Case Digest (G.R. No. 117680)
Case Digest (G.R. No. 117680)
Facts:
First Lepanto Ceramics, Inc. v. Hon. Court of Appeals and Mariwasa Manufacturing, Inc., G.R. No. 117680, February 09, 1996, the Supreme Court First Division, Vitug, J., writing for the Court.Petitioner First Lepanto Ceramics, Inc. was registered with the Board of Investments (BOI) under Executive Order No. 226 (the Omnibus Investments Code of 1987) by Certificate of Registration No. EP 89-452 dated 16 October 1989 as a non-pioneer enterprise engaged in the manufacture of glazed floor tiles. The registration carried specific terms and conditions including (1) that the enterprise export at least 50% of its production and (2) that it produce only glazed floor tiles. By virtue of registration First Lepanto enjoyed fiscal and non-fiscal incentives such as exemptions on raw materials and on imported capital equipment.
Competitor Mariwasa Manufacturing, Inc. was separately registered with the BOI as a non-pioneer producer of ceramic tiles (Certificate No. 89-427). On 10 August 1991 First Lepanto requested the BOI to amend its registered product to "ceramic tiles" to permit manufacture of ceramic wall tiles. Before the BOI acted, Mariwasa and Fil‑Hispano Ceramics filed complaints with the BOI alleging that First Lepanto had used its tax‑and‑duty‑free equipment to produce wall tiles in violation of its registration.
On 30 April 1992 the BOI found First Lepanto guilty of violating its registration terms and imposed a fine of P797,950.40, but left open the possibility of additional penalties should violations continue and reserved the Board’s authority to evaluate First Lepanto’s pending application for amendment of its certificate. After payment of the fine, First Lepanto formally filed its application to amend its registered product on 20 June 1992 (BOI Case No. 92‑005). A separate verified complaint by Mariwasa (docketed BOI Case No. 92‑004) alleging continued unauthorized production was filed 06 August 1992; the BOI dismissed that complaint and Mariwasa appealed to the Office of the President.
First Lepanto published notice of its BOI filing on 24 September 1992. On 10 December 1992 the BOI approved the application to amend the registered product to "ceramic tiles." Mariwasa filed a petition for review with the Court of Appeals and sought injunctive relief; the appellate court issued a temporary restraining order enjoining the BOI and First Lepanto from enforcing the BOI approval. The Court of Appeals subsequently, by decision dated 13 August 1993, annulled the BOI’s 10 December 1992 approval (the appellate opinion was penned by Justice Ordoñez‑Benitez). First Lepanto’s motion for reconsideration in the Court of Appeals was denied. Petitioner then brought the present recourse to the Supreme Court (petition for review), challenging the Court of Appeals’ annulment of the BOI decision.
Issues:
- Did the Court of Appeals err in annulling the BOI’s approval of First Lepanto’s application on the ground that the BOI should have held action on the amendment in abeyance pending final resolution of BOI Case No. 92‑004?
- Was the BOI’s approval of First Lepanto’s amendment from "glazed floor tiles" to "ceramic tiles" a proper exercise of administrative discretion under Executive Order No. 226 and related investment policy?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)