SC favors oil firm in 21-yr tariff dispute

Pilipinas Shell Petroleum Corp. won its legal battle against the Bureau of Customs, which had accused the country’s second-biggest petroleum refiner and distributor of having “failed to timely pay duties and taxes on its crude imports over two decades ago.”

In a disclosure to the Philippine Stock Exchange, Shell said that the Supreme Court had granted the firm’s petition “and accordingly reversed and set aside the decisions of the lower courts” that had previously favored the customs bureau in earlier years.

“In the decision, the Supreme Court stated that ‘a perusal of the records reveals that there is neither any iota of evidence nor concrete proof offered and admitted to clearly establish that petitioner committed any fraudulent acts’ and ‘that there is no factual finding of fraud established herein,’” Shell said.

In 1996, the commissioner of customs filed a case against Shell for the alleged violations involving its crude oil imports. The lower court decided in favor of the Bureau of Customs, prompting the firm to appeal the decision on the grounds that the delay in payment was due to disputes regarding the computation of the amounts.

As of June 30, 2016, Shell had already set aside provisions worth P1.36 billion to cover its financial exposure if the court’s final decision did not favor it.

But in a decision issued last Dec. 5, 2016—a copy of which was served on the company only on Jan. 9, 2017—the Supreme Court granted Shell’s petition and reversed and set aside the decisions of the lower courts, specifically the decision dated May 13, 2010, and resolution dated Feb. 22, 2011, of the Court of Tax Appeals.

“The company will await the finality of the decision before reversing any provision made,” Shell told the bourse. “The provision of P 1.36 billion will be reversed if the decision becomes final.”