REPUBLIC OF THE PHILIPPINES

Court ofTax Appeals

QUEZON CITY

Third Division

PEOPLE OF THE PHILIPPINES, CTA CRIM. CASE NO. 0 -282

Plaintiff (I.S. No. XVI-INV-llL-00459)
For: Violation of Sections 3601 &
3602 in relation to Sections 2503
& 2530 of the TCCP, as amended.

-versus- Members:
Bautista, Chairperson,
Fa bon-Victorino, and
Ringpis-Liban, II

MOISES BAGAN RODRIGUEZ, Promulgated:

A ccused.
,. ' 7/
x-------------------------------------------------------f~~----~~~-~----------------x
DECISION

BA UTISTA, J:

The Case

Accused Moises Bagan Rodriguez is charged with violation of

Sections 3601 and 3602 in relation to Sections 2503 and 2530 of the Tariff
and Customs Code of the Philippines, as amended ("TCCP")l for unlawful
importation and fraudulent practices against customs revenue
covering the alleged importation of pastry ingredients and dough,
which are, in actuality, importation of onions.

The Fact s

Plaintiff is the People of the Philippines, represented by the

Office of the Prosecutor General. The present case arose from a
complaint instituted by the Bureau of Customs (" BOC") through the

t Approved on June 22, 1957.

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DECISION
CTA CRIM. CASE NO. 0-282
Page 2 of 28

Run After the Smugglers ("RATS") Program.

Accused is the sole proprietor of Yanzhen Enterprises, a sole

proprietorship duly registered with the Department of Trade and
Industry ("DTI") with principal address at 1282 Purok Durian, Lapu-
Lapu Extension, San Miguel (ODACA), Digos City, Davao Del Sur,2
and engaged in the business of dealing and importing surplus auto
parts and merchandise.3

On September 23, 2011, eight (8) shipments declared as "pastries

ingredients" and "dough" consigned to Yanzhen Enterprises arrived
at the Port of Davao aboard the vessels Jan V.922 and Jan. V.1126 with
the following details:

ENTRY BILL OF LADING CONTAINER

SHIPPER; ADDRESS DECLARATION
NO. NO. VAN NOS.
CAIU5470360
Shandong Sunshine
6 x 40 pastries CAIU5470375
c 89954 GOSUQIN6250093 Foodstuff Co., Ltd.;
ingredients CAIU5470631
China
CAIU5470647
MWMU6412675
Xin He Trading Co., 4 x 40 pastries MSWU0090588
c 90005 HKGRF9021
Ltd.; Hong Kong ingredients MWCU5315048
MWCU5263643
--1-- -
ZCSU5118676
Bong Ming Trading 3 x 40 pastries
c 89996 GOSUHKG1240114
Co., Ltd.; Hong Kong ingredients
ZCSU5809153
ZCSU5922299
Laiwu Changyuan
1 x 40 pastries
c 89987 GOSUQIN3450648 Fruit & Vegetable Co.,
ingredients
ZCSU5855879
Ltd.; China
Rin Hop Trading Co., 2 x 40 pastries DAYU6711154
c 89968 HKGRF9017
Ltd.; Hong Kong ingredients MWCU6211520
Shandong Sunshine CAIU5470436
2 x 40 pastries
c 89949 GOSUQIN3450647 Foodstuff Co., Ltd.;
ingredients
China CAIU5471751
Rizhao Wufeng Foods
c 899310 555182865
Co. Ltd.; China
1 x 40 dough MWMU6423495

2 Records, CTA Crim. Case No. 0-282, Vol. 3, Exhibit "3," Department of Trade and Industn; Certificate
of Business Name Registration, p. 1012; Records, Vol. 3, Exhibit "5," Bureau of Internal Revenue Certificate
of Registration, p. 1013; Records, Vol. 3, Exhibit "2," with sub-markings, CPRS-Importer Profile
Information, pp. 1015-1018; Records, Vol. 3, Exhibit "11," Bureau of Customs Certificate of Accreditation
and Registration, p. 1019.
3 Records, Vol. 3, Exhibit "7," Business Certificate, p. 1014.
4 Id., Vol. 2, Exhibit "C" and sub-markings, Single Administrative Document ("SAD"), pp. 752-753.
5 Id., Exhibit "D" and sub-markings, SAD, pp. 754-755.
6 Id., Exhibit "E" and sub-markings, SAD, pp. 756-757.
7 Id., Exhibit "F" and sub-markings, SAD, pp. 758-759.
8 Id., Exhibit "G" and sub-markings, SAD, pp. 760-761.
9 Records, Vol. 2, Exhibit "H" and sub-markings, SAD, pp. 762-763.
10 Records, Vol. 2, Exhibit "I" and sub-markings, SAD, p. 764; Records, Vol. 1, Exhibits "I-2" and "52-B,"

Waybill, p. 265.

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CT A CRIM. CASE NO. 0-282
Page 3 of 28

Rizhao Wufeng Foods

555182818 1 x 40 dough MWCU6514677
Co. Ltd.; China

On the same date, eight (8) alert orders were issued by the BOC
Deputy Commissioner of the Intelligence Group covering the
shipments in question, directing the Customs Officers concerned to
witness the one hundred percent (100%) examination to be conducted
by the assigned Customs Examiner, as follows:

ENTRY CONTAINER
ALERT ORDER NO. DESCRIPTION
NO. VAN NOS.
CAIU5470360
CAIU5470375
C8995 A/ 1G I 20110923-11112 6x40' contrs. Stc Pastries Ingredients
CAIU5470631
CAIU5470647
MWMU6412675
MSWU0090588
C9000 A/1G/20110923-11313 Pastries Ingredients
MWCU5315048
MWCU5263643
ZCSU5118676
C8999 A/ 1G I 20110923-11414 Pastries Ingredients ZCSU5809153
ZCSU5922299
C8998 A/ 1G I 20110925-11515 Pastries Ingredients ZCSU5855879
DAYU6711154
C8996 A/1G/20110923-11616 Pastries Ingredients
MWCU6211520
CAIU5470436
C8994 A/1G/20110923-11717 Pastries Ingredients
CAIU5471751
C8993 A/ 1G I 20110923-11818 -Other, not containing cocoa DOUGH MWMU6423495
C8997 A/1G/20110923-12019 -Other, not containing cocoa DOUGH MWCU6514677

On September 29, 2011, the examination of the shipment 1n

question was conducted.

The following day, September 30, 2011, the After Examination

Reports(" AER") on the shipment in question was issued, summarized
as follows:

11 Records, Vol. 2, Exhibit"!" and sub-markings, SAD, pp. 766-767.

12 Records, Vols. 1 &2, Exhibits "K" and sub-markings, Alert Order, pp. 268-269, 768.
13 Records, Vols. 1 & 2, Exhibit "L" and sub-markings, Alert Order, pp. 270-271, 769.
14 Records, Vols. 1 & 2, Exhibit "M" and sub-markings, Alert Order, pp. 272-273, 770.
15 Records, Vols. 1 & 2, Exhibit "N" and sub-markings, Alert Order, pp. 274-275, 771.
16 Records, Vols. 1 & 2, Exhibit "0" and sub-markings, Alert Order, pp. 276-278, 772.
17 Records, Vols. 1 & 2, Exhibit "P" and sub-markings, Alert Order, pp. 279-280, 773.
18 Records, Vols. 1 & 2, Exhibit "Q" and sub-markings, Alert Order, pp. 281-282, 774.
19 Records, Vols. 1 & 2, Exhibit "R" and sub-markings, Alert Order, pp. 283-284, 775.
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DECISION
CTA CRIM. CASE NO. 0-282
Page 4 of 28

ENTRY ALERT ORDER DESCRIPTION CONTAINER

NO. NO. SAD AER VAN NOS.
-
CAIU5470360
CAIU5470375
6x40' contrs. Stc Pastries CAIU5470631
C8995 A/1G/20110923-111 Onions 20
Ingredients CAIU5470647
ZCSU583550621
ZCSU511600922
MWMU6412675
MSWU0090588
C9000 A/1G/20110923-113 Pastries Ingredients Onions 23
MWCU5315048
MWCU5263643
ZCSU5118676
C8999 A/1G I 20110923-114 Pastries Ingredients Onions 24 ZCSU5809153
ZCSU5922299
C8998 A/1G/20110925-115 Pastries Ingredients Onions 25 ZCSU5855879
DAYU6711154
C8996 A/1G/20110923-116 Pastries Ingredients Onions 26
MWCU6211520
CAIU5470436
C8994 A/1G/20110923-117 Pastries Ingredients Onions 27
CAIU5471751
-Other, not containing
C8993 A/1G/ 20110923-118 Onions 28 MWMU6423495
cocoa DOUGH
- Other, not containing
C8997 A/1G/20110923-120 Onions 29 MWCU6514677
-- -
cocoa DOUGH

Based on the aforementioned documents, the shipments in

question were found to contain onions; thus, the relevant Customs
Officer requested for the issuance of a Warrant of Seizure and
Detention ("WSD") covering the said shipments. As a result, a WSD3°
was issued on September 30, 2011 covering Container Van Nos.
CAIU5470360, CAIU5470375, CAIU5470631, CAIU5470647,
ZCSU583559631, ZCSU5116009, MWMU6412675, MSWU0090588,
MWCU5315048, MWCU5263643, ZCSU5118676, ZCSU5809153,
ZCSU5922299, ZCSU5855879, DAYU6711154, MWCU6211520,
CAIU5470436, CAIU5471751, MWMU6423495 and MWCU6514677,
which are the subjects of the case; along with two (2) other container
vans covered by other alert orders, which do not relate to the case.

Consequently, the RATS Group issued the 1st Indorsement3 2 on

20 Records, Vol. 2, Exhibits "S" & "S-1," After Examination Report ("AER"), p. 776.
21 Not included in the SAD.
22 Not included in the SAD.
23 Records, Vol. 2, Exhibit "S-2," AER, p. 777.
24 Id., Exhibit "S-3," AER, p. 778.
2s Id., Exhibit "S-4," AER, p. 779.
26 Id., Exhibit "S-5," AER, p. 780.
27 Id., Exhibit "S-6," AER, p. 781.
2s Id., Exhibit "S-7," AER, p. 782.
29 Records, Vol. 2, Exhibit "S-8," AER, p. 783.
3° Id., Exhibits "T" & "T-1," Warrant of Seizure and Detention, pp. 784-785.
31 Note that Alert Order states ZCSU5835506.
32 Records, Vol. 2, Exhibit "U-3," Jsl Indorsement, p. 788. (
DECISION
CTA CRIM. CASE NO. 0-282
Page 5 of 28

November 23, 2011 requesting for the valuation and computation of

the appropriate duties and taxes supposedly due on the shipment in
question. In reply, the Import Assessment Service ("lAS") issued the
2nd Indorsement33 on November 29, 2011 stating that the total duties
and taxes due on the shipment in question is Php1,484,332.00.

On December 21, 2011, a Complaint-Affidavit34 was filed against

the following:

1. Moises Bagan Rodriguez as the owner-proprietor of

Yanzhen Enterprises;

2. Abolkhayr L. Cali as the customs broker of Yanzhen

Enterprises for the shipments covering Import Entry Nos. C-8995, C-
8994, and C-8993; and

3. Zahraida M. Abdul as the customs broker of Yanzhen

Enterprises for the shipments covering Import Entry Nos. C-9000, C-
8999, C-8998, C-8996, and C-8997.

On April18, 2012, the Department of Justice approved the filing

of an information against accused Moises Bagan Rodriguez.35

On May 18, 2012, the present Information36 was filed against

accused for violation of Sections 3601 and 3602 in relation to Sections
2503 and 2530 of the TCCP. The Information reads:

The undersigned prosecutor of the Department of Justice

hereby accuses MOISES BAGAN RODRIGUEZ, of violation
of Sections 3601 & 3602, in relation to Sections 2503 and 2530 of
the Tariff and Customs Code of the Philippines, as amended,
committed as follows:

[]That on or about September 2011, in Davao

City, and within the jurisdiction of this Honorable
Court, the above-named accused, being the
owner/proprietor of Yanzhen Enterprises, willfully,
unlawfully and feloniously did then and there

33 Records, Vol. 2, Exhibit "U," 2"d Indorsement, pp. 786-787.

34 Id., Exhibit "A" and sub-markings, Complaint-Affidavit, pp. 744-751.
35 Records, Vol. 1, Department of Justice Resolution, pp. 7-14.

36 Id., Information, pp. 4-223, with annexes. (

DECISION
CTA CRIM. CASE NO. 0-282
Page 6 of28

imported [sic] onions from China through false

declaration in the Import Entries and Internal Revenue
Declarations and other pertinent documents filed with
the Bureau of Customs covering the shipment of 20x40'
' container vans declared as "Pastries Ingredients" and
"Dough" classified under Tariff Heading H.S. Code
No. 1905.09.09 with tariff rate of only 15% and Tariff
Heading H.S. Code No. 1901.20.23 with tariff rate of
only 10%, respectively, instead of declaring it as
onion[s] with Tariff Heading H.S. Code No. 0711.90.40
with tariff rate of 40%, evading higher duties and taxes
estimated to [sic] One Million Four Hundred Eighty
Three Thousand Three Hundred Thirty Two Pesos
(Phpl,483,332.00) consigned to YANZHEN which
arrived at the port of Davao on board vessel M/V Jan
V-1126, from China, to the damage and prejudice of the
government.[]

CONTRARY TO LAW.

In a Resolution3 7 promulgated on October 3, 2012, the Court

found the existence of probable cause to hold accused for trial. Thus,
on October 5, 2012, the Court issued a Warrant of Arrest38 against
accused.

On October 16,2012, the National Bureau of Investigation issued

a Return of Warrant of Arrest39 stating that accused was arrested on
August 16, 201240.

On October 17, 2012, accused appeared before the Office of the

Executive Judge of the Regional Trial Court, 11th Judicial Region,
Davao City, posted the required cash bond, and was released. 41
Accused likewise executed an Undertaking42 on even date, which was
approved by Judge George E. Omelio.43

The defense filed a Motion for Preliminary Investigation44 on

November 12, 2012 to which the prosecution filed its Comment (to

37 Records, Vol. 1, Resolution, pp. 307-308.

38 Id., Warrant of Arrest, p. 309.
39 Id., Return ofWarrant of Arrest, p. 314.
40 Should be October 16, 2012. See Records, Vol. 3, Memorandum of Accused, p. 1074; Records, Vol. 1,

Motion for Preliminary Investigation, p. 332.

41 Records, Vol. 1, Regional Trial Court Order, p. 322.
42 Id., Undertaking, p. 324.
43 Id., Regional Trial Court Order, p. 322.
44 I d., Motion for Preliminary Investigation, pp. 332-335.

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DECISION
CTA CRIM. CASE NO. 0-282
Page 7 of 28

"Motion for Preliminary Investigation") 45 on December 3, 2012 via

registered mail. The Court, in a Resolution46 dated December 18,2012,
denied the Motion for Preliminary Investigation filed by the defense.

On March 20,2013, accused was arraigned. Accused, assisted by

his counsel, admitted that he was the same person charged in the
Information, and entered a plea of "Not Guilty" to the crime charged. 47

The defense filed its Preliminary Conference Brief48 on April12,

2012; and a preliminary conference49 was held on April16, 2013. The
prosecution filed its Pre-Trial Brief50 on May 7, 2013. Thereafter, a pre-
trial conference was held on May 29, 2013.51

The parties filed their Joint Stipulation of Facts and Issues5 2 on

June 17, 2013 by registered mail. Thus, the Court issued the Pre-Trial
Order53 on July 12, 2013, wherein the parties admitted the following
facts: (1) accused is the owner and proprietor of Yanzhen Enterprises
with office address at 1282 Purok Durian, Lapu-Lapu Extension, San
Miguel, (ODACA) Digos City; (2) the prosecution has sent one (1)
subpoena with two (2) settings to the accused of the notice of hearing
for the preliminary investigation of the above-mentioned case; and (3)
the charges for violation of Sections 3601 and 3602 in relation to Sections
2503 and 2530 of the TCCP against the customs brokers, namely,
Abolkhayr L. Cali and Zahraida M. Abdul, were dropped by the
investigating state prosecutor in a resolution of the preliminary
investigation.

Trial ensued.

The prosecution presented both testimonial and documentary

evidence through the following witnesses: (1) Diamongun Datu-

45 Records, Vol. 1, Comment (to "Motion for PreliminanJ Investigation"), pp. 340-343, with annex.
46 Id., Resolution, pp. 350-352.

47 Records, Vol. 1, March 20, 2013 Minutes of Hearing, p. 356; Records, Vol. 1, Resolution, pp. 360-361;
Records, Vol. 1, Certificate of Arraignment, p. 357; Records, Vol. 1, Identity Admission of the Accused, p.
358.
48 Records, Vol. 1, Preliminary Conference Brief, pp. 362-365.
49 Id., Minutes of PreliminanJ Conference, pp. 366-368.

50 Id., Pre-Trial Brief, pp. 370-374.

51 Id., Resolution, pp. 384-385.

(
52 Id., Joint Stipulation of Facts and Issues, pp. 389-391.

53 Id., Pre-Trial Order, pp. 394-407.

DECISION
CT A CRIM. CASE NO. 0-282
Page 8 of 28

Dacula, a BOC Examiner at the Port of Davao;s4 (2) Faisal Basman, a

BOC Examiner at the Port of Davao;55 (3) Al Tomas B. Albano, Officer-
In-Charge of the Customs Investigation and Intelligence Service
("CIIS") Group of the BOC; 56 (4) Nomie V. Gonzales, Chief of the
System Management Division ("SMD") of the BOC;57 (5) Atty. Julito L.
Doria, Attorney IV of the Legal Service, Revenue Collection
Monitoring Group of the BOC;58 (6) Remedios Salazar Espinosa,
Acting Director III of the lAS of the BOC;S9 and (7) Atty. Martiniano B.
Bangcoy, a retired Acting District Collector of the Port of Davao.6o

The prosecution presented its first witness. Datu-Dacula testified

that his office received alert orders issued by the office of the Deputy
Commissioner of Customs directing the former to conduct a physical
examination of the container vans in question. Thus, on September 29,
2011, Datu-Dacula, together with his colleagues and armed with
Inward Foreign Manifests and Bills of Lading, conducted a physical
examination of the shipments from China with Yanzhen Enterprises as
consignee. Further, the Inward Foreign Manifest indicated that the
shipments were declared as pastry ingredients. Upon examination of
the same, Datu-Dacula discovered that the contents of the shipments
were onion instead of the declared pastry ingredients. Accordingly,
Datu-Dacula prepared an AER.

Upon cross examination, Datu-Dacula testified that the Inward

Foreign Manifests merely indicated pastry ingredients, and that
onions have a different classification under the TCCP. He also testified
that he and his colleagues who conducted the physical examination of
the shipment in question were authorized to do so; that while the alert
orders were addressed to the District Collector, the Chief of the
Assessment Division to which he belongs verbally assigned the
physical examination of the shipments in question to him and his

54 Records, Vol. 1, Minutes of Hearing dated August 28, 2013, p. 420; Transcript of Stenographic Notes
("TSN"), Vol. 1, August 28, 2013 Hearing, pp. 1-99.
55 Records, Vol. 1, Minutes of Hearing dated September 25, 2013, p. 430; TSN, Vol. 1, September 25, 2013

Hearing, pp. 1-104.

56 Id.
57 Records, Vol. 1, Minutes of Hearing dated October 16, 2013, p. 431; Records, Vol. 1, TSN, October 16,
2013 Hearing, pp. 432-484; Records, Vol. 1, Minutes of Hearing dated Januan; 15, 2014, p. 492; Records,
Vol. 1, TSN, January 15, 2014 Hearing, pp. 493-510.
58 Records, Vol. 1, Minutes of Hearing dated Januan; 29, 2014, p. 513; TSN, Vol. 1, Januan; 29, 2014
Hearing, pp. 1-73; Records, Vol. 1, Minutes of Hearing dated Febntary 12, 2014, p. 586; TSN, Vol. 1,
Febntan; 12, 2014 Hearing, pp. 1-37; Records, Vol. 1, Minutes of Hearing dated February 26, 2014, p. 626;
Records, Vol. 1, TSN, February 26, 2014 Hearing, pp. 627-666.
59 Records, Vol. 2, Minutes of Hearing dated March 26, 2014, p. 676; TSN, Vol.1, March 26,2014 Hearing,

pp. 1-32.
60 Records, Vol. 2, Minutes of Hearing dated June 25, 2014, p. 728; TSN, Vol. 1, June 25, 2014 Hearing,
pp. 1-48.

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DECISION
CTA CRIM. CASE NO. 0-282
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colleagues. Datu-Dacula then stated that aside from him and his
colleagues, other people were present at the time of the physical
examination of the shipments in question, i.e., members of the ens
Group, Customs police, and local media; and that the members of the
local media were the ones who took pictures when the shipments in
question was opened. According to Datu-Dacula, twenty (20)
container vans were opened almost at the same time, and all contained
onions; that he personally inspected around seven (7) of the twenty
(20) container vans; and that it took the team around three (3) hours to
finish inspecting all the container vans. He went on to explain that
even if he normally inspects around four (4) to ten (10) container vans
per day, in this particular case, he inspected twenty (20) container vans.
Datu-Dacula likewise testified that while he did not know the
consignee or its owner, he was familiar with the brokers.

The prosecution presented its second witness. Similar to Datu-.

Dacula's testimony, Basman testified that he was a principal Customs
Examiner, and was instructed by the District Collector to conduct a one
hundred percent (100%) examination of the shipments in question
consigned to Yanzhen Enterprises in compliance with the alert orders
issued by the Deputy Commissioner of Customs; that the alert orders
were issued by the random selectivity system of the BOC, which
tagged the shipments as" red." Bas man narrated that on September 29,
2011, he, together with other Customs Examiners, the Customs police,
members of the ens Group, and media, went to the container yard to
open the shipments in question, pursuant to the alert orders; that he
brought the Inward Foreign Manifests, Bills of Lading, and alert orders
when he examined the twenty (20) container vans; that upon opening
the container vans, Basman discovered that the same contained red
onions packed in big net bags, contrary to the importation documents
which indicated the shipments as pastry ingredients and dough; and ·
that thereafter, he prepared the AER.

On cross examination, Basman testified that he identified the

shipments in question through the container van numbers indicated
on the alert orders; and that he did not notify the shipper, brokers, or
owner of the shipments in question when the container vans were
examined as he assumed that the ens Group personnel had already
done so. Basman likewise testified that he and his team immediately
went to the container yard to conduct the inspection as soon as they
received the alert orders; that the inspection, which consisted of
opening the container vans and taking a look inside but not stripping,
took approximately thirty (30) minutes. Basman, however, claims that

t
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CTA CRIM. CASE NO. 0-282
Page 10 of 28

he has no footage of the inspection he conducted. Finally, Basman

testified that while he was familiar with Yanzhen Enterprises, he did
not know the owner of the same; but he is familiar with the brokers of
Yanzhen Enterprises.

The prosecution presented its third witness. Albano testified that

he received alert orders from the Deputy Commissioner of Customs to
conduct a one hundred percent (100%) examination of the shipments
in question; that upon receipt of the alert orders, he proceeded to the
District Collector to give a copy of the same. Albano went on to narrate
that on September 29, 2011, the ocular inspection of the shipments in
question was conducted; that he discovered that there was a
misdeclaration, because while the relevant documents stated the
shipments contained pastry ingredients, as also provided in the alert
orders, the actual contents of the shipments in question were onions;
and that upon confirming the misdeclaration, Albano testified that he
requested the issuance of WSD from the District Collector and
prepared the AER.

On cross examination, Albano testified that he brought copies of

the alert orders with him when he witnessed the ocular inspection
conducted by the Customs Examiners; that he had no knowledge as to
the actual contents of the shipments in question, and that he only acted
based on the facts indicated in the alert orders. Albano then re-counted
that, in a way, the ens Group tried to locate the shipper and to notify
them of the inspection to be conducted; that, however, they did not
come; and that the Group likewise tried to notify the consignee, but
Albano could not confirm the same as the event happened years
before. Considering the shipments in question arrived on September
23, 2011 and the alert orders were issued on the same day, Albano
stated that he was sure the ens Group and the office of the District
Collector tried to notify the concerned persons, i.e., the shipper, the
consignee, and the brokers. Thereafter, Albano testified that he did not
know the brokers of Yanzhen Enterprises or its owners.

The prosecution presented its fourth witness. Gonzales testified

that the SMD is in charge of the whole Philippines and can access each
entry per lodgment from all the ports. She explained that the Electronic
to Mobile Customs System ("E2M System"), which started sometime
in 2009, requires importers, brokers, shipping lines, and consolidators
to register under the system in order to process or release shipments;
that the broker normally encodes entries, which consists of
information indicated in the Bill of Lading, in the system through the

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DECISION
CT A CRIM. CASE NO. 0-282
Page 11 of 28

BOC-accredited Value-Added Service Provider ("VASP"); and that

thereafter, Customs Examiners verify the encoded information with
their online database. She further testified that the Single
Administrative Document ("SAD"), which is the equivalent of the
manual Import Entry and Internal Revenue Declaration ("IEIRD"), is
the declaration of the broker while the Bill of Lading is the declaration
of the contents of the vessel or of a particular cargo by the shipping
line.

On cross examination, Gonzales testified that while she is not an

Information Technology degree holder, she is an Electronic Data
Processing specialist which is the equivalent of the former. Gonzales
also explained that the SMD is able to determine who encoded certain
information because each broker and each importer has its own access
codes to the E2M System. In addition, Gonzales stated that the SAD,
which is within the jurisdiction of the SMD, only contains the
necessary information while the IEIRD, which is within the
jurisdiction of the Assessment Division, contains the other
information. Gonzales testified that in the present case, that the waybill
indicated Yanzhen Enterprises as the owner of the shipment in
question and Shandong Sunshine Foodstuff from Shandong, China as
the supplier; that the documents do not show the name of accused; and
that, accordingly, she is not able to determine who the owner of
Yanzhen Enterprises is based on the documents presented. Finally,
Gonzales stated that under the E2M System, a consignee cannot make
a declaration unless he nominates and indicates his primary broker
and secondary broker; and that, in this way, the consignee authorizes
the brokers in case the latter lodge a declaration.

The prosecution presented its fifth witness. Atty. Doria testified

that he was part of the RATS Group; that in September 2011, the
Deputy Commissioner issued alert orders for the shipments in
question; that the RATS Group took three (3) months to conduct its
investigation, beginning from the date the alert orders were issued and
received by the Group; and that, accordingly, the complaint-affidavit
was filed on December 1, 2011. He further narrated that pursuant to
the Group's investigation, they requested the CIIS in the Port of Davao,
as well as the other responsible officials who conducted the physical
examination, to submit the relevant documents (e.g., alert orders,
electronic manifest, SAD, report, and WSD) to the Group; that based
on the one hundred percent (100%) physical examination conducted,
it appeared that the import entries declared as pastries and dough
were actually onions, which are subject to regulatory requirements;

(
DECISION
CTA CRIM. CASE NO. 0-282
Page 12 of 28

and that it appeared that even the tariff heading on the importation
was changed to suit the declaration in the import entry. Atty. Doria
also testified that he did not personally examine the shipment, but
relied on the results of the examination conducted by the officials in
the Port of Davao; and that what he conducted was a document
investigation. He explained that the WSD issued stated that, upon
100% examination, the declaration of pastries was actually onions; and
that the Enforcement Unit was directed to forfeit and seize the
container vans and subject the items to a seizure and detention hearing
by the Law Division of the Port of Davao. Personally, however, he had
no knowledge if the seized goods were actually forfeited in favor of
the government. Finally, Atty. Doria identified the Client Profile
Registration System (" CPRS") Profiles of Yanzhen Enterprises61, Cali62,
and Abd ul63.

On cross examination, Atty. Doria testified that in conducting its

investigation, the RATS Group does not normally notify the accused;
notification is only made when the case for seizure and forfeiture will
be done by the port; that the Group relies on the presumption of
regularity in the performance of the functions by the officials in the
Port of Davao, hence, he only relied on the documents gathered from
the latter; and that seizure is no longer part of the Group's
investigation process. Thereafter, Atty. Doria explained that the Group
assumed that it was accused who lodged the entry based on the
documents the Group gathered and considering Yanzhen Enterprises
was owned by accused. Based on Atty. Doria's understanding, a
unique code is assigned to the importer and the broker; that the broker
can only open the particular shipment pertaining to the importer if the
broker is also given the code coming from the importer; and that in
this case, considering the importation was coming from Yanzhen
Enterprises, the RATS Group was pretty confident all the security
measures attendant in the particular entry was provided by the
importer itself. Further, Atty. Doria testified that as far as the Group
knows, Yanzhen Enterprises and the brokers are accredited importers
because their records were still in the Group's file; and that the lodging
of a profile with the Interim Customs Accreditation Registration Unit
("iCARE") is part of the accreditation process as an importer. Atty.
Doria said that considering he has a copy of Yanzhen Enterprise's
CPRS, he assumed the latter renewed its accreditation on October 22,
2011. Further, Atty. Doria testified that once an importer does not

61 Records, Vol. 2, Exhibits "V" and "V-1," Client Profile Registration System ("CPRS") Profile, pp. 789-
790.

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62 I d., Exhibits "W" and "W-1," CPRS Profile, pp. 791-792.

63 Id., Exhibits "X" and "X-1," CPRS Profile, pp. 793-794.

DECISION
CTA CRIM. CASE NO. 0-282
Page 13 of 28

comply with the requirements for the application for accreditation,

such importer cannot lodge an entry; that while the BOC can change
the electronic entry lodged by another person, the entry in the present
case was not cancelled because cancellation can only start from the
importer itself; and that once an entry is filed, it cannot be deleted from
the system unless the importer does so. As regards the apparent
discrepancy in the number of container vans in the shipment in
question, Atty. Doria clarified that even though the WSD indicated
twenty-two (22) container vans, only twenty (20) container vans were
included in the complaint as the investigation focused only on the
shipments said to contain onions but were supposed to be pastry
ingredients; and that the remaining two (2) container vans contained
motor vehicles. Accordingly, the Group intentionally excluded the
container vans containing motor vehicles from the complaint
notwithstanding the 2nd Indorsement because there are different
requirements in the importation of motor vehicles. Atty. Doria then
narrated that he attended the preliminary investigation as one of the
two (2) complaining witness for the prosecution; however, he has no
knowledge whether the accused was notified of the proceedings.
Moreover, Atty. Doria stated that in the ordinary course of
proceedings, there should be a justification why an alert order is issued
against a particular shipment; that in this case, however, he did not
receive a copy of the attachments to the alert orders, just the alert
orders; and that as regards the forfeiture of the shipments in question,
it is a logical conclusion that the same were already forfeited
considering a WSD was issued for the same.

On re-direct, Atty. Doria clarified that a person cannot import

goods or lodge entries in the system without being accredited by the
BOC; and that the BOC cannot change the entries in the system, only
the importer can do so. He also testified that there is a historical log for
the subsequent processing of specified entries in the system.

The prosecution presented its sixth witness. Espinosa testified

that she was the one who computed the total duties and taxes due from
Yanzhen Enterprises in the amount of Php1,484,332.00.

On cross examination, Espinosa stated that she did not compute

the taxes and duties due on the two (2) remaining container vans
which consisted of items other than onions because she was only
requested to compute the taxes and duties due on the onions.
According to Espinosa, she arrived at her computation of the twenty
(20) container vans based on the documents presented to her together

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DECISION
CTA CRIM. CASE NO. 0-282
Page 14 of 28

with the 1st Indorsement, which documents were returned upon the
issuance of the 2nd Indorsement. Espinosa also testified that the
documents were only forwarded to her for computation, and at that
point there was already a finding of misdeclaration.

Finally, the prosecution presented its seventh and last witness.

Atty. Bangcoy testified that he was the acting District Collector when
the shipments in question arrived; that the alert orders were issued on
the same day the shipments arrived; and that upon receipt of the same,
he directed the assessment people to assign Customs Examiners to
conduct the one hundred percent (100%) physical examination. Atty.
Bangcoy then narrated that considering the alert orders directly came
from the Deputy Commissioner, he made it a point to attend the
examination and witness the same personally; that based on the
records, the shipment was declared as ingredients for pastries and
dough; that, however, after the examination, it was discovered that the
actual contents was onions; and that, as a result, the Chief of the ens
submitted to him a report of the examination, which recommended the
issuance of a WSD in view of the blatant misdeclaration of the
shipments. Acting on the request for issuance of WSD, Atty. Bangcoy
stated that he directed the Law Division to prepare the WSD which he
eventually signed; and that the WSD was then issued against the
shipment consisting of twenty-two (22) container vans consigned to
Yanzhen Enterprises, which same vans were opened and subjected to
the one hundred percent (100%) physical examination. Atty. Bangcoy
also testified that out of the twenty-two (22) container vans, only
twenty (20) contained onions; that the remaining two (2) contained
motor vehicles; and that, meanwhile, the WSD was issued to cover all
the twenty-two (22) container vans because they were all consigned to
the same consignee.

On cross examination, Atty. Bangcoy testified that before being

assigned to the Port of Davao, he was a Deputy Collector
Administrator in Cebu; that his first alert orders happened to be the
alert orders issued in the present case; and that all full alert orders or
original copies were submitted to him through the office of the Chief
of the ens of the Port of Davao. According to Atty. Bangcoy, the
physical examination of the shipments in question was done in one
day (i.e., September 29, 2011), the report of the ens was received by
his office the following day, and the WSD was issued on that same day.
Finally, Atty. Bangcoy testified that after the issuance of the WSD, the
Law Division was responsible for notifying the consignee; that when
he signed the WSD, the same had yet to be received by Yanzhen

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DECISION
CTA CRIM. CASE NO. 0-282
Page 15 of 28

Enterprises; and that, in issuing the WSD, he relied on the documents

on record which stated that Yanzhen Enterprises, an entity which he
had no personal knowledge of, was the consignee of the shipment in
question.

Thereafter, the prosecution formally offered its evidence on

August 1, 2014;64 to which the defense filed its opposition on
September 9, 2014. 65 The Court admitted all of the prosecution's
evidence in a Resolution66 dated September 16, 2014.

The defense filed a Motion for Leave of Court to File Demurrer

to Evidence67 on September 30, 2014, which the Court granted in a
Resolution68 dated November 12, 2014. Thus, the defense filed its
Demurrer to Evidence69 on November 25, 2014. The prosecution filed
its Comment/ Opposition (To The Demurrer to Evidence Filed by
Accused Moises Bagan Rodriguez)70 on December 9, 2014. In a
Resolution71 promulgated on February 11, 2015, the Court denied the
demurrer to evidence filed by the defense.

For its part, the defense presented both testimonial and

documentary evidence through the following witnesses: (1) Adnan D.
Dilangalen, a former employee of accused; 72 (2) Moises Bagan
Rodriguez, accused in the present case;73 and (3) Marlowe Noble
Ejercito, the Sales Import Manager of accused.74

The defense presented its first witness. Dilangalen testified that

he was hired by Yanzhen Enterprises, a sole proprietorship owned by
accused, in June 2010 as a sales representative of the supposed
importation of second-hand truck parts; and that, however, he was

64 Records, Vol. 2, Prosecution's Formal Offer of Evidence, pp. 731-743.

65 Id., Opposition to tlze Formal Offer of Evidence filed by Accused, pp. 796-798.
66 Id., Resolution, pp. 800-801.
67 Id., Motion for Leave of Court to File Demurrer to Evidence, pp. 809-813.

68 Id., Resolution, pp. 818-819.

69 Id., Demurrer to Evidence, pp. 820-828.
70 Records, Vol. 2, Comment/Opposition (To The Demurrer to Evidence Filed by Accused Moises Bagan

Rodriguez), pp. 842-848.

71 Id., Resolution, pp. 857-868.
72 Records, Vol. 2, Minutes of Hearing dated March 18, 2015, p. 869; TSN, Vol. 2, March 18,2015 Hearing,

pp. 1-67.
73 Records, Vol. 2, Minutes of Hearing dated june 10, 2015, p. 875; TSN, Vol. 2, june 10, 2015 Hearing,

pp. 1-47; Records, Vol. 2, Minutes of Hearing dated September 2, 2015, p. 955; TSN, Vol. 2, September 2,
2015 Hearing, pp. 1-27; Records, Vol. 3, Exhibit "58," Judicial Affidavit of Moises Rodriguez, pp. 1005-
1011;
74 Records, Vol. 3, Minutes of Hearing dated ]arwanJ 20, 2016, p. 990; TSN, Vol. 2, january 20, 2016

Hearing, pp. 1-28.

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DECISION
CT A CRIM. CASE NO. 0-282
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also responsible for securing the necessary business permits and other
government requirements. Dilangalen stated that was connected with
Yanzhen Enterprises until December 2010; that during his
employment, he secured the DTI permit, Bureau of Internal Revenue
("BIR") certificates, receipts, and other documents necessary for
Yanzhen Enterprises to pursue business; that he facilitated the
processing of Yanzhen Enterprises' BOC accreditation; that,
accordingly, Yanzhen Enterprises has a CPRS because it was one of the
requirements of the BOC to be accredited as an importer; and that after
securing the necessary government licenses in December 2010,
Dilangalen decided to leave Yanzhen Enterprises because it was
obvious that the latter would eventually cease its operations as it was
incapable of operating (e.g., he and the other employee's salaries could
not be paid by accused, Yanzhen Enterprises could not comply with
the office space requirements of the DTI, Yanzhen Enterprises had
insufficient capital). Dilangalen also testified that while Yanzhen
Enterprises was supposed to be engaged in importing surplus
materials for auto parts and car trucks, no importation was made
during the time he was connected with Yanzhen Enterprises; and that
neither did Yanzhen Enterprises have any transactions with the
brokers indicated for the shipments in question. In addition,
Dilangalen clarified that as far as he knew, Yanzhen Enterprises'
business permit was no longer renewed after 2010. Finally, Dilangalen
stated that sometime in October 2012, he learned about the arrest and
detention of accused in relation to Yanzhen Enterprises, the entity
Dilangalen helped set up; and that he then assisted accused with his
arrest and retrieved all the relevant documents (e.g., Inward Manifest,
bank records of Yanzhen Enterprises, import entries from the BOC for
the period June to July 2011).

On cross examination, Dilangalen narrated that he had no

employment contract with accused; and that he had previously
worked with the accused as an intern. Dilangalen also testified that
considering he was a close family friend of accused, he knew for a fact
that Yanzhen Enterprises made no importations.

Thereafter, the defense presented its second witness, accused

himself. Accused testified that in May 2010, he befriended a certain Mr.
Min who encouraged him to enter into the business of selling second-
hand spare car parts from Korea for sale to North Cotabato and
Cotabato City; that Min provided the necessary capital while
Dilangalen helped secure the necessary papers (i.e., DTI Certificate of
Business Name Registration, BIR Certificate of Registration, Mayor's

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DECISION
CT A CRIM. CASE NO. 0-282
Page 17 of 28

Permit, CPRS - Importer Profile Importation, Certificate of

Accreditation and Registration) to establish Yanzhen Enterprises, a
sole proprietorship; and that Yanzhen Enterprises secured all the
necessary documents in October 2010. Accused stated, however, that
Yanzhen Enterprises never had the opportunity to conduct business
due to the lack of capital; and that in fact, accused executed an
Affidavit of No Operation in February 2011 in order to retire the
business. As regards the shipment in question, accused testified that
he did not have the capacity to import the same; neither did he know
how to use the internet. Further, accused stated that he had no
knowledge whatsoever of the importation of the container vans in
question, including the investigation conducted thereon,
notwithstanding that Yanzhen Enterprises was indicated as the
consignee of the shipments. Accused explained that aside from
himself, he did not authorize any other person to use the name
Yanzhen Enterprises; that he never appointed or even knew the
brokers of the shipment in question, Cali and Abdul; that he never saw
or signed any document in relation to the shipment in question; that in
fact, from the time the permits of Yanzhen Enterprises was secured up
to the present, he never imported goods which arrived at the Port of
Davao; and that the first time he learned about the shipments In
question was when he was arrested in October 16, 2012.

On cross examination, accused testified that he, together with his

wife and Min, came up with the name Yanzhen Enterprises; that
accused met Min when the former was delivering chicharon, and knew
the latter for around one (1) year; that Min, who was based in Davao,
was in the business of selling second-hand cars; that Min encouraged
accused to enter into the business of importing second-hand spare car
parts; that Min provided all the capital to process the necessary
licenses using the name of the accused; and that under their
agreement, Min would give accused money upon arrival of the
importation. Accused went on to narrate that, however, the business
did not progress and accused did not receive any compensation
whatsoever from Min; that, apparently, Min's business did not prosper
in 2010; and that thus, Min did not have the sufficient capital to pursue
the business of Yanzhen Enterprises.

Finally, the defense presented its third and last witness. Ejercito
testified that he was hired by Yanzhen Enterprises as a sales import
manager, who was supposed to be in charge of processing any
importations made by Yanzhen Enterprises; and that accordingly, he
has a CPRS Profile. Ejercito explained that while employed by

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DECISION
CTA CRIM. CASE NO. 0-282
Page 18 of 28

Yanzhen Enterprises, no importation was made either by accused or

by Yanzhen Enterprises; and thus, he has no knowledge who the
owner of the shipment in question is, considering Yanzhen Enterprises
is only authorized to import second-hand truck parts.

On cross examination, Ejercito stated that he paid for his own

plane ticket coming to Manila; that Dilangalen informed him of the
pending case against accused; that he was the employee of Yanzhen
Enterprises for the period July to December 2010; that he did not
receive any salary while connected with the latter; and that he did not
process any importation for the accused during his employment.
Finally, Ejercito testified that at the time of the importation of the
shipment in question, he was no longer connected with accused, but
he learned of the same subsequently.

On re-direct, Ejercito stated that he was informed that Yanzhen

Enterprises applied for a certificate of no operation in February 2011.

Having finished presenting its evidence, the defense formally

offered its evidence on February 1, 2016.75 The prosecution filed its
comment/ opposition to the formal offer of evidence on March 9,
2016,76 which was deemed by the Court as having been filed out of
time.77 Accordingly, the Court admitted all of the evidence formally
offered by the defense in a Resolution78 dated March 22, 2016.

In compliance with the Court's March 22, 2016 Resolution, which

ordered the parties to file their respective memoranda within thirty
(30) days from receipt thereof, the prosecution filed its Memorandum79
on May 30,2016, while the defense filed its Memorandum80 on June 24,
2016. Thus, the Court issued a Resolution81 on June 28,2016 submitting
the case for decision; hence, this Decision.

The Issues

Based on the Pre-Trial Order, the following are the issues to be

75 Records, Vol. 3, Formal Offer of Evidence of Accused, pp. 1001-1004.

76 Id., Comment/Opposition to Accused' Formal Offer of Evidence, pp. 1036-1039.
77 See Records, Vol. 3, Resolution, pp. 1041-1042.
78 Records, Vol. 3, Resolution, pp. 1041-1042.
79 Id., Prosecution's Memorandum, pp. 1059-1069.

80 Id., Memorandum of Accused, pp. 1072-1082.

81 Id., Resolution, p. 1084.

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DECISION
CTA CRIM. CASE NO. 0-282
Page 19 of 28

resolved by the Court:

WHETHER ACCUSED IS THE AUTHOR WHO BENEFITED

FROM THE PROCEEDS/EFFECTS OF THE FALSIFIED/SPURIOUS
CARGO MANIFEST/WAY BILL THAT FACILITATED THE
COMMISSION OF THE COMPLAINED MISDECLARATION;

WHETHER ACCUSED ENGAGED THE SERVICES OF

ABOLHAYR L. CALI AND ZAHRAIDA M. ABDUL TO BE THE
CUSTOMS BROKERS OF THE SUBJECT IMPORTED GOODS;

WHETHER ACCUSED CONSENTED TO THE IMPORTATION

OF PASTRIES INGREDIENTS/DOUGH/ONIONS FROM CHINA,
WITHOUT HAVING THE BILL OF LADINGS DULY SIGNED BY
HIM AS CONSIGNEE OF THE SUBJECT IMPORTED GOODS; AND

WHETHER ACCUSED IS GUILTY OF VIOLATING SECTIONS

3601 AND 3602 IN RELATION TO SECTIONS 2503 AND 2530 OF THE
TCCP. 82

Ultimately, the main issue to be resolved by the Court is whether

accused is guilty of violating Sections 3601 and 3602 in relation to
Sections 2503 and 2530 of the TCCP.

Arguments of the Prosecutions3

The prosecution claims that accused performed overt acts

indicative of a criminal objective, i.e., knowingly, feloniously,
fraudulently, and willfully importing onions without a permit to
import from the Bureau of Plant and Industry ("BPI"); and that
consequently, accused committed undervaluation of the imported
articles. The prosecution further alleges that accused merely raised the
defenses of alibi and denial, instead of presenting evidence to disprove
the prosecution's allegations. Finally, the prosecution avers that the
self-serving testimony of accused was worsened by the immaterial,
irrelevant, and purely hearsay testimonies of his witnesses.

82 Records, Vol. 1, Pre-Trial Order, Issues, p. 395.

83 Id., Vol. 3, Prosecution's Memorandum, pp. 1059-1069.

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DECISION
CT A CRIM. CASE NO. 0-282
Page 20 of 28

Arguments of the DefenseB4

On the other hand, the defense argues that the prosecution was
not able to prove that accused actually imported or assisted in so
doing, by fraudulent means, onions in the shipments in question. In
addition, the defense avers that the prosecution utterly failed to prove
that accused knowingly facilitated an entry of goods upon a false
classification as to quality to lower the payment of tax, and that
accused was duly notified of the arrival of the shipments in question.
The defense also claims that Yanzhen Enterprises practically ceased to
operate from February 2011 onwards, seven (7) months before the
importation of the shipments in question; that consequently, Yanzhen
Enterprises could not have imported the onions. The defense argues
that, indeed, the name of accused does not appear on any document
presented by the prosecution; that only Yanzhen Enterprises, which is
a person that cannot be sued, appears on the same. Moreover, the
defense posits that the prosecution failed to present evidence that the
brokers were authorized by accused to facilitate or process the
documents of the imported onions; that in fact, the prosecution failed
to prove a relationship or agency between the shipper, broker,
consignor, and consignee; and that neither did accused claim or
demand ownership over the shipments in question. Thus, the defense
argues that the prosecution failed to prove the culpability of accused
in knowingly importing the onions; and that on the other hand, the
defense vehemently denies the same. Finally, the defense claims that,
surprisingly, the prosecution has set free the brokers who were
culpable of the importation at the expense of accused whose business
name was unscrupulously used to import the onions.

The Ruling of the Court

The evidence presented by the prosecution is sufficient to indict

accused of the violation charged.

Accused is charged with violating Sections 3601 and 3602 in

relation to Sections 2503 and 2530 of the TCCP. Sections 3601 and 3602
refer to acts that amount to unlawful importation and those that
amount to fraudulent practices against customs revenue, respectively,
and their corresponding penalties. They read:
(
84 Records, Vol. 3, Memorandum of Accused, pp. 1072-1082.
DECISION
CTA CRIM. CASE NO. 0-282
Page 21 of 28

Sec. 3601. Unlawful Importation. -Any person who shall

fraudulently import or bring into the Philippines, or assist in so
doing, any article, contrary to law, or shall receive, conceal,
buy, sell, or in any manner facilitate the transportation,
concealment, or sale of such article after importation, knowing
the same to have been imported contrary to law, shall be guilty
of smuggling and shall be punished with:

XXX XXX XXX

In applying the above scale of penalties, if the offender is

an alien and the prescribed penalty is not death, he shall be
deported after serving the sentence without further
proceedings for deportation. If the offender is a government
official or employee, the penalty shall be the maximum as
hereinabove prescribed and the offender shall suffer and
additional penalty of perpetual disqualification from public
office, to vote and to participate in any public election.

When, upon trial for violation of this section, the

defendant is shown to have had possession of the article in
question, possession shall be deemed sufficient evidence to
authorize conviction unless the defendant shall explain the
possession to the satisfaction of the court: Provided, however,
That payment of the tax due after apprehension shall not
constitute a valid defence in any prosecution under this section.

XXX XXX XXX

Sec. 3602. Various Fraudulent Practices Against Customs

Revenue. - Any person who makes or attempts to make any
entry of imported or exported article by means of any false or
fraudulent invoice, declaration, affidavit, letter, paper or by
any means of any false statement, written or verbal, or by any
means of any false or fraudulent practice whatsoever, or
knowingly effects any entry of goods, wares or merchandise, at
less than true weight or measurers thereof or upon a false
classification as to quality or value, or by the payment of less
than the amount legally due, or knowingly and willfully files
any false or fraudulent entry or claim for the payment of
drawback or refund of duties upon the exportation of
merchandise, or makes or files any affidavit abstract, record,
certificate or other document, with a view to securing the
payment to himself or others of any drawback, allowance, or
refund of duties on the exportation of merchandise, greater
than that legally due thereon, or who shall be guilty of any
willful act or omission shall, for each offence, be punished in
accordance with the penalties prescribed in the preceding

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DECISION
CTA CRIM. CASE NO. 0-282
Page 22 of 28

section.

On the other hand, Sections 2503 and 2530 imposes the surcharge
for undervaluation, misclassification, and misdeclaration in entry and
the forfeiture of articles and objects. They provide:

Sec. 2503. Undervaluation, Misclassification and

Misdeclaration in Entry. - When the dutiable value of the
imported articles shall be so declared and entered that the
duties, based on the declaration of the importer on the face of
the entry, would be less by ten percent (10%) than should be
legally collected, or when the imported articles shall be so
described and entered that the duties based on the importer's
description on the face of the entry would be less by ten percent
(10%) than should be legally collected based on the tariff
classification, or when the dutiable weight, measurement or
quantity of imported articles is found upon examination to
exceed by ten percent (10%) or more than the entered weight
measurement or quantity, a surcharge shall be collected from
the importer in an amount of not less than the difference
between the full duty and the estimated duty based upon the
declaration of the importer, nor more than twice of such
difference: Provided, That an undervaluation, misdeclaration in
weight, measurement or quantity of more than thirty percent
(30%) between the value, weight, quantity, or measurement
shall constitute a prima facie evidence of fraud penalized under
Section 2530 of this Code: Provided, further, That any
misdeclared or undeclared imported articles/items found
upon examination shall ipso facto be forfeited in favor of the
Government to be disposed of pursuant to the provisions of
this Code.

When the undervaluation, misdescription,

misclassification or misdeclaration in the import entry is
intentional, the importer shall be subject to the penal provision
under Section 3602 of this Code.

XXX XXX XXX

Sec. 2530. Property Subject to Forfeiture Under Tariff and

Customs Laws. - Any vehicle, vessel or aircraft, cargo, article
and other objects shall, under the following conditions be
subjected to forfeiture:

XXX XXX XXX

!
DECISION
CTA CRIM. CASE NO. 0-282
Page 23 of 28

f. Any article the importation or exportation of

which is effected or attempted contrary to law, or any article of
prohibited importation or exportation, and all other articles
which, in the opinion of the Collector, have been used, are or
were entered to be used as instruments in the importation or
the exportation of the former;

XXX XXX XXX

i. Any package of imported article which is found by

the examining official to contain any article not specified in the
invoice or entry, including all other packages purportedly
containing imported articles similar to those declared in the
invoice or entry to be the contents of the misdeclared package;
Provided, That the Collector is of the opinion that the
misdeclaration was contrary to law;

XXX XXX XXX

1. Any article sought to be imported or exported

XXX XXX XXX

(3) On the strength of a false declaration or

affidavit executed by the owner, importer, exporter or
consignee concerning the importation of such article;

(4) On the strength of a false invoice or other

document executed by the owner, importer, exporter or
consignee concerning the importation or exportation of
such article; and

(5) Through any other practice or device

contrary to law by means of which such articles was
entered through a customhouse to the prejudice of the
government.

Applying the foregoing provisions to the present case, the Court

finds the prosecution's allegation that the eight (8) shipments declared
to contain pastries ingredients" and dough" were actually onions,
II II

given direct evidence from the various prosecution witnesses proving

this fact. In addition, it is worthy to note that considering the
11
shipments in question were declared as pastries ingredients" and
IIdough," the importation was clearly made without the required
import clearance from the BPI.85 Thus, there is clear and intentional

85 See Department of Agriculture Administrative Order No. 08-09, May 7, 2009.

(
DECISION
CT A CRIM. CASE NO. 0-282
Page 24 of 28

misdeclaration of the shipments in question and unlawful importation

and fraudulent practice against the BOC, as contemplated in the TCCP.

Considering that the violation charged was clearly committed, it

is now necessary to determine the guilt of accused.

Accused denies that he was involved in the commission of the

violation of the TCCP. As his defense, accused argues that Yanzhen
Enterprises never operated and had in fact ceased operations as early
as February 2011; that he has no capacity to make any importations
because he has no capital; that he does not know the brokers who
facilitated the shipment in question; and that Yanzhen Enterprises was
unscrupulously used to make the unlawful importation.

However, the Court notes that the defenses of the accused are
only supported by self-serving and hearsay evidence, i.e., the
testimony of accused, his Affidavit of No Operations6, and the
testimony of two other witnesses whose employment with Yanzhen
Enterprises already ended in December 2010 and who cannot therefore
validly claim that Yanzhen Enterprises did not make the unlawful
importation on September 23, 2011. While there is no direct evidence
pointing to accused as the one who committed the crime, there is
ample circumstantial evidence by the prosecution showing that he is
the person responsible therefor.

In Zabala v. PeopleB7, the Supreme Court explained that

circumstantial evidence is sufficient to support a conviction, thus:

It is a settled rule that circumstantial evidence is

sufficient to support a conviction, and that direct evidence is
not always necessary. This is but a recognition of the reality that
in certain instances, due to the inherent attempt to conceal a
crime, it is not always possible to obtain direct evidence. In
Bacolod v. People, this Court had the occasion to say:

The lack or absence of direct evidence does not

necessarily mean that the guilt of the accused cannot
be proved by evidence other than direct evidence.
Direct evidence is not the sole means of establishing
guilt beyond reasonable doubt, because circumstantial
evidence, if sufficient, can supplant the absence of

Records, Vol. 3, Exhibit "6," Affidavit of No Operation, p. 1020.

(
86

87 G.R. No. 210760, January 26, 2015, 748 SCRA 246.

DECISION
CTA CRIM. CASE NO. 0-282
Page 25 of28

direct evidence. The crime charged may also be proved

by circumstantial evidence, sometimes referred to as
indirect or presumptive evidence. Circumstantial
evidence has been defined as that which" goes to prove
a fact or series of facts other than the facts in issue,
which, if proved, may tend by inference to establish a
fact in issue."

The Rules of Court itself recognizes that circumstantial

evidence is sufficient for conviction, under certain
circumstances:

Sec. 4. Circumstantial evidence, when sufficient. -

Circumstantial evidence is sufficient for conviction if:

(1) There is more than one circumstance;

(2) The facts from which the inferences are

derived are proven;

(3) The combination of all the circumstances

is such as to produce a conviction beyond a reasonable
doubt.

Moreover, in Lozano v. People, this Court clarified the

application of the circumstantial evidence rule:

To sustain a conviction based on circumstantial

evidence, it is essential that the circumstantial evidence
presented must constitute an unbroken chain which
leads one to a fair and reasonable conclusion pointing
to the accused, to the exclusion of the others, as the
guilty person. The circumstantial evidence must
exclude the possibility that some other person has
committed the crime.

In the present case, it is worthy to note the following evidence

presented by the prosecution:

1. The waybill of the shipment indicates Yanzhen Enterprises

as the owner of the shipments in question and different entities from
China and Hong Kong as the supplier;

2. The E2M System of the BOC shows Yanzhen Enterprises

as the importer of the shipments;

(
DECISION
CTA CRIM. CASE NO. 0-282
Page 26 of28

3. The BOC Certificate of Accreditation and Registrationss of

Yanzhen Enterprises was still valid and subsisting at the time the
shipments in question were made; and

4. The parties have jointly admitted that accused is the owner

and sole proprietor of Yanzhen Enterprises, the consignee of the
shipments in question.

The aforementioned evidence, while circumstantial, clearly

show beyond reasonable doubt that accused was guilty of the crime
charged. Further, under the E2M System, there is a fair and reasonable
conclusion that accused, acting through Yanzhen Enterprises, was the
one who committed the violations of the TCCP. The claim of accused
that he does not know how to use the internet and that he does not
know the brokers of the shipments in question deserves scant
consideration considering the feature of the E2M System which only
allows the consignee and/ or its broker to lodge entries therein through
the unique access code granted to each of them. There is none other
than the consignee and/ or its broker who can lodge import entries
under the E2M System.

Considering the foregoing, the Court finds that the defense

failed to overcome the convincing proof presented by the prosecution.
Accordingly, the Court holds accused Moises Bagan Rodriguez liable
for the charged acts under Sections 3601 and 3602 in relation to Sections
2503 and 2530 of the TCCP. In addition, the Court notes that the
appraised value of the unlawfully imported onions, including duties
and taxes, clearly exceeds Php150,000.00.89

WHEREFORE, premises considered, the Court finds accused

Moises Bagan Rodriguez GUlL TY BEYOND REASONABLE DOUBT
for violating Sections 3601 and 3602 in relation to Sections 2503 and 2530
of the TCCP. For violating Section 3601 of the TCCP, accused is hereby
SENTENCED to suffer an indeterminate penalty of eight (8) years and
one (1) day, as a minimum, to twelve (12) years, as a maximum, and to
pay a fine in the amount of Php10,000.00. Similarly, for violating
Section 3602 of the TCCP, accused is hereby SENTENCED to suffer an

88Records, Vol. 3, Exhibit "11/' Bureau of Customs Certificate of Registration, p. 1019.

89Under Section 3601 (4) of the TCCP, a fine of not less than Php8,000.00 nor more than Php10,000.00
and imprisonment of not less than eight (8) years and one (1) day nor more than twelve (12) years
shall be imposed if the appraised value of the unlawfully imported article, including duties and
taxes, exceeds Php150,000.00. Meanwhile, Section 3602 of the TCCP imposes the same penalty under
Section 3601(4) for violations thereof.

(
 DECISION
CTA CRIM. CASE NO. 0-282
Page 27 of 28

indeterminate penalty of eight (8) years and one (1) day, as a

minimum, to twelve (12) years, as a maximum, and to pay a fine in the
amount of Php10,000.00.

SO ORDERED.

LOVELt:.. BAUTISTA
Associate Justice

WE CONCUR:

(Wit]ICpnfu-rring Opinion) ~. ~ _,</ L'

ESPERANZAIRfFABON-VICTORINO MA. BELEN M. RINGPIS-LIBAN
As so cia te Justice

ATTESTATION

I attest that the conclusions in the above Decision were reached

in consultation before the case was assigned to the writer of the
opinion of the Court's Division.

LOVEL~. BAUTISTA
Associate Justice
Chairperson
DECISION
CTA CRIM. CASE NO. 0-282
Page 28 of28

CERTIFICATION

Pursuant to Article VIII, Section 13 of the Constitution and the

Division Chairperson's Attestation, it is hereby certified that the
conclusions in the above Decision were reached in consultation before
the case was assigned to the writer of the opinion of the Court.

Presiding Justice
 REPUBLIC OF THE PHILIPPINES
COURT OF TAX APPEALS
QUEZON CITY

THIRD DIVISION

PEOPLE OF THE CTA CRIM. CASE NO. 0-282

PHILIPPINES,
Plaintiff, Members:
BAUTISTA, Chairperson,
FABON-VICTORINO, and
- versus - RINGPIS-LIBAN, JJ.

Promulgated:
MOISES BAGAN
RODRIGUEZ, JUN 2 8 2017 /
Respondent.
X- - - - - - _ _ _ _ _ _ _ _ _ _ _ _ /' '{o p-.. . {:7
- - - - - - - - - - - - - - - - -x

SE PARATE CONCURRING OPINION

Fa bon-Victorino, J.:

I subscribe to the pronouncement of the Honorable

Ponente that the accused Moises Bagan Rodriguez is GUILTY
BEYOND REASONABLE DOUBT of violation of Sections 3601
and 3602, in relation to Sections 2503 and 2530 of the Tariff
and Customs Code of the Philippines (TCCP), for importing
onions but declared as pastry ingredients and dough in the
Import Entries and Internal Revenue Declarations and other
documents pertinent to such importation.

Violation of Section 3601 of the TCCP or Unlawful

Importation or smuggling is committed by (i) fraudulently
importing/bringing into the country any article, contrary to
law; (ii) assisting in such importing/bringing of any article,
contrary to law; (iii) receiving, concealing, buying or selling
such prohibited article; and (iv) facilitating the
transportation, concealment, or sale of such prohibited
article.

Importation commences when the carrying vessel or

aircraft enters the jurisdiction of the Philippines with /
intention to unload and is deemed terminated upon payment
Separate Concurring Opinion
CTA Crim. Case No. 0-282
Page 2 of4

of the duties, taxes and other charges due upon the articles
and the legal permit for withdrawal has been issued, -or
where the articles are duty-free, once the articles have left
the jurisdiction of the customs. 1

In the present case, accused is charged with smuggling

through fraudulent practice against customs revenue. To
sustain such charge the following must be established, to wit:

1) There was importation made by the accused;

2) Such importation must be illegal or contrary to law.

The fact of importation was unarguably established by

the prosecution through the testimonies of its 7 witnesses
who identified relevant importation documents such as but
not limited to the Import Entries 2 and Inward Foreign
Manifests.

The prosecution was also able to prove that the

importer/owner of the subject shipments was Yanzhen
Enterprises, owned by accused as appearing in the waybill of
the shipment and in the Electronic to Mobile Customs
System (E2M System) of the Bureau of Customs (BOC).
Significantly, accused himself admitted to be the owner and
sole proprietor of Yanzhen Enterprises, whose BOC
Certificate of Accreditation and Registration was still valid
and subsisting at the time of the subject importation.

On the second element, it must be pointed out that the

imported article itself - the onions - is not illegal per se. The
subject importation of onions became illegal when it was
entered or misdeclared 3 in the importation documents as

1 Salvador vs. People, G.R. No. 146706, August 15, 2005

2 Exhibits 8 to J, and sub-markings.
3 Section 2503. Undervaluation, Misclassification and Misdec/aration of Entry. - When the

dutiable value of the imported articles shall be so declared and entered that the duties,
based on the declaration of the importer on the face of the entry, would be less by ten
percent ( 10%) than should be legally collected, or when the imported articles shall be so
described and entered that the duties based on the importer's description on the face of
the entry would be less by ten percent (10%) than should be legally collected based on
the tariff classification, or when the dutiable weight, measurement or quantity of imported
articles is found upon examination to exceed by ten percent (10%) or more than the

j
entered weight, measurement or quantity, a surcharge shall be collected from the
importer in an amount of not less than the difference between the full duty and the
estimated duty based upon the declaration of the importer, nor more than twice of such
difference: Provided, That an undervaluation, misdeclaration in weight, measurement or
quantity of more than thirty percent (30%) between the value, weight, measurement, or
quantity declared in the entry, and the actual value, weight, quantity, or measurement
shall constitute a prima facie evidence of fraud penalized under Section 2530 of this Code:
Separate Concurring Opinion
CTA Crim. Case No. 0-282
Page 3 of4

pastry ingredients and dough, when in truth and in fact as

unveiled during the physical inspection, was onions.

In the present case, the Import Entries4 declared that

the shipment contained either pastry ingredients or dough.
The Alert Orders 5 however revealed that upon physical
inspection, the shipment inside the container vans was
found to be onions. This fact is clearly indicated in the
After-Examination Reports 6 and unequivocally declared by
prosecution witnesses Diamongun Datu-Dacula, Faisal
Basman, AI Tomas B. Albano, and Atty. Martiniano B.
Bang coy.

Section 3602 7 of the TCCP, on the other hand,

enumerates the various fraudulent practices against customs
revenue, i.e., the entry of imported or exported articles by
means of false or fraudulent invoice, statement or practice;
the entry of goods at less than the true weight or measure;
or the filing of any false or fraudulent entry for the payment
of drawback or refund of duties.

In the case of Jardeleza v. People 8 , the Supreme Court

had the occasion to discuss at length the kind and nature of
fraud contemplated by law on the matter, thus:

The fraud contemplated by law must be intentional

fraud, consisting of deception, willfully and deliberately
dared or resorted to in order to give up some right. The

Provided, further, That any misdeclared or underdeclared imported articles/items found

upon examination shall ipso facto be forfeited in favor of the Government to be disposed
of pursuant to the provision of this Code.

When the undervaluation, misdescription, misclassification or misdeclaration in the import

entry is intentional, the importer shall be subject to the penal provision under Section 3602 of
this Code.
4 Exhibits B to J, and sub-markings.
5 Exhibits K to R, and sub-markings.
6 Exhibits S, and sub-markings.
7 Sec. 3602. Various fraudulent practices against customs revenue.- Any person who makes or

attempts to make any entry of imported or exported article by means of any false or
fraudulent invoice, declaration, affidavit, letter, paper, or by any means of any false statement,
written or verbal, by any means of any false or fraudulent practice whatsoever, or knowingly
effects any entry of goods, wares or merchandise, at less than true weight or measures
thereof or upon a false classification as to quality or value, or by the payment of less than the
amount legally due, or knowingly and willfully files any false or fraudulent entry or claim for
the payment of drawback or refund of duties upon exportation of merchandise, or makes or
files any affidavit, abstract, record, certificate or other document, with a view to securing the
payment to himself or others of any drawback, allowance, or refund of duties on the
exportation of merchandise, greater than that legally due thereon, or who shall be guilty of
any willful act or omission, shall, for each offense, be punished in accordance with the
J
penalties prescribed in the preceding section.
8 G.R. No. 165265, February 06, 2006
Separate Concurring Opinion
CTA Crim. Case No. 0-282
Page 4 of4

offender must have acted knowingly and with the

specific intent to deceive for the purpose of causing
financial loss to another; even false representations or
statements or omissions of material facts come within
fraudulent intent. The fraud envisaged in the law
includes the suppression of a material fact which a
party is bound in good faith to disclose. Fraudulent
nondisclosure and fraudulent concealment are of the
same genre.

Fraudulent concealment presupposes a duty to

disclose the truth and that disclosure was not made
when opportunity to speak and inform was present, and
that the party to whom the duty of disclosure as to a
material fact was due was thereby induced to act to his
injury. Fraud is not confined to words or positive
assertions; it may consist as well of deeds, acts or
artifice of a nature calculated to mislead another and
thus allow one to obtain an undue advantage.

Thus, for violation of Section 3602 of the TCCP to exist,

there must be:

(1) fraudulent practices against customs revenue,

such as the entry of imported or exported articles
by means of false or fraudulent invoice, statement
or practice;
(2) the entry of goods at less than the true weight or
measure; or
(3) the filing of any false or fraudulent entry for the
payment of drawback or refund of duties.

In the instant case, fraudulent practice by means of

false or fraudulent declarations or entries in the import
documents was established. The evidence presented point
to a logical conclusion that fraud was intentional as there
were clear false representations made by accused as the
owner of the shipment calculated to mislead the collecting
agent as to the subject of importation with the end in view
of defeating taxes.

Precisely, I concur with the verdic'J.