(AMENDED) Chevron Philippines Inc. vs. Commissioner of Internal Revenue

DECISION

ACOSTA, PJ This is a Petition for Review seeking a refund or credit in the amount of ONE HUNDRED THIRTY ONE MILLION , ONE HUNDRED SEVENTY FIVE

THOUSAND

FOUR

HUNDRED

EIGHTY

PESOS

AND

18/100 (P131 , 175,480 18), alleged ly representing erroneously paid excise taxes on imported finished petroleum products for the month of November 2003

THE FACTS

As found by the Court, the facts are as follows 9 9 ~- IJU '/,)'J()N CT-1 Case No. 7358 fJnge 2 Petitioner is a corporation organized and existing under and by virtue of the laws of the Republic of the Philippines Respondent is the public officer duly appointed and vested with authority to decide, approve and grant tax credits and/or refund of national internal revenue taxes 1 On October 7, 2004, petitioner filed an administrative claim for refund or credit with the Bureau of Internal Revenue under Claim No. 2004-XP-11 /03 2 in the amount of P131, 175,480 18 representing alleged overpayment of excise taxes on imported finished unleaded premium gasoline and diesel fuel withdrawn from its refinery in San Pascual, Batangas for the month of November 2003. The amounts claimed as computed were as follows

Product

Unleaded premium gasoline

Diesel Fuel

TOTAL

--+---o_u•nii!Y-~~t;,':~ 1r•:7::

41 ,102,541 I _ P __ 1 63 56,280,848 -- - -- -·--- ----

Excise Tax Paid

p 64 ,178,33835 p 66 ,997,14 1 83 p 131,175,480.18 ------------ ---- - - ----·-- ---- - Without any action by the respondent on petitioner's administrative claim , petitioner, on October 28, 2005, filed this instant Petition for Review3 praying that judgment be rend ered directing the respondent to refund or credit the exc1se taxes it allegedly erroneously paid for the month of November 2003 in the amount of P131 , 175,480 18 The respondent posited 1n his January 12, 2006 Answer4 a special and affirmative defense. to wit Petitioner has no ca use of action against respondent because, as admitted by petitioner 1tself, the exc1se ta x on petroleum IS due before the removal thereof from the place of production pursuant to the provisions of Section 130 of the National Internal Revenue Code (N IRC) of 1997 thus its payment of excise ta x on each removal of petroleum products from its refinery at San Pascual , Batangas does not constitute erroneous payment of ta x that may be claimed for refund under Secti on 204 of the NIRC of 1997 1 Jomt St1pulat1on of Facts and Issues, Rollo. p 353.

2 Exhibit "FFFFFFFFFF"

3 Rollo, pp 4-296 4 Rollo, pp 196-206 992 ULC '/.'liON Cf I ( '(/se No. 7 Jj8 l)uge 3 Respondent and petitioner filed their Pre-trial Briefs5 on January 26, 2006 and February 10, 2006, respectively.

On March 23, 2009, the Joint Stipulation of Facts and Issues (JSFI)6 was filed by the parties A corresponding Resolution 7 promulgated on April 12, 2006 approved said JSFI and thereafter terminated the pre-trial. During trial , only the petitioner presented testimonial and documentary evidence in support of its pos1tion The respondent waived its right to present evidence.

On September 25, 2009, the case was submitted for decision after petitioner and respondent subm itted their Memoranda 8 on September 18, 2009 and September 22, 2009, respectively.

THE ISSUES

By agreement of the parties in the JSF1 9 , the lone issue to be tried and resolved in this case is whether peti tioner overpaid exc1se taxes for the month of November 2003 and is, therefore, entitled to the instant claim for refund

THE ARGUMENTS OF THE PARTIES

Petitioner's Arguments

Peti tioner anchors its claim for refund of 1ts alleged excess payment of excise tax on its withdrawals of imported finished unleaded premium gasoline and diesel fuel which it allegedly erroneously recorded as loca lly-manufactured refined unleaded gasoline and diesel fuel. It avers that although its volumes of loca lly-manufactured refined petroleum products did not increase and were progressively depleted begi nning November 2003 due to the complete shutdown of its refinery operations, there remained sufficient inventory to support withd rawals from the locally-manufactured refined products because the ~ Rollo, pp. 32 1-332 6 Rollo. pp 353-354 7 Rollo , p 24 7.

8 Rollo, pp. 94 5-986 ~l Rollo p 353 9 ( 1 ') ~,J

OU '/SIU\'

( '/:-! Cuse ,\'o 7 358 l)uge -1 company comm ingles its imported fm ished petroleum products with the processed domestic fuel Petitioner avers that it paid the correct amount of taxes on the volumes of imported fini shed unleaded prem1um gasoline and diesel fuel as well as the excise taxes on the withdrawals recorded as sourced from locally manufactured refined unleaded prem ium gasoline and diesel fuel for the periods of October,

November and December 2003

Petitioner alleges that per its records there existed a negative difference between the beginning balance of December 2003 and end ing balance in the November 2003 locally-ma nufactured refined unleaded premium gasoline and locally-manufactured refined diesel fuel , which according to 1t was a result of the petitioner's erroneous recording of imported unleaded premium gasoline and imported diesel fuel as coming from loca lly manufactured unleaded premium gasoline and locally manufactured diesel fuel Lastly, petitioner asserts that its case is not premised on a specific exemption granted under the NIRC or other statues, thus , the general rule of requiring strict adherence to the law shall not apply but a mere preponderance of evidence is required .

Respondent's Arguments

On the other hand, respondent, for the first time, asserts that the Court has no jurisdiction over petitioner's cla1m for refund on the ground that petitioner fai led to substantially prove by concrete evidence that the amount petitioner alleges to have been paid to the Bureau of Customs (BOC) was actually transferred to respondent.

In view thereof, respondent argues that petitioner should have filed the specific ta x refund with the BOC. Also, respondent believes that petitioner failed to prove by convincing and substantial evidence its entitlement to the claim for refund upon 1ts failure to present the excise tax returns for taxable year 2003 and further stresses that it is petitioner's obligation to pay the excise tax on thE manufactured and imported petroleum products for domestic sa le or consumption 9 9 ·l IJU IS/(},\' (' r I Cuse \ o 7 358 1-'uge 5

THE DECISION OF THE COURT

Taking into consideration that respondent raises an issue on jurisdiction, the Court deems to address said argument first The Court has jurisdiction.

The respondent's argument on jurisdiction lacks merit

Under

the 1997

National

Internal

Revenue

Code

(NIRC), the Commissioner of Customs and his subordinates are the ones duly constituted as agents of the Commissioner of Internal Revenue for the collection of the national internal revenue tax on imported good. 1° Considering that the Commissioner of Customs is a mere agent of the respondent for the said purpose, the filing of the claim for refund with the Commissioner of the Bureau of Internal Revenue is proper as he is the principal The Court, therefore, has jurisdiction The claim for refund was filed within the two (2) year prescriptive period.

It is important for the Court to determine foremost if the claim for refund was timely filed On the outset, the time of payment of excise taxes for finished petroleum products are reliant upon the1r sources , namely importation and local manufacturing of imported crude oil For excise taxes on imported gasoline and diesel fuel , the same are paid before the release of said imported articles from the customshouse , to wit:

10 Section 12 (A)

Section 131 . Payment of Exc1se Taxes on Importer Ar/lcles. - (A) Person s Liable . - Excise taxes on imported articles shall be paid by the owner or importer to the Customs Officers, conformably with th e regulations of the Department of Finance and before the release of such articles from the customshouse, or by the person who is found in possession of articles which are exempt from excise taxes other than those legally entitled to exemption (Emphasis provided)

99J

UU 'JSIU·\ '

( T -1 C 'use No.7 ])8

Fuge 6

On the other hand, for locally manufactured petroleum products, the excise taxes shall be paid before their removal from the place of production, to wit Section 130. Filing of Retum and Payment of Excise Tax on Domestic Products. - (A) Persons Liable to File a Return , Filing of Return on Removal and Payment of Tax. - xxx

(2) T1me for Filing of Return and Payment of the Tax. - Unless otherwise specifically allowed , the return shall be filed and the excise tax paid by the manufacturer or producer before removal of domestic products from place of production Provided , That the excise tax on locally manufactured petroleum products and indigenous petroleum/levied under Sections 148 and 151 (A)(4) , respectively , of this Title shall be paid within ten

(10) days from the date of removal of such products for the period from January 1, 1998 to June 30, 1998: within five (5) days from the date of removal of such products for the penod from July 1, 1998 to December 31, 1998, and , before removal from the place of production of such products from January 1, 1999 and th ereafter xxx (EmphCJ~is Ours) Petitioner, in this case, admits that its unleaded premium gasoline and diesel fuel sold to its dealers and commercial customers came from the aforementioned two sources , namely 1) from its imported finished products, and 2) from imported crude oil which it locally manufactured into refined petroleum products Section 229 of the 1997 Nl RC prescribes the requisite for a valid claim for refund, viz Section 229. Recovery of Tax Erroneously or Illegally Collected. - no suit or proceeding shall be maintained in any court for tr1e recovery of any national 1nternal revenue tax hereafter alleged to have been erroneously or illegally assessed or collected , or of any penalty cla1med to have been collected without authonty , or any sum alleged to have been excessively or 111 any manner wrongfully collected without authority, or of any sum alleged to have been excessively or in any manner wrongfully collected , until a claim for refund or credit has been duly filed with the Commissioner: but such suit or proceeding may be mamtained, whether or not such tax , penalty , or sum has been pa1d under protest or duress.

In any case, no such suit or proceeding shall be filed after the expiration of two (2) years from the date of payment of the tax or penalty regardless of any supervening cause that may arise after payment: Prov1ded , however, That the Commissioner may , even without a wntten cla1m therefor, refund

UU '/SW /1'

! T -1 (·use :\ ·u 7 358

Poge 7

or credit any tax , where on the face of the return upon wh1ch payment was made , such payment appears clearly to have been erroneously paid (Emphasis Ours) This is congruent with the authority of respondent to refund erroneously collected ta xes as stated in Section 204 of the1997 NIRC , viz

Section

204 .

Au/.'1onty of t11e Com111isstOner lo Compronuse, Abate and f?e!uncl or Creclit

Taxes

- The Comm iSSioner may - xxx (C) Credit or refund taxes erroneously or illegally received or penalties imposed without authority, refund the value of internal revenue stamps when they are returned in good condition by the purchaser, and , in his discretion , redeem or change unused stamps that have been rendered unfit for use and refund th e1r value upon proof of destruction No credit or refund of taxes or penalties shall be allowed unless the taxpayer files in writing with the Commissioner a claim for credit or refund within two (2) years after the payment of the tax or penalty: Provided , however, That a return fil ed showing an overpaymen t shall be considered as a written claim for credit or refund . (Emphasis Ours) Based on Secti ons 204 and 229, in relation to Section 131 (A) of the 1997 NIRC, the petitioner has two (2) years from the release of the imported finished petroleum products from the customshouse within which to file its claim for refund Applying th e preceding in the case at bar, petitioner's earliest payment for the excise ta xes on imported finished unleaded gasoline for the month of November 2003 was November 1, 2003 11 The earliest payment for the excise tax on imported diesel fuel was made on November 20, 2003 12 Petitioner filed its administrative claim for refund on its overpaid imported finished petroleum products with respondent on October 7, 2004 13 and 1ts judicial claim for refund on October 28, 2005 Counting from petitioner's earliest date of payment, both the administrative and judicial claims of petitioner for its overpaid excise taxes on imported unleaded premium gasoline and diesel fuel fall within the two year prescriptive period 11 Exhibit "11111111-2", p 12, Annexes J & 6 12 Exhibit "11111111-2". pp 25-26. Annexes 21 & 24

13 Supra

997 I ;/ct 'ISIU\' ( 1.-1 ('ose ,\o 7 358 l'ug<! 8 The claim for refund on petitioner's overpaid excise taxes on imported petroleum products has basis.

Proceeding to the main controversy raised in this case , the Court finds partial merit to petitioner's claim for refund It appears from the records that petitioner's Imported finished products and local ly manufactured refined products were permitted by the BIR 14 to be comming led and stored in the same storage facilities pursuant to Section 157 15 of the 1997 NIRC.

Accordingly , petitioner posits that despite no increase in the volume of its locally manufactured refin e d petroleum products and 1ts constant depletion which came as a result of the complete shutdown of its refinery operations in November 2003, it appeared to still have sufficient inventory to support withdrawals from the locally manufactured refined products because of the comming ling of the imported finished petroleum products and of the locally manufactured petroleum products .

From the commingling of both the imported finished products and locally manufactured refined products 16 and th e winding up of petitioner's refinery operation 17 by November 2003, the controversy of excess payment of excise tax 1 '

1 Exhibtt "PPP" "PPF'-1" "PPF'-2"

15 Section 157. 'Removai of Articles After the Payment of Tax - Wl1en the tax has been patd on art tcles or rroducts subject to exctse tax . the same shall not thereafter be stored or permttled to rematn 111 lhe dtstillery , dtsttllery warehouse, bonded warehouse. or other factory or place where produced. However, upon pnor permtt from the Commtsstoner, oil reftnenes and/or compantes may store or depostt tax-patd petroleum products and comm tngle the same wtth tis own manufactured products not yet subjected to excise tax. Imported petroleum products may be allowed to be wtlhdrawn from customs custody without the prepayment of excise tax, which products may be commingled with the tax- paid or bonded products of the tmporter htmself after securing a pnor permtl from H1e Commtsstoner Provtded, That wtthdrawals shall be taxed and accounted for on a 'ftrst-tn , first-out' basts 16 Exhibit "MMMMMMMMM-1 to YYYYYYYYY-4". "AAAAAAAAAA to AAAAAAAAAA-8". "1111111111-1111111111-2" 11 Exhibits " RI~R RRI~" . "SSSSSS", "TTTTTl ". "UUUUUU " (Exhibit "SSSSSSS") Judtctal Afftdavtt dated September 18, 2006, vtz 052 Why do you say thai Callex dtd nol reftne crude oil tn lhe month of November 2003?

A52

From the ttme lhat Caltex dectded to shu t down 1n reftnery operatton tn March 2003. lhe company was gradually de-commtsstontng the equtpment and m ac ~1mery that would process the crude 011 tnto locally reftned petroleum By November 2003, t11ese equtpment and machtnery had been completely shut down. Thus. Caltex ceased producing loca l 053.

A 53

unleaded premtum gasoline and dtesel fuel and merely consumed extsltng inventory. And do you have proof that Caltex shut down its refinery operatton by November 2003?

Yes

054 What IS th1s proal'?

A54

We have an appltcalton to Cancel 1-'ermtt to Manufacture Crude Otl tnto Refined Petroleum F'roducts and App l1ca t1on for Convers1on 111!0 Term tnal (da ted October 15, 2003). as well as sevetal letters to the Bll'\ submttltng Caltex's general plan for tis termmal pursuant to ti s appltcatton lot· converston tnto tenntnal (dated Apnl 6, 2004) , requesttng for urgent attenl1on to the pendtng appltcatton for permtts. tncludtng converston of the 99 3 I !U '/,\JON C T -1 Cuse .\'u. 7 358 l'uge 9 on imported finished unleaded premium gasoline and d1esel fuel for the month of November 2003. in the amount of P131 , 175,480.18, arose when the withdrawals from the locally manufactured refined unleaded gasoline and diesel fuel exceeded the beginnmg balance of the loca lly manufactured unleaded prem ium gasoline and diesel fuel reco rd ed for the month of November 2003 The amount of excise taxes paid for the ending balance of the locally manufactured unleaded premium gasoline and diesel fuel , including that of the reprocessed petroleum products, are actually the amount of excise taxes claimed by petitioner to have been overpaid on its imported fin1shed unleaded gasoline and diesel fuel The claim of overpayment is broken down as follows

Products

Beginning Balance (in liters)

Less: Withdrawals

Reprocessed Products

Ending Balance (in liters)

Excise Tax Rate

Excess Excise Tax Pa1d p p

Unleaded Premium

Gasoline

24,914,902 00 37,947,74 1 00 1 ,72 0 ,8 0~ , 0_9 (14,753 ,641 00) 4 35 64 ,178 ,338 35

Diesel

28,400,366 .00 68,676,189 .00 __ - ~?_6 ,7 1~C QQ __ (41 ,102,541 .00) p 1.63 p 66,997 ,141 .83 During trial , petitioner presented the BOC Import Entry Declarations (IED) 18 and BOC Import Entry and Internal Revenue Declarations (IEIRDs) 19 to prove the payment of excise taxes on the imported finished unleaded gasolme and diesel fuels; Excise Tax Returns20 to prove the payment of excise taxes on its local fuels; Daily Volume of Removals (DVRs) 21, Withdrawal Certificates 22 , Official Register Book-Oil Manufacturing Operations(ORBs) 23 and General Ledger24 to prove the figures declared in the Excise Tax Returns and to corroborate payment of excise taxes ; Stock Quality Ledger (SQLs)25 , Pumping Records 26 , Meter Batch Reports 27 , Tank Batch Reports 2B, Product Transfer Batangas refinery into a world class term1nal (dated December 7. 2004), and requestmg for resolut1on to sa1d application for perm1ts to convert (dated .i<tnual·l 1-1. 2005). w Exhibits "A-1 to G-1", "VVVVVV to ZZZZZZ". 'FFFFFI~ F to 1111111", "NNNNNNN to 0000000" 1 H Exh1bits "A-G", "AAAAAAA to EEEEEEE" . "JJJJJJJ to MMMMMMM ", "PF'PPPPP to QQQQQQQ" 20 Exh1b1ts "H to Z", "LLLLLLLL to JJJJJJJJ ", "FFFFFFFF" 2 1 Exh1b1ts "H to Z", "QQQ to AAAAAA"

22 Exhibits "AA to MMM"

~ M

n Exh1b1ts "NNN", "000 ", "RRRRRim" ( 2• Exhibit "ZZZZZZZZZ".

2 !> Exhibits"KKKKKKKKK", "LLLLLLLLL", "PPP-3" 2 " ExhibitS "UUUUULJU -1 to LJUULJLJLJU -30" 99 9 I!/: ( IS/(),\' C T· / Case No. 7 358

Page I 0

Records 29 , Bulk Stock Transfer Receipts/Stock Transfer Receipts 30 and Product Withdrawal & Tax Payments3 1 to corroborate the figures declared in the DVRs and ORBs.

Based on the documents presented and as confirmed by the Court- appointed Independent Certified Public Accountant (ICPA), petitioner imported a total of 52,997 ,582 liters of unleaded prern 1urn gasoline and 64 ,529,403 liters of diesel fuel for the month of November 2003. The petitioner, pursuant to Secti on 131 (A) of the 1997 NIRC , paid the corresponding excise taxes for the imported unleaded premium gasoline and diesel fuel in the amount of P230,539,481 00 and P1 05,182,927 00 respectively during the month of November 2003 The breakdown of which is as follows

Unleaded Premium Gasoline

Period

11 /1/2003 11 /4/2003 11/4/2003 11 /25/2003 11 /25/2003

TOTAL

D1escl

Period

11 /20/2003 11 /25/2003

TOTAL

Exhibit (lED & IEIRD) 1\ lo 1\ 3 B to ll 3

C to C -3

0 to 0 -3

E to L 3

l::xh 11111111 2 (ICPA f<eport

p. 12. Annexes 3 & G) Exhibit (lED & IEIRD)

F to 1- 3

G loG-3 E xl1 11111111 -2 (ICPA l'eport pp 25-26. A n11cxes 21 & 24) Vol (in liters) 9.629,832 3,701.545 13,475,658 13,883,8 12 12,306,735 52,997,582 Vol (in liters) 52.952 ,470 11 , 5 7 6 .~33 64,529,403 Excise lax Ra te 4 35 4 35 4 35 4 35 4 35

Excise Tax Rate

1 63 1 li3 p p

Excise Tax

41 ,889,769 00 16, 101,72 t 00 58,619 ,112.00 60 ,394 ,582 00 ~3 . 5 3 4 .~92 QQ 230,539,481 .00

Excise Tax

86,312.526 00 __l~.87 Q__,~ Q 1 Q.Q_ 105,182,927.00 As to the locally manufactured unleaded premium gasolme and diesel fuel , it appears from the records and as confirmed by ICPA, petitioner withdrew 37,94 7,7 41 liters and 68,676,189 liters of locally manufactured unleaded premium gasoline and d1esel fuel respectively for the month of November 2003 and paid the correspond ing excise taxes pursuant to Section 130 (A)(2) The same is broken down as follows

27 EXhibits "VVVVVVV-1 to VVVVVVV-13"

28 Exhibits "WWVVWWWW-1 lo WWVVWWWW-85" 29 Exh1b1ts "XXXXXXX-1 to XXXXXXX-41 " 311 Exhibits" YYYYYYY -1 to YY YYY YY -87" "IJBI:3BBBBBBB" "DDDDDDDDDD-1' ::

1 Exhibits "AAAAAAAA-1 to AAAAAAAA-33"

• / ....... ,.. f} l tJuJ ,I

/)/J IS/(J\

C T l ( 'use iVo. 735,')' ?uge II Withdrawal on locally manufactured refined products

Unleaded Premium Gasoline

Diesel Fuel

Vol (in liters) 37.947,741 68,676 .1 B9

Excise Tax Rate

4.35 1 63

Excise Tax

165,072,673 35" 111 ,942, 188.00)3 Notably, the ICPA venfied that there existed a beginning balance inventory of 24,914 ,902 liters 34 and 28,400,366 liters 35 for petitioner's locally manufactured refined unleaded premium gasoline and diesel fuel for the month of November 2003.

At the same time, the !CPA verified that there was no increase in the inventory of petitioner's locally manufactured refined petroleum products since the month of November 2003 as evidenced by the zero figures in the beginning balances of the locally manufactured refined unleaded premium gasoline and diesel fuel for the month of December 2003 36 Considering that the volume of Withdrawals of the locally manufactured refined unleaded premium gasoline and diesel fuel for the month of November 2003, which is 37 ,947 ,741llters and 68,676,189 respectively, as outlined above, actually exceeded the beginning inventory for locally manufactured refined unleaded premium gasoline and diesel fuel for the month of November 2003, which is 24,914 ,902 liters and 28,400,366 liters respectively, there being no operations for the production of locally manufactured petroleum products, 1t is concluded that the excess volume of withdrawals pertain to the imported finished unleaded premium gasoline and diesel fuel which were comming led with the locally manufactured refined petroleum products The mathematical computation is as follows

Products

Beginning Balance (in lilers)

Less Withdrawals

Ending Balance (in liters) 37 Exhibit "11111111-2". Annex 14 :n Exh1bit "11111111-2", Annex 32 3

~ Exhibits" NNN-17" and "PPP-3"

35 Exhibit "NNN-24"

36 Exhibit "11111111-2", pp 17-18 and 29-31

Unleaded Premium

Gasoline

24,914 ,902 00 3?_~~4?.2_~ 1 09- -- (1}, 032 ,? 3~ : 00)

Diesel

28 ,400 ,366 00 - ~~676_,_1 ~9 00 (40J.J§.l82~ :00L_ _ l OG:

I JU 'IS/(}!\ ('T-1 Case ,Vo 7J58 !'age 12 Consequently, since all the imported finished unleaded premium gasoline and diesel fuel imported for the month of November 2003 were actually paid 37 before the 1r release from the customshouse pursuant to Section 131 (A), as well as , all the locally manufactured refined unleaded gasoline and diesel fuel for the month of November 2003 before removal from their place of produ ction or the refinerl8 pursuant to Section 130(A)(2), the excise taxes paid for the excess volume of withdrawals of the locally manufactured unleaded premium gasoline and diesel fuel , which are actually imported finished unleaded premium gasoline and diesel fuel , is actually an overpayment cons idenng that the excise taxes on such imported finished unleaded prem ium gasoline and diesel fuel were already paid upon their release from the customshouse Interestingly though, petitioner claims a refund even for reprocessed products in the am ou nt of P2 ,852 ,811 0039 and P826,718 00 40 for its unleaded premium gasoline and diesel fuel , respectively. However, there exists no evidence among the documents presented that shows that the excise taxes on the reprocessed unleaded premium gasoline and diesel fuel were actually paid up In fact, according to petitioner's witness Mr A rm ando Casabal , in his

Judicial Affidavit

41 dated September 18, 2006, petitioner only pays excise taxes after the crude oi l has been processed into locally refined or finished petroleum products .

Even th e ICPA failed to ment1on that petitioner paid the excise taxes on reprocessed unleaded premium gasoline and diesel fuel , viz

17 Supra

3 ~ Supra.

"The Company pa1d exc1se tax on w1thdrwals of unleaded prem1um gasolme in excess of the beg1nn1ng balance of the manufactured unleaded premium gasoline 4 ~" and 39 Exhibits "11111111-2", Annex 19 40 Exhibit "11111111-2". Annexes 36 & 37

41 Exhibit "SSSSSSS"

010:

Does Caltex pay exc1se taxes on crude 011 upon importation?

A 10

No Caltex only pays exc1se taxes after I he crude oil has been processed 1nto locally ref1ned or f1n1shed petroleum products 4 ;· Exhibit "1111 1111-2" Annex 1, VII , No 2 pp 18 to 19 /!U'/SWN

C T / Cose No 7 358

/'uge I 3 "The Company paid exc1se tax on withdrawals of d1esel 1n excess of the beginning balance of the manufactured diesel 4 .! ..

Thus, the Court concludes that petttioner did not pay the excise taxes on reprocessed unleaded premium gasoline and diesel tuel and the same should not be included tn the cla im for refund Therefore , the Court finds petitioner's claim for refund on erroneous overpayment of excise taxes on tmported finished unleaded gasoline and diesel fuel for the month of November 2003 JUStified , but only tn the amount of P1 08,585,162. 95, computed as follows

Unleaded Premium

Products

Gasoline

Diesel

TOTAL

Beginnmg Balance (in liters) 24,9 14 ,902 00 28, 400 ,366.00

Add Reprocessed Product

2,852,8 11 .00 826,7 18.00

Less: Withdrawals

_(3?_~~ 4 7,7 41 Q_O} _ {~~,67~'-l ~-9 00) Ending Balance (in liters) (10,180,028.00) (39 ,449 , 1 05.00) Excise Ta x Rate p 4.35 p 1.63 - ·-

Excess Excise Tax Paid

p 44,283 ,121.80 p 64,302,041 .15 p 108,585,162.95

WHEREFORE , the Petition for Review is hereby PARTIALLY GRANTED. Accordingly, respondent is hereby ORDERED to refund to petitioner the reduced amount of ONE HUNDRED EIGHT MILLION FIVE HUNDRED EIGHTY FIVE

THOUSAND

ONE

HUNDRED

SIXTY

TWO

PESOS

AND

95/100.

(P1 08,585, 162.95)

Presiding Justice

l DGJ I !U'!S/CJ!\ ( f./ Cose ,\ 'u 7 J58 1-'uge 1-1 ~ CAESAR A. CASANOVA

Associate Justice

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's Division. l ----- v-. \..~ ERNESTO D. ACOSTA

Presiding Justice

Chairperson, First Division