The Supreme Court (SC) has affirmed the decisions handed down by the Court of Appeals (CA) which dismissed the criminal cases filed against businessman Dennis A. Uy and a customs broker in the alleged smuggling of P5.9 billion worth of petroleum products in 2010 and 2011.
With the ruling the SC junked the petitions filed by then Justice Secretary Leila M. De Lima and the Bureau of Customs (BOC) which charged Uy, as president and chief executive officer of Phoenix Petroleum Philippines (Phoenix Petroleum), and customs broker Jorlan C. Cabanes.
Phoenix Petroleum is a domestic corporation engaged in the importation of refined petroleum products from Taiwan, Singapore, and Thailand.
The SC decision in G.R. No. 219295-96/G.R. No. 229705 was promulgated last July 14 and made public last Dec. 11. It was written by Associate Justice Marvic M.V.F. Leonen for the SC’s third division.
In 2011, the BOC charged Uy and Cabanes with violations of the Tariff and Customs Code. It alleged that Phoenix Petroleum imported petroleum products with dutiable value of P5.9 billion reportedly without import entries, withdrew the importations despite failure to file import entries, and without load port surveys in the ports of Batangas City and Davao City.
Uy and Cabanes denied the allegations. In 2012, the charges were dismissed.
BOC then filed a motion to reopen the preliminary investigation of its complaints. The panel of prosecutors of the Department of Justice (DO) denied BOC’s motion.
On automatic review, then DOJ Undersecretary Francisco F. Baraan III affirmed the dismissal of the BOC’s complaints.
On a motion for reconsideration filed by BOC, however, then DOJ Secretary De Lima issued a resolution on April 24, 2013 ordering the filing of criminal charges against Uy and Cabanes.
Thus, three criminal charges were filed before the regional trial court (RTC) in Batangas City and 22 cases before the RTC in Davao City against Uy and Cabanes.
Cabanes challenged De Lima’s resolution before the CA’s main office in Manila. Uy filed his own petition. The two petitions were consolidated.
On July 25, 2014, Uy and Cabanes’ petitions were granted by the CA which nullified the resolution issued by De Lima. The CA ordered the dismissal of the criminal charges filed against Uy and Cabanes before the Batangas City and Davao City RTCs.
The CA ruled there was no probable cause to charge Cabanes and Uy because there is no proof of their personal liability. It said: “While Cabanes was the customs broker who processed the import documents, there was no evidence that he made the false import entries. On the other hand, Uy cannot be charged solely based on his position as president and chief executive officer of Phoenix.”
The CA also ruled that there was no evidence of fraud with respect to Phoenix's importations from 2010 to 2011. Cabanes and Uy, it said, offered sufficient counter-evidence proving that the importations were duly processed.
While the case was pending with the CA in Manila, Uy asked the Davao City RTC to determine probable cause and to defer issuance of arrest order.
On Oct 4, 2013, the Davao City RTC ruled that in the absence of probable cause a warrant of arrest could not be issued. It ordered the dismissal of the 22 cases filed against Uy.
The trial court ruled that the criminal charges do not allege specific acts committed by Uy and that there was no allegation that he was personally responsible for the filing and processing of import documents.
It said the government was not defrauded because the taxes, customs, and duties were fully paid by Phoenix Petroleum.
Also, it noted that the shipments were covered by bills of lading and the failure to submit a load port survey is not a criminal offense. In any event, the submission of the load port survey is not Phoenix's obligation and it was not required to be filed at the time the shipments were made, it said.
At the same time, the RTC said that it is not bound by Secretary De Lima's resolution as it can ascertain for itself whether there is probable cause to charge the accused (Uy).
The Davao City RTC’s ruling was affirmed by the CA in Mindanao based in Cagayan de Oro City.
De Lima and the BOC on their own and the Office of the Solicitor General (OSG) elevated the case to the SC which denied their petitions.
Reiterating its previous ruling, the SC said: “When probable cause is already judicially determined by the trial court, questions on the propriety of the executive determination of probable cause becomes moot. At that point, questions on the accused's guilt or innocence rests on the trial court's sound discretion.”
The SC said:
“As observed by the trial court and affirmed by the Court of Appeals, there were neither allegations nor proof showing that respondent Uy participated in the preparation, processing, and lodging of import documents and release of shipments to Phoenix.
“There was no proof that he willfully and deliberately acted to defraud the government to complete the importation. Respondent Uy was being charged solely on the basis of his position in Phoenix and on the presumption that he knew the details of the importation given the value of shipments involved.
“However, to find probable cause to issue a warrant against respondent Uy, there must be a showing of his actual participation and not merely a speculation based on his position in the company
“Here, the prosecution failed to show proof that Phoenix failed to file an import entry within the prescribed period. As culled from the records, the Single Administrative Documents submitted by the Bureau of Customs only indicate the date of the arrival of the shipment in the Philippines and not the date of discharge of the last package.
“Petitioners (De Lima and BOC) claim that the shipments were deemed abandoned because the import entries were filed 36 to 65 days late from the date of arrival. However, the law's reckoning point for the 30-day period is the date of the discharge of the last package from the carrying vessel or aircraft, and not from the date of arrival.
“Without this reckoning point, the prosecution cannot claim that there is an abandonment of the shipment. Moreover, the prosecution's claim of lack of import entries, bills of lading, and port surveys was sufficiently controverted by respondent Uy.
“Petitioners assert that the bills of lading submitted by respondents are inconsistent and do not pertain to the shipments in question. However, this is debunked by a cross-checking of the entries indicated in the bills of lading and import entries using the customs reference numbers.
“Lastly, the evidence on record shows that the taxes and duties due on the shipments were all settled by Phoenix through the Bureau of Customs' E2M Customs System, which indispensably requires the lodging and filing of all import documents and entries.
“This is proof that Phoenix complied and filed all the necessary import documents. Moreover, the Import Entry and Internal Revenue Declaration proves the final payment of duties and taxes.
“Meanwhile, the Bureau of Customs merely claims that respondents manipulated its system to allow the processing of the import entries without any evidence.
“In sum, the lower courts' finding of no probable cause are supported by relevant laws and evidence on record. Mindful of these considerations, the Court of Appeals' affirmation of the dismissal of the charges is not tainted with grave abuse of discretion.
“WHEREFORE, the Petitions are DENIED. The Court of Appeals' Decisions and Resolutions in CA-G.R. SP No. 129740 and CA-G.R. SP No. 131702 and CA-G.R. SP No. 06500-MIN are AFFIRMED. SO ORDERED.”