CA affirms dismissal of Shell’s libel raps vs BOC exec

MANILA, Philippines - The Court of Appeals (CA) has upheld the dismissal of a libel complaint filed by oil giant Pilipinas Shell Petroleum Corp. against a Bureau of Customs port collector.

In a 13-page decision released last week, the sixth division of the appellate court dismissed the petition of Shell questioning an earlier resolution of the Department of Justice (DOJ) junking the libel charges against Batangas Port collector Juan Tan for his alleged “defamatory” remarks in connection with the bureau’s effort to collect P7.34 billion in back taxes from the oil firm.

The CA, through Associate Justice Edwin Sorongon, ruled there was no grave abuse of discretion on the part of the DOJ in dismissing the complaint.

It held that the oil firm’s move to file a libel complaint against Tan, who has the duty to assess and collect taxes, “borders on harassment.”

The CA noted that none of the newspapers that published articles based on Tan’s memorandum to his superiors were included in the complaint.

“Why is he being singled out by petitioner? Clearly, there was no evidence showing that respondent Tan had a hand in the reporting of the allegedly libelous news articles,” the CA ruled.

The CA added that it has been a judicial policy to refrain from interfering in the conduct of preliminary investigation and to allow the DOJ to freely establish whether or not there is probable cause for the prosecution of an accused.

The case stemmed from a newspaper articles published on March 8, 2010 where Tan was quoted questioning the government-approved posting of surety bond by Shell for its alleged back taxes.

Opposing arrangements

In a memorandum to then BOC Commissioner Napoleon Morales, Tan insisted that they were not informed by the Court of Tax Appeals when then Solicitor General Alberto Agra accepted the Shell offer of a surety bond in return for the assurance Shell imports will not be seized while the case is pending.

The BOC assessed Shell P7.34 billion in back taxes for allegedly not paying the proper taxes on imports of catalytic cracked gasoline and light CCG.

Tan said the bond agreement counters an earlier agreement among the petroleum firm, Department of Finance (DOF) and the Office of the President (OP) that Shell will have to set up an escrow account equivalent to P7.34 billion.

Tan said the bond is “tantamount to giving Shell unwarranted benefits at the expense of the government because it will then be allowed to keep and use the said P7.34 billion of the government without any consideration.”

He added that Shell is already selling some of its Philippine assets in case the court rules in favor of the bureau.

Shell said Tan’s comments, reported in the news articles, accused the firm of reneging on its contractual commitments and being a tax evader.

Shell also said Tan made it appear that there was an earlier agreement among petitioner, the DOF and OP when there was none.

Tan, on the other hand, said Shell filed a complaint against him to stop him from discharging his duty to collect taxes from the oil firm.

He also denied releasing to the media the memorandum sent to his superiors, adding that the memorandum is privileged communication and may not be the basis for libel.