SISON, YOLANDA C.

TAX LAW REVIEW – Atty. Eufrocina Sacdalan-Casasola

Arellano University School of Law
05.05.18

COMMISSIONER OF CUSTOMS, COLLECTOR OF CUSTOMS OF THE PORT OF BATANGAS and the BUREAU
OF CUSTOMS VS. PILIPINAS SHELL PETROLEUM CORPORATION (PSPC), WILLIE J. SARMIENTO, PSPC
Vice-President for Finance and Treasurer and ATTY. CIPRIANO U. ASILO
G.R. No. 205002. 20 April 2016. Del Castillo, J. (Second Division)

TOPIC: Forum Shopping; Sec. 1508, Tariff and Customs Code of the Philippines
NATURE OF THE ACTION: Action to Cite Respondents in Direct Contempt of Court.

This Petition for Review on Certiorari assails the June 11, 2012 Decision and the August 28, 2012
Resolution of the Court of Tax Appeals (CTA) in C.T.A. EB Case No. 744.

FACTS

On January 30, 2009, petitioner District Collector Tan, the Collector of Customs of the Port of Batangas
issued a demand letter asking PSPC to pay the excise tax and Value-Added tax, plus penalty on the importation
of Catalytic Cracked Gasoline (CCG) and Light Catalytic Cracked Gasoline (LCCG) for the years 2006 to 2008 in
the total amount of Php 21, 419, 603.00.

Respondent PSPC, however, refused to heed the demand and, instead, issued a letter questioning the
factual or legal basis of the demand. Thereafter, petitioner District Collector issued another letter reiterating
the demand for the payment of the said unpaid taxes.

RULING OF THE COMMISSIONER OF CUSTOMS AND THE COURT OF TAX APPEALS

Respondent PSPC appealed the matter to petitioner Commissioner of Customs, however, the same was
DENIED (Letter-Decision dated November 11, 2009) and the respondent was ordered to pay the unpaid taxes
to avoid application of Sec. 1508 of the Tariff and Customs Code of the Philippines. Respondents moved for
reconsideration but petitioner Commissioner of Customs DENIED the same (Letter-Decision dated November
26, 2009).

Respondent PSPC then filed a Petition for Review with the Court of Tax Appeals assailing the Letter-
Decision dated November 11 and 26, 2009. Likewise, PSPC filed a Verified Motion for the Issuance of a
Suspension Order against the collection of taxes with a prayer for immediate issuance of a Temporary
Restraining Order. The Court of Tax Appeals, granted the application for a 60-day TRO, however, the request
for the issuance of a suspension order was denied.

In light of the said denial, petitioner District Collector issued a Memorandum dated February 9, 2010
ordering the personnel of the petitioner Bureau of Customs in the Port of Batangas to hold the delivery of all
import shipments of respondent PSPC to satisfy its excise tax liabilities.

RULING OF THE REGIONAL TRIAL COURT OF BATANGAS

Respondent PSPC filed with the RTC, a Complaint for Injunction, to enjoin the implementation of
the said Memorandum. In the Verification and Certification attached thereto, respondent thru its Vice President
for Finance and Treasurer declared that there is a pending case before the Court of Tax Appeals, however, it
involves different issues and/or reliefs. In turn, petitioner District Collector filed with the Court of Tax
Appeals a Motion to Cite respondents for Direct Contempt of Court.
SISON, YOLANDA C.
TAX LAW REVIEW – Atty. Eufrocina Sacdalan-Casasola
Arellano University School of Law
05.05.18

RULING OF THE COURT OF TAX APPEALS

The Motion to Cite Respondents in Direct Contempt of Court was DENIED. The Court ratiocinated that,
although the parties in the CTA Case and the Batangas Injunction are the same, the rights asserted and the
reliefs prayed for are different. The decision in one case would not result in res judicata in the other case. Thus,
CTA ruled that the filing of the Batangas Injunction Case does not constitute forum shopping, as such, the court
found no reason to cite respondents in direct contempt of court.

ISSUE

Whether the Court of Tax Appeals committed reversible error when it ruled that respondents did not
commit willful and deliberate forum shopping.

Arguments of the Petitioners: The Complaint for Injunction filed before the RTC of Batangas involve
exactly the same parties, the same rights, and the same reliefs. Further, the material allegations
in both pleadings are based on the same set of facts; that both cases substantially raise the same
issues; and that both seek to enjoin the enforcement of Section 1508 of the TCCP. The phrase "to
refrain or stop from exercising any action described in, under or pursuant to, Section 1508 of the
TCCP" in the prayer of the Verified Motion is all-encompassing as it includes whatever relief
respondent PSPC sought in the Complaint for Injunction filed before the RTC.

Argument of the Respondents: Among others, respondent PSPC filed the Batangas injunction case to
question the validity of the Memorandum dated February 9, 2010 and to oppose the seizure of
the 13 importations/shipments on the ground that petitioners NO longer have jurisdiction over
the subject importations/shipments as these have been discharged and placed in its Batangas
refinery since 90% of the import duties due on the said shipments have been paid.

To support its case, respondent PSPC interposed that Section 1508 of the TCCP is available only
if petitioner BOC has actual physical custody of the goods sought to be held, a situation not present
in the case of the said importations/shipments; that petitioners have no reason to seize the 13
importations/shipments, as only two were CCG and only one was LCCG; and that the
Memorandum dated February 9, 2010 deprives respondent PSPC of its property without due
process of law.

RULING

NO. Since the subject matter, the causes of action, the issues raised, and the reliefs prayed for are NOT
the same, respondents are not guilty of forum shopping. Accordingly, the Court of Tax Appeals did not err in
denying the Motion to Cite respondents in Direct Contempt.

*** SEC. 1508. Authority of the Collector of Customs to Hold the Delivery or Release of Imported Articles. —Whenever any importer, except the government, has an outstanding and
demandable account with the Bureau of Customs, the Collector shall hold the delivery of any article imported or consigned to such importer unless subsequently authorized by the
Commissioner of Customs, and upon notice as in seizure cases, he may sell such importation or any portion thereof to cover the outstanding account of such importer; Provided, however,
That at any time prior to the sale, the delinquent importer may settle his obligations with the Bureau of Customs, in which case the aforesaid articles may be delivered upon payment of
the corresponding duties and taxes and compliance with all other legal requirements.
SISON, YOLANDA C.
TAX LAW REVIEW – Atty. Eufrocina Sacdalan-Casasola
Arellano University School of Law
05.05.18
CTA CASE
Alleged UNPAID TAXES of PSPC
SUBJECT MATTER on the importation of CCG and
LCCG for the years 2006 and 2009.
Based on the LETTER-DECISIONS
of Petitioner Commissioner of
CAUSE OF ACTION Customs, finding PSPC liable for
excise taxes and VAT.
The main issue involved in the
Petition for Review is the
ISSUES VALIDITY of the Letter
Decisions dated November 11
and 26, 2009.
PSPC seeks the REVERSAL of the
Letter-Decisions of petitioner
Commissioner of Customs in
RELIEFS
order to prevent petitioners from
imposing payment of excise tax
and VAT for importation of CCG
and LCCG for the years 2004 to
2009.
WHEREFORE, the Petition was DENIED.
BATANGAS INJUNCTION CASE
13 IMPORTATIONS AND/OR
SHIPMENTS of PSPC, for the
period of January to February
2010, which PSPC claims are
threatened to be SEIZED by
petitioners pursuant to the
February 9 2009 Memorandum
issued by petitioner District
Collector
Based on the MEMORANDUM
dated February 9, 2010.
The issue involved in the Verified
Motion is the ENTITLEMENT to a
suspension order pending the
resolution of the validity OF THE
Letter-Decisions.
PSPC seeks to PREVENT
petitioner from ENTERING and
SEIZING its importations
pursuant to Sec. 1508 of the Tariff
and Customs Code of the
Philippines by virtue of the
Memorandum dated February 9,
2010.