judges may properly take and act on without proof because they already know them.

Under the Rules of Court, judicial notice may either be mandatory or discretionary.

Same; Same; Same; As a general rule, courts are not authorized to take judicial
notice of the contents of the records of other cases, even when such cases have been
tried or are pending in the same court, and notwithstanding the fact that both cases
may have been tried or are actually pending before the same judge.—It has been held
that the doctrine of judicial notice rests on the wisdom and discretion of the courts;
however, the power to take judicial notice is to be exercised by the courts with caution;
SPECIAL THIRD DIVISION care must be taken that the requisite notoriety exists; and every reasonable doubt upon
the subject should be promptly resolved in the negative. As a general rule, courts are
December 5, 2016 not authorized to take judicial notice of the contents of the records of other cases, even
when such cases have been tried or are pending in the same court, and notwithstanding
the fact that both cases may have been tried or are actually pending before the same
G.R. No. 195876
judge. However, this rule is subject to the exception that in the absence of objection
PILIPINAS SHELL PETROLEUM CORPORATION, Petitioner
and as a matter of convenience to all parties, a court may properly treat all or any part
vs.
of the original record of the case filed in its archives as read into the records of a case
COMMISSIONER OF CUSTOMS, Respondent
pending before it, when with the knowledge of the opposing party, reference is made
to it, by name and number or in some other manner by which it is sufficiently
Same; Evidence; Formal Offer of Evidence; For evidence to be considered by the designated. Thus, for said exception to apply, the party concerned must be given an
court, the same must be formally offered. Corollarily, the mere fact that a particular opportunity to object before the court could take judicial notice of any record
document is identified and marked as an exhibit does not mean that it has already pertaining to other cases pending before it. Pilipinas Shell Petroleum
been offered as part of the evidence of a party.—It is clear that for evidence to be Corporation<br/>vs. Commissioner of Customs, 812 SCRA 1, G.R. No. 195876
considered by the court, the same must be formally offered. Corollarily, the mere fact December 5, 2016
that a particular document is identified and marked as an exhibit does not mean that it
has already been offered as part of the evidence of a party. In Interpacific Transit, Inc.
DECISION
v. Aviles, 186 SCRA 385 (1990). We had the occasion to make a distinction between
identification of documentary evidence and its formal offer as an exhibit. We said that
the first is done in the course of the trial and is accompanied by the marking of the PEREZ, J.:
evidence as an exhibit while the second is done only when the party rests its case and
not before. A party, therefore, may opt to formally offer his evidence if he believes Before the Court is a Petition for Review on Certiorari seeking to reverse and set aside
that it will advance his cause or not to do so at all. In the event he chooses to do the the 13 May 2010 Decision1 and the 22 February 2011 Resolution2 rendered by the
latter, the trial court is not authorized by the Rules to consider the same. Court of Tax Appeals (CTA) Former En Banc in C.T.A. EB No. 472 which dismissed
petitioner's petition, and accordingly affirmed with modification as to the additional
Same; Same; Same; Evidence not formally offered during the trial cannot be used imposition of legal interest the 19 June 2008 Decision3 of the CTA Former First
for or against a party-litigant by the trial court in deciding the merits of the case.— Division (CTA in Division) ordering petitioner to pay the amount of P936,899,883.90,
Clearly therefore, evidence not formally offered during the trial cannot be used for or representing the total dutiable value of its 1996 crude oil importation, which was
against a party-litigant by the trial court in deciding the merits of the case. Neither may considered as abandoned in favor of the government by operation of law.
it be taken into account on appeal. Since the rule on formal offer of evidence is not a
trivial matter, failure to make a formal offer within a considerable period of time shall The Facts
be deemed a waiver to submit it. Consequently, any evidence that has not been offered
and admitted thereafter shall be excluded and rejected. The factual antecedents of the case are as follows:

Same; Same; Judicial Notice; Words and Phrases; Judicial notice is the cognizance On 16 April 1996, Republic Act (R.A.) No. 8180, 4 otherwise known as the
of certain facts which judges may properly take and act on without proof because "Downstream Oil Industry Deregulation Act of 1996" took effect. It provides, among
they already know them.—Judicial notice is the cognizance of certain facts which others, for the reduction of the tariff duty on imported crude oil from ten percent (10%)
to three percent (3%). The particular provision of which is hereunder quoted as importation had been irregularly filed and accepted beyond the thirty-day (30) period
follows: prescribed by law. Petitioner protested the aforesaid demand letter on 7 November
200110 for lack of factual and legal basis, and on the ground of prescription.
Section 5. Liberalization of Downstream Oil Industry and Tariff Treatment. - x x x
Seeking clarification as to what course of action the BOC is taking, and reiterating its
b) Any law to the contrary notwithstanding and starting with the effectivity of this Act, position that the respondent's demand letters dated 29 October 2001 and 27 July 2000
tariff shall be imposed and collected on imported crude oil at the rate of three percent have no legal basis, petitioner sent a letter to the Director of Legal Service of the BOC
(3%) and imported refined petroleum products at the rate of seven percent (7%), except on 3 December 2001 for said purpose.
fuel oil and LPG, the rate for which shall be the same as that for imported crude
oil Provided, That beginning on January 1, 2004 the tariff rate on imported crude oil On 28 December 2001,11 BOC Deputy Commissioner Gil A. Valera sent petitioner a
and refined petroleum products shall be the same: Provided, further, That this letter which stated that the latter had not responded to the respondent's 29 October
provision may be amended only by an Act of Congress. 2001 demand letter and demanded payment of the amount of P936,899,885.90, under
threat to hold delivery of petitioner's subsequent shipments, pursuant to Section
Prior to its effectivity, petitioner's importation of 1,979,674.85 U.S. barrels of Arab 150812 of the Tariff and Customs Code of the Philippines (TCCP), 13 and to file a civil
Light Crude Oil, thru the Ex MT Lanistels, arrived on 7 April 1996 nine (9) days earlier complaint against petitioner.
than the effectivity of the liberalization provision. Within a period of three days
thereafter, or specifically on 10 April 1996, said shipment was unloaded from the In reply thereto, petitioner sent a letter dated 4 January 2002 14 to the BOC Deputy
carrying vessels docked at a wharf owned and operated by petitioner, to its oil tanks Commissioner and expressed that it had already responded to the aforesaid demand
located at Batangas City. letter through the letters dated 7 November 2001 and 3 December 2001 sent to
respondent and to the Director of Legal Service of the BOC, respectively.
Subsequently, petitioner filed the Import Entry and Internal Revenue Declaration and
paid the import duty of said shipment in the amount of P11,231,081.00 on 23 May On 11 April 2002, the BOC filed a civil case for collection of sum of money against
1996. petitioner, together with Caltex Philippines, Inc. as co-party therein, docketed as Civil
Case No. 02103239, before Branch XXV, Regional Trial Court (RTC), of the City of
More than four (4) years later or on 1 August 2000, petitioner received a demand Manila.15
letter5 dated 27 July 2000 from the Bureau of Customs (BOC), through the District
Collector of Batangas, assessing it to pay the deficiency customs duties in the amount Consequently, on 27 May 2002, petitioner filed with the Court of Tax Appeals (CTA)
of P120,162,991.00 due from the aforementioned crude oil importation, representing a Petition for Review, raffled to the Former First Division (CTA in Division), and
the difference between the amount allegedly due (at the old rate often percent (10%) docketed as C.T.A. Case No. 6485, upon consideration that the civil complaint filed
or before the effectivity of R.A. No. 8180) and the actual amount of duties paid by in the RTC of Manila was the final decision of the BOC on its protest.16
petitioner (on the rate of 3%).
Respondent filed on 2 August 2002 a motion to dismiss the said petition raising lack
Petitioner protested the assessment on 14 August 2000,6 to which the District Collector of jurisdiction and failure to state a cause of action as its grounds, which the CTA in
of the BOC replied on 4 September 2000 7 reiterating his demand for the payment of Division denied in the Resolution dated 17 January 2003. Likewise, respondent's
said deficiency customs duties. motion for reconsideration filed on 14 February 2003 was denied on its 16 June 2003
Resolution.17
On 11 October 2000,8 petitioner appealed the 4 September 2000 decision of the
District Collector of the BOC to the respondent and requested for the cancellation of Subsequently, respondent, through the Office of the Solicitor General, filed on 13
the assessment for the same customs duties. August 2003 before the Court of Appeals (CA) a Petition for Certiorari and Prohibition
with Prayer for the Issuance of a Temporary Restraining Order and Writ of Preliminary
However, on 29 October 2001,9 five years after petitioner paid the allegedly deficient Injunction, docketed as CA-G.R. SP No. 78563, praying for the reversal and setting
import duty' it received by telefax from the respondent a demand letter for the payment aside of the CTA in Division's Resolutions dated 17 January 2003 and 16 June 2003.18
of the amount of P936,899,885.90, representing the dutiable value of its 1996 crude
oil importation which had been allegedly abandoned in favor of the government by
operation of law. Respondent stated that Import Entry No. 683-96 covering the subject
In the interim, respondent filed his Answer to the petition in C.T.A. Case No. 6485 on case of Chevron Phils., Inc. v. Commissioner of the Bureau of Customs,29 as the
20 October 2003 which reiterated the lack of jurisdiction and failure to state a cause jurisprudential foundation therein.30
of action. Thereafter, trial on the merits ensued.
Aggrieved, petitioner appealed to the CTA Former En Banc by filing a Petition for
On 15 February 2007, the Former First Division of the CA dismissed respondent's Review on 31 March 2009, under Section 3(b), Rule 8 of the 2005 Revised Rules of
petition in CA-G.R. SP No. 78563. Similarly, respondent's motion for reconsideration the CTA, as amended, in relation to Rule 43 of the 1997 Rules of Civil Procedure, as
of the 15 February 2007 Decision was denied in its 24 July 2007 Resolution. 19 amended, docketed as C.T.A. EB No. 472.

The Ruling of the CTA in Division The Ruling of the CTA Former En Banc

In a Decision dated 19 June 200820, the CTA in Division ruled to dismiss the Petition In the 13 May 2010 Decision31, the CTA Former En Banc affirmed the CTA in
for Review on C.T.A. Case No. 6485 for lack of merit and accordingly ordered Division's ruling pertaining to the implied abandonment caused by petitioner's failure
petitioner to pay the entire amount of P936,899,883.90 21 representing the total dutiable to file the Import Entry and Internal Revenue Declaration within the 30-day period,
value of the subject shipment of Arab Light Crude Oil on the ground of implied and transfer of ownership by operation of law to the government of the subject
abandonment pursuant to Sections 1801 and 1802 of the TCCP. shipment in accordance with Sections 1801 and 1802, in relation to Section 13.01, of
the TCCP, and with the pronouncements made in the Chevron case. Notably however,
Relevant thereto, the CTA in Division made the following factual and legal findings: the ponente of the assailed Decision declared therein that the existence of fraud is not
(a) that petitioner filed the specified entry form (Import Entry and Internal Revenue controlling in the case at bench and would not actually affect petitioner's liability to
Declaration) beyond the 30-day period prescribed under Section 1301 of the pay the dutiable value of its imported crude oil, pertinent portion of which are quoted
TCCP;22 (b) that for failure to file within the aforesaid 30-day period, the subject hereunder for ready reference, to wit:
importation was deemed abandoned in favor of the government in accordance with
Sections 1801 and 1802 of the TCCP;23 (c) that petitioner's excuses in the delay of As regards the issue on the existence of fraud, it should be emphasized that fraud
filing its Import Entry and Internal Revenue Declaration were implausible 24; (d) that is not controlling in this case. Even in the absence of fraud, petitioner Shell is still
since the government became the owner of the subject shipment by operation of law, liable for the payment of the dutiable value by operation of law. The liability of
petitioner has no right to withdraw the same and should be held liable to pay for the petitioner Shell for the payment of the dutiable value of its imported crude oil arose
total dutiable value of said shipment computed at the time the importation was from the moment it appropriated for itself the said importation, which were already a
withdrawn from the carrying vessel pursuant to Section 204 of the TCCP;25 (e) that property of the government by operation of law. Absence of fraud in this case would
there was fraud in the present case considering that "the District Collector, in not exclude petitioner Shell from the coverage of Sections 1801 and 1802 of
conspiracy with the officials of Caltex and Shell acted without authority or [with] the TCCP.32 (Emphasis supplied)
abused (sic) [of] authority by giving undue benefits to the importers by allowing the
processing, payment and subsequent release of the shipments to the damage and Furthermore, citing the case of Eastern Shipping Lines, Inc. v. Court of Appeals and
prejudice of the government who, under the law is already the owner of the shipments Mercantile Insurance Company, Inc.,33 the CTA Former En Banc imposed an
x x x;" thus, prescription under Section 1603 of the TCCP does not apply herein;26 and additional legal interest of six percent (6%) per annum on the total dutiable value of
(f) that the findings of facts of administrative bodies charged with their specific field P936,899,883.90, accruing from the date said decision was promulgated until its
of expertise, are afforded great weight by the courts; and in the absence of substantial finality; and afterwards, an interest rate of twelve percent (12%) per annum shall be
showing that such findings are made from an erroneous estimation of the evidence applied until its full satisfaction.34
presented, they are conclusive, and in the interest of stability of the government
structure, should not be disturbed.27
Not satisfied, petitioner filed a motion for reconsideration thereof which was denied
in the assailed Resolution dated 22 February 2011.
On 24 February 2009, the CTA in Division denied petitioner's Motion for
Reconsideration for lack of merit citing Section 5(b),28 Rule 6 of the 2005 Revised
Consequently, this Petition for Review wherein petitioner seeks the reversal and
Rules of the CTA, as sole legal basis in considering the Memorandum dated 2 February
setting aside of the aforementioned Decision and Resolution dated 13 May 2010 and
2001 issued by the Customs Intelligence & Investigation Service, Investigation &
22 February 2011, respectively, and accordingly prays that a decision be rendered
Prosecution Division (CIIS-IPD) of the BOC as evidence to establish fraud, and the finding: (a) that petitioner has already paid the proper duties on its importation and
therefore not liable anymore; and (b) that petitioner is not deemed to have abandoned
its subject shipment; or, in the alternative, (c) that respondent's attempt to collect is C. PETITIONER PSPC'S ADVANCE FILING OF ITS IED WHICH,
devoid of any legal and factual basis considering that the right to collect against BY LAW, ALREADY CONSTITUTES A VALID AND
petitioner relating to its subject shipment has already prescribed. EFFECTIVE IMPORT ENTRY FORM, AND ITS CLEAR
ACTUATIONS SHOWED AN INTENTION NOT TO
In support of its petition, petitioner posits the following assigned errors: ABANDON THE SUBJECT SHIPMENT ESPECIALLY SINCE
IT HAD ALREADY FULLY PAID THE TARIFF DUTY DUE ON
THE SHIPMENT IN ADVANCE.
I
D. RESPONDENT COMMISSIONER DID NOT CONSIDER
THE CTA FORMER EN BANC ERRED WHEN IT HELD IN THE QUESTIONED PETITIONER PSPC'S REASONABLE AND JUSTIFIABLE
DECISION THAT PETITIONER PSPC IS DEEMED TO HAVE IMPLIEDLY REASONS FOR THE SLIGHT DELAY IN FILING ITS IEIRD.
ABANDONED THE SUBJECT SHIPMENT AND, THUS, IS LIABLE FOR THE
ENTIRE VALUE OF THE SUBJECT SHIPMENT, PLUS INTEREST, DESPITE E. TO SUSTAIN THE CTA FORMER EN BANC IS TO TREAT
THE FACT THAT SUCH CLAIM, IF ANY AT ALL, HAS ALREADY
PETITIONER PSPC WORSE THAN SMUGGLERS AND
PRESCRIBED, ESPECIALLY BECAUSE PETITIONER PSPC DID NOT
COMMON CRIMINALS, AS TO DEPRIVE IT OF ITS RIGHT TO
COMMIT ANY FRAUD.
EQUAL PROTECTION OF THE LAW.

II IV

THE CTA FORMER EN BANC ERRED WHEN IT FAILED TO RECOGNIZE

THE CTA [FORMER] EN BANC ERRED IN FAILING TO RECOGNIZE THAT
THAT THE GOVERNMENT DID NOT SUFFER ANY DAMAGE OR REVENUE
THE IMPOSITION OF A NINE HUNDRED THIRTY-SIX MILLION EIGHT
LOSS SINCE ALL TARIFF DUTIES IMPOSABLE ON THE SUBJECT HUNDRED EIGHTY-NINE THOUSAND EIGHT HUNDRED EIGHTY-THREE
SHIPMENT WERE ALREADY PAID TO THE GOVERNMENT, SUCH THAT TO AND 90/100 PESOS (P936,889,883.90) PENALTY BY REASON OF IMPLIED
ALLOW RESPONDENT COMMISSIONER TO RECOVER THE ENTIRE VALUE
ABANDONMENT AGAINST PETITIONER PSPC, DESPITE ITS FULL
OF THE SUBJECT SHIPMENT WOULD BE CONFISCATORY AND AMOUNT
PAYMENT OF THE TARIFF DUTY DUE ON THE SHIPMENT AND THE
TO UNJUST ENRICHMENT ON THE PART OF THE GOVERNMENT.
JUSTIFIABLE SLIGHT DELAY IN THE LATTER'S SUBMISSION OF ITS IEIRD,
IS IN VIOLATION OF INTERNATIONAL LAW UNDER THE REVISED KYOTO
III CONVENTION.

THE CTA FORMER EN BANC ERRED WHEN IT CONSIDERED THE SUBJECT V

SHIPMENT AS IMPLIEDLY ABANDONED, DEPRIVING PETITIONER PSPC
OF ITS RIGHT TO DUE PROCESS AND EQUAL PROTECTION OF THE LAW, THE CTA [FORMER] EN BANC ERRED IN FAILING TO RECOGNIZE THAT
CONSIDERING:
THERE IS NO STATUTORY PROVISION EMPOWERING RESPONDENT
COMMISSIONER TO SUBSTITUTE ITS CLAIMS FOR THE ABANDONED
A. RESPONDENT COMMISSIONER DID NOT OBSERVE THE GOODS WITH THE VALUE THEREOF.
DUE NOTICE REQUIREMENT UNDER SECTION 1801 OF
THE TCCP OR COMPLIED WITH THE RULES THAT BOC VI
HAD PROMULGATED, WHICH DUE NOTICE IS
MANDATORY IN THE ABSENCE OF FRAUD AS HELD IN
THE CHEVRON CASE. THE CTA [FORMER] EN BANC GROSSLY MISAPPRECIATED THE FACTS
AND MISAPPLIED THE RULING OF THE HONORABLE COURT IN
B. THE DUE NOTICE REQUIRED UNDER SECTION 1801 OF THE CHEVRON CASE WHEN IT HELD THAT PRESCRIPTION IS NOT A
THE TCCP ACTUALLY REFERS TO THE NOTICE TO FILE DEFENSE AND THAT THE NOTICE REQUIREMENT UNDER SECTION 1801
ENTRY FOR IMPORTED ARTICLES AND NOT THE OF THE TCCP AND THE BOC'S OWN RULES AND REGULATIONS DO NOT
ARRIVAL THEREOF. APPLY EVEN IN THE ABSENCE OF FRAUD. QUITE THE CONTRARY,
THE CHEVRON CASE CLEARLY RECOGNIZED THAT THE PRESCRIPTIVE
PERIOD OF THE FINALITY OF THE LIQUIDATION UNDER SECTION 1603 OF facto owned by the government arising from a mere delay in the submission of the
THE TCCP IS A DEFENSE IN THE ABSENCE OF FRAUD AND THE NOTICE Import Entry and Internal Revenue Declaration, such as in the present case. In other
REQUIREMENT WAS SET ASIDE DUE TO THE FINDING OF FRAUD words, petitioner is convinced that the provisions of Sections 1801 and 1802 cannot
AGAINST CHEVRON. MOREOVER, UNLIKE IN CHEVRON CASE WHERE be applied blindly which may cause goods to be impliedly abandoned in favor of the
THE HONORABLE COURT FOUND CHEVRON TO HAVE BENEFITED FROM government, without even recognizing the peculiar circumstances of the case and
ITS DELAY AND WAS GUILTY OF FRAUD, THE without allowing the importer (petitioner herein) to provide justifications for the delay
QUESTIONED DECISION AND RESOLUTION BOTH DID NOT FIND FRAUD in the submission of its Import Entry and Internal Revenue Declaration. Allegedly,
ON THE PART OF PETITIONER PRPC.35 both notices to the importer to file entry and for its failure to file an entry within the
non-extendible period of 30 days are essential before a shipment can be considered
Petitioner asseverates that: (a) in the absence of fraud, the right of respondent to claim impliedly abandoned. Otherwise, to do so would constitute violation of the basic
against petitioner, assuming there is any, has already prescribed since an action substantial constitutional rights of petitioner.
involving payment of customs duties demanded after a period of one (1) year from the
date of final payment of duties shall not succeed, relying on Section 1603 of the TCCP; Petitioner explains that, in issuing Customs Administrative Order (CAO) No. 5-93
(b) the alleged Memorandum dated 2 February 2001 issued by the Investigation and dated 1 September 1993 and Customs Memorandum Order (CMO) No. 15-94 dated
Prosecution Division (IPD) of the BOC, which served as the court a quo's basis in 29 April 1994, respondent even recognized the significance of the due notice
finding fraud on the part of petitioner, was never presented, authenticated, marked, requirement before any goods may be deemed impliedly abandoned articles. Such
identified, nor formally offered in evidence; hence, inadmissible and cannot be the notice purportedly refers to notice to file entry, and not notice of arrival as mistakenly
basis of any finding of fraud; (c) even if the Memorandum dated 2 February 2001 is interpreted by the CTA Former En Banc. Thus, in the absence of such notice in the
legally admitted in evidence, it still does not constitute clear and convincing proof to present case, there could have been no implied abandonment in favor of the
establish any fraud on the part of petitioner since, unlike in the Chevron case, it was government of the said imported crude oil by petitioner pursuant to Section 1801 of
entitled to avail of the reduced three percent (3%) rate under R.A. No. 8180, which the TCCP.
was already in effect as early as 16 April 1996; thus, petitioner did not gain any undue
advantage or benefit from its justifiable delay in filing the Import Entry and Internal Lastly, petitioner believes that affirmance of the ruling a quo, would be tantamount to
Revenue Declaration within the 30-day mandatory period; and (d) the evidence on a clear violation of international laws, i.e. the Revised Kyoto Convention, which
record and the acts of petitioner [filing of Import Entry Declaration (JED) and paying generally prohibit the imposition of substantial penalties for errors when there is no
advance duties] disclose honest and good faith on its part showing clear absence of fraud or gross negligence on the part of an importer. Consequently, such current and
any fraudulent intent to evade the payment of the proper customs duties and taxes due reasonable trend in the international and uniform application of customs rules and laws
at the time of the entry of its imported crude oil in the Philippines. 36 shows how unreasonable, unjust, confiscatory, iniquitous and incongruent the
disposition made against petitioner in the instant case; hence, the very need to set aside
Petitioner further argues that the government suffered or lost nothing when petitioner the assailed Decision and Resolution of the CTA Former En Banc in C.T.A. EB No.
filed its Import Entry and Internal Revenue Declaration thirteen (13) days beyond the 472, in order to prevent the creation of a legal precedent which contravenes State
period allowed by law, considering that the former did not lose any tax collection when commitments.
petitioner had allegedly paid in advance the amount of P71,923,285.00 for the regular
tariff duty of 10% then prevailing, notwithstanding its entitlement to the reduced 3% Respondent, on the other hand, counters that petitioner's failure to file its Import Entry
rate under RA No. 8180. Consequently, by ordering petitioner to pay for the entire and Internal Revenue Declaration within the non-extendible period of 30 days was
dutiable value amounting to P936,899,883.90, the government shall be guilty of unjust fatal to its cause of action. Resultantly, the subject imported crude oil is deemed
enrichment, and such would result to deprivation of property on the part of petitioner abandoned in favor of the government by reason of such non-filing of the imported
without due process of law.37 entries within said prescriptive period.38

Moreover, it is petitioner's contention that the principles enunciated in the Chevron Our Ruling
case were misapplied in the case at bench. It explained that the reason for such ruling
establishing the "ipso facto abandonment" doctrine was because there was a finding of
The submissions of the parties to this case bring to fore two timelines and the
fraud on the part of Chevron, being the importer. The existence of fraud was a critical
consequences of the lapse of the prescribed periods. Petitioner appears to be covered
and essential fact in the disposition on the issues in the Chevron case that justified the
by Section 1801, in relation to Section 1301, which respectively states:
goods to be deemed impliedly abandoned in favor of the government. Corollarily, in
the absence of fraud, goods cannot be deemed impliedly abandoned and ipso
Sec. 1801. Abandonment, Kinds and Effects of. - An imported article is deemed and conclusive upon all parties, unless the liquidation of the import entry was merely
abandoned under any of the following circumstances: tentative. (Emphasis supplied)

(a) When the owner, importer, or consignee of the imported article expressly signifies We rule that in this case, Section 1603 is squarely applicable. The finality of
in writing to the Collector of Customs his intentions to abandon; or liquidation which arises one (1) year after the date of the final payment of duties, which
is in this case 23 May 1996, renders inoperable the provisions of Section 1801.
(b) When the owner, importer, consignee or interested party after due notice, fails to
file an entry within thirty (30) days, which shall not be extendible, from the date of Discussion
discharge of the last package from the vessel or aircraft, or having filed such entry,
fails to claim his importation within fifteen (15) days which shall not likewise be At the outset, it bears emphasis that the determination of the issues presented in this
extendible, from the date of posting of the notice to claim such importation. (Emphasis case requires a comprehensive assessment of the pronouncements made in the case
supplied) of Chevron Philippines, Inc. v. Commissioner of the Bureau of Customs;39 thus, we
find it imperative to reproduce hereunder the points there considered which are
Any person who abandons an article or who fails to claim his importation as provided germane to the controversy under review.
for in the preceding paragraph shall be deemed to have renounced all his interests and
property rights therein. THE IMPORTATION WERE ABANDONED
IN FAVOR OF THE GOVERNMENT
xxxx
The law is clear and explicit. It gives a non-extendible period of 30 days for the
Sec. 1301. Persons Authorized to Make Import Entry.- Imported articles must be importer to file the entry which we have already ruled pertains to both the IED
entered in the customhouse at the port of entry within thirty (30) days, which shall not and IEIRD. Thus under Section 1801 in relation to Section 1301, when the
be extendible, from the date of discharge of the last package from the vessel or aircraft importer fails to file the entry within the said period, he "shall be deemed to have
either (a) by the importer, being holder of the bill of lading, (b) by a duly licensed renounced all his interests and property rights" to the importations and these
customs broker acting under authority from a holder of the bill or (c) by a person duly shall be considered impliedly abandoned in favor of the government:
empowered to act as agent or attorney-in-fact for each holder: Provided, That where
the entry is filed by a party other than the importer, said importer shall himself be Section 1801. Abandonment, Kinds and Effect of. -
required to declare under oath and under the penalties of falsification or perjury that
the declarations and statements contained in the entry are true and correct: Provided,
xxxx
further, That such statements under oath shall constitute prima facie evidence of
knowledge and consent of the importer of violations against applicable provisions of
this Code when the importation is found to be unlawful. Any person who abandons an article or who fails to claim his importation as
provided for in the preceding paragraph shall be deemed to have renounced all his
interests and property rights therein.
Tersely put, when an importer after due notice fails to file an Import Entry and Internal
Revenue Declaration within an unextendible period of thirty (30) days from the
discharge of the last package, the imported article is deemed abandoned in favor of the According to petitioner, the shipments should not be considered impliedly abandoned
government. because none of its overt acts (filing of the IEDs and paying advance duties) revealed
any intention to abandon the importations.
Upon the other hand, respondent is covered in a manner likewise mandatory, by the
provisions of Section 1603 which states that: Unfortunately for petitioner, it was the law itself which considered the
importation abandoned when it failed to file the IEIRDs within the allotted
time. Before it was amended, Section 1801 was worded as follows:
Sec. 1603. Finality of Liquidation. - When articles have been entered and passed free
of duty or final adjustment of duties made, with subsequent delivery, such entry and
passage free of duty or settlement of duties will, after the expiration of one year, Sec. 1801. Abandonment, Kinds and Effect of. - Abandonment is express when it is
from the date of the final payment of duties, in the absence of fraud or protest, be final made direct to the Collector by the interested party in writing and it is implied when,
from the action or omission of the interested party, an intention to abandon can
be clearly inferred. The failure of any interested party to tile the import entry within The rationale of strict compliance with the non-extendible period of 30 days within
fifteen days or any extension thereof from the discharge of the vessel or aircraft, shall which import entries (IEIRDs) must be filed for imported articles are as follows: (a)
be implied abandonment. An implied abandonment shall not be effective until the to prevent considerable delay in the payment of duties and taxes; (b) to compel
article is declared by the Collector to have been abandoned after notice thereof is importers to file import entries and claim their importation as early as possible under
given to the interested party as in seizure cases. the threat of having their importation declared as abandoned and forfeited in favor of
the government; (c) to minimize the opportunity of graft; (d) to compel both the BOC
Any person who abandons an imported article renounces all his interests and property and the importers to work for the early release of cargo, thus decongesting all ports of
rights therein. entry; (e) to facilitate the release of goods and thereby promoting trade and commerce;
and (f) to minimize the pilferage of imported cargo at the ports of entry. 41 The
aforesaid policy considerations were significant to justify a firm observance of the
After it was amended by RA 7651, there was an indubitable shift in language as to
aforesaid prescriptive period.
what could be considered implied abandonment:

Section 1801. Abandonment, Kinds and Effect of. - An imported article is deemed It was observed that it is the law itself that considers an imported article abandoned
abandoned under any of the following circumstances: for failure to file the corresponding Import Entry and Internal Revenue Declaration
within the allotted time. No acts or omissions to establish intent to abandon is
necessary to effectuate the clear provision of the law. Since Section 1801(b) does not
a. When the owner, importer, consignee of the imported provide any qualification as to what may have caused such failure in filing said import
article expressly signifies in writing to the Collector of entry within the prescriptive period in order to render the imported article abandoned,
Customs his intention to this Court shall likewise make no distinction and plainly apply the law as clearly stated.
abandon;ChanRoblesVirtualawlibrary Hence, upon the lapse of the aforesaid non-extendible period of 30 days, without the
required import entry filed by the importer within said period, its imported article is
b. When the owner, importer, consignee or interested therefore deemed abandoned.
party after due notice, fails to file an entry within thirty
(30) days, which shall not be extendible, from the date
Moreover, Section 1.802 of the same Code states to whom said abandoned imported
of discharge of the last package from the vessel or
articles belong as a consequence of such renouncement by the owner, importer,
aircraft x x x.
consignee or interested party. It provides:
From the wording of the amendment, RA 7651 no longer requires that there be
Sec. 1802. Abandonment of Imported Articles. An abandoned article shall ipso
other acts or omissions where an intent to abandon can be inferred. It is enough
facto be deemed the property of the Government and shall be disposed of in
that the importer fails to file the required import entries within the reglementary
accordance with the provisions of this Code.
period. The lawmakers could have easily retained the words used in the old law (with
respect to the intention to abandon) but opted to omit them. It would be error on our
part to continue applying the old law despite the clear changes introduced by the x x x x (Emphasis supplied)
amendment.40 (Emphasis and underlining supplied)
In the Chevron case, we explained that the term "ipso facto" is defined as "by the very
Based on the foregoing, it appears that in the Chevron case, the Court simply applied act itself” or "by mere act." Hence, there is no need for any affirmative act on the part
the clear provision of Section 1801(b), in relation to Section 1301, of the TCCP, as of the government with respect to abandoned imported articles given that the law itself
amended, which categorically provides that mere failure on the part of the owner, categorically provides that said articles shall ipso facto be deemed the property of the
importer, consignee or interested party, after due notice, to file an entry within a non- government. By using the term "ipso facto" in Section 1802 of the TCCP, as amended
extendible period of 30 days from the date of discharge of the last package (shipment) by R.A. No. 7651,42 the legislature removed the need for abandonment proceedings
from the vessel, would mean that such owner, importer, consignee or interested party and for any declaration that imported articles have been abandoned before ownership
is deemed to have abandoned said shipment. Consequently, abandonment of such thereof can be effectively transferred to the government. In other words, ownership
shipment (imported article) constitutes renouncement of all his interests and property over the abandoned imported articles is transferred to the government by operation of
rights therein. law.
The rulings in Chevron was generously applied by CTA Former En Banc in the present In Chevron, we observed that:
case. Thus:
The minutes of the deliberations in the House of Representatives Committee on
Petitioner Shell's failure to file the required entries, within the prescribed non- Ways and Means on the proposed amendment to Section 1801 of the TCC show
extendible period of thirty (30) days from the date of discharge of the last package that the phrase "after due notice" was intended for owners, consignees,
from the carrying vessel, constitutes implied abandonment of its oil importation. importers of the shipments who live in rural areas or distant places far from the
This means, that from the precise moment that the non-extendible thirty-day port where the shipments are discharged, who are unfamiliar with customs
period had lapsed, the abandoned shipment was deemed the property of the procedures and need the help and advice of people on how to file an entry:
government. Therefore, when petitioner withdrew the oil shipment for consumption,
it appropriated for itself properties which already belonged to the government. x x x xxxx

Petitioner Shell's contention that the belated filing of its import entries is justified MR. FERIA. 1801, your Honor. The question that was raised here in the last hearing
due to the late arrival of its import documents, which are necessary for the proper was whether notice is required to be sent to the importer. And, it has been brought
computation of the import duties, cannot be sustained. forward that we can dispense with the notice to the importer because the shipping
companies are notifying the importers on the arrival of their shipment. And, so
xxxx that notice is sufficient to ... sufficient for the claimant or importer to know that
the shipments have already arrived.
The [CTA Former En Banc] cannot also accept such excuses, as the absence of
supporting documents should not have prevented petitioner Shell from Second, your Honor, the legitimate businessmen always have ... they have their
complying with the mandatory non-extendible period, since the law prescribes an agents with the shipping companies, and so they should know the arrival of their
extremely serious consequence for delayed filing. If this kind of excuse was to be shipment.
accepted, then the collection of customs duties would be at the mercy of importers,
which our lawmakers try to avoid. xxxx

For all the foregoing, we rule that the late filing of the IEIRDs alone, which constituted HON. QUIMPO. Okay. Comparing the two, Mr. Chairman, I cannot help but notice
implied abandonment, makes petitioner Shell liable for the payment of the dutiable that in the substitution now there is a failure to provide the phrase AFTER NOTICE
value of the imported crude oil. x x x43 (Emphasis supplied) THEREOF IS GIVEN TO THE INTERESTED PARTY, which was in the original.
Now in the second, in the substitution, it has been deleted. I was first wondering
Since it is undisputed that the Import Entry and Internal Revenue Declaration was whether this would be necessary in order to provide for due process. I'm thinking of
belatedly filed by petitioner on 23 May 1996, or more than 30 days from the last day certain cases, Mr. Chairman, where the owner might not have known. This is now
of discharge of its importation counted from 10 April 1996, the importation may be on implied abandonment not the express abandonment.
considered impliedly abandoned in favor of the government. Petitioner argues that
before Section 1802 can be applied and the ipso facto provision invoked, the xxxx
requirement of due notice to file entry and the determination of the intent of the
importer are essential in order to consider the subject imported crude oil of petitioner
HON. QUIMPO. Because I'm thinking, Mr. Chairman. I'm thinking of certain
impliedly abandoned in favor of the government. It further asserts that, in the Chevron
situations where the importer even though, you know, in the normal course of business
case, it was conceded that as a general rule, due notice is indeed required before any sometimes they fail to keep up the date or something to that effect.
imported article can be considered impliedly abandoned, but Chevron's non-
entitlement to such prior notice was legally justified because of the finding of fraud
established against it, rendering it impossible for the BOC to comply with the due THE CHAIRMAN. Sometimes their cargoes get lost.
notice requirement under the prevailing rules. Consequently, it is petitioner's
conclusion that such finding of fraud is indispensable in order to waive the "due notice HON. QUIMPO. So just to, you know . . . anyway, this is only a notice to be sent
requirement," that would eventually consider the subject imported crude oil impliedly to them that they have a cargo there.
abandoned in favor of the government.
xxxx
MR. PARAYNO. Your Honor, I think as a general rule, five days [extendible] to case, for having been considered as one of the regular, large-scale and multinational
another five days is a good enough period of time. But we cannot discount that there importers of oil and oil products, familiar with said rules and procedures (including
are some consignees of shipments located in rural areas or distant from urban the duty and obligation of filing the IEIRD within a non-extendible period of 30 days)
centers where the ports are located to come to the [BOC] and to ask for help and fully aware of the arrival of its shipment on its privately owned pier or wharf in
particularly if a ship consignment is made to an individual who is uninitiated with the Port of Batangas. Applying Chevron, the decision assailed here said:
customs procedures. He will probably have the problem of coming over to the
urban centers, seek the advice of people on how to file entry. And therefore, the The due notice required under Section 1301 is the notice of the arrival of the
five day extendible to another five days might really be a tight period for shipment. In this case, pursuant to the Chevron case, notice to petitioner Shell is not
some. But the majority of our importers are knowledgeable of procedures. And required under the peculiar circumstances of the case. Petitioner Shell, like Chevron,
in fact, it is in their interest to file the entry even before the arrival of the shipment. is a regular, large-scale and multinational importer of oil and oil products, who
That's why we have a procedure in the bureau whereby importers can file their entries falls under the category of a knowledgeable importer, familiar with the governing
even before the shipment arrives in the country. (Emphasis supplied) rules and procedures in the release of importations.

xxxx More importantly, petitioner Shell even admitted that it filed an application for
Special Permit to Discharge and paid the corresponding advance duties on March
Petitioner, a regular, large-scale and multinational importer of oil and oil 22, 1996 (Exhibits "K" and "P"),, which undeniably proved knowledge on the
products, fell under the category of a knowledgeable importer which was familiar part of petitioner Shell of the arrival of the shipment. Likewise, upon arrival of the
with the governing rules and procedures in the release of importations. shipment, they were unloaded from the carrying vessels docked at the wharf
owned by petitioner Shell at Tabangao, Batangas City; thus, petitioner Shell was
Furthermore, notice to petitioner was unnecessary because it was fully aware that fully aware that their importation had already arrived.45 (Emphasis supplied)
its shipments had in fact arrived in the Port of Batangas. The oil shipments were
discharged from the carriers docked in its private pier or wharf, into its shore The foregoing having been said, we must with equal concern, go to the other timeline
tanks. From then on, petitioner had actual physical possession of its oil which is provided for in Section 1603 of the TCCP, to wit:
importations. It was thus incumbent upon it to know its obligation to file the
IEIRD within the 30-day period prescribed by law. As a matter of fact, importers Sec. 1603. Finality of Liquidation. - When articles have been entered and passed free
such as petitioner can, under existing rules and regulations, file in advance an of duty or final adjustment of duties made, with subsequent delivery, such entry and
import entrv even before the arrival of the shipment to expedite the release of the passage free of duty or settlement of duties will, after the expiration of one year, from
same. However, it deliberately chose not to comply with its obligation under the date of the final payment of duties, in the absence of fraud or protest, be final and
Section 1301. conclusive upon all parties, unless the liquidation of the import entry was merely
tentative.
The purpose of posting an "urgent notice to file entry" pursuant to Section B.2.1
of CMO 15-94 is only to notify the importer of the "arrival of its shipment" and Petitioner insists that, in the absence of fraud, the right of respondent to claim against
the details of said shipment. Since it already had knowledge of such, notice was it has already prescribed considering that an action involving the entry and payment
superfluous. Besides, the entries had already been filed, albeit belatedly. It would of customs duties involving imported articles demanded after a period of one (1) year
have been oppressive to the government to demand a literal implementation of from the date of final payment of duties, shall not succeed, pursuant to the clear
this notice requirement.44 (Emphasis and underlining supplied) provision of Section 1603. It therefore contends that even if the subject imported crude
oil of petitioner is by law deemed abandoned by operation of law under Sections
Therefrom, it is without a doubt that the requirement of due notice contemplated under 1801(b), in relation to Section 1301, of the Code, respondent's right to claim
Section 1801(b) of the TCCP, as amended, refers to the notice to the owner, importer, abandonment had already lapsed since fraud is wanting in this case. On the other hand,
consignee or interested party of the arrival of its shipment and details thereof. The respondent counters that since there was a factual finding of fraud committed by
legislative intent was clear in emphasizing the importance of said notice of arrival, petitioner in the filing of its Import Entry and Internal Revenue Declaration beyond
which is intended solely to persons not considered as knowledgeable importers, or the 30-day period prescribed under Section 1301 of the TCCP, the 1-year prescriptive
those who are not familiar with the governing rules and procedures in the release of period under Section 1603 therefore does not apply.
importations. We as much as said that the due notice requirement under Section
1801(b), do not apply to knowledgeable importers, such as Chevron in the above-cited
At this point, it bears emphasis that in a petition for review on certiorari under Rule clear and convincing, and not merely preponderant. Upon failure to establish these two
45 of the Rules of Court, only questions of law may be raised.46 The Court is not a trier (2) requisites, the presumption of good faith must prevail.
of facts and does not normally undertake the re-examination of the evidence presented
by the contending parties during the trial of the case considering that the findings of Section 3611(c) of the TCCP, as amended defines the term fraud as the occurrence of
facts of the CA are conclusive and binding on the Court 47 and they carry even more a "material false statement or act in connection with the transaction which was
weight when the CA affirms the factual findings of the trial court. 48 However, it is committed or omitted knowingly, voluntarily and intentionally, as established by clear
already a settled matter that, the Court had recognized several exceptions to this rule, and convincing evidence." Again, such factual finding of fraud should be established
to wit: (1) when the findings are grounded entirely on speculation, surmises or based on clear, convincing, and uncontroverted evidence.
conjectures; (2) when the inference made is manifestly mistaken, absurd or impossible;
(3) when there is grave abuse of discretion; (4) when the judgment is based on a
Relevant thereto, in the landmark case of Aznar v. Court of Tax Appeals,55 we
misapprehension of facts; (5) when the findings of facts are conflicting; (6) when in
explained the general concept of fraud as applied to tax cases in the following fashion:
making its findings the Court of Appeals went beyond the issues of the case, or its
findings are contrary to the admissions of both the appellant and the appellee; (7) when
the findings are contrary to the trial court; (8) when the findings are conclusions The fraud contemplated by law is actual and not constructive. It must be
without citation of specific evidence on which they are based; (9) when the facts set intentional fraud, consisting of deception willfully and deliberately done or
forth in the petition as well as in the petitioner's main and reply briefs are not disputed resorted to in order to induce another to give up some legal right. Negligence,
by the respondent; (10) when the findings of fact are premised on the supposed whether slight or gross, is not equivalent to the fraud with intent to evade the tax
absence of evidence and contradicted by the evidence on record; and (11) when the contemplated by the law. It must amount to intentional wrong doing with the sole
Court of Appeals manifestly overlooked certain relevant facts not disputed by the object of avoiding the tax. It necessarily follows that a mere mistake cannot be
parties, which, if properly considered, would justify a different conclusion.49 considered as fraudulent intent, and if both petitioner and respondent
Commissioner of Internal Revenue committed mistakes in making entries in the
returns and in the assessment, respectively, under the inventory method of
Records of this case reveal that the CTA in Division in its 19 June 2008
determining tax liability, it would be unfair to treat the mistakes of the petitioner
Decision50 made a pronouncement that there was indeed fraud committed by petitioner
as tainted with fraud and those of the respondent as made in good
based on the factual finding contained in the Memorandum dated 2 February 2001
faith.56 (Emphasis supplied)
issued by Special Investigator II Domingo B. Almeda and Special Investigator III
Nemesio C. Magno, Jr. of the CIIS-IPD of the BOC. Consequently, since such
memorandum made such factual finding of fraud against petitioner, the court a In the case at bench, a perusal of the records reveals that there is neither any iota of
quo ruled that prescription does not set in even if respondent's claim was made beyond evidence nor concrete proof offered and admitted to clearly establish that petitioner
the 1-year reglementary period. committed any fraudulent acts. The CTA in Division relied solely on the Memorandum
dated 2 February 2001 issued by the CIIS-IPD of the BOC in ruling the existence of
fraud committed by petitioner. However, there is no showing that such document was
Upon an assiduous review of the factual finding of fraud, we find petitioner's
ever presented, identified, and testified to or offered in evidence by either party before
contention meritorious. Hence, the instant case falls among the exceptions to the
the trial court.
general rule previously mentioned which would require this Court's judicial
prerogative to review the court a quo's findings of fact.
Time and again, this Court has consistently declared that cases filed before the CTA
are litigated de novo, party-litigants must prove every minute aspect of their
Generally, fraud has been defined as "the deliberate intention to cause damage or
cases.57 Section 8 of R.A. No. 1125,58 as amended by R.A. No. 9282,59 categorically
prejudice. It is voluntary execution of a wrongful act, or a willful omission, knowing
described the CTA as a court of record. Indubitably, no evidentiary value can be given
and intending the effects which naturally and necessarily arise from such act or
to any documentary evidence merely attached to the BOC Records, as the rules on
omission.51 For fraud to exist, it must be intentional, consisting of deception willfully
documentary evidence require that such documents must be formally offered before
and deliberately done or resorted to in order to induce another to give up some the CTA. Pertinent is Section 34, Rule 132 of the Rules of Court which reads:
right.52 It is never presumed and the burden of proof to establish lies in the person
making such allegation since every person is presumed to be in good faith. 53 To
discharge this burden, fraud must be proven by clear and convincing evidence. 54 Also, Section 34. Offer of evidence. - The court shall consider no evidence which has not
fraud must be alleged and proven as a fact where the following requisites must concur: been formally offered. The purpose for which the evidence is offered must be
(a) the fraud must be established by evidence; and (b) the evidence of fraud must be specified.
From the foregoing provision, it is clear that for evidence to be considered by the court, Per the records of this case, the BIR was directed to present its evidence in the hearing
the same must be formally offered. Corollarily, the mere fact that a particular of February 21, 1996, but BIR's counsel failed to appear. The CTA denied petitioner's
document is identified and marked as an exhibit does not mean that it has already been motion to consider BIR's presentation of evidence as waived, with a warning to BIR
offered as part of the evidence of a party. In Interpacific Transit, Inc. v. Aviles,60 We that such presentation would be considered waived if BIR's evidence would not be
had the occasion to make a distinction between identification of documentary evidence presented at the next hearing. Again, in the hearing of March 20, 1996, BIR's counsel
and its formal offer as an exhibit. We said that the first is done in the course of the trial failed to appear. Thus, in its Resolution dated March 21, 1996, the CTA considered
and is accompanied by the marking of the evidence as an exhibit while the second is the BIR to have waived presentation of its evidence. In the same Resolution, the parties
done only when the party rests its case and not before. A party, therefore, may opt to were directed to file their respective memorandum. Petitioner complied but BIR failed
formally offer his evidence if he believes that it will advance his cause or not to do so to do so. In all of these proceedings, BIR was duly notified. Hence, in this case, we are
at all. In the event he chooses to do the latter, the trial court is not authorized by the constrained to apply our ruling in Heirs of Pedro Pasag v. Parocha:
Rules to consider the same.61
A formal offer is necessary because judges are mandated to rest their findings of
The Rule on this matter is patent that even documents which are identified and marked facts and their judgment only and strictly upon the evidence offered by the parties
as exhibits cannot be considered into evidence when the same have not been formally at the trial. Its function is to enable the trial judge to know the purpose or
offered as part of the evidence, but more so if the same were not identified and marked purposes for which the proponent is presenting the evidence. On the other hand,
as exhibits, such as in the present case. An assay of the records reveals that the subject this allows opposing parties to examine the evidence and object to its
Memorandum dated 2 February 2001 was neither identified nor offered in evidence by admissibility. Moreover, it facilitates review as the appellate court will not be
respondent during the entire proceedings before the CTA in Division. Consequently, required to review documents' not previously scrutinized by the trial court.
this is fatal to respondent's cause in establishing the existence of fraud committed by
petitioner since the burden of proof to establish the same lies with the former alone. Strict adherence to the said rule is not a trivial matter. The Court in Constantino v.
Court of Appeals ruled that the formal offer of one's evidence is deemed waived
As a matter of fact, even if the aforesaid documentary evidence was included as part after failing to submit it within a considerable period of time. It explained that
of the ROC Records submitted before the CTA in compliance with a lawful order of the court cannot admit an offer of evidence made after a lapse of three (3) months
the court,62 this does not permit the trial court to consider the same in view of the fact because to do so would ''condone an inexcusable laxity if not non-compliance with
that the Rules prohibit it. The reasoning forwarded by the CTA in Division in its a court order which, in effect, would encourage needless delays and derail the
Resolution dated 24 February 2009, that the apparent purpose of transmittal of the speedy administration of justice."
records is to enable it to appreciate and properly review the proceedings and findings
before an administrative agency, is misplaced. Unless any of the party formally offered Applying the aforementioned principle in this case, we find that the trial court had
in evidence said Memorandum, and accordingly, admitted by the court a quo, it cannot reasonable ground to consider that petitioners had waived their right to make a formal
be considered as among the legal and factual bases in resolving the controversy offer of documentary or object evidence. Despite several extensions of time to make
presented before it. their formal offer, petitioners failed to comply with their commitment and allowed
almost five months to lapse before finally submitting it. Petitioners' failure to comply
By analogy, in Dizon v. CTA,63 this Court underscored the importance of a formal offer with the rule on admissibility of evidence is anathema to the efficient, effective,
of evidence and the corresponding admission thereafter. We quote: and expeditious dispensation of justice. (Emphasis and underlining supplied)

While the CTA is not governed strictly by technical rules of evidence, as rules of Clearly therefore, evidence not formally offered during the trial cannot be used for or
procedure are not ends in themselves and are primarily intended as tools in the against a party litigant by the trial court in deciding the merits of the case. Neither may
administration of justice, the presentation of the BIR's evidence is not a mere it be taken into account on appeal. Since the rule on formal offer of evidence is not a
procedural technicality which may be disregarded considering that it is the only means trivial matter, failure to make a formal offer within a considerable period of time shall
by which the CTA may ascertain and verify the truth of BIR's claims against the be deemed a waiver to submit it. Consequently, any evidence that has not been offered
Estate. The BIR's failure to formally offer these pieces of evidence, despite CTA's and admitted thereafter shall be excluded and rejected.
directives, is fatal to its cause. Such failure is aggravated by the fact that not even a
single reason was advanced by the BIR to justify such fatal omission. This, we take Moreover, even if not submitted as a contention herein, We find it apropos to rule that
against the BIR. the CTA likewise cannot motu proprio justify the existence of fraud committed by
petitioner by applying the rules on judicial notice.
Judicial notice is the cognizance of certain facts which judges may properly take and by which it is sufficiently designated.67 Thus, for said exception to apply, the party
act on without proof because they already know them. 64 Under the Rules of Court, concerned must be given an opportunity to object before the court could take judicial
judicial notice may either be mandatory or discretionary. Pertinent portions of Rule notice of any record pertaining to other cases pending before it.
129 of the Rules of Court provide as follows:
Such being the case, it would also be an error for the CTA in Division to even take
RULE 129 judicial notice of the subject Memorandum being merely a part of the BOC Records
submitted before the court a quo, without the same being identified by a witness,
What Need Not Be Proved offered in and admitted as evidence, and effectively, depriving petitioner, first and
foremost, an opportunity to object thereto. Hence, the subject Memorandum should
not have been considered by the CTA in Division in its disposition.
Section 1. Judicial notice, when mandatory. - A court shall take judicial notice,
without the introduction of evidence, of the existence and territorial extent of states,
their political history, forms of government and symbols of nationality, the law of It is well-settled that procedural rules are designed to facilitate the adjudication of
nations, the admiralty and maritime courts of the world and their seals, the political cases. Courts and litigants alike are enjoined to abide strictly by the rules. While it is
constitution and history of the Philippines, the official acts of legislative, executive true that litigation is not a game of technicalities, it is equally true that every case must
and judicial departments of the Philippines, the laws of nature, the measure of time, be prosecuted in accordance with the prescribed procedure to ensure an orderly and
and the geographical divisions. speedy administration of justice. Party litigants and their counsel are well advised to
abide by, rather than flaunt, procedural rules for these rules illumine the path of the
Section 2. Judicial notice, when discretionary. - A court may take judicial notice of law and rationalize the pursuit of justice.68
matters which are of public knowledge, or are capable to unquestionable
demonstration, or ought to be known to judges because of their judicial functions. The claim of respondent against petitioner has already prescribed

Section 3. Judicial notice, when hearing necessary. -During the trial, the court, on its Since we have already laid to rest the question on whether or not there was fraud
own initiative, or on request of a party, may announce its intention to take judicial committed by petitioner, the last issue for Our resolution is whether respondent's claim
notice of any matter and allow the parties to be heard thereon. against petitioner has already prescribed.

After the trial, and before judgment or on appeal, the proper court, on its own initiative This Court rules in the affirmative.
or on request of a party, may take judicial notice of any matter and allow the parties to
be heard thereon if such matter is decisive of a material issue in the case. There being no evidence to prove that petitioner committed fraud in belatedly filing
its Import Entry and Internal Revenue Declaration within the 30-day period prescribed
xxxx under Section 1301 of the TCCP, as amended, respondent's rights to question the
propriety thereof and to collect the amount of the alleged deficiency customs duties,
In relation thereto, it has been held that the doctrine of judicial notice rests on the more so the entire value of the subject shipment, have already prescribed. Simply put,
in the absence of fraud, the entry and corresponding payment of duties made by
wisdom and discretion of the courts; however, the power to take judicial notice is to
petitioner becomes final and conclusive upon all parties after one (1) year from the
be exercised by the courts with caution; care must be taken that the requisite notoriety
date of the payment of duties in accordance with Section 1603 of the TCCP, as
exists; and every reasonable doubt upon the subject should be promptly resolved in the
amended:
negative.65

Section 1603. Finality of Liquidation. - When articles have been entered and passed
As a general rule, courts are not authorized to take judicial notice of the contents of
free of duty or final adjustments of duties made, with subsequent delivery, such entry
the records of other cases, even when such cases have been tried or are pending in the
same court, and notwithstanding the fact that both cases may have been tried or are and passage free of duty or settlements of duties as well, after the expiration of
actually pending before the same judge.66 However, this rule is subject to the exception one (1) year, from the date of the final payment of duties, in the absence of
that in the absence of objection and as a matter of convenience to all parties, a court fraud or protest or compliance audit pursuant to the provisions of this Code,
may properly treat all or any part of the original record of the case filed in its archives be final and conclusive upon all parties, unless the liquidation of the import entry
was merely tentative. (Emphasis and underscoring supplied)
as read into the records of a case pending before it, when with the knowledge of the
opposing party, reference is made to it, by name and number or in some other manner
The above provision speaks of entry and passage free of duty or settlements of duties. Consequently, applying the foregoing provision and considering that we have
Generally, in customs law, the term "entry" has a triple meaning, to wit: (1) the determined already that there is no factual finding of fraud established herein, the
documents filed at the customs house; (2) the submission and acceptance of the liquidation of petitioner's imported crude oil shipment became final and conclusive on
documents and (3) the procedure of passing goods through the customs house. 69 As 24 May 1997, or exactly upon the lapse of the 1-year prescriptive period from the date
explained in the Chevron case, it specifically refers to the filing and acceptance of the of payment of final duties. As such, any action questioning the propriety of the entry
Import Entry and Internal Revenue Declaration of the imported article. Simply put, the and settlement of duties pertaining to such shipment initiated beyond said date is
entry of imported goods at the custom house consists in submitting them to the therefore barred by prescription.
inspection of the revenue officers, together with a statement or description of such
goods, and the original invoices of the same, for the purpose of estimating the duties Since time immemorial, this Court has consistently recognized and applied the statute
to be paid thereon.70 The term "duty" used therein denotes a tax or impost due to the of limitations to preclude the Government from exercising its power to assess and
government upon the importation or exportation of goods. It means that the duties on collect taxes beyond the prescribed period, and we intend to abide by our rulings on
imports signify not merely a duty on the act of importation, but a duty on the thing prescription and to strictly apply the same in the case of petitioner; otherwise, both the
imported. It is not confined to a duty levied while the article is entering the country, procedural and substantive rights of petitioner would be violated. After all,
but extends to a duty levied after it has entered the country. 71 prescription is a substantive defense that may be invoked to prevent stale claims from
being resurrected causing inconvenience and uncertainty to a person who has long
Based on the foregoing definitions, it is commonsensical that the finality of liquidation enjoyed the exercise. Thus, symptomatic of the magnitude of the concept of
referred to under Section 1603 covers the propriety of the submission and acceptance prescription, this Court has elucidated that:
of the Import Entry and Internal Revenue Declaration covering the imported articles
being brought in the country for the sole purpose of determining whether it is subject The law prescribing a limitation of actions for the collection of the income tax is
to tax or not; and if it is, whether the computation of the tax or impost to be paid to the beneficial both to the Government and to its citizens; to the Government because tax
government was properly made. These shall include, among others, the declarations officers would be obliged to act promptly in the making of assessment, and to citizens
and statements contained in the entry, made under oath and under the penalties of because after the lapse of the period of prescription citizens would have a feeling
falsification or perjury that such declarations and statements contained therein are true of security against unscrupulous tax agents who will always find an excuse to
and correct, which shall constitute prima facie evidence of knowledge and consent of inspect the books of taxpayers, not to determine the latter's real liability, but to
the importer of violation against applicable provisions of the TCCP when the take advantage of every opportunity to molest peaceful, law-abiding citizens.
importation is found to be unlawful.72 Without such legal defense taxpayers would furthermore be under obligation to
always keep their books and keep them open for inspection subject to harassment
Indubitably, the matters which become final and conclusive against all parties include by unscrupulous tax agents. The law on prescription being a remedial measure
the timeliness of filing the import entry within the period prescribed by law, the should be interpreted in a way conducive to bringing about the beneficient purpose of
declarations and statements contained therein, and the payment or non-payment of affording protection to the taxpayer within the contemplation of the Commission
customs duties covering the imported articles by the owner, importer, consignee or which recommend (sic) the approval of the law.73 (Emphasis supplied)
interested party. Since the primordial issue presented before us focuses on petitioner's
non-compliance in filing its Import Entry and Internal Revenue Declaration within a Basic is the rule that provisions of the law should be read in relation to other provisions
non-extendible period of 30 days from the date of discharge of' the last package from therein. A statute must be interpreted to give it efficient operation and effect as a whole
the vessel, respondent may only look into it within a limited period of one (1) year in avoiding the nullification of cognate provisions. Statutes are read in a manner that
accordance with the above-quoted provision. makes it wholly operative and effective, consistent with the legal maxim ut res magis
valeat quam pereat.
In the case at bench, it is undisputed that petitioner filed its IEIRD and paid the
remaining customs duties due on the subject shipment only on 23 May 1996. Yet, it This maxim applied, we read Sections 1301, 1801, and 1802, together with Section
was only on 1 August 2000, or more than four (4) years later, that petitioner received 1603 of the TCCP. Thus, should there be failure on the part of the owner, importer,
a demand letter from the District Collector of Batangas for the alleged unpaid duties consignee or interested party, after due notice of the arrival of its shipment (except in
covering the said shipment. Thereafter, on 29 October 2001, or after more than five cases of knowledgeable owners or importers), to file an entry within the non-
(5) years, petitioner received another demand letter from respondent seeking to collect extendible period of 30 days from the date of discharge of the last package (shipment)
for the entire dutiable value of the same shipment amounting to P936,899,855.90. from the vessel, such owner, importer, consignee or interested party is deemed to have
abandoned said shipment in favor of the government. As imperative, however, is the
strict compliance with Section 1603 of the TCCP, which should be read as we have
ruled. Any action or claim questioning the propriety of the entry and settlement of
duties pertaining to such shipment made beyond the 1-year prescriptive period from
the date of payment of final duties, is barred by prescription. In the present case, the
failure on the part of respondent to timely question the propriety of the entry and
settlement of duties by petitioner involving the subject shipment, renders such entry
and settlement of duties final and conclusive against both parties. Hence, respondent
cannot any longer have any claim from petitioner. Sections 1301, 1801, and 1802 of
the TCCP have been rendered inoperable by reason of the lapse of the period stated in
Section 1603 of the same Code.

Indeed, if the prescriptive period of one year specified in Section 1603 of the TCCP is
not applied against the respondent, the reality that the shipment has been unloaded
from the carrying vessels to petitioner's oil tanks and that import duty in the amount
of P11,231,081.00 has been paid would be obliterated by the application of the
principle of deemed abandonment four years after the occurrence of the facts of
possession and payment, as a consequence of which application, the petitioner would
be made to pay the government the entire value of the shipment it had as vendee of the
shipper already paid.

WHEREFORE, the petition is GRANTED. Accordingly, the Decision dated 13 May

2010 and Resolution dated 22 February 2011 of the Court of Tax Appeals Former En
Banc in C.T.A. EB No. 472 are hereby REVERSED and SET ASIDE on the ground
of prescription.

No costs.

SO ORDERED.