PHILIPPINE AIRLINES, INC. v. COMMISSIONER OF INTERNAL REVENUE and COMMISSIONER OF CUSTOMS

REPUBLIC OF THE PHILIPPINES Court of Tax Appeals QUEZON CITY Second Division PHILIPPINE AIRLINES, INC., CTA CASE NO. 8198 Petitioner, Members: -versus- RINGPIS-LIBAN, Chairperson, and MODESTO-SAN PEDRO, and FERRER-FLORES, JJ COMMISSIONER OF INTERNAL REVENUE and COMMISSIONER OF Promulgated: CUSTOMS, / OCT 0 3 ZOZ4/ Respondent. X -----------------------------------------------------------------------------------T------------------------------ X /o:. w ~- �. \ 1 J DECISION MODESTO-SAN PEDRO, J.: The Case This is a remanded case for the determination of the final amount to be refunded to petitioner Philippine Airlines, Inc., (PAL), pursuant to the Supreme Court Resolution dated March 27, 2019 rendered in G.R. No. 240532, 1 and this Court En Bane's Amended Decision dated February 13, 20182 (En Bane Decision) remanding the case to this Court in Division. The Facts To recall, on December 10, 2010, petitioner PAL filed a Petition for Review before this Court,3 praying for a declaration that under its franchise, Presidential Decree (PD) No. 1590, it is exempt from specific tax on its importation of liquors, cigarettes and wines for international flight consumption and, therefore, entitled to the refund of the following: a) P2,610,430.72 specific tax paid under protest on December 11,2008;andy Docket (CTA EB No. 1363)- Vol. 2, pp. 838 to 840. /d. at 731 to 744. 3 Rollo- Vol. I, pp. I to 22.

DECISION CTA CASE NO. 8198 Page 2of16 b) P5,147,669.00 specific tax paid under protest on December 11,2008, or a total ofP7,758,099.72 all paid to the respondent COC . Petitioner further prays that respondents Commissioner of Customs (COC) and Commissioner of Internal Revenue (CIR) be ordered to refund the total amount ofP7,758,099.72 specific taxes, which was erroneously collected form petitioner in connection with its subject importations of assorted liquor and wine for international flight consumption. On June 2, 2015, this Court in Division promulgated its Decision4 (Division Decision), denying petitioner's Petition for Review, the dispositive portion of which reads: WHEREFORE, premises considered, the Petition for Review is hereby DENIED for lack of merit. SO ORDERED. While petitioner assailed this through a Motion for Reconsideration, filed on on June 25, 2015,5 the Court denied the same through a Resolution, dated September 10, 2015.6 Consequently, petitioner filed its Petition for Review with this Court En Bane on October 15, 2015. 7 The case was docketed as CTA EB No. 1363. The Court En Bane eventually ruled on said Petition through a Decision, dated April 5, 2017,8 the dispositive portion of which reads: WHEREFORE, the petition is DISMISSED. The Decision of the Third Division ofthis Court in CTA Case No. 8198 dated June 2, 2015 , and its Resolution dated September 10, 2015, are AFFIRMED. No pronouncement as to costs. SO ORDERED. Petitioner then posted a Motion for Reconsideration with the Court En Bane on May 11, 2017.9 This was partially granted in En Bane Decision, 10 the dispositive portion of which states;,.. 4 Rollo- Vol. 3, pp. 1700 to 1730. Rollo- Vol. 4, pp. 1731 to 1744. 6 !d. at 1796 to 1800. Rollo-Vol.l , pp.46to61. Rollo- Vol. 2, pp. 639 to 655 . 9 Jd.at671to677. 10 !d. at 731 to 744.

DECISION CfA CASE NO. 8198 Page 3 of16 WHEREFORE, in view of the foregoing considerations, the Motion for Reconsideration filed by petitioner Philippine Airlines, Inc. is PARTIALLY GRANTED. Let the case be REMANDED to the Court in Division for the determination of the amount of refundable, substantiated excise taxes paid on petitioner's importation of liquors. SO ORDERED. Thus, a Motion for Reconsideration Re: Amended Decision dated 13 February 2018 was filed by respondent CIR on March 23, 2018, 11 while a Motion for Reconsideration (of the Amended Decision dated February 13, 2018) was posted by respondent COC on March 28,2018. 12 Both were denied in a Resolution, dated June 19, 2018. 13 Respondents then filed a Petition for Review on Certiorari entitled "Commissioner ofInternal Revenue (CIR) and the Commissioner ofCustoms (COC), Petitioners versus Philippine Airlines, Inc., Respondent" with the Supreme Court, which was docketed as G.R. No 240532. On March 27, 2019, the Supreme Court rendered a Resolution, 14 denying the Petition for Review on Certiorari, the pertinent portions of which read: After reviewing the Petition and its annexes, including the Amended Decision dated February 13, 2018 and Resolution dated June 19, 2018 of the Court of Tax Appeals (CTA) En Bane in CTA EB No . 1363, the Court resolves to DENY the same for failure ofthe petitioners to sufficiently show that the CTA En Bane committed any reversible error in the assailed Decision and Resolution as to warrant the exercise of this Court's discretionary appellate jurisdiction. Moreover, the Court, in subsequent cases involving the legal issue of whether the respondent, pursuant to Section 13 of PO 1590, is exempt from the payment of excise taxes on its importation of alcohol and tobacco products for its commissary supplies, consistently echoed the ruling in the afore-cited case. Hence, it is erroneous for the petitioners to continuously insist that the respondent's privileges under PD 1590 no longer stand. As regards the respondent's noncompliance with the conditions set by Section 13 ofPD 1590 for its imported wines and liquors, the Court notes that these are factual determinations that are best left to the CTA and cannot be reviewed by this Court under Rule 45. The CTA is a highly specialized body that reviews tax cases and conducts trial de novo. Thus, without anyIV 11 !d. at pp. 755 to 764. 12 Jd. at pp. 766 to 790. 13 Jd.atpp.811to815 . 14 Jd. at pp. 838 to 840.

DECISION CTA CASE NO. 8198 Page4 of16 showing that the findings of the CTA are completely unsupported by substantial evidence, as in the case, its findings are binding on this Court. Verily, the Court finds no reason to deviate from the CTA En Bane findings. The assailed Decision and Resolution of the CTA En Bane are hereby AFFIRMED. SO ORDERED. Thereafter, the Second Division of the Supreme Court issued the Entry of Judgment certifying that the above-entitled case with G.R. No 240532 had become final and executory on June 3, 2019 and had been recorded in the Book of Entries of Judgments. 15 In response, petitioner filed a Motion for Execution of Judgment on June 6, 2023, 16 praying for this Court in Division to implement and execute the En Bane Decision and to provide computation for the partial granting of PAL's claim for refund. Accordingly, this Court issued the Resolution dated July 21, 2023, 17 directing the parties to submit, within five days from notice, their respective manifestations to inform this Court of any supervening event which may have transpired that would affect the final resolution of the present case, and to determine whether there is a need to conduct further proceedings. On August 2, 2023, petitioner filed a Manifestation, 18 stating that it has no knowledge of any supervening events which would affect the final resolution of the case and that there is no need for further proceedings. On the other hand, respondent COC filed his Manifestation on August 1, 2023, 19 while respondent CIR filed his Manifestation on August 29, 2023.20 In both Manifestations, respondents likewise informed the Court that they do not have any knowledge of any supervening evening event which may have transpired that would affect the final resolution of the present case. Thereafter, the present case was transferred to this Court's Second Division per the Notice of Resolution, dated September 12, 2023. 21 In the Resolution dated October 6, 2023,22 the Manifestations of all the parties were noted, and the case was submitted anew for decision to determine the amount refundable to the taxpayer,r 15 !d. at pp. 850 to 852. 16 Rollo- Vol. 4. pp. 1894 to 190 I . 17 /d.at1928tol929. 18 !d. at 1935 to 1938. 19 !d. at 1930 to 1932. 20 !d. at 1940 to 1943. 21 !d. at 1945. 22 !d. at 1947 to 1949.

DECISION CTA CASE NO. 8198 Page 5 of16 Pending resolution of the present case, on March 20, 2024, petitioner filed another Manifestation,23 stating that it filed with the Securities and Exchange Commission (SEC) an Amended General Information Sheet bearing its new office address at Philippine Airlines, Lucio K. Tan Jr. Center (LKTJC), PAL Gate 5, Andrews Avenue, Nichols, Pasay City, where it may be served with court orders and processes. The Ruling of The Court The present Petition for Review must be partially granted. As previously mentioned, the Supreme Court, in G.R. No 240532, pursuant to its Resolution, dated March 27, 2019,24 denied respondents CIR and COC's Petition for Review on Certiorari, which assailed the En Bane Decision, and Resolution, dated June 19, 2018, of the CTA En Bane in CTA EB No. 1363, for failure to sufficiently show that the CTA En Bane committed any reversible error in the challenged Decision and Resolution. The Supreme Court thus upheld the Court En Bane's ruling to remand the case for the determination of the substantiated refundable amount of excise taxes paid on petitioner's importation of liquors. Accordingly, the Court shall confine the succeeding discussions on the findings of the Court En Bane and the determination of the above matters as ordered by the Supreme Court and this Court En Bane. Requisites in claiming exemption under Section 13 ofPD No. 1590 In the En Bane Decision,25 it was stated that the pronouncement of the Supreme Court in the consolidated cases of Republic of the Philippines v. Philippine Airlines, Inc. (PAL) and Commissioner of Internal Revenue v. Philippine Airlines, Inc. (PAL) is unequivocal- Republic Act (RAJ No. 8424 and RA No. 9334 did not amend the exemption granted to PAL under PD No. 1590. As such, petitioner's tax privilege provided under Section 13 ofPD No. 1590 has not been repealed or revoked by Section 131 ofthe NIRC of 1997, as amended by Section 6 of RA No. 9334. The matter has already been exhaustively discussed in the Division Decision.26 As ruled therein, the governing law therefore in petitioner's franchise is PD No. 1590, subject however to certain conditions:.,.. 23 Manifestation with attached Amended Genera/Information Sh eet, id. at 1950 to 1951. 24 Docket (CTA EB No. 1363)- Vol. 2, pp. 838 to 840. 25 !d. at 734 to 738. 26 Docket (CTA Case No. 8198) - Vol. 3. , pp. 1714 to 1716.

DECISION CTA CASE NO. 8198 Page6 of16 SECTION 13. In consideration of the franchise and rights hereby granted, the grantee shall pay to the Philippine Government during the life of this franchise whichever of subsections (a) and (b) hereunder will result in a lower tax: (a) The basic corporate income tax based on the grantee's annual net taxable income computed in accordance with the provisions of the National Internal Revenue Code; or (b) A franchise tax of two per cent (2%) of the gross revenues derived by the grantee from all sources, without distinction as to transport or nontransport operations; provided, that with respect to international air- transport service, only the gross passenger, mail, and freight revenues from its outgoing flights shall be subject to this tax. The tax paid by the grantee under either of the above alternatives shall be in lieu ofall other taxes, duties, royalties, registration, license, and other fees and charges ofany kind, nature, or description, imposed, levied, established, assessed, or collected by any municipal, city, provincial, or national authority or government agency, now or in the future, including but not limited to the following: - (2) All taxes, including compensating taxes, duties, charges, royalties, or fees due on all importations by the grantee of aircraft, engines, equipment, machinery, spare parts, accessories, commissary and catering supplies, aviation gas, fuel, and oil, whether refined or in crude form and other articles, supplies, or materials; provided, that such articles or supplies or materials are importedfor the use ofthe grantee in its transport and transport operations and other activities incidental thereto and are not locally available in reasonable quantity, quality, or price. (Italics supplied.) On the basis of the foregoing provision, petitioner must thus comply with the following three requisites in order for the exemption on excise tax to apply, viz: 1. the corporate income tax and VAT liabilities for the subject period of importation was paid; 2. the imported articles, supplies or materials are intended to be used in its transport and non-transport operations and other activities incidental thereto; and 3. the imported articles, supplies or materials are not locally available in reasonable quantity, quality, or pricey

DECISION CTA CASE NO. 8198 Page 7 o�16 It must be pointed out this Court, in the Division, Decision, had already ruled that petitioner complied with the first requisite,27 a finding that was later upheld in the En Bane Decision.28 Thus, the Court shall proceed to discuss petitioner's compliance with the second and third requisites. Petitioner was able to show compliance with the second requisite Anent the second requisite, a perusal of the pertinent documents submitted by petitioner, and as found in the En Bane Decision,29 the imported articles were described as "lnflight Materials" under the column "Description of Articles" in the Informal Import Declaration and Entry30 (!IDEs); also, in the Authority to Release Imported Goods31 (ATRIGs) issued by the respondent CIR addressed to respondent COC, it was indicated that "the shipment to be released at the port of Manila consisting ofthe above described articles, will be used exclusively for international inflight consumption." Such being the case, the said supplies are for the use of petitioner in its transport operations. Petitioner also complied with the third requisite only insofar as its importation of alcohol products is concerned It must be stressed that it is no longer for this Court in Division to determine compliance by petitioner with the third requisite as the Court En Bane already made a finding on this score, which is already final. Instead, what is left for determination is merely the amount refundable to petitioner. As regards the imported cigarettes, the Court En Bane held that Ms. Capinpin' s testimony, standing alone, sans any credible document, is insufficient to prove that the cost of importing cigarettes is lower than purchasing them locally or that they are not locally available in reasonable quantity, quality, or price.32 Evidently, petitioner fell short in proving the non- availability of imported cigarettes at a reasonable quantity, quality, or price in the local market).. 27 Id. at1718to1722 . 28 Docket (CTA EB No . 1363)- Vol. 2, p. 741. 29 !d. 30 Exhibits "I", "J", " K", "L", "M ", "N", "0 ", "P", "Q", "R", " S", "T", "LL", "MM", "NN", "00", "PP", "QQ", " RR", " SS", "TT", "UU ", " VV", " WW", "XX", "YY", "ZZ", and "AAA", Docket (CTA Case No.8198) - Vo1.2, pp. I089to 1112and 1126to 1157. 31 Exhibits " W", "X", "Y", "Z", "AA", " BB", " CC", " DO", " EE", " FF", " GG", " HH", " DOD", " EEE", " FFF", "GGG", "HHH", "Ill", "JJJ", "KKK", "LLL", " MM_M", "NNN", "000", "PPP", "QQQ", " RRR", and "SSS", id. at pp. 1114 to 1125 and 1159 to 1174. 32 Docket (CTA EB No . 1363)- Vol. 2, p. 743.

DECISION CTA CASE NO. 8198 Page 8 of16 Considering petitioner's failure to prove compliance with the third requisite on its importation of cigarettes, the aforementioned ruling in the En Bane Decision is reiterated. As to the imported liquors, the Court En Bane explicitly stated that the evidence presented by petitioner is sufficient to evaluate that the costs of importing liquors are lower than purchasing them locally :33 Anent the third requisite, to prove that the imported articles were not locally available in reasonable quantity, quality or price, petitioner submitted the Judicial Affidavit of Ms. Cheryl Capinpin, petitioner's Manager for In-flight Materials Purchasing Division, Catering & In-flight Materials Purchasing Sub-Department; the Philippine Wine Merchant Price List; sales invoices issued to petitioner for its purchase of the subject articles, Monthly Philippine Dealing System Rates (2007 to 201 0); 2008 Booking Rates for the Month of May; Letters of Ms. Marianne C. Raymundo, petitioner' s Vice-President - Financial Services re: Booking Rates for the Months of January, March, and April 2008 ; and a Table of Comparison. The controversy relating to the sufficiency of evidence of PAL to supp011 its refund claim with respect to the third requisite, i.e., the imported miicles are not locally available in reasonable quantity, quality or price, is not of first impression as the same was raised in earlier cases before the Court involving the same parties, albeit relating to different taxable years. In the following cases, the Court found that a Table of Comparison Between Cost of Importing and Cost of Locally Purchasing Commissary and Catering Supplies and the local prices reflected in one price list, i.e., the Philippine Wine Merchants' Price List, were sufficient to establish that the cost of importing the imported articles is lower than purchasing them locally and accordingly granted the claims for refund: In other words, the Court En Bane, in its determination of petitioner's fulfillment of the third requisite, gave evidentiary weight to petitioner's documentary and testimonial evidence relating to its importation of alcohol products. Thus, in compliance with the En Bane Decision34 and the Resolution, dated June 19, 2018,35 as well as the Supreme Court Resolution, dated March 27, 2019,36 in G.R. No. 240532, the same evidence shall be considered in ascertaining the amount of excise tax to be refunded to petitioner in this case. Records show that the excise taxes paid under protest by petitioner on December 11, 2008 which totaled to !>7,758,099.72 pertain to its importation for the period January 23, 2008, to July 21, 2008, of assorted liquors and winep-- 33 !d. at 741 to 743 . 34 Jd. at 731 to 744. 35 Jd. at 811 to 815. 36 !d. at 838 to 840.

DECISION CTA CASE NO. 8198 constituting its commissary and catering supplies for international flight consumption, detailed as follows: No. Arrival Date Informa l Air Authority to Sales Description Value Amount of Import Wayb ill/ Re lease Invoice (in US$) Excise Taxes Declaration Imported Yin de Table Paid Under and Entry37 Bill of Goods 39 40 Blanc PAL, Yin 24 ,967 .90 Lading38 "W" de Table Rouge Protest 1 23 January "Ill "HHHH" PAL 24,961.68 (in PHP) 2008 "I - I" "X" Ballantine 17 YO 169,999.83 "Ill!" 21YO, Royal 46, 177.20 2 28 January "J" "J-1" "Y" Salute & Martell 252,481.74 2008 "JJJJ" VSOP 25 ,527 .23 "K-1" "Zit Ballantine 17YO 599,655.57 3 22 February "K" "KKKK" and21YO& 18,420.24 2008 "L-1" "AA" Chivas Regal 169,999.83 "LLLL" Yin de Table 26,558.77 4 I March 2008 "L" "M-1" "BB" Blanc PAL, Yin 9,360.00 55, 194.75 "CC" "MMM de Table Rouge 14,400 .00 5 22 March 2008 "M" "N-1" "DD" M" PAL 4,430 .76 169,999 .83 "0-1" "EE" Lindem a ns 6 26 March 2008 "N" "P-1" "NNNN" Premier Shiraz 17 ,558 .25 78,643 .35 "Q-1'' "FF" "0000" Cabernet, 32 ,382.00 235, 146.24 7 4 April2008 "0" "GG" "PPPP" Penfolds Shiraz "R- 1" "HH" "QQQQ" Cabernet 2,097. 12 24,285 .69 8 I I April 2008 "P" "S-1" Yin de Table 246,841.15 "T-1" and Blanc PAL, Yin 321,244.06 9 16 April 2008 "Q" "QQQQ- de Table Rouge Va lue PAL (i n US$) 530, 156.79 10 19 April 2008 IIR'' I" Ballantines 21 3,623.04 "RRRR" YO $4 ,920.00 11 21 April 2008 "S" "SSSS" Jack Daniels 33 ,008.40 2,610,430.71 42 Lindemans Amount of 12 25 April 2008 "T" Premier Selection Excise Taxes Chardonnay Paid Under JW Black Label Protest & Gordons Gin 146,313 .22 539,529.98 Chivas Regal Martel YSOP Martini Dry & Sweet Vermouth Subtota l (BOC OR No. 15819702441 ) Informa l Air Aut hority to Sales Wayb ill/ Release Invo ice No. Ar riva l Date Import Imported Description Declaratio n Bill of Goods45 46 Ladi ng44 Camus Cognac and Entry 43 "DOD" ''TTTT'' YSOP Elegance "LL - 1" Balian tines, 13 I May 2008 "LL" "EEE" "UUUU" Carlos I, Royal "MM- 1" Salute Whisky 14 2 May 2008 "MM" 37 Docket-Vol.2, pp.I089, 1091 , 1093 , 1095,1097,1099,1101 , 1103 , 1105,1 107, 1109,& 1111. 38 !d. at 1090, 1092, 1094, 1096, 1098, 1100, 1102, 1104, 1106, 1108, & 1110; Docket- Vo l. 3, p. 1320. 39 Docket - Vol. 2, pp. 1114 to 1125. 40 !d. at 1183 to 1189 & 1192 to 1193 ; Docket- Vol. 3, pp. 1397 to 1400. 41 Exhibit"V", Docket- Vol. I, p. 100 . 42 The difference ofPO .Ol is due to rounding off to the nearest peso . 43 Docket- Vol. 2 , pp. 1126, 1128, 1130, 1132, 1134, 1136, 1138, 1140, 1142, 1144, 1146, 1148, 1150, 1152, 1154, & 1156. 44 !d. at 1127, 1129, 1131 , 1133, 1135 , 1137, 1139, 1141 , 1143, 1145 , 1147, 1149, 1151 , 1153, 1155, & 1157. 45 !d. at 1159 to 1174. 46 !d. at 1195 to 1197, 1199, &1202 to 1207; Docket- Vol. 3, pp. 1401 to 1404.

DECISION CTA CASE NO. 8198 Page 10of16 15 10 May 2008 "NN" "NN-1 " "FFF" "VVVV" Piper Heidsieck 32,512 .50 759,320.46 "GGG" and Brut, Absolut 8,572 .50 164,602 .37 16 16 May 2008 "00" "00-1" "HHH" Vodka 6,724.00 149,971.05 17 17 May 2008 "PP" "PP-1" "VVVV- 161 ,338.50 18 21 May 2008 "QQ" "QQ-1 " "III" I" Remy Martin 62,220.06 VSOP Cognac 42,457 .50 19 24 May 2008 "RR" "RR-1 " "JJJ" "WWW Camus Cognac 11 ,796.00 W" VSOP Elegance 176,947.55 20 28 May 2008 "SS" "SS-1" "KKK" Center Merlot 8,493 . 12 "XXXX" MRP Rouge & 651 ,877.63 21 3 June 2008 "TT" "TT-l" "LLL" Blanc 45 ,306.00 "YYYY" Wine Lindemans 700,533 .90 22 7 June 2008 "UU" "UU-1" "MMM" Premier Shiraz 30,937.50 824,579.48 "VV" "VV-1" "NNN" "ZZZZ" Cabernet, 23 ,463 . 17 23 21 June 2008 11 WW" "WW-1 " "000" Penfolds Shiraz 26,127 .36 "XX" "XX-I " "PPP" "AAAA Cabernet 4,200.00 38,2 11.75 24 25 June 2008 "QQQ" A" Johnie Walker 9,450 .00 542,730.59 "RRR" Black Label 33 ,528.00 25 9 July 2008 "SSS" "BBBBB Chivas Regal 3,657.83 " Scotch Whisky, 30.00 219,469.82 26 10 July 2008 "YY" "YY -1 " Royal Salute 7,380.00 5,147,668.9949 None Whisky, Martell $322,541 .25 27 18 July 2008 "ZZ" "ZZ- 1" Denied VSOP Cognac "AAA-1 " Exhibits Piper Heidsieck 28 2 1 July 2008 "AAA" Brut 47 JW Black Label, "EEEEE J&B Rare " Camus Cognac "FFFFF" XO Suoerieur Wine Lindemans "GGGG Premier Shiraz G" Cabernet Ballantines 17YO None & 21 YO , Carlos I "IIIII" Camus Cognac XO Suoerior Camus Cognac VSOP Elegance S ubtotal (BOC OR No. 15819700648) TOTAL $569,382.40 p 7,758,099.72 To determine whether the above listed imported liquor and wine products were not locally available in reasonable quantity, quality, or price, a comparison of the importation costs vis-a-vis the prices provided by the Philippine Wine Merchants (PWM) for the year 2008 is necessary.50 Accordingly, the importation cost per bottle of the subject imported liquors and wine is tabulated below: No Description Amount of Va lue No. of Ave. US$ Conve Ave. Ave. Total Excise Taxes (in US$) Bottles Purchase rsio n Rate Purchase Excise Importatio Paid Under Price Per Per PDS Price Per Tax Per n Cost Per (8) (C) Bottle Protest Bottle Rates 51 Bottle (in PHP) Bottle (in PHP) (in US$) (in PHP) {G=AIC) (in PHP) {D=BIC) (if (F=DxE) (H=F+G) (A) 1 Yin de Table 10,401 .21 5,004 2.08 40.6260 84.44 14. 15 98.60 Blanc PAL 70,819.11 47 Exhibits "ZZZ" and "ZZZ-1". 48 Exhibit "CCC", Docket- Vol. I, p. 168 ; Docket - Vol. 2, p. 734. 49 The difference ofPO .O l is due to rounding off to the nearest peso. 50 Exhibit "JJJJJ-2", Docket- Vol. 2, p. 999. 51 Exhibit "JJJJJ-3 ", id. at 1000.

DECISION CTA CASE NO. 8198 Page 11 of16 Yin de Table Rouge PAL 99, 180.72 14,566.69 7,008 2.08 40.6260 84.44 14. 15 98.60 169,999.83 24,967.90 12,012 Subtotal 35 .28 1,760 .97 39.00 1,912.09 Ballantines 46.22 2, 182.50 14.00 l7YO 51 , 118. 18 5,503 .68 156 40.6260 1,433 .29 327.68 873 .58 35.28 2 Ballantines 55,050.34 6,552.00 168 39.00 40.6260 I ,584.41 327.68 1,755 .00 21YO 11 .25 40 .6260 1,877.68 304.82 1,905.50 40.6260 304.82 Royal Salute 58,525.29 8,874.00 192 2. 13 568.76 630.68 2.13 Martell YSOP 87,787.93 4,032 .00 288 102.89 102.89 Subtotal 252,481.74 24,961.68 804 Balian tines 17YO 78,643 .35 8,467.20 240 40.4570 1,427.32 327.68 3 Ballantines 40 .4570 1,577.82 327.68 40.4570 455. 14 175 .54 21YO 78,643.35 9,360.00 240 442 ,368 .86 28,350.00 2,520 Chivas Regal 599,655.57 46,177.20 3,000 Subtotal Yin de Table 4 Blanc PAL 70,819.11 10,634.22 5,004 41.7560 88.74 14. 15 Yin de Table 41.7560 88 .74 14.15 Rouge PAL 99,180.72 14,893.01 7,008 169,999.83 25,527.23 12,012 Subtotal Lindemans Primier Shiraz 5 Cabernet 25 ,474 .50 18,420.24 1,800 Pen ford s Shiraz Cabernet 29 ,720 .25 2, 100 55,194.75 18,420.24 3,900 Subtotal 4.72 41.7560 197.22 14.15 211.37 2.21 41.7560 92 .32 14.15 106.48 Yin de Table 2.21 41.7560 92.32 14.15 I 06.48 6 Blanc PAL 70,819. 11 11 ,063.94 5,004 39.00 I ,974.53 Yin de Table 60 .00 3,513.40 Rouge PAL 99, 180.72 15,494.83 7,008 169,999.83 26,558.77 12,012 Subtotal 7 Ballantines 78,643 .35 9,360.00 240 42 .2270 1,646 .85 327.68 21YO 42 .2270 2,533 .62 979.78 Subtotal 78,643.35 9,360.00 240 8 Jack Daniels 235, 146.24 14,400.00 240 Subtotal 235,146.24 14,400.00 240 Lindeman s 9 Premier Selection Chardonnay 24,285 .69 4 ,430 .78 1,716 2.58 42 .2270 109.03 14. 15 123.18 24,285.69 4,430.78 1,716 Subtotal 591.78 1,680 228.28 .IW Black 300 10 Label 294,912.58 16,560.00 9.86 42.2270 416.24 175 .54 Gordons Gin 26,331 .48 998 .25 3.33 42.2270 140.51 87 .77 Subtotal 321,244.06 17,558.25 1,980 11.25 42.2270 475.05 175 .54 650.60 Chivas Regal 442 ,368 .86 28,350.00 2,520 14.00 42.2270 591.18 304.82 896.00 11 Martel VSOP 87 ,787 .93 4,032.00 288 48.01 Subtotal 530,156.79 32,382.00 2,808 Martini Dry 12 & Sweet 3,623 .04 2,097.12 1,920 1.09 42 .2270 46 . 12 1.89 3,623.04 2,097.12 1,920 Vermouth Subtotal 246,841.1 Total52 2,610,430.72 5 52,644 No Description Amount of Value No. of Ave. US$ Conve Ave. Ave. Total Excise Taxes (in US$) Bottles Purchase rsion Rate Purchase Excise lmportatio Paid Under Price Per Per PDS Price Per Tax Per n Cost Per (B) (C) Bottle (in Protest Bottle Rates53 Bottle PHP) Bottle (in PHP) (in US$) (in PHP) (G=AIC) (in PHP) (D=B/C) (E) (F=DxE) (H=F+G) (A) Camus 146,313 .22 13 Cognac YSOP Elegance 4,920.00 480 10.25 43.8200 449.16 304.82 753 .97 52 Exhibit "V", Docket- Vol. 1, p. 100. 53 Exhibit "JJJJJ-3" , Docket- Vol. 2, p. 1000.

DECISION CTA CASE NO. 8198 Page 12of16 Subtotal 146,313.22 4,920.00 480 78,643 .35 11 ,040.00 240 Ballantines 402,361.34 13 ,094.40 1,320 46 .00 43.8200 2,015 .72 327.68 2,343.40 192 9.92 43.8200 434.69 304.82 739 .51 14 Carlos I 58 ,525.29 8,874.00 1,752 Royal Salute 539,529.98 33,008.40 46 .22 43 .8200 2,025 .31 304.82 2,330.12 1,980 Whisky 360 15 .63 1,038.49 4.38 355.0 1 Subtotal 2,340 15 .88 I ,000.46 Piper 540 540 13 .67 903 .69 Heidsieck 492 5.46 253 .32 IS Brut 700,533.90 30,937.50 492 3.50 43.8200 684 .69 353.81 167.52 4.58 43 .8200 191.71 163.30 214 .85 Absolut 58 ,786.56 1,575.00 11,400 759,320.46 32,512.50 1,800 8.43 544.76 Vodka 1,200 3,000 11.25 680.62 Subtotal 46.22 2,379.86 1,008 14.00 Remy Martin 1,008 933 .36 15.63 16 VSOP 2,880 4 .84 1,055 .31 192 4.84 392.84 Cognac 164,602.37 8,572.50 288 43 .8200 695.64 304.82 380.59 164,602.37 8,572.50 35 .00 Subtotal 3,360 1,789 .09 3.50 Camus 1,980 35 .28 168.89 1,980 46 .00 I ,887.41 17 Cognac 2,688 2,36 1.34 VSOP 2, 160 9.92 4,848 743.38 Elegance 149,971.05 6,724 .00 43.8200 598.87 304.82 149,971.05 6,724.00 120 Subtotal 120 Canter Merlot 2,700 2,700 18 MRP Bordeaux 300 240 Rouge 106, 143 .75 62 ,220.06 1,200 Canter Merlot MRP Bordeaux Blanc 55 , 194.75 161,338.50 Subtotal 2,220.06 43 .8200 239.17 14 . 15 25 ,474.50 43 .8200 153.37 14.15 Lindemans 6,300.00 43 .8200 200.70 14. 15 16,983 .00 19 Shiraz Cab. 42,457.50 5,496 .00 Penfolds 1,796.00 Shiraz Cab. Subtotal Johnnie 20 Walker Black Label 176,947 .55 8,493.12 43 .8200 369.21 175 .54 176,947.55 8,493.12 Subtotal Chivas Regal Scotch Whisky 505,564.42 32,400.00 44 .8960 505.08 175 .54 44 .8960 2,075 .04 304.82 21 Royal Salute 44.8960 304.82 628 .54 Whisky 58,525 .29 8,874 .00 Martell VSOP Cognac 87,787 .92 4,032 .00 651,877 .63 54 45,306.00 Subtota l Piper 700,533 .90 30,937 .50 44 .8960 70 1.50 353 .81 22 Heidsieck 700,533.90 30,937.50 44.8960 217 .30 175.54 Brut 471 ,860. 12 23 ,463.17 44 .8960 217.30 163.30 352,719 .36 Subtotal 824,579.48 23,463.17 JW Black 23 Label 26, 127.36 4,200.00 44.8960 I,571.36 2 17.73 J&B Rare 26,127.36 4,200.00 Subtotal Camus 38,211.75 9,450 .00 44 .2100 154.74 14.15 24 Cognac XO 38,211.75 9,450.00 Superieur 44 .2100 1,559 .73 327.68 Subtotal 98,304.19 10,584.00 Wine 44.2100 2,033 .66 327.68 25 Lindeman's 78,643 .35 11 ,040.00 44.2 100 438.56 304.82 Shiraz Cab. 365,783.04 11,904.00 Subtotal Ballantines 17YO 26 Ballantines 21YO Carlos I 54 The difference ofPO .Ol is due to rounding off to the nearest peso.

DECISION CT A CASE NO. 8198 Page 13 o�16 Subtotal 542,730.5855 33,528.00 1,740 Camus 12 12 27 Cognac XO 720 Superior 3,657.83 30.00 720 2.50 44.2 100 110.53 304.82 4 15.34 3,657.83 30.00 757 .97 Subtota l Camus 28 Cognac VSOP Elegance 219,469 .82 7,380.00 10.25 4 4 .2100 453 .15 304.82 219,469.82 7,380 .0 0 Subtotal 322,541.2 5,147,668.98 T o t a 156 7,758,099.70 5 57 GRAND 569,382.4 TOTAL 0 For ease of reference, a side-by-side comparison of the importation costs (as computed above) and the prices reflected in the Philippine Wine Merchants (PWM) Price List for the year 200858 is presented below: No Description Amo un t of Excise lm portatio n Cost Per Retail Price/Bottle Taxes Paid Under Bottle if Purchased Protest p 98.60 Domestica lly (Per 98 .60 PWM Price List for I Yin de Table Blanc PAL 1'70,819 . 11 Yin de Table Rouoe PAL 99, 180.72 I ,760.97 year 2008) 51 , 118.18 1,912 .09 p 353.50 Ballantines 17YO 55,050.34 2, 182.50 353.50 58 525.29 None 2 Balian tines 21 YO 87,787.93 873.58 None Royal Salute 78,643.35 I ,755 .00 6,400.00 78,643.35 1,905 .50 1,620 .00 Martell VSOP 442 ,368.86 None 70 ,819 . 11 630.68 None Ballantines 17YO 99, 180.72 102.89 1, 100 .00 102.89 353.50 3 Ballantines 21 YO 55, 194.75 353 .50 70,8 19. 11 Cl1ivas Reaal 99, 180.72 78,643.35 Yin de Table Blanc PAL 235 , 146.24 4 Yin de Table Rouge PAL 24 ,285.69 5 Lindemans Primier Shiraz Cabernet, 294,912.58 211.37 353 .50 Penfords Shiraz Cabemet 26,331.48 I 06.48 353 .50 442,368.86 I 06.48 353.50 6 Yin de Table Blanc PAL 1,974 .53 None Yin de Table Rouoe PAL 87 ,787 .93 3,513.40 920 .00 3,623 .04 7 Ballantines 21 YO 146,313.22 78,643.35 8 Jack Daniels 402,361 .34 58,525 .29 9 Lindemans Premier Selection Chardonnay 700,533 .90 123 . 18 267.50 58,786.56 591.78 1,003 .00 10 JW Black Label 164,602.37 228.28 Gordons Gin 149,971.05 None 650 .60 Cl1ivas Regal 161 338.50 896.00 1,100.00 II Martel VSOP 25 ,474 .50 48.01 1,620.00 16,983.00 753 .97 12 Martini Dry & Sweet Vermouth 176 ,947 .55 2,343.40 400.00 505 ,564.42 739 .51 1,800.00 13 Camus Cognac VSOP Elegance 58,525 .29 2,330 . 12 87,787 .92 1,038 .49 None Ballantines 700 ,533 .90 355 .01 1,099 .00 471 ,860.12 I ,000.46 6,400.00 14 Carlos I 903.69 2,540.00 Royal Salute Whisky 450.00 I ,485 .00 15 Piper Heidsieck Brut I ,800.00 Absolut Vodka 16 Remy Martin VSOP Coonac 17 Camus Cc>gnac VSOP Eleoance 18 Canter Merlo! MRP Bordeaux Rouge, 253.32 353 .50 Canter Merlot MRP Bordeaux Blanc 167.52 267.50 214.85 267 .50 19 Lindemans Shiraz Cab. 544.76 1,003 .00 Penfolds Shiraz Cab. 680 .62 1, 100.00 2,379.86 6,400.00 20 Johnnie Walker Black Label 933 .36 1,620.00 I ,055.31 2,540 .00 Chivas Regal Scotch Whisky 392.84 1,003 .00 21 Royal Salute Whisky Martell VSOP Coonac 22 Piper Heidsieck Brut 23 JW Black Label 55 The difference ofPO.Ol is due to rounding offto the nearest peso. 56 Exhibit "CCC", Docket- Vol. I, p. 168; Docket- Vol. 2, p. 734. 57 The difference ofP0.02 is due to rounding off to the nearest peso. 58 Exhibit "JJJJJ-2", Docket- Vol. 2, p. 999 .

DECISION 352,719.36 380.59 863.50 CTA CASE NO. 8198 26, 127.36 1,789.09 4,200.00 Page14 o�16 38,211.75 98,304.19 168.89 267.50 J&B Rare 78,643.35 1,887.41 None 24 Camus Cognac XO Superieur 2,361.34 None 25 Wine Lindeman's Shiraz Cab. 365,783.04 3,657.83 743.38 I 099.00 Ballantines 17YO 415.34 4,200.00 26 Ballantines 21 YO 219,469.82 757.97 1,800.00 p 7,758,099.7059 Carlos I 27 Camus Cognac XO Superior 28 Camus Cognac VSOP Ele<>ance TOTAL Evidently, petitioner complied with the third requisite relative to its importation of liquor and wine products, but only to the extent of the claimed excise tax payment of P6,898,932.51 which were shown to have lower cost per bottle of importation than purchasing them locally, detailed as follows: No Description Amount of Excise Importation Cost Per Retail Price/Bottle Taxes Paid Under Bottle if Purchased Yin de Table Blanc PAL I Yin de Table Rouge PAL Protest 1"98.60 Domestically (Per 98.60 PWM Price List for 2 Royal Salute 1" 70 819.11 Martell VSOP 99, 180.72 2,182.50 year 2008) 58 ,525.29 873.58 1" 353.50 3 Cl1ivas Regal 87 787.93 630.68 353.50 102.89 6,400.00 4 Yin de Table Blanc PAL 442,368.86 102.89 1,620.00 Yin de Table Rouge PAL 70,819.11 1, 100.00 99 180.72 353.50 353.50 5 Lindemans Primier Shiraz Cabernet, 55, 194.75 211.37 353.50 Penfords Shiraz Cabernet 70,819.11 106.48 353.50 99, 180.72 I 06.48 353.50 Yin de Table Blanc PAL 24 ,285.69 123.18 267.50 6 Yin de Table Rouoe PAL 294 912.58 591.78 1,003.00 442 ,368 .86 650.60 1,100.00 9 Lindemans Premier Selection Chardonnay 87,787.93 896.00 1,620.00 48.01 400.00 10 JW Black Label 3 623.04 753 .97 1,800.00 146,313.22 739.51 1,099.00 II Chivas Re<>al 402,361.34 2,330.12 6,400.00 Martel VSOP 58,525.29 I ,038.49 2,540.00 700 533.90 355.01 450.00 12 Martini Dry & Sweet Vermouth 58 786.56 I ,000.4 7 1,485.00 164 ,602 .37 903.69 1,800.00 13 Camus Co<>nac VSOP Elegance 149,971.05 Carlos I 14 Royal Salute Whisky Piper Heidsieck Brut 15 Absolut Vodka 16 Remy Martin VSOP Co<>nac 17 Camus Co<>nac VSOP Elegance 18 Canter Merlot MRP Bordeaux Rouge, 161 ,338.50 253.32 353.50 Canter Merlo! MRP Bordeaux Blanc 25 ,474.50 167.52 267.50 16,983 .00 214.85 267.50 Lindemans Shiraz Cab. 176,947.55 544.76 I ,003.00 19 Penfolds Shiraz Cab. 505 ,564.42 680.62 1, 100.00 20 Johnnie Walker Black Label 58,525.29 2,379.86 6,400.00 87 787.92 933.36 1,620.00 Cl1ivas Re<>al Scotch Whisky 700,533.90 I 055.31 2,540.00 471 ,860.12 392 .84 1,003.00 21 Royal Salute Whisky 352,719.36 380.59 863.50 26, 127.36 I ,789.09 4,200.00 Martell VSOP Cognac 38,211.75 168.89 267.50 365 ,783.04 743.38 1,099.00 22 Pioer Heidsieck Brut 415.34 4,200.00 3,657.83 757.97 I ,800.00 JW Black Label 219 469.82 23 J&B Rare p 6,898,932.5 1 24 Camus Co<>nac XO Superieur 25 Wine Lindeman's Shiraz Cab. 26 Carlos I 27 Camus Co<>nac XO Superior 28 Camus Cognac VSOP Ele<>ance TOTAL The disallowance of the items listed below is either due to petitioner's failure to provide information on the retail price per bottle if purchased domestically or upon determination that such domestic price is lower than importation cost per bottle:,.a... 59 The difference ofP0.02 is due to rounding off to the nearest peso.

DECISION CTA CASE NO. 8198 PagelS of16 No Description Amount of Excise Importation Cost Per Retail Price/Bottle Taxes Paid Under Bottle 2 Ballantines 17YO if Purchased Ballantines 21 YO Protest I ,760 .97 1,912 .09 Domestically (Per 3 Ballantines 17YO 51 , 118.18 1,755.00 PWM Price List for 55 ,050.34 I,905 .50 3 Ballantines 21 YO 78 643.35 1,974.53 year 2008) 78,643 .35 3513.40 None 7 Ballantines 21 YO 78,643.35 None 235, 146.24 228 .28 None 8 Jack Daniels 26,331.48 2,343.40 None 78 ,643.35 1,887.41 None 10 Gordons Gin 98,304.19 2,361.34 78,643.35 920 .00 14 Ballantines p 859,167.18 None None 26 Ballantines 17YO None Ballantines 21 YO None TOTAL In sum, only the amount ofP6,898,932.51 constitutes erroneously paid excise tax that is refundable pursuant to Sections 204 and 229(C) of the NIRC of 1997, as amended. ACCORDINGLY, in view of the foregoing, petitioner's claim for refund is PARTIALLY GRANTED. The Decision, dated June 2, 2015 of this Court in Division is AMENDED to read as follows: WHEREFORE, in light ofthe foregoing considerations, the Petition for Review is PARTIALLY GRANTED. Accordingly, respondent is DIRECTED TO REFUND to petitioner the amount of P6,898,932.51, representing the latter's erroneously paid excise tax on importations of wine and liquor products for its international flight consumption. SO ORDERED. Furthermore, petitioner's Manifestation, filed on March 20, 2024, is hereby NOTED. Let all Court orders and processes be served and furnished upon petitioner at the address provided therein. SO ORDERED. MARIARO WE CONCUR: C/L. ~ '"4\.._ MA. BELEN M. RINGPIS-LIBAN Associate Justice ON LEAVE CORAZON G. FERRER-FLORES Associate Justice