G.R. No. L-31733 September 20, 1985
COMMISSIONER OF CUSTOMS, petitioner, vs. COURT OF TAX APPEALS and JOSE PASCUAL, respondents.

FACTS

Private respondent Jose Pascual is the registered owner of the motor boat M/B “Maria Victoria-P,” licensed for coastwise trade. On December 16, 1963, the vessel was apprehended by the Philippine Navy off the coast of Naic, Cavite, carrying a large cargo of untaxed “blue seal” cigarettes. Seizure proceedings were instituted against both the cargo and the vessel. The cigarettes were forfeited in favor of the government due to a lack of claimant. In the separate proceeding for the vessel’s forfeiture, Pascual and his captain, Jose Joloc, claimed the vessel had gone to Mindoro for fishing, its nets were destroyed, and it was subsequently commandeered at gunpoint by armed individuals to load the smuggled cigarettes. Pascual also asserted he reported the vessel as missing to the Philippine Navy.
The Collector of Customs ordered the forfeiture of the vessel, ruling the captain acted as an agent, binding the owner. The Commissioner of Customs affirmed this decision. On appeal, the Court of Tax Appeals modified the ruling, holding that while the vessel was used in illegal importation under the Tariff and Customs Code, the penalty of forfeiture was excessive. The CTA considered that Pascual had taken steps to prevent illegal use by reporting the vessel missing and ordered him to pay a fine of P5,000 instead.

ISSUE

Whether the motor boat M/B “Maria Victoria-P” is subject to forfeiture under Section 2530 of the Tariff and Customs Code.

RULING

The Supreme Court granted the petition and reinstated the forfeiture. The legal logic is anchored on the in rem nature of forfeiture proceedings under customs laws. The Court emphasized that liability attaches to the vessel itself (the res) used in the unlawful importation, irrespective of the owner’s personal knowledge or innocence. Applying Section 2530(a) and (b) of the Tariff and Customs Code, the vessel, engaged in coastwise trade and found carrying contraband foreign cigarettes in commercial quantities, was clearly subject to forfeiture. The Court cited established doctrine, notably United States vs. Steamship “Rubi”, which holds that the vessel committing the offense is treated as the offender, and the acts of the master and crew bind the owner’s interest to suppress the violation effectively.
The Court found the owner’s defenses unconvincing. The claim of destroyed nets and a forced loading at gunpoint was deemed improbable and unsupported by evidence, such as weather reports. The delay in reporting the vessel missing and the inconsistencies in the narrative led the Court to conclude the vessel was intentionally used for smuggling, not fishing. Therefore, the mitigating circumstance recognized by the CTA was erroneous. Forfeiture is the statutory penalty mandated by the clear provisions of the Code when a vessel is used in smuggling, and the owner’s alleged lack of participation or preventive reporting does not exempt the vessel from this consequence. The decision of the Court of Tax Appeals was set aside, and the forfeiture of the M/B “Maria Victoria-P” in favor of the government was ordered.