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Customs loses bid to collect P1-B unpaid duty from oil giant

By Julius N. Leonen

The Supreme Court has denied with finality the omnibus motion of the Bureau of Customs (BoC) seeking to reconsider the SC’s resolution barring the latter from collecting almost P1 billion from oil giant Pilipinas Shell Corp.
The amount represents the total dutiable value of the oil giant’s 1996 crude oil importation, which was considered as abandoned in favor of the government by operation of law.
In its eight-page resolution penned by Associate Justice Presbitero Velasco Jr., the SC’s Special Third Division denied the BoC’s motion for reconsideration of the High Court’s December 5, 2016 resolution.
The resolution held that the BoC is 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 High Court also denied the BoC’s pleading to refer the case to the court en banc for lack of merit, explaining that the BoC raised the same arguments in its omnibus motion and in this petition.
The tribunal said the arguments have already been evaluated and considered in the assailed December 5, 2016 decision.
The BoC’s motion was based primarily on the alleged applicability of Chevron Philippines Inc. vs Commissioner of the BoC to its case, the SC said.
But the court explained that the Chevron case cannot be applied to Pilipinas Shell’s case considering the facts and circumstances pertaining to 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.
In this case, the High Bench said that the BoC failed to present evidence to back its claim that Pilipinas Shell acted in a fraudulent manner.
“On the other hand, proof that petitioner Pilipinas Shell Petroleum Corp. was just as guilty was clearly wanting. 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 SC said.
“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,” it added.
In its December 2016 ruling, the SC reversed and set aside the Court of Tax Appeals’ former en banc May 13, 2010 ruling which ordered Pilipinas Shell to pay the said 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 in 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 SC ruled.

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