SC affirms dismissal of P5.9 billion smuggling cases filed against tycoon Dennis Uy


THE Supreme Court (SC) has affirmed the decisions issued by the Court of Appeals in Manila and Cagayan de Oro dismissing the P5.9 billion smuggling charges filed against tycoon Dennis Uy and a licensed customs broker in connection with allegations of fraudulent importation of petroleum products at the ports of Davao and Batangas from 2010 to 2011.

In a 36-page decision penned by Associate Justice Marvic Leonen, the Court’s Third Division denied the consolidated petitions filed by the Department of Justice and the Bureau of Customs seeking the reversal of the decisions issued by the CA with respect to charges filed against Uy and licensed customs broker Jorlan Cabanes. 

In the first petition, the DOJ  and the BOC assailed the decision and resolution of the Court of Appeals (CA)-Manila which overturned the Justice Secretary’s finding of probable cause to charge Cabanes and Uy for violation of the Tariff and Customs Code of the Philippines (TCCP).

The second petition filed by the “People of the Philippines” assailed the decision and resolution of the CA-Cagayan De Oro which affirmed the trial court’s dismissal of the charges against Uy and Cabanes.

Uy is the president and chief executive officer of Phoenix Petroleum Philippines (Phoenix), a domestic corporation importing refined petroleum products from Taiwan, Singapore, and Thailand 

On the other hand, Cabanes assisted in the preparation and processing of import and export entries and declaration of customs duties and taxes as licensed customs broker.

 “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,”  the SC declared. 

“Thus, absent proof that respondent Uy himself committed the acts, he cannot be charged for fraudulent practices. On this basis alone, the criminal charges against respondent Uy must fail,” the SC said.

The Court said based on the evidence on record, the taxes and duties due on the shipments were all settled by Phoenix through the BOC’s E2M Customs System, which requires the lodging and filing of all import documents and entries.

 “This is proof that Phoenix complied and filed all the necessary import documents,” the SC said.

Based on the records of the case, the BOC in 2011, through its Run After Smugglers Program, filed a complaint against Cabanes and Uy, among others, for· violations of the TCCP.

The complaint alleged that from 2010 to 2011, Phoenix unlawfully and fraudulently imported petroleum products at the ports of Davao and Batangas with a total dutiable value of P5,990,212,832.72.

Uy and Cabanes denied the allegations and prayed for the dismissal of the complaint.

They claimed that there were only three importations from June to November 2010 all covered by import entries.

Furthermore, Uy and Cabanes insisted that  BOC’s allegations were belied by its issuance of Statements of Settlement of Duties and Taxes (SSDT)  to Phoenix. 

They also alleged that the SSDT evidenced the payment of duties and taxes and their issuance presupposes that import documents were processed.

In 2012,  a DOJ panel of prosecutors recommended the dismissal of the complaint, however, then Justice Secretary Leila de Lima reversed the panel’s resolution and ordered the filing of criminal charges against Uy and Cabanes.

Subsequently, three informations before the Regional Trial Court of Batangas and 22 informations before the Regional Trial Court of Davao City were filed against Uy and Cabanes.

On the other hand, Cabanes filed a petition before the CA- Manila assailing  De Lima’s resolution.

Uy likewise filed a petition challenging the same resolution. The petitions were consolidated.

The CA-Manila eventually found that  De Lima’s resolution was issued with grave abuse of discretion.

It ruled that  De Lima illegally allowed the BOC to introduce new evidence in its review of the panel’s findings, which essentially allowed the latter “to do indirectly what the DOJ panel of prosecutors already denied.”

The CA-Manila further held that there was no evidence of fraud with respect to Phoenix’s importations from 2010 to 2011.

Meanwhile, Uy moved for a judicial determination of probable cause and suspension of issuance and service of a warrant of arrest before the Regional Trial Court of Davao City following the decision of CA-Manila.

The Davao RTC granted the motion and dismissed all 22 charges against Uy in its October 4, 2013 order.

The prosecution moved for reconsideration of the RTC’s decision but it was denied.

This prompted the prosecution to file a petition for certiorari before the CA-Cagayan De Oro seeking to overturn the Davao RTC ruling.

The CA-Cagayan de Oro, however, denied, the petition.

It held that the legal and factual issues raised in the petition were similar to those raised and resolved in the decision of the CA-Manila.

“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,” the SC declared.

Image courtesy of Elmer B. Domingo

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