Petron Corporation vs. Commissioner of Internal Revenue

DECISION

REYES-FAJARDO, J.:

These Petitions for Review filed by Petron Corporation seek the refund of excise taxes it paid on locally produced and imported Jet A-

Respondent Commissioner of Internal Revenue is sued in his official capacity, having been duly appointed and empowered to perform the duties of his office, including, among others, the duty to act on and approve claims for refund as provided by law.4 Petitioner filed its Applications for Tax Credits/Refunds (BIR Form No. 1914), with letters requesting a tax refund of the excise taxes it paid on its locally produced and imported Jet A-1 fuel, which were subsequently sold and delivered to various international carriers and tax-exempt entities, for the following periods:

Period

Source of Jet A-1

Date of Filing

Excise Tax Paid

Jan. 1 to June 30, Locally manufactured Nov. 5, 20215

I'

9,383,688.00 2020

Imported

Nov. 26, 20216 308,863,888.00 July 1 to Dec. 31, Locally manufactured Apr. 11, 20227 48,684,692.00 2020

Imported

Apr. 11, 20228 220,026,396.00

Total

P 586,95M64.00 On February 2, 2022,9 petitioner filed its Petition for Review docketed as CT A Case No. 10750, to refund the amount of P318,247,576.00, representing excise taxes paid from January 1, 2020 to June 30, 2020. Respondent filed his Answer,10 thereto on May 10, 2022.

On June 29, 2022,11 petitioner filed another Petition for Review docketed as CTA Case No. 10905, to refund the amount of P268,711,088.00, representing excise taxes paid during the period July 1, 2020 to December 31, 2020. Respondent posted his Answer12 thereto on September 9, 2022.

4 5 6 7 8 9 10 11 12 13 Petitioner thereafter moved13 to consolidate the two (2) cases. Par. 3, Summary of Admitted Facts, JSFI, Docket (CT A Case No. 10750)- Vol. I, p. 426. Exhibits "P-7-A" and "P-8-A," Docket (CT A Case No. 10750) -Vol. 2, pp. 838 to 844, and 852, respectively.

Exhibits "P-13-A" and "P-14-A," Docket (CTA Case No. 10750)- Vol. 2, pp. 876 to 883. Exhibits "P-7-B" and "P-8-B," Docket (CTA Case No. 10750)- Vol. 2, pp. 845 to 851, and 853, respectively.

Exhibits "P-9-B" and "P-10-B," Docket (CTA Case No. 10750)- Vol. 2, pp. 858 to 863, and 870, respectively.

Docket (CTA Case No. 10750)- Vol. I, pp. 11 to 54. Docket (CTA Case No. 10750)- Vol. I, pp. 188 Lo 197. Docket (CTA Case No. 10905), pp. 6 to 49. Docket (CTA Case No.10905), pp. 157 to 172. Docket (CTA Case No. 10905), p. 156. Docket (CTA Case No. 10750)- Vol. I, pp. 268 to 278.

In separate Resolutions dated August 23, 202214 and September 23, 2022,15 the Court consolidated CTA Case No. 10905 with CTA Case No. 10750.

On January 19, 2023,16 the Pre-Trial Conference of the two (2) consolidated cases was set and held. On February 20, 2023, the parties filed their Joint Stipulation of Facts and Issues,17 which was approved by the Court by Resolution dated February 28, 2023.18 The Consolidated Pre-Trial Order dated May 10, 202319 was then issued.

Trial then ensued.

Petitioner presented: (¹) Ms. Ma. Clarissa C. Arguelles,20 petitioner's Tax Manager; (²) Ms. Marissa U. Viray,21 petitioner's then Operations Finance Manager, and presently Accounting Services Manager; (³) Mr. Francis Herthiel N. Carino,22 petitioner's then Area Sales Manager - Industrial South Luzon, and presently petitioner's Key Accounts Manager - Industrial Fuels Trade; (4) Mr. Raymond John M. Valin,23 petitioner's then Account Sales Coordinator - National Accounts Industrial Trade, and presently petitioner's Manager- VisMin Field Technical Services; (5) Mr. Emmanuel Victor T. Tatoy,24 petitioner's Terminal Manager for the Joint Oil Companies Aviation Fuel Storage Plant Ninoy Aquino International Airport Terminal 2, Pasay City (JOCASP /NAIA); (6) Mr. Ronalda A. 14 15 16 17 18 19 20 21 23 Docket (CTA Case No. 10905), pp. 6 to 49. Docket (CTA Case No. 10750)- Vol. I, pp. 288 to 290. Resolution dated October 25, 2022, Docket (CT A Case No. 10750)- Vol. I, p. 293; Minutes of the hearing held on, and Order dated, on January 19, 2023, Docket (CTA Case No. 10750)- Vol. I, pp. 357 to 364.

Docket (CT A Case No. 10750)- Vol. I, pp. 426 to 455. Docket (CTA Case No. 10750)- Vol. I, pp. 463 to 464. Docket (CTA Case No. 10750)- Vol. I, pp. 509 to 55·±. Exhibits "P-41-A" and "P-39-B," Docket (CTA Case No. 10750)- Vol. I, pp. 59 to 84, and 381 to 391, respectively; Exhibit "P-34-B," Docket (CT A Case No. 10905), pp. 55 to 81; Minutes of the hearing held on, and Order dated, March 28,2023, Docket (CTA Case No. 10750)- Vol. I, pp. 488 to 492, and 494 to 496, respectively. Exhibit "P-42-A," Docket (CT A Case No. 10750)- Vol. I, pp. 88 to 101; Exhibit "P-35-B,'' Docket (CTA Case No. 10905), pp. 85 to 99; Minutes of the hearing held on, and Order dated, March 28, 2023, Docket (CTA Case No. 10750)- Vol. I, pp. 488 to 492, and 494 to 496, respectively.

Exhibit "P-44-A," Docket (CTA Case No. 10750)- Vol. I, pp. 116 to 124; Order dated April 20, 2023, Docket (CT A Case No. 10750)- Vol. I, pp. 499 to 501. Exhibit "P-45-A," Docket (CTA Case No. 10750)- Vol. I, pp. 128 to 135; Exhibit "P-37-B," Docket (CT A Case No. 10905), pp. 115 to 122; Order dated April 20, 2023, Docket (CTA Case No. 10750)- Vol. I, pp. 499 to 501. Exhibit "P-46-A," Docket (CTA Case No. 10750)- Vol. I, pp. 139 to 147; Exhibit "P-38-B," Docket (CT A Case No. 10905), pp. 126 to 135; Order dated April 20, 2023, Docket (CTA Case No. 10750)- Vol. I, pp. 499 to 501.

Tadena,25 petitioner's then Terminalling Manager, and presently Oil Movement & Storage and Terminalling Manager; (7) Mr. Jake Martin A. Magana,26 petitioner's OIC-Commercial Services Manager; and (8) Ms. Madonna Mia S. Dayego,27 the Court-commissioned Independent Certified Public Accountant (ICP A Dayego ), 28 as its witnesses. On February 27, 2024, petitioner filed its Formal Offer of Evidence,29 with respondent's Comment filed on March 8, 2024.30 By the Resolution dated May 30, 2024,31 the Court admitted petitioner's offered exhibits, while several exhibits were denied. On June 14, 2024,32 petitioner filed a Motion for Reconsideration with respondent's Manifestation filed on September 16, 2024.33 By Resolution dated September 7, 2022,34 the Court admitted Exhibits "P-1007," "P-1008," "P-1010," and "P-1018." Respondent presented Revenue Officer Alexander M. Atienza as his witness (RO Atienza).35 On June 25, 2024, Respondent filed his Formal Offer of Evidence,36 with petitioner's Comment filed on July 11, 2024.37 By Resolution dated October 9, 2024,38 the Court admitted all of respondent's offered exhibits.

25 26 27 29 30 31 33 34 35 36 37 Exhibit "P-47/' Docket (CTA Case No. 10750) - Vol. I, pp. 151 to 161; Minutes of the hearing held on, and Order dated, February 7, 2021, Docket (CTA Case No. 10750) -Vol. 2, pp. 681 to 681.

Exhibit "P-43-a," Docket (CTA Case No. 10750)- Vol. I, pp. 259 to 267; Exhibit "P-36-B," Docket (CT A Case No. 10905), pp. 103 to 111; Minutes of the hearing held on, and Order dated, February 7, 2024, Docket (CT A Case No.10750)- Vol. 2, pp. 681 to 684. Exhibit "P-48," Docket (CT A Case No. 10750) - Vol. 2, pp. 738 to 775; Minutes of the hearing held on, and Order dated, February 7, 2024, Docket (CTA Case No.10750)- Vol. 2, pp. 681 to 681.

Oath of Commission dated March 28,2023, Docket (CTA Case No. 10750)- Vol. I, p. 492; Minutes of the hearing held on, and Order dated, March 28, 2023, Docket (CTA Case No. 10750)- Vol. I, pp. 488 to 492, and 494 to 4% respectively. Docket (CT A Case No. 10750)- Vol. 2, pp. 686 to 800. Docket (CTA Case No. 10750)- Vol. 2, pp. 902 to 904. Docket (CTA Case No. 10750)- Vol. 2, pp. 909 to 921. Docket (CTA Case No. 10750)- Vol. 2, pp. 935 to 972, and 973 to 976 (!CPA's Certification dated june 14, 2024).

Docket (CTA Case No. 10750)- Vol. 2, pp. 996 to 998. Docket (CTA Case No. 10232)- Vol. 2, pp. 1335 to 1336. Exhibit "R-9," Docket (CTA Case No. 10750)- Vol. I, pp. 340 to 345; Exhibit "R-10," (CTA Case No. 10750)- Vol. 2, pp. 894 to 901; Minutes of the hearing held on, and Order dated, May 30, 2024, Docket (CTA Case No. 10750)- Vol. 2, pp. 926 to 928. Docket (CTA Case No. 10750)- Vol. 2, pp. 979 to 983. Docket (CTA Case No. 10750)- Vol. 2, pp. 989 to 993.

On November 13, 2024, petitioner filed its Memorandum,’ while respondent’s Memorandum was submitted on November 19, 2024.70 By Resolution dated April 10, 2025,41 the Court admitted*#? and denied* certain exhibits of petitioner, and submitted the case for decision.

ISSUES*

1. Whether We obtained jurisdiction over CTA Case Nos. 10750 & 10905.

. Whether petitioner is entitled to the refund in the amount of Five Hundred Eighty-Six Million, Nine Hundred Fifty-Eight Thousand Six Hundred Sixty-Four Pesos (P586,958,664.00), representing excise taxes paid during the period January 1, 2020 to June 30, 2020 amounting to Three Hundred Eighteen Million Two Hundred Forty-Seven Thousand Five Hundred Seventy-Six Pesos (P318,247,576.00) docketed as CTA Case No. 10750; and excise taxes paid during the period July 1, 2020 to December 31, 2020 amounting to Two Hundred Sixty-Eight Million Seven Hundred Eleven Thousand Eighty-Eight Pesos (P268,711,088.00) docketed as CTA Case No. 10905, for petitioner’s locally produced and imported Jet A-1 fuel, which were subsequently sold and delivered to various international carriers and tax-exempt entities.

Docket (CTA Case No. 10750) ~ Vol. 3, pp. 1002 to 1003.

Docket (CTA Case No. 10750) - Vol. 3, pp. 1006 to 1089, Docket (CTA Case No. 10750) - Vol. 3, pp. 1091 to 1110.

Docket (CTA Case No. 10750) - Vol. 3, pp. 1117 to 11235.

Exhibits, “P-108-146,” “P-109-1736,” “P-109-1760,” “P-111-1” to “P-111-21,” “P-114-13-1 to P-114-13-12” and “P-114-14-1 to P-114-14-12,” “P-115-1," “P-118-1-1512,” “P-118-1- 3415,” “P-118-1-3726,” “P-119-1-20,” "P-8-B,” “P-8-1-B,” “P-28-B,” and “P-29-B.”

Exhibits “P-6-A,” “P-6-1-A to P-6-6103-A,” “P-6-B,” “P-6-B to P-6-5260-B,” “P-11-B,” “P- 11-1-B to P-11-56-B,” “P-12-B,” “P-13-B,” “P-13-1-B to P-13-15-B,” “P-14-B,” “P-14-1-B to P-14-5-B,” “P-15-A,” “P-15-A to P-15-89-A,” “P-15-1-B to P-15-34-B,” “P-16-A,” “P-16-1-A to P-16-11-A,” “P-16-B to P-16-6-B,” “P-17-A,” “P-17-B,” “P-17-1-A to P-17-15-A,” “P-17-1- B to P-17-6-B,” “P-18-B,” “P-18-B to P-18-30-B,” “P-19-A,” “P-19-1-A to P-19-4-A,” “P-19- B,” “P-19-1-B to P-19-10-B,” “P-20-A,” “P-20-1-A to P-20-33-A,” “P-20-B,” “P-20-1-B to P- 20-2767-B,” “P-21-A,” “P-21-1-A to P-21-6-A,” “P-21-B,” “P-21-1-B to P-21-135-B,” “P-21- 1-A to P-22-6-A,” “P-22-A,” “P-22-B,” “P-22-1-B to P-22-14-B,” “P-23-A,” “P-23-1-A to P- 23-57-A,” “P-23-B,” “P-23-1-B to P-23-512-B,” “P-24-A,” “P-24-1-A to P-24-12-A,” “P-24-1- B to P-24-6-B,” “P-25-A,” “P-25-1-A to P-25-4266-A,” “P-25-B,” “P-25-1-B to P-25-93-B,” “P-26-A,” “P-26-1-A to P-26-238-A,” “P-26-B,” “P-26-1-B to P-26-93-B,” “P-27-A,” “P-27-1- A to P-21-17-A,” “P-27-B,” “P-27-1-B to P-27-93-B,” “P-28-A,” “P-28-1-A to P-28-1056-A,” “P-29-A,” “P-29-1-A to P-29-12-A,” “P-30-A,” “P-30-1-A to P-30-117-A,” “P-30-B,” “P-31- A,” “P-31-1-A to P-31-157-A,” “P-31-B,” “P-32-A,” “P-32-1-A to P-32-104-A” and “P-35- See Statement of the Issues, JSFI, Docket (CTA Case No. 10750) - Vol. 1, p. 427.

ARGUMENTS

Petitioner maintains that its administrative and judicial claims for refund were timely filed; that the imported and locally produced Jet A-1 fuel sold to international carriers and tax-exempt entities is exempt from excise tax under Section 135 of the National Internal Revenue Code of 1997 (NIRC), as amended; and that the excise taxes paid thereon were erroneously collected. Thus, it is entitled to a tax refund of 'P586,958,664.00.

Taking an opposite view, respondent ripostes that: (1) petitioner failed to file the required administrative claim for refund;

(2) petitioner is not entitled to a refund of excise taxes, as such claims are governed solely by Section 130(D) of the NIRC, as amended; and

(3) the denial of petitioner's claim in CTA Case No. 10905 is supported by factual and legal bases.

RULING

We partly grant the Petitions.

First. Did We acquire jurisdiction over CTA Case Nos. 10750 and 10905?

Yes. Petitioner timely filed its administrative and judicial claim within the two (2)-year period from date of its payment of excise tax on locally produced and imported Jet A-1 fuel, which were subsequently sold and delivered to various international carriers and tax-exempt entities.

Section 7(a)(2) of Republic Act (RA) No. 1125,45 as amended by RA No. 9282 reads:

45 Sec. 7. Jurisdiction.- The CTA shall exercise:

a. Exclusive appellate jurisdiction to review by appeal, as herein provided:

An Act Creating the Court of Tax Appeals.

2. Inaction by the Commissioner of Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties in relations thereto, or other matters arising under the National Internal Revenue Code or other laws administered by the Bureau of Internal Revenue, where the National Internal Revenue Code provides a specific period of action, in which case the inaction shall be deemed a denial; ... 46 Section 3(a)(2), Rule 4 of the Revised Rules of the Court of Tax Appeals clarified that the CT A in Division has jurisdiction over the inaction of respondent involving refunds of internal revenue taxes. Among the classes thereof is one premised upon illegal, erroneous, or excessive collection of internal revenue taxes, as recognized in Sections 204(C) and 229 of the NIRC, as amended. Commissioner of Internal Revenue v. Carrier Air Conditioning Philippines, Inc. (Carrier) 47 clarified that for Us to acquire jurisdiction over said type of refund case, the taxpayer must, within two (2) years from the date of payment of the tax, file an administrative claim with respondent prior to instituting a judicial claim.

Both the

administrative and judicial claims must be filed within the same two (2)-year period, viz.:

46 47 Section 204 [of the NIRC, as amended] refers to the Commissioner of Internal Revenue's administrative authority to credit or refund erroneously paid or illegally collected taxes. Under this provision, an administrative claim for refund or credit must be filed within two years from payment of the tax. Section 229 [of the NIRC, as amended], on the other hand, requires two conditions for the filing of judicial claims: (1) an administrative claim must be filed first; and (2) the judicial claim must be filed within two years after payment of the tax sought to be refunded.

Reading the two provisiOns together, both administrative and judicial claims must be filed within the two[(2)]-year period. Furthermore, the administrative claim must be filed before the judicial claim. This Court has previously declared that "[t]imeliness of the filing of the claim is mandatory and jurisdictional. The [Court of Tax Appeals] cannot take cognizance of a judicial claim for refund filed either prematurely or out of time." Emphasis ours.

G.R. No. 226592, July 27, 2021.

Relevantly, for imported Jet A-1 fuel, the two(2)-year period is reckoned from the date of actual payment of the excise tax pursuant to Section 131(A) of the NIRC as amended. Meanwhile, for locally produced Jet A-1 fuel, the two(2)-year period is counted from the date of removal of the petroleum products from the place of production pursuant to Section 130(A)(2) of the NIRC as amended. Parsed from these observations, petitioner timely filed its administrative and judicial claims within the two(2)-year period, as shown below:

Type of

Case

Earliest

Last Day to File

Administrative

Judicial Claim

JetA-1

Payment/

Fuel

No.

Removal Date

(2-year period)

Claim Filed

Filed

10750 Jan. 7, 2020 48 Jan. 7, 2022 Nov. 5, 2021 49 Feb. 2, 2022 5o

Imported

10905 July 29, 2020 51 July 29, 2022 A prilll, 2022 52 June 29, 2022 53 10750 Jan. 2, 2020 5-l Jan. 2, 2022 Nov. 5, 2021 55 Feb. 2, 2022 56

Locally

Produced

10905 July 1, 2020 57 July 1, 2022 Aprilll, 2022 ss June 29, 2022 59 To be sure, the judicial claim in CTA Case No. 10750, although filed on February 2, 2022, is timely filed. The Court, through CT A Circular No. 02-2021,60 suspended the filing of pleadings from December 21, 2021 to January 3, 2022 in light of Super Typhoon Odette, and granted an additional seven (7) calendar day extension from January 4, 2022. Thereafter, the Supreme Court, through Administrative Circular No. 01-2022,61 further extended all filing deadlines in all courts falling in January 2022 until February 1, 2022. 48 49 50 51 52 53 54 55 56 57 58 59 60 61 Exhibit "P-104-3-1 (1/3 and 2/3), !CPA USB (Exhibit "P-50-3"). Exhibits "P-13-A" and "P-14-A," Docket (CT A Case No. 10750)- Vol. 2, pp. 876 to 883. Docket (CTA Case No. 10750)- Vol. I, pp. 11 to 54. Exhibit "P-104-3-7 (1/3 and 2/3), ICP A USB (Exhibit "P-50-3"). Exhibits "P-9-B" and "P-10-B," Docket (CTA Case No. 10750)- Vol. 2, pp. 858 to 863 and 870.

Docket (CTA Case No. 10905), pp. 6 to 45. Q&A No. 24, Exhibit "P-41-A," Docket (CTA Case No. 10750)- Vol. I, p. 64; Exhibit "P- 109-1 (1/2), !CPA USB (Exhibit "P-50-3). Exhibits "P-7-A" and "P-8-A." Docket (CTA Case No. 10750) -Vol. 2, pp. 838 to 844, and 832, respectively.

Docket (CTA Case No. 10730)- Vol. I, pp. 11 to 54. Q&A No. 24, Exhibit "P-34-B," Docket (CT A Case No. 10905), p. 61; Exhibit "P-109-3026." Exhibits "P-9-B" and "P-10-B," Docket (CTA Case No.10750)- Vol. 2, pp. 838 to 863 and 870.

Docket (CTA Case No. 10905), pp. 6 to 43. RE: EXTENSION OF THE DEADLINES FOR THE FILING OF ANY AND ALL PLEADINGS AND OTHER COURT SUBMISSIONS WITH THE COURT OF TAX APPEALS IN LIGHT OF SUPER TYPHOON ODETTE. RE: EXTENSION OF THE DEADLINES FOR THE FILING OF ANY AND ALL PLEADINGS AND OTHER COURT SUBMISSIONS FALLING DUE IN THE MONTH OF JANUARY 2022 IN ALL COURTS.

Considering that February 1, 2022, fell on a holiday, filing the judicial claim on February 2, 2022, the next working day, was considered on time.

Respondent claims that petitioner's administrative claim for CTA Case No. 10905 filed on April 11, 2022 was improper as it was not accepted by the BIR and was returned along with petitioner's documents. For him, the proper filing was made only on July 22, 2022. Hence, when petitioner filed the Petition for Review on June 29, 2022, there was still no valid administrative claim, thereby depriving Us of jurisdiction over the case.62 We are not persuaded.

For one, a perusal of petitioner's Application for Refund,63 shows that the same was filed with the BIR on April 11, 2022, as per the stamped receipt on the first page of the Application. For another, RO Atienza said that he returned "several boxes with unaccounted and loose documents to petitioner for proper documentation," as evidenced by a transmittal letter.64 He did not state that petitioner's refund application itself was returned. In fact, the transmittal letter dated June 30, 2022, offered in evidence by respondent, shows only the return of loose documents for proper accounting, such as paging and preparation of schedules. The refund application was not listed among the returned documents. Thus, contrary to respondent's claim, petitioner timely filed both its administrative and judicial claims in CTA Case No. 10905, thereby vesting Us with jurisdiction over the case. Next. Is petitioner entitled to the refund of excise tax paid on its imported and locally produced Jet A-1 fuel, which were subsequently sold and delivered to various international carriers and to tax-exempt entities, covering the period January 1, 2020 to December 31, 2020? Yes, albeit in part.

" Respondent's Memorandum, Docket (CTA Case No. 10750)- Vol. 3, pp. 1094 to 1095.

Respondent contends that petitioner is not the proper party to claim for a refund of excise taxes paid on its petroleum products sold to international carriers and exempt entities. For respondent, Section 135 of the NIRC, as amended does not provide an exemption to sellers like petitioner, as such exemption can only be invoked by buyers who are exempt entities.65 We disagree.

Pilipinas Shell Petroleum Corporation v. Commissioner of Internal Revenue,(2021 Pililipinas Shell) 66 categorically declared that the excise tax exemption under Section 135 of the NIRC, as amended, pertains to the importer/manufacturer of petroleum products, as the statutory taxpayer, viz.:

Based on (a) the nature of excise taxes as a property tax and an indirect tax, and (b) the principle that a buyer, when shouldering the tax burden, does not become the statutory taxpayer, it is thus clear that the purchaser of local products (such as international carriers) cannot be deemed to have been conferred a tax exemption when it has not been imposed a tax liability. In the ordinary course of things, international carriers do not manufacture or import petroleum products and hence, are not statutory taxpayers to which the exemption under Section 135 could pertain. If anything, international carriers merely bear the tax burden when the costs therefor are passed on to them by the actual manufacturers or importers. However, as earlier discussed, the "passing on" of the tax burden is largely a contractual affair between the parties and should not determine the tax incidence imposed by law unless the contrary is provided. As such, the tax exemption under Section 135 must correspondingly benefit the one who actually bears the liability to pay the same (i.e., the importers/manufacturers of petroleum products sold to international carriers, among others), and not the one who simply bears the economic burden thereof (i.e., the purchasers of the products, such as international carriers)P Following 2021 Pilipinas Shell, petitioner as the statutory taxpayer can claim a refund under Section 135 of the NIRC for the sale of its imported and locally manufactured Jet A-1 fuel to various international air carriers and tax-exempt entities. 65 6o 67 Respondent's Memorandum, Docket (CT A Case No. 10750), at pp. 1103. G.R. No. 211303, June 15, 2021.

Emphasis ours.

Section 135 of the NIRC, as amended, provides distinct categories of sale of petroleum products that are exempt from excise tax, which may be the subject of a claim for tax refund when excise taxes were erroneously paid thereon, viz.: SEC. 135. Petroleum Products Sold to International Carriers and Exempt Entities or Agencies.- Petroleum products sold to the following are exempt from excise tax: (a) International carriers of Philippine or foreign registry on their use or consumption outside the Philippines: Provided, That the petroleum products sold to these international carriers shall be stored in a bonded storage tank and may be disposed of only in accordance with the rules and regulations to be prescribed by the Secretary of Finance, upon recommendation of the Commissioner;

(b) Exempt entities or agencies covered by tax treaties, conventions and other international agreements for their use or consumption: Provided, however, That the country of said foreign international carrier or exempt entities or agencies exempts from similar taxes petroleum products sold to Philippine carriers, entities or agencies; and (c) Entities which are by law exempt from direct and indirect taxes. 68 In this case, petitioner's sales subject of the refund claim for the taxable year 2020, are as follows: 69

Particulars

Sales to:

International air carrier use Domestic air carrier with tax exemption (Alphaland

Aviation)

Tax-exempt entity (Petron Singapore PTE)

[Total]

Volume

(In [Liters])

144,258,829 46,735 144,305,564 2,434,102 146,739,666 From the foregoing, petitioner's sales to international air carriers and its sales to Petron Singapore PTE fall under Section 135

(a) and (b) of the NIRC, as amended, while its sales to Alphaland Aviation fall under Section 135(c). Accordingly, petitioner's entitlement to an excise tax refund must be determined by applying 68 Emphasis Ours.

Page 12 o£31 the specific requirements of Section 135 (a), (b), and (c) of the NIRC, as amended.

Petitioner's sales of imported and locally-produced Jet A-1 fuel to international carriers and exempt entities To engage the application of excise tax exemption under Section 135 of the NIRC, as amended, on petitioner's sales of imported and locally-produced Jet A-1 fuel to international carriers and exempt entities, petitioner must establish the following requirements:

a. Sales to international carriers of Philippine or foreign registnr on their use or consumption outside the Philippines under Section 135(a) of the NIRC, as amended

1. Proof of foreign registry of the international carrier, or in case of Philippine-registered air carriers, the latter's proof of authority to operate international flights;

2. Proof that the petroleum products were used or consumed outside the Philippines; and

3. Proof that the petroleum products were stored in a bonded storage tank and may be disposed of only in accordance with the rules and regulations to be prescribed by the Secretary of Finance, upon recommendation of the Commissioner. In this regard, petitioner, presented the following:

(a) Certification issued by the Civil Aeronautics Board certifying that its customers: (1) have been issued a valid and existing Foreign Air Carrier's Permit to Operate International Air Transportation Services between the Philippines and their country of registration during the period of January 1, 2020 to December 31, 2020; and (2) that Philippine carriers have been issued a Certificate of Public Convenience and Necessity to operate domestic and international air transportation services during the period of January 1, 2020 to December 31, 2020;70

(b) Aviation Delivery Receipts (ADRs), which indicate among other things, the details of the Jet A-1 fuel deliveries made by petitioner to international air carriers, including the origin and destination of the aircrafts; and 7o Exhibit "P-123-1," USB (Exhibit "P-50-3").

(c) Commingling Permit No. LTAD II (P)-008-12-07-14268 dated December 20, 2007 that is renewed and valid from January 1, 2020 until December 31, 2020, which represents that petitioner's imported Jet A-1 fuel are stored and commingled along with locally manufactured Jet A-1 fuel. 71

(d) Testimony of (1) Mr. Ronaldo A. Tadena72 on storage, withdrawals and deliveries to clients supported by Shipment Schedules, Shore Tank Gauge Sheets, Withdrawal Certificates, Product Reconciliation Statements, and Cargo Outturn Certificates, which show the loading, delivery, and taxes paid on the fuel; and (2) Mr. Emmanuel Victor T. Tatoy on withdrawals from JOCASP jNAIA to international carriers evidenced by the Manual Official Register Book, Withdrawal Certificates, and Jet A-1 Liquidation Statements, which indicate the volumes delivered, dates, and receiving vessels.

b. Sales to exempt entities or agencies ciJVered bu tax treaties, conventions and other international agreements under Section 135(b) of the NIRC as amended 1.

Copy of tax treaty, convention and other international agreement showing that that the country of said foreign international carrier or exempt entities/agencies exempts from similar taxes petroleum products sold to Philippine carriers, entities or agencies; and 2.

Proof that the petroleum products were used or consumed by the said entities or agencies.

For this purpose, petitioner submitted the following:

(a) Certification, issued by the Office of Treaties and Legal Affairs of the Department of Foreign Affairs, listing the Air Service Agreements or Air Transport Agreements and other agreements between the Philippines and the following countries/ states that were in effect for the years 2019 and 2020/3

(b) Certified true copies of various treaties/ agreements between the Philippines and other countries, showing that the country of said international carriers or exempt entities/agencies exempts from similar taxes petroleum products sold to Philippine carriers, entities or agencies/4 71 Exhibit "P-5", Docket (CTA Case No. 10750)- Vol. 2, p. 837. See also Exhibit "P-100-2/' USB (Exhibit "P-50-3").

72 Q&A No. 10 and 11, Exhibit "P-47," Docket (CT A Case No. 10750)- Vol. I, pp. 153 to 154. '' Exhibit "P-123-2," USB (Exhibit "P-50-3").

(c) Certified true copy of the Memorandum of Association and Articles of Association of Petron Singapore Trading PTE. LTD., issued by Asst. Registrar of Companies & Business Names Singapore/s and the sales invoice showing sales volume of 2,434,102 liters;76 and

(d) Aviation Delivery Receipts (ADRs), which indicate among other things, the details of the Jet A-1 fuel deliveries made by petitioner to international air carriers, including the origin and destination of the aircrafts.

c. Sales to entities which are b11 law exempt from direct and indirect taxes

1. Proof that the entity is by law exempt from direct and indirect taxes.

(a) petitioner submitted the Certificate of Registration and Tax Exemption Clark Business Registration No. C2018-044 of Alphaland Aviation-Pampanga, Inc., which is effective from 2018 January 10 until 2021 January 09.77 After verifying petitioner's claims and submissions, ICPA Dayego prepared a summary of sales in volume totaling 140,330,680 liters.78 Our validation thereof disclosed that: One. The following sales in volume of 3,974,884liters should be disallowed for lack of proper substantiation, viz.:79 I' articulars

Aviation Delivery Receipts (ADR)

Sales Invoice (Petron Singapore

Trading PTE. LTD.)

Sales per Schedule of excise taxes claimed for refund of or issuance of TCC prepared by the Petitioner Downward adjustments Exhibit No.

Volume in Liters

"P-118"

140,330,680 "P-119-1- 944" 2,434,102 142,764,782

"P-101"

146,739,666 (3,974,884)

Equivalent Excise

Tax

P561,322,720.00 9,736,408.00 571,059,128.00 586,958,664.00 (Pl5,899,536.00) The disallowance of the difference of 3,974,884 liters pertains to the following reasons:so

Exhibit

No.

Particulars

Recommended for disallowances:

1. Local destination not covered by " Exhibit "P-100-51," USB (Exhibit "P-50-3").

Volume in

Liters

2,923,633 76 Exhibits "P-119-1-944" and "P-108-1-104," USB (Exhibit "P-50-3"). ,.., Exhibit "T-100-18," USB (Exhibit "P-50-3"). 78 Exhibit "P-118," USB (Exhibit "P-50-3").

Equivalent Excise

Tax

1"11,694,532.00 " Table 20, Exhibit "P-50," Docket (CTA Case No. 10750)- Vol. 2, p. 642. 8o Table 21, Exhibit "P-50," Docket (CTA Case No. 10750)- Vol. 2, p. 642.

"P-119"/

Table 20

tax exemplion

2. No destinations indicated

3. Unsupported ADR

4. Out-of-period ADR Date

5. Unreadable

6. No date and no sil!l1ature 521,641 264,263 177,410 61,750 26,187 3,974,884 2,086,564.00 1,057,052.00 709,640.00 247,000.00 104,748.00 1!15,899,536.00 Two. Out of the total A DRs examined by the ICP A Dayego, with a total sales volume of 140,330,680 liters, ADRs traced to the CAB and DFA Certifications showed a total sales volume of only 139,233,005 liters.81 Upon examination, the total volume in liters for ADRs traced to CAB and DFA Certifications should be 139,201,149. Thus, the difference of 1,129,531 liters (140,330,680 less 139,201,149) should likewise be disallowed.

Three. Further examination of the ADRs traced to the CAB and DFA Certifications shows that the following sales of 1,080,410 liters should likewise be disallowed due to failure to meet the requirements to prove the foreign registry of the international carrier or, in the case of Philippine-registered air carriers, the latter's proof of authority to operate international flights, as summarized below:

PERADR

(Exhibit No. "P-118") Traced to Certifications?

Exhibit

ADR

Client/

Volume

No.

Date

No.

Customer

Destination in Liters

CAB

DFA

"P-118-1-3"

June 07, 0011064

AIR CALEDONIE

Nadi

58,172

No

No

2020

NA1302-

"P-118-1-247"

Sep.03,2020 0-

AIR MACAU

Macau

4,506 0014111

No

No

NA1302-

"P-118-1-248"

Sep. 12, 2020 0-

AIR MACAU

Macau

7,357 0014484

CAL CARGO

country of

"P-118-1-290"

Feb. 07, 2020 0003527 AIR! LINES

Belgium

123,121

No

registry not known country of

"P-118-1-309"

Jan. 23, 2020 0001508

CARGOL=ICAIR

Hongkong

16,231

No

registry not known

NA1302-

HIMALAYA

"P-118-1-1108"

July 12, 2020 0-

Tribhuvan

18,956

No

No

0012491

AIRLINES

11P-118-l-1416" June 05, 0010958

JC INTERNATIONAL

Phnom Penh

8,598 20?0

AIRLINES

"P-118-1-1417"

june 19, 0011527

JC INTERNATIONAL

Phnom Penh

8,165 country of 2020

AIRLINES

No

registry not

"P-118-1-1418"

July 31, 2020 0013074

]C INTERNATIONAL

Cambodia

8,523 known

AIRLINES

"P-118-1-1419"

Aug. 04, 0013263

]C INTERNATIONAL

Cambodia

7,806 2020

AIRLINES

"P-118-1-2021"

julv 31, 2020 0013064

PACIFIC FLIGHT

Singapore

3,200

No

country of s1 Exhibit "P-123," USB (Exhibit "P-50-3").

6 os NA1302- | p aCIFIC FLIGHT "P-118-1-2022" | Sep. 18, 2020 0- SERVICES Singapore 2,805 0014667 *

NA1302-

"P-118-1-2023" | Sep. 22, 2020 0- oes LIGHT Singapore 3,10. 0014849

NA1302-

"P-118-1-2024" | Sep. 23, 2020 0- ceevCES LIGHT Singapore 3,5 0014868 ?~ wpriecaoier | Mar05, | 892° | SILKWaY WEST Hongkong 302

2021 0020741 | AIRLINES

"prisr4sore" | J pha 0011062 | SMARTWINGS Saigon 1 “a 82 “P-1181-4027" aelees 0011083 | SMARTWINGS "P-118-1-4028" ee 0011113 | SMARTWINGS 703 a

June 21 Subhash

“P-118-14029" 020 , 0011648 | SMARTWINGS Chandra 13,773

Bose

registry not known 3 026 country of registry not known

NA1302-

“P-118-14030" | July 03, 2020 0- SMARTWINGS India 19,843 0012082 Mar. 16 NA1302- "P-118-1-4031" 2021 ’ 0- SOLOMON AIRLINES Kuching 18,025 No No ~~ 0023330 7 } " June 11, SRI LANKAN P-118-1-4038 2020 0011222 AIRLINES Colombo 42,191 No No " ” June 20, es Ho Chi P-118-1-4062 0011599 | VIETJET AIR Minh 7,635

NAi302-

"P-118-1-4063" | Sep. 04, 2020 0- VIETJET AIR Camranh 4,353 0014166

NA1302- Caniho

“P-118-14064" | Sep. 06, 2020 Q- VIETJET AIR Vietnam 5,775 0014271 °

NA1302-

"P-118-14065" | Sep. 09, 2020 Q- VIETJET AIR Saigon 6,677 No 0014336

NA1302-

0014350

NA1302-

i 0014388

NA1302- Caniho

"P-118-14068" | Sep. 15, 2020 0- VIETJET AIR Vietnam 7,987 0013516 "P-118-1-4144" | Jan. 16, 2020 CATHAY DRAGON 4,080 "P-118-1-4145" | Jan. 17, 2020 CATHAYDRAGON | HKG | __ 1,270 | "P-118-1-4146" | Jan. 18, 2020 CATHAY DRAGON

KG

PBI101-

rpaisises | “38% 0 | ye NBO. 2,362 we 0000860

PBI101-

"P-118-1-4690" AS, a 0- wRWAYe FAOROR 30,810 202 0000859

PB1101-

Aug. 14 SOUTH AFRICAN FAOROR | ns) "P-118-1-4691" , 0- 42,330

0000858 TAMBO

"P_118-1-4692" Aug. 13, rer SOUTH AFRICAN FAOROR 14,459 ee 2020 oe, | AIRWAYS TAMBO 0000857 country of registry not known country of registry not known

PBIIO1-

"P.118-1-4693" Aug Wave AN OR TAMBO 32,475 < oooesé

PBUIOL

"P.118-1-4694" a a a eRWaye nN FAOR-OR 20,428 < ones

PBLIOL

"Parisi4ess" | ASB i RWAYS NY | PVG/ ZSPD 28,567 a“ ooooed9 *

PBLIOL

*P_118-1-4696" Ae ewe ON PVG/ ZSPD 34,560 “se oooosis ‘

PB1101-

*P-118-1-4697" Aug. 0- RW ANS TAN PVG/ ZSPD 32,200 0000909

PB1101-

99 "P-118-1-4698" Aug. 22, 0- SOUTH AFRICAN PVG/ ZSPD 28,886 2020 coos | AIRWAYS

Par10L

2 "P-118-1-4699" Ang, or RW Ave N PVG/ ZSPD 24,160 000907

P51101-

“P-118-1-4700" ANG oe RW Ave aN ZSPD 25,702 000906

PB1101- JNB/FAOR

‘Prisi47oi | Avs: 23, o. | SOUTH AFRICAN OR TAMBO 28,182 2020 ovooois | AIRWAYS

PB1101-

“P-118-1-4702" Ang, O- eWay aN INB 10,274 0000918

PB1LOI-

"P-118-1-4703" ng ewaye 40,000 ono0e16

PB1101-

9 "P-118-1-4704" Ag 0- RW ae aN INB 34,900 0000917

PB1101-

“P-118-1-4705" Ag 0- ewan INB 33,537 0000919

PB1101-

Aug. 23, SOUTH AFRICAN "P-118-1-4706" we | | 916

Ea 2620 | 090920

PBLLOI-

% "P-118-14707" Aug wae nN ZSPD 34,532 202 0000927

PBI101-

%e “P-118-1-4708" Ang, Ae 0. eWay ZSPD 34,148 202 0000928 PB1i01- % “P-118-1-4700" Ang. ot 0- Se wye CAN ZSPD 34,537 202 0000929

PBILOI-

%:

"P_118-1-4710" Aug. 24, SOUTH AFRICAN PVG/ ZSPD 29,610

2020 0000930 AIRWAYS

Mar. 24 country of *P-118-1-6048" 3819 SMARTWINGS Thailand registry not 2020 known Mar. 01, we country of "P-418-1-6114" 5020. VISTA JET LIMITED UAAA 16,587 registry not 0000807 — Four. Petitioner’s sales to Royal Air Philippines in the volume of 1,346 liters should be excluded for the reason that the destination of the aircraft cannot be determined as the corresponding ADR only indicates "ferry flight."82

Summing

up

Our

observations, petitioner's sales to international carriers and exempt entities per ADRs and Sales Invoices for the period from January 1, 2020, to December 31, 2020, which are properly supported, amount to 140,553,495 liters, calculated as follows:

Sales (Volume in Liters)

Domestic air carrier with tax International air carriers

Claim

144,258,829

Supported by ADRs/Sales

140,290,887

Invoice (Exhibit "P-118")

Unsupported sales (Table 21, Exhibit 3,967,942

JIP-50")

Supported by ADRs/Sales

140,290,887

Invoice

Traced to CAB & OF A

139,162,896

Certifications (Exhibit "P-123")

Not supported by certifications 1,127,991 Additional disallowance found by the Court: Not supported by certifications 1,080,410 Destination of aircraft not 1,346 indicated

Total

1,081,756 Total disallowances 6,177,689 Properly supported sales 138,081,140 Excise taxes paid on the imported and locally-produced Jet A-lfuel exemption

(Alphaland

Aviation)

46,735 39,793 6,942 39,793 38,253 1,540 - - - 8,482 38,253

Excise Taxes Paid on Imported Jet A-1 Fuel

Tax-exempt

entity (Petron

Singapore PTE)

2,434,102 2,434,102 - 2,434,102 2,434,102 - - - - - 2,434,102

Total

146,739,666 142,764,782 3,974,884 142,764,782 141,635,251 1,129,531 1,080,410 1,346 1,081,756 6,186,171 140,553,495 Petitioner paid excise taxes for imported Jet A-1 fuel for the period January 1, 2020 to December 31, 2020 as follows:83 '' Exhibit "P-118-1-5060," USB (Exhibit "P-50-3").

Dates of Payment

Im portationj

Tentative

Final

Volume85

Amount of

SADNo.84

Arrival Date•

Assessment

Assessment

(In Liters)

Excise Tax

6WOA2000003

Jan. 4, 2020 Jan. 7, 2020 Feb.26,2020 16,808,233 1>67,232,932.00

6WOA2000008

Jan. 14, 2020 Jan. 16, 2020 Feb. 27, 2020 18,514,200 74,056,800.00

6WOA2000011

Jan. 22, 2020 Jan. 23, 2020 June 24, 2020 17,831,506 71,326,024.00

6WOA2000021

Feb.6,2020 Feb. 7, 2020 Sep. 1, 2020 17,462,283 69,849,132.00

6WOA2000041

Mar. 16,2020 Mar. 18, 2020 - 17,658,144 70,632,576.00

6WOA2000071

June 18, 2020 June 23, 2020 Oct. 29, 2020 12,610,103 50,440,412.00

6WOA2000100

July 26, 2020 July 29, 2020 Oct. 29, 2020 18,393,817 73,575,268.00

6WOA2000119

Aug. 13, 2020 Aug. 17, 2020 Nov. 26, 2020 15,324,971 61,299,884.00

6WOA2000153

Sep.25,2020 Sep.28,2020 Nov. 26, 2020 17,714,548 70,858,192.00

Total

152,317,805 1!609,271,220.00 'Arrival date is considered the last day when the imported jet A-1 fuel was fully discharged from the cargo vessel to the Petitioner's storage tanks in Petron Bataan Refinery (PBR). The foregoing importations are likewise supported by Statements of Settlement of Taxes and Duties,86 Customs Payment Receipts,B? and Authority to Release Imported Goods (ATRIGs).88 ICP A Dayego noted that of the total volume of 152,317,805 liters, 132,222,571 liters of imported Jet A-1 fuel are subject to the refund claim. The difference of 20,095,234 liters pertains to imported Jet A-1 fuel sold to domestic carriers not related to the refund claim.89 We also note the difference found by ICPA Dayego between volumes of Jet A-1 fuel per importation documents as compared with the Certificates (CIS), thus:9o

Per Importation Documents -

Final Volume

Per CIS

(From Table 4)

(Actual Volume Received)

Difference

US Barrels

Liters

US Barrels

Liters

US Barrels

Liters at 60°F at Air at 60°F at Air at60°F at Air

(e)=

(f) =

Vessel

(a) (b) (c) (d)

(a) - (c)

(b) - (d)

6WOA2000003

104,657,080 16,808,233 104,657,080 16,808,233 - -

6WOA2000008

114,030,000 18,514,200 114,047,420 18,424,775 (17,420) 89,425

6WOA2000011

110,912,520 17,831,506 110,912,520 17,831,506 - -

6WOA2000021

108,143,000 17,462,283 107,884,690 17,396,714 258,310 65,569

6WOA2000041

109,907,000 17,658,144 109,646,770 17,640,402 260,230 17,742

6WOA2000071

78,074,730 12,610,103 78,074,730 12,610,103 - -

6WOA2000100

113,877,000 18,393,817 113,802,130 18,370,915 74,870 22,902

6WOA2000119

94,980,910 15,324,971 94,117,120 15,179,514 863,790 145,457

6WOA2000153

109,772,000 17,714,548 109,580,320 17,700,906 191,680 13,642

Total

944,354,240 152,317,805 942,722,780 151,963,068 1,631,460 354,737 84 Exhibits "P-104-1-1" to "P-104-1-9," USB (Exhibit "P-50-3"). 85 Exhibits "P-103-3-1" to "P-103-3-9," USB (Exhibit "P-50-3"). 86 Exhibits "P-104-2-1" to "P-104-2-9," USB (Exhibit "P-50-3") . • , Exhibits "P-104-3-1" to "P-104-3-9,"' USB (Exhibit 'T-30-3"). 8s Exhibits "P-104-4-1" to "P-104-4-9," USB (Exhibit "P-50-3"). 89 Exhibit "P-50," Docket (CTA Case No. 10750)- Vol. 2, p. 627. oo Table 5, Exhibit "P-50," Docket (CT A Case No. 10750) -Vol. 2, p. 627.

ICP A Dayego found discrepancies between the volumes reflected in importation documents and the actual volumes received per Certificates of Inspection (CIS), resulting in a net variance of 354,737 liters. As per ICP A Dayego, petitioner explained that these differences were due to normal factors such as temperature, density, and measurement conditions. Any excess volume required additional tax payment, while any shortfall resulted in absorbed losses, with no corresponding refund from the BOC. This difference does not affect the Petitioner's claim for refund since the refund claim was lower than the amount actually paid.

Excise Taxes Paid on Locally-produced Jet A-1 Fuel

An examination of the summary of Electronic Tax Returns (ETRs)91 for the period from January to December 2020 shows that petitioner paid the following excise taxes, viz.:92

Petroleum Products

Jet A-1 Fuel

Others

Total

Volume in Liters

119,142,660.54 10,248,372,632.66 10,367,515,293.20 Excise tax

I'

476,644,797.90 73,071,103,849.96 p 73,547,748,647.86 It is also noted that per ETR filed on January 2, 2020, petitioner had an excise tax payment balance carried over from previous return of :P592,836,827.98,93 while its ETR for December 31, 2020 shows a balance to be carried over to next return of !>863,643,674.75.94 On the other hand, a summary of petitioner's Product Replenishment Debit Memos 95 (BIR Form No. 2331) shows a beginning balance of P77,843,820.00, additions of P1,320,000,000.00, and an ending balance of P39,796,180.00.96 For the locally-produced Jet A-1 fuel,

ICPA Dayego

summarized petitioner's excise taxes payments on the following withdrawals:97 " Exhibits "P-109-1" to "P-109-5632," USB (Exhibit "P-50-3"). 92 Exhibit "P-109," USB (Exhibit "P-50-3"). 93 Exhibit "P-109-1," USB (Exhibit "P-50-3"). " Exhibit ""P-109-5627,"' USB (Exhibit "P-50-3"'). " Exhibits "P-111-1" to "P-111-21," USB (Exhibit "P-50-3").

Total PBR-

Particulars

SOPD

PerWC/PBR-

SO PO (Exhibit

Less: Other

JET A-1

Excisable

Products -Not

Related to the

Locally

Claim

Total

Imported

Produced

No. "P-110")* 3, 930,647,483 3,460,252,127 471,946,173 148,622,373 323,323,800

Per ETR (Exhibit

No. "P- 109")** 166,223,013 148,622,373 17,600,640

PROM (Exhibit

No. "P-111") 305,723,160 - 305,723,160 471,946,173 148,622,373 323,323,800

Difference

- * ..

SAP-generated PBR-SOPD marked as Exlnbzt Nos. "P-110-1" to "P-110-256" ** ETR marked as Exhibit Nos. "P-109-1" to "P-109-5632"

JetA-1 Fuel

Particulars

Imported

Locally Produced

Total volume of removals from PBR per we (in Liters) 1-±8,622,373 323,323,800

Multiply by: Equivalent Exdse Tax Rate per Liter

1>4.00 1>4.00 Amount of exdse tax that should have been paid in ETR/PRDM i> - 1>1,293,295,200 Actual amount of excise tax due and paid on PBR removals per ETR/PRDM - 1,293,295,200

Difference

1"- 1"- -

Total

471,946,173 1>1,293,295,200 1,293,295,200 1"- Out of the total volume of locally produced of 323,323,800 liters, 14,517,095 liters were related to and part of the claim. The difference of 308,806,705 liters were either refunded thru PRC or sold to domestic airline carrier not related to nor part of the claim of refund. 98 In fine, the excise taxes paid on the imported and locally- produced Jet A-1 fuel may be claimed for refund pursuant to Sections 129 and 135, of the NIRC, as amended. Sales and delivery of locally- produced and imported fuel to international carriers and tax- exempt entities Under Section 135 of the NIRC, as amended, petitioner must prove that the paid and claimed excise taxes on the petroleum products paid in taxable year 2020 were sold to international carriers and exempt entities.

98 Exhibit "P-50," Docket (CTA Case No. 10750)- Vol. 2, p. 631. -

Page 22 o£31 In this regard, petitioner avers that the following pieces of evidence prove that excise taxes on the locally-produced and imported Jet A-1 are paid, and that the Jet A-1 was withdrawn from the Petron Bataan Refinery (PBR) and subsequently sold and delivered to international carriers and tax-exempt clients, to wit:

1. PBR Official Register Books (ORBs) signed by the BIR Revenue Officer on Premise99 and SAP-Generated ORBJoo for the year 2020;

2. Withdrawal Certificates (WCs);lOJ

3. ATRIGs;102

4. ETRs with Schedule 1 Summary of Removals and Excise Tax Due on Petroleum Products Chargeable against Payments;103

5. Cargo Outturn Certificates;liJ.J

6. Cargo Intake Certificates;JOs

7. Liquidation Statements (LS);106

8. Product Movement by Movement Type (PMMT)1°7

9. ADRs108 10.

Sis;l09 and

11. Cash Receipts.JlO We partly agree.

To properly understand the foundation of Our conclusion, it is necessary to elaborate on the movement of petitioner's Jet A-1 fuel from local production or importation including the payment of excise taxes due and withdrawal should to the delivery of the same to the international carriers and tax-exempt entities.

1. Volume of]et A-1 in Petron Bataan Refinery (PBR) The ORB of the Petron Bataan Refinery for the month of January 2020 shows a beginning balance of 22,190,632 liters, broken down as follows:m 99 Exhibits "P-105-1-1" to "P-105-1-12," USB (Exhibit "P-50-3"). 1oo Exhibits "P-105-2-1" to "P-105-2-12," USB (Exhibit "P-50-3"). 1o1 Exhibits "P-108-2-1" to "P-108-2--±91," USB (Exhibit "P-50-3"). 1o2 Exhibits "P-10-±-4-1" to "P-10-±-4-9," USB (Exhibit "P-50-3"). 1m Exhibits "P-109-1" to "P-109-5632," USB (Exhibit "P-50-3"). 104 Exhibits "P-108-1-1" to "P-108-1-290," USB (Exhibit "P-50-3"). 10s Exhibits "P-107-1" to "P-107-9," USB (Exhibit "P-50-3"). 106 Exhibits "P-116-1-1-1" to "P-116-8-1-1," USB (Exhibit "P-50-3"). 107 Exhibits "P-106-1" to "P-106-12," "P-115-1-1" to "P-115-22-1," USB (Exhibit "P-50-3"). 108 Exhibits "P-118-1-1" to "P-118-1-6116," USB (Exhibit "P-50-3"). 109 Exhibits "P-119-1-1" to "P-119-944," USB (Exhibit "P-50-3"). no Exhibits "P-122-1" to "P-122-20," USB (Exhibit "P-50-3").

Beginning Balance -January 2020:

Local

Imported

Total

Volume in Liters

4,683,676 17,506,956 22,190,632 A scrutiny of the summary of WCs reveals that 27,967,064liters of imported Jet A-1 fuel were withdrawn from the PBR112 before the date of the earliest Authority to Release Imported Goods (ATRIG) which was January 10, 2020,113 We disallow this withdrawal.

Any withdrawal from the PBR prior to this date is not covered by the importation upon which the claimed deliveries to international carriers and exempt entities were sourced.

2. Withdrawal of jet A-1 Fuel from PBR to various depots Per ORBs of the PBR, total removals of Jet A-1 fuel from importation and local production for the year 2020 is 494,230,699 liters.114 The same were transferred to the following depots namely,

(1) SL Harbor; (2) Navotas; (3) Rosario; (4) Palawan; (5) Mactan; (6) Iloilo; (7) Davao; (9) Tagoloan; and (10) Zamboanga, where petitioner's claim for refund were sourced_115 Excluding the volume of sales to Petron Singapore Trading PTE LTD, We adopt ICPA Dayego's findings on the movements of 452,332,199 liters of petitioner's locally manufactured and imported Jet A-1 fuel from the PBR to the various depots are as follows:116

PerCOC/WC

Per Depot's PMMT-

-

Per Deoot's L5-Receiots

Receiots

Withdrawals

fromPBR

Gross

In-transit

Net Volume

Volume

(Exhibit No.

Exhibit

Volume

Gain

to be

Exhibit

Received by

Deoots

P-108)

No.

Received

(Loss)

Received

No.

Deoot

Davao

5,685,682 "P-116-3" 5,685,682 (36,708) 5,648,974

"P-115-4"

5,648,974

Iloilo

13,151,210 "P-116-4" 13,151,210 (477,073) 12,674,137

JJP-115-5"

12,674,137

Mactan

46,608,745 "P-116-5" 46,608,745 (262,458) 46,346,287

"P-115-8"

46,346,287

Palawan

3,800,643 "P-116-6" 3,800,643 249,614 4,050,257 "P-115-9" 4,050,257 112 Exhibits "P-108-2-2," "P-108-2-4" to "P-108-2-18," "P-108-2-227" to "P-108-2-234," and "P- 108-2-456" to "P-108-2-459," USB (Exhibit "P-50-3"). m Exhibit "P-104-4-1," USB (Exhibit "P-50-3"). 114 Exhibit "P-105," USB (Exhibit "P-50-3"). 11' Exhibit "P-50," Docket (CTA Case No. 10750)- Vol. 2, p. 623.

|Tagoloan | ___ 2,638,398 |P-116-2" | Zamboanga | ___ 3,618,433 |'P-116-7" eNO | sygeseifranerr| yams Jocasp | 080,000} P= |Navotas | 38,571,985 | | 38,571,985 | (91,351) | 38,480,634 |"P-115-12"| 38,480,634 | [Rosario | 483,987 | | 4,831,987 | 15,405) | 4,816,582 |“P-115-13” | Harbor |__—-298,063,595 | | 298,063,595 | (213,510) |__ 297,850,085 |”P-115-14" | | 341,467,567 [*P-116-8"| 341,467,567 | (320,266) | 341,147,301 | 341,147,301 | [Total | —-452,332,199[ | 851,252,199 | (232,239) | 451,019,960| | 451,019,960

Per Depot’s PMMT-Receipts Per Depot’s ORB-Receipts

Volume

Exhibit | Received by | Not Related Exhibit Related to | Not Related Depots No. Depot to claim Total No Claim to claim Total “P-115-4” 5,648,974 2,806,728 8,453,702 | “P-114-4” 5,648,974 2,811,642 8,460,616 14,997,711 | “P-114-5” | 12,674,137 [___2,324,511 | 14,998,648 P.

“P-115-8” 46,346,287 | 12,255,279 58,601,566 | “P-114-8 46,346,287 | 13,018,852 59,365,139 “P-115-9" 4,050,257 620,315 4,670,572 | “P-114-9 4,050,257 4,652,285 “P-115-16” 2,656,678 581,773 3,238,451 2,656,678 3,238,919

DMIA/Clar

k “P-115-2” 34,281,521 1,333,479 35,615,000 | “P-114.2 34,281,521 1,473,389 35,734,910 jocase | Te “p-115.13"| 4816582 | = | 4,816,582 |”P-114-13 “P-115-14" pT et tz7301 | 30,937,338 | 372,084,639 | 341,147,301 | 30,896,869 | _ 372,044,170 | [Total | | 51,019,960 | 50,858,486 | 501,878,446 | S| 451,019,960 | 51,710,252 | _ 502,730,212 | “P-115-11 4214803] | 4,214,805 |”“P-114-11” 4,214,805 4,215,525 r , : p e Thus, after reconciliation and accounting for in-transit losses of 232,239 liters, only 451,019,960 liters confirmed received by the depots.

We also found that there is a discrepancy of 6,327,103 liters when the foregoing volume of removals is compared with the

WCs:117

Jet A-1 Fuel

Related Other

Particulars Exhibit No. Depots Depots

Per PBR-ORB ~ Removals and COC

“P.108” Davao Depot 5,685,682 5,685,682 Iloilo Depot 13,151,210 13,151,210 Mactan Depot 46,608,745 46,608,745 Palawan Depot 3,800,643 3,800,643 Tagoloan Depot 2,638,398 2,638,398 Zamboanga Depot 3,618,433 3,618,433 DMIA/Clark Depot 34,281,521 34,281,521 Navotas Depot 38,571,985 38,571,985 Rosario Depot 4,831,987 4,831,987 Harbor Depot 298,063,595 298,063,595 JOCASP 1,080,000 1,080,000 7 Table 8, Exhibit “P-50,” Docket (CTA Case No. 10750) - Vol. 2, p. 629. See also Exhibit “P- 108,” USB (Exhibit “P-50-3”).

qe

Jet A-1 Fuel

Related

Other

Particulars

Exhibit No.

Deuots

Depots

Total

Petron Singapore Trading

PTE LTD (Export)

18,391,527 - 18,391,527

Others

- 23,506,973 23,506,973 470,723,726 23,506,973 494,230,699

PerWC

"P-110"

464,396,623 23,506,973 487,903,596

Difference

6,327,103 - 6,327,103 ICP A Dayego noted that the difference in volume totalling 6,327,103 liters pertains to the WCs which were not provided due to time constraint. Hence, the same should be disallowed for being unsupported. The details of the said WCs are as follows:118

Volume

Depot/

Dinectly

Excise Tax

Customer

Volume per

Related to

(Volume x

Traced to

Name

coc

Claim

1"4.00) Exhibit No.

Navotas depot 1,551,497 1,189,635 i> 4,758,540.00

P-125-7-1

MC!Adepot 2,729,861 281,700 1,126,800.00

P-116-5-1

JOCASP

520,000 520,000 2,080,000.00

Not Traced

Iloilo depot 805,743 - -

P-116-4-1

DMIA-Oark

720,000 - -

P-116-1-1

Difference

6,327,103119 1,991,335 1"7,%5,340.00 3.

Transfer from Depots to into-plane (ITP) facilities and refuellers From the foregoing depots, petitioner's Jet A-1 fuel is subsequently transferred to another depot, into-plane (ITP) facilities and refueller before it is delivered to the international carrier or exempt entity:120

Source

Destination

SAP Plant Code

Plant/Depot

SAP Plant Code

Depot/Facility

1202

Rosario Terminal

1302

)OCASP /NAIA Depot

1?10 Navolas depot 1302

JOCASP/NAIA Depot

1?11 Palawan d~pot -

Direct to Customer

1301 Laoag!TP 1215 SL Harbor depot 130?

)OCASP /NAIA Deoot

1304 DMIA/ Clark depot -

Direct to Customer

Mactan depot -

Direct to Customer

2307 ??04

Tagbilaran ITP

Iloilo depot 2301

Iloilo ITP

2209 2305

Kalibo ITP

3209 Davao deoot 3302

Davao ITP

3203 Tagoloan depot 3303

Laguindingan (Cagayan)

ITP

3205 Zambomwa deoot 3301 Zamboanga refueller na Table 9, Exhibit 'T-50," Docket (CTA Case No. 10750)- Vol. 2, p. 629. See also Exhibil "P- 108," USB (Exhibit "P-50-3").

119 Should be 6,327,101.

CIA Case Nos. 10750 & 10905

The aforementioned depots issued a total of 441,923,025 liters of petitioner's Jet A-1 fuel to another depot, ITP and refueller as shown hereafter: 121

Per Depot's LS-Issuance

Per Depot's PMMf-Issuance

Exhibit

Related to

Not Related

Exhibit

Volume Issued

Depots

No.

Claim

to claim

Total

No.

by Depot

Davao

"P-117-2"

67,948 8,415,479 8,483,427

"P-115-4"

8,483,427

Iloilo

"P-117-3"

3,924,652 9,925,348 13,850,000

"P-115-5"

13,850,000

Mactan

"P-117-4"

9,223,562 42,441,211 51,664,773

"P-115-8"

51,664,773

Tagoloan

"P-117-1"

17,649 4,074,311 4,091,960

"P-115-16"

4,091,960

Zamboang

a

"P-117-5"

13,182 3,945,778 3,958,960

"P-115-11"

3,958,960

Navotas

34,958,000 3,657,205 38,615,205

"P-115-12"

38,615,205

Rosario

4,520,000 - 4,520,000

"P-115-13"

4,520,000

Harbor

78,918,849 237,819,851 316,738,700

"P-115-14"

316,738,700

"P-117-6"

118,396,849 241,477,056 359,873,905 359,873,905

Total

131,643,842 310,279,183 441,923,025 441,923,025

Per Depot's PMMT-Issuance

Per Depot's ORB-Issuance

Volume

Volume

Exhibit

Issued by

Not Related

Exhibit

Issued by

Not Related

Depots

No.

Depot

to claim

Total

No.

Depot

to claim

Total

Davao

"P-115-4"

67,948 8,415,479 8,483,427

"P-114-4"

67,948 8,418,971 8,486,919

Iloilo

"P-115-5"

3,924,652 9,925,348 13,850,000

"P-114-5"

3,924,652 9,925,348 13,850,000

Mactan

"P-113-8"

9,223,562 42,441,211 51,664,773

"P-114-8"

9,223,562 43,338,066 52,561,628

Tagoloan

"P-115-16"

17,649 4,074,311 4,091,%0 "P-114-15" 17,649 4,074,311 4,091,%0

Zamboanga "P-115-11"

13,182 3,945,778 3,958,%0 "P-114-11" 13,182 3,945,778 3,958,%0

Navotas

"P-115-12"

34,9:>8.000 3,657,205 38,615,205 "P-114-12" 34,958.000 120,000 35,078,000

Rosario

"P-115-13"

4,520,000 - 4,520,000 "P-114-13" 4,520,000 - 4,520,000

Harbor

"P-115-14"

78,918,849 237,819,851 316,738,700 "P-114-15" 78,918,849 239,544,448 318,463,297 118,396,849 241,477,056 3:>9,873,905 118,396,849 239,664,448 358,061,297

Total

131,643,842 310,279,183 441,923,025 131,643,842 309,366,922 441,010,764 Based on the foregoing information, of the 441,923,025 liters total issuances of Jet A-1 fuel from petitioner's depots per ORB, LS, and PMMT, only 131,643,842 liters are related to petitioner's claim. The issuances are broken down as follows:122

Per Depot LS-Issuances

Per SAP

Subject to Claim

PMMT-

Per Depots/

Recei-

Direct

Issuances-

Issuances

ITPsj

ving

Delivery

Depots to Another

Related to

Refueller

ITP

to Custo-

DepotfiTP/

Exhibit

Locally

Claim

LS-Receipts

Exhibit

mers

Refueller

No.

Produced

Imported

(a) (b) No.

(c) Davao depot to

Davao ITP

"P-117-2"

67,948 67,948 67,948 "P-125-2" Iloilo depot to:

Iloilo ITP

2,534 13,817 16,351 16,351 "P-125-3"

Kahbo ITP

35,544 3,872,757 3,908,301 3,908,301 "p -125-4"

"P-117-3"

38,078 3,886,574 3,924,652 3,924,652 Mactan depot to:

Tagbilaran ITP

3,370 249,617 252,987 252,987 II p -125-5"

Customers

1,745,872 7,224,703 8,970,575 8,970,575

"P-117-4"

1,749,242 7,474,320 9,223,562 252,987 8,970,575

Per Depot LS-Issuances

Subject to Claim

Per SAP

PMMT-

Per Depots/

Recei-

Direct

Issuances-

Issuances

ITPsf

ving

Delivery

Depots to Another

Related to

Refueller

ITP

to Custo-

DepolfiTP/

Exhibit

Locally

Claim

LS-Receipts

Exhibit

mers

Refueller

No.

Produced

Imported

(a) (b) No.

(c)

Tagoloan to

Laguindingan

(Caga.)'an) deEot

"P-117-1"

17,649 17,649 17,649 "P-125-1" Zamboanga depot

to Zamboanga

refueller

"P-117-5"

13,182 13,182 13,182 "P-125-6" Navotas, Rosario

and SL Harbor

depot to:

JOCASP /NAJA

11,809,053 106,567,716 118,376,769 118,376,769 "P-125-7"

LaoagiTP

20,080 20,080 20,080 "P-125-8"

"P-117-6"

11,829,133 106,567,716 118,396,849 118,396,849

Total

13,715,232 117,928,610 131,643,842 122,673,267 8,970,575

Per ITP's PMMT-Receipts

Per ITP's ORB-Receipts

ITPName

Davao ITP

Iloilo!TP

Kalibo ITP

Tagbilaran ITP

Laguindingan

(Cagayan) ITP

Zamboanga ITP

JOCASP

Laoag ITP

Total

Exhibit No.

" "

P-115-18

"P-115-19"

"P-115-6"

"P-115-10"

"P-115-3"

"P-115-20"

"P-115-1"

"P-115-7"

Related to

Claim

ITP

67,948

Davao ITP

16,351

Iloilo ITP

3,908,301

Kalibo ITP

252,987

Tagbilaran ITP

Laguindingan

17,649

(Cagayan) ITP

13,182 Zamboanga ITP 118,376,769 JOCASP 20,080

Laoag ITP

122,673,267 Exhibit No.

" ·"

P-114-4

"P-114-5"

"P-114-6"

"P-114-10"

"P-114-3"

"P-114-11"

"P-114-1"

"P-114-7"

Volume

Received by

ITP

67,948 16,351 3,908,301 252,987 17,649 13,182 118,376,769 20,080 122,673,267 Thus, the issuances from the depots to another depot, ITP, or refueller per LS, PMMT, and ORB of the receiving facility tally at 122,673,267 liters, excluding the direct delivery to customers of 8,970,575 liters.

4. Delivery to petitioner's customers From the depots, ITP, or refueller, petitioner's imported and locally manufactured Jet A-1 fuel is delivered to international carriers and exempt entities. Per their LS, PMMT, and ORB, 144,305,564liters were issued:123

Per LS -Receipts

Per LS - Issuances

(Exhibit Nos. "P-116" and "P-125") (Exhibit Nos. "P-117" and "P-128")

Related to Claim

From

From

Depot!VITPs/

Exhibit

Locally

From

Total

Exhibit

Locally

From

Imported

Refueller

No.

Produced

Imported

Receipts

No.

Produced

123 Tables 18 and 19, Exhibit "P-50," Docket (CTA Case No. 10750)- Vol. 2, p. 638.

Total

CTA Case Nos, 10750 & 10905

Per LS - Receipts

(Exhibit Nos. “P-116” and “P-125”)

Per LS

- Issuances

(Exhibit Nos. “P-117” and “P-128”")

Related to Claim

From From

Depots/ITPs | Exhibit Locally From Total Exhibit Locally Refueller No. Produced Imported Receipts No. Produced Imported Total DavaolTP |“P-125-2"| 67,948 | = | 67,948 [ “P1283” | 67048 T= | 67,948 JOCASP/NAIA 118,376,769 Laoag ITP 20,080 | | 20,080 [“P-128-10"[ 20,080 T= | 20,080 Iloilo TTP 16,351 Kalibo ITP 3,908,301 Tagbilaran ITP 252,987 Palawan ITP 48,353 (Cagayan) ITP | “P-125-1” 17,649 17,649 | “P-128-2” 17,649 17,649 Zamboanga ITP|“P-125-6"| 13,182] = | 13,182 | “Paes” | 13182] | 13,182 Mactan (MCIA) 8,970,575 DMIA/ Clark 12,613,369 Total 14,517,095 129,788, 469 144,305,564 14,517,095 129,788 469 144,305,564

Per ITP’s ORB-Issuance

ITP Name Exhibit No. Claim ITP Exhibit No. Claim Davao ITP “P.415-18" 67,948 | Davao ITP “p_114-4” 67,948 JOCASP-NATA “P-115-1” 118,376,769 | JOCASP “P-114-1” 118,376,769 Laoag ITP “P-115-7” 20,080 | Laoag ITP “P-114-7” 20,080 lloilo ITP “P-115-19” 16,351 | Iloilo ITP “P-114-5” 16,351 Kalibo ITP “P-115-6" 3,908,301 | Kalibo ITP “P-114-6” 3,908,301 Tagbilaran ITP “P-115-10” 252,987 | Tagbilaran ITP “P-114-10” 252,987 Palawan ITP “P-115-9" 48,353 | Palawan ITP “P-114-9” 48,353

Laguindingan Laguindingan

(Cagayan) ITP “P-115-3” 17,649 | (Cagayan) ITP “P-114-3” 17,649 Zamboanga ITP “P-115-20" 13,182 | Zamboanga ITP | “P-114-11”" 13,182 Mactan (MCIA) “P-115-8” 8,970,575 | Mactan (MCIA) “P-114-8” 8,970,575 DMIA/Clark “P-115-2” 12,613,369 | DMIA/Clark “P-114-2” 12,613,369 However, as previously discussed, petitioner substantiated the foregoing issuances with ADRs amounting only to 140,330,680 liters.124 Moreover, the volume of imported and locally-manufactured Jet A-1 fuel that has been traced from the PBR all the way to the depots, ITP, refueller, or direct delivery to its customers that is related to the claim is 131,643,842 liters. However, based on the issuances shown above, the depots, ITP, and refueller collectively issued more than what they received. Notably, the difference of 12,661,722 liters is not accounted for by petitioner:

Received by depots, ITPs, refueller Issued by depots, ITPs, refueller to international carriers

Difference

124

Volume in Liters

131,643,842 144,305,564 12,661,722 Tables 20 and 21, Exhibit “P-50,” Docket (CTA Case No. 10750) - Vol. 2, p. 642.

144,305,564

Page 29 o£31 After tracing the movement of the Jet A-1 fuel, ICPA Dayego summarized her findings as follows:125 Ref./

Exhibit

Volume

Excise Tax

Table

No.

Particulars

(in Liters)

Amount

"P-101"

Amount of Claim per Schedule of

Excise Tax Paid/Petition for Review

146,739,666 1'586,958,664 Less recommended for downward adjustments 4.f

"P-108"

Unsupported WC:

Table 9

Navotas depot 1,189,635 P'4,758,540.00 MCIA depot 281,700 1,126,800.00

JOCASP

520,000 2,080,000.00

Sub-total

1,991,335 7,965,340.00 4.h Table Not traced to PMMT, LS and ORB - 13 -

JOC:ASP

560,000 2,240,000.00

"P-119"

Disallowance of ADRs:

Local destination not covered by tax exemption 2,923,633 11,694,532 4.k No destinations indicated 521,641 2,086,564

Table 21

Unsupported ADR

264,263 1,057,052

Out-of-period ADR Date

177,410 709,640

Unreadable

61,750 247,000 No date and no signature 26,187 104,748

Sub-total

3,974,884 15,899,536 Total recommended for downward adjustments 6,526,219 26,104,876 Recommended for refund or issuance of TCC 140,213,447 1'560,853,788 In sum, considering the disallowances We found, along with the adoption of the disallowances made by ICP A Dayego, petitioner's refundable excise taxes paid on Jet A-1 fuel sold to international carriers and exempt entities for the period covering January 1, 2020 to December 31, 2020 is P389,493,496.00, computed as follows:

Total Amount of Claim

Less: Disallowances per !CPA Dayego

Unsupported Withdrawals

Withdrawals not traced to PMMT, LS, and ORB-

JOCASP

Disallowed ADRS

Total Disallowances per ICPA Dayego

Disallowances per Our findings:

A DRs not traced to certifications Additional A DRs not supported by certifications Destination of aircraft not indicated in ADR Withdrawals before date of earliest ATRlG Difference between fuel traced to depots, ITPs, and

Volume

(in Liters)

146,739,666 1,991,335 560,000 3,974,884 6,526,219 1,129,531 1,080,410 1,346 27,967,064 12,661,722 12s Table 26, Exhibit "P-50," Docket (CTA Case No. 10750)- Vol. 2, p. 646.

Excise Tax Amount

1"586,958,664.00 f' 7,965,340.00 2,240,000.00 15,899,536.00 !' 26,104,876.00 f' 4,518,124.00 4,321,640.00 5,384.00 111,868,256.00 refuellers vs fuel issued by depots, ITPs, and refuellers Total Disallowances per Our findings 42,840,073 50,646,888.00 !' 171,360,292.00 Total disallowances p 197,465,168.00 Refundable excise taxes 97_373_374 P389,493,496.00

WHEREFORE, the Petitions for Review are PARTIALLY GRANTED. Accordingly, respondent is ORDERED to REFUND in favor of petitioner in the total amount of P389,493,496.00, representing petitioner's erroneously paid excise taxes for its imported and locally-produced Jet A-1 fuel for the periods from January 1, 2020 to June 30, 2020, and from July 1, 2020 to December 31, 2020, which were subsequently sold and delivered to various international carriers and tax-exempt entities.

I CONCUR:

~ ~

f. ~ '~A,k MARIAN IVM. REYES'-FAJARDO

Associate Justice

HENRY 1/fNGELES

Associate Justice

ATTESTATION

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

~ frp, f.~ - /Fr;;;.cl.

MARIAN IVY' F. REY~S~FAJARDO

Associate Justice

Chairperson

CIA Case Nos. 10750 & 10905

CERTIFICATION

Pursuant to Article VIII, Section 13 of the Constitution, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court.

~. ~ ).....________ MA. BELEN M. RINGPIS-LIBAN

Presiding Justice