tariff and customs laws.docx

7/24/2019 TARIFF AND CUSTOMS LAWS.docx

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TARIFF AND CUSTOMS LAWS

Substantive Aspect of Tariff and Customs LasMeaning and ScopeSection 3514 (TCC)

Provides that Tariff and Customs Laws include not only the provisions of the code

itself and reulations pursuant thereto !ut all other laws and reulation which are su!"ect toenforcement !y the #ureau of Customs or otherwise within its "urisdiction$ %t e&tend not onlyto the provisions of the Tariff Customs Code !ut to all other laws as well' lie Central #anCirculars the enforcement of which is entrusted to the #ureau of Customs$

Nature of Customs Duties and Tariff

!" Custom duties#

*re duties which are one chared upon commodities on their !ein imported into ore&ported out of a country$

$" Tariff#

+eans a !oo of rates a ta!le or cataloue drawn usually in alpha!etical ordercontainin the names of several inds of merchandise with the duties to !e paid forthe same as settled or areed upon !etween several states that holds commercetoether$

Concept of %oods for Customs dut& purposes#

As to Imported Articles:


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*ll articles when imported from any forein country into the Philippines shall !esu!"ect to duty upon each importation even thouht previously e&ported from thePhilippines$ ,&cept as otherwise specifically provided for in the code or other laws-

As to Exported Articles

Certain articles lie specific types of wood mineral plant veeta!le and animalproducts are su!"ect to tariff and premium duties$.ote- *rticles- /hen used with reference to importation or e&portation includes oods

wares and merchandise and in eneral anythin that may!e made the su!"ect ofe&portation and importation$'ertinent Case#

4 0S dollars havin ceased to !e leal tender in the Philippines fall within the

meanin of the term merchandise2 (#astida vs$ *ctin Commissioner of Customs et al L411 6ct$ 4 178)Artic(es ) %oods Covered under t*e Tariff and Customs Code#

1. Artic(es sub+ect to dut&General Rule: *ll articles when imported from a forein country includin thosepreviously e&ported from the Philippines one su!"ect to duty unless otherwisespecifically provided for in the Tariff and Customs Code or other laws$ (Sec$ 1TCS)

2. 'ro*ibited Importations

Classifications:*$ *rticles which are a!solutely prohi!ited-

1$ weapons of war$ am!lin devices

3$ narcotics or prohi!ited drus


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4$ immoral o!scene or insidious articles

5$ those prohi!ited under special laws

#$ *rticles 9ualifiedly Prohi!ited-

:efers to those which may!e imported !ut su!"ect to and after compliance withcertain conditions$

Pertinent Cases-

1$ /here such conditions as to warrant lawful importation neither do nor

e&ist the leal effects of the importation of ;ualifiedly prohi!ited articles arethe same as those of a!solutely prohi!ited articles$ (*uyon


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Liabi(it& for Custom Duties

General Rule: *ll importations @ e&portation of articles @ oods are su!"ect to customsduties$

Exceptions:

1. ,&empt under the TCC$2. ,&emption ranted to overnment aencies instrumentalities with e&istin contracts

commitment areements or o!liations with forein countries$

3. ,&empt international oraniAations pursuant to areements or special laws' and

4. ,&empt !y the President upon recommendation of .,>*$

Liabi(it& of Importer for Custom Duties#

1. * personal de!t which can !e dischared only !y payment in full thereof'2. * lien upon the imported article while they are in custody or su!"ect to the control of

the overnment$,a(uation of t*e %oods#

%nvoice value of the oods plus-

1$ freiht$ insurance

3$ cost

4$ e&penses and

5$ other necessary e&penses$

.ote- %mported oods must !e entered into a custom house at their port of entry otherwisethey shall !e considered as contra!and and the importer is lia!le for smulin$


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Import entr&

%t is a declaration in the #ureau of Customs showin particulars of the importedarticle that will ena!le the customs authorities to determine the correct duties$

1. W*en importation does be-in.

%mportation !eins when the carryin vessel or aircraft enters the "urisdiction of thePhilippines with the intention to unlade therein$

2. W*en is it terminated ) ended.

%mportation is deemed terminated upon payment of duties ta&es and other chares

due upon the articles pr secured to !e paid at a port of entry and the leal permit forwithdrawal shall ave !een ranted or in case said articles are free of duties ta&esand other chares until they have leally left the "urisdiction of the customs (Sec$1 TCC)

.ote- *ll imported articles into the Philippines whether su!"ect to duty or not shall !eentered throuh a customs house at a port of entry$

!" 'ort of /ntr&

+eans a domestic open to !oth forein and continuous trade includin airport ofentry$

$" /0portation

%t is the !rinin out of oods from the Philippines territorial "urisdiction$

3$ 0nder ,&ecutive 6rder B Series of 17D ,&port ta&es e&cept on los have

!een suspended

1inds of Custom Duties

A. :eular @ 6rdinary >uties


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These are duties imposed on imported articles that enter the country of thePhilippines in avoidance with the schedules and classifications provided under theTariff and Customs Code$

C(assification#

!" Adva(orem Dut&

>uty !ased on the value of the imported article$

$" Specific Dut&

>uty !ased on the dutia!le weiht of oods num!er or measurement$

B. Special >uties

%mposed in addition to reular or ordinary duties principally in order to protect localindustries aainst unfair competition from forein manufacturers or procedures'consumer aainst possi!le deceptions' and national interest$

C(assifications#

!" Dumpin- Dut&

%mposed !y the secretary of =inance upon the recommendation of the TariffCommission when-

a$ The price of the imported article is deli!erately or continually fi&ed at less

than the fair maret value or cost of production' and!$ %mportation would cause or liely cause and in"ury to local industries

enaed in the manufacture or production of the same or similar articles orprevent their esta!lishment$

*mount of special duty- e&tent of the under pricin$

$" Countervai(in- dut&

Special duty imposed on imported articles which are ranted any ind or form ofsu!sidy !y the overnment in the country or oriin or e&portation the importation


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of which has caused or threatens to cause material in"ury to a domestic industryor has materially relaided the rowth or prevents the esta!lishment of a domesticindustry$ (:* BD851)

Re2uisites#

1$ The levy of an e&cise ta& or inland ta& or local oods of the same or

similar class as the article imported or the rant of su!sidy to the foreine&porter !y his overnment' and

$ The importation is liely to insure materially esta!lished local industries or

prevent their esta!lishments$

*mount of special duty- ,;ual to the !ounty or su!sidy or su!vention$

3" Mar4in- Dut&

Special duty of five percent (5E) advalorem imposed or articles properly maredcollected !y the commissioner e&cept when such article is e&ported or destroyedunder the customs supervision and prior to final li;uidation of the correspondinentry$

Purpose- To prevent possi!le deception of the consumers$

5" Discriminator&)Reta(iator& dut&

%mposed on imported oods whenever it is found as a fact that the country oforiin discriminates aainst the commerce of the Philippines in such a manner asto place the commerce of the Philippines at a disadvantae compared with thecommerce of any forein country$

6" Duties imposed under t*e F(e0ib(e Tariff C(ause 7Sec" 58!9 TCC:

%mport duties which are modified !y the President upon investiation of the TariffCommissions and recommendation of the .ational ,conomic >evelopment*uthority in the interest of national economy eneral welfare and nationalsecurity$


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The President is iven !y the Tariff and Customs Code ample powers to ad"ust tariff ratesSec$ 41 of TCC' empowers the president to-

1$ %ncrease reduce or remove e&istin protective rates of import duty'$ ,sta!lish import ;uota or to !an imports of any commodity'

3$ %mpose and additional duty on all imports not e&ceedin 1E advalorem

whenever necessary$Limitations imposed re-ardin- t*e F(e0ib(e Tariff C(ause#

1. Conduct !y the Tariff Commission of an investiation in which a pu!lic hearin shall!e hold wherein interested parties shall !e afforded reasona!le opportunity to !e

present produce evidence and to !e heard'2. The commission shall also hear the views and recommendations of any overnment

office aency or instrumentality concerned'

3. The commission shall su!mit their findins and recommendations to the .,>* within3 days after the termination of the pu!lic hearins$ The .,>* thereafter su!mitsits recommendation to the President$

Administrative Aspect ofTariff and Customs Las

*encies directly concerned with Tariff and Customs *dministration-

TARIFF COMMISSION

6fficials of the Tariff Commission are the chairman and mem!er Commissionersall appointed !y the President$Functions:

A. Investi-ative 'oers#


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1$ *dministration and the fiscal and industrial effect of the Tariff and Customslaws of this country now in force or when hereafter !e enacted'

$ :elations !etween the rates of duty on raw materials and the finished or

partly finished products'3$ ,ffects of ad valorem and specific duties and of compound specific and ad

valorem duties'

4$ *ll ;uestions relative to the arranement of schedules and classification ofarticles in several sections of the tariff law'

5$ Tariff relations !etween the Philippines and the =orein countries commercial

treaties preferential provisions economic alliances the effect of e&port !ounties

and preferential transportation rate'

$ Folume of importations compared with domestic production and consumption'

8$ Conditions causes and effects relatin to completion of forein industrieswith those of the Philippines includin dumpin and cost of production'

D$ %n eneral to investiate the operation of customs and tariff laws includin

their relations to the national revenues their effect upon the industries or la!or ofthe country and to su!mit reports of its investiation'

7$ .ature and composition and the classification and headin num!er for

customs revenue and other related purposes$

B. Administrative Assistance to t*e 'resident and Con-ress

1$ *scertain conversion costs and costs of production-

a$ %n the principal rowin producin or manufacturin-

1$ Centers in the Philippines whenever possi!le'$ Centers in forein countries' whenever necessary'

!$ %ncludin effects of tariff modifications or import restriction or prices$


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$ Select and descri!e representative articles imported to the Philippines similarto or compara!le with those locally produced

3$ *scertain imposts costs of such representative articles so selected$

4$ *scertain the rower?s producers or manufacturer?s sellin prices$

5$ Su!mit annual reports of these to the President of the Philippines copies of

which shall !e furnished to the .,>* #SP >ept$ of =inance and the #ureau of%nvestments$

;UR/AU OF CUSTOMS

Composed of one chief and assistant chiefs nown as commissioner of

customs appointed !y the President respectively$Functions of the Bureau of Customs (CASE

1. Control smulin and related frauds$2. *ssessment and collection of :evenues from imported articles and all other

impositions under the tariff and customs laws$

3. Supervision and control over due entrance and clearance of vessels and aircraftenaed in forein commerce$

4. ,nforcement of Tariff and Custom Code and related laws$

5. Supervision on control over the handlin of forein mails arrivin in the Philippines$

6. Supervise and control all import and e&port caros for the protection of the

overnment revenue$

7. ,&clusive oriinal "urisdiction over seiAure and forfeiture cases under the tariff andcustoms laws$

!ther "o#ers:

1. Supervision of collection districts and ports of entry coast ruse trade vessels an

aircrafts used in forein trade'


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2. *scertainment collection and recovery of import duty'

3. /arehousin of imported articles' and

4. *dministrative proceedins lie search seiAure and arrest includin forfeitures$

Commissioner of Customs is vested with authority to-

*$ *ssess

#$ Collect

1$ *ll lawful revenues from imported articles'$ *ll other dues fees chares fines and penalties$

'rocedura( Aspect oft*e Tariff and Customs Las

Nature of Customs 'rotest< Sei=ures and Forfeiture cases

There are two inds of proceedins in the #ureau of Customs these are-

a. Customs protest cases deal safely with lia!ility for customs duties fees and other

chares$b. SeiAure and forfeiture cases refer to matters involvin smulin or the act of any

person who fraudulently imports or !rins into the Philippines or assists in so doinany article contrary to law or shall receive conceal !uy sell or in any manner


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facilitate the importation concealment or sale of such auricles after importationnowin the same to have !een imported contrary to law smulin includes thee&portation act of articles in a manner contrary to law$ (Sec$ 3154 TCC)$

'rocedure in Custom 'rotest Cases

These are the steps-

1$ The collector of customs shall cause all the articles enterin the "urisdiction of hisdistrict and destined for importation throuh his port to !e entered at the customshouse$


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/henever the decision of the Collector is adverse to the Government said decision

is automatically elevated to the Commissioner for review and if such decision isaffirmed !y the commissioner the same shall !e automatically elevated to and finallyreceived !y the Secretary of =inance$

Rationa(e- %t is intended to protect the interest of the Government in the collectionof ta&es and custom duties in seiAures and protest cases$ +oreover a favora!ledecision will no !e appealed !y the ta&payer and certainly a collector will not appeal hisown decision (See Haoasin vs$ Commissioner of Customs et al$ G$:$ .o$ D4111' >ec$ 17D7$)

*utomatic :eview *pplies to-

1) Custom Protest Cases) SeiAures and =orfeiture Cases

Custom Sei=ures and Forfeiture Cases#asic Concepts-

a: >urisdiction of Customs in Sei=ures and Forfeiture

Related "ro$isions:The territorial "urisdiction of the #ureau of Customs em!races all seas within the

"urisdiction of the Philippines and over all coasts ports har!ors !ays rivers andinland waters whether navia!le or not from the sea$2 (Sec$ 3 TCC)/0tra?Territoria( +urisdiction

(:iht of


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%t is lawful for any person e&ercisin police authority under the TCC to oa!oard any vessel or aircraft within the limits of any Collection district and toinspect search and e&amine said vessel or aircraft and any other trun pacae!o& as envelope on !oard and to search any person on !oard the said vessel oraircraft if underway to use all necessary force to compel compliance' and if itshall appear that any !reach or violation of the customs and tariff laws of thePhilippines has !een committed where!y or in conse;uence of which suchvessel or aircraft or the article or any part thereof on on !oard of or imported!y such vessel or aircraft is lia!le to forfeiture to mae seiAure of the same$

.ote- 1) Such power shall e&tend to the removal of any false !ottom partition

!ulhead or other o!struction$ ) .o proceedin herein shall ive rise to anyclaim fro the damae caused to the article or vessel or aircraft$

1) :iht to Search Fehicles #east and Persons

%t shall also !e lawful for a person e&ercisin authority to open and e&amine any!o& trun envelope or other container wherever found when he has reasona!lecause to suspect the presence of dutia!le or prohi!ited article or articleintroduced into the Philippines contrary to law and liewise to stop search ade&amine any vehicle !east or person reasona!ly suspected of holdin orconveyin such article$

) Search of Persons *rrivin from =orein Countries

*ll persons comin in the Philippines from the forein countries shall !e lia!le todetention and search !y the Customs *uthorities under such reulations as may!e prescri!ed relative thereto$ (Sec$ 3 TCC)

Non?necessit& of Searc* Warrant%enera( Ru(e# Persons e&ercisin police authority under the customs laws may effectsearch and seiAures without a search warrant in the enforcement of customs laws$ (See

Sec$ D TCC)/0ception# %n the case of a dwellin house (Pacis etc$ vs$ Pamaran +arch 15 1784)$Reason# 6n rounds of practicality$'ertinent Cases on Searc*es and Sei=ures


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1) The leality of a search can !e contested only !y the party whose rihts have

!een impaired there!y and that the o!"ection to an unlawful search and seiAure ispurely personal and cannot !e availed of !y third parties$ (.asiad et al$ vs$ CT*.ov$ 7 1774)

) /arrants of seiAure and detention issued !y the Collector of C coverin the

seiAure of imported oods are not eneral warrantsissued in violation of Section 3(now section 4) rule 1 of the :ules of Court$ 0pon effectin the seiAure of theoods the #ureau of Customs ac;uired e&clusive "urisdiction not only over the case!ut also over the oods seiAed for the purpose of enforcin the tariff and Customslaws$ (Chia vs$ *ctin Collector of Customs Sept$ 17D7)

3) The proceedins upon search warrants must !e a!solutely leal for there is nota description of process nown to the law the e&ecution of which is more distressinto the citiAen$ Perhaps there is none which e&cites such intense feelin in theconse;uence of its humiliatin and deradin effect$2 The warrants will always !econstured strictly without however oin the full lenth of re;uirin technicalaccuracy$ .o presumptions of reularity are to !e invoed in aid of process when anofficer undertaes to "ustify under it$ (0y vs$ #%: 6ct$ )

Customs Forfeiture Actions1. W*at 4ind of Actions are Customs Forfeiture.

*n action for the forfeiture of seiAed oods in the #ureau of Customs is an action inrem or action taen aainst the %mported oods themselves independently arisinfrom any criminal action or action in personam that may result as a conse;uence of aviolation of an e&istin law$ Lac of nowlede !y the owner does not enerallyrender the vessel immune from forfeiture$


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$ %f the owner is not in the !usiness for which the conveyance is enerallyused' and

3$ %f the owner is not financially in a position to own such conveyance$

'ertinent Cases#

Actin- Commissioner of Customs vs" CTA

The dismissal of the criminal chare in the =iscal?soffice aainst respondent *ndrulisdoes not constitute re "udicata in the forfeiture proceedins$ =orfeiture is in rem

whereas a criminal action is in personam$ Conviction in the criminal action is not a !ar

to forfeiture$ :esults of a criminal proceedin !ein dependent on the evidencetherein will not necessarily influence "udment in the forfeiture proceedins$

L(amado vs" Commissioner of Customs!$3 SCRA !!B

* Cessna plane carryin persons enaed in the smulin of unta&ed !lue seal2ciarettes landed at an airstrip in *la!at 9ueAon Province$ The plane was also usedto !rin in de aAa2 erosene lanterns and erosene used to liht the airstrip tofacilitate the loadin of the ciarettes$ The plane was su!"ect to forfeiture pursuant toSec$ 53 (a) of the Tariff and Customs Code$ %t is not necessary that the vessel oraircraft must carry the contra!and$ %t is not liewise essential that the vessel or aircraftmust come from a forein country$

Commissioner of Customs vs"CTA and >ose 'ascua(

!3B SCRA 6B!

The Supreme Court ruled that the forfeiture of Pascual?s vessel used in the illealimportation of unta&ed ciarettes is "ustified$=orfeiture accordin to the Citin the case of Fierneya vs$ Commissioner ofCustoms (Iuly 3 17D) is in the nature of proceedins in rem and is directedaainst the res$ The fact that the owner of the vessel had no actual nowlede that


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the vessel was illeally used does not render the vessel immune from forfeiture$ Thisis so !ecause the forfeiture action is aainst the vessel itself$.ote- The said vessel was duly authoriAed to enae in coasturse trade !ut has nocertificate of pu!lic convenience$

Trans-(obe Internationa( Inc"

vs" Court of Appea(s%"R" No" !$359>anuar& $69 !"

=orfeiture of seiAed oods in the #ureau of Customs is a proceedin aainst theoods and not aainst the owner$ %t is the nature of a proceedin in rem i$e$ directedaainst the res or imported article and entails a determination of the leality of their

importation$ %n this proceedin it is in leal contemplation the property itself whichcommits the violation and is treated as the offender without reference whatsoever tothe character or conduct of the owner$

2. Forfeiture Cases and t*e Doctrine 'rimar& >urisdiction

The >octrine of primary "urisdiction provides that the #ureau of Customs ac;uirede&clusive "urisdiction over imported oods for the purpose of the enforcement of theCustoms laws from the moment the oods are actually in its possession or controleven if no warrant of seiAure or detention had previously !een issued !y the collectorof the Customs$ Primary "urisdiction is vested in seiAures and forfeiture proceedinsin the collector and the Commissioner or the Customs to the e&clusion of the reularcourts$ (Commissioner of Customs vs$ .avarro L3314 +ay 31 1788)

Rationa(e of t*e doctrine# %t is anchored on the policy of placin no necessaryhindrance on the Government?s drive not only to prevent smulin and other fraudsupon Customs !ut also to render effective the collection of import and e&port dutiesduet to the State$ (Iao et al$ vs$ Court of *ppeals et al$ G$:$ .os$ 144 and

1113 6ct$ 1775)$

'ertinent Cases#

1$ Proceedins for the forfeiture of oods illeally imported are civil andadministrative not criminal in nature since they do not result in the conviction ofthe wrondoer nor in the imposition upon him of a penalty (Collector vs$ FillaluA


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L343D Iune 1D 178' Commissioner vs$ .avarro supra' :epu!lic vs$ #ocarsupra)$

$ Proof !eyond reasona!le dou!t2 is not re;uired to warrant forfeiture (=eeder

%nternational vs$ C* 178 SC:* D4)$

3$ The Collector of Customs when sittin in forfeiture proceedins constitutes atri!unal upon which the law e&pressly confess "urisdiction to hear and determineall ;uestions touchin on the forfeiture and further disposition of the illealimported mechanics (Government of the P$%$ vs$ Gale 4 Phil 75' *uyon


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3$ The Collector of Customs maes a report of the seiAure to the seiAure to the

Commissioner on *udits$

4$ The Collector shall ive the owner or importer of property or his aent awritten notice of the seiAure and shall ive him an opportunity to !e heard'

5$ .otice to an unnown owner shall !e effected !y postin for fifteen days (15)days in the pu!lic corridor of the customhouse of the district in which theseiAures was made and in the discretion of the Commissioner !y pu!lication ina newspaper or !y other means a he shall consider desira!le'

$ The Collector of Customs schedules the hearin and renders his decisionafter the hearin is conducted'

8$ %n case the decision of the Collector of Customs is adverse to the importer@

owner within fifteen (15) days after notification in writin !y the collector of hisaction or decision the importer@ owner may ive written notice to the Collectorand one copy furnished to the Commissioner of his desire to have the matterreviewed !y the Commissioner$ Thereupon the collector shall forthwith transmitall the records of the proceedin to the Commissioner'

D$ %n case the decision of the collector of Customs is affirmed !y theCommissioner of Customs or in case of inaction on the part of theCommissioner of Customs the importer@ owner may appeal to the court of*ppeals within 3 days from notice of the decision' and

7$ %n case an adverse decision is still rendered the importer@ owner may appealto the Court of *ppeals and the Supreme Court$Note# %f the Collector renders a decision adverse to the Government suchdecision shall automatically !e elevated to and reviewed !y the Commissioner'and if the Collector?s decision is affirmed !y the Commissioner such decision

shall !e automatically elevated to and !e finally !e reviewed !y the secretary of=inance$%f within 3 days from receipt of the record of the case !y the Commissioner or !ythe Secretary of =inance as the case may !e no decision is rendered !y eitherof them the decision under review shall !ecome final and e&ecutory$


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Sett(ement of Sei=ures

Su!"ect to the approval of the commissioner of the district collector may while thecase is still pendin e&cept when there is fraud-

a) *ccept the settlement of any seiAure case provided that the owner importer

e&porter or consinee or his aent shall offer to pay a fine' or!) In case of forfeiture the owner importer e&porter consinee or his shall offer to

pay for the domestic maret value of the seiAed article$Note#The commissioner may accept the settlement of any seiAure case on appeal inthe same manner$

/ffect of Sett(ement# The property shall !e forthwith released and all the lia!ilitieswhich may or miht attac to the property !y virtue of the offense which was theoccasion of the seiAure and all the lia!ility which miht have !een incurred under anycash deposit or !ond iven !y the owner or aent in respect to such property shall!e deemed to !e dischared$

Settlement of any seiAure case shall not !e allowed-

a. where the importation is a!solutely prohi!ited orb. /here the release of the property could !e contrary to the law$

'ertinent Cases#

1) :edemption of forfeited property is unavailin of three (3) instances-

a) when there is fraud!) where the importation is a!solutely prohi!ited or

c) /here the release of the property would !e contrary to law$ (Translo!e

%nternational %nc$ vs$ C$* supra)

) The fraud contemplated !y law must !e actual and not constructive$ %t must!eintentional fraud consistin of deception willfully and deli!erately done or


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resorted to in order to induce another to ive up some riht$ (=arolan vs$ CT* and#aon #uhay Tradin 18 SC:* 7D)

Remission of Customs9 Duties and Compromise

The Collector of customs has the discretion

a) :emit the assessment and collection of customs duties ta&es and other chareswhere the areate amount is less than ten (1) pesos' and

!)


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$ unauthoriAed withdrawal of imported articles from !onded warehouses'3$ failure to supply the consular or invoice when ac;uired'4$ undervaluation misclassification or misdeclaration' and

5$ failure or refusal to ive evidence or su!mit documents for e&amination

b" A fine ma& be imposed in t*e fo((oin- case#

1$ *ny dutia!le article is found in the !aae of an arrivin passener which isnot included in the !aae declaration'

$ !reach of !ond'

3$ unlawful !oardin as leavin of vessel or aircraft'

4$ unloadin of caro !efore arrival at ports of destination or at improper time orplace after arrival' and

5$ failure to supply the re;uisite manifest$

c. T*e pena(t& of forfeiture is imposed in t*e cases enumerated in Section $638of t*e Tariff and Customs Code"

The re;uisite for forfeiture are-

1. The wronful main !y the owner importer e&porter or consinee of any

declaration or affidavit or the wronful main as delivery !y the samepersons of any invoice letter or paper touchin on the importation ore&portation of merchandise' and

2. That such declaration affidavit invoice letter or paper % false$


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Remedies under t*e

Tariff and Customs Code

A" %overnment Remedies#

a" /0tra+udicia(

!" /nforcement or ta0 (ien

* ta& lien attaches on the oods reardless of the ownership while still in thecustody or control of the overnment

Proceeds of sale are applied to the ta& due$ *ny deficiency or e&cess is for

the account or credit respectively of the ta&payer

This is availed of when the importation is neither nor improperly made

$" Sei=ures

Generally applied when the penalty is fine or forfeiture which is imposed whenthe importation is unlawful and it may !e e&ercised even where the articlesare not or no loner in Customs Custody unless the importation is merelyattempted$

%n the case of attempted importation administrative fine or forfeiture

may !e affected only'

a$ while the oods are still within the customs "urisdiction or!$ in the hands or under the control of the importer or person who is

aware thereof$

3" Sa(e of 'ropert&

Property in the customs custody shall !e su!"ect to sale under the followinconditions'

a$ a!andoned articles'


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!$ articles entered under warehousin entry not withdrawn nor the

duties and ta&es paid thereon within the period provided under Section17D TCC'

c$ seiAed property other than contra!and after lia!ility to sale shall have!een esta!lished !y proper administrative or "udicial proceedins inconformity with the provision of this code- and

d$ *ny articles su!"ect to a valid lien for customs duties ta&es or otherchares collecti!le !y the #ureau of Customs after the e&piration of theperiod allowed for the satisfaction of the same$

.ote- Goods in the collector?s possession or of Customs authorities pendin

payment of customs duties are !eyond the reach of attachment$

b" >udicia( Action

The ta& lia!ility of the importer constitutes a personal de!t to the overnmentenforcea!le !y action (Sec$ 14 TCC)

This is availed of when the ta& lien is lost !y the release of the oods$

;" Ta0pa&erEs Remedies

Administrative Recourse

Claim for refund%awritten claim for refund may !e su!mitted !y the importer-

1$ %n a!atement uses such as-

a$ on missin pacaes'!$ deficiencies in the contents of pacaes or shortae !efore arrival of the

oods in the Philippines'

c$ articles lost or destroyed after such arrival


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d$ articles lost or destroyed

e$ dead or in"ured animals' and

f$ for manifest classical errors' (see section 18118D TCC)

$ Iudicial relief

%n draw!ac cases where the oods are ree&ported

a$ Protestsee the earlier discussions on Customs Protest Cases2

!$ %n seiAure cases

see earlier discussion on the su!"ect

c$Settlement of case !y the payment of fine or redemption of forfeited property

see earlier discussions on the su!"ect

.ote- The owner or importer may a!andon either e&pressly or #y importation infavor of the Government thus relievin himself of the ta& lia!ility !ut not from thepossi!le criminal lia!ility$

The ta&payer may appeal to the Court of *ppeals which has e&clusive "urisdictionto review decisions of the Commissioner of Custom in cases involvin-

a) lia!ility for customs duties fees or other money chares'!) seiAures detention or release of property affected'c) fines forfeitures or other penalties imposed in relation thereto' and

d) other matters arisin under the customs Law or other laws administered

!y the :evenue of Customs$Remedies of t*e %overnment,numeration of the :emedies


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Administrati$e

1$ >istraint of Personal Property$ Levy of :eal Property

3$ Ta& Lien

4$ Compromise

5$ =orfeiture

$ 6ther *dministrative :emedies

&udicial

8$ Civil *ctionD$ Criminal *ction

Distraint of 'ersona( 'ropert&

Distraint SeiAure !y the overnment of personal property tani!le or intani!le to

enforce the payment of faces to !e followed !y its pu!lic sale if the ta&es are notvoluntarily paid$

a$ *ctual J There is tain of possession of personal property out of the ta&payer

into that of the overnment$ %n case of intani!le property$ Ta&payer is also divertedof the power of control over the property'

!$ Constructive J The owner is merely prohi!ited from disposin of his

personal property$

*ctual >istraint$ Constructive >istraint

+ade on the property only of a delin;uentta&payer$

+ay !e made on the property of anyta&payer whether delin;uent or not

There is actual tain or possession of theproperty$

Ta&payer is merely prohi!ited fromdisposin of his property$


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,ffected !y havin a list of the distraintproperty or !y service or warrant of distraint

or arnishment$

,ffected !y re;uirin the ta&payer to sina receipt of the property or !y leavin a list

of same

*n immediate step for collection of ta&es

where amount due is definite$

Such immediate step is not necessary' ta&

due may not !e definite or it is !ein;uestioned$

Re2uisites#

1. Ta&payer is delin;uent in the payment of ta&$2. Su!se;uent demand for its payment$

3. Ta&payer must fail to pay delin;uent ta& at time re;uired$

4. Period with in to assess or collect has not yet prescri!ed$ %n case of constructivedistraint re;uisite no$ 1 is not essential (see Sec$ TC)

W*en remed& not avai(ab(e#

/here amount involved does not e&ceed P1 (Sec$ 5 TC)$ %n eepin with theprovision on the a!atement of the collection of ta& as the cost of same miht even !e more

than P1$'rocedure#

1. Service of warrant of distraint upon ta&payer or upon person in possession ofta&payer?s personal property$

2. Postin of notice is not less than two places in the municipality or city and notice to

the ta&payer specifyin time and place of sale and the articles distrained$

3. Sale at pu!lic auction to hihest !idder

4. >isposition of proceeds of the sale$

/ho may effect distraint *mount %nvolved


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1. commissioner or his due authoriAed representative2. :>6

%n e&cess ofP1$P1$ or less

o Actua( Distraint /ffected

1. %n case of Tani!le Property-

a. Copy of an account of the property distrained sined !y the officer left eitherwith the owner or person from whom property was taen at the dwellin orplace of !usiness and with someone of suita!le ae and discretion

b. Statement of the sum demanded$

c. Time and place of sale$

2. %n case of intani!le property-

a. Stocs and other securitiesServin a copy of the warrant upon ta&payer and upon president manaer

treasurer or other responsi!le officer of the issuin corporation company orassociation$

b. >e!ts and credits

1$ Leavin a copy of the warrant with the person owin the de!ts orhavin in his possession such credits or his aent$

$ /arrant shall !e sufficient authority for such person to pay C%: his

credits or de!ts$

c. #an *ccounts J arnishment

1$ Serve warrant upon ta&payer and president manaer treasurer orresponsi!le officer of the !an$


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$ #an shall turn over to C%: so much of the !an accounts as may !esufficient$

o constructive Distraint /ffected

1. :e;uire ta&payer or person in possession to

a$ Sin a receipt coverin property distrained!$ 6!liate him to preserve the same properties$

c$ Prohi!it him from disposin the property from disposin the property in any

manner with out the authority of the C%:$

2. /here Ta&payer or person in possession refuses to sin-

a$ 6fficer shall prepare list of the property distrained$!$ %n the presence of two witnesses of sufficient ae and discretion leave a

copy in the premises where property is located$%rounds of Constructive Distraint

1. Ta&payer is retirin from any !usiness su!"ect to ta&$2. Ta&payer is intendin to leave the Philippines' or

3. To remove his property there from$

4. Ta&payer hides or conceals his property$

5. Ta&payer acts tendin to o!struct collection proceedins$

.ote-

1. #an accounts may !e distrained with out violatin the confidential nature of !anaccounts for no in;uiry is made$ #%: simply seiAes so much of the deposit with outhavin to now how much the deposits are or where the money or any part of itcame from$


31/48


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6. >isposition of proceeds of sale$

The e&cess shall !e turned over to owner$Redemption of propert& so(d or forfeited

a. Person entitled- Ta&payer or anyone for himb. Time to redeem- one year from date of sale or forfeiture

- #eins from reistration of the deed of sale or declaration of forfeiture$- Cannot !e e&tended !y the courts$

c. Possession pendin redemption J owner not deprived of possessiond. Price- *mount of ta&es penalties and interest thereon from date of delin;uency to

the date of sale toether with interest on said purchase price at 15E per annum fromdate of purchase to date of redemption$

Distraint and Lev& compared

1. #oth are summary remedies for collection of ta&es$2. #oth cannot !e availed of where amount involved is not more than P1$

3. >istraint J personal property

Levy J real property

4. >istraint J forfeiture !y overnment not provided

Levy J forfeiture !y overnment authoriAed where there is no !idder or the hihest!id is not sufficient to pay the ta&es penalties and costs$

5. >istraint J Ta&payer no iven the riht of redemption

Levy J Ta&payer can redeem properties levied upon and sold@forfeited to theovernment$


33/48

.ote-

1. %t is the duty of the :eister of >eeds concerned upon reistration of the declarationof forfeiture to transfer the title to the property with out of an order from a competentcourt

2. The remedy of distraint or levy may !e repeated if necessary until the full amountincludin all e&penses is collected$

/nforcement of Ta0 Lien

Ta0 Liena leal claim or chare on property either real or personal esta!lished !ylaw as a security in default of the payment of ta&es$

1. Nature#* lien in favor of the overnment of the Philippines when a person lia!le to pay a ta&nelects or fails to do so upon demand$K

2. Duration#

,&ists from time assessment is made !y the C%: until paid with interests penaltiesand costs$

3. /0tent#

0pon all property and rihts to property !elonin to the ta&payer$

4. /ffectivit& a-ainst t*ird persons#6nly when notice of such lien is filed !y the C%: in the :eister of >eeds concerned$

/0tin-uis*ment of Ta0 Lien

1. Payment or remission of the ta&2. Prescription of the riht of the overnment to assess or collect$3. =ailure to file notice of such lien in the office of reister of >eeds purchases or

"udment creditor$


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4. >estruction of the property su!"ect to the lien$

%n case .os$ 1 and there is no more ta& lia!ility$ 0nder nos$ 3 and 4 the ta&payeris still lia!le$

/nforcement of Ta0 Lien vs" Distraint

* ta& lien is distinuished from disttraint in that in distraint the property seiAedmust !e that of the ta&payer althouh it need not !e the property in respect to the ta& isassessed$ Ta& lien is directed to the property su!"ect to the ta& reardless of its owner$.ote-

1. This is superior to "udment claim of private individuals or parties

2. *ttaches not only from time the warrant was served !ut from the time the ta& was

due and demanda!le$Compromise

Compromisea contract where!y the parties !y reciprocal concessions avoidlitiation or put an end to one already commenced$Re2uisites#

1. Ta&payer must have a ta& lia!ility$2. There must !e an offer !y ta&payer or C%: of an amount to !e paid !y ta&payer$

3. There must !e acceptance of the offer in settlement of the oriinal claim$

W*en ta0es ma& be compromised#

1. * reasona!le dou!t as to the validity if the claim aainst the ta&payer e&ists'2. The financial position of the ta&payer demonstrates a clear ina!ility to pay the

assessed ta&$

3. Criminal violations e&cept-


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a$ Those already filed in court!$ Those involvin fraud$

Limitations#

1. +inimum compromise rate-

a. 1E of the !asic ta& assessed J in case of financial incapacity$b. 4E of !asic ta& assessed J other cases$

2. Su!"ect to approval of ,valuation #oard

a$ /hen !asic ta& involved e&ceeds P1$ or!$ /here settlement offered is less than the prescri!ed minimum rates$

De(e-ation of 'oer to Compromise

General Rule- The power to compromise or a!ate shall not !e deleated !y thecommissioner$

Exception- The :eional ,valuation #oard may compromise the assessment issued!y the reional offices involvin !asic ta&es of P 5 M or less$Remed& in case of fai(ure to comp(

The C%: may either-

1. enforce the compromise or

2. :eard it as rescinded and insists upon the oriinal demand$Compromise 'ena(t&

1. %t is a certain amount of money which the ta&payer pays to compromise a ta&violation$


36/48

2. %t is pain in lieu of a criminal prosecution$

3. Since it is voluntary in character the same may !e collected only if the ta&payer iswillin to pay them$

/nforcement of forfeiture

=orfeitureimplies a divestiture of property with out compensation in conse;uenceof a default or offense$ %t includes the idea of not only losin !ut also havin the propertytransferred to another with out the consent of the owner and wrondoer$

1. ,ffect- Transfer the title to the specific thin from the owner to the overnment$2. /hen availa!le-

a. .o !idder for the real property e&posed for sale$b. %f hihest !id is for an amount insufficient to pay the ta&es penalties and

costs$

- /ith in two days thereafter a return of the proceedin is duly made$

3.


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3$ ciars

4$ ciarettes and other manufactured products of to!acco

5$ playin cards

$ *ll apparatus used in or a!out the illicit production of such articles$

!$ To !e sold or destroyed J depends upon the discretion of C%:

1$ *ll other articles su!"ect to e&ercise ta& (wine automo!ile mineralproducts manufactured oils miscellaneous products nonessential itemsa petroleum products) manufactured or removed in violation of the Ta&

Code$$ >ies for printin or main %: stamps la!els and tas in imitation of

or purport to !e lawful stamps la!els or tas$

5. /here to !e sold-

a$ Pu!lic sale- provided there is notice of not less than days$!$ Private sale- provided it is with the approval of the Secretary of =inance$

6. :iht of :edemption-

a$ Personal entitled J ta&payer or anyone for him

!$ Time to redeem J with in one (1) year from forfeiture

c$ *mount to !e paid J full amount of the ta&es and penalties plus interestand cost of the sale

d$ To whom paid J Commissioner or the :evenue Collection 6fficer

e$ ,ffect of failure to redeem J forfeiture shall !ecome a!solute$


38/48

.ote- The :eister of >eeds is duty !ound to transfer the title of property forfeited to theovernment with our necessity of an order from a competent court$Ot*er Administrative Remedies

1$ :e;uirin filin of !onds J in the followin instances-

a$ ,state and donor?s ta&!$ ,&cise ta&es

c$ ,&porter?s !ond

d$ +anufacturer?s and importer?s !ond

$ :e;uirin proof of filin income ta& returns

#efore a license to enae in trade !usiness or occupation or to practice aprofession can !e issued$

3$ Givin reward to informers J Sum e;uivalent to 1E of revenues surchares or

fees recovered and@or fine or penalty imposed and collected or P1 $ percase whichever is lower$

4$ %mposition of surchare and interest$

5$ +ain arrest search and seiAure

Limited to violations of any penal law or reulation administered !y the #%:committed with in the view of the %nternal :evenue 6fficer or ,,$

$ >eportation in case of aliens J on the followin rounds

a$ Mnowinly and fraudulently evades payment of %: ta&es$!$ /illfully refuses to pay such ta& and its accessory penalties after decision on

his ta& lia!ility shall have !ecome final and e&ecutory$

8$ %nspection of !oos


39/48

#oos of accounts and other accountin records of ta&payer must !e preservedenerally within three years after date the ta& return was due or was filed whicheveris later$

D$ 0se of .ational Ta& :eister7$ 6!tainin information on ta& lia!ility of any person

1$ %nventory J Tain of stocintrade and main surveillance$11$ Prescri!in presumptive ross sales or receipt-

a$ Person failed to issue receipts and invoices!$ :eason to !elieve that records do not correctly reflect declaration in return$K

1$ Prescri!in real property values13$ %n;uirin into !an deposit accounts of

a$ * deceased person to determine ross estate!$ *ny ta&payer who filed application for compromise !y reasons of financial

incapacity his ta& lia!ility$

14$ :eistration of Ta&payers$

>udicia( RemediesCi$il and Criminal Actions:

1$ #rouht in the name of the Government of the Philippines$

$ Conducted !y Leal 6fficer of #%:

3$ +ust !e with the approval of the C%: in case of action for recovery of ta&es orenforcement of a fine penalty or forfeiture$


40/48

A. Civi( Action

*ctions instituted !y the overnment to collect internal revenue ta&es in reularcourts (:TC or +TCs dependin on the amount involved)/hen assessment made has !ecome final and e&ecutory for failure or ta&payer to-a$ >ispute same !y filin protest with C%:!$ *ppeal adverse decision of C%: to CT*

B. Crimina( Action

* direct mode of collection of ta&es the "udment of which shall not only impose thepenalty !ut also order payment of ta&es$*n assessment of a ta& deficiency is not necessary to a criminal prosecution for ta&evasion provided there is a prima facie showin of willful attempt to evade$

/ffect of Ac2uitta( on Ta0 Liabi(it

>oes not e&onerate ta&payer his civil lia!ility to pay the ta& due$ Thus theovernment may still collect the ta& in the same action$:eason- Ta& is an o!liation does not arise from a criminal act$/ffect of Satisfaction of Ta0 Liabi(it& on Crimina( Liabi(it&

/ill not operate to e&tinuish ta&payer?s criminal lia!ility since the duty to pay theta& is imposed !y statute independent of any attempt on past of ta&payers to evadepayment$

This is true in case the criminal action is !ased on the act to ta&payer of filin a false

and fraudulent ta& return and failure to pay the ta&$.ote- The satisfaction of civil lia!ility is not one of the rounds for the e&tinction of criminalaction$


41/48

'rescriptive 'eriods )Statute Of Limitation

'urpose#

=or purposes of Ta&ation statue of limitation is primarily desined to protect the rihtsof the ta&payer?s aainst unreasona!le investiation of the ta&in authority with respect toassessment and collection of %nternal :evenue Ta&es$'rescription of %overnmentEs Ri-*t to Assess Ta0es#General Rule: %nternal :evenue Ta&es shall !e assessed within three (3) years after the last

day prescri!ed !y law for the filin of the return or from the day the return was filed in caseit is filed !eyond the period prescri!ed thereof$ (Section 3 of the Ta& Code)

.ote-

1$ * return filed !efore the last day prescri!ed !y law for the filin thereof shall !econsidered as filed on such last day$

$ %n case a return is su!stantially amended the overnment riht to assess the ta&

shall commence from the filin of the amended return (C%: vs$ Phoeni& +ay 175' Mei N Co$ vs$ Collector 4 SC:* D8)

3$ %n computin the prescriptive period for assessment the latter is deemed made

when notice to this effect is released mailed or sent !y the Commissioner to thecorrect address of the ta&payer$


42/48

/0ceptions# 7Sec" $$$ ic:

1. /here no return was filed within ten (1) years after the date of discovery of theomission$

2. /here a return was filed !ut the same was false or fraudulent J within ten (1) years

from the discovery of falsity or fraud$

Nature of Fraud#a$ =raud is never presumed and the circumstances consistin it must !e alleed

and proved to e&ist !y clear N convincin evidence (:epu!lic vs$ Meir Sept$ 3

17)

!$ The fraud contemplated !y law is actual and not constructive$ %t must amountto intentional wrondoin with the sole o!"ect of avoidin the ta&$ * mere mistaeis not a fraudulent intent$ (*Anar case *u$ 3 1784)

c$ * fraud assessment which has !ecome final and e&ecutory the fact of fraudshall !e "udicially taen coniAance of in the civil or criminal action for thecollection thereof$ (Sec$ pararaph (a))

Fraud ma& be estab(is*ed b& t*e fo((oin- # 7;ad-es of Fraud:a$ %ntentional and su!stantial understatement of ta& lia!ility of the ta&payer$

!$ %ntentional and su!stantial overstatement of deductions of e&emption

c$ :ecurrence of the foreoin circumstances$

Instances)Circumstances ne-atin- fraud#a$ /hen the Commissioner fails impute fraud in the assessment notice@demand

for payment$

!$ /hen the Commissioner failed to allee in his answer to the ta&payer?spetition for review when the case is appealed to the CT*$


43/48

c$ /hen the Commissioner raised the ;uestion of fraud only for the first time in

his memorandum which was filed the CT* after he had rested his case$

d$ /here the #%: itself appeared not sure2 as to the real amount of theta&payer?s net income$

e$ * mere understatement of income does not prove fraud unless there is a

sufficient evidence shavin fraudulent intent$3. /here the commissioner and the ta&payer !efore the e&piration of the three (3) year

period of limitation have areed in writin to the e&tension of said period$

Note# Limitations#

a$ The areement e&tendin the period of prescription should !e in writin and

duly sined !y the ta&payer and the commissioner$!$ The areement to e&tend the same should !e mode !efore the e&piration of

the period previously areed upon$

4. /here there is a written waiver or renunciation of the oriinal 3year limitation sined!y the ta&payer$

Note# Limitations#

a$ The waiver to !e valid must !e e&ecuted !y the parties !efore the lapse of

the prescriptive period$!$ * waiver is inefficient % it is e&ecuted !eyond the oriinal three year$

c$ The commissioner can not valid aree to reduce the prescriptive period to

less than that ranted !y law$

Imprescriptib(e Assessments#1. /here the law does not provide for any particular period of assessment the ta&

souht to !e assessed !ecomes imprescripti!le$


44/48

2. /here no return is re;uired !y law the ta& is imprescripti!le$

3. *ssessment of unpaid ta&es where the !ases of which is not re;uired !y law to !ereported in a return such as e&cise ta&es$ (Carmen vs$ *yala Securities Corp$ .ov$1 17D)

4. *ssessment of compensatin and documentary stamp ta&$

'rescription of %overnmentEs

Ri-*t to Co((ect Ta0es

A. General :ule-

1$ /here an assessment was made J *ny internal revenue ta& which has !eenassessed within the period of limitation may !e collected !y distraint or levy or !yproceedin in court within 5 years followin the date of assessment$

$ /here no assessment was made and a return was filed and the same is notfraudulent or false the ta& should !e collected within 3 years after the return wasdue or was filed whichever is later$

B. ,&ceptions-

1$ /here a fraudulent@false return with intent to evade ta&es was filed aproceedin in court for the collection of the ta& may !e filed without assessmentat anytime within ten years after the discovery of the falsity or fraud$

.ote- The 1year prescriptive period for collector thru action does not apply if it

appears that there was an assessment$ %n such case the ordinary 5year period(now 3 years) would apply (:ep$ vs$ :et$ +arch 31 17)

$ /hen the ta&payer omits to file a return J a court proceedin for the

collection of such ta& may !e filed without assessment at anytime within 1years after the discovery of the omission$


45/48

3$ /aiver of statute of limitations J any internal revenue ta& which has !eenassessed within the period areed upon may !e collected !e distinct or levy of!y a proceedin in court within the period areed upon in writin !efore thee&piration of 5year period$

4$ /here the overnment maes another assessment on the !asis ofreinvestiation re;uested !y the ta&payer J the prescriptive period for collectionshould !e counted from the last assessment$ (:ep$ vs$ LopeA +arch 3 173)

5$ /here the assessment is revised !ecause of an amended return J the periodfor collection is counted from the last revised assessment$

$ /here a ta& o!liation is secured !y a surety !ond J the overnment mayproceed thru a court action to forfeit a !ond and enforce such contractual

o!liation within a period of ten years$

8$ /here the action is !rouht to enforce a compromise entered into !etweenthe commission and the ta&payer J the prescriptive period is ten years$

C. /hen ta& is deemed collected for purposes of the prescriptive period$

1$ Collection !y summary remedies J %t is effected !y summary methods whenthe overnment avail of distraint and levy procedure$

$ Collection !y "udicial action J The collection !eins !y filin the complaint

with the proper court$ (:TC)

3$ /here assessment of the commissioner is protected N appealed to the CT* Jthe collection !ein when the overnment file its answer to ta&payer?s petition forreview$

Ru(es of 'rescription in Crimina( Cases

:ule- *ll violations of any provision of the ta& code shall prescri!e after five (5)years$

.ote-


46/48

W*en it s*ou(d commence.The five (5) year prescriptive period shall !ein to run from the-

a$ >ay of the commission of the violation if now$!$ %f not nown from the time of discovery and the institution of "udicial proceedin

for its investiation and punishment$

W*en it is interrupted#a$ /hen a proceedin is instituted aainst the uilty person!$ /hen the offender is a!sent from the Philippines$

W*en it s*ou(d run a-ain#/hen the proceedin is dismissed for reason not Constitutin "eopardy$

W*en does t*e defense of prescription ma& be raised#

a$ %n civil case J %f not raised in the lower court it is !ailed permanently' if can not!e raised for the first time on appeal$

!$ %n criminal case J %t can !e raised even if the case has !een decided !y thelower court !ut pendin decision on appeal$

Interruption of t*e 'rescriptive 'eriod

1$ /here !efore the e&piration of the time prescri!ed for the assessment of the ta&!oth the commissioner and the ta&payer have consented in writin to its assessment

after such time the ta& may !e assessed prior to the e&piration of the period areedupon$

$ The runnin of statute of limitations on main an assessment and the !einnin

of distraint@levy or a proceedin in court for collection shall !e suspended for theperiod$


47/48

>urin which the Commissioner is prohi!ited from main the assessment or!einnin distraint@levy or a proceedin in court and for days thereafter' e$$a$ =ilin a petition for review in the CT* from the decision of the Commissioner$

The commissioner is prevented from filin an ordinary action to collect the ta&$!$ /hen CT* suspends the collection of ta& lia!ility of the ta&payer pursuant to

Section 11 of :* 115 upon proof that its collection may "eopardiAes theovernment and @or the ta&payer$

c$ /hen the ta&payer re;uests for reinvestiation which is ranted !y

commissioner$

.ote- * mere re;uest for reinvestiation without any action or the part of the

Commissioner does not interrupt the runnin of the prescriptive period$ There;uest must not !e a mere proformer$ Su!stantial issues must !e raised$

d$ /hen the ta&payer cannot !e located in the address iven !y him in the

return$

.ote- %f the ta&payer informs the Commissioner of any chane in address thestatute will not !e suspended$

e$ /hen the warrant of distraint or levy is duly served upon any of the

followin person-

1$ ta&payer$ his authoriAed representative

3$ +em!er of his household with sufficient discretion and no property

could !e located$

f$ /hen the ta&payer is out of the Philippines$

$ %n criminal cases for violation of ta& code J the period shall not run whenthe offender is a!sent from the Philippines$


48/48

.ote- * petition for reconsideration of a ta& assessment does not suspend thecriminal action$ :eason- .o re;uirement for assessment of the ta& !efore thecriminal action may !e instituted$

.ota #ene-

1. The law on prescription remedial measure should !e interpreted li!erally in order toprotect the ta&payer$

2. The defense of prescription must !e raised !y the ta&payer on time otherwise it is

deemed waived$3. The ;uestion of prescription is not "urisdictional and as defense it must !e raised

reasona!ly otherwise it is deemed waived$

4. The prescriptive provided in the ta& code over ride the statute of nonclaims in thesettlement of the deceased?s estate$

5. %n the event that the collection of the ta& has already prescri!ed the overnment

cannot invoe the principle of ,;uita!le recum!ent !y settin off the prescri!ed ta&aainst a ta& refused to which the ta&payer is entitled$

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