Вы находитесь на странице: 1из 12

taxpayer by the BIR in support of the

Summary of Significant assessment did not substantially comply with


Supreme Court Decisions Section 228 of the NIRC and RR No. 12-99
because the aforementioned documents
on Tax Cases (August failed to show the applicability of the law the
BIR cited to the facts of the assessment.
2008 – January 2009)
by Atty. Oliver Gil M. Beltran The CIR then elevated the case to the SC
claiming that Enron was informed of the legal
1. COMMISSIONER OF INTERNAL and factual bases of the deficiency
REVENUE vs. ENRON SUBIC POWER assessment against it.
CORPORATION (G.R. No. 166368, January
19, 2009) In denying the CIR’s petition for review, the
SC held that Section 3.1.4 of RR No. 12-99 is
Is it mandatory for the BIR to indicate the explicit that “a taxpayer must be informed in
legal and factual bases of their findings in the writing of the legal and factual bases of the
assessment? Is the notice requirement tax assessment made against it.”
satisfied when the BIR advised the taxpayer’s
representative of the tax deficiency during the The Court said that the use of the word “shall”
pre-assessment stage, and furnished the indicates the mandatory nature of the
taxpayer of a copy of the audit working requirements laid down therein.
papers?
Even so, taking note of the CTA’s findings,
the SC held that “the CIR merely issued a
formal assessment and indicated therein the
supposed tax, surcharge, interest and
Enron, a duly registered Subic Bay Freeport
compromise penalty due thereon. The
Zone enterprise received a formal notice of
Revenue Officers of the CIR in the issuance
assessment from the Commissioner of
of the Final Assessment Notice did not
Internal Revenue (CIR) despite filing its
provide Enron with the written bases of the
protest letter to the preliminary five-day letter.
law and facts on which the subject
assessment is based. The CIR did not bother
The Company filed a Petition for Review with
to explain how it arrived at such an
the Court of Tax Appeals (CTA) since the CIR
assessment. Moreso, he failed to mention the
failed to resolve its protest against the formal
specific provision of the Tax Code or rules
notice of assessment within the mandated
and regulations which were not complied with
180-day period. Enron alleged that the BIR
by Enron.
failed to provide the legal and factual bases of
the assessment in violation of Section 3.1.4 of
The SC gave weight to the findings of the
Revenue Regulations No. 12.99
CTA and CA that the BIR failed to indicate the
factual and legal bases of the deficiency tax
Finding for Enron, the CTA held that the
assessment as the same merely itemized the
assessment notice sent to the Company
deductions disallowed and included these in
failed to comply with the requirements of a
the gross income, aside from imposing the
valid written notice set by the law. The CIR’s
preferential rate of 5% on some items
motion for reconsideration was likewise
categorized by Enron as costs.
denied.
Ultimately, the CIR alleged that during the
On appeal, the Court of Appeals (CA)
pre-assessment stage, they supposedly have
affirmed the decision of the CTA and held that
advised and informed Enron’s representative
the audit working papers presented to the
of the proposed tax deficiency through a
preliminary five-day letter apart from Manila without the necessary clearance from
furnishing the latter a copy of the audit the Philippine Coast Guard.
working paper.
Since Seizure Identification No. 06-2001
However, the SC ruled that “(t)he advice of merely covered the cargo, but not the M/V
tax deficiency, given by the CIR to an Criston which transported it, Seizure
employee of Enron, as well as the preliminary Identification No 6-2001-A was subsequently
five-day letter, were not valid substitutes for issued particularly for the said vessel.
the mandatory notice in writing of the legal
and factual bases of the assessment.” The 35,000 bags of rice were consequently
released to the consignees, Antonio Chua Jr.
According to the SC, “the requirement for and Carlos Carillo, after the two have posted
issuing a preliminary or final notice, as the the P31,450,000.00 bond required by the
case may be, informing a taxpayer of the Regional Trial Court of Tabaco, Albay.
existence of a deficiency tax assessment is
markedly different from the requirement of Meanwhile, as M/V Criston was under the
what such notice must contain. Just because custody of the Bureau of Customs of the
the CIR issued an advice, a preliminary letter Province of Albay, the vessel was allowed to
during the pre-assessment stage and a final temporarily transfer to another anchorage
notice, in the order required by law, does not area in order to prevent any damage which
necessarily mean that Enron was informed of could be caused by typhoon “Manang”.
the law and facts on which the deficiency Nonetheless, M/V Criston failed to return to
assessment was made.” the Port of Tabaco after “Manang” had
passed through the area.
Hence, the assessment against Enron was
declared to be void by reason of the absence M/V Crimson was thereafter found in the
of a fair opportunity for Enron to be informed waters of Bataan sporting the name M/V
of the aforesaid assessment’s legal and Neptune Breeze.
factual bases.
The BOC District Collector of the Port of
Manila issued a Warrant of Seizure and
2. EL GRECO SHIP MANNING AND Detention under Seizure Identification No.
MANAGEMENT CORPORATION vs. 2001-208 against M/V Neptune Breeze in
COMMISSIONER OF CUSTOMS (G.R. NO. view of the vessel’s failure to present a
177188, December 4, 2008) clearance from its last port of call.

What pieces of information are helpful in On June 27, 2002, the Legaspi District
identifying a particular vessel? What are the Collector rendered a Decision in seizure
quantum of proof required and the essence of Identification No. 06-2001 and Seizure
due process in proceedings pending before Identification No. 06-2001-a ordering the
the Bureau of Customs (BOC)? When is the forfeiture of M/V Criston (M/V Neptune
penalty of forfeiture imposed? Breeze), and its cargo, for violating Section
2530 (a), (f) and (k) of the Tariff and Customs
Code.

A Warrant of Seizure and Detention (Seizure El Greco, filed a Motion for Intervention and
Identification No. 06-2001) was issued by the Motion to Quash with the Manila District
Legaspi District Collector for the 35,000 bags Collector asserting that M/V Neptune Breeze
of imported rice shipped by M/V Criston on was a foreign registered vessel owned by
the ground that it allegedly left the Port of Atlantic Pacific Corporation, Inc. and different
from M/V Criston. The Manila District
Collector ruled in favor of El Greco for lack of established by its unique motor and chassis
probable cause showing that M/V Nuptune numbers. It is, thus, highly improbable that
Breeze is the same vessel known as M/V two totally different vessels would have
Criston. engines and generators bearing the very
same serial numbers; and the only logical
The abovementioned ruling by the Manila conclusion is that they must be one and the
District Collector was reversed by BOC same vessel.
Commissioner Antonio Bernardo when the
latter ruled that M/V Neptune Breeze and M/V The SC further said that the failure of the
Criston were one the same and that the supposed operator to appear before the
Legaspi District Collector had already Legaspi District Collector is surprising since it
acquired prior jurisdiction over the vessel. is highly unfathomable for a purported owner
to ignore proceedings for the seizure of its
El Greco sought the reversal of the vessel since it risks the loss of a property of
aforementioned Decision and accordingly enormous value.
filed a Petition for Review with the CTA
claiming that M/V Criston is entirely different While the foreign registration of M/V Neptune
from M/V Neptune Breeze the two have Breeze proves that it was registered in a
different and separate Certificates of Registry, foreign country; it does not render impossible
and that the decision of the Manila District the conclusions consistently reached by the
Collector already became final and executory Legaspi District Collector, the CTA Second
in view of the BOC Commissioner’s failure to Division, the CTA En Banc, and the SC that
act thereon within the 30-day period required M/V Neptune Breeze was the very same
under Section 2313 of the tariff and Customs vessel used in the conduct of smuggling
Code. activities in the name M/V Criston.

The 2nd Division of the CTA denied the The technical rules of procedure and
Petition and held that both vessels were evidence are not strictly applied in
indeed one and the same by giving credence administrative proceedings. The essence of
to the crime laboratory report submitted by the due process in BOC proceedings “is simply
Philippine National Police which indicated that an opportunity to be heard or, as applied to
the M/V Criston and M/V Neptune Breeze administrative proceedings, an opportunity to
have similar serial numbers in their respective explain one’s side or an opportunity to seek
engines and generators. reconsideration of the action or ruling
complained of”.1
The CTA En Banc dismissed the Petition for
Review filed by El Greco for lack of merit. Hence, El Greco cannot claim that it was
denied due process since it was given ample
On appeal, the Supreme Court sustained the opportunity to rebut the findings of the
findings of the CTA En Banc and ruled that Legaspi District Collector.
there is more than substantial evidence to
establish that M/V Neptune Breeze is the very Further, the fact that M/V Neptune Breeze
same vessel as M/V Criston. (a.k.a. M/V Criston), was caught carrying
35,000 bags of imported rice without the
The SC took judicial notice of the fact that necessary papers showing that they were
along with the gross tonnage, net tonnage, entered lawfully through a Philippine port after
length and breadth of the vessel, the serial the payment of appropriate taxes and duties
numbers of its engine and generator are the thereon, gives rise to the presumption that the
necessary information identifying the vessel.
According to the SC, “(i)n as much the same 1Danan vs. Court of Appeals, G.R. No. 132759, 25 October
way, the identity of a land motor vehicle is 2005.
importation involved was illegal. By reason of Claiming exemption from payment of excise
El Greco’s failure to rebut such presumption, taxes pursuant to Section 135 of the Tax
the 35,000 bags of rice and the concerned Code and Article 4 of the Philippines
vessel are subject to forfeiture. Singapore Air Agreement, Silkair filed a
formal claim for refund with the Commissioner
The penalty of forfeiture is imposed on any of Internal Revenue (CIR).
vessel engaged in smuggling, provided that
the following conditions are present: 1.) The Silkair alleged that it was the one who actually
vessel is “used unlawfully in the importation or paid the excise taxes due on the transactions
exportation of articles into or from” the while Petron merely remitted the payment to
Philippines; 2.) The articles are imported to or the BIR, thereby negating the tax exemption
exported from any Philippine port or place, expressly granted to it.
except a port of entry”; or 3.) If the vessel has
a capacity of less than 30 tons and is “used in Nonetheless, the Supreme Court held that
the importation of articles into any Philippine “the proper party to question, or seek a refund
port or place other than a port of the Sulu of an indirect tax is the statutory taxpayer, the
Sea, where importation in such vessel may be person on whom the tax is imposed by law
authorized by the Commissioner, with the and who paid the same even if he shifts the
approval of the department head.2 burden thereof to another.”3

Lastly, the Decision of the Manila District Excise tax, “whether classified as specific or
Collector could not have become final and ad valorem tax, is basically an indirect tax
executory since Section 2313 of the Tariff and imposed on the consumption of a specified
Customs Code provides that “in the case the list of goods or products. The tax is directly
BOC Commissioner fails to decide on the levied on the manufacturer upon removal of
automatic appeal of the Collector’s Decision the table goods from the place of production
within 30 days from receipt of the records but in reality, the tax is passed on to the end
thereof, the case shall again be deemed consumer as part of the selling price of goods
automatically appealed to the Secretary of sold.”4
Finance.”
In view thereof, while Petron actually passed
3. SILKAIR (SINGAPORE) PTE. LTD., on the burden of the tax to Silkair, the
vs. COMMISSIONER OF INTERNAL additional amount billed to the latter was
REVENUE (G.R. No. 171383 & 172379, 14 essentially a part of the purchase price and
November 2008) not a tax in itself.

Who is the proper party to claim a refund for Hence, the SC ruled that “even if the
the payment of excise taxes? What is an consumers or purchasers ultimately pay for
excise tax? What is the remedy of a taxpayer the tax, they are not considered the
who enjoys tax exemption with regard to the taxpayers. The fact that Petron, on whom the
payment of excise taxes? excise tax is imposed, can shift the tax
burden to its purchasers does not make the
latter the taxpayers and the former the
Silkair (Singapore Pte. Ltd. purchased withholding agent.”
aviation jet fuel from Petron, to which the
latter imposed a P3.67 per liter excise
(specific) tax.
3
Silkair (Singapore) Pte. Ltd. vs. Commissioner of Internal
Revenue, G.R. No. 173594, 6 February 2008.
2 Commissioner of Customs vs. Manila Star Ferry, Inc., G.R. No. 4
De Leon and De Leon, Jr., The National Internal Revenue Code
31776-78, 21 October 1993. Annotated, Volume 2 (2003), p. 198.
Although it was ruled in the instant case that
Petron is the proper party that can claim the In spite of such pronouncement, the SC still
refund of the excise taxes paid to BIR, the SC declared that Antam is not liable for
said that Silkair may nevertheless invoke its delinquency interest and surcharges by
tax exemption to Petron before buying reason of its good faith in relying on its honest
aviation jet fuel in the future. belief that one is not subject to tax in the light
of the BIR’s previous interpretation that a
4. ANTAM PAWNSHOP pawn ticket is not a printed evidence of
CORPORATION vs. COMMISSIONER OF indebtedness.
INTERNAL REVENUE (G.R. No. 167962, 19
September 2008) 5. COMMISSIONER OF INTERNAL
REVENUE vs. DOMINADOR MENGUITO
Are pawn tickets subject to documentary (G.R. No. 167560, September 17, 2008)
stamp tax (DST)? What contract is entered
into by the pawnshop and the What are the circumstances that would
pawner/borrower? Is good faith enough warrant the piercing of the veil of corporate
justification to spare a taxpayer from payment fiction? Is the taxpayer’s right to due process
of interest and surcharges? of law violated with the non-issuance of a
post-reporting notice and pre-assessment
notice?
The Petitioner (Antam), alleged that a pawn
ticket, being merely a receipt for pawn, is not
subject to DST. It is neither a security nor a
printed evidence of indebtedness. Menguito is a restaurateur who operated
branches in the cities of Pasay and Baguio.
On the other hand, the CIR averred that a
pawn ticket is proof of a contract of pledge, Sometime in 1997, Menguito and his wife
and as such, is subject to DST. were informed by the Assessment Division of
the BIR Baguio that the results of their
In ruling for the CIR, the Supreme Court held investigation showed that they have
that in accordance with Articles 2085, 2087 undeclared sales for the periods 1991, 1992
and 2093 of the Civil Code, a pawnshop in and 1993, thereby resulting to deficiency
essence, as defined under Section 3 of P.D. income and percentage taxes amounting to
No. 114, enters into a contract of pledge with P34, 193,041.55. The BIR alleged that
the pawner or the borrower. Menguito committed fraud with intent to
evade the payment of tax by under declaring
The Court further said that is a pawn ticket is his sales.
a proof of a contract of pledge, since for every
transaction, a pawnshop is required to deliver The CTA ruled in favor of the CIR and
to each person a signed copy thereof ordered Menguito to pay deficiency and
containing, among others: 1.) the amount of percentage tax liabilities. Menguito’s motion
the loan; 2.) the date the loan was granted; for reconsideration was likewise denied.
3.) rate of interest; 4.) the name and
residence of the pawnee. Menguito then sought redress with the Court
of Appeals (CA), arguing that Copper Kettle
Moreover, though the law neither considers a Catering Services, Inc. (CKCS, Inc.) was a
pawn ticket as a security nor a printed separate and distinct entity from Copper
evidence of indebtedness, what is subject to Kettle Cafeteria Specialist (CKCS) and in view
DST is not the ticket itself but the privilege of thereof:
entering into a contract of pledge.
1.) the sales and revenues of CKCS, Inc.
could not be ascribed to CKCS; As regards, the issue on the non-issuance of
2.) neither may the taxes due from one, a post-reporting notice and pre-assessment
charged to the other; notice by the BIR, the SC stressed that the
3.) nor the notices to be served on the stringent requirement that an assessment
former, coursed through the latter. notice be satisfactorily proven to have been
issued and released or, if receipt thereof is
The CA gave greater weight to the arguments denied, that said assessment notice have
of Menguito and reversed the decision of the been served on the taxpayer, applies only to
CTA. The motion for reconsideration formal assessments prescribed under Section
subsequently filed by the CIR was also 228 of the National Internal Revenue Code,
denied by the CA. and not to post-reporting notices or pre-
assessment notices.
Nevertheless, the SC overturned the decision
of the CA and interpreted the presence of the According to the SC, “a post-reporting notice
following circumstances as substantial and pre-assessment notice do not bear the
evidence in support of the CIR’s contention gravity of a formal assessment notice. The
that CKSC, Inc. and CKSC are actually one post-reporting notice and pre-assessment
juridical taxable personality: notice merely hint at the initial findings of the
BIR against a taxpayer and invites the latter
1. the owner of one directs and controls to an “informal” conference or clarificatory
the operations of the other; and meeting. Neither notice contains a declaration
2. the payments effected or received by of the tax liability of the taxpayer or a demand
one are for the accounts due from or for payment thereof. Hence, the lack of such
payable to the other; or notices inflicts no prejudice on the taxpayer
3. when the properties or products of one for as long as the latter is properly served a
are all sold to the other, which in turn formal assessment notice.”
immediately sells them to the public.5
However, “(t)he issuance of a valid formal
The Supreme Court said that the facts and assessment is a substantive prerequisite to
circumstances of the case belie the claim of tax collection, for it contains not only a
Menguito that CKCS, Inc. is different from computation of tax liabilities but also a
CKCS. Although it is established that the demand for payment within a prescribed
Articles of Incorporation of CKCS, Inc was period, thereby signaling the time when
issued in 1989, the pieces of documentary penalties and interests begin to accrue
evidence submitted before the Court indicate against the taxpayer and enabling the latter to
that after the aforementioned issuance, determine his remedies therefore. Due
CKCS, Inc. has also assumed the name process requires that it must be served on
CKCS, and vice-versa. and received by the taxpayer.6

Hence, the SC ruled that it is undeniable that


the Menguito spouses operated the 6. COMMISSIONER OF INTERNAL
restaurants in Club John Hay and Texas REVENUE vs. MIRANT PAGBILAO
Instruments under the names Copper Kettle CORPORATION (Formerly SOUTHERN
Cafeteria Specialist (CKCS) and Copper ENERGY QUEZON, INC.) (G.R. No. 172129,
Kettle Catering Services or Copper Kettle 12 September 2008)
Catering Services, Inc.

5
Liddell & Co., Inc. vs. Commissioner of Internal Revenue, 112
Phil. 524. See also Commissioner of Internal Revenue vs. Toda, 6 Roxas Securities, Inc. vs. Commissioner of Internal Revenue,

G.R. No. 147188, September 14, 2004. G.R. No. 157064, August 7, 2006.
What is the best evidence to substantiate the P146,760,509.48. The CA likewise denied the
payment of input VAT? Is the non-payment of CIR’s motion for reconsideration.
interest by reason of the late payment of input
VAT fatal to a claim for refund thereof? How is The main difference between the decisions of
the prescriptive period in filing a claim for the CTA and CA involves the sufficiency of
refund of unutilized input VAT reckoned? O.R. No. 0189 to substantiate the payment of
input VAT. While the CA claimed that O.R.
Mirant Pagbilao Corporation (MPC) sells its No. 0189 was the best evidence for the
generated power to the National Power payment of input VAT by MPC to Mitsubishi,
Corporation (NPC). on the other hand, the CTA claims otherwise
and doubted the veracity and genuineness of
By reason of NPC’s tax exempt status, MPC O.R. No. 0189.
filed an Application for Effective Zero Rating
with the BIR’s Revenue District Office No. 60 Eventually, the SC held that O.R. No. 0189
in Lucena City. undoubtedly proves payment by MPC of its
creditable input VAT relative to its purchases
Getting no response from the RDO, MPC filed from Mitsubishi.
a request for ruling with the VAT Review
Committee at the BIR National Office. The SC affirmed that O.R. No. 0198 in itself
Subsequently, the CIR issued VAT Ruling No. sufficiently proves payment of creditable input
052-99, stating that “the supply of electricity VAT involved pursuant to Section 110
by Hopewell Phil. To the NPC shall be subject (A)(1)(B) of the NIRC. The Court said that
to zero percent (0%) VAT. although the BIR is not precluded from
requiring additional evidence to prove that
MPC then chose not to pay the VAT in the input VAT had indeed been paid or, in fine,
progress billings from Mitsubishi for the period that the taxpayer is indeed entitled to a tax
covering April 1993 to September 1996. It refund or credit for input VAT,KxxxK..the law
was only in April 14, 1998 that MPC paid considers a duly executed VAT invoice or OR
Mitsubishi the abovementioned VAT as sufficient evidence to support a claim for
component of P135,993,570. input tax credit.

While awaiting the approval of its application The SC further said that any doubt as to what
with the RDO, MPC filed its quarterly VAT OR 0198 was issued for was put to rest by
return for the second quarter of 1998 on the report of the independent accountant that
August 25, 1998 where it reflected an input O.R. No. 0189 dated April 14, 1998 is for
VAT of P148,003,047.62, which amount payment of the VAT on the progress billings
includes the abovementioned P135,993,570 from Mitsubishi Japan.
supported by Official Receipt 0189.
Furthermore, the SC ruled that MPC’s non-
MPC subsequently filed an administrative payment of interest to Mitsubishi, in view of
claim for refund of unutilized input VAT, the former’s late payment of creditable input
however, the CIR failed to act on the same. VAT, is not fatal to MPC’s claim for refund
Hence, MPC filed a petition with the CTA. since such issue does not belie the fact of
payment by MPC of the input VAT involved,
The CTA granted MPC’s claim for input VAT as well as, the genuineness of OR 0189.
refund or credit, but only for the amount of
P10,766,939.48. Nonetheless, the Court affirmed that MPC has
already lost its right to file the instant claim for
On appeal, the CA modified the decision of refund of the unutilized input VAT since
the CTA and granted MPC’s claim for tax prescription has already set in.
refund or credit in the total amount of
Section 112(A) of the NIRC declares that a solely derived from the talent fees paid to her
VAT registered person may file for the by the Kapamilya Network.
issuance of a tax credit certificate or refund of
creditable input tax within two (2) years after However, this was belied by documents given
the close of the taxable quarter when the by Juday’s accountant and other parties,
sales were made. which establish that Juday actually had an
income of at least P14,796,234.70, coming
As pronounced by the Court, “prescriptive not only from the Kapamilya Network, but
period commences from the close of the from movies and product endorsements as
taxable quarter when the sales were made well. The non-declaration made by Juday
and not from the time the input VAT was paid amounts to at least 84.18% of the income
nor from the time the official receipt was declared in her ITR, which constitutes prima
issued. Thus when a zero-rated VAT taxpayer facie evidence of false or fraudulent return.
pays its input VAT a year after the pertinent
transaction, said taxpayer only has a year to Consequently, an Information charging Juday
file a claim for refund or tax credit of the for violation of Section 255 in relation to
unutilized creditable input VAT. The reckoning Sections 254 and 248 (B) of the Tax Code
frame would always be the end of the quarter was filed with the CTA.
when the pertinent sales or transaction was
made, regardless when the input VAT was Juday then filed a Motion to Quash the
paid. Information which the CTA denied. Similarly,
Juday’s reconsideration was also denied by
Hence, while the creditable input VAT the CTA’s First Division.
involved in the present case relates to the
progress billing dated September 6, 1996, Juday then filed with the CTA en banc, a
MPC filed the present claim for refund only on Motion for Extension of Time to File Petition
December 10, 1999, which is clearly beyond for Review to appeal the denial of the
the period provided under the law. abovementioned Motion to Quash.

In the meantime, while Juday was able to file


7. JUDY ANNE L. SANTOS vs. her Petition for Review with the CTA en banc
PEOPLE OF THE PHILIPPINES, ET AL. on June 16, 2006, the CTA en banc denied
(G.R. No. 173176, August 26, 2008) on June 19, 2006 the Motion for Extension of
time to file Petition for Review previously filed
Is the filing of a Petition for Review with the by Juday.
CTA En Banc the proper remedy for a party
aggrieved by an interlocutory order of a Aggrieved, Juday sought redress from the
Division of the CTA? Supreme Court asserting that the resolution
of the CTA Division denying a motion to
quash is appealable to the CTA en banc
pursuant to Section 18 of Republic Act No.
The case began when then CIR Guillermo L. 1125, as amended. Juday alleged that if that
Parayno Jr. recommended the criminal is not the case, a procedural void would be
prosecution of Juday to Justice Secretary created, leaving the parties without any
Raul M. Gonzales for substantial remedy involving erroneous resolutions of the
underdeclaration of income. CTA Division.

Juday allegedly declared in her Income Tax However, this failed to persuade the Supreme
Return for 2002 an income of P8,033,332.70 Court.
The SC ruled that “the petition for review to Finally, the SC emphasized that “there is no
be filed with the CTA en banc as the mode for dispute that a court order denying a motion to
appealing a decision, resolution, or order of quash is interlocutory. The denial of the
the CTA Division, under Section 18 of motion to quash means that the criminal
Republic Act No. 1125, as amended, is not a information remains pending with the court,
totally new remedy, unique to the CTA, with a which must proceed with the trial to determine
special application or use therein. To the whether the accused is guilty of the crime
contrary, the CTA merely adopts the charged therein. Equally settled is the rule
procedure for petitions for review and appeals that an order denying a motion to quash,
long established and practiced in other being interlocutory, is not immediately
Philippine courts. Accordingly, doctrines, appealable,8 nor can it be the subject of a
principles, rules, and precedents laid down in petition for certiorari. Such order may only be
jurisprudence by this Court as regards reviewed in the ordinary course of law by an
petitions for review and appeals in courts of appeal from the judgment after trial.9”
general jurisdiction should likewise bind the
CTA, and it cannot depart therefrom.” Therefore, the Petition for Review filed by
Juday is the wrong remedy to assail an
Section 1, Rule 41 of the Revised Rules of interlocutory order denying her Motion to
Court, governing appeals from the Regional Quash.
Trial Courts (RTCs) to the Court of Appeals,
provides that an appeal may be taken only The SC declared that assuming Juday’s
from a judgment or final order that completely Petition for Review was treated by the CTA as
disposes of the case or of a matter therein a special civil action for certiorari, the same
when declared by the Rules to be appealable. would still be dismissed for lack of merit.
Said provision, thus, explicitly states that no
appeal may be taken from an interlocutory According to the Court, although “the City
order. Prosecutor has the power to investigate
crimes, misdemeanors, and violations of
It is well-settled that after a final order or ordinances committed within the territorial
judgment has been issued, the court should jurisdiction of the city, and which can be
have nothing more to do in respect of the prosecuted before the trial courts of the said
relative rights of the parties to the case. city,” however, said prosecutor had no
Conversely, "an interlocutory order is one that authority to appear before the CTA where the
does not finally dispose of the case and does case was already pending.
not end the Court's task of adjudicating the
parties' contentions in determining their rights Besides, “there is nothing in the Revised
and liabilities as regards each other, but Quezon City Charter which would suggest
obviously indicates that other things remain to that the power of the City Prosecutor to
be done by the Court."7 investigate and prosecute crimes,
misdemeanors, and violations of ordinances
Further, the SC stressed that one reason why committed within the territorial jurisdiction of
the law does not permit an appeal from an the city is to the exclusion of the State
interlocutory order is to avoid the multiplicity Prosecutors.”
of appeals in a single action, which would
result into the delay of the trial on the merits Moreover, there could not have been a
of the case in the course of such appeal. violation of Juday’s right to due process and
equal protection of laws just because a similar

8 Villasin vs. Seven-Up Bottling Co. of the Philippines, 107 Phil.


7BA Finance Corporation vs. Court of Appeals, G.R. No. 801.
84294, October 16, 1989. 9 Gamboa vs. Cruz, G.R. No. L-56291, June 27, 1988.
case filed against the Songbird were 8. CHEVRON PHILIPPINES, INC. vs.
dismissed by the DOJ. COMMISSIONER OF CUSTOMS (G.R. No.
178759, 11 August 2008)
The SC emphasized that the more
appropriate course of action that Juday Does “entry” under Section 1301 in relation to
should have taken is to appeal the Resolution Section 1801 of the Tariff and Customs Code
of the State Prosecutor to the DOJ Secretary. (TCC) refer to the Import Entry Declation
(IED) or the Import Entry and Internal
Juday was also not denied of due process Revenue Declaration (IEIRD)? When should
since she was “given the opportunity to file the IED and IEIRD be filed? How are
her affidavits and other pleadings and submit importations considered abandoned under
evidence before the DOJ during the Section 1801 of the TCC? Is notice necessary
preliminary investigation of her case and before importations shall be deemed as
before the Information was filed against her. impliedly abandoned by the importer?
Due process is merely an opportunity to be
heard. In addition, preliminary investigation
conducted by the DOJ is merely inquisitorial.
It is not a trial of the case on the merits. Its Chevron is engaged in importing, distributing
sole purpose is to determine whether a crime and marketing of petroleum products.
has been committed and whether the
respondent therein is probably guilty of the In 1996, the importations made by the
crime. It is not the occasion for the full and Company were appraised at a duty rate of 3%
exhaustive display of the parties' evidence. pursuant to RA 8180.
Hence, if the investigating prosecutor is
already satisfied that he can reasonably In 1999, then Finance Secretary Edgardo
determine the existence of probable cause Espiritu received a letter from a certain
based on the parties' evidence thus Alfonso A. Orioste, which alleged the
presented, he may terminate the proceedings deliberate concealment, manipulation and
and resolve the case.10” scheme employed by petitioner and Pilipinas
Shell in the importation of crude oil, thereby
There was likewise no violation of Juday’s resulting in huge losses of revenue for the
rights to equal protection of the law since she government.
was not able to establish that she and the
Songbird were similarly situated, i.e., that they Subsequent to an investigation conducted by
committed identical acts for which they were the Bureau of Customs, Chevron received a
charged with the violation of the same demand letter from the District Collector of
provisions of the NIRC; and that they Customs of the Port of Batangas, requiring
presented similar arguments and evidence in the immediate settlement of the amount of
their defense — yet, they were treated P73,535,830 which represents the difference
differently. between the 10% duty rate prior to the
effectivity of RA 8180 on April 16, 1996 and
Much less, aside from her claim that a similar the 3% tariff rate under RA 8180 on the
charge against the Songbird was dismissed shipments made by the Company.
while that against her prospered, Juday has
failed to present evidence showing that the Acting on Chevron’s request for the creation
DOJ committed a clear and intentional of a unified team with exclusive authority to
discrimination against her. act on the matter, the Commissioner of
Customs assigned the Investigation and
Prosecution Division, Customs Intelligence
10 De Ocampo vs. Secretary of Justice, G.R. No. 147932, 25 and Investigation Service (IPD-CIIS), to the
January 2006.
exclusion of the Legal Division and the District period when the specified entry form is
Collector, to handle the case. properly filed and accepted.

The IPD-CIIS alleged that since the import Hence, the operative act that constitutes
entries pertaining to Chevron’s transactions in "entry" of the imported articles at the port of
1996 were filed beyond the 30-day non- entry is the filing and acceptance of the
extendible period, the importations were "specified entry form" together with the other
already considered abandoned in favor of the documents required by law and regulations.
government. There is no dispute that the "specified entry
form" refers to the IEIRD.
The Commissioner of Customs subsequently
informed Chevron of the findings of In addition, the word “entry” was interpreted in
irregularity in the filing and acceptance of the Go Ho Lim vs. The Insular Collector of
import entries beyond the period required by Customs (64 Phil. 64) as referring to the
customs law and in the release of the regular consumption entry, which in present
shipments after the same had already been terms is the IEIRD and not the IED which
deemed abandoned in favor of the indicates provisional entry only.
government. In view of the foregoing,
Chevron was ordered to pay the amount of The important purposes addressed by the
P1,180,170,769.21 representing the total filing of the IEIRD are the following:
dutiable value of the importations. 1. to ascertain the value of the imported
articles; 2. collect the correct and final amount
On appeal with the CTA, the Court’s First of customs duties and avoid smuggling of
Division affirmed the existence of fraud and goods into the country.
ordered Chevron to pay deficiency customs
duties equal to P105,899,569.05. Lastly, the IEIRD accompanies the final
payment of duties and taxes which must first
The CTA En Banc sustained the findings of be paid in full before the BOC can allow the
fraud by the First Division and ordered release of the imported goods from its
Chevron to pay the total dutiable value of the custody.
shipments equal to P893,781,768.21.
For the abovementioned reasons, the SC
Chevron then filed an appeal to the Supreme held that the submission of the IEIRD cannot
Court, which ruled that “(t)he term "entry" in be left to the exclusive discretion or whim of
customs law has a triple meaning. It means the importer.
(1) the documents filed at the customs house;
(2) the submission and acceptance of the Therefore, both the IED and IEIRD should be
documents and (3) the procedure of passing filed within 30 days from the date of discharge
goods through the customs house.11” of the last package from the vessel or aircraft.

According to the SC, “the IED serves as basis The SC likewise found Chevron guilty of
for the payment of advance duties on fraud since the evidence showed that the
importations whereas the IEIRD evidences Company bided its time to file the IEIRD in
the final payment of duties and taxes.” order to enable it to avail of the new rate of
3% mandated under RA 8180, instead of the
Moreover, Section 205 of the TCC defines the previous rate of 10%.
precise moment when imported articles are
deemed “entered” in the Philippines as the The SC stated that “(t)here was a calculated
and preconceived course of action adopted
by petitioner purposely to evade the payment
11 Rodriguez vs. CA, G.R. No. 115218, September 18, 1995. of the correct customs duties then prevailing.”
Company already had actual physical
As proven during the investigation of the IPD- possession of the property.
CIIS which was further affirmed by the CTA
First Division and CTA En Banc, indications of Since “the purpose of posting an "urgent
Chevron’s deliberate intention to defraud the notice to file entry" pursuant to Section B.2.1
government were its collusion with the former of CMO 15-94 is only to notify the importer of
District Collector, who allowed the acceptance the "arrival of its shipment" and the details of
of the late IEIRDs and the collection of duties said shipment.” Compliance with the notice
using the 3% declared rate; as well as, the requirement is no longer required in the
Company’s non-disclosure of discrepancies instant case.
on the duties declared in the IEDs (10%) and
IEIRDs (3%) covering the shipments. Finally, the SC ruled that the commencement
of abandonment proceedings is not a
Under RA 7651, Chevron’s failure to file the necessary requirement in order to effect the
required IEIRD within the non-extendible transfer of ownership of the abandoned
period of 30 days indicates that the Company articles to the government.
is already deemed to have renounced all its
interests and property rights to the Section 1802 of the TCC makes use of the
importations, even as the cargo shall be term “ipso facto”, which may be translated as
considered as impliedly abandoned in favor of “by the fact itself”.
the government.
Accordingly, “there was no need for any
Consequently, the SC ruled that in order for a affirmative act on the part of the government
shipment to be considered abandoned, it with respect to the abandoned imported
already sufficient that an importer fails to file articles since the law itself provides that the
the required import entries within the abandoned articles shall ipso facto be
indicated reglementary period as the law no deemed the property of the government.
longer requires that there be acts or Ownership over the abandoned importation
omissions where intent to abandoned may be was transferred to the government by
inferred. operation of law under Section 1802 of the
TCC, as amended by R.A. 7651.”
Moreover, the SC likewise held that notice to
the importer is not required in view of the
peculiar facts of the case.

A review of the deliberation of the Committee


on Ways and Means of the House of
Representatives concerning the proposed
amendment to Section 1801 of the TCC,
revealed that the phrase “after due notice”
was intended to assist the owners/importers
who live in rural areas or places far from the
port and are unfamiliar with customs
procedures and need help and advice of
people on how to file an entry.

More importantly, notice to Chevron is no


longer necessary as it was aware that the
shipments already arrived at the Port of
Batangas, aside from the fact that the

Похожие интересы