SC rules BOC can’t collect P1-B import duty from Pilipinas Shell

The Supreme Court has dismissed with finality the appeal of the Bureau of Customs (BOC) that it be allowed to collect from Pilipinas Shell Corp. almost P1 billion, an amount representing total dutiable value of the firm’s 1996 crude oil importation.

In an eight-page resolution made public Monday, the court’s Special Third Division, through Associate Justice Presbitero Velasco Jr., denied the motion for reconsideration filed by the BOC which sought a reversal of the court’s Dec. 5, 2016 decision.

“The arguments raised by respondent in this pending incident are the very same arguments raised in the petition, which have already been evaluated, passed upon and considered in the Dec. 5, 2016 decision,” the court said.

“Ergo, the Court rejects these arguments on the same grounds discussed in the challenged decision and denies as a matter of course, the pending motion,” the court added.

In its December decision, the court said the BOC was already barred from collecting the dutiable value of the shipment amounting to P936,899,855.90 on the ground of prescription under Section 1603 of the Tariff and Customs Code of the Philippines.

Section 1603 of the Tariff and Customs Code provides that “when articles have been entered and passed free of duty or final adjustments of duties made, with subsequent delivery, such entry and passage free of duty or settlements of duties as well, after the expiration of one (1) year, from the date of the final payment of duties, in the absence of fraud or protest or compliance audit pursuant to the provisions of this Code, be final and conclusive upon all parties, unless the liquidation of the import entry was merely tentative.”

Aside from dismissing the motion for reconsideration, the court also denied the agency’s plea to refer the case to the court sitting en banc.

“Acting on the Omnibus Motion (For Reconsideration and Referral to the Court En bane) dated January 20, 2017 filed by public respondent Commissioner of Customs, the Court denies the same for lack of merit,” the resolution read.

The court noted that BOC’s motion was anchored primarily on the alleged applicability of Chevron Philippines, Inc. v. Commissioner of the Bureau of Customs  to its case.

However, the court said the Chevron case could not be applied to Pilipinas Shell’s case considering that the facts and circumstances pertaining to the two cases are not the same.

According to the court, in the Chevron case, the evidence on record established that the oil company committed fraud in its dealings.

“On the other hand, proof that petitioner Pilipinas Shell Petroleum Corporation was just as guilty was clearly wanting,” the court said. “Simply, there was no finding of fraud on the part of petitioner in the case at bar. Such circumstance is too significant that it renders Chevron indubitably different from and cannot, therefore, serve as the jurisprudential foundation of the case at bar.”

The court added that the BOC failed to present evidence to back its claim that Pilipinas Shell acted in a fraudulent manner.

“At best, the allegation of fraud on the part of Pilipinas Shell is mere conjecture and purely speculative. Settled is the rule that a court cannot rely on speculations, conjectures or guesswork, but must depend upon competent proof and on the basis of the best evidence obtainable under the circumstances,” the court added.

In its December 2016 ruling, the Supreme Court reversed and set aside the May 13, 2010 ruling issued by the Court of Tax Appeals (CTA), which directed Pilipinas Shell to pay the said amount plus an additional legal interest of six percent per annum on the total dutiable value.

The court noted that Pilipinas Shell filed its Import Entry and Internal Revenue Declaration (IEIRD) and paid the remaining customs duties for the shipment on May 23, 1996.

However, it was only on August 2000 or more than four years when Pilipinas Shell received a demand letter from the District Collector of Batangas for the alleged unpaid duties covering the shipment.

Thereafter, on October  29 2001, or after more than five years, the oil company received another demand letter from respondent seeking to collect for the entire dutiable value of the same shipment amounting to P936,899,855.90.

“Any action or claim questioning the propriety of the entry and settlement of duties pertaining to such shipment made beyond the one-year prescriptive period from the date of payment of final duties, is barred by prescription,” the court ruled. /atm