The Philippine Bureau of Customs (BOC) has ordered the suspension of accreditation of local tobacco manufacturer Mighty Corporation after a series of raids which yielded thousands of cases of Mighty cigarettes with alleged fake tax stamps, the haul amounting to more than a billion pesos.
The suspension was announced during The Clean Forum press conference organized by the Coalition of Clean Air Advocates on March 14, according to BOC’s Facebook page and Twitter account.
A memo about the suspension, from Atty Alvin Ebreo, director III of the Legal Service, was later released.
The suspension means Mighty Corp, which is accredited by the BOC as a manufacturer, importer and exporter, may not transact with the BOC.
In a related development, the BOC filed an administrative case against a Manila Regional Trial Court (RTC) judge who issued a temporary restraining order (TRO) that prevents the agency from raiding the warehouses of Mighty.
In a 24-page complaint filed on March 13, Customs Commissioner Nicanor Faeldon asked the Supreme Court to administratively sanction presiding judge Tita Bughao Alisuag of the Manila Regional Trial Court (RTC) Branch I “for gross misconduct, gross ignorance of the law, and for violating the Supreme Court’s rules, directives, and circulars.”
Faeldon said Alisuag’s issuance of the TRO “constitutes ignorance of the law, so gross that it strikes at the very core of the public’s faith and confidence on the integrity and competence of the country’s judicial system.”
“Worse, it demonstrates deplorable and highly irregular conduct, causing grave and irreparable damage to the public in general, to the benefit of suspect individuals,” Faeldon added.
Alisuag on March 6 issued a TRO that prevents BOC from raiding and inspecting the warehouses of local tobacco manufacturer Mighty Corporation for a period of 20 days, or from March 3 to 23, 2017.
Faeldon said Alisuag should be held administratively liable for gross ignorance of the law tantamount to gross misconduct for issuing the TRO “despite the clear and unquestionable fact that she had no authority nor jurisdiction to do so.”
Faeldon stressed that Alisuag blatantly disregarded the long-established rule that regular courts do not have jurisdiction over seizure and forfeiture proceedings.
He added that the presiding judge is also liable for gross violation of the New Code of Judicial Conduct “for exhibiting unquestionable bias and partiality in favor of Mighty Corporation to the prejudice of the public in general.”
BOC stressed that it has exclusive jurisdiction over all seizure and forfeiture cases as per Section 202 of Republic Act No. 10863, or the Customs Modernization and Tariff Act.
Section 301 of the CMTA further provides that “all goods, including means of transport, entering or leaving customs territory, regardless of whether they are liable to duties and taxes, shall be subject to customs control.”
The complaint also stated that “the TRO was overboard, practically prohibiting the BOC from exercising its mandate over Mighty Corporation.”
It “effectively made Mighty Corporation untouchable and immune from any and all acts of the BOC,” it added.
“Undeniably, these circumstances lead to no other conclusion but that the respondent Judge is manifestly biased and partial in favor of Mighty Corporation, to the damage not only of the BOC, but to the public in general who are: (i) exposed to the danger of using counterfeit cigarettes; and (ii) deprived of millions, if not billions, of pesos in tax collections due to the counterfeit and smuggled cigarettes being sold by Mighty Corporation.”
Finance Secretary Carlos Dominguez III, meanwhile, earlier said lawyers for the cigarette manufacturing firm have been “obstructing” government efforts to look into its business activities.
Dominguez said the Bureau of Internal Revenue (BIR) is “having a hard time determining how much the taxes should be because the lawyers of Mighty have been obstructing us.”
He added that BIR and BOC were busy gathering evidence for submission to the Department of Justice, “preparatory to the government’s filing of an airtight case against Mighty Corp. for tax evasion and other possible charges.”
“The government needs to first establish strong evidence to pin down this cigarette manufacturer on such charges,” Dominguez said.
“They (BOC and BIR) should speed up their investigations and also look into the possible involvement of bureaucrats acting as protectors of these large-scale tax evasion attempts,” he added.
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.”
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