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G.R. No. 159149 https://www.lawphil.net/judjuris/juri2006/jun2006/gr_159149_2006.

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Today is Wednesday, July 04, 2018

THIRD DIVISION

G.R. No. 159149 June 26, 2006

The HONORABLE SECRETARY VINCENT S. PEREZ, in his capacity as the Secretary of the Department of
Energy, Petitioner,
vs.
LPG REFILLERS ASSOCIATION OF THE PHILIPPINES, INC., Respondent.

DECISION

QUISUMBING, J.:

Before us is a petition for review on certiorari under Rule 45, assailing the Decision1 and Order2 of the Regional
Trial Court of Pasig City, Branch 161, in SCA Case No. 2318, which nullified Circular No. 2000-06-010 of the
Department of Energy (DOE).

The facts are undisputed.

Batas Pambansa Blg. 33, as amended, penalizes illegal trading, hoarding, overpricing, adulteration, underdelivery,
and underfilling of petroleum products, as well as possession for trade of adulterated petroleum products and of
underfilled liquefied petroleum gas (LPG) cylinders.3 The said law sets the monetary penalty for violators to a
minimum of P20,000 and a maximum of P50,000.4

On June 9, 2000, Circular No. 2000-06-010 was issued by the DOE to implement B.P. Blg. 33, thus:

SECTION 4. NO PRICE DISPLAY BOARD –

LPG Marketer/LPG Dealer/LPG Retail Outlet

1st Offense - Reprimand/warning letter

2nd Offense - Recommend suspension of business operation to the proper local government unit

3rd Offense - Recommend business closure to the proper local government unit and initiate
criminal proceedings

SECTION 5. NO WEIGHING SCALE –

A. LPG Refiller/Marketer

1st Offense - Fine of P5,000

2nd Offense - Fine of P10,000

3rd Offense - Recommend business closure to the proper local government unit

B. Dealer

1st Offense - Fine of P3,000

2nd Offense - Fine of P7,000

3rd Offense - Recommend business closure to the proper local government unit

C. LPG Retail Outlet

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1st Offense - Reprimand

2nd Offense - Fine of P500.00

3rd Offense - Fine of P1,000.00

SECTION 6. NO TARE WEIGHT OR INCORRECT TARE WEIGHT MARKINGS. (REQUIREMENT ON


ENGRAVED TARE WEIGHT SHALL TAKE EFFECT TWO (2) YEARS AFTER EFFECTIVITY OF
THIS CIRCULAR)

A. LPG Refiller/Marketer

1st Offense - Fine of P3,000 for each cylinder

2nd Offense - Fine of P5,000 for each cylinder

3rd Offense - Recommend business closure to the proper local government unit

B. Dealer

1st Offense - Fine of P2,000 for each cylinder

2nd Offense - Fine of P4,000 for each cylinder

3rd Offense - Recommend business closure to the proper local government unit

C. LPG Retail Outlet

1st Offense - Fine of P1,000 for each cylinder

2nd Offense - Fine of P2,000 for each cylinder

3rd Offense - Recommend business closure to the proper local government unit

SECTION 7. NO APPROPRIATE OR AUTHORIZED LPG SEAL

A. LPG Refiller/Marketer

1st Offense - Fine of P3,000 for each cylinder

2nd Offense - Fine of P5,000 for each cylinder

3rd Offense - Recommend business closure to the proper local government unit

B. Dealer

1st Offense - Fine of P2,000 for each cylinder

2nd Offense - Fine of P4,000 for each cylinder

3rd Offense - Recommend business closure to the proper local government unit

C. LPG Retail Outlet

1st Offense - Fine of P1,000 for each cylinder

2nd Offense - Fine of P2,000 for each cylinder

3rd Offense - Recommend business closure to the proper local government unit

SECTION 8. NO TRADE NAME, UNBRANDED LPG CYLINDERS, NO SERIAL NUMBER, NO


DISTINGUISHING COLOR, NO EMBOSSED IDENTIFYING MARKINGS ON CYLINDER OR
DISTINCTIVE COLLAR OR DESIGN (REQUIREMENT ON SERIAL NUMBER AND DISTINCTIVE
COLLAR OR DESIGN SHALL TAKE EFFECT TWO (2) YEARS AFTER EFFECTIVITY OF THIS
CIRCULAR)

A. LPG Refiller/Marketer

1st Offense - Fine of P4,000 for each cylinder

2nd Offense - Fine of P5,000 for each cylinder

3rd Offense - Recommend business closure to the proper local government unit

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B. Dealer

1st Offense - Fine of P3,000 for each cylinder

2nd Offense - Fine of P4,000 for each cylinder

3rd Offense - Recommend business closure to the proper local government unit

C. LPG Retail Outlet

1st Offense - Fine of P1,000 for each cylinder

2nd Offense - Fine of P2,000 for each cylinder

3rd Offense - Recommend business closure to the proper local government unit

SECTION 9. UNDERFILLED LPG CYLINDERS

A. LPG REFILLER/MARKETER

1st Offense - Fine of P4,000 for each cylinder

2nd Offense - Fine of P6,000 for each cylinder

3rd Offense - Recommend business closure to the proper local government unit

B. DEALER

1st Offense - Fine of P3,000 for each cylinder

2nd Offense - Fine of P4,000 for each cylinder

3rd Offense - Recommend business closure to the proper local government unit

C. LPG RETAIL OUTLET

1st Offense - Fine of P1,000 for each cylinder

2nd Offense - Fine of P2,000 for each cylinder

3rd Offense - Recommend business closure to the proper local government unit

SECTION 10. TAMPERING, ALTERING, OR MODIFYING OF LPG CYLINDER THRU ANY MEANS
SUCH AS BUT NOT LIMITED TO CHANGING THE VALVE, REPAINTING, AND RELABELLING BY
ANY PERSON OR ENTITY OTHER THAN THE LEGITIMATE AND REGISTERED OWNER OF THE
SAME. FOR THIS PURPOSE, LPG REFILLER, MARKETER, DEALER, OR RETAIL OUTLET, AS
THE CASE MAY BE, WHO HAS POSSESSION OF SUCH ILLEGALLY TAMPERED, ALTERED, OR
OTHERWISE MODIFIED LPG CYLINDER SHALL BE HELD LIABLE FOR THIS OFFENSE

A. LPG Refiller/Marketer

1st Offense - Fine of P5,000 for each cylinder

2nd Offense - Fine of P10,000 for each cylinder

3rd Offense - Recommend business closure to the proper local government unit

B. Dealer

1st Offense - Fine of P3,000 for each cylinder

2nd Offense - Fine of P5,000 for each cylinder

3rd Offense - Recommend business closure to the proper local government unit

C. LPG Retail Outlet

1st Offense - Fine of P1,500 for each cylinder

2nd Offense - Fine of P3,000 for each cylinder

3rd Offense - Recommend business closure to the proper local government unit

SECTION 11. UNAUTHORIZED DECANTING OR REFILLING OF LPG CYLINDERS

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1st Offense - Fine of P5,000 for each cylinder

2nd Offense - Fine of P10,000 for each cylinder

3rd Offense - Recommend business closure to the proper local government unit

SECTION 12. HOARDING OF PETROLEUM PRODUCTS INCLUDING LIQUEFIED PETROLEUM


GAS

1st Offense - Fine of P10,000 per cylinder

2nd Offense - Recommend business closure to the proper local government unit plus the filing of
appropriate criminal action

SECTION 13. REFUSAL TO ALLOW OR COOPERATE WITH DULY AUTHORIZED INSPECTORS


OF THE ENERGY INDUSTRY ADMINISTRATION BUREAU (EIAB) OF THE DEPARTMENT OF
ENERGY IN THE CONDUCT OF THEIR INSPECTION/INVESTIGATION, WHETHER REGULAR AND
ROUTINARY OR COMPLAINT-INITIATED

1st Offense - Fine of P10,000

2nd Offense - Recommend business closure to the proper local government unit

SECTION 14. REFUSAL OR FAILURE TO PAY FINE – The Department of Energy shall recommend
to the proper local government unit the closure of business of a respondent who refuses or fails to pay
any administrative fine without prejudice to the filing of an appropriate criminal action if warranted.5

Respondent LPG Refillers Association of the Philippines, Inc. asked the DOE to set aside the Circular for being
contrary to law. The DOE, however, denied the request for lack of merit.

Respondent then filed a petition for prohibition and annulment with prayer for temporary restraining order and/or writ
of preliminary injunction before the trial court.

After trial on the merits, the trial court nullified the Circular on the ground that it introduced new offenses not included
in the law.6 The court intimated that the Circular, in providing penalties on a per cylinder basis for each violation,
might exceed the maximum penalty under the law. The decretal part of its Decision reads:

IN VIEW OF THE FOREGOING, this Court renders judgment declaring DOE Circular No. 2000-06-010 null and void
and prohibits the respondent from implementing the same.

SO ORDERED.7

The trial court denied for lack of merit petitioner’s motion for reconsideration. Hence this petition, raising the
following issues:

WHETHER OR NOT THE COURT A QUO GRAVELY ERRED IN HOLDING THAT "A CLOSE
SCRUTINY OF BP 33, PD 1865 AND R.A. NO. 8479 SHOWS THAT OFFENSES LIKE NO PRICE
DISPLAY [BOARD], NO WEIGHING SCALE, ETC. SET FORTH IN THE CIRCULAR ARE NOT
PROVIDED FOR IN ANY OF THE THREE (3) LAWS".

II

WHETHER OR NOT THE COURT A QUO GRAVELY ERRED IN HOLDING THAT "A SCRUTINY OF
THE NEW SET OF PENALTIES PROVIDED BY THE CIRCULAR SHOWS THAT THE PENALTIES
THIS TIME ARE BASED ON PER CYLINDER BASIS"; THAT "BEING SUCH, NO CEILING WAS
PROVIDED FOR AS TO THE ADMINISTRATIVE FINES"; THAT "AS ILLUSTRATED BY THE
PETITIONER, FOR JUST ONE LPG CYLINDER FOUND VIOLATING AT LEAST SEC[TIONS] 6, 7, 8,
9, 10 AND 11 OF THE [CIRCULAR], A FINE OF P24,000.00 IS IMPOSED;" AND THAT "THIS WILL
CLEARLY BE BEYOND THE P10,000.00 PROVIDED BY THE LAWS."

III

WHETHER OR NOT THE COURT A QUO GRAVELY ERRED IN HOLDING THAT SECTION 16 OF
PETITIONER’S CIRCULAR WHICH AUTHORIZES THE IMPOSITION OF PECUNIARY PENALTIES
WITH THE TOTAL FINE NOT EXCEEDING P20,000.00 FOR RETAIL OUTLETS VIOLATES THE
PENALTY CEILING OF P10,000.00 SET UNDER BP BLG. 33, AS AMENDED.

IV

WHETHER OR NOT THE COURT A QUO GRAVELY ERRED IN HOLDING THAT SINCE SECTION

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5(g) OF R.A. 7638 FINDS NO REFERENCE IN DOE CIRCULAR NO. 2000-06-010, THE SAME
SHOULD BE DISREGARDED.

WHETHER OR NOT THE COURT A QUO GRAVELY ERRED IN HOLDING THAT "ON THE NEW
OFFENSES INTRODUCED IN THE CIRCULAR SUCH AS SECTIONS 4, 5, 10, 13 AND 14 AND THE
IMPOSITION OF THE GRADUATED PENALTIES ON ‘A PER CYLINDER BASIS’, THIS COURT
FINDS [NO] REASON TO DISTURB ITS FINDINGS THAT RESPONDENT-MOVANT EXCEEDED ITS
AUTHORITY. X X X IT SHOULD BE REMEMBERED THAT BP BLG. 33 AS AMENDED AND P.D. 1865
ARE CRIMINAL STATUTES AND MUST BE CONSTRUED WITH SUCH STRICTNESS AS TO
CAREFULLY SAFEGUARD THE RIGHTS OF THE DEFENDANT."

VI

WHETHER OR NOT THE COURT A QUO ERRED IN HOLDING THAT "THE ASSAILED CIRCULAR
SETS NO MAXIMUM LIMIT AS TO THE FINE THAT MAY BE IMPOSED ON AN ERRING PERSON
OR ENTITY TO WHICH FACT MOVANT CONCEDES. FOR ONE (1) CYLINDER ALONE, NOT ONLY
DOES THE CIRCULAR MAKE THE FINE EXCESSIVE TO THE EXTENT OF BEING
CONFISCATORY, BUT IT EVEN IMPOSES A PENALTY WHICH MAY EVEN GO BEYOND THAT
MAXIMUM IMPOSABLE FINE OF P50,000.00 SET BY P.D. 1865 IN ITS SEC. 4 AFTER A CRIMINAL
PROCEEDING."8

To our mind, the issue raised by petitioner may be reduced to the sole issue of whether the Regional Trial Court of
Pasig erred in declaring the provisions of the Circular null and void, and prohibiting the Circular’s implementation.

Petitioner argues that the penalties for the acts and omissions enumerated in the Circular are sanctioned by
Sections 19 and 3-A10 of B.P. Blg. 33 and Section 2311 of Republic Act No. 8479.12 Petitioner adds that Sections
5(g)13 and 2114 of Republic Act No. 763815 also authorize the DOE to impose the penalties provided in the Circular.

Respondent counters that the enabling laws, B.P. Blg. 33 and R.A. No. 8479, do not expressly penalize the acts and
omissions enumerated in the Circular. Neither is the Circular supported by R.A. No. 7638, respondent claims, since
the said law does not pertain to LPG traders. Respondent maintains that the Circular is not in conformity with the
law it seeks to implement.

We resolve to grant the petition.

For an administrative regulation, such as the Circular in this case, to have the force of penal law, (1) the violation of
the administrative regulation must be made a crime by the delegating statute itself; and (2) the penalty for such
violation must be provided by the statute itself.16

The Circular satisfies the first requirement. B.P. Blg. 33, as amended, criminalizes illegal trading, adulteration,
underfilling, hoarding, and overpricing of petroleum products. Under this general description of what constitutes
criminal acts involving petroleum products, the Circular merely lists the various modes by which the said criminal
acts may be perpetrated, namely: no price display board, no weighing scale, no tare weight or incorrect tare weight
markings, no authorized LPG seal, no trade name, unbranded LPG cylinders, no serial number, no distinguishing
color, no embossed identifying markings on cylinder, underfilling LPG cylinders, tampering LPG cylinders, and
unauthorized decanting of LPG cylinders. These specific acts and omissions are obviously within the contemplation
of the law, which seeks to curb the pernicious practices of some petroleum merchants.

As for the second requirement, we find that the Circular is in accord with the law. Under B.P. Blg. 33, as amended,
the monetary penalty for any person who commits any of the acts aforestated is limited to a minimum of P20,000
and a maximum of P50,000. Under the Circular, the maximum pecuniary penalty for retail outlets is P20,000,17 an
amount within the range allowed by law. However, for the refillers, marketers, and dealers, the Circular is silent as to
any maximum monetary penalty. This mere silence, nonetheless, does not amount to violation of the aforesaid
statutory maximum limit. Further, the mere fact that the Circular provides penalties on a per cylinder basis does not
in itself run counter to the law since all that B.P. Blg. 33 prescribes are the minimum and the maximum limits of
penalties.

Clearly, it is B.P. Blg. 33, as amended, which defines what constitute punishable acts involving petroleum products
and which set the minimum and maximum limits for the corresponding penalties. The Circular merely implements
the said law, albeit it is silent on the maximum pecuniary penalty for refillers, marketers, and dealers. Nothing in the
Circular contravenes the law.

Noteworthy, the enabling laws on which the Circular is based were specifically intended to provide the DOE with
increased administrative and penal measures with which to effectively curtail rampant adulteration and shortselling,
as well as other acts involving petroleum products, which are inimical to public interest. To nullify the Circular in this
case would be to render inutile government efforts to protect the general consuming public against the nefarious
practices of some unscrupulous LPG traders.

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WHEREFORE, the petition is GRANTED. The assailed Circular No. 2000-06-010 of DOE is declared valid. The
Decision and Order of the Regional Trial Court of Pasig City, Branch 161, in SCA Case No. 2318, nullifying said
Circular and prohibiting its implementation are hereby REVERSED and SET ASIDE.

No pronouncement as to costs.

SO ORDERED.

LEONARDO A. QUISUMBING
Associate Justice

WE CONCUR:

ANTONIO T. CARPIO
Associate Justice

CONCHITA CARPIO MORALES DANTE O. TINGA


Associate Justice Asscociate Justice

PRESBITERO J. VELASCO, JR.


Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned
to the writer of the opinion of the Court’s Division.

LEONARDO A. QUISUMBING
Associate Justice
Chairperson

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson’s Attestation, I certify that the
conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of
the opinion of the Court’s Division.

ARTEMIO V. PANGANIBAN
Chief Justice

Footnotes

1 Rollo, pp. 64-72. Penned by Judge Alicia P. Mariño-Co.

2 Id. at 73-77.

3 SEC. 2. Prohibited Acts. – The following acts are prohibited and penalized:

(a) Illegal trading in petroleum and/or petroleum products;

(b) Adulteration of finished petroleum products, or possession of adulterated finished petroleum


products for the purpose of sale, distribution, transportation, exchange or barter;

(c) Underdelivery or underfilling beyond authorized limits in the sale of petroleum products or
possession of underfilled liquefied petroleum gas cylinder for the purpose of sale, distribution,
transportation, exchange or barter;

xxxx

[(b)] (D) Hoarding of petroleum and/or petroleum products;

[(c)] (E) Overpricing in the sale of petroleum products;

[(d)] (F) Misuse of petroleum allocations;

[(e)] (G) Speed contests and rallies involving mainly the use of motor vehicles, motor-driven watercraft
or aircraft utilizing petroleum-derived fuels, including car and motorcycle rallies and drag racing, without
the permit from the Bureau of Energy Utilization; and

[(f)] (H) Sky-diving, and water-skiing except when methanol is used for the power-boat operation.

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4 SEC. 4. Penalties. – Any person who commits any act herein prohibited shall, upon conviction, be punished
with a fine of not less than [two] TWENTY thousand pesos [(P2,000)] (P20,000) but not more than [Ten]
FIFTY thousand pesos [(P10,000)] (P50,000)….

5 Rollo, pp. 274-280.

6 Batas Pambansa Blg. 33 (1979), Presidential Decree No. 1865 (1983), or Republic Act No. 8479 (1998).

7 Rollo, p. 72.

8 Id. at 500-502.

9 SECTION 1. Declaration of Policy. – It is the declared policy of the State to institutionalize as a national way
of life energy conservation geared towards the judicious and efficient use of energy in order to enhance
availability of energy supplies required to support economic, social and developmental goals. In view of the
continuing uncertainty of the international oil supply, it is imperative that measures to conserve energy be
strengthened and that acts and activities involving petroleum and/or petroleum products contrary to the intent
and spirit of judicious usage and conservation of energy, which are inimical to the public interest and national
security, be prohibited and appropriate sanction therefor be imposed.

10 Section 3-A (inserted by Section 3 of PD No. 1865) reads:

"SEC. 3-A. Rules and Regulations; Administrative sanctions for violation thereof. – The Bureau of
Energy Utilization shall issue such rules and regulations as are necessary to carry into effect the
provisions of this Act, subject to the approval of the Minister of Energy, after consultation with the
affected industry sectors. Said rules and regulations shall take effect fifteen (15) days from the date of
its publication in two (2) newspapers of general circulation.

"The Bureau of Energy Utilization is empowered to impose in an administrative proceeding, after due
notice and hearing, upon any person who violates any provision of such rules and regulations, a fine of
not more than ten thousand pesos (P10,000.00) or to suspend or remove the license or permit of a
hauler, marketer, refiller, dealer, sub-dealer or retail outlet: Provided, That hearing in any administrative
proceedings may be waived by respondent. Provided, Further, That during the pendency of such
administrative proceeding, the Bureau may suspend the business operations of such hauler, marketer,
refiller, dealer, sub-dealer or retailer or retail outlet operator when the suspension is consistent with
public interest. …

xxxx

"The administrative sanction that may be imposed shall be without prejudice to the filing of a criminal
action as the case may warrant."

11 SEC. 23. Implementing Rules and Regulations. – The DOE, in coordination with the Board, the DENR,
DFA, Department of Labor and Employment (DOLE), Department of Health (DOH), DOF, DTI, National
Economic and Development Authority (NEDA) and TLRC, shall formulate and issue the necessary
implementing rules and regulations within sixty (60) days after the effectivity of this Act.

12 An Act Deregulating the Downstream Oil Industry, and For Other Purposes.

13 SEC. 5. Powers and Functions. – The Department shall have the following powers and functions:

xxxx

(g) Formulate and implement programs, including a system of providing incentives and penalties, for
the judicious and efficient use of energy in all energy-consuming sectors of the economy;

14 SEC. 21. Appropriations. – x x x

Subject to existing rules and regulations, the funds and monies collected or which otherwise come into
the possession of the Department and its bureaus from fees, surcharges, fines and penalties which the
Department and its bureaus may impose and collect under this Act, x x x shall be disbursed for
expenses necessary for the effective discharge of the powers and functions of the Department under
this Act.

15 An Act Creating the Department of Energy, Rationalizing The Organization and Functions of Government
Agencies Related to Energy, and For Other Purposes.

16 See United States v. Panlilio, 28 Phil. 608, 613-614 (1914).

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17 DOE Circular No. 2000-06-010.

SEC. 16. Maximum Total Penalty. In the imposition of pecuniary penalties the total fine shall not exceed
Twenty Thousand Pesos (P20,000.00) for retail outlets.

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