Customs-Oilink row to tax court

The Supreme Court has reinstated the resolution of the petition involving criminal and administrative complaint filed by the Bureau of Customs against officials of Oilink and Unioil and a customs broker for the unlawful withdrawal of  oil products from their storage that had been ordered padlocked for failure to settle P2.7 billion in administrative fine imposed by the agency.

Voting 14-0, the SC set aside the resolutions issued by the Court of Appeals on March 26, 2010 and Aug. 4, 2010, which dismissed due to procedural defects the petition for certiorari filed by the BOC assailing the dismissal of the complaint it filed against Oilink for violation of the Tariff and Customs Code of the Philippines by the Department of Justice.

The high court however remanded the case to the Court of Tax Appeals, after it ruled that the Court of Appeals has lost jurisdiction to hear the case anymore.

The SC held that the CA’s original jurisdiction over petition for certiorari assailing the DOJ resolution involving tax and tariff offenses has been transferred to the Court of Tax Appeals pursuant to Section 7 of Republic Act. No. 9282 or An Act Expanding the Jurisdiction of the CTA.

“As the CA dismissed the petition for certiorari solely due to a procedural defect without resolving the issue of whether or not the acting Secretary of Justice gravely abused her discretion, affirming the dismissal of the BOC’s complaint-affidavit for lack of probable cause, the Court ought to reinstate the petition and refer it to the CTA for proper disposition,” the Court said  in a 32-page decision written by Associate Justice Diosdado Peralta.

Named respondents in the BoC’s complaint were Paul Chi Ting Co, chairman of Unioil and Oilink; Kenneth Pundanera, president/director of Unioil; Manuel Co, officer/director of Unioil; Sally Co, officer/director of Unioil; Stanley Tan, officer/director of Unioil; Rochelle Vicencio, corporate administrative supervisor of Unioil; Liza Magaway, president of Oilink; Janice Co, director of Oilink; Vicencio Abafio, director of Oilink; Greg Yu, director of Oilink; Edwin Agustin, corporate secretary of Oilink; and custom broker Victor Piamonte.  

The SC stressed that the referral of the petition to the CTA is in line with the policy of hierarchy of courts in order to prevent excessive demands upon the Court’s time and attention which are better devoted to those matters within its exclusive jurisdiction and to prevent further overcrowding of its docket.

The case arosed from the audit notification letter issued by then    BOC Commissioner Napoleon Morales on Jan. 30, 2007 informing Oilink that the Post Entry Audit    Group of the agency will be conducting a compliance audit, including the examination, inspection, verification and/or investigation of all pertinent reecords of the oil company’s import transactions for 2007 to 2010.

But on July 24, 2007, Morales approved the filing of an administrative case against Oilink for failure to comply with the customs requirements.

On December 14, 2007, the BOC’s Legal Department found Oilink liable for violation of customs rules and regulations when it refused to furnish the audit team copies of required documents despite repeated demands.  

  Morales directed Oilink to pay   BOC the administrative fine of P2.76 billion and subsequently issued a hold order against all shippments of the oil firm for failure to settle its outstanding account with the BOC and to protect the interest of the government.

However, on May 2, 2008, Unioil through its Corporate Administrative Supervisor Rochelle Vicencio, citing the existing Terminalling Agreement with Oilink for the storage of its arommatic process oil and industrial lubricating oil, asked BOC to allow it to withdraw base oils from Oilink’s temporarily closed terminal.

Morales granted the request of Unioil subject to several conditions such as only Unioil’s  products will be withdrawn and appropriate taxes and duties due on the products to be withdrawan are fully paid.

But, on December 15, 2008, lawyer Balmyrson Valdez, a member of the BOC’s anti-oil smuggling coordinating committee that investigated the illegal withdrawal by Unioil of oil products consigned to Oilink, valued at P181.98 million with corresponding duties and taxes in the amount of P35.5 million, accused Unioil and Oilink of violation of Sectioons 3601 (unlawful importation) and 3602 (various fraudulent practices against customs revenue).

In a resolution issued on May 29, 2009, the DOJ recommended the dismissal of the commplaint-affidavit for lack of probable cause. The resolution was affirmed by then Justice Secretary Raul Gonzales.

This prompted the BOC to bring the case before the appellate court.

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