PEZA vs. Pearl City Manufacturing Corporation; G.R. No. 168668; December 16, 2009; Administrative Proceedings; Due Process

Facts

PEZA is an administrative agency. Pearl City Manufacturing Corporation (PCMC) is a PEZA-registered Ecozone Export Enterprise. PCMC was informed of a physical inventory to be conducted by the PEZA officers. PEZA officers discovered that PCMC had an unaccounted importation of 8,259,645 kilograms of used clothing.

PCMC was instructed to submit its explanation regarding the unaccounted shortage. After submitting the required explanation, PCMC was subjected to a special audit conducted by PEZA to determine the amount of wastage generated by the company. On the basis of the results of the inventory and the special audit conducted, the PEZA Board passed a resolution canceling the PEZA Registration of PCMC as an Ecozone Export Enterprise.

An administrative appeal was filed by PCMC to the Office of the President (OP) from the resolution canceling its registration. The OP affirmed the resolution and denied the Motion for Reconsideration filed by PCMC afterwards. PCMC then filed a petition for review with the Court of Appeals. The CA reversed the decision of the OP and declared the PEZA Board Resolution cancelling the registration of PCMC as null and void.

Issue(s)
1. Whether or not PCMC was afforded due process
2. Whether or not there is substantial evidence to support the PEZA Board Resolution and the OP decision

Held

PCMC was afforded due process. In administrative proceedings, a fair and reasonable opportunity to explain one’s side suffices to meet the requirements of due process. The essence of procedural due process is embodied in the basic requirement of notice and a real opportunity to be heard. "To be heard" does not mean only verbal arguments in court; one may be heard also thru pleadings. Where opportunity to be heard, either through oral arguments or pleadings, is accorded, there is no denial of procedural due process.

PCMC cannot claim that it was denied due process because it was properly informed of the supposed discrepancy in its import and export liquidations. It was given ample opportunity to be heard or to explain its side in relation to its unaccounted imported materials. And it was informed of the decision of the PEZA Board to cancel its registration on the basis of its assessment of the evidence presented or lack thereof.

The PEZA Board Resolution and the Decision of the OP is supported by substantial evidence. Settled is the rule that Courts will not interfere in matters which are addressed to the sound discretion of the government agency entrusted with the regulation of activities coming under the special and technical training and knowledge of such agency. Administrative agencies are given wide latitude in the evaluation of evidence and in the exercise of their adjudicative functions, latitude which includes the authority to take judicial notice of facts within their special competence. The PEZA Board and the OP were correct in ruling that, based on the evidence presented, or the insufficiency thereof, the PCMC failed to account for the unexplained shortage in its imported materials. The failure of PCMC to account for the importation shortages constitutes prima facie proof that the goods or merchandise were illegally sent out of the restricted areas.