if you did not personally see and hear the person say the slanderous remarks and only rely on the reports of others, then it is hearsay, meaning you only heard it said by others. to be a competent witness, you must have personal knowledge of the facts you are stating.
for your complaint to prosper, you have to present the persons who heard and saw your sister in law state the slanderous remarks about you.
the rules of the barangay are very loose, and we lawyers are not allowed to be present. however, if you were notified of her counter charge and were given an opportunity to respond, then i would say that the minimum requirements of due process were fulfilled.