In a statement, the BOC said the order denying the motion signed by commissioner Nicanor Faeldon on April 11 stressed the purpose of a preventive suspension to suppress smuggling.
On March 14, BOC issued a preventive suspension of the customs accreditation of Mighty for alleged violation of customs regulations. Recent raids of warehouses in Zamboanga City, General Santos City, and San Simon in Pampanga province that yielded more than P2 billion worth of counterfeit cigarettes were cited as basis for the suspension.
On April 3, Mighty filed a motion for the temporary lifting of the suspension. The motion was limited to shipments that had arrived prior to the suspension and those in transit, arguing that the shipments would deteriorate and would substantially hamper operations. The cigarette manufacturer then undertook steps to pay duties and taxes due on the shipments and to post a bond to cover any damage on the part of the BOC.
Government prosecutor Danilo Campos opposed the motion, noting that while Mighty offered to pay the rightful duties and taxes and to post bond, it failed to present supporting documents, particularly the bills of lading (BL) of the shipments. Without the BL, BOC cannot identify and examine shipments that Mighty wants processed; the BOC also cannot identify the ports where the shipments are being stored pending their release.
Faeldon said ordering the preventive suspension was part of BOC’s function to prevent smuggling and other instances of customs fraud.
Earlier, Finance Secretary Carlos Dominguez III said any settlement with Mighty on the latter’s tax evasion case is “now out of the question until the courts say so”.
The Bureau of Internal Revenue (BIR) on March 22 has filed before the Department of Justice a tax evasion case against Mighty for its alleged failure to pay an estimated deficiency excise tax liability totalling P9.564 billion. The case covers the seizure of Mighty’s cigarettes with alleged fake stamps at its warehouses in Pampanga.
BIR said it is preparing at least three more tax evasion cases against Mighty, aside from a plan to cancel the firm’s license to operate.
BIR said it might file a P27 billion to P30 billion tax evasion case against Mighty for the Bulacan raid alone.
On March 24, another inspection led by BOC operatives, on two warehouses reportedly owned by Mighty in San Ildefonso, Bulacan, yielded about 160,000 master cases with allegedly bogus tax stamps. The stash had an estimated street value of P3.2 billion, and cost the government an estimated P2.4 billion in unpaid excise taxes.
Image courtesy of Stuart Miles at FreeDigitalPhotos.net