MANILA, Philippines?The Department of Energy is taking a step back over the new P24.5-billion tax row between oil giant Pilipinas Shell Petroleum Corp. and the Bureau of Customs, stressing that the matter no longer falls under its jurisdiction.

Energy Secretary Jose Rene D. Almendras explained that since this was a tax issue?specifically, a customs bureau tax claim?the energy department would take a ?hands off? stance with the case for now.

?I believe [Pilipinas Shell and BOC] have to discuss this. But if we are called in, we will assist. We will only get involved if they call on us, or if they want us to participate in the discussions,? Almendras said.

Last week, the Customs bureau filed with the justice department a P24.5-billion complaint against Pilipinas Shell for allegedly evading import duties and taxes. In particular, the BOC had accused Pilipinas Shell of ?intentional misclassification and misdeclaration? of various petroleum imports from 2004 to 2009 to avoid payment of excise duties and value-added taxes (VAT).

According to the BOC, Pilipinas Shell had allegedly ?misclassified? import shipments of catalytic cracked gasoline (CCG) or light catalytic cracked gasoline (LCCG), as tetra-propylene.

In what Customs Commissioner Angelito Alvarez had earlier described to be the biggest claim ever against a suspected smuggler, the government had then sought payment of P24.5 billion in unpaid taxes including additional penalties.

For its part, Pilipinas Shell stood its ground, stressing that it had ?paid all the right taxes.?

It strongly denied ?having engaged in any fraudulent activity, especially smuggling, as this is very much against its business principles.?

The oil company explained in a statement that CCG and LCCG are blending components used to produce Clean Air Act-compliant unleaded gasoline.

But since there was no Customs classification (AHTN) code for CCG or LCCG under the Tariff and Customs Code of the Philippines, Shell used a comparable product tariff heading, which was ?2710.11.30 (tetra-propylene).?

Although this was the case, the tariff description still clearly stated that the product is CCG or LCCG.

?More importantly, this classification passed through the process of assessment, review and approval by the Customs,? Pilipinas Shell further said.

The oil firm also said it had consistently been on the top 10 taxpayers list of the government over the last five years, with annual tax payments averaging about P26 billion a year.

The issue surrounding the alleged non-payment of excise taxes on its 2005-09 shipments is already the subject of an earlier case involving Shell and Customs, which is now pending with the Court of Tax Appeals, Shell added.

?Shell will continue to exhaust all available legal remedies for the immediate resolution of this important issue,? it said.