Thursday, April 26, 2012

National Development Co. v. Collector of Customs, 9 SCRA 429 (1963)


FACTS: The NDC which is engaged in the shipping business under the name of “Philippine National Lines” is the owner of the steamship “S.S. Doña Nati” whose local agent in Manila is A.V. Rocha.

When the customs authorities found that the vessel Doña Nati carried on board unmanifested cargo consisting of one RCA Victor TV set 21 in violation of Section 2521 of the Tariff and Customs Code, respondent sent a written notice to C.F. Sharp and Company, believing it to be the operator or agent of the vessel, and when the latter referred the notice to A.V. Rocha, the real operator of the vessel, for such step as he may deem necessary to be taken, the latter answered stating that the television set was not cargo and so was not required by law to be manifested, and he added to his answer the following: “If this explanation is not sufficient, we request that this case be set for investigation and hearing in order to enable the vessel to be informed of the evidence against it to sustain the charge and to present evidence in its defense.

Respondent, however, replied to this letter saying that said television was a cargo within the meaning of the law and so he does not find his explanation satisfactory and then and there imposed on the vessel a fine of P5,000.00. Respondent even went further. He ordered that the said fine be paid within 48 hours from receipt with the threat that the vessel would be denied clearance and a warrant of seizure would be issued if the fine would not be paid. Considering that this is a grave abuse of discretion, petitioners commenced the present action for certiorari before the court a quo.

ISSUE: WON notice and hearing is required

RULING: We find this action proper for it really appears that the petitioner Rocha was not given an opportunity to prove that the television set complained of is not a cargo that needs to be manifested as required by Section 2521 of the Tariff and Customs Code. Under said section, in order that an imported article or merchandize may be considered a cargo that should be manifested, it is first necessary that it be so established for the reason that there are other effects that a vessel may carry that are excluded from the requirement of law, among which are the personal effects of the members of the crew.

The fact that the set in question was claimed by the customs authorities not to be within the exception does not automatically make the vessel liable. It is still necessary that the vessel, its owner or operator, be given a chance to show otherwise. This is precisely what petitioner Rocha has requested in his letter. Not only he was denied this chance, but respondent collector immediately imposed upon the vessel the huge fine of P5,000.00. This is a denial of the elementary rule of due process.

True it is that the proceedings before the Collector of Customs insofar as the determination of any customs law or regulation is concerned, or of any act arising under the Tariff and Customs Code, are not judicial in character, but merely administrative, where the rules of procedure are generally disregarded, but even in the administrative proceedings, due process must be observed because that is the right enshrined in our Constitution. The right to due process is not merely statutory. It is a constitutional right. Indeed, the Constitution provides that “No person shall be deprived of life, liberty and property without due process of law,” which clause epitomizes the principle of justice which hears before it condemns, which proceeds upon inquiry and renders judgment only after trial. That this principle applies with equal force to administrative proceedings was well elaborated upon by this Court in the Ang Tibay case.  

Another point raised is that the petitioners have brought this action prematurely for they have not exhausted all the administrative remedies available to them, one of which is to appeal the ruling to the Commissioner of Customs. This may be true, but such step we do not consider a plain, speedy or adequate remedy in the ordinary course of law as would prevent the petitioners from taking the present action, for it is undisputed that respondent collector has acted in utter disregard of the principle of due process. 

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