CTA Case No. 3548

DECISION

This is a clai• for refund in the total a•ount of P334,710.75 allegedly representing 25• of the specific taxes paid on the oils and fuels actually used by Petitioner in its operations as a duly licensed forest concessionaire.

The facts of this case re•ain undisputed. During the period beginning July 1, 1980 to Dece•ber 31, 1981, Petitioner purchased fro• Caltex <Philippines>, Inc.

and Pilipinas Shell Petroleu• Corp., refined and •anufactured mineral oils, oils which Petitioner actually and exclusively used in connection with the exploitation and operations of its forest concession.

The said oil co•panies paid and passed on to Petitioner the specific taxes i•posed on the above-•entioned oils sold to Petitioner under Sections 775

DECISION -·

C. T. A. CASE NO. 3548 - 2 - 153 and 156 <formerly Sections 1~2 and 1~5) of the 1977 Tax Code.

On October 6, 1982, Petitioner filed a written claim for refund in the amount of P33~,710.75 computed as follows:

July 1980 - December 1981 Vtl.lJE PROOU:T !HCIFIC m llitrrs) COST TAl

REF IN)

DIESEL 3,254,225 PI0,334,0-'-'l.40 p S69,-'l89.38 P142,372.35 SASli.JtE REQLAR -'l93,000 2,397,712.90 -'l-'JJ, 700.00 110,925.00

OILS & LUBRICANTS

-'l03,003.26 2, 340,525. 86 322,40Z.6J 80,600.65 SREASE 6,50e 7~998.31?

~251!00 IJ~,z;;

PI~ "'J1all. 48 Pl1JJ8.84Z. 'J'J PJJ'1 710. 15 representing twenty-five percent <251t) of the specific taMes collected on the oils used by the Petitioner in its - operations as a fores~ concessionaire. Such claim for refund,was never acted upon by the Respondent. Hence, this appeal.

ln its appeal, Petitioner, prayed for an order requiring Respondent to pay 20~ interest per annum, in addition to its claim for refund, for her alleged refusal to refund the inst.!mt claim.

Petitioner likewise prayed for the costs of suit. ln support to its claim for refund, Petitioner relied on the case of Insular Luaber Coapany vs. Court of Tax . Appeals and Co•aissioner of Internal Revenue, G. R.

No. L-31057, May 29, 1981 in which the Supreme Court held 776

DECISION -

C.T.A. CASE NO. 3548 - 3 - that the proviso of Section 5 of Republic Act No.1435 is in effect a partial eMemption from the imposed increased specific taM on manufactured oils. Section 5 of Republic Act No. 1435 provides: "SEC. 5.

The pt"oceeds of the additional taM on manufactured oils shall accrue to the road and bridge funds of the political subdivision fot" whose benefit the taM is collected:

Provided, however, That whenever any oils mentioned above are used by •iners or forest concessionaires in their operations, twenty-five per cen~u• of the specific taM paid thereon shall be refunded by the Coll•ctor of Internal Revenue upon submission of proof of actual use of oils and under similar conditions enumerated in sub-paragraphs one and two of section one hereof, amending section one hundred forty-two of the Internal Revenue Code: Provided, further, That no new road shall be constructed unless the routes or location thereof shall have been approved by the Co•missioner of Public Highways after a determination that such road can be made part of an integral and articulated route in the Philippine Highway System, as requir•d in section twenty-siM of the Philippine Highway Act of 1953 ...

Respondent, however, asserted that the above-quoted Section of R.A. 1435 has already been repealed by Section 343 of the 1977 TaM Code <Presidential Decree Nos. and 1158-A> which provides in part: "SEC. 343.

Granting provinces, cities and municipalities shares in the specific taM on certain petroleum products.

ln addition to the internal revenue allotment under Section three hundred forty-four, provinces, cities and municipalities shall share in the specific taMes on the following petroleum products in Sltch a~aounts as may be equivalent to the 777 1158

DECISION -

C.T.A. CASE NO. 3548 4 - collections therefrom at the rates indicated hereunder.

The additional allotment is in lieu of local taMes imposed on petroleum products and for this purpose, Section twenty-four of Presidential Decree n~mbered 231, otherwise known as the Local TaM Code, has been repealed by Presidential Decree numbered 43G on March 30, 1974.

Even assuming that Section 5 of Republic Act No. 1435 is still in effect, partial taM refund thereunder refers to specific taMes paid by miners and concessionaires on fuel oil, commercially known as diesel fuel oil, and other similar oils having more or less the same generating power, and hence, according to the Respondent, Petitioner is not entitled to a refund of 25• on the specific taM it paid on gasoline, kerosene, avgas <aviation gas> or petroleum and lubricating oils.

Respondent also contended that Petitioner's right to file a judicial action for refund of all taMes paid before November 1G, 1980 has already prescribed. Is the Petitioner entitled to the refund claimed representing 25• of the specific taMes paid on the oils and fuels actually used by Petitioner in its operations as a forest concessionaire? If entitled to the refund claimed, were they filed within the prescriptive period of two years?

These are the issues involved. 778

DECISION -

C.T.A. CASE NO. 3548 - 5- We find for the Petitioner. In the case of Co••issioner of Internal Revenue vs.

Atlas Consolidated Mining and Develop•ent Corporation, et al., G. R.

No.

93631, November 12, 1990, the Supre111e Court, in a Resolution by the Third Division, had the occasion to rule that "the purpose for the increase in the rate of tax cannot in anyway negate the policy behind the grant of partial refund.

The Court sees no inconsistency between the increase in specific tax rates and the retention of the refund privilege. In fact, with the increased specific tax rates, the grant of partial refund to mining and lumber concessionaires is made more imperative considering that they seldo• use the highways, the construction of which are financed by specific taxes."

Moreover, We find fitting the following comments of the Supreme Court in the case of Co••issioner of Internal Revenue vs.

Atlas Consolidated Mining and Develop•ent Corp., et al., (supra>.: "A reading of the legislative proceedings leading to the enact•ent of RA 1435 shows that •ining and lumber concessionaires were granted partial refund of specific taxes because the gasoline and fuel they consume is mostly used within their own compounds and roads. RA 1435 gave these concessionaires relief, in the form of a tax refund, since their trucks and vehicles seldo• ply the national highways, the construction of which is funded by the specific tax collected by the national govern•ent.

779

DECISION -

C.T.A. CASE NO. 3548 There is therefore no the grant of refund •ining or lumber additional local tax. 6- rationale in conditioning on the payment of these concessionaires of any Moreover, Section 5 states 'that the 25~ specific tax shall be refunded by· the Collect or- of Internal Revenue.

Since it is the latter who collects the specific taxes due to the national govern•ent, then it follows that the refund refers to a refund of the specific taxes paid to the national govern•ent, not the specific taxes paid to the local gover-n•ent." And in the •ore recent case of Co••issioner o~ Internal Revenue vs. Rio Tuba Nickel Mining Corporation and Court o~ Tax Appeals, G.R. Nos. 83583-84, 30, 1991 <202 SCRA 137>, the Supre•e Cout .. t Third Division held:

"to our •ind, the proviso in Section 5 standing alone is enough basis for the grant of refund. X X X. Jn fact, the entire proviso of Section 5 does not even •ake any reference to Section 4 which e•powers •unicipalities and cities to i•pose the additional tax on oils sold or distributed within their territorial jurisdiction. What is clear therein is that the Revenue Co•aissioner shall refund 25~ of the specific tax whenever 'any oils mentioned above are used by miners or fot .. est concessionaires in their operations and the procedure for refund is co~plied with."

(see also Aras-Asan Ti•ber Co., Inc., CTA Case No.

3524, Dec.

17' 1993;

Curuan Ti•ber Corp., vs.

CIR, CTA Case No.

3582, Sept.

20, 1994").

780

DECISION -

c.T.A. CASE NO.

Finding carefully the invoices affered by far 3548 the Petitianer, considered only the following:

Invoice Ne.

3O34 3830) 38390 38410 38409 3B469 SBAT2 SBA74 38539 3540 354) 3B?

30686 38630 3863!

30649 38673 35706 3873S 387% 38737 38746 39030 Sm 39038 39039 39103 39133 3929) 33368 39573 39574 39383 39390 3347) 38 3905 3510 372 Date Shipped 51/03/80 11/04/80 13/08/80 43/07/80 91/07/80 11/12/80 43/31/80 94/13/80 $1/14/80 11/14/80 11/14/80 11/14/80 41/17/80 11/18/80 91/18/80 31/10/80 13/23/80 11/27/80 11/28/80 13/28/80 31/28/80 §2/01/80 12/12/80 12/12/80 i2/15/80 J2715/80 12/39/80 12/23/80 01/05/81 01/09/83 01 /09783 01/09/83 01/09/83 01/12/81 01/14/81 01/16/83 01/56/68) 00736/8) 01/16/81 Exh.

f-110 Al A-I32 A-113 A-1)4 AH-115 A116 A-137 QUANTITY Diesel 10,000 9, 000 fi}s and Lubricants 4 this Court

IN LITERS

Regular Baseline 12,000 6, 000 6, 000 6,000 6,000 examining Fetitianer as evidence,

DECISION —

C.T.A CASE NO. 3548 — 8 ~~

BUANTITY IN LITERS

Invoice Date Dids and Reguiar Ro. Shi pped Exh. Diese] Lubricants Gasoline 354 01/21/81 A318 10, 000 33583 01/23/83 f-119 10, 000 3H 01/26/81 f-i20 40, 000 3355s (1/26/83 121 6,000 6, 000 39645 0/26/81 fizz 9, 000 39688 01/28/81 f-123 12,000 752 = -O1/30/BI A-124 10, 000 36753 01/30/83 125 10, 000 35751 = -02/02/8 f-126 12,00 55759 = 02/02/8 f-ig? 9,000 3777 2/0278 A-128 10, 000 some 02/05/81 f-129 9, 000 35874 =: 02/05/8) 190 30, 000 36879 = (02/06/81 A-133 12,000 35884 =: 02/06/81 A-132 10, 000 55893 0209/8} -133 42,000 eeB4 02/24/83 A-134 10,000 ee = ie /25/ BI His 10, 000 gxe8F = 02 / 25/8 f-136 10, 000 e5c8B = 02/27/81 -337 10, 000 29291 =: 03/03/8i f-138 10,000 ees =: 03/03/81 A-139 10, 000 252%3 =: 03/04/81 f-140 10, 000 25294 03/04/81 14 10, 000 252% = 03/31/81 f-142 10,000 25298 =: 03/31/83 f-143 10, 000 25306 = 03/58/8! f-144 40,000 25307 = «03/58/81 f-145 10,000 23318 = 03/38/83 A146 10,000 #5319: 03/18/83 f-147 10, 000 25520: 03/19/83 f-946 10, 000 wse2 (03/21/83 A-149 10, 000 20323 (03/21/81 f-150 10,000 CORD 03/23/81 A-15) 10, 000 253206 = 03/23/81 f-15e 10,000 2327) «03/23/81 i533 10, 000 2oR28 = 03/24/83 i545 10, 000 2334s 03/25/8) 1S 10, 000 235 03/25/81 P56 10,000 2336 =: 03/25/81 f-i57— «= 10, 000 25342 =: 03/31/81 A-158 9,000 25344 = 04/01/8 A-159 10, 000 29345 = 04/01/81 A-160 10, 000 25346 04/01/81 A-161 9, 000 25347 = 04/02/81 f-162 10,000 25348 = 04/02/83 f-163 10, 000 782

DECISION —

c.T.A. CASE NO. 3546 _— 9 _

QUANTITY IN LITERS

Invoice Date Oils and Regular No. Shipped Exh. Diese} Lubricants baseline 29353 = 04/03/81 f-164 10,000 25357 =: 04/06/81 A-165 10, 000 20398 04/06/81 A-166 10, 000 25359 04/06/81 A-167 10,000 25362 04/06/81 f-168 9, 000 29363 = 04/08/83 A-169 40, 000 25367 = 04/09/81 A-170 10, 000 25369 04/09/83 A-173 10, 000 25370 = 04/09/81 A-172 10, 000 25371 04/09/81 A-173 9, 000 25375 =: 04/10/81 A-174 10,000 25376 = 04/13/81 A-175 — 10,000 29377 04/13/81 f-176 9, 000 23379 = 04/13/81 A-177 10, 000 25382 = 04/20/81 f-178 10, 000 23383 = 04/21/81 f-179 10, 000 25388 =. 04/22/83 f-180 10, 000 25389 = 04/22/81 A-181 9,000 25392 = 04/27/81 A-182 10,000 25394 = 04/29/81 A-183 10,000 25395 = 04/30/81 A-184 9, 000 25397 =. 05/05/81 A-185 10,000 25398 =: 05/05/8! A-186 9, 000 68051 05/06/83 A-187 10, 000 66053 05/06/81 f-188 2, 000 8, 000 68054 05/07/81 A-189 9, 000 68055 05/07/81 a bel 10, 000 68060 = 05/08/81 A-19) 9, 000 68066 = 05/12/81 f-192 ~ 10,000 68067 05/12/81 A-193 10, 000 68070 = 05/13/81 A-194 8, 000 2,000 68072 =. 05/13/81 155 10,000 68076 = 05/15/83 f-1% 10,000 68079 05/19/81 f-197 10, 000 bm82 = (05/25/81 1598 10, 000 6083 = 05/27/81 399 10,000 68084 = 05/28/83 few 10, 000 68092 = 05/28/83 201 10, 000 68098 = 06/02/81 f-202 10, 000 68099 06/03/81 f-203 10, 000 6830) =: 05/19/8! f-204 10, 000 68105 06/04/81 f-205 10, 000 6BI06 =: 0604/8) 206 10,000 68108 = 06/04/81 A-207 9,000 68112 06/04/81 f-208 10, 000 68115 06/08/81 A-209 10,000 - 783

DECISION -

C. T. A. CASE NO. 3548 - 10 - OUANTJTY

J N LITERS

lnvoicr Datr Oils and Rrgular No.

Shipptd Ell h.

Dirsrl Lubricants &asolinr 68116 06/08/81 A-210 10,000 68120 06/08/81 A-211 10,000 68126 06/J0/81 A-212 9,000 68130 06112/81 A-213 10,000 68131 06112/81 A-214 10,000 68134 06/15/81 A-215 10,000 68152 06/26/81 A-216 10,000 68153 06/26/81 A-217 10,000 68154 06/26/81 A-218 10,000 68156 06/29/81 A-219 10,000 68157 06/29/81 A-220 10,000 68J1J 07/08/81 A-221 . 10,000 68172 07/08/81 A-222 10,000 68173 07/08/81 A-223 10,000 68174 07/09/81 A-224 4,000 6,000 68177 07/09/81 A-225 9,000 68181 07/09/81 A-226 10,000 68182 07/J0/81 A-227 10,000 68183 07/10/81 A-228 10,000 68194 07/13/81 A-229 10,000 68195 07/IJ/81 A-230 10,000 68198 07/14/81 A-231 6,000 3,000 68205 07/21/81 A-232 10,000 68206 07/21181 A-233 10,000 68207 07/21/81 A-234 10,000 68208 07/21/81 A-235 10,000 68211 07/22/81 A-236 9,000 68224 07/30/81 A-237 10,000 68226 07/30/81 A-238 10,000 68227 07/30/81 A-239 10,000 68230 07/31/81 A-240 10,000 68232 07/31/81 A-241 10,000 68239 08/03/81 A-242 4,000 6,000 68241 08/03/81 A-243 6,000 4,000 68248 08/05/81 A-244 9,000 81001 08/06/81 A-245 9,000 81002 08/07/81 A-246 10,000 81003 08/07/81 A-247 10,000 81004 08/07/81 A-248 10,000 81006 08/10/81 A-249 10,000 81015 08/12/81 A-250 10,000 81016 08/13/81 A-251 10,000 81017 08/13/81 A-252 9,000 81023 08/14/81 A-253 10,000 81024 08/14/81 A-254 10,000 81026 08/17/81 A-255 10,000 784

DECISION -

C. T. A. CASE NO. 3548 - 11 - DUANTJTY ] ..

LJTERS lnvoicr Dah Oib and Rrgular No.

Shipptd Exh.

Dinrl Lubricants Gasolinr 81030 08/20/81 A-256 10,000 81031 08/20/81 A-257 10,000 81032 08/20/81 A-258 10,000 81035 08/21/81 A-259 9,000 81037 08/21/81 A-260 10,000 81038 08/21/81 A-261 10,000 81057 08/ZB/81 A-Z62 10,000 81058 08/ZB/81 A-263 10,000 81059 08/ZB/81 A-264 10,000 81060 08/31/81 A-265 10,000 81061 08/31/81 A-266 10,000 81080 09/04/81 A-267 9,000 81082 09/04/81 A-268 10,000 81089 09/08/81 A-269 10,000 81097 09/10/81 A-270 9,000 81099 09/10/81 A-271 10,000 8ll00 09/10/81 A-272 10,000 8Jl01 09/10/81 A-273 10,000 8Jl04 09/JJ/81 A-274 9,000 8Jl06 09/JJ/81 A-275 10,000 81107 09/!4/81 A-276 10,000 8Jl08 09/14/81 A-277 10,000 81109 09/14/81 A-278 10,000 8Jl10 09/15/81 A-279 10,000 811ll 09/15/81 A-ZBO 10,000 81112 09/15/81 A-281 10,000 8JJJ3 09/15/81 A-282 9,000 81114 09/18/81 A-283 10,000 81115 09/18/81 A-284 10,000 81116 09/18/81 A-285 8,000 1,000 81131 09/17/81 A-286 4,000 6,000 81157 09/20/81 A-28?

10,000 81158 09/29/81 A-288 10,000 81159 09/28/81 A-289 10,000 81160 09/20/81 A-290 10,000 81161 09/30/81 A-291 10,000 8Jt64 10/01/81 A-292 10,000 81167 10/0Z/81 A-293 10,000 8Jl68 10/0Z/81 A-294 10,000 81169 10/0Z/81 A-295 10,000 8Jl74 10/05/81 A-~ 10,000 81184 10/07/81 A-297 10,000 8Jl85 10/07/81 A-298 10,000 81214 10/20/81 A-299 8,000 81215 10/20/81 A-300 10,000 81216 10/20/81 A-301 10,000 785 • . DECISION - C. T. A. CASE NO. 3548 - 12 - DUANTJTY

J N LITERS

Jnvoicr Datr Oils and Rrgular No.

Shipprd Exh.

Dirsrl Lubricants 6asolinr 81219 10/21/81 A-302 9,000 81217 10/Z0/81 A-303 10,000 81ZZ1 10/21/81 A-304 10,000 81231 10/26/81 A-305 2,000 81239 10/30/81 A-306 10,000 81240 10/30/81 A-307 10,000 81241 10/30/81 A-308 10,000 81243 10/30/81 A-309 10,000 8121J2 10/30/81 A-310 10,000 8121)5 11/02/81 A-311 10,000 91007 11/05/81 A-312 I, 000 7,000 91023 11/17181 A-313 10,000 91024 IJ/17/81 A-314 10,000 91025 11/17181 A-315 10,000 91026 11/17/81 A-316 10,000 91028 IJ/18/81 A-317 10,000 9101)0 11/Z0/81 A-318 8,000 9101)5 IJ/Z0/81 A-319 10,000 9101)6 11/26/81 A-~ 10,000 9101)8 11/26/81 A-JZ1 8,000 91051 11/27/81 A-322 IJ,OOO 91063 12/0IJ/81 A-JZ3 10,000 91061) 12/0IJ/81 A-JZIJ 6,000 2,000 91069 12/07/81 A-JZS 8,000 91071) 12/09/81 A-326 6,000 2,000 91082 12/11/81 A-JZ7 8,000 2,000 91084 12/11/81 A-328 2,000 4,000 91094 12/16181 A-329 10,000 91095 12/16181 A-330 10,000 91096 12/16/81 A-331 10,000 91098 12/18/81 A-JJZ 8,000 91J03 12/18/81 A-333 10,000 91101) 12/18/81 A-334 10,000 91J05 12/18/81 A-335 10,000 91106 12/18/81 A-336 10,000 91J16 12/ZZ/81 A-337 10,000 91119 12/23/81 A-338 10,000 911ZO 12/23/81 A-339 10,000 91121 12/23/81 A-340 10,000 08561 11/19/80 A-362 6,954 08562 Jl/19/80 A-363 5,655 08563 Jl/19/80 A-364 400 63405 12/08/80 A-365 101)68 12/08/80 A-366 4,190 39428 01/14/81 A-367 12,000 13Z37 01/08/81 A-368 2,940 788

DECISION -

C. T. A. CASE NO. 3548 - 13 - OUANTJTY J ..

L J T E R S

Jnvoicr Datr Oils and Rrgular No.

Shipptd Exh.

Dirsrl Lubricants Sasolinr ll009 12/23/80 A-3&9 ~,660 25286 02/25/81 A-370 10,000 55829 02/0o\/81 A-371 12',000 15787 02/03/81 A-372' z,~o 15788 02/03/81 A-373 3,190 15889 02/03181 A-374 9,000 252'!.15 03/J0/81 A-315 10,000 ·~I 03/19181 A-376 10,000 25332' 03/Z~/81 A-317 10,000 25333 03/2~/81 A-378 9,000 2532~ 03/2'3/81 A-379 10,000 2'2248 04/03/81 A-380 II, 7~0 253&8 04/09/81 A-381 10,000 25380 04/1~/81 A-382 10,000 25381 04/11t/81 A-383 10,000 25390 04/2'4/81 A-384 10,000 Zlt~6 04/30/81 A-385 Z,91t0 Zlt815 f15/07/81 A-386 10,000 2'~879 05/09/81 A-387 4,200 255'11 05/15/81 A-388 68102 05/18/81 A-389 9,000 68068 05/12'/81 A-390 9,000 68077 05/15/81 A-391 10,000 68139 06/18/81 A-39Z 10,000 68140 06/18/81 A-393 10,000 68158 06/2'8/81 A-391t 10,000 68159 06/29/81 A-395 9,000 68225 07/30/81 A-396 9,000 30086 07/07/81 A-397 7,350 3019Z 07/08/81 A-398 30210 07/08/81 A-399 5,225 30535 07/11/81 A-#tOO 6,300 323&9 08/05/81 A-~01 3,570 32370 08/05/81 A-~02 200 329Z7 08/10/81 A-~03 7,390 682'38 08/03/81 A-404 10,000 35505 09/11t/81 A-~05 9,495 35507 09/11t/81 A-~07 13,020 3&217 09/23/81 A-~08 384 63879 05/28/81 A-lt09 81062 08/31/81 A-410 10,000 81063 08/31/81 A-411 10,000 81065 08/31/81 A-lt12 10,000 81098 09/10/81 A-~13 10,000 81130 09/16/81 A-~1~ 8,000 81162 09/30/81 A-415 9,000 78'7

DECISION —

C.T.A. CASE NO. 3548

QUANTITY IN LITERS

Invoice Date Oils and Regular No, Shipped Exh, Diese] Lubricants Gasoline BIi75) =: 10/05/81 A-416 9, 000 81189 = 10/12/83 A417 10, 000 61196 =: 10/12/81 A-4iB 6, 000 37871: 10/12/83 A419 6,290 37872 = :10/ 12/81 f-420 6,220 43102 12/21/81 f-421 5, 690 43703 12/21/81 f-422 2,310 93117 12/22/81 A-423 10,000 71966 31/19/81 f-567 6, 00 71967) 39/19/83 A-568 7,524 34650 =: 10/28/81 A-569 13,018 33713 09/01/81 f-570 B, 400 33714 =: 09/06/81 fA-571 1,460 33288 = (08/21/8) f-572 3,150 31900 = 07/22/81 f-573 208 21529 (05/14/81 -575 3,990 21530 = 05/15/81 f-576 B, 430 19222 03/20/81 A-577 2, BA4 19223 03/20/81 f-578 5,200 18106 =: 02/20/81 A-579 10, 920 S31) 01/94/81 A-SB0 2, 100 19088 = «03/06/81 f-581 2,310 20998 = 03/20/81 f-382 9,000 63499 03/06/81 9-583 TOTAL 2,483, 000 238, 507 3%, 000 The other invoices, namely, Exhs. "A-1" to “A-78", "A-341" to "“A-36L", and "A-424" to “A-5S66", are not being considered because they are already beyond the two-year Prescriptive period. The Tax Code provides for the judicial remedy of filing a claim for refund within a period of two (2) years from the date of payment of the tax pursuant to the provision of Section 230 (formerly Section 292).

Section 135 af the Tax Code insofar as pertinent provides "that specific taxes on locally manufactured 788

DECISION -

C.T.A. CASE NO. 3548 - 15 - petroleum products levied under Sections 153, 155 and 156 of this title, except lubricating oil and grease, shall be paid within fifteen (15) davs fro• the date of re•oval thereof from the place of production."

<Emphasis supplied) It is therefore evident that the manufacturer of petroleum products has up to 15 days from the date of its removal within which to pay the specific taxes on locally manufactured petroleum products.

As an exception, manufacturers of lubricating oils and grease have to pay the specific tax collected fro• the purchaser on the date of its removal from the place of production. Petitioner purchased both manufactured petroleu• products and lubricating oils and grease.

Thus, with respect to its purchases of lubricating oils, the specific taxes paid thereon are deemed paid at the date of its removal.

The claim for refund of the 25• specific taxes paid on oils and lubricants purchased and delivered prior to November 16, 1980 had indeed prescribed.

The purchases of oils other than lube have prescribed on October 31, 1980 because the specific taxes of said purchases were deemed paid on November 15, 1980 which is ~lready more than two years fro• the filing of this Petition for Review 1982.

Thus, purchases made on or before October 31, 1980 are no 789

DECISION -

C.T.A. CASE NO. 3548 - 16 - longer considered in the co•putation.

Exhibits "B", "B- 1" to "B-211", "C", "C-1" to "C-191", "D", "D-1" to "D- 75", "E" "E-1" to "E-187" are also not being considered since these are purchases of petroleuM products which do not form part of the original period these are purchases for the years 1982 and 1983 which probably have been inadvertently included by the Petitioner. Thus, following the formula of conversion already used by this Court in the other cases of this nature, We arrived at this computation of the 25~ specific tax refund under Sec. 5 of R.A. No. 1435, to wit: RElDIPUTATI~ IF ~ SPECJFJC TAX REFill) lJUR SEC. 5 IF RERR.JC ACT til. J~J5 Manufactured Oils Diesel t2,48J,OOO x .8~ f 1,000) Oil' and lubricants Ret~lar Gasoline Total specific taxes "-ltiply by specific tax refund rate ~ specific tax refund under RA ".15 Quantity 2, OCR. 92 NT 2.18,507.00 L J96, 000. 00 L Sprcific Tu Rate Pl.OOIT 0.07/L 0.08/L Specific Tax p 2,0CR.CJ2 16,695.49 31.680.00 PSO,~.u 25J P12,617.10 As regards the 20~ interest per annum being clai•ed by Petitioner, the rule is that no interest on refund of taK can be awarded unless authorized by law or the collection of the taK was attended by arbitrariness.

<Collector vs. Prieto, 112 Phi 1.

907; Co••issioner vs. Asturias Sugar Central, 2 SCRA 1140;

Co••issioner oF Internal Revenue vs. A•erican Rubber Co.,

18 SCRA

842:;

790

DECISION -

C.T.A. CASE NO. 3548 - 17 - 100 SCRA 556;

Shell Phi 1 ippines, Inc.

vs ..

Central Bank of the Philippines,

162 SCRA

628.> An action is not arbitrary when exercised honestly and upon due consideration where there is roo• for two opinions, however much it may be believed that an erroneous conclusion was reached.

(F .. B. Moreno, Philippine Law Dictionary C3rd ed.), Corporation 08473-AP, August 23,1979.)

Arbitrariness presupposes inexcusable or obstinate disregard of legal provisions.

(Victorias Milling Co .. , Inc.

et al., 19 SCRA 430.> None of the exceptions are present in the case at bar.

Respondent's decision denying Petitioner's claim for refund was based on an honest interpretation of law.

We, therefore, see no reason why Petitioner should be entitled to the payment of interest. Moreover, the Supreme Court held in the Rio Tuba case that no interest shall be charged in computing the 25~ refund on specific taxes paid. <See Supreae Court "Resolution dated March 25, 1992.> In the same manner, Petitioner's prayer for cost of suit cannot be awarded.

It is an ele•entary rule that the government shall not be liable for costs of suits unless otherwise provided by law.

(Section 1, Rule 142, 791

DECISION -

C.T.A. CASE NO. 3548 - 18 - Revised Rules o~ Court; Collector o~ Internal Revenue vs. Convention o~ Philippine Baptist Churches and the Court o~ Tax appeals, 2 SCRA 10).

WHEREFORE, in all the foregoing, Respondent is hereby ORDERED to REFUND Petitioner the sum of Pl2,617 .. 10 without interest representing 25~ refund of specific taxes paid on its purchases of oils and fuels actually used by Petitioner in its operations as a duly licensed forest concessionaire pursuant to Sec .. 5 of R .. A .. 1435.

WE CONCUR:

e,.. . .h.. Q, ~ ERNESTO D. ACOSTA Pt~es id i ng GRUBA Associate Judge 792 ~~I ft.~· /;V RAMON o. DE VENRA Associate.Juctt~

DECISION -

C.T.A. CASE NO. 3548 - 19 - CERT:IF:ICAT:ION I hereby certify that this decision was reached after due consultation among the •e•bers of the Court of TaH Appeals in accordance with Section 13 Article VIII of the Constitution.

793 ~lQ.~ ERNESTO D. ACOSTA Presiding Judge Court of TaH Appeals