The Bureau of Customs (BOC) has suspended the accreditation of embattled cigarette manufacturer Mighty Corp., effectively stopping the firm from importing or sourcing out its raw materials abroad that it uses for production.
Alvin Ebreo, Legal Service director and Bureau’s Action Team Against Smugglers executive director, issued the directive against Mighty for alleged violation of Customs regulations.
In a two-page directive, Ebreo said the suspension is a purely administrative matter that is within the bureau’s power and jurisdiction.
“The initiative will provide the government an unhampered venue for investigation, and free it from any collateral issues and concerns,” he added.
Among other raw materials, the company is importing tobacco leaf, rolling paper and acetate tow, which is used in production of cigarette filters.
According to Ebreo, this is not the first time that the BOC has penalized Mighty Corp., saying a preventive suspension order had been issued against the company by then-Commissioner John Sevilla in 2014 for infraction of Customs bonded warehouse privileges.
The Fiscal Intelligence Unit of the Department of Finance reported that there was an undervaluation of the importation of cigarette-manufacturing materials amounting to P163,117,995.
In order to withdraw raw materials for local consumption, their correct value must be determined first for the payment of correct duties and taxes.
Apart from previous violations of Mighty Corp., the BOC cited recent raids on warehouses in various parts of the country that yielded more than P2 billion worth of counterfeit cigarettes.
Earlier, Manila Regional Trial Court Branch 1 Presiding Judge Tita Bughao Alisuag issued a temporary restraining order (TRO), preventing the BOC from conducting raids on or inspections of warehouses of Mighty Corp. for 20 days or from March 3 to 23, 2017.
Prior to the issuance of the TRO, the BOC and the Bureau of Internal Revenue (BIR) conducted a series of raids that resulted in the seizure of thousands of cases of cigarettes with fake tax stamps amounting to more than a billion pesos.
BIR operatives confirmed that the seized tax stamps were fake after subjecting them to authenticity tests.
Customs Commissioner Nicanor Faeldon said Customs operatives will remain on guard at Mighty warehouses to ensure that the confiscated cigarettes will not be tampered with or swapped with legitimate products.