PETRON CORPORATION v. COMMISSIONER OF INTERNAL REVENUE

CTA Fonn No.8 (For DCC) 111111111111 111111111111111 1111111111 1111111111111111111111111 1111111111 11111111 20-000465-0073 REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY FIRST DIVISION CTA CASE NO. 10439 PETRON CORPORATION, Petitioner, -versus - NOTICE OF RESOLUTION COMMISSIONER OF INTERNAL REVENUE, Respondent. To: OFFICE OF TH E SOLICITOR GENERAL 134 Amorsolo Street, Legazpi Village Makati City ATTY. AYESHA HANIA B. GUJLING-MATANOG ATTY. CLARISSA J. VIRTUDES-BABARAN Bureau of Internal Revenue Room 703, Litigation Division, BIR ational Office Building Sen. Miriam P. Defensor Santiago Avenue Diliman, Quezon City DU-BALADAD & ASSOCIATES 20th Floor, Chatham House Building Rufino comer Valero Street, Salcedo Village Makati City GREETINGS: You are hereby notified by these presents that on September 9, 2025, a Resolution was rendered in the above-entitled case, copy of which is attached hereto. Quezon City, Philippines, September 10, 2025. Atty. Maria Jo~ Chan-Te Executive CrerK-or-Court II

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY FIRST DIVISION PETRON CORPORATION, CTA CASE NO. 10439 Petitioner, Members: -versus- DEL ROSARIO, P.J., Chairperson, BACORRO-VILLENA, arid CUI-DAVID, JJ. COMMISSIONER OF Promulgated: INTERNAL REVENUE, SEP 09~o~IJ'f?AI Respondent. X- - - - - - - - - - - - - - - - - - - - - - - - - - --=-~ - - - - - - - - -X RESOLUTION CUI-DAVID, J.: For this Court's resolution are the following: (1) Petitioner's Motion for Reconsideration (Re: Decision Promulgated on April 15, 2025), filed on May 7, 2025, with respondent's Opposition (Re: Motion for Reconsideration of the Decision dated 15 April 2025), filed on June 10, 2025; and (2) Respondent's Motion for Partial Reconsideration (Re: Decision promulgated 15 April 2025), filed on May 7, 2025, with petitioner's Comment/ Opposition [To Respondent's Motion for Partial Reconsideration (Re: Decision dated 15 April 2025)}, filed on June 9, ' 2025. Both parties seek reconsideration, reversal, or setting aside of the Decision dated April 15, 20251 (assailed Decision}, wherein this Court partially granted petitioner's Petition for Review. The dispositive portion of the assailed Decision reads: 1 Docket- Vol. III, pp. 1398-1450. "

RESOLUTION CTA Case No. 10439 Petron Corporation v. Commissioner of Internal Revenue X----------------------------------------------------------------------------X WHEREFORE, in light of the foregoing considerations, the present Petition for Review is PARTIALLY GRANTED. Accordingly, respondent is ORDERED TO REFUND or ISSUE A TAX CREDIT CERTIFICATE in favor of petitioner for the amount of Pl,097,563,148.00, representing excise taxes erroneously paid on its imported and locally-produced Jet A-1 fuel, subsequently sold and delivered to various international carriers from January 1, 2019 to December 31, 2019. SO ORDERED. In its Motion for Reconsideration, petitioner argues that the Court erred in denying its claim for refund of erroneously paid excise taxes in the amount of l"401,906,516.00, representing a portion of its total claim of l"1,499,409,664.00. Petitioner submits that: (1) it was able to establish that the excise taxes due on the imported and locally produced Jet A-1 fuel were duly paid, and (2) the said fuel was sold and delivered to various air carriers of Philippine or foreign registry for use or consumption outside the Philippines and to tax-exempt entities. In his Opposition, respondent prays for the denial of petitioner's Motion for Reconsideration. Citing the categorical findings of the Court and the Court-commissioned Independent Certified Public Accountant (ICPA), respondent asserts that claims for refund are strictly construed against the claimant, as they partake of the nature of exemption from taxation. As such, such claims cannot be allowed unless granted in the most explicit and categorical language. Conversely, in his Motion for Partial Reconsideration, respondent reiterates his position that a claim for refund of excise taxes is only authorized under Section 130(D) of the National Internal Revenue Code (NIRC) of 1997, as amended. Further, respondent maintains that petitioner cannot anchor its claim for refund on Section 135 of the NIRC of 1997, as amended, since Section 135 can only be invoked by buyers who are exempt entities. In its Comment/ Opposition, petitioner contends that the arguments raised in respondent's Motion for Partial Reconsideration are mere rehashes of those previously raised in respondent's Answer2 dated March 2, 2021, and which were thoroughly discussed and passed upon by this Court in the./ Docket- Vol. I, pp. 152-160. l'f

RESOLUTION CTA Case No. 10439 Petron Corporation v. Commissioner of Internal Revenue X----------------------------------------------------------------------------X assailed Decision. Petitioner further emphasizes that the Supreme Court, in Pilipinas Shell Petroleum Corporation v. Commissioner of Internal Revenue (2021 Pilipinas She11),3 has already settled the issue by ruling that Section 135 of the NIRC of 1997, as amended, confers an impersonal tax exemption, meaning it applies to the tax liability itself, not just to a specific taxpayer. Hence, such a ruling refutes respondent's claim that only buyers may invoke the exemption under Section 135. The Court resolves. After a careful and judicious review of the parties' arguments, the Court finds that both petitioner's Motion for Reconsideration and respondent's Motion for Partial Reconsideration must fail. Respondent's Motion for Partial Reconsideration A perusal of respondent's Motion for Partial Reconsideration verily shows that the arguments interposed by respondent are mere rehash, almost word-for-word, of those previously raised not only in his Answer, as pointed out by petitioner, but also in his Memorandum.4 These arguments were already thoroughly considered and found to be without merit in the assailed Decision. Thus, there is no need to revisit or readdress them in resolving the instant motion. It is well-settled that if the issues raised in a motion for reconsideration are mere reiterations of those already passed upon and adjudged unmeritorious by the Court, these cannot be regarded as substantial and do not require further discussion. Any additional discourse would be unnecessary and repetitive. s Accordingly, there being no new matters and issues v advanced by respondent that would merit reconsideration, the Court finds his Motion for Partial Reconsideration to be without merit. G.R. No. 211303, June \5,2021 [Per J. Pcrlas-Bcrnabe, En Bane]. Docket- Vol. Ill. pp. 1339-1347. Social Justice Society (SJS) Officers v. Lim. G.R. Nos. 187836 & 187916 (Resolution). March 10. 2015 [Per J. Perez, En Bane] citing Ortigas and Compan.v Limited Partnership v. Judge l'e/asco, eta!., G.R. No. 109645 & 112564 (Resolution), March 4, 1996 [Per J. Narvasa. Third Division].

RESOLUTION CTA Case No. 10439 Petron Corporation v. Commissioner of Internal Revenue x----------------------------------------------------------------------------x Petitioner's Motion for Reconsideration To recall, petitioner sought a refund ofP1,499,409,664.00, representing excise taxes allegedly paid from January 1, 2019, to December 31, 2019, on imported and locally produced Jet A- 1 fuel subsequently sold and delivered to various international carriers and tax-exempt entities. In the assailed Decision, the Court granted the refund only for Pl,097,563,148.00, and denied the remaining P401,906,516.00, which petitioner seeks reconsideration in the present motion. Petitioner contends that it was able to show that it paid the corresponding excise taxes on imported and locally produced Jet A-1 fuel covering the period January 1, 2019 to December 31, 2019. With respect to imported Jet A-1 fuel, petitioner reiterates its importation process and argues that the ICPA reviewed the supporting documents and verified that petitioner paid the excise taxes on these importations. Likewise, for locally produced Jet A-1 fuel, petitioner argues that it has duly paid and filed the applicable excise taxes through its advance excise tax deposit scheme, and that the ICPA ascertained these advance excise tax deposits made by petitioner as sufficient to cover the total excise taxes due on the actual removals of locally produced fuel. Furthermore, petitioner submits that the imported and locally produced Jet A-1 fuel were sold and delivered to various air carriers of Philippine or foreign registry for use or consumption outside the Philippines and to tax-exempt entities, as verified by the ICPA. At the outset, it must be stressed that the findings and conclusions of the ICPA are only persuasive in nature but are not conclusive upon the Court.6 As the ICPA's report is but a tool or guide to aid the Court in the resolution of the case, the Court is free to either adopt totally, partially, or entirely Section 3, Rule 13 of the Revised Rules of the Court ofT ax Appeals provides: SEC. 3. Findings of independ['nt ('PA.- The suhmission hy the independent CPA of pre-marked documentary exhibits shall be subject to verification and comparison with the original documents, the availability of which shall be the primary responsibility of the party possessing such documents and, secondarily, by the independent CPA. The findings and conclusions of the independent CPA may be challenged by the parties and shall nofbe conclusive upon the Court, which may, in whole or in part, adopt such findings and conclusions subject to verification.

RESOLUTION CTA Case No. 10439 Petron Corporation v. Commissioner of Internal Revenue x----------------------------------------------------------------------------x disregard the ICPA's findings depending on its own appreciation of the documents upon which the ICPA's report is based.7 From the foregoing discussion, petitioner cannot rely solely on the ICPA's findings to substantiate its claim. Aside from narrating its importation process and excise tax payment scheme for its imported and locally produced Jet A-1 fuel, petitioner relies on the fact that the ICPA was able to review the supporting documents and verifY the entire claim. Such contention is misplaced. As exhaustively discussed and presented in the assailed Decision, both the ICPA and the Court identified exceptions that reduced the total substantiated excise taxes to P1,097,563,148.00. Regarding the excise tax payments on both imported and locally produced Jet A-1 fuel under the present claim, the Court disallowed P384,895,860.00 as the excise tax payments could not be traced due to unresolved multiple entries identified during the ICPA's verification and the unavailability of original documents. These findings were duly supported by the ICPA's Reports and Supplemental Report.9 Moreover, the Court made additional disallowances amounting to P16,950,656.00 pertaining to: (1) imported and locally produced Jet A-1 fuel sold to customers without a valid Foreign Air Carrier's Permit (FACP), Certificate of Public Convenience and Necessity (CPCN), or Air Service Agreements; (2) Aviation Delivery Receipts (ADRs) with a local destination, no destination, or with unreadable details; (3) ADRs dated prior to the Authority to Release Imported Goods (ATRIG) dated March 13, 20 19; and (4) sales made to tax-exempt entities not substantiated. Notably, petitioner failed to address these matters in the present motion, nor did it present compelling grounds to warrant their reversal. All told, the Court finds no cogent reason to disturb the assailed Decision. The arguments raised by petitioner have already been thoroughly considered, resolved, and addressed in the assailed Decision. In the absence of any new or significant grounds in petitioner's plea for reconsideration, the Court maintains its conclusion in the assailed Decision that petitioner (C~ BSM Crew Service Centre Philippines, foe. v. Commissioner of Internal Revenue, CTA EB Case No. 2788 Case No. 10135). March 25, 2025 citing Tullett Prebon (Philippines), Inc. v. Commissioner of internal Revenue, G.R. No. 257219. July 15,2024 [Per J. Dimaampao, Third Division]. Exhibit ''P-37" and "P-73"' (on separate binder). Exhibit �'P-73'" (on separate binder).

RESOLUTION CTA Case No. 10439 Petron Corporation v. Commissioner of Internal Revenue X----------------------------------------------------------------------------X sufficiently proved its entitlement to a refund of erroneously paid excise taxes, but only in the amount ofl'l ,097 ,563,148.00. WHEREFORE, premises considered, petitioner's Motion for Reconsideration (Re: Decision Promulgated on April 15, 2025) and respondent's Motion for Partial Reconsideration (Re: Decision promulgated 15 April2025) are hereby DENIED for lack of merit. SO ORDERED. li.AAA)/1y LANN~~tul-])AVID Associate Justice WE CONCUR: Presiding Justice JEAN MAR~I�~iB~At~ CeOJR� uRsOtic-eVILLENA