G.R. Nos. L-20847-9; June 22, 1965
SERREE INVESTMENT COMPANY, petitioner, vs. COMMISSIONER OF CUSTOMS, respondent.

FACTS

Petitioner Serree Investment Company was the consignee of three separate shipments that arrived at the Port of Manila from Hongkong without the required Central Bank release certificates mandated by Central Bank Circulars Nos. 44 and 45. The shipments consisted of: 85 packages of melon seeds arriving on April 21, 1955; 10 baskets of fresh lichees arriving on May 14, 1955; and 17 cases of candles arriving on December 14, 1954. Due to the lack of release certificates, the shipments were seized under Section 1363(f) and Section 1250 of the Revised Administrative Code. To secure their release, petitioner filed bonds subscribed by Pioneer Insurance and Surety Corporation and Malayan Insurance Company. The Collector of Customs, after separate seizure proceedings, ordered the forfeiture of the merchandise and the payment of the bond amounts. The Commissioner of Customs affirmed these decisions and ordered the confiscation of the bonds. The Court of Tax Appeals also affirmed. Petitioner now appeals, arguing that the Central Bank lacked authority to issue Circulars Nos. 44 and 45, especially concerning no-dollar importations, and that Republic Act No. 1410 nullified these circulars, rendering the seizure proceedings void.

ISSUE

Whether the Central Bank had the legal authority to issue Circulars Nos. 44 and 45, thereby making the importation of the shipments without the required release certificates a prohibited importation subject to forfeiture under Section 1363(f) of the Revised Administrative Code.

RULING

The Supreme Court affirmed the decision of the Court of Tax Appeals. The Court held that the Central Bank had the authority under its charter, specifically Section 74 of Republic Act No. 265, to issue Circulars Nos. 44 and 45 as measures to control foreign exchange during an exchange crisis, even for importations that might not require immediate dollar remittances, as all imports ultimately affect foreign exchange reserves. The Court cited its precedent in Commissioner of Customs vs. Serree Investment Company (L-12007, May 16, 1960) and other cases, ruling that merchandise imported in violation of these circulars constitutes “merchandise of prohibited importation” under Section 1363(f) of the Revised Administrative Code and is therefore subject to forfeiture. The Court found no merit in petitioner’s claim that Republic Act No. 1410 nullified the circulars. Consequently, the forfeiture of the shipments and the bonds was upheld.