision or omission
of the Bureau pertaining to an importation, exportation, or any
other legal claim shall have the right to appeal within fifteen (15)
days from receipt of the questioned decision or order.

*** Note: There seems an apparent conflict between Section 1126

and 1106 vis-a-vis Section 114.

*** To be safe, see CMO 3-2002 “Procedure on Protest Cases

against the Determination of Customs Value and Tariff
Classification”
Remedy when Administrative Appeals are
Unfavourable to Importers/Brokers

“Judicial” Appeal by filing a “Petition for Review” to the

CTA within 30 days from receipt of receipt of an adverse
ruling or decision. (Section 1104, CMTA in relation to
Section 9, par. 2 of RA 9282).

*****For specifics of appeals in seizure and forfeiture cases,

see CAO 10-2020

 PROTESTS

(Sections 1106 to 1110 of the CMTA)

Sec. 1106. Protest

– When a ruling or decision of the District Collector or

customs officer involving goods with valuation, rules of
origin, and other customs issues is made, except the
fixing of fines in seizure cases, . . .
Sec. 1106. Protest

. . . the party adversely affected may appeal by way of

protest against such ruling or decision by presenting to
the Commissioner at the time when payment of the
amount claimed to be due the government is made, or
within fifteen (15) days thereafter, a written protest
setting forth the objection to the ruling or decision in
question and the reasons therefore.
Sec. 1106. Protest

- Subject to the approval of the Secretary of Finance, the

Commissioner shall provide such rules and regulations
as to the requirement for payment or non-payment of
the disputed amount and in case of non-payment, the
release of the importation under protest upon posting of
sufficient security.
Sec. 1107. Protest Exclusive Remedy in Protestable Case.

- In all cases subject to protest, the interested party who

desires to have the action of the District Collector
reviewed, shall file a protest as provided in Section 1106
of this Act, otherwise the action of the District Collector
shall be final and conclusive.
Sec. 1108. Form and Scope of Protest.

- A protest shall be filed in accordance with the

prescribed rules and regulations promulgated under this
section.
Sec. 1108. Form and Scope of Protest.

- It shall specify the particular decision or ruling of the

District Collector for which protest is being made, and
shall indicate the particular ground or grounds upon
which the protesting party bases the claim for relief.
Sec. 1108. Form and Scope of Protest.

- The scope of a protest shall be limited to the particular

goods subject of a goods declaration, but any number of
issues may be raised in a protest with reference to the
goods declaration constituting the subject matter of the
protest.
Sec. 1109. Samples to be Furnished by Protesting Parties.

- If the nature of the goods permit, importers filing

protests involving questions of fact must, upon demand,
present to the Commissioner samples of the goods
which are the subject matter of the protest.
Sec. 1109. Samples to be Furnished by Protesting Parties.

- The samples of the goods shall be verified by the

customs officer who made the classification, against
which the protests are filed.
Sec. 1110. Decision in Protest.

- When a protest is filed in proper form, the

Commissioner shall render a decision within thirty (30)
days from receipt of the protest. In case the protest is
sustained, in whole or in part, the appropriate order
shall be made, and the entry reassessed, if necessary.
Notes:

*** As the provisions of this chapter are worded, it appears

that protests as an administrative remedy only applies
to such “protestable” actions rendered by a Collector.
(See Section 1106, CMTA)
Notes:

*** Protest as an appeal from the decision of the collector of

customs shall be filed with the Commissioner of
Customs at the time when payment of the amount
claimed to be due the government is made, or within
fifteen (15) days thereafter, setting forth the objection to
the ruling or decision in question and the reasons
therefore. (See Section 1106, CMTA)
Notes:

*** Protest is the only exclusive remedy in “protestable

cases”. (See Section 1107, CMTA)
Notes:

*** Protestable cases refers to a ruling or decision of the

District Collector or customs officer involving goods
with valuation, rules of origin, and other customs
issues, except the fixing of fines in seizure cases.

(See Section 1106, CMTA)

 ABANDONMENT
(Section 1129 to 1130, CMTA)
Sec. 1129. Abandonment, Kinds and Effects of.

- Imported goods are deemed abandoned under any

of the following circumstances:

(a) When the owner, importer, or consignee of the

imported goods expressly signifies in writing to
the District Collector the intention to abandon the
same; or
(b) When the owner, importer, consignee, or interested party
after due notice, fails to file the goods declaration within
the prescribed period in Section 407 of this Act: Provided,
That the term goods declaration shall include provisional
or incomplete goods declaration deemed valid by the
Bureau as provided in Section 403 of this Act.
(b) cont . . .

For this purpose, it is the duty of the District Collector to

post a list of all packages discharged and their consignees,
whether electronically or physically in the District Office,
or send a notice to the consignee within five (5) days from
the date of discharge; or
(c) Having filed such goods declaration, the owner,
importer, consignee or interested party after due notice,
fails to pay the assessed duties, taxes and other charges
thereon, or, if the regulated goods failed to comply with
Section 117 of this Act, within fifteen (15) days from the
date of final assessment:
(c) cont . . .

Provided, That if such regulated goods are subject of an

alert order and the assessed duties, taxes and other charges
thereof are not paid within fifteen (15) days from
notification by the Bureau of the resolution of the alert
order, the same shall also be deemed abandoned; or
(d) Having paid the assessed duties, taxes and other
charges, the owner, importer or consignee or
interested party after due notice, fails to claim the
goods within thirty (30) days from payment.
(d) cont . . .

For this purpose, the arrastre or warehouse operator

shall report the unclaimed goods to the District
Collector for disposition pursuant to the provisions of
this Act; or
(e) When the owner or importer fails to claim goods in
customs bonded warehouses within the prescribed
period.
The due notice requirement under this section may be
provided by the Bureau through electronic notice or
personal service: Provided, That for non-regular
importers, notification shall be by registered mail or
personal service.
cont . . .

For this purpose, the accreditation of importers,

exporters, and other third parties shall include
provision for mandatory receipt of electronic notices.
Sec. 1130. Treatment and Disposition of Abandoned Goods.

– Expressly abandoned goods under paragraph (a) of

Section 1129 of this Act shall ipso facto be deemed
the property of the government and shall be
disposed of in accordance with the provisions of
this Act.
- If the Bureau has not disposed of the abandoned goods,
the owner or importer of goods impliedly abandoned
may, at any time within thirty (30) days after the lapse
of the prescribed period to file the declaration, reclaim
the goods provided that . . .
. . . all legal requirements have been complied with and
the corresponding duties, taxes and other charges,
without prejudice to charges and fees due to the port
or terminal operator, as well as expenses incurred
have been paid before the release of the goods from
customs custody.
- When the Bureau sells goods which have been impliedly
abandoned, although no offense has been discovered,
the proceeds of the sale, after deduction of any duty and
tax and all other charges and expenses incurred as
provided in Section 1143 of this Act, shall be turned over
to those persons entitled to receive them or, when this is
not possible, held at their disposal for a specified period.
cont . . .

After the lapse of the specified period, the balance

shall be transferred to the forfeiture fund as
provided in Section 1151 of this Act.
Kinds of Abandonment
(Section 1129, CMTA)
1. Express Abandonment.

– When the owner, importer, or consignee of the

imported goods expressly signifies in writing to the
District Collector his intention to abandon his
goods. (See Section 1129 (a), CMTA)
2. Implied Abandonment

(1) When the owner, importer, consignee, or

interested party after due notice, fails to file the
goods declaration within the prescribed period in
Section 407. (See Section 1129 (b), CMTA)
Sec. 407, par. 3.

– Goods declaration must be lodged within fifteen (15) days

from the date of discharge of the last package from the
vessel or aircraft. The period to file the goods declaration
may, upon request, be extended on valid grounds for
another fifteen (15) days: . . .
Sec. 407, par. 3.

. . . Provided, That the request is made before the expiration

of the original period within which to file the goods
declaration: Provided, however, That the period of the
lodgement of the goods declaration maybe adjusted by
the Commissioner.
Sec. 407, par. 3.

**** This is made controversial by the issuance of CMO 27-2019

Note:
Chevron Philippines vs. Commissioner of Customs, G.R.
No. 178759, August 11, 2008

Issue:
- Whether or not timely filing of Import Entry Declaration
comply the statutory requirement of filing of filing an “entry”
within the prescribed period to file, hence imported articles
will is not be deemed “impliedly” abandoned.
Pilipinas Shell vs. Commissioner of Customs, GR No.
195876, December 5, 2016

Correlate Pilipinas Shell case with:

Sec. 430. Period of Limitation.

– In the absence of fraud and when the goods have been finally
assessed and released, the assessment shall be conclusive upon
all parties three (3) years from the date of final payment of
duties and taxes, or upon completion of the post clearance
audit.
2. Implied Abandonment

(2) Having filed such goods declaration, the owner,

importer, consignee or interested party after due
notice, fails to pay the assessed duties, taxes and
other charges thereon, or, if the regulated goods
failed to comply with Section 117 of this Act, within
fifteen (15) days from the date of final assessment.
(See Sec. 1129 (c), CMTA)
Correlate with Section 1425 and CAO 3-2020 (Sec.7, item 3)

(3.) Having paid the assessed duties, taxes and other

charges, the owner, importer or consignee or
interested party after due notice, fails to claim the
goods within thirty (30) days from payment.

(See Sec. 1129 (d), CMTA)

(4) When the owner or importer fails to claim goods in
customs bonded warehouses within the prescribed
period. (See Sec. 1129 (e), in relation to Sec. 811,
CMTA)
(5) The failure or refusal of the owner or importer to
mark the goods as required within a period of thirty
(30) days after due notice.

See Section 710, subsection 2, par (e), CMTA)

Effects of Abandonment

1. Express Abandonment.

- Subject articles shall ipso facto be deemed the

property of the government and shall be disposed of
in accordance with the provisions of the CMTA.
(See Par 1, Sec. 1130, CMTA)
Effects of Abandonment

2. Implied Abandonment.

A. When Goods are not yet disposed by the BOC, the

owner or importer may, at any time within thirty (30)
days after the lapse of the prescribed period to file the
declaration, reclaim the goods provided that . . .
. . . all legal requirements have been complied with and
the corresponding duties, taxes and other charges,
without prejudice to charges and fees due to the
port or terminal operator, as well as expenses
incurred have been paid before the release of the
goods from customs custody.

(See Par 2, Sec. 1130, CMTA)

******* See CAO 17-2019

Effects of Abandonment

2. Implied Abandonment.

B. When Goods are already disposed by the BOC, the

proceeds of the sale, after deduction of any duty and tax
and all other charges and expenses incurred as provided
in Section 1143 of this Act, shall be turned over to those
persons entitled to receive them or, when this is not
possible, held at their disposal for a specified period.
Effects of Abandonment

2. Implied Abandonment. (B) cont . . .

- After the lapse of the specified period, the balance

shall be transferred to the forfeiture fund as provided
in Section 1151 of this Act.
(See Par 3, Sec. 1130, CMTA)

**** VERY CONTROVERSIAL NOW IN THE MATTER OF

ABANDONMENT, READ CAO 13-2020
OTHER ADMINISTRATIVE PROCEEDINGS
Sec. 1131. Authority of the Commissioner to Make Compromise.
- Subject to the approval of the Secretary of Finance, the
Commissioner may compromise any administrative case
arising under this Act involving the imposition of fines and
surcharges, including those arising from the conduct of a post
clearance audit, unless otherwise specified by law.

Cases involving forfeiture proceedings shall however not be

subject to any compromise.
Note:

A tax compromise is an agreement whereby the taxpayer

offers to pay something less than what is due and the
government accepts it as a full settlement of his tax liability.
(Atty. Benedicta Du-Balalad)
To date BOC is yet to issue an implementing rule on this
matter of tax compromise under the CMTA. However, there
is a jurisprudence in which a former high-ranking customs
official was penalized for his act in entering into a
compromise of a case against an importer which compromise
was made without the prior approval of the commissioner of
customs.
CIVIL REMEDIES FOR THE COLLECTION
OF DUTIES AND TAXES
Sec. 1132. Remedies for the Collection of Duties, Taxes
Fines, Surcharges, Interests, and Other Charges.

– The civil remedies for the collection of import duties,

taxes, fees, or charges resulting from the conduct of a
post clearance audit shall be obtained by:
(a) Distraint of goods, chattels, or effects, and other
personal property of whatever character, including
stocks and other securities, debts, credits, bank
accounts, and interest in and rights to personal
property, and by levy upon real property and
interest in rights to real property; and
(b) Either or both of these remedies may be pursued at
the discretion of the Bureau: Provided, That the
remedies of distraint and levy shall not be allowed
when the amount of duties and taxes involved is
not more than ten thousand pesos (10,000.00).
The Bureau shall advance the amounts needed to
defray costs of collection by means of civil or criminal
action, including the preservation or transportation of
personal property distrained and the advertisement
and sale thereof, as well as of real property and
improvements thereon.
Sec. 1133. Constructive Distraint of the Property.
– To safeguard the interest of the government, the
Commissioner may place under constructive distraint
the property of a delinquent importer who, in the
opinion of the Commissioner, is retiring from any
business subject to duty and tax, . . .
Sec. 1133. Constructive Distraint of the Property.

- The constructive distraint of personal property shall

be effected by requiring the importer or any person
in possession or control of such property to sign a
receipt covering the property, . . .
Sec. 1133. Constructive Distraint of the Property.

... to obligate to preserve the distrained property on

the state and condition at the time of the
government's seizure of the same, and not to
dispose of the same in any manner whatsoever,
without the express authority of the
Commissioner.
Sec. 1133. Constructive Distraint of the Property.

- In case the importer or the person in possession and

control of the property sought to be placed under
constructive distraint refuses or fails to sign the
receipt herein referred to, the customs officer
effecting the constructive distraint shall proceed to
prepare a list of such property and . . .
Sec. 1133. Constructive Distraint of the Property.

... in the presence of two (2) witnesses, leave a copy

thereof in the premises where the property
distrained is located, after which the said
property shall be deemed to have been placed
under constructive distraint.
Sec. 1134. Summary Remedies.

(A) Distraint of Personal Property.

– Upon failure of the person owing any delinquent duty,

tax and other charges to pay at the time required, the
Commissioner shall seize and distraint the goods,
chattels or effects, and the personal property, . . .
(A)

. . . including stocks and other securities, debts,

credits, bank accounts, and interests in and rights
to personal property of such persons, in sufficient
quantity to satisfy the duty, tax or other charge and
the expenses of the distraint and the cost of the
subsequent sale.
(A)
- The officer serving the warrant of distraint shall make
or cause to be made an account of the goods, chattels,
effects, or other personal property distrained, a copy of
which, signed by the said officer, shall be left either
with the owner or person from whose possession such
goods, chattels, or effects or other personal property
were taken, . . .
(A)

. . . or at the dwelling or other place of business of such

person and with someone of suitable age and
discretion, to which list shall be added a statement of
the sum demanded and note of the time and place of
sale.
(A)

- Stocks and other securities shall be distrained by

serving a copy of the warrant of distraint upon the
importer and upon the president, manager, treasurer,
or other responsible officer of the corporation, company
or association, which issued the said stocks or
securities.
(A)

- Debts and credits shall be distrained by leaving with the

person owing the debts or having in his/her possession
or under his/her control such credits, or with his/her
agent, a copy of the warrant of distraint.
(A)

The warrant of distraint shall be sufficient authority to

the person owing the debts or having in his possession
or under his control any credits belonging to the
importer to pay to the Commissioner the amount of
such debts of credits.
(A)

- Bank accounts shall be garnished by serving a warrant of

garnishment upon the importer and upon the president,
manager, treasurer, or other responsible officer of the
bank. Upon the receipt of the warrant of garnishment, the
bank shall turn over to the Commissioner so much of the
bank accounts as may be sufficient to satisfy the claim of
the government.
(A)

- A report on the distraint shall, within ten (10) days from

receipt of the warrant, be submitted by the Commissioner
to the Secretary of Finance: Provided, That the
Commissioner shall have the power to lift such order of
distraint subject to the rules and regulations promulgated
pursuant to this Act.
(B) Levy on Real Property.

- After the expiration of the period within which to pay the

duty, tax and other charges as prescribed in this section,
real property may be levied upon, before, simultaneously,
or after the distraint of personal property belonging to the
importer.
(B)

To this end, the Commissioner or the duly authorized

representative shall prepare a duly authenticated
certificate showing the name of the importer and the
amounts of the duty and tax and penalty due. The
certificate shall operate with the force of a legal
execution throughout the Philippines.
(B)
- The levy shall be effected by writing upon the certificate a
description of the property on which levy is made. At the
same time, written notice of the levy shall be mailed to or
served upon the register of deeds of the province or city
where the property is located and upon the importer, or if the
latter is not in the Philippines, upon the agent or the manager
of the business from which the liability arose, or if there be
none, to the occupant of the property in question.
(B)
- In case the warrant of levy on real property is not issued
before or simultaneously with the warrant of distraint on
personal property, and the personal property of the
importer is not sufficient to satisfy the duty and tax due,
the Commissioner or a duly authorized representative
shall, within thirty (30) days after execution of the
distraint, proceed with the levy on the real property of the
importer.
(B)
- Within ten (10) days after receipt of the warrant, a
report on any levy shall be submitted by the levying
officer to the Commissioner: Provided, That the
Commissioner may lift such warrants of levy issued,
subject to the rules and regulations promulgated
pursuant to this Act.
Kinds of Remedies (See Sections 1132 to 1134 of the CMTA)

1. Distraint of personal property, chattels, movables

and intangibles

2. Levy of Personal Property

3. Filing of Civil and/or Criminal Action

Done and open for discussion.