SAN MIGUEL BREWERY INC. v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY Third Division SAN MIGUEL BREWERY, CTA CASE NO. 10000 INC., Members: Petitioner, -versus - UY, Chairperson, RINGPIS-LIBAN, and COMMISSIONER OF MODESTO-SAN PEDRO,lf INTERNAL REVEN UE , Promulgated: Respondent. f ~; II WI I X- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X DECISION RINGPIS-LIBAN, _l: Before this Court is a Petition for Review filed by petitioner San l'v1iguel Brewery, Inc. (SMBI) against respondent Commissioner of Internal Revenue (CIR), praying that judgment be rendered: (1) Declaring that the excise tax rate of 1>24.07 per liter imposed by Respondent on the subject Bottle or Can Products and Keg Products during the period January 1 to December 31, 201 7, is not valid; (2) Declaring Petitioner is entitled to a refund of the amount o f 1>122,620,732.71, allegedly representing erroneous, excessive, illegal and/ or wrongful collection from, and overpayment by, petitioner to the Bureau of Internal Revenue (BIR) of excise taxes on the aforementioned beer products during the same period; (3) Ordering Respondent to refund the aforesaid amount of 1>122,620,732.71 to Petitioner, or issue to the latter a tax credit certificate for said amount, with legal interest; andfr"

DECISION CTA CASE NO. 10000 (4) Declaring as null and void Revenue Memorandum Circular (RMC) No. 90-2012, particularly the portions thereof imposing the tax rate of f>20.57, instead of the tax rates provided for in Section 143 of the National Internal Revenue Code (NIRC), and Revenue Regulations (RR) No. 17-2012, particularly the portion of Section 5 hereof providing that "Starting January 1, 2014, the applicable tax rate shall be increase by four percent (4%) annually". THE PARTIES Petitioner SMBI is a corporation duly organized and existing under the laws of the Republic of the Philippines, with principal address at 40 San Miguel Avenue, Mandaluyong City, Metro Manila. 1 Respondent is the head of the BIR, with office address at the Office of the Commissioner of Internal Revenue, BIR, BIR National Office Building, Agham Road, Diliman, Quezon City, Metro Manila.2 THE FACTS On December 12,2018, Petitioner filed an administrative claim for refund in the total amount of f>122,620,732.71, representing alleged overpayment of excise taxes erroneously, illegally, excessively, and/or wrongfully assessed on and collected from Petitioner on the removals of its various products for the period from January 1, 2017 to December 31,2017.3 The instant Petition for Review was filed on December 27, 2018.4 Respondent posted his Answer on March 15, 2019,5 setting forth its special and affirmative defenses. On March 25, 2019, Respondent transmitted the BIR Records for this case/v" 1 Docket, p. 281, Pre-Trial Order dated August 14, 2019, par. I(A)(1). 2 /d., pp. 281 to 282, par. I(A)(2). 3 /d., pp. 57 to 66, Exhibit "P-3". 4 /d., pp. 10 to 41. 5 ld., pp. 96 to 124. 6 /d., pp. 128 to 130, Compliance dated March 22, 2019.

DECISION CTA CASE NO. 10000 The pre-trial conference was set and held on June 25,2019.7 Prior thereto, Respondent's Pre-Trial Brief Ad Cautelam was ftled on June 14, 2019;8 while Petitioner's Pre-Trial Brief was submitted on June 19,2019,9 attaching therewith a draft Joint Stipulation of Facts, Documents, Issues, and Other Matters. 10 Upon Petitioner's motion,11 the Court commissioned Ms. Katherine 0. Constantino as an Independent Certified Public Accountant (ICPA). 12 The Report of the said ICPA was submitted on July 25, 2019_13 On July 25,2019, Petitioner filed a Manifestation,14 stating that the parties had not been able to reach an agreement on the draft Joint Stipulation of Facts, Documents, Issues and Other Matters proposed by Petitioner; and hence, they would no longer ftle a Joint Stipulation in this case. In the Resolution dated July 31, 2019,15 the Court noted the said Manifestation. Thereafter, the Court issued the Pre-Trial Order dated August 14, 2019.16 Trial then proceeded. During trial, Petitioner presented its documentary and testimonial evidence. Petitioner offered the testimonies of the following individuals, namely: (1) Ms. Noemi L. Ronquillo,17 its Financial Services and Accounting Manager; and (2) Ms. Katherine 0. Constantino,18 the Court duly commissioned ICPA. Subsequently, on September 25, 2019, Petitioner filed its Formal Offer of Evidence. 19 Respondent submitted his Comment (on Petitioner's Formal Offer of Evidence with Manifestation) on October 9, 2019,20 stating, inter alia, that in view of the confirmation of the office conducting an investigation/audit on Petitioner's claim for refund that there was still no report on the investigation, 'rl 7 ld., pp. 126 to 127, Notice of Pre- Trial Conference dated March 22, 2019; pp. 260, and 266 to 267, Minutes of the hearing held on, and Order dated, June 25, 2019, respectively. 8 ld., pp. 133 to 136. 9 /d., pp. 139 to 145. 10 ld., pp. 146 to 152. 11 ld., pp. 211 to 214, Motion for Commissioning of Independent Certified Public Accountant. 12 /d., pp. 260, and 266 to 267, Minutes of the hearing held on, and Order dated, June 25, 2019, respectively; p. 261, Oath of Commission dated June 25, 2019. 13 /d., p. 275, Letter dated July 25, 2019. 14 ld., pp. 276 to 277. 15 /d., p. 279. 16 ld., pp. 281 to 286. 17 /d., pp. 156 to 171, Exhibit "P-4"; pp. 287 to 288, Minutes of the hearing held on, and Order dated, August 15, 2019. 18 td., pp. 292 to 307, Exhibit "P-7"; pp. 309 to 311, Minutes of hearing held on, and Order dated, September 17, 2019. 19 /d., pp. 312 to 327. 20 ld., pp. 329 to 331.

DECISION CTA CASE NO. 10000 Respondent would no longer present his witness, but instead requested the Court to allow him to submit his Memorandum to further support his defense. In the Resolution dated November 7, 2019,21 the Court admitted Petitioner's exhibits, except for Exhibit "P-6-i-25714", for not being found in the records. Thus, on November 26, 2019, Petitioner filed a Motion for Partial Reconsideration (Re: Resolution dated November 7, 2019);22 and on December 26, 2019, a Manifestation and Submission/Motion.23 Respondent did not file his comment on the said Motion for Partial Reconsideration.24 In the Resolution dated June 8, 2019,25 the Court then granted the same, and admitted Exhibit "P- 6-i-25714" in evidence. Respondent's Memorandum was posted on August 17, 2020; 26 while the Memorandum for the Petitioner was ftl.ed on September 24, 2020."7 On October 5, 2020, the instant case was deemed submitted for decision.28 THE ISSUES As the parties did not reach any stipulation of issues, the following issues set forth separately by them shall be addressed by this Court, to wit: For Petitioner: 1. Whether SMBI is entitled to a refund in the amount of 'P122,620,732.71 as having been erroneously, excessively, illegally and/ or wrongfully collected from and overpaid by it as excise taxes on its subject beer products for the period January 1, 2017 to December 31, 2017. 2. Whether the excise tax rate of 'P24.07 per liter imposed by the CIR on SMBI's subject beer products during the period January 1, 2017 to December 31, 2017, is directly contradictory to and inconsistent with, and violative of, the express provisions o~ 21 ld., pp. 336 to 337. 22 ld., pp. 338 to 340. 23 ld., pp. 344 to 346. 24 /d., p. 349, Records Verification Report dated January 20, 2020 issued by the Judicial Records Division of this Court. 25 ld., pp. 353 to 354. 26 ld., pp. 363 to 392. 27 ld., pp. 401 to 440. 28 /d., p. 442, Resolution dated October 5, 2020.

DECISION CTA CASE NO. 10000 Section 143 of the NIRC, as amended by RA No. 10351 and therefore not valid. 3. Whether M1C 90- 2012, particularly the excise tax rate of P20.57 imposed by said MIC on the subject beer products, is valid. 4. Whether RR 17-2012, particularly Section 5 thereof providing that starting January 1, 2014, the applicable tax rate shall be increased by four percent (4%) annually, is valid. For Respondent: 1. Whether the Court has jurisdiction over the instant petition. 2. Without conceding that the Court has jurisdiction, but in the alternative, if the Court assumes jurisdiction, whether Petitioner is entitled to a claim for refund or issuance of tax credit certificate in the amount of P121,620,732.71 representing alleged excise taxes erroneously paid for the period 1 January 2017 to 31 December 2017. 29 THE ARGUMENTS OF THE PARTIES Petitioner argues that the excise tax rate of P24.07 per liter imposed by Respondent on the subject products is directly contradictory to and inconsistent with, and violative of, the express provisions of the lOth paragraph of Section 143 of the NIRC, as amended by Republic Act (RA) No. 10351, and is therefore invalid; that the said tax rate is not the rate provided for in the law; and that the increase on the excise tax rate from the previous rates ofP20.57, P21.39, P22.25, and P23.14 per liter to P24.07 is without legal basis. Moreover, Petitioner contends that said excise tax rate ofP24.07 per liter is invalid on the additional ground that it is based on the previous tax rates of P20.57, P21.39, P22.25, and P23.14, which in turn were based on BIR MIC 90- 2012 and RR 17-2012, and which Circular and RR are directly contradictory to and inconsistent with, and violative of, the express provisions of the relevant paragraphs of Section 143 of the NIRC, as amended, and were issued without prior notice to Petitioner and hearing, in utter disregard of the due process provision of the Constitution and the process required by mandatory provisions of the Administrative Code of 1987; and Petitioner is entitled to a refund in the amount of P122,620,732.71, allegedly representing erroneous, excessive, illegal and/ or wrongful collection from, and overpayment by, Petitioner in excise taxes on 'Jan M(gL.ight"for the period from January 1, 2017 up to December 31, 201;.,.-- 29 /d., pp. 282 to 283, Pre-Trial Order dated August 14, 2019, par. I(B).

DECISION CTA CASE NO. 10000 On the other hand, Respondent counters that the instant petition is not warranted to be given due course for lack of jurisdiction; that assuming, without conceding, that this Court may take cognizance of cases involving the validity or constitutionality of BIR issuances, this Court should dismiss the instant petition due to Petitioner's non-exhaustion of administrative remedies; that Petitioner failed to exhaust the remedy provided for under Section 4 of the NIRC; that Petitioner denied respondent the opportunity to review its claim for refund; that assuming without conceding that the Court has jurisdiction and/or Petitioner has a cause of action, Petitioner is not entitled to a tax refund because there was no erroneous or illegal collection of excise taxes; and that clainls for refund are construed strictly against the taxpayer and in favor of the government. THE RULING OF THE COURT The instant Petition for Review is partly meritorious. This Court has jurisdiction over the instant Petition for Review. Respondent argues that this Court has no jurisdiction to determine the constitutionality and validity ofRt\1C No. 90-2012 and RR No. 17-2012. The issue of jurisdiction, however, has already been settled by the Supreme Court. In Banco De Oro, et aL vs. Republic ofthe Philippines, et aL (hereinafter referred to as the "Banco De Oro case"),30 the Supreme Court En Bane ruled as follows: "The Court of Tax Appeals has undoubted jurisdiction to pass upon the constitutionality or validity of a tax law or regulation when raised by the taxpayer as a defense in disputing or contesting an assessment or claiming a refund. It is only in the lawful exercise of its power to pass upon all matters brought before it, as sanctioned by Section 7 of Republic Act No. 1125, as amended. This Court, however, declares that the Court of Tax Appeals may likewise take cognizance of cases directly challenging the constitutionality or validity of a tax law or regulation or administrative issuance (revenue orders, revenue memorandum circulars, rulings)j/ 30 G.R. No. 198756, August 16, 2016.

DECISION CTA CASE NO. 10000 Section 7 of Republic Act No. 1125, as amended, is explicit that, except for local taxes, appeals from the decisions of quasi- judicial agencies (Commissioner of Internal Revenue, Commissioner of Customs, Secretary of Finance, Central Board of Assessment Appeals, Secretary of Trade and Industry) on tax- related problems must be brough exclusive!J to the Court of Tax Appeals. In other words, within the judicial system, the law intends the Court of Tax Appeals to have exclusive jurisdiction to resolve all tax problems. Petitions for writs of certiorari against the acts and omissions of the said quasi-judicial agencies should, thus, be filed before the Court of Tax Appeals. Republic Act No. 9282, a special and later law than Batas Pambansa Big. 129 provides an exception to the original jurisdiction of the Regional Trial Courts over actions questioning the constitutionality or validity of tax laws or regulations. Except for local tax cases, actions directly challenging the constitutionality or validity of a tax law or regulation or administrative issuance may be filed directly before the Court of Tax Appeals." (Emphases and underscoring added) Based on the foregoing jurisprudential pronouncements, it is clear that this Court not only has jurisdiction to pass upon the constitutionality or validity of a tax law or regulation when raised by the taxpayer as a defense in disputing or contesting an assessment or claiming a refund, but also, this Court has jurisdiction over cases directly challenging the constitutionality or validity of a tax law, or regulation or administrative issuance such as revenue orders, revenue memorandum circulars, and revenue regulations and rulings. The Banco De Oro case intends this Court to have exclusive jurisdiction to resolve all tax problems except in cases questioning the legality or validity of assessment of local taxes where the Regional Trial Court has jurisdiction.31 Considering that the instant case questions the validity of administrative issuances, specifically, certain portions of ~\1C No. 90-2012 and a portion of RR No. 17-2012, both as a direct challenge and in connection with a refund claim, this Court clearly has jurisdiction to entertain the same. Needless to state, it is the duty of this Court to obey decisions of the Supreme Court and render obeisance to its status as the apex of the hierarchy of courts.32 As eloquently declared by Justice J.B.L. Reyes, "There is on!J one Supreme ~ 31 Games and Amusement Board, eta/. vs. Klub Don Juan De Manila, Inc., eta/., G.R. No. 252189, November 3, 2020. 32 Refer to Manila Electric Company vs. Philippine Consumers Faundatian, Inc., eta/., G.R. No. 101783, January 23, 2002.

DECISION CTA CASE NO. 10000 Courtfrom whose decisions all other courts should take their bearings." 33 Thus, the Banco De Oro case must be followed. Section 143 of the NIRC of1997, as last amended by RA 10351, must prevail over the pertinent provisions ofRR 17-2012. and RMC 90-2012. Section 3 of RA 10351 34, which took effect on January 5, 2013,35 reads, in part, as follows: "SEC. 3. Section 143 of the National Internal Revenue Code of 1997, as amended by Republic Act No. 9334, is hereby further amended to read as follows: 'SEC. 143. Fermented Liquors. - There shall be levied, assessed and collected an excise tax on beer, lager beer, ale, porter and other fermented liquors except tuba, basi, tapuy and similar fermented liquors in accordance with the following schedule: 'Effective on January 1. 2013' '(a) If the net retail price (excluding the excise tax and the value-added tax) per liter of volume capacity is Fifty pesos and sixty centavos (P50.60) or less, the tax shall be Fifteen pesos (P15.00) per liter; and '(b) If the net retail price (excluding the excise tax and the value-added tax) per liter of volume capacity is more than Fifty pesos and sixty centavos (P50.60), the tax shall be Twenty pesos (P20.00) per liter. XXX XXX XXX/ 33 /d. 34 AN ACT RESTRUCTURING THE EXCISE TAX ON ALCOHOL AND TOBACCO PRODUCTS BY AMENDING SECTIONS 141, 142, 143, 144, 145, 8, 131 AND 288 OF REPUBLIC ACT NO. 8424, OTHERWISE KNOWN AS THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED BY REPUBLIC ACT NO. 9334, AND FOR OTHER PURPOSES. 35 RA 10351 was published in the Manila Bulletin on December 21, 2012. Thus, counting fifteen (15) days from the said date (pursuant to Tanada, eta/. vs. Tuvera, eta/., G.R. No. L-63915, December 29, 1986; and Article 2 of the Civil Code of the Philippines, as amended by Executive Order No. 200, series of 1987), the said RA took effect on January 5, 2013.

DECISION CTA CASE NO. 10000 'Effective on January 1. 2017, the tax on all fermented liquors shall be Twenty-three pesos and fifty centavos (P23.50) per liter. 'The rates of tax imposed under this Section shall be increased by four percent (4%) every year thereafter effective on January 1. 2018. through revenue regulations issued by the Secretary of Finance. However, in case of fermented liquors affected by the 'no downward reclassification' provision prescribed under this Section, the four percent (4%) increase shall apply to their respective applicable tax rates. XXX XXX XXX Any downward reclassification of present categories, for tax purposes, of fermented liquors duly registered at the time ofthe effectivity ofthis Act which will reduce the tax imposed herein, or the payment thereof, shall be prohibited. The proper tax classification of fermented liquors, whether registered before or after the effectivity of this Act, shall be determined every two (2) years from the date of effectivity of this Act. All fermented liquors existing in the market at the time of the effectivity of this Act shall be classified according to the net retail prices and the tax rates provided above based on the latest price survey of the fermented liquors conducted by the Bureau of Internal Revenue. XXX XXX xxx." (Emphases and underscoring added) Based on the foregoing provision, effective on January 1, 2013, the excise tax shall be ~15.00 per liter, in case the net retail price per liter ofvolume capacity of the fermented liquor is ~50.60 or less; and the excise tax shall be ~20.00 per liter, in case the net retail price per liter of volume capacity of the fermented liquor is more than ~50.60. Furthermore, the BIR was tasked to classify all fermented liquors existing in the market at the time of the effectivity ofRA 10351 according to the net retail prices and the tax rates provided therein based on the latest price survey of the said fermented liquor~

DECISION CTA CASE NO. 10000 Such being the case, certain portions of Annex "A-1" of R.c\1C 90-201236 must be struck down. Particularly, said portions are as follows: "Annex 'A-1' LIST OF BRANDS OF LOCALLY MANUFACTURED FEJU\.fENTED LIQUORS As of December 2012 -� ~~~ ~~ ~~-~~~~ ... d ..... ............ ~~~ ~~~ -~ ~~ ~~~~ ~ ~~--~ } BRAND NAME/ TYPE OF CONTENT NET Applicable Product Description PACKAGING PER TYPE RETAIL Excise Tax PRICE OF (Based on Rate Per PACKAGING 2010 BIR Liter (in milliliter) Price (Effective Survey) January 1, Per Liter 2013) A. NRP is P50.60 per liter and below XXX XXX XXX San Miguel Pale Pilsen bottle 1000 32.73 15.49 320 45.48 15.49 San Miguel Pale Pilsen bottle 330 43.18 20.57 (embossed label marking) 330 47.99 20.57 330 32.36 20.57 Coors Light Beer bottle 330 45.21 20.57 San Mig Light bottle The Original Coors bottle The Silver Bullet bottle Coorslight B. NRP is more than P50.60 XXX XXX XXX Colt Ice bottle 330 60.37 20.57 330 56.03 20.57 Coors Light Beer can 330 56.61 20.57 320 66.39 20.57 Red Horse can 330 61.51 20.57 330 62.66 20.57 San Mig Cerveza Negra bottle 330 65.10 20.57 San Mig Light can 330 70.36 20.57 330 74.75 20.57 San Mig Strong Ice bottle 330 60.05 20.57 330 91.73 20.57 non-returnable 330 100.30 20.571 San Mig Strong Ice bottle 330 104.73 20.57 San Mig Strong Ice can 69.90 330 20.57. San Mig Oktoberfest Beer bottle IV San Mig Pale Pilsen San Miguel Premium Malt bottle Beer San Miguel Premium Malt can Beer San Miguel Premium Malt non-returnable Beer bottle Super Drv can 36 SUBJECT: Revised Tax Rates of Alcohol and Tobacco Products Under Republic Act No. 10351, "An Act Restructuring the Excise Tax on Alcohol and Tobacco Products Amending Sections 141, 142, 143, 144, 145, 8, 131 And 288 of Republic Act No. 8424, Otherwise Known as The National Internal Revenue Code Of 1997, as amended By Republic Act No. 9334, and for Other Purposes".

DECISION CTA CASE NO. 10000 The Original Coors can 330 54.00 20.57 The Silver Bullet Coorslight can 330 57.05 20.57 II. List of Brands (not included on 2010 BIR Price Survey and introduced in the market before effectivity ofR.A. No. 10351) Based on Latest Suggested Net Retail Price Per Sworn Statement Submitted by the Manufacturer or I---- - - - - - NET Applicable RETAIL Excise Tax CONTENT PRICE Rate Per BRAND NAME/ TYPE OF PER TYPE (Based on Liter Product Description PACKAGING OF 2010 BIR (Effective PACKAGING Price Survey) January 1, (in milliliter) Per Liter 2013) A. NRP is P50.60 per liter and below XXX XXX XXX Beer Pale Pilsen bottle 330 45.21 20.57 B. NRP is more than P50.60 XXX XXX XXX Carlsberg bottle 330 60.37 20.57 San Mig Zero can 56.03 20.57 San Miguel Flavored can 330 56.61 20.57 Beer-Apple San Miguel Flavored bottle 330 66.39 20.57 Beer-Lemon San Miguel Flavored can 320 61.51 20.57 Beer-Strong Lager Stag bottle 330 62.66 20.57 The Original Coors can 70.36 330 20.57 " (Emphase.r added) 330 Clearly, the foregoing tax impositions, respectively, are beyond the tax rates under Section 143 of the NIRC of 1997, as last amended by RA 10351. RMCs are considered administrative rulings (in the sense of more specific and less general interpretations of tax laws) which are issued from time to time by Respondent. It is widely accepted that the interpretation placed upon a statute by executive officers, whose duty to enforce it, is entided to great respect by the courts. Nevertheless, such interpretation is not conclusive and will be ignored if judicially found to be erroneous. Thus, courts will not countenance administrative issuances that override, instead of remaining consistent and in harmony with, the law they seek to apply and implemen~ 37 Philippine Bank a/Communications vs. Commissioner of Internal Revenue, eta/., G.R. No. 112024, January 28, 1999.

DECISION CTA CASE NO. 10000 For being inconsistent or contrary to Section 143 of the NIRC of 1997, as last amended by RA 10351, the aforequoted portions of Annex "A-1" ofRMC No. 90-2012 are invalid. Moreover, still on the basis of the Section 143 of the NIRC of 1997, as last amended by RA 10351, for the year 2017, the excise tax to be imposed on all fermented liquors shall be at the rate of P23.50 per liter thereof. The said rate, inter alia, shall be increased by 4%, every year thereafter, but such increase will take effect only on January 1. 2018, subject to the "no downward reclassification" rule. In other words, the above-quoted Section 3 of RA 10351, amending Section 143 of the NIRC of 1997, as last amended by RA 9334: (1) fixed the excise tax rate of P23.50 per liter imposable on all fermented liquors, which necessarily includes Petitioner's beer products, for calendar year 2017, regardless of the net retail price per liter of volume capacity of the fermented liquor; and (2) laid down the rule that the increase in the said tax rate, by 4%, shall only be made effective on January 1, 2018, subject to the "no downward reclassification" provision. There is then a discrepancy between the said Section 143 and a certain portion of Section 5 ofRR 17-201238, which implements RA 10351. Said Section 5 reads as follows: "SEC. 5. DOWNWARD RECLASSIFICATION OF FERJ\1ENTED LIQUORS. -Any downward reclassification of any fermented liquor product that is duly registered with the BIR at the time of effectivity of the Act which will reduce the tax imposed herein, or the payment thereof, shall be prohibited. Starting January 1, 2014, the applicable tax rate shall be increase[d) by four percent (4%) annually: Provided, however, it shall not be lower than the rates prescribed under Section 3 of these Regulations." (Emphasis and underscoring added) On the basis of the foregoing provision, the increase of 4% in the excise tax rate shall be made "[s]tarting January 1, 2014". This direcdy contravenes Section 143 of the NIRC of 1997, as last amended by RA No. 10351, which clearly states that the increase by 4% shall be "effective [only] on January 1, 2018". Apropos, the law cannot be amended by a mere regulation. In fact, a regulation that operates to create a rule out of harmony with the statute is a mere nullity; it cannot prevail.39 In addition, in case of conflict, the law must prevail. A regulation adopted pursuant to law is law. Conversely, a regulation or any /)/ 38 SUBJECT: Prescribing the Implementing Guidelines on the Revised Tax Rates on Alcohol and Tobacco Products Pursuant to the Provisions of Republic Act No. 10351 and to Clarify Certain Provisions of Existing Revenue Regulations. 39 Commissioner of Internal Revenue vs. Central Luzon Drug Corporation, G.R. No. 159647, April 15, 2005.

DECISION CTA CASE NO. 10000 portion thereof not adopted pursuant to law is no law and has neither the force nor the effect oflaw.40 Correspondingly, that portion of Section 5 of RR 17-2012, which states that "[s]tartingjanuary 1, 2014, the applicable tax rate shall be increase[d] by four percent (4%) annually" is likewise invalid. Governingprovisions for refund claims. Sections 204(C) and 229 of the NIRC of 1997 read: "SEC. 204. Authority if the Commissioner to Compromise/Abate and Refund or Credit Taxes. - The Commissioner may - XXX XXX 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 their 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, howez,er, that a return filed showing an overpayment shall be considered as a written claim for credit or refund." (Emphasis added) "SEC. 229. Recovery if Tax Erroneously or Illegally Collected. - No suit or proceeding shall be maintained in any court for the recovery of any national internal revenue tax hereafter alleged to have been erroneously or illegally assessed or collected, or of any penalty claimed to have been 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 maintained, whetber or not such tax, penalty, or sum has been paid 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: Provided, however, That the Commissioner may, even without a written claim therefor, refund or credit any tax, ~ 40 /d.

DECISION CTA CASE NO. 10000 where on the face of the return upon which payment was made, such payment appears clearly to have been erroneously paid." (Emphases added) The aforequoted provisions are clear: within two (2) years from the date of payment of tax, the claimant must first flie an administrative claim with Respondent before filing its judicial claim with the courts of law. Both claims must be flied within a two (2)-year reglementary period. Timeliness of the filing of the claim is mandatory and jurisdictional, and thus the Court cannot take cognizance of a judicial claim for refund filed either prematurely or out of time. It is worthy to stress that as for the judicial claim, tax law even explicidy provides that it be flied within two (2) years from payment of the tax "regardless of any supervening cause that may arise after payment. "41 Moreover, the foregoing proVlstons allow the recovery of taxes erroneously or illegally collected. An "erroneous or illegal tax" is defined as one levied without statutory authority, or upon property not subject to taxation, or by some officer having no authority to levy the tax, or one which is some other similar aspect is illegal.42 Thus, for the instant claim for refund to prosper, Petitioner must not only establish that it has timely filed its refund claim, it must likewise prove that the subject excise taxes paid are "erroneous or illegal". Petitioner timely fJJed its administrative andjudicial claims. For excise tax on domestic products in general, the return is filed and the excise tax is paid by the manufacturer or producer before removal of the products form the place of production. Hence, the date of payment of excise tax on domestic products depends on the date of actual removal of the taxable domestic products from the place of productionY Thus, the reckoning of the 2-year prescnpuve period under the aforequoted Sections 204(C) and 229 should be from the date of "actual removal" of the taxable domestic products from the place of production; and not from the date when the pertinent excise tax return was filed and/or when the corresponding excise tax was paidiY' 41 Commissioner of Internal Revenue vs. San Miguel Corporation, etseq., G.R. Nos. 180740 and 180910, November 11, 2019. 42 Commissioner of Internal Revenue vs. Pilipinas Shell Petroleum Corporation, G.R. No. 188497, April 25, 2012, citing the definition provided in BLACK'S LAW DICTIONARY, Fifth Edition, p. 486. 43 Commissioner of Internal Revenue vs. San Miguel Corporation~ etseq., supra.

DECISION CTA CASE NO. 10000 In this case, throughout calendar year 2017, petitioner filed Excise Tax Returns and paid excise taxes;44 and actually removed its beer products from its plants,45 the earliest of which was made on January 1, 2017.4D Such being the case, Petitioner had two (2) years from the said date or until January 1, 2019 within which to file its administrative and judicial claims for refund. Clearly, Petitioner's administrative claim for refund flied on December 12, 2018,47 and the judicial claim for refund filed before this Court on December 27, 2018,48 both fell within the two-year prescriptive period. Correspondingly, Petitioner timely filed its administrative and judicial claims. Anent Respondent's contention that it was denied the opportunity to review petitioner's claim for refund, the same deserves scant consideration. As can be noted, from the filing of Petitioner's administrative claim on December 12, 2018 until the filing of the instant Petition for Review on December 27, 2018, Respondent had fifteen (15) days to act on the said administrative claim. This negates the contention of Respondent that he was denied opportunity to review Petitioner's administrative claim. Furthermore, since he ought to know the tax records of all taxpayers, Respondent could have easily disproved the claimant's allegation,49 and decide on such administrative claim. Nevertheless, the primary purpose of filing an administrative claim was to serve as a notice of warning to Respondent that court action would follow unless the tax or penalty alleged to have been collected erroneously or illegally is not refunded. To clarify, Section 229 of the NIRC of 1997, however, does not mean that the taxpayer must await the final resolution of its administrative claim for refund, since doing so would be tantamount to the taxpayer's forfeiture of its right to seek judicial recourse should the two (2)-year prescriptive period, expire without the appropriate judicial claim being filed. 50 Notably, the aforequoted Section 229, as worded, only required that an administrative claim should first be flied. It bears stressing that Petitioner could~ 44 Exhibits "P-6-a" to "P-6-a-3007"; "P-6-b" to "P-6-b-754"; 11P-6-c" to "P-6-c-681"; "P-6-d'' to "P-6-d-27"; and "P-6-e" to "P-6-e-40". 45 Exhibits "P-6-f-1" to "P-6-f-12". 46 Exhibit "P-6-f-1". 47 /d. at Note 1, pp. 57 to 66, Exhibit "P-3". 48 /d., p. 10. 49 Commissioner of Internal Revenue vs. lroncon Builders and Development Corporation, G.R. No. 180042, February 8, 2010. �5 Commissioner of Internal Revenue vs. Goodyear Philippines, Inc., G.R. No. 216130, August 3, 2016; refer also to CBK Power Company Limited vs. Commissioner of Internal Revenue, et seq., G.R. Nos. 193383-84, and 193407-08, January 14, 2015.

DECISION CTA CASE NO. 10000 not be faulted for resorting to court action, considering that the prescriptive period stated therein was about to expire. Had Petitioner awaited the action of Respondent knowing fully well that the prescriptive period was about to lapse, it would have resultantly forfeited its right to seek a judicial review of its claim, thereby suffering irreparable damage.51 Thus, in view of the aforesaid circumstances, Petitioner correctly and timely sought judicial redress, notwithstanding that its administrative and judicial claims were ftled only fifteen (15) days apart. In the same vein, one of the recognized exceptions to the doctrine of exhaustion of administrative rule is when, as here, there are circumstances indicating the urgency of judicial intervention.52 Thus, in this case, there is no violation of the said doctrine. The Court shall now proceed to rule on whether the claim for refund in the amount of f'122,620,732.71 represents erroneous or illegal excise taxes paid by Petitioner covering the year 2017. The amount of P122,620,732.71 represents erroneous orillegal excise taxes paid by Petitioner covering the yeat2017. Petitioner alleges that during the period from January 1, 2017 up to December 31, 2017, in order that it will be able to make removals of its beer products without penalty, it was constrained to pay, as required by the BIR, excise taxes on its removals of the said products at the tax rate of f'24.07 per liter, when it should have paid only f'23.50 per liter, as provided for in the tenth paragraph of Section 143 of the NIRC of 1997, as amended by RA 10351. In view of Our foregoing disquisitions, We rule in favor of Petitioner. To be clear, pursuant to Section 143 of the NIRC of 1997, as last amended by R.A 10351, the excise tax rate that should have been imposed, for the year 2017, is only f'23.50 per liter, instead off'24.07 per liter. Hence, it is evident that the difference berween the said amounts, i.e., f'0.57 per liter, has been erroneously, illegally, excessively and/or wrongfully collected from Petitioner by the BIR.t/ 51 Commissioner of Internal Revenue vs. Goodyear Philippines, Inc., supra. 52 Banco De Oro, eta/. vs. Republic of the Philippines, eta/., G.R. No. 198756, January 13, 2015.

DECISION CTA CASE NO. 10000 The said difference amounting to P0.57 per liter yielded to a total amount ofP122,620,732.7P3, which is the subject of the present claim, broken down as follows: Product SMI. in can Removals 2017 Excise Tax San Mig Light in Difference San Mig I .ight (S~vfl .) -Can and in (in Liters) Payment @P24.07 Bottle, in Can and in I' 6,948,365.85 bottle Kegs and Other Beer San Mig I .ight- Bottle S~IL in 12,190,115.52 I' 293,416,080.57 Products Should be 89,362,624.74 Kegs 156,776,534.64 3,773,611,188.78 @P23.50 pursuant to 265,631.40 San Mig; I.ight in Keg:; - 30 I .iter~ 11,217,101.40 402,562.50 ( hh<:r b~:t:r 466,020.00 16,999,437.50 Section 143 of the San Mig Light in Kegs - 50 Liters products 706,250.00 147,900,649.09 NIRC of1997, as 3,502,425.01 6,144,605.28 amended by RA No. San ~liJ,.,>ud Pale Pibcn - Can 183,216.92 San Miguel Premium ,\11 Malt B~.:cr- 321,433.20 10351 Hottle 89,448.32 San Miguel Premium All Malt B~:cr- 156,926.88 I' 286,467,714.72 271,866.20 Can 476,958.24 115,067.54 201,872.88 3,684,248,564.04 3,202,131.64 San Mig Zero- Bottle in Case:/ Carton 5,617,774.80 10,951,470.00 16,203,811.30 Super Drv- Can 28,427,739.12 16,596,875.00 2,073,581.29 Red I Iorsc- Can 3,637,861.92 P122,620,732.71 San Miguel Flavored Beer - ,\ pple - 215,124,092.48 144,398,224.08 Bottle San Miguel 1'\avored Beer - L~mon - 7,736,897.12 7,553,680.20 Bottle 3,777,230.00 3,687,781.68 TOTAL 11,480,384.84 11,208,518.64 4,859,080.22 4,744,012.68 135,219,839.44 132,017,707.80 684,255,680.62 668,051 ,869.32 87,563,336.41 85,489,755.12 P5,178,036,905.99 P5,055,416,173.28 As ascertained by the court-commissioned ICPA, Mrs. Katherine 0. Constantino, Petitioner filed separate Excise Tax Returns (BIR Form No. 2200- A) for each of the six plants, namely: (1) Sta. Rosa, Laguna; (2) Davao; (3) Bacolod; (4) Mandaue, Cebu; (5) San Fernando, Pampanga; and (6) Polo, Valenzuela. Petitioner paid the excise taxes in advance before the actual removal of all of its domestic beer products (including "San Mig Ught" and "Other Beer Products') from the six plants and filed the corresponding excise tax returns. The advance excise tax payments served as deposits to be applied on the excise taxes due on actual removals of all domestic beer products from the six plants. In this regard, Petitioner flied separate Excise Tax Returns for the application of advance excise tax payments on the excise taxes due on the actual removal of all the beer products.54 Furthermore, the ICPA examined Petitioner's balance of excise tax advance payments carried from the previous return and the excise tax payments/deposits made in the year 2017, then compared the same with all the removals/ applications of the excise taxes for the same year, to wit~ 53 Exhibit "P-5", Table 3, p. 7. 54 Exhibit "P-5", pp. 8 to 9. 55 Exhibit "P-5", Table 8, p. 11.

DECISION CTA CASE NO. 10000 Advance Excise Tax Payments and Excise Taxes Due per Excise Tax Returns (BIR Form No. 2200-A) for the period from January 1, 2017 to December 31, 2017 Plant Location Balance of Deposits Excise Tax Payments / Excise Tax Due / Balance of Deposits Sta. Rosa, Laguna Carried Over from Deposits Applied to be Carried Over to Davao Previous Returns Bacolod j> 3,922,507,905.56 j> (3,899,121,212.95) Next Return ~fandaue, Cebu j> 5,634,021.72 5,479,437,486.38 (5,430,459,208.71) j> 29,020,714.30 San Fernando, 13,759,224.82 2,577,929,510.82 (2,557 ,964,458 33) Pampanga 9,474,470,117.45 (9,350,449,550.37) 62,73 7,502.45 Polo, \'alenzuela 4,304,405.10 24,269,457.62 142,772,242.52 Total 18,751,675.46 63,180,529.64 13,701,787,759.78 (13,552,435,522.84) 212,532,766.54 27,643,614.50 6,873,918,820.69 (6,815,960,168.34) 85,602,266.81 P133,273,471.24 P42,030,051,600.68 (P41,606,390,121.54) P556,934,950.24 Based on the foregoing, the total amount of Advance Excise Tax Deposits during the year 2017 amounting to 1'42,030,051,600.68 when added to the beginning balance of Advance Excise Tax Deposits amounting to 1'133,273,471.24 will result to a total amount ofJ>42,163,325,071.92. The sum is sufficient to cover the total excise taxes due for the year 2017 of 1'41,606,390,121.54 and will result to an excess advance payment of 1'556,934,950.24 as of December 31, 2017. Thus, it is established that Petitioner had enough excise tax payments/deposits to cover all its removals during the year 2017. The beginning balance of deposits carried forward to January 2017 in the amount of 1'133,273,471.24 can be verified through the corresponding Excise Tax Returns (BIR Form No. 2200-A)56 duly filed by the Petitioner. The payments/deposits made for the year 2017 in the amount of 1'42,030,051 ,600.68 was properly supported by Excise Tax Returns (BIR Form No. 2200-A) 57; Original Print-outs of Bank Online Payment Confirmations58; Monthly Movement Report with Allocated Deposits, as attached to the Total Removals Report and Monthly Removals Schedules duly flied and stamped "Received" by the BIR59; and Official Register Books (ORB) and Sworn Statement of the Volume of Removals (SSR) 60, which contain information, such as total volume of removals of Petitioner's domestic beer products and the corresponding excise taxes due, as well as the beginning balance of excise tax deposits, total deposits paid and the ending balance thereof. A comparison of the foregoing documents reveals the following, vi:;;;61 // 56 Exhibits "P-6-a-3000" to "P-6-a-3005", Line 20. 57 Exhibits "P-6-a" to "P-6-a-2999"; Annex 1.1 to Annex 1.6 of the ICPA Report. 58 Exhibits "P-6-b" to "P-6-b-754", "P-6-c" to "P-6-c-681", "P-6-d" to "P-6-d-27", 11?-6-e" to "P-6-e-40"; Annex 2.1 to Annex 2.5 of the ICPA Report. 59 Exhibits "P-6-f-1" to "P-6-f-12". 60 Exhibits "P-6-g" to "P-6-g-69". 61 Exhibit "P-5", Table 12 and 13, pp. 14 to 15.

DECISION CTA CASE NO. 10000 Total Advance Excise Tax Deposits Paid and Total Excise Taxes Due on Removals of All Beer Products for the period from January 1, 2017 to December 31, 2017 Annex Beginning Advance Excise Reference Balance Tax Deposits Excise Tax Due Ending Balance Per Excise Tax Returns (BIR Form No. 2200-.\) ~--\nnex 1 1'133,273,471.24 1'42,030,051,600.68 (1'41,606,390,12154) 1'556,934,950.38 Per Month!J Movement &port with Allocated Deposits ~\nnex 3 133,273,460.17 42,030,051,600.67 (41 ,606,390,129.47) 556,934,931.37 Difference* 1'11.07 1'0.01 (1'7.93) 1'19.01 Difference rim to rounding-off Total Excise Tax Due and Paid on Total Removals of All Beer Removals for the period January 1, 2017 to December 31, 2017 Annex Excise Tax Due and Reference Paid Per Total Removals Report Annex 4 I' 41,606,390,129.39 Per lvfonthiy Movement &port with A!!owted Deposits .-\nnex 3 41,606,390,129.47 Difference* (1'0.08) *Difference dne to ro11nding-ojf. Consequently, the total excise tax due and paid in the amount of f'41,606,390,121.54 was for the actual removals of all beer products in the total of 1,765,266,782.84liters, as evidenced by the Monthly Movement Report with Allocated Deposits, as attached to the Total Removals Report and Monthly Removals Schedules duly filed and stamped "Received" by the BIR62� Out of the said total volume, 215,124,092.48liters pertain to "San Mig Ught'' and "Other Beer Products", and the remaining 1,550,142,690.36 liters pertain to "Other Products", as shown below:63 Total Volume of Liters and Total Excise Taxes Paid on Actual Removals of All Beer Products per Total Removals Report and Monthly Removals Schedules for the period from Januarv 1, 2017 to December 31, 2017 On "San Mig Light~, and "Other Beer Products" On Other Products Total 2017 Volume of Excise Volume of Excise Volume of Excise janwm� Removals Tax Paid Removals Tax Paid Removals Tax Paid (in Liter) (in Liter) (in Liter) p _182,707,743.11 p 2,(,41 ,512,4<J5.4(J p 3,024,220,238.57 15,899,781.60 112,404,787.04 12H,3(l4,56H.64 r:ebruarv 16,237,317.92 YJ(l,H32,247.33 1B,(J?9,26 1.1' 2,656,187,6.)(j_.)(j 129,2(J6,57<J.(J4 3,047,019,H7HNJ March 17,422,987.04 419,.171,'1JK05 121,311,905.2!-l 2,H5tl,H29,774.tl6 13K,7.14,H92..12 .1,270,201,(172.11 ;\pril Hi,349,442.HO .19.1,5.11 ,!1HH.2!1 119,.1.1.1,126.HH 2,H04,32H,4H 1.67 135,6H2,569.6H 3,197,H59,5W.H7 Mav 17,990,539.52 433,032,2H6.25 1.11 ,!1H7,5.19 ..16 .\OH0,557,174.9U 149,07H,07H.HH 3,513,5!-\9,46 1.15 June.: 1H,647,5H7.44 44H,H47,429.6H 126,496,4411.6(1 2,972,666,354.!19 145,144,02K!14 .1,421,513,7H3.77 Juh- 17,202,917..16 414,074,?2tl.H6 119,481,732.40 2,H07,H20,711.41 136,6114,649.76 .\221,894,932.27 ! :\ugu~t 17,59H,641 ..16 42.1,599,297.54 129,765,19(1.H4 3,049,481,9H4.71 147,36.1,8.1?.2(1 .\47.\t1Hl,282.25 September 17,872,921.36 430,201,':117.14 139,72(1,865..16 3,28.\441 1,3.16.(1() 157,59.1,7H6.72 .1,7U,641,553.14 October 19,256,656.88 46.1,507,731.1!1 136,5tlH,920.12 3,207,95!J,622.H4 155,765,577.00 3,671,467,353.94 Non:mbcr 18,800,1 U.MI 452,51H,736.2H 140,412,5H.lOO .\299,695,7(1().47 159,212,696.61-l 3,752,214,436.75 December 2l,H45,1H5.52 525,H13,(,JS.47 l6!1,59!J,33H.36 3,77.1,H72,951.41 182,435,52.1.!-\H 4,299,6H6,566.H8 Total 215,124,092.48 P5,178,036,905.99 1,550,142,690.36 P36,428,353,223.40 1,765~266,782.84 P41,606,390,129.39 Thus, the claim for refund in the total amount of f'122,620,732.71 emanated from "San Mig Ught" and "Other Beer Products" removals which we~ 62 Exhibits "P-6-f-1" to "P-6�1�12". 63 Exhibit "P-5", Table 14, p. 17.

DECISION CTA CASE NO. 10000 imposed by the Respondent an excise tax at the rate of f>24.07 per liter, when Petitioner should have paid only at f>23.50 per liter. Based on the ICPA Report,64 the details of Petitioner's beer products subjected to the excise taxes at the rate of f>24.07 per liter are as follows: TOTAL VOLUME OF REMOVALS AND TOTAL EXCISE TAXES PAID ON "SANMIG LIGHT AND OTHER BEER PRODUCTS"REMOVALS PER MONTHLY REMOVALS SCHEDULES PER PLANT DULY FILED AND STAMPED ''RECEIVED"BY THE BIR LOCATION SAN MIG LIGHT (SML) VOLUME OF TAX EXCISE TAX PAID STA. ROSA, LAGUNA PRODUCTS REMOVALS RATE BREWERY PER STA ROS,\, L\GUR\ (in liters) LITER BREWERY S~ILBOTTLE 1,523,158.56 24.07 1'36,662,426.54 DAVAO BREWERY DAVAO BREWERY S~ILBOTTLE 294,394.32 24.07 I' 7,086,071.28 BACOLOD BREWERY BACOLOD BREWERY S~ILBOTTLE 970,295.04 24.07 1'23,355,001.61 MANDAUE, CEBU BREWERY "L\NDAUE, CEBU BREWERY S"IL BOTTLE 871,999.92 24.07 1'20,989,038.07 "'-L\NDAUE, CEBU BRE\X'ERY S"'-IAPPLE 751,251.60 24.07 18,082,626.01 sub-total 1,623,251.52 1'39,071,664.09 SAN FERNANDO, PAMPANGA BREWERY SAN FERNAJ-:DO, PA\IP.\NG.\ S"'-ILBOTfLE 3,095,040.96 24.07 1'74,497,635.91 BREWERY C\~ RPTPP 402,336.00 24.07 I' 9,684,227.52 POLO BREWERY, VALENZUELA POLO BREWERY, V,\LE~ZUEL\ POLO BREWERY, PREC\IIU"'I 330"'-IL 19,538.64 24.07 470,295.06 V"\LENZUEL\ PRE"IIU?\1330"'-IL- C\N 3,421.44 24.07 82,354.06 POLO BREWERY, RED HORSE-C\~S 399,730.32 24.07 V,\LENZUEL\ 9,621,508.80 POLO BREWERY, VALENZUEL\ POLO BREWERY, S.\~ ~l!G LIGHT BOTTLE 4,912,340.40 24.07 118,240,033.43 VALENZUEL\ Sc\l\ ~l!G ZERO 330~1L BTL 45,476.64 24.07 1,094,622. 72 POLO BREWERY, SC\IL C\N 24.07 V,\LENZUEL\ SC\IL D~\FT 30 LITERS 951,001.92 24.07 22,890,616.21 POLO BREWERY, 35,580.00 856,410.60 \',\LE!\ZUEL\ POLO BREWERY, V,\LENZUEL\ POLO BREWERY, S:\IL D~\FT 50 LITERS 35,250.00 24.07 848,467.50 SUPERDRY-C\NS 7,088.40 24.07 170,617.79 V"\LE~ZUEL\ S:\1 ,\PPLE 24.07 32,101,879.79 S:\1 LEAION 1,333,688.40 24.07 5,973,910.19 POLO BREWERY, 248,189.04 V"\LENZUEL\ POLO BREWERY, V,\LEJ-:ZUEL\ POLO BREWERY, V"\LENZUEL\ sub-total 8,393,641.20 . 1'202,034,943.68 ;1 ~--<)\' .-,'ii STA. ROSA, LAGUNA BREWERY I I I I 64 Excerpt from Annex 5 of Exhibit "P-5".

DECISION CTA CASE NO. 10000 STA. ROSA, L\GU~L\ SMLBOTTLE 1,580,689.44 24.07 1'38,047,194.82 BREWERY SJ\IL BOTTLE 1'11,381,064.31 DAVAOBREWERY SJ\! APPLE 472,831.92 24.07 66,765.60 24.07 1,607,047.99 D,\VAO BREWERY S.\IL B01TLE 1'12,988,112.31 S.\IL BOTTLE 539,597.52 1'21,362,872.13 D,\VAO BREWERY SJ\1 ,\PPLE 1'21,538,637.05 887,531.04 24.07 sub-total 14,490,311.38 894,833.28 24.07 P36,028, 948.43 BACOLOD BREWERY 602,007.12 24.07 1,496,840.40 1'78,312,230.25 BACOLOD BREWERY S.\IL BOTTLE 3,253,520.16 24.07 1'11,805,797.76 MANDAUE, CEBU BREWERY 401,094.78 C\N RPTPP 490,477.68 24.07 290,526.83 .\L\NDAUE, CEBU BREWERY 16,663.68 24.07 PREJ\IICM 330:\IL 12,070.08 24.07 12,058,388.34 .\L\NDAUE, CEBU BRE\X'ERY 24.07 115,476,597.17 PRE.\IIUJ\! 330.\IL- C\N 500,971.68 24.07 sub-total 4,797,532.08 24.07 692,193.51 SAN FERNANDO, RED HORSE-C\NS 24.07 29,311,564.08 PAMPANGA BREWERY 28,757.52 24.07 S,\N FERN,\NDO, PM,fP,\NG,\ S,\N MIG LIGHT BOTTLE 1,217,763.36 24.07 8,092,430.28 BREWERY 24.07 23,3 70,824.27 POLO BREWERY, S,\N MIG ZERO 330.\IL BTL 336,204.00 24.07 VALENZUELA 970,952.40 24.07 905,513.40 POLO BREWERY, S.\1.\PPLE 37,620.00 1,365,972.50 \'ALENZUEL\ POLO BREWERY, SJ\1 LEJ\ION 56,750.00 321,981.50 \',\LENZUEL\ 13,376.88 1'204,092,884.40 POLO BREWERY, SJ\IL C\N 8,479,139.36 YALENZUEL\ 1'39,027,627.54 POLO BREWERY, SJ\IL DR.\FT 30 LITERS 1'17,653,317.34 V,\LENZUEL\ POLO BREWERY, S.\IL DR.\FT 50 LITERS 3,977,586.76 YALENZUEL\ 1'21,630,904.10 POLO BREWERY, SUPERDRY-CANS 1'34,540,475.03 \'ALENZCEL\ 1'31 ,533,598.64 POLO BREWERY, \'.\LENZUEL\ 16,582,523.92 POLO BREWERY, P48, 116,122.56 \'ALENZUEL\ POLO BREWERY, 1'81,409,086.08 \'.\LENZUEL\ POLO BREWERY, ,../ VALENZCEL\ POLO BREWERY, \',\LENZUEL\ POLO BREWERY, \'ALENZUEL\ sub-total .. j ' STA. ROSA, LAGUNA S.\IL BUITLE 1,621,422.00 24.07 BREWERY SJ\IL BOTTLE STA ROS,\, L\GUNA SJ\L\PPLE 733,415.76 24.07 BREWERY 165,250.80 24.07 DAVAOBREWERY S.\IL BUITLE 898,666.56 D,\\',\0 BREWERY Si\IL BOTTI.E DA\',\0 BREWERY SJ\1 ,\PPLE 1,435,001.04 24.07 sub-total S.\IL BUITLE 1,310,078.88 24.07 BACOLOD BREWERY 688,929.12 24.07 B,\COLOD BREWERY MANDAUE, CEBU BREWERY 1,999,008.00 .\L\NDAUE, CEBU BREWERY J\L\NDAUE, CEBU BREWERY 3,382,180.56 24.07 sub-total SAN FERNANDO, PAMPANGA BREWERY S,\N FERN,\NDO, P.\J\IPA~G,\ BREWERY

DECISION CTA CASE NO. 10000 POLO BREWERY, C\.N RPTPP 301,870.80 24.07 I' 7,266,030.16 VALENZUELA PRE,\!IU,\1 330,\!I, 14,461.92 24.07 348,098.41 POLO BREWERY, 6,082.56 24.07 146,407.22 YALENZUEL\. PREJ\!IC:J\1 330J\!L - C\N 24.07 POLO BREWERY, 314,130.96 24.07 7,561,132.21 \',\.LENZUEL\ RED HORSE-C\NS 4,839,896.16 24.07 116,496,300.57 POLO BREWERY, S.\N 1\!IG LIGHT BOTTLE 24.07 \',\LENZUEL\ S.\t--: J\!IG ZERO 330J\!L BTL 17,170.56 24.07 413,295.38 POLO BREWERY, Sl\L\PPLE 1,467,282.96 24.07 35,317,500.85 V.\LENZUEL\ 24.07 POLO BREWERY, Sl\1 LE.\ION 299,257.20 24.07 7 ,203,120.80 YALENZUEL\ SJ\!L C\.N 735,047.28 24.07 17,692,588.03 POLO BREWERY, Sc\!L DR.\FT 30 LITERS \',\LENZUEL\ S.\!L DR.\FT 50 LITERS 29,700.00 714,879.00 POLO BREWERY, SUPERDRY-C.\:--:S 52,550.00 1,264,878.50 Y,\LENZC:EL\ 9,258.48 POLO BRE'W'ERY, 8,086, 708.88 222,851.61 \'ALENZUEL\ P194,647,082.74 POLO BREWERY, V.\LENZUEL\. P34,839,580.41 POLO BREWERY, 4,551,015.03 \',\LENZUEL\. 13,700,131.79 POLO BREWERY, \',\LENZUEL\ P18,251,146.82 POLO BREWERY, P29,438,907.85 \',\LENZUEL\ 1'15,835,427.70 sub-total 28,038,316.92 P43,873,744.62 .. " "�I'�. '�' P80,781,136.37 STA. ROSA, LAGUNA Sl\!L BOTI'l.E 1,447,427.52 24.07 BREWERY Sc\1 .\PPLE I' 7,351,625.00 ST}... ROSA, L\.GUR\. S:\!L BOTTLE 189,074.16 24.07 344,095.09 BREWERY 569,178.72 24.07 139,544.38 DAVAOBREWERY Sl\!L BOTTLE 758,252.88 Sl\1 .-\.PPLE 7,533,299.58 D.\\',\0 BREWERY S,\!L BOTTLE 1,223,053.92 24.07 109,631,365.19 D.-\.\'.-\.0 BREWERY Sl\!L BOTTLE 657,890.64 24.07 802,380.19 1,164,865.68 24.07 12,009.97 sub-total C.\N RPT PP 1,822,756.32 PREc\!IU.\1 330,\!L 34,047.494.47 BACOLOD BREWERY PRE.\!JU,\1 330:\!L - C.\N 3,356,092.08 24.07 RED HORSE-CANS ~ BACOLOD BREWERY S.\N .\!IG LIGHT BOTTLE 305,426.88 24.07 MANDAUE, CEBU BREWERY S.\N 1\!IG ZERO 330,\!L BTL 14,295.60 24.07 S.\N MIG ZERO C.\RTO!\ 5,797.44 24.07 ,\L\ND,-\.UE, CEBC: BREWERY S,\1 c\.PPLE 24.07 312,974.64 24.07 ,\L-\.NDAUE, CEBU BREWERY 4,554,689.04 24.07 24.07 sub-total 33,335.28 24.07 SAN FERNANDO, 498.96 PAMPANGA BREWERY SAN FER.'\1,-\.NDO, P.-1..\!PANG.-\. 1.414.519.92 BRE'W'ERY POLO BREWERY, VALENZUELA POLO BREWERY, \',\.LENZUEL-1. POLO BREWERY, \'ALENZUEL\ POLO BREWERY, \',\LE!\ZUEL\ POLO BREWERY, \',\LENZC:EL\ POLO BREWERY, \',\LENZUEL\. POLO BREWERY, VALENZUEL\ POLO BREWERY, \'ALENZC:EL\ POLO BREWERY, \'ALENZUEL-1.

DECISION 24.07 915.80 CTA CASE NO. 10000 Page 23 of 32 75 SMLEMON :-: S;\IL DR.\IT 30 LITERS S'\IL DR.\IT 50 SUPERDRY SI>IL BOTfLE SAN FERNANDO, PAMPANGA BREWERY S;\IL BOTfLE 24.07 C\N RPTPP 770.40 24.07 PRE;\IIU'\!330;\1!_ 24.07 PRE;\l!U'\l 330;\IL - C\N 24.07 RED HORSE-C\NS 24.07 24.07 S.\:-: 7\l!G ZERO 330l\!L BTL POLO BREWERY, I S'\l _\l'PLE 1,741,124.88 1 24.07 \'_\LENZUEL\ 374,251.68 1 24.07 POLO BREWERY, I S!\l LE;\!ON I 775,684.80 1 24.07 YALENZUEL\ 4o,o2o.oo 1 24.07 POLO BRE\\7ERY, I S'\IL C\N I s8,4oo.oo 1 24.07 \'ALENZUEL\ 14.770.80 I 24.07 POLO BREWERY, Sl\IL DR.\IT 30 LITERS I V_\LENZT.:EL\ POLO BREWERY, Si\lJ_ DR..\IT 50 LITERS I \'_\LENZUEL\ POLO BREWERY, I SUPERDRY-C\1\:S I \'ALENZUEL\ STA. ROSA, LAGUNA Si\IL BOTTLE BREWERY STA ROS_\, L\GUN-\ BREWERY ~

DECISION CTA CASE NO. 10000 D.-\\'.-\0 BRE\VERY SO.l.\PPLE 243,254.88 24.07 I' 5,855,144.96 SMLBOTTLE 911,132.64 24.07 21,930,962.64 DA\'AO BREWERY 1,154,387.52 1'27,786,107.61 S;\!L BOTTLE sub-total S;\l .-\PPLE 1,493,078.40 24.07 1'35,938,397 .09 Sl\!L BOTTI.E BACOLOD BREWERY 780,159.60 24.07 1'18,778,441.57 1,132,623.36 24.07 27,262,244.28 BACOLOD BREWERY 1, 912,782.96 MANDAUE, CEBU BREWERY 1'46,040,685.85 l\HNDAUE, CEBU BRE'-"'ERY SO.!L BOTILE 4,111,913.52 24.07 1'98,973, 758.43 l\L-\NDAUE, CEBU BREWERY C.\'-: RPT PP 491,364.72 24.07 1'11,827,148.81 sub-total PRb\l!Ul\1 3300.!1. 26,674.56 24.07 642,056.66 SAN FERNANDO, PAMPANGA BREWERY PREl\l!UM 330l\!L - C\N 16,243.92 24.07 390,991.15 S.\N FERN.\NDO, P.\MP.\NG.\ BREWERY RED HORSE-C\NS 526,965.12 24.07 12,684,050.44 POLO BREWERY, VALENZUELA S.\N :\!IG LIGHT BOTfLE 5,472,886.32 24.07 131,732,373.72 POLO BREWERY, \'ALENZUEL\ S.\N l\!IG ZERO 330l\!L BTL 30,832.56 24.07 742,139.72 POLO BREWERY, \'.\LENZUEL-\ Sl\! .\PPLE 1,535,917.68 24.07 36,969,538.56 POLO BRE'-"'ERY, \'.\LENZUEL\ SMLE?-.!ON 313,782.48 24.07 7,552,744.29 POLO BREWERY, \'.-\LENZUEL\ Sl\!L C\N 944,547.12 24.07 22,735,249.18 POLO BREWERY, \'ALENZUEL\ Sl\!L DR.\FT 30 LITERS 31,620.00 24.07 761,093.40 POLO BREWERY, \'.\LENZUEL\ Sl\!L DR.\FT 50 LITERS 49,650.00 24.07 1,195,075.50 POLO BREWERY, \'ALENZUEL-\ SUPERDRY-C\NS 16,426.08 24.07 395,375.75 POLO BRE'-"'ERY, \'ALENZUEL-\ 9,456,910.56 1'227,627 ,837.18 POLO BREWERY, �'�i;\~ �. \'.\LENZUEL\ ;,,.. POLO BREWERY, \'ALENZUEL\ POLO BRE'-"'ERY, \'ALENZUEL\ POLO BREWERY, \'.-\LE!--:ZUEL\ sub-total . ~~� " -,�,;,_ STA. ROSA, LAGUNA Sl\!L BOTI"LE 20,956.32 24.07 1'504,418.62 BREWERY SO.! .-\PPLE 1'5,588,256.80 STA. ROSA, L\GUN.\ Sl\!L BOTTLE 232,166.88 24.07 21,098,271.59 BREWERY 876,538.08 24.07 1'26,686,528.39 DA VAO BREWERY S;\!L BOTTLE 1,108,704.96 1'29,481,038.06 S;\l APPLE 1'13,723,007.92 D.\\'.\0 BREWERY Sl\!L BOTfLE 1,224,804.24 24.07 33,162,569.59 D.\\'.\0 BREWERY 1'46,885,577 .51 S:\!L BOTfLE 570,129.12 24.07 sub-total 1,377,755.28 24.07 1'77,436,074.55 C\1--:RPTPP 1,947,884.40 BACOLOD BREWERY I' 10,404,253.65 B.\COLOD BREWERY 3,217,119.84 24.07 MANDAUE, CEBU BREWERY p' 432,249.84 24.07 l\L\ND.\UE, CEBU BREWERY l\L\ND.\CE, CEBU BRE\X'ERY sub-total SAN FERNANDO, PAMPANGA BREWERY SAN FERN.\NDO, PAl\WANG.\ BREWERY POLO BREWERY, VALENZUELA POLO BREWERY, \'ALENZUEL\

DECISION CTA CASE NO. 10000 POLO BREWERY, PREMIUM 330?\!L 30,626.64 24.07 737,183.22 \'ALENZUEL\ PREMIU'\1 3301\!L - C.\N 12,378.96 24.07 297,961.57 POLO BREWERY, RED HORSE-C.\NS 395,730.72 24.07 9,525,238.43 \'.\LENZUEL\ S.\N 1\IIG LIGHT BOTTLE 5,961,740.40 24.07 143,499,091.43 POLO BREWERY, S.\N MIG ZERO 3301\!L BTL 35,988.48 24.07 866,242.71 \'.\LENZUEL\ Si\! .\PPLE 1,475,377.20 24.07 35,512,329.20 POLO BREWERY, Si\1 LEi\ION 264,337.92 24.07 6,362,613.73 \'ALENZUEL\ SJ\!L C.\N 977,122.08 24.07 23,519,328.47 POLO BREWERY, SJ\!L DRAFT 30 LITERS 30,030.00 24.07 722,822.10 \'.\LENZUEL\ Si\!L DR.\FT 50 LITERS 53,150.00 24.07 1,279,320.50 POLO BREWERY, SVPERDRY-C.\NS 14,715.36 24.07 354,198.72 \'ALENZUEL\ 9,683,447.60 1'233,080,583. 73 POLO BREWERY, .. . \'.\LENZUEL\ POLO BREW'ERY, ,.\1y'� . \'.\LENZUEL\ POLO BREWERY, \',\LENZUEL\ POLO BRE\X'ERY, \'.\LENZUEL\ POLO BRE\X'ERY, \',\LENZUEL\ sub-total STA. ROSA, LAGUNA Sl\IL BOTTLE 1,074,348.00 24.07 1'25,859,556.36 BREWERY S'\1.\PPLE I' 5,979,438.59 STA ROSA, L\GUNA Sl\IL BOTTLE 248,418.72 24.07 19,260,365.34 BREWERY 800,181.36 24.07 1'25,239,803.93 DAVAO BREWERY S'\11. BOTTLE 1,048,600.08 1'31,860,917.91 SA! c\PPLE 1'12,833,889.08 DA\'.-\0 BREWERY SJ\!L BOTTI.E 1,323,677.52 24.07 30,647,911.22 1'43,481,800.30 D.\\'.\0 BREWERY Si\!L BOTtLE 533,190.24 24.07 1,273,282.56 24.07 1'84,630,426.17 sub-total CANRPTPP 1,806,472.80 PREi\IIL:i\1 3301\!L 1'12,265,607.93 BACOLOD BREWERY PREl\IIL:i\1 3301\!L - C.\N 3,516,012.72 24.07 511,281.46 RED HORSE-C.\NS 339,138.60 B.\COLOD BRE\X'ERY SAN '\IIG LIGHT BOTTLE 509,580.72 24.07 S.\N '\IIG ZERO 330:\!L BTL 21,241.44 24.07 13,97 4,645.33 MANDAUE, CEBU BREWERY S'\1.\PPLE 14,089.68 24.07 122,579,634.91 S'\1 LEMON 580,583.52 24.07 '\L\NDAUE, CEBU BREWERY Si\IL CAN 5,092,631.28 24.07 719,454.23 Sl\IL DR.\FT 30 LITERS 29,890.08 24.07 29,463,499.69 !\L\NDAUE, CEBU BREWERY 1,224,075.60 24.07 166,462.56 24.07 4,006,753.82 sub-total 1,079,606.88 24.07 25,986,137.60 SAN FERNANDO, 40,080.00 24.07 PAMPANGA BREWERY 964,725.60 SAN FERN.\NDO, PAi\!PANG.\ BREWERY ~ POLO BREWERY, VALENZUELA POLO BREWERY, \'.\LENZUELA POLO BRE\X'ERY, \'.\LENZUEL.\ POLO BRE\X'ERY, \'ALENZUEL\ POLO BREWERY, \',\LENZUEL\ POLO BRE\X'ERY, \'.\LENZUEL\ POLO BREWERY, \',\LENZUEL\ POLO BREWERY, \'.\LENZL:EL\ POLO BREW'ERY, \'.\LENZUEL\ POLO BREWERY, \',\LENZUEL\ POLO BRE\X'ERY, \',\LENZUEL\

DECISION CTA CASE NO. 10000 Si\!L DRAFI' 50 LITERS Sl:PERDRY-C\NS Si\!L BOTILE SAN FERNANDO, PAMPANGA BREWERY S.\N FERc'\1.\NDO, PAi\fP.\:\lGA BREWERY I Si\!L BOTTLE 70 72.59 POLO BREWERY, 773.70 VALENZUELA .00 POLO BRE\\?ERY. \'ALENZl:EL\ C.\:-: RPT PP PREi\!1 Ui\! 330i\!L PREi\liU"-l 330i\!L- RED HORSE-CANS S.\N BOTTLE 82.161 24.07 24.07 Sc\N MIG ZERO 330i\!L BTL -24.- 07 24.07 POLO BRE\'1/ERY, S:\l .\PPLE \'ALEJ-.:ZUEL\ S:\l LEi\!ON - 24.- 07 POLO BREWERY, SJ\!L C.\:-: -24.- 07 \'.\LENZUEL\ SJ\!L DR.\FT 30 LITERS - 24.- 07 POLO BREW'ERY, Si\!L DR.\FT 50 LITERS 24.07 \'ALENZUEL\ SUPERDRY-C\NS POLO BRE\X'ERY, \'ALENZUEL\ POLO BREWERY, \'ALENZUEL\ STA.ROSA, BREWERY Si\ll. BOTILE

DECISION CTA CASE NO. 10000 MANDAUE, CEBU BREWERY S:\1.\PPLE 693,974.16 24.07 1'16,703,958.03 1,545,580.08 24.07 37.202,112.53 ~L\ND.\UE. CEBU BREWERY S~ILBOTTLE 2,239,554.24 1"53,906,070.56 ;>,L\ND.\UE, CEBU BREWERY S"-ILBOTTLE 3,891,159.36 24.07 1"93,660,205.80 sub-total C.\N RPT PP 801,630.72 24.07 SAN FERNANDO, 20,885.04 24.07 1'19,295,25143 PAMPANGA BREWERY PREMIUM 330~1L 12,972.96 24.07 502.702.91 SAN FERNANDO. P"\~IPAt-.:G.\ 24.07 312,259.15 BREWERY PREMIU:-1 330:\IL - C.\N 454,045.68 24.07 POLO BREWERY, 5,003.721.36 10,928,879.52 VALENZUELA RED HORSE-C.\NS 24.07 120,439,573.14 POLO BREWERY. 57,491.28 YALENZUEL\ Sc\:\ J\IIG LIGHT BOTTLE 1,664.73648 24.07 1,383,815.11 POLO BREWERY, 24.07 40,070,207.07 \'ALENZUEL\ S.\N MIG ZERO 330:\IL BTL 399.769.92 24.07 POLO BREWERY, 1,202,683.68 24.07 9,622,461.97 \'.\LENZUEL\ S:-1.\PPLE 24.07 28,948,596.18 POLO BREWERY. 38,100.00 24.07 VALENZUEL\ SJ\1 LEMO:\ 66,500.00 917,067.00 POLO BREWERY, 22,793.76 1,600,655.00 \'.\LENZUEL\ SJ\IL C.\N 9,745,330.88 POLO BREWERY. 548,645.80 \'.\LENZUEL\ S.\U. DRAFJ" 30 LITERS 1"234,570,114.28 POLO BREWERY. Y.\LENZCEL\ S~IL DR.\FT 50 LITERS 1"29,359, 794.58 POLO BREWERY, 1'6,289,410.12 \'.\LENZCEL\ SUPERDRY-C\:\S 26,310,978.62 POLO BREWERY. \'ALENZUEL\ 1"32,600,388. 74 POLO BREWERY, 1"36,162,201.87 \'ALENZUEL\ 1'15,497,242.28 POLO BREWERY. \'.\LENZCEL\ 24,120,780.00 POLO BRE\\?ERY. 1"39,618,022.28 \'.\LENZCEL\ 1"90,342,404. 70 sub-total 1'16,358.528.50 .. ,�,,:, -� 974,523.05 704,012.84 STA. ROSA, LAGUNA S;>,U~BOTTLE 1,219,767.12 24.07 BREWERY 12,575,388.83 . ST.\. ROS.\, L\GUt-.:.\ S.\1.\PPLE 261,296.64 24.07 BREWERY SJ\IL BOT1LE 1,093,102.56 24.07 1,354,399.20 DA VAO BREWERY S.\IL BOTTLE D.\\'.\0 BREWERY SJ\1.\PPLE 1,502,376.48 24.07 SJ\IL BOTTI.E D.W.\0 BREWERY 643,840.56 24.07 SJ\IL BOTTLE 1,002,109.68 24.07 sub-total 1,645,950.24 C.\N RPTPP BACOLOD BREWERY PRE;>,IIU.\1 33Q;>,IL 3,753,319.68 24.07 BACOLOD BREWERY PRE.\IIU.\1 330:\IL - C.\N MANDAUE, CEBU BREWERY RED HORSE-C.\NS 679,623.12 24.07 40,487.04 24.07 .\L\ND.\UE, CEBU BREWERY 29,248.56 24.07 24.07 .\L\NDAUE, CEBU BRE\VERY 522,450.72 sub-total SAN FERNANDO, PAMPANGA BREWERY SAN FERN.\NDO. PAJ\IPANG.\ BREWERY POLO BREWERY, VALENZUELA POLO BREWERY. \'.\LENZUEL\ POLO BREWERY, VALENZUEL\ POLO BREWERY, \'ALENZUEL\ POLO BREWERY, \'.\LENZUEL\

DECISION S.\~ LIGHT BOTTLE 24.07 1 .14 CTA CASE NO. 10000 24.07 Page 28 of 32 S.\~ 24.07 POLO BREWERY, 24.07 S?\1.\PPLE 724.10 POLO BRE\X'ERY, 12 \'"\LENZUEL\ S?\1 POLO BREWERY, \'ALENZUEL\ S""!L C\N POLO BREWERY, \'ALENZUEL\ S:O.!L DRAFT 30 LITERS S:O.!L D!L\FT 50 LITERS SUPERDRY.CAt--:S S~!LBOTTLE S:\!L BOTTLE 92 24.07 C.\N pp 24.07 POLO BREWERY, PRE!'.l!UJ\1 3301!L . C\N 734.961 24.07 1 179.88 \'ALENZUEL\ RED HORSE�CANS -24.- 07 POLO BREWERY, S.\N MIG LIGHT BOT!l.E 24.07 V.\LENZUEL\ S.\~ 11IG ZERO 3301!L BTL - 24.- 07 POLO BREWERY, S?\1 .\PPLE - 24.- 07 VALENZUEL\ S?\1 LE110N 24.07 POLO BREWERY, S1!L C\N - 24.- 07 VALENZUEL\ S?\!L DRAFT 30 LITERS - 24.- 07 POLO BREWERY, 24.07 \'.\LENZUEL\ 50 LITERS 24.07 7.00 37 fr

DECISION CTA CASE NO. 10000 GRAND TOTAL 215,124,092.48 P5,178,036,905.99 Petitioner, in addition to the documents mentioned above, presented the corresponding Excise Tax Removal Declarations (ETRDs) (BIR Form No. 2299)65 for the 215,124,092.48 liters, duly signed and attested to by the BIR Revenue Officer on Premise (ROOP), and which were likewise scrutinized by the ICPA. Accordingly, the brand name and volume of alcohol products removed within the production premises are separately indicated in the prescribed ETRDs of Petitioner. Furthermore, the ICPA examined other related documents supporting the volume of removals of "San Mig Light" and "Other Beer Products" based on the Schedule of Removals for the six plants for the year 2017, such as Shipping Memoranda66 and Issue/Receipt Documents, Plant Breakages Report, Gate Passes, Delivery Receipts, Claim Memoranda and Stock Transfer Receipts67. Based on the foregoing findings, Petitioner has duly established that the removals of its "San Mig Light" and "Other Beer Products" for the year 2017 in the total of215,124,092.48liters arc subject to excise tax rate of'l"23.50 only, instead of the '1"24.07 imposed by Respondent, and thus, it is entided to a refund corresponding to its erroneously, excessively, and/ or illegally collected excise taxes due on the removals of "San Mig Light" and "Other Beer Products" for the period covering January 1, 2017 to December 31,2017, in the total amount of '1"122,620,732.71. As for the payment of legal interest by Respondent, the same, however, cannot be granted. It is well-setded in this jurisdiction that our national government cannot be required to pay interest in tax refunds. In the absence of statutory provision clearly or expressly directing or authorizing such payment, the National Government cannot be required to pay interest.68 Nevertheless, it is the rule that interest may be awarded only when the collection of tax sought to be refunded was attended with arbitrariness.69 There being no law which clearly or expressly directs the payment of interest on tax refunds, and since there is no indication that the collection of the excise taxes sought to be refunded was attended with arbitrariness, the award of legal interest cannot be made. /'I' 65 Exhibits "P-6-h" to "P-6-h-2324". 66 Exhibits "P-6-i" to "P-6-i-38635". 67 Exhibits "P-6-j" to "P-6-j-1576". 68 Commissioner of Customs vs. Borres, eta/., G.R. No. L-12867, November 28, 1959. 69 Atlas Fertilizer Corporation vs. Commissioner of Internal Revenue, et seq., G.R. Nos. L-26686 and L-26698, October 30, 1980.

DECISION CTA CASE NO. 10000 WHEREFORE, in light of the foregoing considerations, the tnstant Petition for Review is PARTIALLY GRANTED. For being contrary to Section 143 of the NIRC of 1997, as last amended by RA 10351, the following portions of Annex "A-1" of ~\1C 90-2012, prescribing the applicable excise tax rates per liter, are declared invalid, and have no force and effect, viz "Annex 'A-1' LIST OF BRA.NDS OF LOCALLY MANUFACTURED FERMENTED LIQUORS As of December 2012 I-- ------f-B-r-a-n-d-s--B-a-s-e-d---------B--IR--P--.------�- BRAND NAME/ TYPE OF CONTENT NET Applicable Product Description PACKAGING PER TYPE RETAIL Excise Tax PRICE OF (Based on Rate Per PACKAGING 2010 BIR Liter (in milliliter) Price (Effective Survey) January 1, Per Liter 2013) A. NRP is P50.60 per liter and below XXX XXX XXX San Miguel Pale Pilsen bottle 1000 32.73 15.49 320 45.48 15.49 San Miguel Pale Pilsen bottle 330 43.18 20.57 (embossed label marking) 330 47.99 20.57 330 32.36 20.57 Coors Light Beer bottle 330 45.21 20.57 San Mig Light bottle The Original Coors bottle The Silver Bullet bottle Coors light B. NRP is more than P50.60 XXX XXX XXX Colt Ice bottle 330 60.37 20.57 330 56.03 20.57 Coors Light Beer can 330 56.61 20.57 320 66.39 20.57 Red Horse can 330 61.51 20.57 330 62.66 20.57 San Mig Cerveza Negra bottle 330 65.10 20.57 San Mig Light can 330 70.36 20.57 330 74.75 20.57 San Mig Strong Ice bottle 330 60.05 20.57 330 91.73 20.57 non-returnable fr San Mig Strong Ice bottle San Mig Strong Ice can San Mig Oktoberfest Beer bottle San Mig Pale Pilsen San Miguel Premium Malt bottle Beer

DECISION CTA CASE NO. 10000 San Miguel Premium Malt can 330 100.30 20.57 Beer 104.73 20.57 69.90 San Miguel Premium Malt non-returnable 330 54.00 20.57 57.05 20.57 Beer bottle 20.57 Super Dry can 330 The Original Coors can 330 The Silver Bullet can 330 Coorslight II. List of Brands (not included on 2010 BIR Price Survey and introduced in the market before effectivity ofR.A. No. 10351) Based on Latest Suggested Net Retail Price Per Sworn Statement Submitted by the Manufacturer or ----y~~~-~ 1YPEOF CONTENT NET Applicable PACKAGING PER 1YPE RETAIL Excise Tax BRAND NAME/ PRICE Product Description OF (Based on Rate Per PACKAGING 2010 BIR Liter Price Survey) (in milliliter) Per Liter (Effective January I, 2013) A. NRP is P50.60 per liter and below Beer Pale Pilsen XXX XXX XXX 20.57 bottle 330 45.21 B. NRP is more than P50.60 XXX XXX XXX Carlsberg bottle 330 60.37 20.57 San Mig Zero can 56.03 20.57 San Miguel Flavored can 330 56.61 20.57 Beer-Apple San Miguel Flavored bottle 330 66.39 20.57 Beer-Lemon San Miguel Flavored can 320 61.51 20.57 Beer-Strong Lager Stag bottle 330 62.66 20.57 The Original Coors can 70.36 330 20.57 " 330 Moreover, also for being contrary to Section 143 of the NIRC of 1997, as last amended by RA 10351, the portion of Section 5 ofRR 17-2012, which states that "[s]tarting]anuary 1, 2014, the applicable tax rate shall be increase[d] byJour percent (4%) annualfy" is likewise declared as invalid and has no force and effect of law. Lastly, Respondent is ORDERED TO REFUND in favor of Petitioner the amount of P122,620,732.71, representing erroneously, excessively, and/or illegally collected excise taxes due on the removals of "San Mig Light" and "Other Beer Products" for the period covering January 1, 2017 to December 31, 2017, WITHOUT LEGAL INTEREST THEREON/)I"

DECISION CTA CASE NO. 10000 SO ORDERED. %f.~ A(__ WE CONCUR: MA. BELEN M. RINGPIS-LIBAN Associate Juslice ERL~.UY Associate Justice ,TO-SAN PEDRO 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. ERL~.UY AsJOdate Justice Chairpmon CERTIFICATION Pursuant to Section 13 of Article VIII of the Constitution, and the Division's Chairperson's Attestation, 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. Presiding Juslice