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Pilipinas Shell Petroleum Corp., a unit of Royal Dutch Shell Plc will file cases against Customs officials for negligence, incompetence and defamation against those who allegedly misled the government in the filing of its P24-billion tax evasion case.

Roberto Kanapi, Shell vice president for corporate communications, said the case would be filed against selected Customs officials but they were still studying whether to include Customs Commissioner Angelito Alvarez.

"The complaint is not yet with us so we are unsure if we will include Alvarez. We still have to look at Alvarez because he is new and not all information was given to him. He has been misled," Kanapi said.

Shell said in a separate statement that it always acted according to its business principles and had built and protected its reputation for many years.

"Accordingly, we will be filing cases for gross negligence, gross incompetence and defamation against those who had misled this government," Shell said.

The Bureau of Customs filed a complaint against officers and employees of Shell last week, alleging that the country's second largest oil company, intentionally misdeclared its 2005-2009 catalytic cracked gasoline (CCG) or light catalytic cracked gasoline (LCCG)importations by using the tariff heading tetrapropylene to evade the payment of the proper taxes and duties.

Shell said Customs officials publicly accused Shell of technical smuggling and made it appear that Shell evaded the payment of excise taxes and the value added tax.

"We view this development as reinforcement of President Aquino's assessment that the biggest challenge facing his administration is trying to replace a system that has been in the country in its worst form for practically the last 10 years," the company said.

Shell, which owns an 110,000 barrels per day refinery in Batangas, said it was hopeful and committed to help the present administration in the continued fight to change the system "and to expose corrupt and incompetent government officials."

Shell also said that Alvarez had been misled by "holdovers from the previous administration" to believe that the company committed fraud by misdeclaring its CCG/LCCG importations, there was evasion of the payment of taxes and loss of revenue for the government and the facts of this criminal complaint were different from the current case pending in the Court of Tax Appeals.

"As a responsible corporate citizen, Shell has paid all appropriate taxes and duties on all its imports. Even if the tariff heading number of tetrapropylene (2710.11.30) was used for CCG/LCCG importations, Shell consistently declared that the product imported was CCG/LCCG in the documents it submitted to the Customs," the company said.

It said Customs reviewed and assessed proper tariffs and taxes to be paid by Shell, based on the product declaration of CCG and LCCG.

"Therefore Shell accordingly paid the tariff duty assessed by Customs and as such there was never any revenue loss to the government since it collected either the higher duty of three percent or the relevant tariff rate for CCG and LCCG based on the applicable executive orders," it said.

Shell said that there were no excise taxes due on the 2005-2209 CCG and LCCG imports since each importation is covered by an Internal Revenue directive to Customs not to assess Shell's excise taxes on these imports.

"CCG and LCCG are not subject to excise taxes since these are not final products but raw materials used by Shell's refinery to produce clean air act complaint petroleum products. From 2004 until December 2009, the BIR did not assess excise taxes on these imported raw materials upon importation but collected the excise taxes from Shell upon the withdrawal of the finished products from Shell's refinery," it said. - source: PNA

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