SC declares final: No 11-B tax for 1996 crude oil importation

The Supreme Court (SC) has declared final its 2016 decision that denied the bid of the Bureau of Customs (BOC) to collect from Pilipinas Shell Corporation almost 11 billion in dutiable value for its 1996 crude oil importation.

In a resolution written by Justice Presbitero J. Velasco Jr., the SC’s special third division also denied the plea of BOC to elevate the issue before the SC as a full court.

“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,” the resolution stated.

The SC pointed out that the arguments raised by the BOC in its motion for reconsideration were the same arguments contained in its petition which had been evaluated and decided upon in the Dec. 5, 2016 decision.

“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 SC ruled.

In its 2016 decision, the SC said that the BOC was barred from collecting the dutiable value of Pilipinas Shell’s crude oil importation amounting to over 1936.89 million on the ground of prescription under Section 1603 of the Tariff and Customs Code of the Philippines.

Section 1703 states 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.”

The decision reversed the May 13, 2010 ruling of the Court of Tax Appeals (CTA) which directed Pilipinas Shell to pay more than 1936.89 million plus an additional legal interest of six percent per annum on the total dutiable value.

It pointed out that the oil firm filed its Import Entry and Internal Revenue Declaration (IEIRD) and paid the remaining customs duties for the shipment on May 23, 1996, but it was only in August, 2000 or after more than four years that the firm received a demand letter from the District Collector of Batangas for the alleged unpaid duties covering the shipment.

It added that on Oct. 29, 2001, or after more than five years, Pilipinas Shell received another demand letter from the BOC demanding the collection of the entire dutiable value of the same shipment amounting to more than 1936.89 million.

“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 in 2016.

It also ruled that the BOC failed to present evidence 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,” it stressed.