G.R. No. 156946 ; July 15, 2009
SECRETARY OF FINANCE, Petitioner, vs. ORO MAURA SHIPPING LINES, Respondent.

FACTS

Glory Shipping Lines imported the vessel M/V “Haruna” under a tax-free, temporary bareboat charter arrangement secured by a re-export bond. Upon the bond’s expiration in 1994, Glory Shipping Lines failed to renew it or re-export the vessel, rendering it liable for customs duties. Despite repeated demands from the Collector of the Port of Mactan, Glory Shipping Lines did not pay. Unknown to customs, Glory Shipping Lines sold the vessel to respondent Oro Maura Shipping Lines in December 1994. Relying on a MARINA appraisal, Oro Maura filed a new import entry at the Port of Manila, declaring a lower value based on depreciation, paid the corresponding duties assessed by the Manila Collector, and secured the vessel’s release.
Subsequently, the Collector of the Port of Mactan discovered the sale and demanded payment from Oro Maura for the original, higher duties owed by Glory Shipping Lines. Upon non-payment, seizure proceedings were initiated. The Cebu District Collector and the Commissioner of Customs ruled in favor of Oro Maura, upholding the validity of the Manila assessment. However, the Secretary of Finance, on appeal, ordered a re-assessment of the vessel based on its original entered value without depreciation, arguing the initial tax-free importation was conditional and the subsequent sale constituted a breach.

ISSUE

Whether the assessment of customs duties on the vessel M/V “Haruna” by the Collector of the Port of Manila, which was paid by Oro Maura Shipping Lines, had become final and conclusive, precluding a re-assessment by the Secretary of Finance.

RULING

Yes, the assessment was final and conclusive. The Supreme Court affirmed the rulings of the Court of Tax Appeals and the Court of Appeals. The legal logic rests on the principle of conclusiveness of a customs collector’s assessment under Section 1603 of the Tariff and Customs Code. Once goods are declared and duties are assessed and paid, and the goods are thereafter released, the assessment becomes final and binding upon the government, absent a showing of fraud or protest. Here, Oro Maura, as a new importer, filed a formal import entry declaring the vessel’s value. The Collector of the Port of Manila, exercising his statutory authority, accepted the declared value—supported by a MARINA appraisal—and issued a final assessment, which Oro Maura paid. The government accepted the payment and released the vessel. The Secretary of Finance’s attempt to re-assess the goods based on a different valuation years later, after the transaction was consummated, contravenes the statutory finality of the original assessment. The Court found no fraud attributable to Oro Maura, which transacted in good faith based on the official action of the Manila customs authority. The liability of the prior importer, Glory Shipping Lines, for breaching the bond conditions is separate and does not justify invalidating a subsequent, regular import transaction by an innocent purchaser.