G.R. No. L-22259 January 19, 1966
FELIPE YUPANGCO AND SONS, INC., petitioner, vs. COMMISSIONER OF CUSTOMS, respondent.

FACTS

In December 1954, petitioner Felipe Yupangco & Sons, Inc. imported twenty-three boxes declared as “phonograph parts and materials” under Central Bank Commodity Code 890102 NEC, as reflected in the letter of credit, consular invoice, bill of lading, and Central Bank release certificate. However, the commercial invoice described the articles as “6 sets of Parts and Materials for Wurlitzer Phonographs Model 1700F” and “6 1700F Deluxe Phonographs (Unassembled),” listing specific assembled components (record changer, amplifier, speaker, coin mechanism, cabinet trim parts) and a “cabinet knocked down, finished & rubbed,” with a unit price of $735.00 per phonograph. Customs examiners found the shipment to consist of six complete Wurlitzer coin-operated phonograph machines in knocked-down condition, classifiable under Code 710660 UI. The goods were seized for lacking the proper Central Bank release certificate, though released to the importer under a surety bond after payment of duties and taxes. The Collector of Customs declared the shipment forfeited for violating Central Bank Circulars 44 and 45 in relation to Sections 1250 and 1363(f) of the Revised Administrative Code, a decision affirmed by the Commissioner of Customs and the Court of Tax Appeals.

ISSUE

1. Whether the importation should be classified as “phonograph parts and materials” (Code 890102 NEC) or as “coin-operated phonograph machines” (Code 710660 UI).
2. If classified as coin-operated phonograph machines, whether the importation is subject to forfeiture for violating Central Bank Circulars 44 and 45.
3. Whether Central Bank Circular 133 repealed Circulars 44 and 45, thereby abrogating the commodity code classification.

RULING

1. The Supreme Court affirmed the factual finding of the Court of Tax Appeals that the importation consisted of six complete coin-operated phonograph machines, not merely parts. The Court held that such factual findings, reasonably supported by evidence (including the Customs examiner’s report, commercial invoice, and packing list), are binding. The commercial invoice’s unit price of $735.00 per phonograph indicated the importation of complete phonographs, not parts. Following the doctrine in Bombay Department Store vs. Commissioner of Customs, complete articles in knocked-down condition are dutiable as entireties; thus, the knocked-down phonographs are properly classified as complete phonographs under Code 710660 UI.
2. Yes, the importation is subject to forfeiture. The Central Bank release certificate presented covered only phonograph parts and materials under Code 890102 NEC, not the actual importation of coin-operated phonograph machines under Code 710660 UI. This discrepancy violates Central Bank Circulars 44 and 45, warranting forfeiture under Sections 1250 and 1363(f) of the Revised Administrative Code.
3. No, Central Bank Circular 133 did not repeal Circulars 44 and 45 or abrogate the commodity code classification. Circular 133 explicitly uses the same commodity code classification to determine the required special time deposit for letters of credit, thereby affirming its continued applicability.
The decision of the Court of Tax Appeals was affirmed, with costs against the petitioner.