Digest - Commissioner of Customs vs Pilipinas Shell Petroleum Corporation, G.R. 205002

Facts: 1.) Pilipinas Shell Petroleum Corporation (Shell) was assessed and issued a demand letter by the District Collector of Customs in the Port of Batangas for deficiency excise and value-added tax (VAT) payments plus penalties on its importation of catalytic cracked gasoline for the years 2006-2008 in the amount of Php21,419,603,310.00. 2.) The District Collector issued another demand letter reiterating the demand for payment of the assessed tax and penalties due. Shell appealed the same before the Commissioner of customs who ordered the District Collector to observe the status quo. 3.) The Commissioner of Customs later denied Shell’s appeal and ordered the latter to settle the unpaid taxes so that the Bureau would not exercise its power to seize all imported articles by Shell and to sell the same in order to apply the proceeds to the Shell’s outstanding balance with the Bureau. (Section 1508, TCCP) 4.) Shell moved for the reconsideration of the Commissioner’s decision but the same was denied so Shell was prompted to assail the Commissioner’s letter-decision file a Petition for Review with the Court of Tax Appeals (CTA). 5.) Shell also filed with the CTA a Verified Motion for issuance of a Suspension Order to enjoin the collection of taxes with issuance of a Temporary restraining Order (TRO). 6.) The CTA First Division issued a resolution granting Shell a 60-day TRO. However, after due hearing on the Verified Motion for issuance of a Suspension Order, the same was denied. 7.) Thus, the District Collector of the Port of Batangas issued a Memorandum ordering the personnel of the BOC Port of Batangas to hold the delivery of all import shipment of Shell to satisfy its excise tax liability. (Section 1508, TCCP) 8.) Shell filed with the RTC of Batangas a complaint for Injunction with prayer for issuance of a 72-hour TRO to enjoin the implementation of the District Collector’s Memorandum. In said complaint, it was disclosed by the VP for Finance and the Treasurer of Shell that there is a pending appealed case with the CTA involving Shell and the Bureau of Customs. 9.) The 72-hour TRO was granted by Branch 3 of RTC Batangas so the Bureau of Customs filed cases against Shell’s officers (1) for Direct Contempt for engaging in forum-shopping and (2) for Perjury.

10.) The CTA denied the motion to cite Shell’s officers in contempt so the Bureau of Customs elevated the same to the Supreme Court. Issue: Do the Petition for Review case filed with the CTA and the case for Injunction against the implementation of the District Collector’s Memorandum filed with the RTC involve the same issues? Held: No. The subject matter in the CTA case is the alleged unpaid taxes for the years 2006-2008 which is sought to be collected by the Bureau of Customs while the subject matter of the Batangas injunction is the 13 importations/shipments of Shell which is being threatened to be seized (Sec. 1508, TCCP) by the Bureau of Customs by virtue of the District Collector’s Memorandum. The cause of action in the CTA case is based on the Letter-Decisions of the Commissioner of Customs denying Shell’s protest while the cause of action in the RTC Batangas injunction case is the Memorandum dated Feb. 9, 2010, ordering the personnel of BOC in the Port of Batangas to hold the delivery of all import shipments of Shell. The issues are not the same. The Batangas injunction case is grounded upon the fact that the Bureau of Customs no longer have jurisdiction over the importations as the same have been discharged and placed in Shell’s Batangas refinery since 90% of the import duties have already been paid. This is on the theory that for Section 1508 to apply, the BOC must have physical custody of the goods sought to be held which is not present in the case. The reliefs prayed for are not the same. a) The Petition for Review filed with the CTA prays for the nullification of the Letter-Decision dated 11 November 2009 and Letter-Decision dated 26 November 2009 issued by the Commissioner of Customs and render a new Decision finding Shell not liable for excise tax and VAT demanded by the BOC. b) The Verified Motion for Suspension Order prays for the issuance of an Order ordering, commanding and directing the BOC, their officers, subordinates, personnel and agents and/or any person

acting on their behalf or authority, to refrain or stop from exercising any action described in, under, or pursuant to, Sec. 1508 of the TCCP x x x c) The RTC injunction case prays for the issuance of an Order restraining BOC, their assigns, agents, employees, representatives or any person under their direction and/or control from entering the Refinery or property of Shell and/or seize or confiscate or forcibly take possession of the imported shipments of Shell that are already in Shell’s physical custody and possession. Since the subject matter, cause of action and issue raised and the reliefs prayed for are not the same, Respondents are not guilty of forumshopping. Accordingly the CTA did not err in denying the Motion to Cite respondents in Direct Contempt of Court.