The Philippine Bureau of Customs (BOC) has suspended Mighty Corp.‘s license to operate as a customs bonded warehouse (CBW) pending the gathering of evidence for the filing of any criminal and/or administrative charges against the cigarette and tobacco manufacturer.
On Jan. 17 Customs Commissioner John Phillip Sevilla approved a BOC task force’s memorandum recommending Mighty’s CBW license suspension, on allegations of “substantial unaccounted raw materials that should have been exported” and the “potentially huge revenue leakage that would continue unabated” if CBW No. M-1718 remained operational.
Task Force Mighty Corporation, created under Customs Special Order No. 60-2013 dated Nov. 31, 2013, and headed by Maria Edita Tan, deputy commissioner for Revenue Collection and Monitoring Group (RCMG), was tasked to investigate the alleged illicit importation activities of Mighty.
Mighty is registered with the Securities and Exchange Commission and is primarily engaged in the business of manufacturing, dealing and sale of cigarettes, cigar and other tobacco products. It also imports, buys and sells, and deals in all kinds of machinery, equipment and appliances, and devices for making cigarettes and tobacco products.
Based on its initial investigation report, the task force noted Mighty’s importation of raw materials rose rapidly since 2010, most of which were for the manufacture of cigarettes intended for export (indicated as warehousing entries) with a minimal amount reported for local production.
“During the course of evidence gathering and documentation at the Port of Manila, it was noted that subject Mighty has made a series of requests for large payment of duties and taxes of Mighty Corporation’s warehousing importations”, the task force said, which began in August 2013 when Finance Secretary Cesar Purisima issued a memorandum order directing the creation of Task Force Mighty.
A series of much larger payments of duties and taxes were notably made by Mighty immediately after the creation of the task force.
“For an importing company that is licensed to operate a CBW, it is highly irregular, bordering on the anomalous, for Mighty to make duty payments for unusually large volume of bonded raw materials that are supposed to be devoted to manufacturing and exportation of its finished products as authorized by its warehousing license,” the task force’s memorandum stated.
“An initial check of the customs value used in the declaration in the covering import entries shows that the same may not be in accordance with the Transaction Value system.”
The task force also recommended the creation of a special team to audit unliquidated raw materials remaining in Mighty’s warehouse and re-assess its raw material importations.
The audit team is headed by RCMG legal service Atty Clarence Dizon, with members from the Assessment and Operations Coordinating Group, Enforcement Group, an account officer and the acting warehouseman from Mighty.–– Roumina M. Pablo
Photo from http://mightycorp.com.ph/