First Lepanto Ceramics, Inc. v. CA

First Lepanto Ceramics, Inc. v. CA

G.R. No. 117680 February 9, 1996

Vitug, J.

Facts:

                Petitioner First Lepanto Ceramics, Inc., was registered as a “non-pioneer enterprise” with public respondent BOI having been so issued a Certificate of Registration under Executive Order NO. 226, also known as the Omnibus Investments Code of 1987, in the manufacture of glazed floor tiles. Among the specific terms and conditions imposed on First Lepanto’s registration were that: (1) The enterprise shall export at least 50% of its production; and (2) The enterprise shall produce only glazed floor tile.

                In a letter addressed to the BOI, First Lepanto requested for an amendment of its registered product to “ceramic tiles” in order to likewise enable it to manufacture ceramic wall tiles; however, before the BOI could act on First Lepanto’s request for amendment, Mariwasa and Fil-Hispano Ceramics, Inc., already had on file their separate complaints with the BOI against First Lepanto for violating the terms and conditions of its registration by the use of its tax and duty-free equipment in the production of ceramic wall tiles.

The BOI rendered a decision finding First Lepanto guilty and imposing on the latter a fine of P797,950.40 without prejudice, however, 1) to an imposition of additional penalty should First Lepanto continue to commit the same violation; and 2) to the Board’s authority to consider/ evaluate First Lepanto’s request for an amendment of its certificate of registration, including, among other things, a change in its registered product from “glazed floor tiles” to “ceramic tiles.”

After paying the imposed fine, First Lepanto formally filed its application with the BOI to amend its registered product from “glazed floor tiles” to “ceramic tiles.”

On 06 August 1992, another verified complaint was filed by Mariwasa with the BOI which asseverated that, despite BOI’s finding that First Lepanto had violated the terms and conditions of its registration, the latter still continued with its unauthorized production and sale of ceramic wall tiles. Respondent BOI dismissed the complaint for lack of merit. Its motion for reconsideration having been denied, Mariwasa appealed the case to the Office of the President.

In the meantime, First Lepanto caused the publicationin the Manila Bulletin of a notice on the official filing with the BOI of the aforementioned application for amendment of Certificate of Registration No. EP 89-452. Mariwasa opposed the application. On 10 December 1992, respondent BOI handed down its decision approving First Lepanto’s application.

Issue:

                whether or not the Court of Appeals erred in setting aside the decision of the Board of Investments

Held:

                The BOI is the agency tasked with evaluating the feasibility of an investment project and to decide which investment might be compatible with its development plans. The exercise of administrative discretion is a policy decision and a matter that can best be discharged by the government agency concerned and not by the courts. BOI has allowed the amendment of First Lepanto’s product line because that agency believes that allowing First Lepanto to manufacture wall tiles as well will give it the needed technical and market flexibility, a key factor, to enable the firm to eventually penetrate the world market and meet its export requirements.

                It is basic rule that the courts will not interfere in matters which are addressed to the sound discretion of government agencies entrusted with the regulation of activities coming under the special technical knowledge and training of such agencies.