The Court of Tax Appeals (CTA) has lifted the seizure order against two Cebu-based rice importers, ruling that the confiscated stocks were lawfully imported and that duties and taxes had been fully paid, ending months of controversy sparked by a high-profile raid in June. | Photo by Joy Torrejos
CEBU CITY, PHILIPPINES — The Court of Tax Appeals (CTA) has ordered the release of over ₱40 million worth of imported rice seized by the Criminal Investigation and Detection Group (CIDG) in June on suspicion of smuggling under Republic Act No. 12022 or the Anti-Agricultural Economic Sabotage Act.
The CTA lifted the seizure order against more than 20,500 sacks of rice owned by River Valley Distribution Inc. (RVDI) and its sister company, Mixed Load Distribution Network Inc. (MLDNI), after finding that the shipments were legitimate.
According to lawyer Jhonelle Estrada-Tan-Kit, lead counsel for RVDI, the CTA directed the immediate release of the rice shipment. Retrieval from the National Food Authority (NFA) warehouse to the importers’ storage facilities started yesterday and is expected to be completed within five days.
The process is being carried out in coordination with the CIDG to ensure proper handling, documentation, and quality preservation of all stocks.
“This is a legitimate business. Even the CIDG admitted in our joint manifestation that all taxes, importations, and registrations are in order,” said Atty. Jade Seit, another RVDI counsel.
RVDI and MLDNI said the seizure caused significant financial losses as they were unable to dispose of the shipment during the pendency of the case. About 169 sacks of rice were also found damaged and unfit for human consumption and therefore could no longer be sold.
“Some of the stocks already have molds and a foul smell. Those will have to be discarded. It’s a big loss. We still have to check the condition of the remaining rice to see if it’s still marketable,” Estrada-Tan-Kit said.
Seit added that the incident disrupted operations and delayed deliveries to buyers.
“Everything got delayed. Our clients are affected. We’re losing a lot because we still have to shoulder fumigation and other costs. It’s unfair because we’ve been doing everything legally like paying taxes and yet our stocks were still seized,” Estrada-Tan-Kit said.
“We just hope this won’t happen again to legitimate importers. The financial burden has been too much,” she added.
In a resolution promulgated on October 7, 2025, the CTA Second Division lifted the seizure order, ruling that the confiscated stocks were lawfully imported and that duties and taxes had been fully paid — ending months of controversy sparked by the June raid.
The court noted that while the CIDG acted under the newly enacted Anti-Agricultural Economic Sabotage Act, the seizure was no longer valid after documentation confirmed that the rice shipments were legitimate.
“With the payment of duties and taxes…proved by respondent and intervenor but, in fact, admitted by applicant, the policy of the State to prevent smuggling of agricultural products finds no application here anymore,” the CTA resolution read.
The ruling ordered the immediate release of the rice from the NFA warehouse in Cebu to RVDI and MLDNI.
Estrada-Tan-Kit welcomed the decision, calling it a “vindication for truth and due process.”
“The transfer of our rice back to our licensed facility is not just procedural, it’s symbolic. It marks the end of months of disruption, reputational harm, and operational paralysis caused by a mistaken enforcement action,” she said.
She said the ruling confirmed that their clients were lawful importers from the start and emphasized that “enforcement must be fair, diligent, and fact-based.”
Seit said the case exposed gaps in the enforcement of the new anti-agricultural smuggling law.
“The CIDG insisted the rice was undocumented despite full documentation. At that time, there were no implementing rules or enforcement guidelines under the new Anti-Agricultural Economic Sabotage Act. That gap created confusion and legitimate businesses paid the price,” Seit said.
She added that RVDI and MLDNI fully cooperated throughout the process, complying with every directive even while operations were at a standstill.
“Our clients were vindicated not only in court but also in the eyes of their workers and the communities they serve. In the end, integrity won,” Seit said.
In a joint compliance report filed on October 1, the Bureau of Customs (BOC) verified that RVDI imported 1,080,000 kilograms of rice from Pakistan and Vietnam through the Port of Cebu, while MLDNI imported 27,930,000 kilograms of rice from Vietnam through the Port of Dumaguete — all with taxes and duties fully settled.
This verification prompted the CTA to rule that there was no reason to continue holding the rice and ordered its immediate return to the companies.
Both RVDI and MLDNI expressed gratitude to the CTA and BOC for recognizing their compliance, saying the case should serve as a lesson to both regulators and importers.
“Protecting the market from smuggling is a noble goal. But it must never come at the expense of law-abiding, tax-paying businesses,” Estrada-Tan-Kit said.
The companies said they support the government’s anti-smuggling campaign but urged authorities to ensure that enforcement actions are guided by due process and factual verification.
With operations now restored, RVDI and MLDNI vowed to continue contributing to the stable and lawful distribution of rice across the Visayas and Mindanao.
| Written by Mitchelle L. Palaubsanon/JG
