CA dismisses Shell’s libel complaint vs Customs collector over firm’s taxes

MANILA, Philippines — The Court of Appeals has dismissed the petition filed by the Pilipinas Shell Petroleum Corp. that sought to prosecute for libel a Bureau of Customs port collector who said the oil firm owed the government P7.34 billion in back taxes.

In a 13-page decision, the court’s Sixth Division said there was no grave abuse of discretion on the part of the Department of Justice when it dismissed the libel complaint filed by Shell against then Batangas port collector Juan Tan.

The appellate court, in the ruling written by Justice Edwin Sorongon, said the act of the oil firm in suing Tan for libel already “border[ed] on harassment” as the port collector was only doing his job to assess and collect taxes.

“The DOJ did not find probable cause to indict respondent Tan because the elements of malice and publication are wanting in the complaint filed by petitioner, thereby failing to show that there exist such facts and circumstances sufficient to excite the belief in a reasonable mind that respondent Tan probably committed the crime of libel,” the court said.

The other division members, Justices Hakim Abdulwahid and Marlene Gonzales-Sison, concurred in the ruling.

Tan first made the pronouncement against Shell in a press conference in September 2009 when he said the oil firm failed to pay excise taxes for its imports of catalytic cracked gasoline and light catalytic cracked gasoline amounted to P7.34 billion for the years 2004 to 2009.

News reports in March 2010 again quoted Tan making the same claims against Shell in a memorandum he submitted to then Customs Commissioner Napoleon Morales.

The appeals justices, however, asked why the reporters or the publishers of the media entities that run the story were not included in Shell’s complaint for libel.

“Why is he (Tan) being singled out by petitioner? Clearly, there was no evidence showing that respondent Tan had a hand in the reporting of the allegedly libelous news articles,” they said.

The court added that it has been a judicial policy to refrain from interfering in the conduct of preliminary investigation and to allow the DOJ to freely establish whether or not there was probable cause for the prosecution of an accused.

Tan was quoted in the articles as having questioned why the government allowed Shell to post a surety bond for its alleged tax liabilities instead of setting up of an escrow account that was allegedly agreed upon earlier by the parties.

At that time, a tax case was already filed against Shell before the Court of Tax Appeals.

Tan said the bond was “tantamount to giving Shell unwarranted benefits at the expense of the government because it will then be allowed to keep and use the said P7.34 billion of the government without any consideration.”

Worse, he added, Shell was already selling some of its Philippine assets in case the court ruled in favor of the Bureau of Customs.

Shell denied the existence of the escrow agreement and said Tan’s comments on the media painted the oil firm as a violator of contracts and a tax evader, thus tarnishing its image and depicting it as an unreliable and untrustworthy company.

Tan, on the other hand, countered that petitioner filed a complaint against him to stop him from discharging his duty to collect the taxes due from the former. He also denied leaking the memo on Shell’s unpaid taxes to the press.

He added that the memo was privileged communication protected from libel.