A unit of San Miguel Corp. (SMC) has sued the Bureau of Customs (BOC) for its recent seizure of bunker fuel cargo without due process and despite being presented with a complete set of import documents.
SL Harbor Bulk Terminal Corp., SMC’s fuel import handling company, filed a case before the Court of Tax Appeals seeking to nullify the forfeiture issued by the customs collector of the Port of Limay, Bataan.
“[Customs] cannot just seize products without following the due process of law at the expense of law abiding taxpayers. They should go after the real criminals,” SMC president Ramon Ang told a press briefing late on Friday. “We have always stood behind the BOC in its efforts to put a lid on fuel smuggling and improve its revenue generation, but it has to be done properly.”
Several weeks ago, Customs personnel—armed with a warrant of seizure and detention—seized 44,000 metric tons of bunker fuel cargo, consigned to SL Harbor and loaded on MT Alpine Magnolia and local barge MT Malolos in Limay, Bataan.
SL Harbor said the alleged inconsistency arose from BOC’s incorrect assumption of the volume being unloaded from MT Magnolia into the terminal tanks and the volume being loaded from SL Harbor’s existing tax-paid inventory into MT Malolos barge. The company said BOC failed to take into account that SL Harbor’s storage tank had existing fuel stock inventory of 6,000 MT at the time of loading.
“There was, therefore, no smuggling, no illegal discharge and no basis for [the seizure],” Ang said. “BOC should focus its efforts on gasoline and diesel smuggling which is becoming more rampant.”
In its petition, SL Harbor explained that industrial fuel oil, more commonly known as bunker fuel oil, is a low value item which can only be used by power plants, seafaring vessels and other manufacturing plants. There are also environmental risks associated with bunker fuel’s transportation and handling.
“[It] is not an activity that anyone would engage in unless it was absolutely necessary,” the firm said in its complaint.
“If one were to smuggle bunker fuel, the conspiracy required would be too complex,” the company said. “SL Harbor would have to conspire with a big trader like Glencore who would then risk a $150-billion business to accommodate a small shipment. On top of this, SL Harbor would have to conspire with ship owners who would then expose their entire fleet to risks of seizure. The risks and costs of smuggling bunker fuel far outweigh the taxes to be paid.”