Philippine cigarette manufacturer Mighty Corporation has asked the Bureau of Customs (BOC) to lift the preventive suspension on its accreditation, saying the suspension unlawfully bars the company from transacting with the agency.
In a motion for reconsideration filed by the company’s counsel Sigfrid Fortun, the company questioned the March 14 customs memorandum calling for the immediate suspension of Mighty’s accreditation based on the recommendation of BOC’s Account Management Office (AMO).
The motion argued that the suspension had no legal basis based on the Revised Guidelines for Registration of Importers and Customs Brokers.
“The grounds and instances where suspension or cancellation or revocation of an importer’s accreditation can prosper: The BOC-AMO discovers any inaccuracy in any of the documents submitted in the application process with the BOC; the accredited importer does not comply with any of the reportorial requirement to be submitted enumerated in the CMO mentioned above; and the BOC discovers any violation of law or regulation by the accredited importer,” the Philippine News Agency quoted the motion.
The motion further said the notice issued against the tobacco manufacturer “is premised on a pending administrative case filed with your Office,” which is “not a ground for suspension, and the policy makers who drafted the memorandum did not include pendency of a suit or investigation as a ground therefor since the existence of a case is not determinative of guilt.”
Aside from asking to lift the suspension, the motion also sought “other just or equitable reliefs available to alleviate the current flight [sic]” of Mighty Corp. arising from its suspended accreditation and asked for a hearing not later than March 21.
Legal Service director and Bureau’s Action Team Against Smugglers (BATAS) executive director Alvin Ebreo, in his March 14 memorandum, said one of the bases for the preventive suspension was a similar order issued in 2014 against Mighty by then Customs Commissioner John Sevilla for infraction of customs bonded warehouse privileges.
Ebreo said the Fiscal Intelligence Unit of the Department of Finance also reported that there has been an undervaluation of the importation of cigarette-manufacturing materials amounting to P163.118 million. In order to withdraw the raw materials for local consumption, its correct value must be determined first for the payment of correct duties and taxes.
Apart from Mighty’s previous violations, the memorandum cited the recent raids of warehouses in Zamboanga City, in General Santos City, and in San Simon town in Pampanga province, which yielded more than P2 billion worth of alleged counterfeit cigarettes, as among the bases of the suspension.
Customs Commissioner Nicanor Faeldon said the order is also in light of BOC’s mandate to prevent smuggling and other cases of customs fraud.
Consequently, the preventive suspension will provide the government an unhampered venue for investigation, and free it from any collateral issues and concerns, according to Ebreo. He added that the suspension is a purely administrative matter that falls within the BOC’s power and jurisdiction.
The preventive suspension came after a temporary restraining order (TRO) was issued on March 6 by presiding judge Tita Bughao Alisuag of the Manila Regional Trial Court Branch 1, which prevents BOC from raiding or inspecting the warehouses of Mighty for 20 days, or from March 3 to March 23.
Faeldon, in response, filed on March 13 an administrative case against Alisuag “for gross ignorance of the law after issuing a TRO against BOC despite her lack of authority to do so, and for gross violation of the New Code of Judicial Conduct for exhibiting unquestionable bias and partiality in favor of Mighty Corporation.”
Justice Secretary Vitaliano Aguirre, meanwhile, disclosed that Mighty owner Alexander Wongchuking, in a letter, has accepted the offer of President Rodrigo Duterte to pay at least P3 billion to settle its unpaid tax obligations. But according to Action for Economic Reform senior economist and trustee Jo-Ann Diosana, “if the law is followed, Mighty must pay as much as P15 billion in taxes.”
Aguirre said the government may still pursue the tax evasion cases against Mighty, and only when the tax evasion charges are filed with the Department of Justice (DOJ) can the settlement offer be entertained.
Finance Secretary Carlos Dominguez III earlier said BIR was having a hard time determining how much taxes Mighty should pay because “the lawyers of Mighty have been obstructing us.”
He added that BIR and BOC were busy gathering evidence for submission to the DOJ, “preparatory to the government’s filing of an airtight case against Mighty Corp. for tax evasion and other possible charges.”
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