RTC dismisses Mighty lawsuit vs BOC


A Manila court has dismissed for lack of jurisdiction the case filed by local cigarette manufacturer Mighty Corporation against the Bureau of Customs (BOC).

In a 13-page resolution dated March 23, Manila Regional Trial Court (RTC) Branch 39 presiding judge Noli Diaz denied Mighty’s application for a writ of preliminary injunction, saying it had no authority to decide on the case.

Mighty had assailed the Mission Order and Letter of Authority issued by Customs Commissioner Nicanor Faeldon, which allowed the agency to inspect the company’s warehouse facilities in San Simon Industrial Park in San Simon, Pampanga.

“Since the acts complained of sought to be enjoined by the complainant (Mighty) is in San Simon, Pampanga, this Court has such order,” the resolution stated.

The BOC has earlier ordered the suspension of accreditation of Mighty 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.

Diaz cited Section 21 of Batas Pambansa 129 (Judiciary Reorganization Act of 1980), which limits injunctions issued by RTCs to acts committed within their territorial jurisdiction.

The resolution added that Mighty should have gone first to the Department of Finance (DOF), BOC’s mother agency, to question the mission order instead of going straight to court.

“The issuance of the Mission Order by the Commissioner of Customs and the Letter of Authority issued by the Revenue Officers of the Bureau of Internal Revenue if done arbitrarily can still be reviewed by the Secretary of Finance as head of the Department of Finance where both the (BOC) and the (BIR) belong under the principle of exhaustion of administrative remedies and not necessarily to the courts,” the resolution said.

Earlier Manila RTC Branch 1 Judge Tita B. Alisuag granted Mighty’s petition for a 20-day temporary restraining order, effective from March 3 to March 23, 2017, which prevented BOC from investigating Mighty’s warehouses.

BOC then filed an administrative case against Alisuag, prompting her to inhibit herself from the case, which was then re-raffled off to Diaz.

The Bureau of Internal Revenue (BIR) had also filed a tax evasion case before the Department of Justice against Mighty for its alleged failure to pay an estimated deficiency excise tax liability totalling P9.564 billion.

Among those charged in BIR’s complaint affidavit were retired AFP deputy chief of staff Edilberto Adan, who is now Mighty president; retired Judge Oscar Barrientos, executive vice president; Alexander Wongchuking, vice president for external affairs and assistant corporate secretary; and Ernesto Victa, treasurer.

Mighty’s legal counsel Atty. Philip Sigfrid Fortun said the company welcomed the BIR’s complaint as it “provides us an opportunity to clear our names and show we violated no tax laws.” He also stressed that the company will “continue to cooperate with government in its continuing effort at tax collection.”

2 more raids yield cigarettes worth P3.2B

Meanwhile, the BOC has again confiscated cigarettes with alleged fake tax stamps owned by Mighty, the seized products estimated to be worth P3.2 billion.

On March 24, around 160,000 master cases of Mighty cigarettes were found in two warehouses in Barangay Matimbubong in San Ildefonso, Bulacan, by a raiding team of BOC agents in coordination with BIR agents, local police, and barangay officials.

The raid was conducted following a tip that cigarettes with fake stamps that belonged to Mighty were stored in these facilities. The search was carried out after the TRO issued by a Manila Trial Court judge that prevented BOC from raiding Mighty’s warehouses lapsed on March 24.

The first warehouse contained 145,000 master cases of cigarettes, with an estimated value of P2.9 billion, while the second facility housed 15,000 master cases worth around P300 million.

BOC said that, using a BIR stamp verifier, the team was able to confirm that the cigarettes had been marked with fake tax stamps.

The latest raid yielded a bigger volume of Mighty cigarettes than the previous one conducted in San Simon, Pampanga, as the first haul was worth P2.8 billion, the customs agency noted.

The Pampanga raid prompted BIR to file tax evasion charges against Mighty Corp. for allegedly evading the payment of around P9.564 billion in excise taxes by using fake tax stamps.

Faeldon said BOC will intensify its campaign against smuggling and all other forms of illicit trade that he said continue to deprive the government of revenues.

“We will not stop in our efforts to weed out those engaged in pernicious activities that undermine and derail the government’s reform agenda,” said Faeldon.

“We are ready to use all available options in the investigation of erring companies, including those engaged in the oil and motor vehicle trade, to make sure we control all forms of revenue leaks that get in the way of hitting revenue targets of the BOC,” he added.

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