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Manila Bulletin devider Philippines devider National devider Court of Tax Appeals affirms forfeiture of foreign-owned vessel

Court of Tax Appeals affirms forfeiture of foreign-owned vessel

Published Aug 15, 2023 06:09 am

The Court of Tax Appeals (CTA) has affirmed the forfeiture of a foreign-owned vessel in favor of the government after the Bureau of Customs (BOC) declared that the owners violated the law by not paying taxes and duties.

 

With the ruling, the CTA’s special first division denied for lack of merit the petition filed by Sub-See Philippines, Inc. and Northern Oriental Shipping, Ltd. – owners of MV Northern Queen – against the 2018 and 2019 rulings of the BOC which issued a warrant of seizure and detention (WSD) against the vessel and ordered its forfeiture.

 

Case records showed that MV Northern Queen arrived in the Sub-Port of Mactan on Oct. 19, 2007. It was then registered under the Philippine flag for a period of one year.  The vessel’s bareboat charter authority granted by the Maritime Industry Authority (MARINA) expired on Nov. 18, 2008.

 

On Oct. 7, 2011, Capt. George G. Macarubo recommended the issuance of a WSD against the vessel considering that Capt. Jens A. Hansen ignored the demand of the BOC for the payment of P2,355,767 for duties and taxes due upon the expiry of the bareboat charter privilege of MV Northern Queen.

 

The assailed BOC decisions ordered and affirmed the forfeiture of MV Northern Queen in favor of the government. Sub-see Philippines and Northern Oriental Shipping filed a petition for review before the CTA on July 4, 2019.

 

In its decision, the CTA ruled in favor of the BOC. "Petitioners' liability to pay customs duties and taxes attached right after the expiration of the bareboat charter authority," the CTA ruled.

 

The tax court stressed that Section 1 of Presidential Decree No. 760 -- on registration of foreign-owned vessel -- is clear that a valid and subsisting temporary certificate of Philippine registry from MARINA is imperative to enjoy the rights and privileges of a vessel of Philippine registry.

 

"Considering, however, petitioners' failure to re-export the vessel right after the expiration of the bareboat charter authority on Nov. 18, 2008, the liability to pay the import duties already attached right after the expiration of said bareboat charter authority," the CTA pointed out.

 

The 21-page decision was written by Associate Justice Marian Ivy F. Reyes-Fajardo with the concurrence of Presiding Justice Roman G. Del Rosario and Associate Justice Catherine T. Manahan.

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