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Manila Standard Today, Philippines: Customs gets go-ahead to dun Shell

Customs gets go-ahead to dun Shell

By Rey E. Requejo

The Court of Appeals has upheld the tax case filed by the Bureau of Customs against Pilipinas Shell for allegedly failing to pay P220 million in customs duties and taxes in connection with its importation of petroleum products.

In a 16-page decision, the appellate court’s 16th Division granted the petition filed by the bureau seeking to reverse and set aside the Jan. 28, 2003 resolution of the Court of Tax Appeals.

The tax court’s resolution denied the bureau’s motion seeking the dismissal of the petition for review filed by Pilipinas Shell on May 23, 2002. The bureau asked Shell for P220 million to settle its tax deficiencies.

The oil firm asserted that it had already settled its obligation using “tax credit certificates” amounting to P220 million. The certificates, however, were found to be fake.

The appellate court said the tax court acted with grave abuse of discretion when it junked the bureau’s motion despite the fact that the petition of Pilipinas Shell was filed beyond the 30-day period allowed by law.

“In the case before us, we hold that the letters of Customs Deputy Commissioner Gil Valera are petitioner’s final rulings on respondents Shell’s protest, and since the subject petition for review was filed away beyond the period allowed by law from receipts of said letters, the demand of the Bureau of Customs from respondent Shell to replace/return the equivalent amount of the fraudulently secured tax credit certificates which the latter had used to pay for the import duties and taxes certificates of its oil importations, is already final and executory,” the appellate court said.

“As a consequence thereof, respondent CTA is without jurisdiction to act on the case. In ruling otherwise, therefore, it acted with grave abuse of discretion,” the CA resolution added.

Court records showed that Pilipinas Shell was able to secure and purchase tax credit certificates from several corporations, which it then used to pay its customs duties and taxes.

Upon the belief that the tax credit certificates were valid, the bureau allowed the oil firm to use the certificates as payment for its obligations.

But the One-Stop Shop Inter-Agency Tax Credit and Duty Drawback Center of the Department of Finance found out that the TCCs were fraudulently secured by the original grantees, who then transferred the same to respondent Shell.

Due to Pilipinas Shell’s refusal to heed the demand of the finance department and the Bureau of Customs to pay the amount equivalent to the TCCs, the bureau filed three complaints for collection of a sum of money against the oil firm.

On April 23, 25, and 30, 2002, Pilipinas Shell received summonses from the Manila Regional Trial Court through Branches 19, 49, 50 for the collection cases.

On May 23, 2002, Shell filed a petition for review with the tax court seeking the dismissal of the tax case filed by the bureau.

The bureau, however, opposed the dismissal of the case, arguing that the petition for review of Pilipinas Shell was filed out of time. The bureau claimed that it sent the oil firm three demand letters dated Feb. 15, 20 and April 12.

The bureau said since the oil firm filed its petition for review only on May 23, 2002, the appeal has prescribed for having been filed beyond the required 30-day period.

According to the CA, the letters demanding settlement by Pilipinas Shell had become final, unappealable and executory.

“It must be clarified that the government through petitioner does not ask for a review of its demand for payment on respondent Shell, much less does it appeal from its assessment. What it seeks is to collect the duties and taxes due it from Shell, and clearly, the regional trial court, a court of general jurisdiction, has jurisdiction over petitioner’s complaint.”

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