G.R. No. 195876 . December 05, 2016
PILIPINAS SHELL PETROLEUM CORPORATION, PETRON CORPORATION, AND CHEVRON PHILIPPINES, INC., PETITIONERS, V. COMMISSIONER OF CUSTOMS, RESPONDENT.

FACTS

Petitioner Pilipinas Shell imported crude oil which arrived on April 7, 1996. The shipments were unloaded on April 10, 1996. Petitioner filed the required Import Entry and Internal Revenue Declaration (IEIRD) and paid duties on May 23, 1996, which was 43 days after discharge. Meanwhile, Republic Act No. 8180 took effect on April 16, 1996, reducing the tariff on crude oil from 10% to 3%. Petitioner paid duties at the new 3% rate. In 2000, the Bureau of Customs (BOC) demanded deficiency duties, asserting the old 10% rate applied, and later, in 2001, demanded payment of the entire dutiable value, claiming the shipment was deemed abandoned due to the late filing of the IEIRD beyond the 30-day period prescribed by the Tariff and Customs Code.
The Court of Tax Appeals (CTA) divisions ruled against the petitioner, ordering payment of the dutiable value with interest. The CTA En Banc affirmed, modifying only the interest rate. Petitioner elevated the case to the Supreme Court, arguing the BOC’s right to collect had prescribed and that there was no fraud in the late filing.

ISSUE

Whether the Bureau of Customs may recover the dutiable value of the imported crude oil which was consumed by the importer after it was deemed abandoned by operation of law for failure to file the import entry within the statutory 30-day period.

RULING

No. The Supreme Court, through the ponencia, granted the petition. The Court ruled that the right to collect the dutiable value had prescribed. Under Section 1603 of the Tariff and Customs Code, the government’s right to institute forfeiture proceedings prescribes after one year from the date of the abandonment. The shipment was deemed abandoned on May 10, 1996 (30 days after discharge). The BOC’s formal demand for the dutiable value was made only on October 29, 2001, which was beyond the one-year prescriptive period. The Court distinguished between an action for forfeiture and a simple collection suit, holding that the prescriptive period for forfeiture applies when the basis of the claim is the abandonment itself.
Furthermore, the Court found no evidence of fraud on the part of the petitioner in belatedly filing its IEIRD. Absent fraud, the applicable prescriptive period for collecting deficiency duties is also one year from the date of final payment, pursuant to Section 1603. The initial duty payment was made on May 23, 1996, and the demand for deficiency duties was made in August 2000, which was beyond the one-year period. Consequently, both the claim for the dutiable value and the claim for deficiency duties had prescribed. The dissenting opinion, however, argued for the application of stare decisis and the Court’s prior ruling in Chevron v. Commissioner of Customs, which upheld the BOC’s right to collect under substantially similar facts.