G.R. No. 120223 - Alba vs. Deputy Ombudsman

The case originated from a collection suit for unpaid taxes and customs duties amounting to P46,844,385.00 filed by the Bureau of Customs against Mitsubishi Motors Philippines Corporation.
It was alleged that during 1997–1998, the petitioner secured Tax Credit Certificates (TCCs) from various transportation companies.
The petitioner utilized these TCCs to settle customs duties and taxes for several importations.
The Bureau of Customs, acting in good faith by relying on the apparent authenticity of the TCCs, accepted these certificates as payment for the taxes and duties.
A post-audit investigation by the Department of Finance later revealed that the TCCs were fraudulently procured using fake commercial and bank documents, thereby questioning their legitimacy.
Based on the investigation’s findings, the Bureau of Customs insisted that the petitioner had not properly settled the tax and customs duties, prompting the filing of the collection suit.

The collection suit was initially lodged before the Regional Trial Court (RTC) of Manila, Branch 17, under Civil Case No. 02-103763.
The RTC first dismissed the case due to the repeated absences of the respondent’s counsel during the trial proceedings.
On appeal to the Court of Appeals (CA) and subsequent judicial intervention, the RTC’s dismissal was set aside, and the trial on the merits resumed.
After the Bureau of Customs presented its evidence, the petitioner filed a Demurrer to Plaintiff’s Evidence, arguing that the respondent had not presented clear and convincing evidence to establish that the TCCs were fraudulently procured.
In its defense, the petitioner maintained that it acquired the TCCs in good faith from their original holders, and thus, the remittance made using these certificates should be recognized as valid settlement of the tax and customs liabilities.
The respondent countered the petitioner's arguments by filing an Opposition, thereby reinforcing its claim that the petitioner did not settle its obligations due to the alleged fraudulent procurement of the TCCs.

On April 10, 2012, the RTC issued an Order granting the petitioner’s Demurrer to Plaintiff’s Evidence.
The RTC dismissed the collection case on the basis that the respondent failed to present any proof or substantial evidence of fraud or conspiracy involving the petitioner.
The ruling underscored the principle that fraud, being never presumed, must be demonstrated by clear and convincing evidence—a threshold which the respondent did not meet.
A subsequent motion for reconsideration by the respondent was filed but was denied in an Order dated August 3, 2012.

Dissatisfied with the RTC’s decision, the respondent appealed to the Court of Appeals.
On June 7, 2013, the CA issued a Resolution referring the case records to the Court of Tax Appeals (CTA) for the proper disposition of the appeal, despite acknowledging its own lack of jurisdiction over tax collection cases.
The CA justified its action by emphasizing the public interest at stake, considering the substantial amount involved in taxes and customs duties, which could impact public works and projects.
In response, the petitioner filed a motion for reconsideration on June 23, 2013, arguing that the CA could not act on an appeal that fell outside its jurisdiction.
This motion was denied by the CA in a Resolution dated November 4, 2013, prompting the petitioner to file the present petition for review on certiorari before the Court.

Whether the CA correctly referred the records of the collection case to the Court of Tax Appeals for disposition of the respondent’s appeal.
Whether the CA could, regardless of public interest considerations, act on an appeal that it lacked jurisdiction to hear.
If the invocation of “substantial justice” by the CA could be used as a justification for not dismissing an appeal that was improperly filed.