Duterte to Panelo: Study criminal rap vs Mighty

President Duterte has ordered his chief legal counsel, Salvador Panelo, to study the filing of a criminal case against tobacco manufacturer Mighty Corp. for its tax liabilities.

Another case being considered against Mighty is its alleged use of fake tax stamps, Panelo said.

His statements came as the Bureau of Customs (BOC) canceled Mighty’s privilege to import raw materials and to transact with the agency.

“We found probable cause for the issuance of preventive suspension, subject to the filing of motion for reconsideration on part of Mighty Corp.,” said BOC legal service director Alvin Ebreo.

Panelo said he would look into the case against Mighty prepared by the Bureau of Internal Revenue (BIR) during the Aquino administration, but which was not filed.

“From what I understand, the BIR then had a case against the owners of Mighty cigarettes, but apparently, they failed to file the same. I’m looking over that,” Panelo told reporters.

He said he was coordinating with the current BIR administration to study this case.

Economic sabotage

“I think that would be the first case I will study, if there’s enough evidence to file the appropriate case against the owners of Mighty cigarettes,” Panelo told reporters.

If the amount reaches P1 billion, it could be economic sabotage, he added.

Raids conducted two weeks ago by the BOC and the BIR on warehouses in General Santos City and San Simon, Pampanga province, yielded Mighty cigarettes with P1.1 billion in unpaid excise taxes.

Mighty cigarettes that the BOC and BIR seized last week in the ports of Cebu and Tacloban were also found to have fake tax stamps, depriving the government of P6 million in excise tax.

Last month, the BIR also confiscated Mighty cigarettes in Cebu bearing fake tax stamps, saving the company P2.49 million.

Panelo said he would be helping the Department of Justice, which would lead the filing of the case. “The President directed me to look over the legal issues in this case.”

Panelo also said the government would have to file the criminal case first before looking into whether Mighty’s civil liabilities could be settled out of court.

Settlement conditions

He pointed out that there were conditions that needed to be met before settling a case.

One is that there must be no fraud committed. Another is there must be reasonable doubt as to the existence of probable cause against the respondent. The third is when the respondent cannot afford to pay.

“That’s where settlement comes in. Otherwise, you can’t compromise,” he added.

Civil liability can be settled, but the criminal case would have to proceed, Panelo said. The corporation’s civil liability would depend on the computation of the BIR.

As for Mr. Duterte’s earlier statements about a possible settlement with Mighty, Panelo reiterated that the President’s statements were always based on what the law said.

“So any imposition or condition imposed by law will be followed by the President,” he said.

On March 9, Mr. Duterte said Mighty could settle its tax deficiency if it doubled its offer to P3 billion. The amount, he said, could be used to refurbish hospitals in Sulu, Basilan and Manila.

The President said he was ready to forget the P1.5 billion worth of fake tax stamps that the company had printed if it offered a P3-billion settlement.

In a memorandum to Deputy Commissioner Natalio Ecarma, BOC legal service director Ebreo recommended the preventive suspension of the customs accreditation privileges of Mighty.

Ecarma has approved the recommendation for the suspension, with a copy of the order to be forwarded to the tobacco firm.