Shell mulls contempt raps vs Customs officials

MANILA, Philippines - Pilipinas Shell Petroleum Corp. is mulling contempt charges against some Bureau of Customs officials for reportedly violating a gag order issued by the Court of Tax Appeals (CTA).

Shell counsel John Balisnomo said the government officials were liable for contempt after they held a press conference last week to announce their plan to file a motion for CTA presiding Justice Ernesto Acosta to inhibit himself from the case since he was a Shell employee from 1975 to 1981.

Balisnomo said with the issuance of a gag order last month, the CTA barred both the Bureau of Customs and Shell from discussing the case in media.

“It came as a big surprise to us that the Bureau of Customs would call a press conference even before the actual filing of a motion for inhibition and even before a notice thereof is served upon our client (Shell) and the justice concerned. What could be its purpose if not to put the court on the defensive and unfairly pre-condition the minds of the public? This is a clear case of contempt,” he said.

Citing the rules of the Supreme Court, Balisnomo said that even justices of the Supreme Court need not inhibit where the connection or relationship had terminated for at least 10 years. In this case, Shell’s relationship with Acosta was almost 30 years ago.

Balisnomo added that the independence and integrity of Acosta was best shown when he ruled against Shell in another case now pending with the CTA en banc. 

Last year, the Bureau of Customs issued a demand letter to Shell on allegations that its unleaded gasoline (catalytic cracked gasoline) was covered by excise taxes. Shell contested the assessment, arguing that excise taxes apply only to finished products for local consumption. It said its imports are raw materials that could not be used directly as fuel because they do not comply as they are with the Clean Air Act and still needed to be processed.

If used as fuel, Shell said these could also cause engine trouble, including knocking and fuel line corrosion, eventually resulting in a dangerous fuel leakage.

Shell said it also has to blend its CCG imports to come up with finished products such as premium unleaded gasoline.