DAVIDE, JR., C.J.: hilario

In this petition for review on certiorari, petitioner urges us to set aside the decision1 [Rollo, 65-75. Per Alicia Austria-Martinez, J., with Buena, A., and Callejo, Sr., R., JJ., concurring.] and resolution2 [Rollo, 77.] of the Court of Appeals in CA-G.R. SP No. 42976 affirming the decision of the Court of Tax Appeals (CTA). The CTA upheld the legality of the forfeiture proceedings conducted by the Collector of Customs of articles illegally withdrawn from Customs custody, and ordered their delivery to the winning bidder in the auction sale.

As summarized by the Court of Appeals, the antecedents of the case are as follows:

The CTA allowed Mary Ann Luz Puno and other individuals claiming to be minority stockholders and receivers of petitioner to intervene in the proceedings. The intervenors’ prayer for possession of the machineries was granted conditioned upon the posting of a cash bond. However, they submitted the case for decision on 4 March 1996 without posting the bond. Esm

On 7 May 1996, the CTA dismissed the petition for review filed by petitioner; affirmed the authority of the Customs Commissioner to seize the machineries; and ordered the Commissioner to deliver the articles to Policarpio as the highest bidder in accordance with its decision in CTA Case No. 5057.4 [Rollo, 106-119. Per Associate Judge Ramon O. De Veyra, with Associate Judges Ernesto D. Acosta and Manuel K. Gruba, concurring.]

The intervenors moved for the reconsideration5 [Rollo, 208-211.] of the CTA’s decision. On 8 October 1996, the CTA denied6 [Id., 220.] the motion for reconsideration.

On appeal, the Court of Appeals sustained the CTA and dismissed the petition for lack of merit, capitalizing on the contract of sale between the Bureau of Customs and Policarpio, which allows a refund in case of loss or short-delivery. In case a refund is made, it is as if duties, taxes and charges on the articles remained unpaid. Consequently, importation could not be considered terminated, and the Collector of Customs was still authorized to seize the articles pursuant to Section 2530(e) of the Tariff and Customs Code (TCC).

The Court of Appeals noted that petitioner’s argument that with the termination of importation the Bureau of Customs lost its jurisdiction over the res was premised upon Policarpio’s ownership of the property. Such premise conflicted with petitioner’s pretension of being a buyer in good faith and for value, and foreclosed the possibility of a compromise. The notarized deeds of sale were merely prima facie evidence of ownership which failed to prove petitioner’s claim over the property. Section 2535 of the TCC laying the burden of proof on the claimant still applied. The Court of Appeals concluded that the jurisdiction of the Collector of Customs in forfeiture proceedings extends to all questions incidental thereto including the authority to determine the true ownership of forfeited property. Kycalr

Petitioner then filed on 6 June 1997 a motion for reconsideration7 [Id., 230-260.] of the decision of the Court of Appeals. That motion was, however, denied for failure to state the material dates showing that it was filed on time, as required by Section 1, Rule 9, of the Revised Internal Rules of the Court of Appeals.

Hence this petition.

Petitioner insists that the purpose of Section 1, Rule 9 of the Revised Internal Rules of the Court of Appeals requiring motions for reconsideration to state material dates is to show that they were filed on time. It had substantially complied with that requirement because its Compliance8 [Rollo, 228-229.] dated 28 May 1997 indicated that it received the challenged decision on 23 May 1997; thus, its filing of the motion for reconsideration was well within the reglementary period prescribed by law.

Petitioner likewise contends that the Bureau of Customs had no jurisdiction over the res because importation had terminated. Forfeiture as a remedy of the government is authorized under Section 2530 of the TCC only when and while the articles are in the custody or within the jurisdiction of customs authorities or in the hands or subject to the control of the importer. When the articles were awarded to Policarpio as the winning bidder in the auction sale, taxes, duties and charges due on them were considered paid; the government was compensated, and so it no longer stood to suffer damages from the importation. Furthermore, with the legal permit for withdrawal of the articles having been granted, the government lost its lien over the property. The "possibility" of a refund in case of short delivery under the warranty in Policarpio’s deed of sale only extends the definition of importation. Kyle

Asserting its "prior right" over the machineries, petitioner also argues that the Bureau of Customs was without authority to seize the same. There was no probable cause that would warrant seizure and forfeiture of the subject articles. Neither was there evidence that the articles were part of Lot 15. Petitioner acquired the machineries in good faith and for value, as confirmed by two notarized deeds of sale; and it was unaware that they were imported. Hence, resort should have been through judicial process under Article 433 of the Civil Code. Besides, before forfeiture proceedings can be instituted as provided for in Section 2530 of the TCC, there must be fraud upon the government. Fraud cannot be presumed; and without evidence that petitioner acquired the machineries fraudulently, it must be presumed the owner of the articles.

Moreover, petitioner maintains that no justifiable reason existed for denying its offer of a compromise in accordance with Section 2307 of the TCC. There was no fraud in the importation of the property. Neither did petitioner’s offer signify that it waived previous defenses and admitted liability.

Finally, petitioner reiterates that the Bureau of Customs had neither authority to seize the articles to determine their true ownership nor jurisdiction to decide questions of ownership.

Respondent sees the matter differently. It accuses petitioner of forum-shopping and of employing delaying tactics and maneuvers which hamper the ends of justice. Respondent contends that petitioner’s substantial compliance with Section 1, Rule 9 of the Revised Internal Rules of the Court of Appeals notwithstanding, the law allows dismissal of the motion for reconsideration for failure to comply with the material data rule. Slxmis

Respondent also insists that the Bureau of Customs had jurisdiction over the machineries. As held by the CTA and the Court of Appeals, the loss of the machineries would mean their non-delivery to Policarpio, thus creating an obligation on the part of the government to refund a proportionate amount of the purchase price paid by Policarpio. Fraudulent removal of the machineries from the warehouse under Customs supervision made Section 2530 of the TCC applicable.

Respondent further points out that petitioner was unable to prove that the subject items were indeed sold to it by Jaina Perez. The latter and the notaries public who notarized the alleged deeds of sale were not presented as witnesses. Besides, said items were stolen; so the alleged seller had no right to pass on to petitioner as buyer. Likewise, petitioner’s failure to present receipts validating its ownership of the property was sufficient cause for instituting seizure and forfeiture proceedings. Pursuant to Section 2535 of the TCC, the burden of proof was shifted to petitioner, who, however, failed to substantiate its good faith and lack of knowledge of the importation.

Finally, respondent claims that settlement of seizure cases is not allowed under Section 2307 of the TCC where the importation is absolutely prohibited or the release of the property is contrary to law, which is what obtains in this case. Petitioner’s offer of compromise puts it in estoppel and negates its argument questioning the jurisdiction of the Bureau of Customs.

The questions for our resolution are the following: Slxsc

Petitioner cannot find fault with the denial of its motion for reconsideration. It admitted non-compliance with the requisites of Section 1, Rule 9 of the Revised Internal Rules of Procedure of the Court of Appeals, for indeed nothing in the motion indicated that it was filed on time. Its Compliance anteriorly filed did not cure the defect. It must be stressed that the rule was designed to save the Court of Appeals from reviewing the record to determine whether the motion was indeed filed on time.

And now on the substantive issues.

The Tariff and Customs law subjects to forfeiture any article which is removed contrary to law from any public or private warehouse under customs supervision,9 [Section 2530, par. (e), Tariff and Customs Code (TCC)] or released irregularly from Customs custody.10 [De Joya v. Lantin, 19 SCRA 893, 897 (1967)] Before forfeiture proceedings are instituted the law requires the presence of probable cause. Once established, the burden of proof is shifted to the claimant.11 [Section 2535, TCC.] Under Section 2536 of the TCC, the Commissioner of Customs, Collector of Customs or any other customs officer, with prior authorization in writing by the Commissioner, may demand evidence of payment of duties and taxes on foreign articles openly offered for sale or kept in storage; and if no such evidence can be produced, such articles may be seized and subjected to forfeiture proceedings; provided, however, that during such proceedings the person or entity from whom such articles were seized shall be given an opportunity to prove or show the source of such articles and the payment of duties and taxes thereon. Rtcspped

The findings of fact of the CTA on this matter is informative.

It is settled that the factual findings of the CTA, as affirmed by the Court of Appeals, are entitled to the highest respect13 [Nasiad v. CTA, 61 SCRA 238, 244 (1974); Commissioner of Internal Revenue v. Cadwallader Pacific Company, 73 SCRA 59 (1976); Raymundo v. De Joya, 101 SCRA 495, 498 (1980)] and are well-nigh conclusive upon this court.14 [Commissioner of Internal Revenue v. PJ Kiener Co. Ltd., 65 SCRA 142, 153 (1975)] Based on the findings of the CTA, the subject machineries were liable to forfeiture under customs law. Upon demand for evidence of payment of duties and taxes, petitioner failed to present receipts. What it presented were two notarized deeds of sale executed in 1985 and 1986 between petitioner as buyer and Jaina Perez as seller. Korte

Despite ample opportunity to discharge the burden of proof, petitioner failed to prove its claim over the machineries. Jaina Perez, the supposed seller, was subpoenaed to substantiate petitioner’s claim; but she never appeared. The notaries public before whom the deed of sale were notarized were not presented either. More importantly, there was no intervening transaction between Perez and the Bureau of Customs concerning the subject machineries that would have transferred their ownership to Perez and thereafter to petitioner. That the goods were allegedly sold to petitioner in 1985 and 1986 while they were still under Customs custody and prior to the auction sale is legally untenable and unacceptable.

Contrary to the CTA’s rationale for sanctioning the forfeiture, importation was terminated after Policarpio signed Gate Pass No. 5136 on 10 April 1987 evidencing withdrawal of Lot No. 15 from customs custody. Importation is deemed terminated upon payment of duties, taxes and other charges due or secured to be paid upon the articles at a port of entry, and upon the grant of a legal permit for withdrawal; or in case said articles are free of duties, taxes and other charges, until they have legally left the jurisdiction of the customs.15 [Section 1202, TCC.] The forfeiture of the subject machineries however, is not dependent on whether or not the importation was terminated; rather it is premised on the illegal withdrawal of goods from Customs custody. Jksmä â Ó

Thus, regardless of the termination of importation, Customs authorities may validly seize goods which, for all intents and purposes, still belong to the government. This is so because forfeiture takes effect immediately upon the commission of the offense. The forfeiture of the subject machineries, therefore, retroacted to the date they were illegally withdrawn from Customs custody. The government’s right to recover the machineries proceeds from its right as lawful owner and possessor thereof upon abandonment by Filipinas Marble. Such right may be asserted no matter into whose hands the property may have come, and the condemnation when obtained avoids all intermediate alienations.16 [21 Am Jur 2d, Customs Duties and Import Regulations §125 (1965)] To sanction petitioner’s possession of the property would be to close our eyes to acts of defraudation practiced upon the government.

Incidentally, the forfeiture of the subject machineries rests on a different statutory basis from Policarpio’s right to receive the property as winning bidder in the auction sale. The forfeiture proceedings were based upon the government’s right to recover property illegally withdrawn from its custody. On the other hand, Policarpio’s right stems from the government’s contractual obligation to deliver the machineries to Policarpio as buyer in good faith at the public auction sale.

Petitioner’s contention of being a buyer in good faith and for value with a prior right over the property is likewise untenable. Petitioner allegedly derived its right over the property through the deeds of sale executed by and between it, as buyer, and a certain Jaina Perez, as seller, prior to the auction sale. The following, however, is worthy to note: justice

Before such machineries were allegedly sold to petitioner they formed part of the mass of Customs property stored inside the Mina Amapola CY-CFS in Taguig. Records of the Bureau of Customs indicated no transactions concerning the subject machineries except the abandonment by Filipinas Marble and the auction sale to Policarpio. Contrary to petitioner’s contention, it is the sale of the subject machineries to petitioner by Jaina Perez, not the sale to Policarpio, that is ineffective. The government never dealt with Jaina Perez; hence Perez, having no right over the property, had nothing to transfer to petitioner18 [See Article 1459, Civil Code, which provides: "The thing must be licit and the vendor must have a right to transfer the ownership thereof at the time it is delivered."] even if petitioner’s alleged acquisition of the property was in good faith and for value.

Lastly, as opined by the Collector of Customs, compromise could not be allowed anymore, since the subject machineries had already been awarded to Policarpio, being the highest bidder in the public auction sale conducted by the Bureau of Customs.

WHEREFORE, the instant petition is hereby DISMISSED, for lack of merit, and the challenged decision of the Court of Appeals is AFFIRMED.

Puno, Kapunan, Pardo, and Ynares-Santiago, JJ., concur.10/22/99 2:40 PM