CTA Case No. 3548 (Decision)

REPUBLIC lF TIE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY TAGGAT INDUSTRIES., INC� ., Petitioner', C.. T .. A.. CASE NO. 3548 C[IIIIIIJ SSJ DNER OF J NTERNAL ProM�AuYlg2at5ed1:92i~� REYENlE, Respondent .. X - - �-� -� - --------------- X DECISION This is a clai� for refund in the total a�ount of P334,710.75 allegedly representing 25� of the specific taxes paid on the oils and fuels actually used by Petitioner in its operations as a duly licensed forest concessionaire. The facts of this case re�ain undisputed. During the period beginning July 1, 1980 to Dece�ber 31, 1981, Petitioner purchased fro� Caltex <Philippines>, Inc. and Pilipinas Shell Petroleu� Corp., refined and �anufactured mineral oils, oils which Petitioner actually and exclusively used in connection with the exploitation and operations of its forest concession. The said oil co�panies paid and passed on to Petitioner the specific taxes i�posed on the above-�entioned oils sold to Petitioner under Sections 775

DECISION -� C. T. A. CASE NO. 3548 - 2- 153 and 156 <formerly Sections 1~2 and 1~5) of the 1977 Tax Code. On October 6, 1982, Petitioner filed a written claim for refund in the amount of P33~,710.75 computed as follows: July 1980 - December 1981 Vtl.lJE PROOU:T !HCIFIC m llitrrs) COST TAl REFIN) DIESEL 3,254,225 PI0,334,0-'-'l.40 p S69,-'l89.38 P142,372.35 -'l93,000 2,397,712.90 -'l-'JJ, 700.00 110,925.00 SASli.JtE REQLAR -'l03,003.26 2, 340,525. 86 322,40Z.6J 80,600.65 6,50e OILS &LUBRICANTS 7~998.31? ~251!00 IJ~,z;; SREASE PI~ "'J1all. 48 Pl1JJ8.84Z. 'J'J PJJ'1 710. 15 representing twenty-five percent <251t) of the specific taMes collected on the oils used by the Petitioner in its - operations as a fores~ concessionaire. Such claim for refund,was never acted upon by the Respondent. Hence, this appeal. ln its appeal, Petitioner, prayed for an order requiring Respondent to pay 20~ interest per annum, in addition to its claim for refund, for her alleged refusal to refund the inst.!mt claim. Petitioner likewise prayed for the costs of suit. ln support to its claim for refund, Petitioner relied on the case of Insular Luaber Coapany vs. Court of Tax . Appeals and Co�aissioner of Internal Revenue, G. R. No. L-31057, May 29, 1981 in which the Supreme Court held 776

DECISION - C.T.A. CASE NO. 3548 - 3- that the proviso of Section 5 of Republic Act No.1435 is in effect a partial eMemption from the imposed increased specific taM on manufactured oils. Section 5 of Republic Act No. 1435 provides: "SEC. 5. The pt"oceeds of the additional taM on manufactured oils shall accrue to the road and bridge funds of the political subdivision fot" whose benefit the taM is collected: Provided, however, That whenever any oils mentioned above are used by �iners or forest concessionaires in their operations, twenty-five per cen~u� of the specific taM paid thereon shall be refunded by the Coll�ctor of Internal Revenue upon submission of proof of actual use of oils and under similar conditions enumerated in sub-paragraphs one and two of section one hereof, amending section one hundred forty-two of the Internal Revenue Code: Provided, further, That no new road shall be constructed unless the routes or location thereof shall have been approved by the Co�missioner of Public Highways after a determination that such road can be made part of an integral and articulated route in the Philippine Highway System, as requir�d in section twenty-siM of the Philippine Highway Act of 1953... Respondent, however, asserted that the above-quoted Section of R.A. 1435 has already been repealed by Section 343 of the 1977 TaM Code <Presidential Decree Nos. 1158 and 1158-A> which provides in part: "SEC. 343. Granting provinces, cities and municipalities shares in the specific taM on certain petroleum products. ln addition to the internal revenue allotment under Section three hundred forty-four, provinces, cities and municipalities shall share in the specific taMes on the following petroleum products in Sltch a~aounts as may be equivalent to the 777

DECISION - C.T.A. CASE NO. 3548 4- collections therefrom at the rates indicated hereunder. The additional allotment is in lieu of local taMes imposed on petroleum products and for this purpose, Section twenty-four of Presidential Decree n~mbered 231, otherwise known as the Local TaM Code, has been repealed by Presidential Decree numbered 43G on March 30, 1974. Even assuming that Section 5 of Republic Act No. 1435 is still in effect, partial taM refund thereunder refers to specific taMes paid by miners and concessionaires on fuel oil, commercially known as diesel fuel oil, and other similar oils having more or less the same generating power, and hence, according to the Respondent, Petitioner is not entitled to a refund of 25� on the specific taM it paid on gasoline, kerosene, avgas <aviation gas> or petroleum and lubricating oils. Respondent also contended that Petitioner's right to file a judicial action for refund of all taMes paid before November 1G, 1980 has already prescribed. Is the Petitioner entitled to the refund claimed representing 25� of the specific taMes paid on the oils and fuels actually used by Petitioner in its operations as a forest concessionaire? If entitled to the refund claimed, were they filed within the prescriptive period of two years? These are the issues involved. 778

DECISION - C.T.A. CASE NO. 3548 - 5- We find for the Petitioner. In the case of Co��issioner of Internal Revenue vs. Atlas Consolidated Mining and Develop�ent Corporation, et al., G. R. No. 93631, November 12, 1990, the Supre111e Court, in a Resolution by the Third Division, had the occasion to rule that "the purpose for the increase in the rate of tax cannot in anyway negate the policy behind the grant of partial refund. The Court sees no inconsistency between the increase in specific tax rates and the retention of the refund privilege. In fact, with the increased specific tax rates, the grant of partial refund to mining and lumber concessionaires is made more imperative considering that they seldo� use the highways, the construction of which are financed by specific taxes." Moreover, We find fitting the following comments of the Supreme Court in the case of Co��issioner of Internal Revenue vs. Atlas Consolidated Mining and Develop�ent Corp., et al., (supra>.: "A reading of the legislative proceedings leading to the enact�ent of RA 1435 shows that �ining and lumber concessionaires were granted partial refund of specific taxes because the gasoline and fuel they consume is mostly used within their own compounds and roads. RA 1435 gave these concessionaires relief, in the form of a tax refund, since their trucks and vehicles seldo� ply the national highways, the construction of which is funded by the specific tax collected by the national govern�ent. 779

DECISION - C.T.A. CASE NO. 3548 6- There is therefore no rationale in conditioning the grant of refund on the payment of these �ining or lumber concessionaires of any additional local tax. Moreover, Section 5 states 'that the 25~ specific tax shall be refunded by� the Collect or- of Internal Revenue. Since it is the latter who collects the specific taxes due to the national govern�ent, then it follows that the refund refers to a refund of the specific taxes paid to the national govern�ent, not the specific taxes paid to the local gover-n�ent." And in the �ore recent case of Co��issioner o~ Internal Revenue vs. Rio Tuba Nickel Mining Corporation and Court o~ Tax Appeals, G.R. Nos. 83583-84, 30, 1991 <202 SCRA 137>, the Supre�e Cout..t Third Division held: "to our �ind, the proviso in Section 5 standing alone is enough basis for the grant of refund. X X X. Jn fact, the entire proviso of Section 5 does not even �ake any reference to Section 4 which e�powers �unicipalities and cities to i�pose the additional tax on oils sold or distributed within their territorial jurisdiction. What is clear therein is that the Revenue Co�aissioner shall refund 25~ of the specific tax whenever 'any oils mentioned above are used by miners or fot..est concessionaires in their operations and the procedure for refund is co~plied with." (see also Aras-Asan Ti�ber Co., Inc., CTA Case No. 3524, Dec. 17' 1993; Curuan Ti�ber Corp., vs. CIR, CTA Case No. 3582, Sept. 20, 1994"). 780

DECISION - C.T.A. CASE NO. 3548 - 7- Finding for the Petitioner, this Court e~amining carefully the invoices offered by Petitioner as evidence, considered only the following: Jn,oicr Datr 0 UANT J T Y J N L J T E AS � Oil~ and RrguJar No. Shipprd hh. Dir~rJ Lubricant~ Sa~olinr 38334 JJ/03/80 A-79 10,000 IZ,OOO 38350 JJ/04/80 A-80 9,000 11/08/80 A-81 10,000 6,000 3839) JJ/07/80 A-8Z 12,000 6,000 JJ/07/80 A-83 10,000 6,000 J&UO JJ/IZ/80 A-84 9,000 38409 JJ/JJ/80 A-85 38469 JJ/JJ/80 A-86 1Z,OOO 38472 JJ/14/80 Jl-87 38474 JJ/14/80 Jl-88 9,000 38S39 JJ/14/80 A-89 10,000 38540 JJ/14/80 A-90 6,000 38541 JJ/J1/80 A-91 10,000 JJ/18/80 A-9Z 10,000 385(.7 JJ/18/80 Jl-93 12,000 11/10/80 Jl-94 10,000 3858(, JJ/21/80 Jl-95 9,000 I 1/'l7/80 A-96 10,000 Jlla() JJ/ZS/80 A-97 9, (1(1(1 1JIZ8/80 A-98 10,000 3ll631 JJ/ZB/80 A-99 JBM9 1ZIOI/80 A-100 10,000 1Z/1Z/80 A-IOJ 38673 1ZJtZI80 Jl-IOZ 10,000 381(16 12/15/80 A-103 6,000 1Z/15/80 A-104 387~ 12/19/80 IZ,OOO 12/23/80 A-1<6 38736 10,000 38737 OJ/05/81 Jl-1(16 6,000 38746 A-107 9,000 01/09/81 A-108 12,000 39030 Jl-109 OJ/09/81 A-JJO 1Z,OOO ~ A-JJI 01/09/81 A-JJ2 6,000 39038 Jl-JJ3 12,000 39039 01/09/81 Jl-JJ4 9,000 01/JZ/81 Jl-JJ5 10,000 39103 OIIJ4/8J 39131 OJ/16/81 A-JJ6 JZ,OOO 39291 01/16/81 01/IL/81 A-JJ7 10,000 39368 (11/16/81 9,000 39313 39314 IZ,OOO 39383 9,000 12,000 39390 9,000 39UI :m98 39565 39510 39512 781

DECISION - C. T. A. CASE NO. 3548 - 8- Jnvoicr Datr Ex h. DUAN1J1Y J II lllERS ND. Shipprd Oih. and RrguJar A-118 A-H9 Dir~rJ Lubricants Sa~oJinr A-llO ~ 01/l1/81 A-IZI 10,000 6,000 01/l3/81 A-IZZ 10,000 lU9 01/l6/81 A-1Zl 10,000 10,000 B3Z 01/l6/81 A-IZ4 6,000 OJ/l6/81 A-125 9,000 ~ OJ/ZB/81 A-ll6 ll,OOO ~5 01/30/81 A-IZ7 10,000 '01/30/81 A-1Z8 10,000 39688 OZ/OZ/81 A-1Z9 IZ,OOO OZ/Ol/81 A-130 9,000 $~ OZ/OZ/81 A-131 10,000 $~ OZ/05/81 A-Ill 9,000 OZ/�:i/81 A-133 10,000 $151 OZ/06/81 A-J34 1Z,OOO $759 OZ/06/81 A-135 10,000 OZ/09/81 A-136 IZ,OOO !Om OZ/Z4/81 A-137 10,000 OZ/25/81 A-138 10,000 55lfl2 OZ/25/81 A-139 10,000 OZIZ1181 A-140 10,000 55814 03/03/81 A-141 10,000 03/03181 A-14l 10,000 $879 03/<M/81 A-143 10,000 03/<M/81 A-144 10,000 55884 03/JJ/81 A-145 10,000 55891 03/11/81 A-146 10,000 25284 031J8/81 A-147 10,000 03/18181 A-148 10,000 ~ 03118181 A-149 10,000 ~ 03/18181 A-ISO 10,000 03119/81 A-151 10,000 25Z88 03/ll/81 A-152 10,000 25291 03/ll/81 A-IS3 10,000 03/Z3/81 A-154 10,000 25lW 03/ll/81 A-155 2SZ9J 03/Z3/81 A-JS(, 10,000 03/Z4/81 A-157 10,000 ~ 03125/81 A-158 10,000 ~ 03125/81 A-159 10,000 03/25/81 A-1�,0 10,000 252'98 03/31/81 A-161 9,000 25306 04/01/81 A-16Z 10,000 25307 04/01/81 A-163 10,000 25318 04/01/81 9,000 25319 04/0Z/81 10,000 04/0Z/81 10,000 ~ 253ZZ 2532'3 253i:'5 25B 253Z7 25.1?8 25334 25Rl 2533L 2534Z 25344 25345 25346 25347 25348 782

DECISION - C.T.A. CASE NO. 3548 - 9- lnvoirr Datr Exh. UUANTJTY J N l l T E AS No. Shipprd Oib and Rrgular A-164 A-165 Dinrl lubricants Gaso1inr A-16& 25353 04/03/81 A-167 10,000 8,000 25357 04/06/81 A-168 10,000 2,000 25358 Olt/06/81 A-169 10,000 25359 04/06/81 A-170 2536Z 04/06/81 A-111 1o, 000 25363 Olt/08/81 A-172 25367 04/09/81 A-173 9,000 25369 04/09/81 A-l11t 10,000 25370 04/09/81 A-175 10,000 25371 04/09/81 A-11�, 10,000 25375 04/10/81 A-177 10,000 25376 Olt/13/8) A-178 9,000 25377 04/13/81 A-179 10,000 25379 04/13/81 A-180 25382 04/20/81 IH81 . 10,000 25383 04/21/81 A-182 9,000 25388 04/22/81 A-183 10,000 25389 04/22/81 A-I Sit 10,000 2539e 04/27/81 A-185 10,000 25394 04/29/81 A-186 10,000 25395 04/30/81 A-187 9,000 25397 05/05/81 A-188 10,000 25398 05/05/81 A-189 10,000 68051 05/06/81 A-190 9,000 68053 05/06/81 A-191 10,000 6805It 05/07/81 A-19e 9,000 68055 05/07/81 A-193 10,000 68060 05/08/81 A-194 2,000 05/12/81 A-195 9,000 68()fl, 05/12/81 A-196 10,000 05/13/81 A-197 9,000 68067 05/13/81 A-198 10,000 68070 05/15/81 A-199 10,000 05/19/81 A-200 8, 000 68072 05/25181 A-201 JO,OOO 05/27/81 A-202 10,000 68076 05/28181 A-203 10,000 68079 05/28/81 A-201t 10,000 L808l 06/0Z/81 A-205 10,000 �8083 06/03/81 A-ZOL 10,000 6IKlM 05/19/81 A-207 10,000 06/04/81 A-208 10,000 (.809e 06/04/81 A-209 10,000 06/04/81 10,000 680!J8 06/04/81 10,000 06/08/81 10,000 f.,8(J99 9,000 10,000 68101 10,000 . 68105 68106 68108 68112 68115 783

DECISION - C. T. A. CASE NO. 3548 - 10 - lnvoicr Datr Ell h. OUANTJTY J N LITERS No. Shipptd Oils and Rrgular A-210 A-211 Dirsrl Lubricants &asolinr A-212 68116 06/08/81 A-213 10,000 6,000 68120 06/08/81 A-214 10,000 3,000 68126 06/J0/81 A-215 9,000 68130 06112/81 A-216 10,000 6,000 68131 06112/81 A-217 10,000 4,000 68134 06/15/81 A-218 10,000 68152 06/26/81 A-219 10,000 68153 06/26/81 A-220 10,000 68154 06/26/81 A-221 10,000 68156 06/29/81 A-222 10,000 68157 06/29/81 A-223 10,000 68J1J 07/08/81 A-224 . 10,000 68172 07/08/81 A-225 10,000 68173 07/08/81 A-226 10,000 68174 07/09/81 A-227 4,000 68177 07/09/81 A-228 9,000 68181 07/09/81 A-229 10,000 68182 07/J0/81 A-230 10,000 68183 07/10/81 A-231 10,000 68194 07/13/81 A-232 10,000 68195 07/IJ/81 A-233 10,000 68198 07/14/81 A-234 6,000 07/21/81 A-235 10,000 68205 07/21181 A-236 10,000 68206 07/21/81 A-237 10,000 68207 07/21/81 A-238 10,000 07/22/81 A-239 9,000 68208 07/30/81 A-240 10,000 07/30/81 A-241 10,000 68211 07/30/81 A-242 10,000 68224 07/31/81 A-243 10,000 07/31/81 A-244 10,000 68226 08/03/81 A-245 4,000 68227 08/03/81 A-246 6,000 68230 08/05/81 A-247 9,000 68232 08/06/81 A-248 9,000 68239 08/07/81 A-249 10,000 68241 08/07/81 A-250 10,000 68248 08/07/81 A-251 10,000 81001 08/10/81 A-252 10,000 81002 08/12/81 A-253 10,000 81003 08/13/81 A-254 10,000 81004 08/13/81 A-255 9,000 81006 08/14/81 10,000 81015 08/14/81 10,000 81016 08/17/81 10,000 81017 81023 81024 81026 784

DECISION - C. T. A. CASE NO. 3548 lnvoicr Dah Exh. - 11 - LJTERS No. Shipptd Rrgular A-256 .. DUANTJTY ] Gasolinr A-257 A-258 Oib and A-259 Dinrl Lubricants A-260 81030 08/20/81 A-261 10,000 1,000 81031 08/20/81 A-Z62 10,000 6,000 81032 08/20/81 A-263 10,000 81035 08/21/81 A-264 9,000 81037 08/21/81 A-265 10,000 81038 08/21/81 A-266 10,000 81057 08/ZB/81 A-267 10,000 81058 08/ZB/81 A-268 10,000 81059 08/ZB/81 A-269 10,000 81060 08/31/81 A-270 10,000 81061 08/31/81 A-271 10,000 81080 09/04/81 A-272 9,000 81082 09/04/81 A-273 10,000 81089 09/08/81 A-274 10,000 81097 09/10/81 A-275 9,000 81099 09/10/81 A-276 10,000 8ll00 09/10/81 A-277 10,000 8Jl01 09/10/81 A-278 10,000 8Jl04 09/JJ/81 A-279 9,000 8Jl06 09/JJ/81 A-ZBO 10,000 81107 09/!4/81 A-281 10,000 8Jl08 09/14/81 A-282 10,000 81109 09/14/81 A-283 10,000 8Jl10 09/15/81 A-284 10,000 811ll 09/15/81 A-285 10,000 81112 09/15/81 A-286 10,000 8JJJ3 09/15/81 A-28? 9,000 81114 09/18/81 A-288 10,000 81115 09/18/81 A-289 10,000 81116 09/18/81 A-290 8,000 81131 09/17/81 A-291 4,000 81157 09/20/81 A-292 10,000 81158 09/29/81 A-293 10,000 81159 09/28/81 A-294 10,000 81160 09/20/81 A-295 10,000 81161 09/30/81 10,000 8Jt64 10/01/81 A-~ 10,000 81167 10/0Z/81 10,000 8Jl68 10/0Z/81 A-297 10,000 81169 10/0Z/81 A-298 10,000 8Jl74 10/05/81 A-299 10,000 81184 10/07/81 A-300 10,000 8Jl85 10/07/81 A-301 10,000 81214 10/20/81 8,000 81215 10/20/81 10,000 81216 10/20/81 10,000 785

� . DECISION - C. T. A. CASE NO. 3548 - 12 - Jnvoicr Datr Exh. DUANTJTY J N LITERS No. Shipprd Oils and Rrgular A-302 A-303 Dirsrl Lubricants 6asolinr A-304 81219 10/21/81 A-305 9,000 7,000 81217 10/Z0/81 A-306 10,000 81ZZ1 10/21/81 A-307 10,000 2,000 81231 10/26/81 A-308 2,000 2,000 81239 10/30/81 A-309 10,000 2,000 81240 10/30/81 A-310 10,000 4,000 81241 10/30/81 A-311 10,000 81243 10/30/81 A-312 10,000 6,954 8121J2 10/30/81 A-313 10,000 5,655 8121)5 11/02/81 A-314 10,000 91007 11/05/81 A-315 I, 000 400 91023 11/17181 A-316 10,000 91024 IJ/17/81 A-317 10,000 91025 11/17181 A-318 10,000 91026 11/17/81 A-319 10,000 91028 IJ/18/81 10,000 9101)0 11/Z0/81 A-~ 8,000 9101)5 IJ/Z0/81 10,000 9101)6 11/26/81 A-JZ1 10,000 9101)8 11/26/81 A-322 8,000 91051 11/27/81 A-JZ3 IJ,OOO 91063 12/0IJ/81 A-JZIJ 10,000 91061) 12/0IJ/81 A-JZS 6,000 91069 12/07/81 A-326 8,000 91071) 12/09/81 A-JZ7 6,000 91082 12/11/81 A-328 8,000 91084 12/11/81 A-329 2,000 91094 12/16181 A-330 10,000 91095 12/16181 A-331 10,000 91096 12/16/81 A-JJZ 10,000 91098 12/18/81 A-333 8,000 91J03 12/18/81 A-334 10,000 91101) 12/18/81 A-335 10,000 91J05 12/18/81 A-336 10,000 91106 12/18/81 A-337 10,000 91J16 12/ZZ/81 A-338 10,000 91119 12/23/81 A-339 10,000 911ZO 12/23/81 A-340 10,000 91121 12/23/81 A-362 10,000 08561 11/19/80 A-363 08562 Jl/19/80 A-364 4,190 12,000 08563 Jl/19/80 A-365 2,940 63405 12/08/80 A-366 101)68 12/08/80 A-367 01/14/81 A-368 39428 01/08/81 13Z37 788

DECISION - C. T. A. CASE NO. 3548 - 13 - Jnvoicr Datr Exh. OUANTJTY J .. L J T E R S Oils and Rrgular No. Shipptd A-3&9 A-370 Dirsrl Lubricants Sasolinr A-371 ll009 12/23/80 A-372' ~,660 10,000 25286 02/25/81 A-373 12',000 02/0o\/81 A-374 z,~o 55829 02/03/81 A-315 10,000 02/03/81 A-376 3,190 10,000 15787 02/03181 A-317 9,000 10,000 15788 03/J0/81 A-378 9,000 15889 03/19181 A-379 II, 7~0 10,000 252'!.15 A-380 03/Z~/81 A-381 Z,91t0 10,000 �~I A-382 10,000 10,000 03/2~/81 A-383 4,200 10,000 25332' A-384 10,000 25333 03/2'3/81 A-385 04/03/81 A-386 9,000 2532~ 04/09/81 A-387 9,000 A-388 10,000 2'2248 04/1~/81 A-389 10,000 253&8 A-390 10,000 25380 04/11t/81 A-391 10,000 25381 04/2'4/81 A-39Z 9,000 25390 04/30/81 A-393 9,000 f15/07/81 A-391t Zlt~6 05/09/81 A-395 7,350 05/15/81 A-396 Zlt815 05/18/81 A-397 5,225 10,000 05/12'/81 A-398 6,300 2'~879 05/15/81 A-399 3,570 06/18/81 A-#tOO 255'11 06/18/81 200 68102 06/2'8/81 A-~01 7,390 68068 06/29/81 A-~02 68077 07/30/81 A-~03 9,495 68139 07/07/81 13,020 68140 07/08/81 A-404 68158 07/08/81 384 68159 07/11/81 A-~05 68225 08/05/81 A-~07 10,000 30086 08/05/81 10,000 3019Z 08/10/81 A-~08 10,000 30210 08/03/81 10,000 30535 09/11t/81 A-lt09 8,000 323&9 09/11t/81 A-410 9,000 32370 09/23/81 A-411 329Z7 05/28/81 A-lt12 682'38 08/31/81 35505 08/31/81 A-~13 35507 08/31/81 3&217 09/10/81 A-~1~ 63879 09/16/81 81062 09/30/81 A-415 81063 81065 81098 81130 81162 78'7

DECISION - C.T.A. CASE NO. 3548 - 14 - ....lnvoicr Datr UUANTJTY IN liTERS Shipprd Exh. Oih and Rrgular DinrJ lubricanh Gasolinr 81175 J.()/05/81 A-416 6,290 9,000 81189 10,000 81196 10/12/81 A-417 8,220 6,000 37871 10/12/81 A-418 5,690 37872 10/12/81 A-419 2,310 10,000 43702 10/12/81 A-420 43703 12/21/81 A-421 6,300 9J117 12/21/81 A-422 7,524 71966 12/22/81 A-423 13,018 71967 8,400 11/19/81 A-567 1,460 ~650 11119/81 A-568 3,150 10/28/81 A-569 33713 09/01/81 A-570 208 33714 09/(1(,/81 A-571 3,990 08/21/81 A-572 8,430 33288 07/22/81 A-573 2,844 05/14/81 A-575 5,200 31900 05/15/81 A-576 10,920 21529 03/20/81 A-577 2,100 21530 03/20/81 A-578 2,310 19222 02/20/81 A-579 9,000 19223 OJ/14/81 A-580 181(1(, 03/(1(,/81 A-581 43611 03/20/81 A-582 19088 03/(1(,/81 A-583 20998 T 0 T Al 63499 The other inv,oices, namely, E.chs. "A-1" to "A-78", "A-341" to "A-361", and "A-424" to "A-566", are not being considered because they are already beyond the two-year prescriptive period. The Ta.c Code provides for the judicial remedy of filing a claim for refund within a period of two (2) years from the date of payment of the ta.c pursuant to the provision of Section 230 (formerly Section 292>. Section 135 of th~ TaH Code insofar as pertinent provides "that specific taHes on locally manufactured 788

DECISION - C.T.A. CASE NO. 3548 - 15 - petroleum products levied under Sections 153, 155 and 156 of this title, except lubricating oil and grease, shall be paid within fifteen (15) davs fro� the date of re�oval thereof from the place of production." <Emphasis supplied) It is therefore evident that the manufacturer of petroleum products has up to 15 days from the date of its removal within which to pay the specific taxes on locally manufactured petroleum products. As an exception, manufacturers of lubricating oils and grease have to pay the specific tax collected fro� the purchaser on the date of its removal from the place of production. Petitioner purchased both manufactured petroleu� products and lubricating oils and grease. Thus, with respect to its purchases of lubricating oils, the specific taxes paid thereon are deemed paid at the date of its removal. The claim for refund of the 25� specific taxes paid on oils and lubricants purchased and delivered prior to November 16, 1980 had indeed prescribed. The purchases of oils other than lube have prescribed on October 31, 1980 because the specific taxes of said purchases were deemed paid on November 15, 1980 which is ~lready more than two years fro� the filing of this Petition for Review 1982. Thus, purchases made on or before October 31, 1980 are no 789

DECISION - C.T.A. CASE NO. 3548 - 16 - longer considered in the co�putation. Exhibits "B", "B- 1" to "B-211", "C", "C-1" to "C-191", "D", "D-1" to "D- 75", "E" "E-1" to "E-187" are also not being considered since these are purchases of petroleuM products which do not form part of the original period these are purchases for the years 1982 and 1983 which probably have been inadvertently included by the Petitioner. Thus, following the formula of conversion already used by this Court in the other cases of this nature, We arrived at this computation of the 25~ specific tax refund under Sec. 5 of R.A. No. 1435, to wit: RElDIPUTATI~ IF ~ SPECJFJC TAX REFill) lJUR SEC. 5 IF RERR.JC ACT til. J~J5 Manufactured Oils Quantity Sprcific Specific Tu Rate Tax Diesel t2,48J,OOO x .8~ f 1,000) 2, OCR. 92 NT Pl.OOIT p 2,0CR.CJ2 Oil' and lubricants 2.18,507.00 L 16,695.49 Ret~lar Gasoline J96, 000. 00 L 0.07/L 31.680.00 Total specific taxes 0.08/L "-ltiply by specific tax refund rate PSO,~.u ~ specific tax refund under RA ".15 25J P12,617.10 As regards the 20~ interest per annum being clai�ed by Petitioner, the rule is that no interest on refund of taK can be awarded unless authorized by law or the collection of the taK was attended by arbitrariness. <Collector vs. Prieto, 112 Phi 1. 907; Co��issioner vs. Asturias Sugar Central, 2 SCRA 1140; Co��issioner oF Internal Revenue vs. A�erican Rubber Co., 18 SCRA 842:; 790

DECISION - C.T.A. CASE NO. 3548 - 17 - 100 SCRA 556; Shell Phi 1 ippines, Inc. vs .. Central Bank of the Philippines, 162 SCRA 628.> An action is not arbitrary when exercised honestly and upon due consideration where there is roo� for two opinions, however much it may be believed that an erroneous conclusion was reached. (F.. B. Moreno, Philippine Law Dictionary C3rd ed.), Corporation 08473-AP, August 23,1979.) Arbitrariness presupposes inexcusable or obstinate disregard of legal provisions. (Victorias Milling Co.. , Inc. et al., 19 SCRA 430.> None of the exceptions are present in the case at bar. Respondent's decision denying Petitioner's claim for refund was based on an honest interpretation of law. We, therefore, see no reason why Petitioner should be entitled to the payment of interest. Moreover, the Supreme Court held in the Rio Tuba case that no interest shall be charged in computing the 25~ refund on specific taxes paid. <See Supreae Court "Resolution dated March 25, 1992.> In the same manner, Petitioner's prayer for cost of suit cannot be awarded. It is an ele�entary rule that the government shall not be liable for costs of suits unless otherwise provided by law. (Section 1, Rule 142, 791

DECISION - C.T.A. CASE NO. 3548 - 18 - Revised Rules o~ Court; Collector o~ Internal Revenue vs. Convention o~ Philippine Baptist Churches and the Court o~ Tax appeals, 2 SCRA 10). WHEREFORE, in all the foregoing, Respondent is hereby ORDERED to REFUND Petitioner the sum of Pl2,617 .. 10 without interest representing 25~ refund of specific taxes paid on its purchases of oils and fuels actually used by Petitioner in its operations as a duly licensed forest concessionaire pursuant to Sec .. 5 of R.. A.. 1435. SO ORDERED. ~~I ft.~� /;V ARsAsMoOcNiaot.e.DJEucVttE~NRA WE CONCUR: e,....h.. Q, ~ ERNESTO D. ACOSTA Pt~es id i ng GRUBA Associate Judge 792

DECISION - C.T.A. CASE NO. 3548 - 19 - CERT:IF:ICAT:ION I hereby certify that this decision was reached after due consultation among the �e�bers of the Court of TaH Appeals in accordance with Section 13 Article VIII of the Constitution. ~lQ.~ ERNESTO D. ACOSTA Presiding Judge Court of TaH Appeals 793