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A CEBU-BASED rice importer is considering legal action after being flagged by authorities for alleged smuggling, citing financial losses and reputational damage.

Over 20,000 sacks of rice were released Tuesday, Oct. 21, 2025, from the National Food Authority warehouse in Cebu City after the Court of Tax Appeals (CTA) lifted a seizure order. In a four-page resolution, the court ruled the stocks had been lawfully imported River Valley Distribution Inc. (RVDI) and all duties and taxes had been fully paid.

Jhonelle Estrada Tan-Kit, lead counsel for RVDI, said the company is studying possible legal steps but declined to name potential respondents.

Kit said the mistaken seizure disrupted operations and caused losses of up to P40 million for RVDI and its sister firm, Mixed-Load Distribution Network Inc. (MLDNI). She added that several clients pulled out after the controversy, hurting both companies’ reputation in the market.

“Protecting the market from smuggling is a noble good, but it must never come at the expense of law-abiding, tax-paying businesses,” Kit said. “It marks the end of months of disruption, reputational harm, and operational paralysis caused by a mistaken enforcement action.”

Authorities seized more than 20,500 sacks of rice from RVDI’s warehouse in Talisay City in July. The rice, allegedly smuggled from Pakistan and Vietnam, was declared undocumented despite the company’s presentation of import and tax papers.

Police earlier said the seized rice, valued at more than P10 million, exceeded the threshold for economic sabotage under Republic Act 12022, or the Anti-Agriculture Economic Sabotage Law. They claimed RVDI submitted documents for only 6,000 sacks.

RVDI’s Cebu-based counsel, Jade Seit, urged caution in enforcing the new law. She said the Criminal Investigation and Detection Group (CIDG) proceeded with the raid without observing proper procedures.

“The CIDG insisted the rice was undocumented despite full compliance,” Seit said. “What this case revealed is that enforcement went ahead without the rules of engagement or implementing guidelines required by law.”

The counsels also raised concerns over the seizure operation’s failure to verify ownership of the rice.

SunStar Cebu sought comment from a CIDG 7 during the transfer of the rice to the NFA warehouse, but was told only authorized personnel from Camp Crame could speak on the matter.

Damaged goods

In a resolution promulgated Oct. 7, the CTA Second Division lifted the seizure order, allowing the transfer of the rice to the companies’ warehouse.

“With the payment of duties and taxes not only 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 court said.

According to a joint compliance filed Oct. 1, the Bureau of Customs confirmed 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 from Vietnam via the Port of Dumaguete.

An initial inspection showed at least 160 sacks, worth about P320,000, were damaged by rain and had developed mold during transport or storage. Seit said the company has yet to determine whether the warehouse was infested and will finalize total losses after further checks.

The full transfer of the 20,000 sacks to a licensed storage facility is expected to be completed within five days, coordinated with CIDG 7 to ensure proper documentation and maintain product quality. (DPC)

Source : sunstar