MANILA, Philippines - Officials of the Bureau of Customs (BOC) failed to confiscate the imported raw materials of Pilipinas Shell Petroleum Corp. in Batangas on Wednesday as managers of the oil firm's refinery refused to accept the former's seizure order.

Arnel Santos, general manager of Shell's refinery in Batangas, told ABS-CBN News that the BOC's seizure order is premature since the Court of Tax Appeals (CTA) is still hearing their case.

Shell has been disputing BOC's P7.34-billion tax assessment on the company's imports of catalytic cracked gasoline (CCG) and light CCG from 2004 to 2009. It explained that the imports in question are raw materials for the production of unleaded gasoline for which duties have been paid for.

The BOC had accused the oil firm of misdeclaring the goods, demanding the payment of excise taxes levied on finished products intended for domestic consumption.

The CTA earlier issued a 60-day temporary restraining order (TRO) barring the BOC from seizing some P43 billion worth of Shell's imports to pay for P7.34 billion in so-called back taxes.

But the said TRO lapsed on Tuesday as the CTA was split in granting Shell's motion for injunction. (Read: Tax court gives go-signal to seize Shell's P43-B imports)

Supply problems?

Santos warned that they will shut down the Batangas refinery should the BOC insist on confiscating Shell's imports, a move which he said will result in significant disruptions in the country's fuel supply.

Shell's refinery plant in Batangas is one of the 2 remaining refineries in the Philippines. The other is owned by Petron Corp. which is controlled by diversifying conglomerate San Miguel Corp.

"Unless the seizures are stopped, Shell will not be able to supply fuel to its dealers and to our vital industries such as transportation, power, and other public utilities. The Shell refinery in Batangas faces the prospect of closing down. Hundreds of jobs may be lost," Shell said in a statement released Tuesday.

The oil giant has said it will exhaust all available legal remedies to stop the BOC from seizing its importations.

The BOC, meanwhile, said it is conferring with government lawyers on how to implement the seizure order. Reports from Alvin Elchico, ABS-CBN News and ANC