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[COMMISSIONER OF CUSTOMS v. FRANCISCO PASCUAL](https://lawyerly.ph/juris/view/c33f9?user=fbGU2WFpmaitMVEVGZ2lBVW5xZ2RVdz09)
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106 Phil. 488

[ G.R. No. L-9836, November 18, 1959 ]

COMMISSIONER OF CUSTOMS, PETITIONER, VS. FRANCISCO PASCUAL, RESPONDENT.

D E C I S I O N

GUTIERREZ DAVID, J.:

This case involves  an importation of the respondent Francisco Pascual in 1954  of  301 cartons of confectionery on a "no-dollar" remittance basis, which was declared forfeited in favor of the Government by the Manila Collector of Customs for lack of a release certificate as required by Circulars Nos. 44 and 45 issued by the Central Bank of the Philippines.  As the shipment was previously released upon the filing of a surety bond, respondent Pascual was ordered to pay in cash the sum of P6,925.00, the amount covered by the bond.  The decree of forfeiture was affirmed by the Commissioner of  Customs, but  on appeal to the Court of Tax Appeals, that court nullified the decree and ordered the surety bond filed by the respondent  cancelled on the ground that  the Central Bank under its Charter and after the expiration of the Import Control Law (Rep. Act No. 650)  on June 30, 1953 had no power to regulate "no-dollar"  imports.  Contending that the Central Bank has such power, the Commissioner of Customs  filed the present petition for review.

The only question for determination is whether or not the Central Bank of the  Philipines has the power to issue Circulars Nos. 44 and 45 in so far as they regulate imports which do not involve the remittance  of dollars or foreign exchange.

In the case of Francisco Pascual  vs. Commissioner of Customs (105 Phil., 1039;  56 Off. Gaz., [47]  7169), the power of the Monetary Board to issue the aforementioned circulars and the validity thereof have been upheld.  Speaking through Mr. Justice Padilla, this Court there said:
"* * *  Even  granting that the importations in question do not require an immediate sale of foreign exchange,  their  importation into the Philippines from another country will  ultimately require the sale of such exchange.   The  currency of one  country  is not legal tender in another.  To pay for imports, traders have to avail themselves of foreign  exchange,  which is the conversion of an amount of money  or  currency of one country into  an equivalent amount of money or  currency of  another.  Every import of goods or merchandise requires an immediate or future demand for foreign exchange.

"SECTION 74. Republic Act No. 265, authorizes the Monetary Board, with the  approval of  the President, to  temporarily  suspend or restrict  sales of exchange and to  subject all transactions in gold and foreign exchange to license during an exchange crisis in order to  protect the international reserve and to give the Monetary Board, and  the Government  time  in which to  take constructive measures to  combat  such a crisis. Circular  No.  44, prohibiting the release by the Commissioner of Customs of any item of Import without  the presentation  of  a  release certificate issued by  the Central  Bank or  any authorized agent bank in a form prescribed by the Monetary Board, and Circular No. 45, requiring  'any person or entity who intends to import or receive goods from any foreign country for which no foreign exchange is required or  will be required of the banks, to apply for a  license from the Monetary Board to  authorize such import are measures taken to check the unregulated flow of  foreign  exchange from the country and are within the powers of the Monetary Board.

"Appellant's contention is that Congress has not authorized the Central  Bank to  issue  regulations governing  imports that do not require  the sale  of foreign  exchange, because according to him, it  would not have enacted into law Republic Act No. 1410.  The contention  assumes that  the importation do not require the  sale foreign  exchange, a fact which he failed to  establish.

"Appellant contends that assuming that the importations in Question require the sale of foreign exchange in violation of  Circular No.  44, yet  they may  not  be forfeited under the  said  Circular because it does not expressly  provide for the penalty of forfeiture. Circular No. 45 in part requires 'any person or entity who. intends. to import  or receive goods  from  any foreign country for which no foreign exchange  is required or will  be required  of the banks, to apply for a license from the Monetary Board to authorize such import'  Circular  No. 44  requires  the presentation of  release  certificates issued by the Central Bank or any authorized  agent bank in a  form prescribed by  the Monetary  Board for the release of import by the Bureau of Customs. Section 1363  (f) of  the Revised Administrative Code provides:

Vessels, cargo,  merchandise, and other  subjects and "things shall, under the conditions hereinbelow specified, be subject to forfeiture:

(f) Any merchandise of prohibited importation or exportation, the importation or exportation of which is effected or attempted contrary to law,  and all  other merchandise which, in  the opinion of the collector, have been used, are or  were  intended to be used as  instrument in the importation  or  exportation of  the former.

"As already staled, Circulars Nos. 44 and 45 were issued by the Monetary Board within the  scope  of its powers.  They were published in  the Official  Gazette in  June  1953. Appellant failed  to present to the Commissioner of  Customs  release certificates issued by the Central Bank or its duly  authorized  agent banks for the importations  in  question.   The  Commissioner  of Customs may, therefore, seize them and order their forfeiture under the aforequoted provisions of the Revised Administrative Code. It is true that neither of the Circulars provide for  the penalty  of forfeiture.  But since  the  importations  in  question  were  made  without the necessary import license issued  by the Monetary Board pursuant to Circular  No. 45 and the release certificates issued by the Central Bank  or its authorized agent bank in the  prescribed form pursuant to Circular No. 44, they  fall within the class  of  'merchandise or prohibited importation' or merchandise 'the importation  * * * of which is effected * * *  contrary to law'  that the Commissioner of Customs may  seize and  order forfeited.  To sustain the appellant's theory of the case  would  render nugatory the aim  and purpose of the law when  it authorizes the Central Bank to temporarily suspend or restrict the sale of foreign exchange to licensing during an exchange crisis  in order to protect the international reserve and to give the  Monetary Board  and the Government  time  in which to take   constructive  measures  to combat  such  a crisis."  (Italics supplied)
The foregoing view was reiterated in  Acting Commissioner of Customs m Estanislao Leuterio (G. R.  No. L-9142, prom. October 17, 1959) which  is on all fours with the present  case.

Wherefore, the decision of the Court of Tax Appeals complained of is reversed, and the decision of the Commissioner of Customs declaring the forfeiture of the importation in question in favor of the Government is affirmed, with costs against respondent Pascual.

Paras, C. J., Bengzon, Padilla, Montemayor, Bautista Angela, Labrador, Reyes, J. B. L., Endencia, and Barrera, JJ., concur.

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