G.R. No. L-9836; November 18, 1959
COMMISSIONER OF CUSTOMS, petitioner, vs. FRANCISCO PASCUAL, respondent.

FACTS

In 1954, respondent Francisco Pascual imported 301 cartons of confectionery on a “no-dollar” remittance basis. The Manila Collector of Customs declared the shipment forfeited in favor of the Government for lack of a release certificate as required by Central Bank Circular Nos. 44 and 45. The shipment had been previously released upon the filing of a surety bond, and Pascual was ordered to pay the bond amount of P6,925.00 in cash. The Commissioner of Customs affirmed the forfeiture. On appeal, the Court of Tax Appeals nullified the decree of forfeiture and ordered the surety bond cancelled, ruling that the Central Bank, under its Charter and after the expiration of the Import Control Law (R.A. 650) on June 30, 1953, had no power to regulate “no-dollar” imports. The Commissioner of Customs filed this petition for review, contending that the Central Bank possesses such power.

ISSUE

Whether or not the Central Bank of the Philippines has the power to issue Circular Nos. 44 and 45 insofar as they regulate imports which do not involve the remittance of dollars or foreign exchange (“no-dollar” imports).

RULING

Yes. The Supreme Court reversed the decision of the Court of Tax Appeals and affirmed the decision of the Commissioner of Customs declaring the forfeiture.
The Court held that the Monetary Board’s power to issue Circular Nos. 44 and 45, and their validity, had been previously upheld in Francisco Pascual vs. Commissioner of Customs (105 Phil., 1039). The Court reiterated that even imports that do not require an immediate sale of foreign exchange will ultimately require it, as the currency of one country is not legal tender in another. Every import of goods requires an immediate or future demand for foreign exchange. Circular Nos. 44 and 45, which require a release certificate and an import license for such transactions, are measures taken to check the unregulated flow of foreign exchange and are within the powers of the Monetary Board under Section 74 of Republic Act No. 265 (The Central Bank Act) to temporarily suspend or restrict sales of exchange during a crisis to protect the international reserve.
The Court further ruled that the importation, made without the necessary license and release certificates, constituted “merchandise of prohibited importation” or merchandise whose importation was effected “contrary to law” under Section 1363(f) of the Revised Administrative Code. Therefore, the Commissioner of Customs was authorized to seize and order its forfeiture, even though the circulars themselves did not expressly provide for the penalty of forfeiture. To hold otherwise would render nugatory the law’s purpose of authorizing the Central Bank to combat an exchange crisis. This ruling was consistent with the earlier case of Acting Commissioner of Customs vs. Estanislao Leuterio (G.R. No. L-9142, October 17, 1959).