notes on tariff

8/11/2019 Notes on Tariff

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TARIFF AND CUSTOMS LAWS

Substantive Aspect of Tariff and Customs La s Meaning and Scope

Section 3514 (TCC) Provides that Tariff and Customs Laws include not only the provisions of the code itself andre ulations pursuant thereto !ut all other laws and re ulation which are su!"ect to enforcement !y the#ureau of Customs or otherwise within its "urisdiction$ %t e&tend not only to the provisions of the Tariff Customs Code !ut to all other laws as well' li e Central #an Circulars the enforcement of which isentrusted to the #ureau of Customs$

Nature of Customs Duties and Tariff

!" Custom duties# *re duties which are one char ed upon commodities on their !ein imported into or e&portedout of a country$ $" Tariff#

+eans a !oo of rates a ta!le or catalo ue drawn usually in alpha!etical order containin thenames of several inds of merchandise with the duties to !e paid for the same as settled or a reed upon !etween several states that holds commerce to ether$

Concept of %oods for Customs dut& purposes#

As to Imported Articles:

*ll articles when imported from any forei n country into the Philippines shall !e su!"ect to duty uponeach importation even thou ht previously e&ported from the Philippines$ ,&cept as otherwisespecifically provided for in the code or other laws-

As to Exported Articles

Certain articles li e specific types of wood mineral plant ve eta!le and animal products are

su!"ect to tariff and premium duties$ .ote- *rticles- /hen used with reference to importation or e&portation includes oods wares andmerchandise and in eneral anythin that may!e made the su!"ect of e&portation and importation$ 'ertinent Case# 4 0S dollars havin ceased to !e le al tender in the Philippines fall within the meanin of the term

merchandise2 (#astida vs$ *ctin Commissioner of Customs et al L 4 11 6ct$ 4 178 )


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Artic(es ) %oods Covered under t*e Tariff and Customs Code#

!"Artic(es sub+ect to dut&

General Rule: *ll articles when imported from a forei n country includin those previouslye&ported from the Philippines one su!"ect to duty unless otherwise specifically provided for inthe Tariff and Customs Code or other laws$ (Sec$ 1 TCS)

$"'ro*ibited Importations

Classifications:

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

1$ weapons of war

$ am!lin devices

3$ narcotics or prohi!ited dru s 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 with certainconditions$

Pertinent Cases-

1$ /here such conditions as to warrant lawful importation neither do nor e&ist thele al effects of the importation of ;ualifiedly prohi!ited articles are the same as those of a!solutely prohi!ited articles$ (*uyon


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3$ Those iven to international institutions entitled to e&emption !y a reementor special laws' and

4$ Those that may!e ranted !y the President upon .,>*?s recommendation$

Liabi(it& for Custom Duties

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

1$,&empt under the TCC$

$,&emption ranted to overnment a encies instrumentalities with e&istin contracts

commitment a reements or o!li ations with forei n countries$

3$,&empt international or aniAations pursuant to a reements 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 dischar ed only !y payment in full thereof'

$* lien upon the imported article while they are in custody or su!"ect to the control of theovernment$

,a(uation of t*e %oods# %nvoice value of the oods plus-

1$ frei ht

$ 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 otherwise they shall!e considered as contra!and and the importer is lia!le for smu lin $ Import entr&

%t is a declaration in the #ureau of Customs showin particulars of the imported article thatwill ena!le the customs authorities to determine the correct duties$


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!"W*en importation does be-in.

%mportation !e ins when the carryin vessel or aircraft enters the "urisdiction of the Philippineswith the intention to unlade therein$

$"W*en is it terminated ) ended.

%mportation is deemed terminated upon payment of duties ta&es and other char es due uponthe articles pr secured to !e paid at a port of entry and the le al permit for withdrawal shall

ave !een ranted or in case said articles are free of duties ta&es and other char es untilthey have le ally left the "urisdiction of the customs (Sec$ 1 TCC)

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

!" 'ort of /ntr&

+eans a domestic open to !oth forei n and continuous trade includin airport of entry$ $" /0portation

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

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

1inds of Custom Duties

*$:e ular @ 6rdinary >uties

These are duties imposed on imported articles that enter the country of the Philippines inavoidance with the schedules and classifications provided under the Tariff 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 wei ht of oods num!er or measurement$

#$Special >uties

%mposed in addition to re ular or ordinary duties principally in order to protect local industriesa ainst unfair competition from forei n manufacturers or procedures' consumer a ainstpossi!le deceptions' and national interest$

C(assifications#


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!" Dumpin- Dut&

%mposed !y the secretary of =inance upon the recommendation of the Tariff Commissionwhen-

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

the fair mar et value or cost of production' and

!$ %mportation would cause or li ely cause and in"ury to local industries en a ed inthe manufacture or production of the same or similar articles or prevent 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 of su!sidy !ythe overnment in the country or ori in or e&portation the importation of which has caused

or threatens to cause material in"ury to a domestic industry or has materially relaided therowth or prevents the esta!lishment of a domestic industry$ (:* BD851)

Re2uisites#

1$ The levy of an e&cise ta& or inland ta& or local oods of the same or similar classas the article imported or the rant of su!sidy to the forei n e&porter !y his

overnment' and

$ The importation is li ely 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 mar ed collected!y the commissioner e&cept when such article is e&ported or destroyed under the customssupervision and prior to final li;uidation of the correspondin entry$

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 of ori indiscriminates a ainst the commerce of the Philippines in such a manner as to place thecommerce of the Philippines at a disadvanta e compared with the commerce of anyforei n 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 investi ation of the Tariff Commissions and recommendation of the .ational ,conomic >evelopment *uthority in theinterest of national economy eneral welfare and national security$


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The President is iven !y the Tariff and Customs Code ample powers to ad"ust tariff rates Sec$ 4 1 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 1 E advalorem whenever necessary$

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

1$Conduct !y the Tariff Commission of an investi ation in which a pu!lic hearin shall !e holdwherein interested parties shall !e afforded reasona!le opportunity to !e present produceevidence and to !e heard'

$The commission shall also hear the views and recommendations of any overnment office

a ency or instrumentality concerned'

3$The commission shall su!mit their findin s and recommendations to the .,>* within 3days after the termination of the pu!lic hearin s$ The .,>* thereafter su!mits itsrecommendation to the President$

Administrative Aspect of Tariff and Customs La s

* encies directly concerned with Tariff and Customs *dministration- TARIFF COMMISSION 6fficials of the Tariff Commission are the chairman and mem!er Commissioners all appointed !ythe President$ Functions:

A"Investi-ative 'o ers#

1$ *dministration and the fiscal and industrial effect of the Tariff and Customs laws 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 valoremduties'


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4$ *ll ;uestions relative to the arran ement of schedules and classification of articles inseveral sections of the tariff law'

5$ Tariff relations !etween the Philippines and the =orei n countries commercialtreaties preferential provisions economic alliances the effect of e&port !ounties andpreferential transportation rate'

$ Folume of importations compared with domestic production and consumption'

8$ Conditions causes and effects relatin to completion of forei n industries with thoseof the Philippines includin dumpin and cost of production'

D$ %n eneral to investi ate the operation of customs and tariff laws includin their relations to the national revenues their effect upon the industries or la!or of the countryand to su!mit reports of its investi ation'

7$ .ature and composition and the classification and headin num!er for customsrevenue and other related purposes$

;"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 forei n countries' whenever necessary'

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

$ Select and descri!e representative articles imported to the Philippines similar to 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 whichshall !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 customsappointed !y the President respectively$ Functions of the Bureau of Customs (CASE

1$Control smu lin and related frauds$

$*ssessment and collection of :evenues from imported articles and all other impositions


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under the tariff and customs laws$

3$Supervision and control over due entrance and clearance of vessels and aircraft en a ed inforei n commerce$

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

5$Supervision on control over the handlin of forei n mails arrivin in the Philippines$

$Supervise and control all import and e&port car os for the protection of the overnment

revenue$

8$,&clusive ori inal "urisdiction over seiAure and forfeiture cases under the tariff and customslaws$

!ther "o#ers:

1$Supervision of collection districts and ports of entry coast ruse trade vessels an aircraftsused in forei n trade'

$*scertainment collection and recovery of import duty'

3$/arehousin of imported articles' and

4$ *dministrative proceedin s li e 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 char es fines and penalties$

'rocedura( Aspect of t*e Tariff and Customs La s


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Nature of Customs 'rotest< Sei=ures and Forfeiture cases There are two inds of proceedin s in the #ureau of Customs these are-

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

!$SeiAure and forfeiture cases refer to matters involvin smu lin or the act of any personwho fraudulently imports or !rin s into the Philippines or assists in so doin any articlecontrary to law or shall receive conceal !uy sell or in any manner facilitate the importationconcealment or sale of such auricles after importation nowin the same to have !eenimported contrary to law smu lin includes the e&portation act of articles in a manner contraryto law$ (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 his districtand destined for importation throu h his port to !e entered at the customs house$


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Rationa(e - %t is intended to protect the interest of the Government in the collection of ta&esand custom duties in seiAures and protest cases$ +oreover a favora!le decision will no !eappealed !y the ta&payer and certainly a collector will not appeal his own decision (See Hao asinvs$ 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 and inland waters whether navi a!le or not from the sea$2 (Sec$ 3 TCC) /0tra?Territoria( +urisdiction

(:i ht of


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not !ein a dwellin house$ * warehouse store or other !uildin or enclosure used for the eepin or stora eof article does not !ecome a dwellin house within the meanin hereof merely !y reason of the fact that a person employed as a watchman lives in the place nor will the fact that hisfamily stays there with him alter the case$ $: Searc* of D e((in- ouse

* >wellin house may !e entered and searched only upon warrant issued !y a

"ud ed$

.ote- ,&cept in the case of the search of a dwellin house persons e&ercisin policeauthority under the customs may effect search and seiAure without a search warrant in theenforcement of custom laws$ 3) Ri-*t to searc* vesse(s or Aircraft and 'ersons or Artic(es Conve&ed t*erein

%t is lawful for any person e&ercisin police authority under the TCC to o a!oard any

vessel or aircraft within the limits of any Collection district and to inspect search ande&amine said vessel or aircraft and any other trun pac a e !o& as envelope on !oardand to search any person on !oard the said vessel or aircraft if underway to use allnecessary force to compel compliance' and if it shall appear that any !reach or violation of the customs and tariff laws of the Philippines has !een committed where!y or inconse;uence of which such vessel 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 ma e seiAure of thesame$

.ote- 1) Such power shall e&tend to the removal of any false !ottom partition!ul head or other o!struction$ ) .o proceedin herein shall ive rise to any claim fro thedama e caused to the article or vessel or aircraft$

1) :i ht to Search Fehicles #east and Persons

%t shall also !e lawful for a person e&ercisin authority to open and e&amine any !o& trunenvelope or other container wherever found when he has reasona!le cause to suspect thepresence of dutia!le or prohi!ited article or article introduced into the Philippines contraryto law and li ewise to stop search ad e&amine any vehicle !east or person reasona!lysuspected of holdin or conveyin such article$

) Search of Persons *rrivin from =orei n Countries

*ll persons comin in the Philippines from the forei n countries shall !e lia!le to detention

and search !y the Customs *uthorities under such re ulations as may !e prescri!edrelative thereto$ (Sec$ 3 TCC)

Non?necessit& of Searc* Warrant %enera( Ru(e# Persons e&ercisin police authority under the customs laws may effect search andseiAures 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)$


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Reason# 6n rounds of practicality$ 'ertinent Cases on Searc*es and Sei=ures

1) The le ality of a search can !e contested only !y the party whose ri hts have !eenimpaired there!y and that the o!"ection to an unlawful search and seiAure is purely personaland 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 warrants issued in violation of Section 3 (now section 4) rule1 of the :ules of Court$ 0pon effectin the seiAure of the oods the #ureau of Customsac;uired e&clusive "urisdiction not only over the case !ut also over the oods seiAed for thepurpose of enforcin the tariff and Customs laws$ (Chia vs$ *ctin Collector of Customs Sept$

17D7)

3) The proceedin s upon search warrants must !e a!solutely le al for there is not adescription of process nown to the law the e&ecution of which is more distressin to thecitiAen$ Perhaps there is none which e&cites such intense feelin in the conse;uence of its

humiliatin and de radin effect$2 The warrants will always !e constured strictly withouthowever oin the full len th of re;uirin technical accuracy$ .o presumptions of re ularity areto !e invo ed in aid of process when an officer underta es to "ustify under it$ (0y vs$ #%: 6ct$

)

Customs Forfeiture Actions

!"W*at 4ind of Actions are Customs Forfeiture.

*n action for the forfeiture of seiAed oods in the #ureau of Customs is an action in rem or action ta en a ainst the %mported oods themselves independently arisin from any criminalaction or action in personam that may result as a conse;uence of a violation of an e&istin law$Lac of nowled e !y the owner does not enerally render the vessel immune from forfeiture$


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is in personam$ Conviction in the criminal action is not a !ar to forfeiture$ :esults of a criminalproceedin !ein dependent on the evidence therein will not necessarily influence "ud ment inthe forfeiture proceedin s$

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

* Cessna plane carryin persons en a ed in the smu lin of unta&ed !lue seal2 ci aretteslanded at an airstrip in *la!at 9ueAon Province$ The plane was also used to !rin in de aAa2

erosene lanterns and erosene used to li ht the airstrip to facilitate the loadin of theci arettes$ The plane was su!"ect to forfeiture pursuant to Sec$ 53 (a) of the Tariff andCustoms Code$ %t is not necessary that the vessel or aircraft must carry the contra!and$ %t is notli ewise essential that the vessel or aircraft must come from a forei n 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 ille al importationof unta&ed ci arettes is "ustified$ =orfeiture accordin to the Citin the case of Fierneya vs$ Commissioner of Customs (Iuly 317 D) is in the nature of proceedin s in rem and is directed a ainst the res$ The fact that theowner of the vessel had no actual nowled e that the vessel was ille ally used does not render the vessel immune from forfeiture$ This is so !ecause the forfeiture action is a ainst the vesselitself$ .ote- The said vessel was duly authoriAed to en a e in coasturse trade !ut has no certificateof 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 a ainst the oods andnot a ainst the owner$ %t is the nature of a proceedin in rem i$e$ directed a ainst the res or imported article and entails a determination of the le ality of their importation$ %n thisproceedin it is in le al contemplation the property itself which commits the violation and istreated as the offender without reference whatsoever to the character or conduct of the owner$

$"Forfeiture Cases and t*e Doctrine 'rimar& >urisdiction

The >octrine of primary "urisdiction provides that the #ureau of Customs ac;uired e&clusive

"urisdiction over imported oods for the purpose of the enforcement of the Customs laws fromthe moment the oods are actually in its possession or control even if no warrant of seiAure or detention had previously !een issued !y the collector of the Customs$ Primary "urisdiction isvested in seiAures and forfeiture proceedin s in the collector and the Commissioner or theCustoms to the e&clusion of the re ular courts$ (Commissioner of Customs vs$ .avarro L3314 +ay 31 1788)


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Rationa(e of t*e doctrine# %t is anchored on the policy of placin no necessary hindrance onthe Government?s drive not only to prevent smu lin and other frauds upon Customs !ut alsoto render effective the collection of import and e&port duties duet to the State$ (Iao et al$ vs$Court of *ppeals et al$ G$:$ .os$ 1 4 4 and 111 3 6ct$ 1775)$

'ertinent Cases#

1$ Proceedin s for the forfeiture of oods ille ally imported are civil and administrativenot criminal in nature since they do not result in the conviction of the wron doer nor in theimposition upon him of a penalty (Collector vs$ FillaluA L 34 3D Iune 1D 178 'Commissioner vs$ .avarro supra' :epu!lic vs$ #ocar supra)$

$ 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 proceedin s constitutes atri!unal upon which the law e&pressly confess "urisdiction to hear and determine all;uestions touchin on the forfeiture and further disposition of the ille al imported

mechanics (Government of the P$%$ vs$ Gale 4 Phil 75' *uyon


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notice of the seiAure and shall ive him an opportunity to !e heard' 5$ .otice to an un nown owner shall !e effected !y postin for fifteen days (15) days inthe pu!lic corridor of the custom house of the district in which the seiAures was made andin the discretion of the Commissioner !y pu!lication in a newspaper or !y other means ahe shall consider desira!le'

$ The Collector of Customs schedules the hearin and renders his decision after thehearin is conducted' 8$ %n case the decision of the Collector of Customs is adverse to the importer@ ownerwithin fifteen (15) days after notification in writin !y the collector of his action or decisionthe importer@ owner may ive written notice to the Collector and one copy furnished to theCommissioner of his desire to have the matter reviewed !y the Commissioner$ Thereuponthe collector shall forthwith transmit all the records of the proceedin to the Commissioner' D$ %n case the decision of the collector of Customs is affirmed !y the Commissioner of Customs or in case of inaction on the part of the Commissioner 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 appeal to theCourt of *ppeals and the Supreme Court$ Note# %f the Collector renders a decision adverse to the Government such decision shallautomatically !e elevated to and reviewed !y the Commissioner' and if the Collector?sdecision is affirmed !y the Commissioner such decision shall !e automatically elevated toand !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 !y theSecretary of =inance as the case may !e no decision is rendered !y either of them thedecision under review shall !ecome final and e&ecutory$

Sett(ement of Sei=ures

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

a) *ccept the settlement of any seiAure case provided that the owner importer e&porter or consi nee or his a ent shall offer to pay a fine' or

!) In case of forfeiture the owner importer e&porter consi nee or his shall offer to payfor the domestic mar et value of the seiAed article$

Note# The commissioner may accept the settlement of any seiAure case on appeal in the samemanner$ /ffect of Sett(ement# The property shall !e forthwith released and all the lia!ilities which mayor mi ht attac to the property !y virtue of the offense which was the occasion of the seiAureand all the lia!ility which mi ht have !een incurred under any cash deposit or !ond iven !ythe owner or a ent in respect to such property shall !e deemed to !e dischar ed$

Settlement of any seiAure case shall not !e allowed-


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a$ where the importation is a!solutely prohi!ited or

!$ /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$ (Trans lo!e%nternational %nc$ vs$ C$* supra)

) The fraud contemplated !y law must !e actual and not constructive$ %t must

!e intentional fraud consistin of deception willfully and deli!erately done or resorted to inorder to induce another to ive up some ri ht$ (=arolan vs$ CT* and #a on #uhayTradin 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 char es wherethe a re ate amount is less than ten (1 ) pesos' and

!)


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a" T*e code imposes surc*ar-es for#

1$ failure to pay li;uidated char es'

$ 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((o in- case#

1$ *ny dutia!le article is found in the !a a e of an arrivin passen er which is notincluded in the !a a e declaration'

$ !reach of !ond'

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

4$ unloadin of car o !efore arrival at ports of destination or at improper time or placeafter 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 $638 of t*eTariff and Customs Code"

The re;uisite for forfeiture are-

1$The wron ful ma in !y the owner importer e& porter or consi nee of anydeclaration or affidavit or the wron ful ma in as delivery !y the same persons of anyinvoice letter or paper touchin on the importation or e&portation of merchandise' and

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

Remedies under t*eTariff and Customs Code

A" %overnment Remedies#

a" /0tra+udicia(

!" /nforcement or ta0 (ien


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* ta& lien attaches on the oods re ardless of the ownership while still in the custodyor control of the overnment

Proceeds of sale are applied to the ta& due$ *ny deficiency or e&cess is for the accountor 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 when theimportation is unlawful and it may !e e&ercised even where the articles are not or nolon er in Customs Custody unless the importation is merely attempted$

%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 awarethereof$

3" Sa(e of 'ropert&

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

a$ a!andoned articles'

!$ articles entered under warehousin entry not withdrawn nor the dutiesand ta&es paid thereon within the period provided under Section 17 D TCC' c$ seiAed property other than contra!and after lia!ility to sale shall have !eenesta!lished !y proper administrative or "udicial proceedin s in conformity with theprovision of this code- and d$ *ny articles su!"ect to a valid lien for customs duties ta&es or other char escollecti!le !y the #ureau of Customs after the e&piration of the period 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 overnment enforcea!le !yaction (Sec$ 1 4 TCC)

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


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;" Ta0pa&erEs Remedies

Administrative Recourse

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

1$ %n a!atement uses such as- a$ on missin pac a es'

!$ deficiencies in the contents of pac a es or shorta e !efore arrival of the oodsin the Philippines'

c$ articles lost or destroyed after such arrival

d$ articles lost or destroyed

e$ dead or in"ured animals' and

f$ for manifest classical errors' (see section 18 1 18 D TCC)

$ Iudicial relief

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

a$ Protest see 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 in favor of theGovernment thus relievin himself of the ta& lia!ility !ut not from the possi!le criminallia!ility$

The ta&payer may appeal to the Court of *ppeals which has e&clusive "urisdiction to review

decisions of the Commissioner of Custom in cases involvin - a) lia!ility for customs duties fees or other money char es'!) 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$


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Remedies of t*e %overnment ,numeration of the :emedies

Administrati$e

1$ >istraint of Personal Property

$ Levy of :eal Property

3$ Ta& Lien

4$ Compromise

5$ =orfeiture

$ 6ther *dministrative :emedies

&udicial

8$ Civil *ction

D$ Criminal *ction Distraint of 'ersona( 'ropert&

Distraint SeiAure !y the overnment of personal property tan i!le or intan i!le to enforce thepayment of faces to !e followed !y its pu!lic sale if the ta&es are not voluntarily paid$

a$ *ctual J There is ta in of possession of personal property out of the ta&payer into thatof the overnment$ %n case of intan i!le property$ Ta&payer is also diverted of the power of

control over the property' !$ Constructive J The owner is merely prohi!ited from disposin of his personalproperty$

*ctual >istraint$ Constructive >istraint

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

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

There is actual ta in or possession of theproperty$

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

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

arnishment$

,ffected !y re;uirin the ta&payer to si n areceipt of the property or !y leavin a list of same

*n immediate step for collection of ta&es whereamount due is definite$

Such immediate step is not necessary' ta& duemay not !e definite or it is !ein ;uestioned$

Re2uisites#


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1$Ta&payer is delin;uent in the payment of ta&$

$Su!se;uent demand for its payment$

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 constructive distraintre;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 the provisionon the a!atement of the collection of ta& as the cost of same mi ht even !e more than P1 $ 'rocedure#

1$Service of warrant of distraint upon ta&payer or upon person in possession of ta&payer?spersonal property$

$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 hi hest !idder

4$>isposition of proceeds of the sale$

/ho may effect distraint *mount %nvolved

1$ commissioner or his due authoriAedrepresentative

$ :>6

%n e&cess of P1 $P1 $ or less

o Actua( Distraint /ffected

1$%n case of Tan i!le Property-

a$Copy of an account of the property distrained si ned !y the officer left either with theowner or person from whom property was ta en at the dwellin or place of !usinessand with someone of suita!le a e and discretion

!$Statement of the sum demanded$


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c$Time and place of sale$

$%n case of intan i!le property-

a$Stoc s and other securities

Servin a copy of the warrant upon ta&payer and upon president mana er treasurer or other responsi!le officer of the issuin corporation company or association$

!$>e!ts and credits

1$ Leavin a copy of the warrant with the person owin the de!ts or havin inhis possession such credits or his a ent$

$ /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 mana er treasurer or responsi!le officer of the !an $

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

sufficient$

o constructive Distraint /ffected

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

a$ Si n a receipt coverin property distrained

!$ 6!li ate him to preserve the same properties$

c$ Prohi!it him from disposin the property from disposin the property in any mannerwith out the authority of the C%:$

$/here Ta&payer or person in possession refuses to si n-

a$ 6fficer shall prepare list of the property distrained$

!$ %n the presence of two witnesses of sufficient a e and discretion leave a copy in thepremises where property is located$

%rounds of Constructive Distraint

1$Ta&payer is retirin from any !usiness su!"ect to ta&$

$Ta&payer is intendin to leave the Philippines' or


23/36

3$To remove his property there from$

4$Ta&payer hides or conceals his property$

5$Ta&payer acts tendin to o!struct collection proceedin s$

.ote-

1$#an accounts may !e distrained with out violatin the confidential nature of !an accountsfor no in;uiry is made$ #%: simply seiAes so much of the deposit with out havin to now howmuch the deposits are or where the money or any part of it came from$

$%f at any time prior to the consummation of the sale all proper char es are paid to the officer

conductin the same the oods distrained shall !e restored to the owner$

3$/hen the amount of the !id for the property under distraint is not e;ual to the amount of theta& or is very much less than the actual mar et value of articles the C%: or his deputy maypurchase the distrained property on !ehalf of the national overnment$

Lev& of Rea( 'ropert& Levy J *ct of seiAure of real property in order to enforce the payment of ta&es$ The property may !esold at pu!lic sale if after seiAure' the ta&es are not voluntarily paid$ The re;uisites are the same asthat of distraint$ 'rocedure#

1$%nternational :evenue officer shall prepare a duly authenticated certificate showin

a$.ame of ta&payer

!$*mount of ta& and

c$Penalty due$

enforcea!le throu h out the Philippines

$6fficer shall write upon the certificate a description of the property upon which levy is made$

3$Service of written notice to-

a$ The ta&payer and

!$ :> where property is located$

4$*dvertisement of the time and place of sale$


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5$Sale at pu!lic auction to hi hest !idder$

$>isposition of proceeds of sale$

The e&cess shall !e turned over to owner$

Redemption of propert& so(d or forfeited

a$Person entitled- Ta&payer or anyone for him

!$Time to redeem- one year from date of sale or forfeiture

#e ins from re istration 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 possession

d$Price- *mount of ta&es penalties and interest thereon from date of delin;uency to the date of sale to ether with interest on said purchase price at 15E per annum from date of purchase todate of redemption$

Distraint and Lev& compared

1$#oth are summary remedies for collection of ta&es$

$#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 hi hest !id is notsufficient to pay the ta&es penalties and costs$

5$>istraint J Ta&payer no iven the ri ht of redemption

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

.ote-

1$%t is the duty of the :e ister of >eeds concerned upon re istration of the declaration of forfeiture to transfer the title to the property with out of an order from a competent court

$The remedy of distraint or levy may !e repeated if necessary until the full amount includin


25/36

all e&penses is collected$

/nforcement of Ta0 Lien Ta0 Lien a le al claim or char e on property either real or personal esta!lished !y law as a securityin default of the payment of ta&es$

!"Nature#

* lien in favor of the overnment of the Philippines when a person lia!le to pay a ta& ne lectsor fails to do so upon demand$K $"Duration#

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

3"/0tent#

0pon all property and ri hts to property !elon in to the ta&payer$ 5"/ffectivit& a-ainst t*ird persons#

6nly when notice of such lien is filed !y the C%: in the :e ister of >eeds concerned$

/0tin-uis*ment of Ta0 Lien

1$Payment or remission of the ta&

$Prescription of the ri ht of the overnment to assess or collect$3$=ailure to file notice of such lien in the office of re ister of >eeds purchases or "ud mentcreditor$

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&payer is stilllia!le$

/nforcement of Ta0 Lien vs" Distraint

* ta& lien is distin uished from disttraint in that in distraint the property seiAed must !e thatof the ta&payer althou h it need not !e the property in respect to the ta& is assessed$ Ta& lien isdirected to the property su!"ect to the ta& re ardless of its owner$ .ote-

1$This is superior to "ud ment claim of private individuals or parties

$*ttaches not only from time the warrant was served !ut from the time the ta& was due and

demanda!le$


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Compromise Compromise a contract where!y the parties !y reciprocal concessions avoid liti ation or put an endto one already commenced$ Re2uisites#

1$Ta&payer must have a ta& lia!ility$

$There must !e an offer !y ta&payer or C%: of an amount to !e paid !y ta&payer$

3$There must !e acceptance of the offer in settlement of the ori inal claim$

W*en ta0es ma& be compromised#

1$* reasona!le dou!t as to the validity if the claim a ainst the ta&payer e&ists'

$The financial position of the ta&payer demonstrates a clear ina!ility to pay the assessed ta&$

3$Criminal violations e&cept-

a$ Those already filed in court

!$ Those involvin fraud$

Limitations#

1$+inimum compromise rate-

a$1 E of the !asic ta& assessed J in case of financial incapacity$

!$4 E of !asic ta& assessed J other cases$

$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 'o er to Compromise General Rule - The power to compromise or a!ate shall not !e dele ated !y the commissioner$ Exception - The :e ional ,valuation #oard may compromise the assessment issued !y the re ionaloffices involvin !asic ta&es of P 5 M or less$


27/36

Remed& in case of fai(ure to comp(

The C%: may either-

1$enforce the compromise or

$:e ard it as rescinded and insists upon the ori inal demand$

Compromise 'ena(t&

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

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

3$Since it is voluntary in character the same may !e collected only if the ta&payer is willin topay them$

/nforcement of forfeiture =orfeiture implies a divestiture of property with out compensation in conse;uence of a default or offense$ %t includes the idea of not only losin !ut also havin the property transferred to another without the consent of the owner and wron doer$

1$,ffect- Transfer the title to the specific thin from the owner to the overnment$

$/hen availa!le-

a$.o !idder for the real property e&posed for sale$

!$%f hi hest !id is for an amount insufficient to pay the ta&es penalties and costs$

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

3$


28/36

$ li;uors

3$ ci ars

4$ ci arettes 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 mineral productsmanufactured oils miscellaneous products non essential items a petroleumproducts) manufactured or removed in violation of the Ta& Code$

$ >ies for printin or ma in %: stamps la!els and ta s in imitation of or purport to !e lawful stamps la!els or ta s$

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$

$:i ht 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 interest andcost 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$

.ote- The :e ister of >eeds is duty !ound to transfer the title of property forfeited to the overnment

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


29/36

c$ ,&porter?s !ond

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

$ :e;uirin proof of filin income ta& returns #efore a license to en a e in trade !usiness or occupation or to practice a profession can !e

issued$

3$ Givin reward to informers J Sum e;uivalent to 1 E of revenues surchar es or feesrecovered and@or fine or penalty imposed and collected or P1 $ per case whichever is lower$

4$ %mposition of surchar e and interest$

5$ +a in arrest search and seiAure Limited to violations of any penal law or re ulation administered !y the #%: committed with inthe view of the %nternal :evenue 6fficer or ,,$

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

a$ Mnowin ly 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 !oo s

#oo s of accounts and other accountin records of ta&payer must !e preserved enerallywithin three years after date the ta& return was due or was filed whichever is later$

D$ 0se of .ational Ta& :e ister

7$ 6!tainin information on ta& lia!ility of any person

1 $ %nventory J Ta in of stoc in trade and ma in 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 values

13$ %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


30/36

his ta& lia!ility$

14$ :e istration of Ta&payers$

>udicia( Remedies Ci$il and Criminal Actions:

1$ #rou ht in the name of the Government of the Philippines$

$ Conducted !y Le al 6fficer of #%: 3$ +ust !e with the approval of the C%: in case of action for recovery of ta&es or enforcement of a fine penalty or forfeiture$

A"Civi( Action

*ctions instituted !y the overnment to collect internal revenue ta&es in re ular courts (: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*

;"Crimina( Action

* direct mode of collection of ta&es the "ud ment of which shall not only impose the penalty

!ut also order payment of ta&es$ *n assessment of a ta& deficiency is not necessary to a criminal prosecution for ta& evasionprovided 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 the overnment maystill collect the ta& in the same action$:eason- Ta& is an o!li ation does not arise from a criminal act$ /ffect of Satisfaction of Ta0 Liabi(it& on Crimina( Liabi(it&

/ill not operate to e&tin uish ta&payer?s criminal lia!ility since the duty to pay the ta& isimposed !y statute independent of any attempt on past of ta&payers to evade payment$ This is true in case the criminal action is !ased on the act to ta&payer of filin a false and fraudulentta& 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 criminal action$


31/36

'rescriptive 'eriods )Statute Of Limitation 'urpose#

=or purposes of Ta&ation statue of limitation is primarily desi ned to protect the ri hts of theta&payer?s a ainst unreasona!le investi ation of the ta&in authority with respect to assessment andcollection 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 dayprescri!ed !y law for the filin of the return or from the day the return was filed in case it 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 ri ht to assess the ta& shall

commence from the filin of the amended return (C%: vs$ Phoeni& +ay 17 5' Mei N Co$ vs$Collector 4 SC:* D8 )

3$ %n computin the prescriptive period for assessment the latter is deemed made whennotice to this effect is released mailed or sent !y the Commissioner to the correct address of the ta&payer$


32/36


33/36

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

!$ * waiver is inefficient % it is e&ecuted !eyond the ori inal three year$

c$ The commissioner can not valid a ree to reduce the prescriptive period to less than

that ranted !y law$

Imprescriptib(e Assessments#

1$/here the law does not provide for any particular period of assessment the ta& sou ht to !eassessed !ecomes imprescripti!le$

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

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

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

'rescription of %overnmentEsRi-*t to Co((ect Ta0es

*$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 was due or was filed whichever is later$

#$,&ceptions-

1$ /here a fraudulent@false return with intent to evade ta&es was filed a proceedin incourt for the collection of the ta& may !e filed without assessment at anytime within tenyears after the discovery of the falsity or fraud$

.ote- The 1 year prescriptive period for collector thru action does not apply if it appearsthat there was an assessment$ %n such case the ordinary 5 year period (now 3 years)would apply (:ep$ vs$ :et$ +arch 31 17 )


34/36

$ /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 1 years after the discovery of the omission$

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

4$ /here the overnment ma es another assessment on the !asis of reinvesti ationre;uested !y the ta&payer J the prescriptive period for collection should !e counted fromthe last assessment$ (:ep$ vs$ LopeA +arch 3 17 3) 5$ /here the assessment is revised !ecause of an amended return J the period for collection is counted from the last revised assessment$

$ /here a ta& o!li ation is secured !y a surety !ond J the overnment may proceedthru a court action to forfeit a !ond and enforce such contractual o!li ation within a periodof ten years$

8$ /here the action is !rou ht to enforce a compromise entered into !etween thecommission 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 when the

overnment avail of distraint and levy procedure$

$ Collection !y "udicial action J The collection !e ins !y filin the complaint with theproper court$ (:TC)

3$ /here assessment of the commissioner is protected N appealed to the CT* J thecollection !e in when the overnment file its answer to ta&payer?s petition for review$

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- W*en it s*ou(d commence.

The five (5) year prescriptive period shall !e in 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 itsinvesti ation and punishment$

W*en it is interrupted#

a$ /hen a proceedin is instituted a ainst the uilty person


35/36

!$ /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 !eraised for the first time on appeal$ !$ %n criminal case J %t can !e raised even if the case has !een decided !y the lower 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& !oththe commissioner and the ta&payer have consented in writin to its assessment after suchtime the ta& may !e assessed prior to the e&piration of the period a reed upon$

$ The runnin of statute of limitations on ma in an assessment and the !e innin of

distraint@levy or a proceedin in court for collection shall !e suspended for the period$

>urin which the Commissioner is prohi!ited from ma in the assessment or !e innindistraint@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$ Thecommissioner 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 Section11 of :* 11 5 upon proof that its collection may "eopardiAes the overnment and @or theta&payer$

c$ /hen the ta&payer re;uests for reinvesti ation which is ranted !ycommissioner$

.ote- * mere re;uest for reinvesti ation without any action or the part of theCommissioner does not interrupt the runnin of the prescriptive period$ The re;uestmust not !e a mere pro former$ 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 chan e in address the statutewill not !e suspended$

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

1$ ta&payer


36/36

$ his authoriAed representative

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

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

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

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

.ota #ene-

1$The law on prescription remedial measure should !e interpreted li!erally in order to protectthe ta&payer$

$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!lyotherwise it is deemed waived$

4$The prescriptive provided in the ta& code over ride the statute of non claims in the settlementof the deceased?s estate$

5$%n the event that the collection of the ta& has already prescri!ed the overnment cannotinvo e the principle of ,;uita!le recum!ent !y settin off the prescri!ed ta& a ainst a ta&refused to which the ta&payer is entitled$

notes on tariff

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