G.R. No. 190487 - Bureau of Customs vs. Sherman

Case Summary (G.R. No. 190487)

Factual Background

Mark Sensing Philippines, Inc. (MSPI) caused the importation of finished printed bet slips and rolls of finished thermal paper from Australia and facilitated the release of those shipments from the Clark Special Economic Zone to the Philippine Charity Sweepstakes Office for lotto operations in Luzon. The Bureau of Customs alleged that MSPI did not pay the duties and taxes due on the imported articles. The RATS Program of the Bureau of Customs prompted the filing of criminal charges against MSPI principals and agents for alleged unlawful importation and related offenses under the Tariff and Customs Code and R.A. 7916.

Accusatory Allegations and Information

The Information filed before the Court of Tax Appeals charged that from June 2005 to December 2007 the accused, in conspiracy, made forty unlawful importations of 255,870 pieces of printed bet slips and 205,200 rolls of thermal paper valued at approximately US$1,240,880.14, and caused their removal from the Clark Special Economic Zone and delivery to the PCSO without payment of duties and taxes estimated at about PHP 15,917,611.83, in violation of Section 3601 in relation to Sections 2530 and Section 101(f) of the Tariff and Customs Code.

Department of Justice Proceedings

State Prosecutor Rohaira Lao-Tamano, by Resolution dated March 25, 2008, found probable cause and recommended filing of the Information. Respondents filed a petition for review with the Secretary of Justice. By Resolution dated March 20, 2009, the Secretary of Justice reversed the State Prosecutor’s Resolution and directed the withdrawal of the Information. The sequence of filings and administrative actions culminated in competing dispositions by the prosecuting authorities and administrative superiors.

CTA Proceedings on Motion to Withdraw

Before the Court of Tax Appeals, Prosecutor Lao-Tamano filed a Motion to Withdraw Information with leave of court. The Bureau of Customs filed an opposition to the motion, and respondents moved for dismissal of the Information. The CTA, by Resolution dated September 3, 2009, granted the prosecutor’s motion to withdraw and dismissed the Information. An Entry of Judgment was issued on September 23, 2009.

CTA Disposition on Motion for Reconsideration

The Bureau of Customs filed a motion for reconsideration on September 22, 2009. The CTA, by Resolution dated October 14, 2009, noted the motion without action and explained that because an Entry of Judgment had already been issued and no Motion for Execution had been filed by the State Prosecutor, the petitioner’s motion was noted without action. The CTA thereby declined to entertain further relief on the ground that prosecutorial steps closing the case had been taken.

Petition for Certiorari to the Supreme Court

The Bureau of Customs filed a petition for certiorari before the Supreme Court challenging the CTA’s grant of the prosecutor’s motion to withdraw and the CTA’s inaction on the Bureau’s motion for reconsideration. The petition invoked alleged grave abuse of discretion by the CTA in permitting withdrawal and dismissing the Information despite the Bureau’s opposition and purported interest as private complainant.

Legal Issues Presented

The central legal issue concerned whether the CTA gravely abused its discretion in allowing a prosecutor to withdraw the Information and dismiss the case over the objection of the private complainant, and whether a motion for reconsideration filed by the Bureau of Customs required action by the CTA when the public prosecutor had chosen not to pursue the case further.

Supreme Court’s Analysis and Reasoning

The Court held that the prosecution of crimes pertains to the executive department, which has the principal power and responsibility to ensure that laws are faithfully executed and, corollarily, the right to prosecute violators. The Court relied on Webb v. De Leon, G.R. No. 121234, August 23, 1995, and Rule 110, Sec. 5 of the Rules of Court to reiterate that all criminal actions commenced by complaint or information are prosecuted under the direction and control of public prosecutors. The designation of special prosecutors from other agencies does not diminish the public prosecutor’s control and supervision. Because the public prosecutor exercises prosecutorial discretion, the CTA

Case Syllabus (G.R. No. 190487)

Parties and Procedural Posture

BUREAU OF CUSTOMS filed the original criminal complaint and later instituted the present petition for certiorari before the Supreme Court.
Peter Sherman, Michael Whelan, Teodoro B. Lingan, and Atty. Ofelia B. Cajigal were named respondents in the Information and are likewise respondents in the present petition.
Mark Sensing Philippines, Inc. (MSPI) was the importer identified in the criminal accusation and served as the private complainant’s principal interest in the underlying transactions.
The Court of Tax Appeals Second Division acted on the Motion to Withdraw Information and issued the resolution assailed in this petition.
State Prosecutor Rohaira Lao-Tamano recommended filing of the Information and later filed the Motion to Withdraw Information with Leave of Court before the CTA.
The Secretary of Justice reversed the State Prosecutor’s Resolution and directed withdrawal of the Information, and petitioner sought relief by certiorari in this Court following CTA action.

Key Facts

MSPI facilitated the importation and release from the Clark Special Economic Zone of printed bet slips and thermal paper rolls for delivery to the Philippine Charity Sweepstakes Office for lotto operations in Luzon.
The decision contains factual recitals that the imports occurred from June 2005 to January 2007 and that MSPI caused the importation of 255,870,000 pieces of finished bet slips and 205,200 rolls of finished thermal papers.
The Information averred forty (40) unlawful importations of 255,870 pieces of finished printed bet slips and 205,200 rolls of finished thermal papers from Australia with an alleged value of US$1,240,880.14 and duties and taxes estimated at Php15,917,611.83.
Only Atty. Ofelia B. Cajigal and Teodoro B. Lingan were served with arrest warrants and thereafter posted cash bail bonds.
The criminal case arose from the Bureau’s Run After The Smugglers (RATS) Program and implicated licensed customs brokers Erick B. Ariarte, Ricardo J. Ebuna, and Eugenio Pasco as alleged agents.

Charges

The Information charged violations of Section 3601 of the Tariff and Customs Code (Unlawful Importation).
The Information invoked forfeiture provisions under Section 2530 paragraphs (f) and (l) subparagraph 5 of the Tariff and Customs Code.
The Information further alleged violation of Section 101(f) of the Tariff and Customs Code regarding prohibited importations of lottery and sweepstakes tickets.
The charges were alleged to have been committed in relation to Republic Act No. 7916 (Special Economic Zone Act of 1995).

Procedural History

State Prosecutor Rohaira Lao-Tamano issued a Resolution dated March 25, 2008 finding probable cause and recommending filing of an Information.
Respondents filed a petition for review with the Secretary of Justice, during which the Information was filed before the Court of Tax Appeals on April 11, 2009.
The Secretary of Justice issued a Resolution dated March 20, 2009 reversing the State Prosecutor’s finding and directing withdrawal of the Information.
The State Prosecutor filed a Motion to Withdraw Information with Leave of Court before the CTA, to which the Bureau of Customs opposed.
By Resolution dated September 3, 2009 the Court of Tax Appeals granted the withdrawal and dismissed the Information, and an Entry of Judgment issued on September 23, 2009.
The Bureau of Customs filed a motion for reconsideration on September 22, 2009 which the CTA noted without action by Resolution dated October 14, 2009 because no Motion for Execution had been filed by the State Prosecutor.
The Bureau of Customs elevated matters by certiorari to the Court of Appeals (CA GR SP No. 10-9431) and eventually filed the present petition for certiorari before the Supreme Court.

Issues Presented

Whether the Court of Tax Appeals gravely abused its discretion b