G.R. No. L-33500 August 30, 1971
ROLANDO E. GEOTINA, in his capacity as COMMISSIONER OF CUSTOMS, petitioner, vs. THE COURT OF TAX APPEALS and UNITRADE, INC., respondents.

FACTS

The case involves a shipment of 37,042 cartons of fresh apples consigned to respondent Unitrade, Inc. The vessel M/V “Mindanao Sea” arrived at the Port of Manila on December 22, 1970. Unitrade paid the taxes and duties for 10,000 cartons, and transfer permits were issued. However, the Collector of Customs issued warrants of seizure and detention, alleging the importation violated Central Bank Circulars Nos. 289, 294, and 295 for lacking the required Central Bank release certificate. The Collector ordered already unloaded goods returned to the vessel. Unitrade subsequently requested the discharge and delivery of the entire shipment under a bond, which the Collector denied, ruling the goods were prohibited importations under Section 102(k) of the Tariff and Customs Code. The Commissioner of Customs sustained this decision. Unitrade appealed to the Court of Tax Appeals (CTA), which granted the petition and ordered the release of the shipment upon posting a P550,000 bond, pending final determination of the legality of the importation.

ISSUE

The principal issue is whether the Court of Tax Appeals acted with grave abuse of discretion or in excess of jurisdiction in ordering the release under bond of the shipment alleged to be a prohibited importation due to the absence of a Central Bank release certificate.

RULING

The Supreme Court ruled in favor of the petitioner Commissioner of Customs, annulling the CTA’s decision. The legal logic is anchored on the nature of the goods and the applicable laws. Central Bank Circulars, issued pursuant to the Central Bank’s authority under Republic Act No. 265 , have the force and effect of law. Violations thereof render an importation prohibited under Section 102(k) of the Tariff and Customs Code. The Court distinguished between importations that are merely “regulated” and those that are absolutely “prohibited.” An importation that fails to comply with a mandatory condition, such as securing a prior Central Bank release certificate for no-dollar imports, falls into the latter category. The goods are deemed contraband from the moment of attempted entry. Consequently, the Collector of Customs has a duty under Section 1207 of the Code to prevent the importation entirely, not merely to detain the goods. The release under bond ordered by the CTA was therefore illegal, as bond is only applicable in seizure proceedings for forfeiture under Section 2301 of the Code. Since the importation was prohibited ab initio, no seizure proceedings for forfeiture could validly be instituted; the only proper course was to order the re-exportation of the goods or their abandonment. The CTA’s order effectively permitted the entry of prohibited goods, constituting an act in excess of its jurisdiction.