BOC loses bid to reverse dismissal of case vs Pilipinas Shell

MANILA, Philippines—The Court of Appeals stood pat on its earlier ruling dismissing the case against Pilipinas Shell Petroleum Corporation (PSPC) over its alleged use of fraudulently obtained tax-credit certificates (TCCs).

In a two-page resolution dated June 3, the appeals court 9^th division denied the motion for reconsideration filed by the government for failure to present new arguments that would warrant a reversal of their earlier decision.

“After carefully considering the grounds raised in the subject…The additional arguments proffered therein constitute no cogent or compelling reason to modify, much less reverse it,” the appeals court said.

The Bureau of Customs went to the appeals court assailing the Manila Regional Trial Court Branch 49 ruling that dismissed the case against PSPC and ordered the trial of the case against Filipino Way Industries.

On May 7, 1997, Filway executed a Deed of Assignment over the TCCs in favor of PSPC whereby it assigned, transferred and waived all its rights, claims and interests in PSPC’s favor, in consideration of which PSPC paid the amount of P9,080,000.

PSPC then used the TCCs to settle its customs duties and taxes on its oil importations with the BoC with prior approval by the One Stop Shop Inter-Agency Tax Credit and Duty Drawback Center (CENTER).

After the CENTER’s post-audit/investigation, it was discovered that the credit memos used by Filway were fake and the export declarations made by Filway in support of its application for TCCs were actually issued to some other corporations and not to Filway.

The CENTER informed PSPC that the TCCs were canceled. PSPC sought a reconsideration. Eventually, the BOC filed a case for collection of money with damages before the Manila court. PSPC questioned the lower court’s jurisdiction over the case but the court turned down the argument raised by PSPC.

Then, the case reached the Supreme Court who opted to toss the case back to the lower court for further hearing. The lower court eventually dismissed the case in favor of PSPC prompting the BOC to elevate the case to the appeals court.