THE Supreme Court has dismissed with finality the appeal of the Bureau of Customs seeking to collect from Pilipinas Shell Corp. almost P1 billion, representing the total dutiable value of the firm’s crude oil importation in 1996.
In an eight-page resolution penned by Associate Justice Presbitero Velasco Jr., the SC’s Special Third Division denied the motion for reconsideration filed by the BoC, which sought to overturn the high 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 SC resolution stated.
“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,” it said.
“Acting on the Omnibus Motion [for reconsideration and referral to the court en banc] dated January 20, 2017 filed by public respondent Commissioner of Customs, the Court denies the same for lack of merit.”
In its December decision, the high court stressed that Customs 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.
The section 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 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.”
Besides dismissing the appeal, the high court also denied the BoC’s plea to refer the case to the court sitting en banc.
The tribunal said 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. It said that could not be applied to Pilipinas Shell’s case considering the facts and circumstances of the two cases are not the same.
The SC said that 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 Corp. was just as guilty was clearly wanting,” the tribunal added.
“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 high court said.
The SC also pointed out that Customs 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 tribunal said.
In its December 2016 ruling, the Supreme Court reversed and set aside the May 13, 2010 ruling issued by the Court of Tax Appeals, which directed Pilipinas Shell to pay the amount plus an additional legal interest of six percent per annum on the total dutiable value.
The SC noted that Pilipinas Shell filed its Import Entry and Internal Revenue Declaration 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 later, when Pilipinas Shell received a demand letter from the District Collector of Batangas for the alleged unpaid duties covering the shipment.
Thereafter, on Oct. 29, 2001, or after more than five years, the oil company received another demand letter from Customs, 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 SC held.