Batangas court claims jurisdiction over Shell imports issue

MANILA, Philippines - The Batangas Regional Trial Court claims it has jurisdiction and can issue a temporary restraining order (TRO) to stop the Bureau of Customs (BOC) from seizing Shell imports worth P7.3 billion.

Batangas RTC executive Judge Ruben Galvez extended last Feb. 12 the TRO to remain effective for 20 days. On Feb. 10, the court of Batangas issued a 72-hour TRO and it was later extended by another 20 days.

In his order, Galvez brushed aside the argument of Assistant Solicitor General Thomas Laragan, who represented the BOC in the case, that the court had no jurisdiction over the case since the Court of Tax Appeals (CTA) was hearing the case on whether the BOC’s claim of P7.3 billion in excise taxes from Shell is valid.

“After a careful examination of the allegations on the complaint and a careful reading of Section 7 of Republic Act No. 9282 which provides for the Jurisdiction of Court of Tax Appeals, the court is convinced that it has jurisdiction over the instant case,” Galvez said

He noted that the case pending before the Batangas court does not involve a decision of the Customs Commissioner or the CTA “but rather a memorandum issued by a district collector ordering the holding of all import shipments of (Shell).” He also stated the case before him does it involve a violation of the customs code.

Court records show that the issue in the Batangas RTC case is whether BOC collector Juan Tan can seize the landed imports of Shell that arrived between Jan. 4 and Feb. 4 after the taxes and duties had already been paid.  

“(Shell) is asking for TRO to restrain the defendants from holding their import shipments which are in their custody and physical possession after all the taxes due to the defendants had been paid,” said Galvez.

He said that “clearly, the issue is not the validity or legality of the said memorandum but rather the taking of the property of (Shell) without due process which this court is constitutionally bound to protect.

Considering that the legal issues raised cannot be fully heard in just three days, Galvez said there is a need to preserve the status quo for a longer period so it can complete the hearings “to thoroughly examine the veracity of the alleged full payment of the taxes and duties of the subject import shipments.”

Galvez noted in a previous order that allowing the seizure of Shell’s imports “will cause irreparable injury and grave injustice to (Shell) as a business entity engaged in the manufacture and sale of petroleum products.”

With no more products to sell, Galvez said Shell’s 959 retail dealer stations will eventually close down to the prejudice of the public in general. Shell said it will be forced to shut down its refinery if its imports are seized since it will no longer have raw materials needed to produce fuel products.

He also noted that closure of Shell’s refinery will result in a supply shortage since Shell has a market share of 27.7 percent. It will also result in P11 billion in losses for Shell while its 823 refinery workers will lose the jobs.