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    CIR Vs AGFHA

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    Cara Lucille Diaz Ros
    This case involves a shipment of textiles that arrived at a port in Manila but was seized by Customs because they claimed the owner was fictitious. AGFHA later intervened claiming to be the true owner. The shipment disappeared while in Customs' custody. The court held that: 1) AGFHA is entitled to recover the value of the lost shipment based on the exchange rate at the time of actual payment, not importation. 2) Customs cannot invoke sovereign immunity to avoid liability, as allowing that would perpetrate injustice against AGFHA, especially since the goods disappeared due to Customs' negligence while under their custody. The state cannot take undue advantage of legitimate claims against

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    CIR Vs AGFHA

    Uploaded by

    Cara Lucille Diaz Ros
    102 views3 pages
    This case involves a shipment of textiles that arrived at a port in Manila but was seized by Customs because they claimed the owner was fictitious. AGFHA later intervened claiming to be the true owner. The shipment disappeared while in Customs' custody. The court held that: 1) AGFHA is entitled to recover the value of the lost shipment based on the exchange rate at the time of actual payment, not importation. 2) Customs cannot invoke sovereign immunity to avoid liability, as allowing that would perpetrate injustice against AGFHA, especially since the goods disappeared due to Customs' negligence while under their custody. The state cannot take undue advantage of legitimate claims against

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    Customs and Tariff

    Original Title

    1. CIR vs AGFHA

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    This case involves a shipment of textiles that arrived at a port in Manila but was seized by Customs because they claimed the owner was fictitious. AGFHA later intervened claiming to be the true owner. The shipment disappeared while in Customs' custody. The court held that: 1) AGFHA is entitled to recover the value of the lost shipment based on the exchange rate at the time of actual payment, not importation. 2) Customs cannot invoke sovereign immunity to avoid liability, as allowing that would perpetrate injustice against AGFHA, especially since the goods disappeared due to Customs' negligence while under their custody. The state cannot take undue advantage of legitimate claims against

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    102 views3 pages

    CIR Vs AGFHA

    Uploaded by

    Cara Lucille Diaz Ros
    This case involves a shipment of textiles that arrived at a port in Manila but was seized by Customs because they claimed the owner was fictitious. AGFHA later intervened claiming to be the true owner. The shipment disappeared while in Customs' custody. The court held that: 1) AGFHA is entitled to recover the value of the lost shipment based on the exchange rate at the time of actual payment, not importation. 2) Customs cannot invoke sovereign immunity to avoid liability, as allowing that would perpetrate injustice against AGFHA, especially since the goods disappeared due to Customs' negligence while under their custody. The state cannot take undue advantage of legitimate claims against

    Copyright:

    © All Rights Reserved
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    of 3

    Commissioner of Customs vs AGFHA Incorporated

    GR 187425
    March 28, 2011

    FACTS

    A shipment containing bales of textile grey cloth arrived at Manila International


    Container Port.

    Customs held the subject shipment because its owner/consignee was allegedly
    fictitious.

    Later, AGFHA intervened claiming it was the owner and actual consignee of the
    shipment

    After the seizure and forfeiture proceedings, Collector of Customs ordered the
    forfeiture of the shipment in favor of the government affirmed by the Commissioner
    of Customs

    CTA 2nd Division revered the Customs decision and ordered immediate release of the
    shipment to AGFHA

    Customs filed an appeal before Court of Appeals so CTA 2nd Division held in abeyance
    its action on the motion for execution

    Court of Appeals denied the appeal of Customs hence latter elevated it to the
    Supreme Court however the SC dismissed the case and the judgment became final

    Since the SC judgment became final and executory, CTA 2nd Division issued a Writ of
    Execution directing Customs to effect the immediate release of the shipment; BUT the
    WRIT WAS RETURNED UNSATISFIED

    Customs explained that despite diligent efforts to obtain the necessary information
    and the length of time that had elapsed since the shipment arrived at the BOC,
    Customs could no longer determine the status, whereabouts and disposition of
    said shipment (nagdanghag lang ni ang Customs)

    CTA 2nd Division adjudged Customs liable to AGFHA for the value of the shipment
    (US$160,348.08) which may be paid in Philippine currency, computed at the exchange
    rate prevailing AT THE TIME OF ACTUAL PAYMENT
    Customs filed a Motion for Partial Reconsideration AGFHA is only entitled to recover
    the value of the lost shipment BASED on its actual acquisition cost AT THE TIME OF
    IMPORTATION

    CTA 2nd Division ruled that in favor of AGFHA

    Arguments of Customs
    - AGFHA is entitled to recover the value of the lost shipment based on its acquisition
    cost at the time of importation

    - The action has been transformed into a suit against the State therefore satisfaction of
    the claim must be pursued in accordance with rule laid down in PD 1445 to recover,
    AGFHA would have to filed a money claim with COA

    - EO 688 mandates that the unclaimed proceeds from the sale of forfeited goods by the
    Bureau of Customs (BOC) will be considered as customs receipts to be deposited with
    the Bureau of Treasury and shall form part of the general funds of the government.
    Any disposition of the said unclaimed proceeds from the sale of forfeited goods will
    be violative of the Constitution, which provides that "No money shall be paid out of
    the Treasury except in pursuance of an appropriation made by law."

    Arguments of AGFHA
    - The applicable peso-dollar exchange rate should be the one prevailing at the time of
    actual payment in order to preserve the real value of the subject shipment to the date
    of its payment.

    - Doctrine of governmental immunity cannot serve as an instrument to perpetrate


    injustice against a citizen

    RULING

    Topic: LIABILITY FOR LOST SHIPMENT Tariff and Customs Topic

    1. WON AGFHA is entitled to recover the value of its lost shipment based on the acquisition
    cost AT THE TIME OF ACTUAL PAYMENT or AT THE TIME OF IMPORTATION?

    Court held that AGFHA is entitled to recover the value of its lost shipment based on
    the acquisition cost AT THE TIME OF PAYMENT - Commissioner of Customs should
    pay AGFHA the value of the subject lost shipment in the amount of
    US$160,348.08 which liability may be paid in Philippine currency computed at
    the exchange rate prevailing at the time of the actual payment.
    The rate of exchange for the conversion in the peso equivalent should be the PREVAILING
    RATE AT THE TIME OF PAYMENT

    The court cited the case of Zagala vs Jimenez, interpreting the provisions of RA 529
    stipulations on the satisfaction of obligations arising in foreign currency are void. Payments
    of monetary obligations, subject to certain exceptions, shall be discharged in the currency
    which is the legal tender in the Philippines.

    Since RA 529 does not provide for the rate of exchange for the payment of foreign currency
    obligations incurred after its enactment, Court held in a number of cases that RATE OF
    EXCHANGE FOR THE CONVERSION IN THE PESO EQUIVALENT SHOULD BE THE PREVAILING
    RATE AT THE TIME OF PAYMENT

    Likewise, in the case of Republic of the Philippines represented by the Commissioner of


    Customs v. UNIMEX Micro-Electronics which involved the seizure and detention of a
    shipment of computer game items which disappeared while in the custody of the Bureau of
    Customs, the Court upheld the decision of the CA holding that petitioner's liability may be
    paid in Philippine currency, computed at the exchange rate prevailing at the time of actual
    payment

    Topic: State Immunity Doctrine; Exception

    2. Can the Bureau of Customs invoke State Immunity to evade its liability?

    NO. Commissioner cannot escape liability for the lost shipment of goods. Doctrine of
    State Immunity cannot be used to perpetrate injustice against an ordinary citizen.

    Court cannot turn a blind eye to BOC's ineptitude and gross


    As previously discussed, the
    negligence in the safekeeping of respondent's goods. We are not likewise unaware of
    its lackadaisical attitude in failing to provide a cogent explanation on the goods'
    disappearance, considering that they were in its custody and that they were in fact
    the subject of litigation. The situation does not allow us to reject respondent's claim on the mere
    invocation of the doctrine of state immunity. Succinctly, the doctrine must be fairly observed and the
    State should not avail itself of this prerogative to take undue advantage of parties that may have
    legitimate claims against it.

    this Court, as the


    In Department of Health v. C.V. Canchela & Associates, we enunciated that
    staunch guardian of the people's rights and welfare, cannot sanction an
    injustice so patent in its face, and allow itself to be an instrument in the
    perpetration thereof.

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