Article 121p. 121

NATIONAL INTERNAL REVENUE CODE TAXATION, TARIFF and CUSTOMS LAWS

reclaim the goods provided that all legal requirements

have been complied with and the corresponding duties,

taxes and other charges, without prejudice to charges

and fees due to the port or terminal operator, as well as

expenses incurred have been paid before the release of

the goods from customs custody.

When the Bureau sells goods which have been

impliedly abandoned, although no offense has been

discovered, the proceeds of the sale, after deduction of

any duty and tax and all other charges and expenses

incurred as provided in Section 1143 of this Act, shall be

turned over to those persons entitled to receive them or,

when this is not possible, held at their disposal for a

specified period. After the lapse of the specified period,

the balance shall be transferred to the forfeiture fund as

provided in Section 1151 of this Act.

CHAPTER 7 Other Administrative Proceedings

SECTION 1131. Authority of the Commissioner to

Make Compromise. — Subject to the approval of the

Secretary of Finance, the Commissioner may compromise

any administrative case arising under this Act involving

the imposition of fines and surcharges, including those

arising from the conduct of a post clearance audit, unless

otherwise specified by law.

Cases involving forfeiture proceedings shall however

not be subject to any compromise.

CHAPTER 8 Civil Remedies for the Collection of

Duties and Taxes

SECTION 1132. Remedies for the Collection of Duties,

Taxes, Fines, Surcharges, Interests, and Other Charges.

— The civil remedies for the collection of import duties,

taxes, fees, or charges resulting from the conduct of a

post clearance audit shall be obtained by:

(a) Distraint of goods, chattels, or effects, and other

personal property of whatever character, including stocks

and other securities, debts, credits, bank accounts, and

interest in and rights to personal property, and by levy

upon real property and interest in rights to real property;

and

(b) Civil or criminal action.

Either or both of these remedies may be pursued at

the discretion of the Bureau: Provided, That the remedies

of distraint and levy shall not be allowed when the

amount of duties and taxes involved is not more than ten

thousand pesos (P10,000.00).

The Bureau shall advance the amounts needed to

defray costs of collection by means of civil or criminal

action, including the preservation or transportation of

personal property distrained and the advertisement and

sale thereof, as well as of real property and improvements

thereon.

SECTION 1133. Constructive Distraint of the Property.

— To safeguard the interest of the government, the

Commissioner may place under constructive distraint the

property of a delinquent importer who, in the opinion of

the Commissioner, is retiring from any business subject

to duty and tax, or is intending to leave the Philippines, or

to remove the property therefrom, or to hide or conceal

the property, or to perform any act tending to obstruct

the proceedings for collecting the duty and tax due, or

which may be due.

The constructive distraint of personal property shall

be effected by requiring the importer or any person in

possession or control of such property to sign a receipt

covering

the

property,

to

obligate

to

preserve

the

distrained property on the state and condition at the time

of the government's seizure of the same, and not to

dispose of the same in any manner whatsoever, without

the express authority of the Commissioner.

In case the importer or the person in possession and

control

of the property sought to be placed under

constructive distraint refuses or fails to sign the receipt

herein referred to, the customs officer effecting the

constructive distraint shall proceed to prepare a list of

such property and, in the presence of two (2) witnesses,

leave a copy thereof in the premises where the property

distrained is located, after which the said property shall

be deemed to have been placed under constructive

distraint.

SECTION 1134. Summary Remedies. — (A) Distraint

of Personal Property. — Upon failure of the person owing

any delinquent duty, tax and other charges to pay at the

time required, the Commissioner shall seize and distraint

the goods, chattels or effects, and the personal property,

including stocks and other securities, debts, credits, bank

accounts, and interests in and rights to personal property

of such persons, in sufficient quantity to satisfy the duty,

tax or other charge and the expenses of the distraint and

the cost of the subsequent sale.

The officer serving the warrant of distraint shall make

or cause to be made an account of the goods, chattels,

effects, or other personal property distrained, a copy of

which, signed by the said officer, shall be left either with

the owner or person from whose possession such goods,

chattels, or effects or other personal property were taken,

or at the dwelling or other place of business of such

person and with someone of suitable age and discretion,

to which list shall be added a statement of the sum

demanded and note of the time and place of sale.

Stocks and other securities shall be distrained by

serving a copy of the warrant of distraint upon the

importer and upon the president, manager, treasurer, or

other responsible officer of the corporation, company or

association, which issued the said stocks or securities.

Debts and credits shall be distrained by leaving with

the

person

owing

the

debts

or

having

in

his/her

possession or under his/her control such credits, or with

his/her agent, a copy of the warrant of distraint. The

warrant of distraint shall be sufficient authority to the

person owing the debts or having in his possession or

under his control any credits belonging to the importer to

pay to the Commissioner the amount of such debts of

credits.

Bank

accounts

shall

be

garnished by serving a

warrant of garnishment upon the importer and upon the

president, manager, treasurer, or other responsible officer

of

the

bank.

Upon

the

receipt

of

the

warrant

of

garnishment,

the

bank

shall

turn

over

to

the

Commissioner so much of the bank accounts as may be

sufficient to satisfy the claim of the government.

A report on the distraint shall, within ten (10) days

from

receipt

of

the

warrant,

be

submitted

by

the

Commissioner to the Secretary of Finance: Provided, That

the Commissioner shall have the power to lift such order

of

distraint

subject

to

the

rules

and

regulations

promulgated pursuant to this Act.

(B) Levy on Real Property. — After the expiration of

the period within which to pay the duty, tax and other

charges as prescribed in this section, real property may

be

levied

upon,

before, simultaneously, or after the

distraint of personal property belonging to the importer.

To this end, the Commissioner or the duly authorized

representative

shall

prepare

a

duly

authenticated

certificate showing the name of the importer and the

amounts of the duty and tax and penalty due. The

certificate shall operate with the force of a legal execution

throughout the Philippines.

The

levy

shall

be effected by writing upon the

certificate a description of the property on which levy is

made. At the same time, written notice of the levy shall

be mailed to or served upon the register of deeds of the

province or city where the property is located and upon

the importer, or if the latter is not in the Philippines, upon

the agent or the manager of the business from which the

liability arose, or if there be none, to the occupant of the

property in question.

In case the warrant of levy on real property is not

issued before or simultaneously with the warrant of

© Compiled by RGL

121 of 201