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PILIPINAS Shell won its 17-year-old case not to pay
P18.5 million to the government as surcharge for
underpayment of its contributions to the Oil Price
Stabilization Fund (OPSF), which was used to mitigate
foreign-exchange cost increases in oil imports.
On
Wednesday the Supreme Court released its decision
affirming the Court of Appeals (CA) ruling declaring as
void a circular issued by the then-Ministry of Finance
mandating oil companies to pay a 15-percent surcharge
for late payment of OPSF contributions.
The OPSF
was created under Presidential Decree 1956 on October
10, 1984, to minimize frequent price changes brought
about by exchange-rate adjustments and/or increase in
world market prices of crude oil and imported petroleum
products.
Associate Justice Minita Chico-Nazario, writing for the
Court’s Third Division, said the appellate court was
right in declaring that MOF Circular 1-85 issued on
April 15, 1985, is ineffective for failure to comply
with the provisions of the Administrative Code of 1987
requiring publication and filing in the Office of the
National Administration Register (Onar) of
administrative issuances.
The High
Court noted that certifications issued by Onar in 2004
prove that MOF Circular 1-85 and its amendatory rule,
Department of Finance Circular 2-94, have not been filed
with Onar and that the Department of Energy (DOE) failed
to controvert Pilipinas Shell’s allegation that neither
of the circulars were published in the official gazette
or in any newspaper of general circulation.
“Thus,
failure to comply with the requirements of publication
and filing administrative issuances renders MOF Circular
185, as amended, ineffective,” the Court ruling said.
Likewise, the Court branded as “specious” the argument
of the DOE that the oil firm waived the requisite
registration of the circular when it paid in full the
principal amount of underpayment totaling P24.5 million.
On
February 27, 1987, Executive Order 137 was enacted to
amend PD 1956. It expanded the sources and utilization
of the OPSF in order to maintain stability in the
domestic prices of oil products at reasonable levels.
In
December 1991, the Office of the Energy Affairs, now the
DOE, informed Pilipinas Shell for the first time that
its contributions to the OPSF for the period of
December 1989 to March 1991 were insufficient, noting an
underpayment of P14.4 million, and, as a consequence, a
surcharge of P11.65 million was being imposed on Shell.
A second
letter demand was sent on December 9, 1991, advising it
of additional underpayments in the amount of P10.1
million for the period April 1991 to October 1991, for
which a surcharge of P2.8 is imposed.
On March
24, 1992, Shell paid in full the principal amount of its
underpayment totaling P24.5 million, but not the
surcharges; it appealed the DOE’s demand with the Office
of the President, which the latter denied.
This
prompted the oil company to elevate the case to the CA,
which ruled in its favor. |
