G.R. No. L-24870. January 21, 1975.
EUGENIA MANABAT VDA. DE LOPEZ and THE EQUITABLE INSURANCE & CASUALTY CO., INC., petitioners, vs. THE HON. COURT OF TAX APPEALS, and THE COMMISSIONER OF CUSTOMS, respondents.

FACTS

The case involves the forfeiture of several shipments of general merchandise consigned to petitioner Eugenia Manabat Vda. de Lopez. Although the estimated duties and sales taxes were paid, the importations were not covered by the required release certificates from the Central Bank or its authorized agent banks, in violation of Central Bank Circulars Nos. 44 and 45. Consequently, the Acting Collector of Customs ordered the seizure and forfeiture of the goods under Section 1363(f) of the Revised Administrative Code. The shipments were later released to the claimant under surety bonds filed by petitioner Equitable Insurance and Casualty Co., Inc. The Commissioner of Customs and subsequently the Court of Tax Appeals affirmed the forfeiture and held the petitioners jointly and severally liable for the bond amounts.
Petitioners raised several arguments before the Court of Tax Appeals, contending that the Central Bank lacked authority to issue Circulars Nos. 44 and 45, especially after the abolition of the Import Control Commission and since the importations involved no foreign exchange remittance. They also argued it was unfair to enforce the surety bonds after many years, as the goods were perishable and the government had suffered no loss from the duties and taxes already paid.

ISSUE

The core issue is the validity of the forfeiture decree based on the violation of Central Bank Circulars Nos. 44 and 45, and consequently, the enforceability of the surety bonds.

RULING

The Supreme Court affirmed the decision of the Court of Tax Appeals, upholding the forfeiture. The Court reiterated its settled doctrine that Central Bank Circulars Nos. 44 and 45 are valid exercises of the Monetary Board’s authority under Section 74 of Republic Act No. 265 (The Central Bank Act) to protect the country’s international reserves during an exchange crisis. The Court rejected the argument that the circulars only apply to importations involving immediate foreign exchange. It ruled that all imports ultimately require foreign exchange, as the currency of one country is not legal tender in another; thus, regulating all imports is within the Central Bank’s powers to manage the overall demand for foreign exchange.
Furthermore, the Court held that goods imported in violation of these circulars are subject to forfeiture under Section 1363(f) of the Revised Administrative Code, which authorizes the forfeiture of merchandise imported “contrary to law.” Regulations issued pursuant to customs laws, such as the Central Bank circulars, form part of that law. The Court also dismissed the claim that the bonds should not be enforced due to the lapse of time and the perishable nature of the goods, as the liability under the bond was contingent on the finality of the forfeiture decree. The forfeiture was a valid legal consequence of the violation, and the surety assumed this risk. The petition was denied, and the decision was affirmed with costs.