CTA Case No. 4617 (Decision)

Republic of the Philippines COURT OF TAX APPEALS � Quezon City ~�� ,Y �f I LA SUERTE CIGAR AND l CIGARETTE FACTORY, f ! Petitioner, t -versus- C.T.A. CASE NO. 461 7 I COMMISSIONER OF PROMULGATED : '. �i INTERNAL REVENUE, SEP 06 1994 ;� . Respondent. .. . ., �' X ---- -- ------ - -- - -------------- - --- -- ----- -- ------- ~ --~�- --~--- X ..l r ; DECISION '� This is an appeal from the decision <A � respondent Cotnmissioner of Inwrhai Revenue denying the pt"otest fiied by petitioner La Suerw Cigar and Cigarette Factory regarding the deficiency specific tax assessment issued by respondent covering the purchase of ihlporwd and loca11y produced stemmed-leaf tobacco from June 21; 1989 to ~ovember 20,� 1990 and the sale of stemmed-1eaf tobacco to Associated Anglo-Atn�rican To~acco � Corporation, in the sum of P 11;757,2 75.25. The facts are as follows :

DECISI � C.T.A. CASH NO. 4617 -Page 2 - Petitioner is a domestic corporation engaged it1 the production and manufacture of cigar and cigatettes. tt imports and purchases locally produced stemmed-leaf tobacco to be. used in its manufacture of cigars and cigarettes: . On January 10, 19911 tl1e Buteau of Internal Revenue sent a Pre-Assessment Notice to petitioner, received oh Jatmat"y 14, 1gg 1, . infonning the latter that it has a11eged1y incurred � deficiency specific taxes on its local purchases and imp~r~tions� \ I'i and on the sale of partially manufactured tobacco pursuant to . It the provisi?ns _of Sections 141 (b )1 12 7(a) -and 12 8 of the Tax Code, computed as follows: a) Partially Manufactured SPECIFIC TAX DUE - Tobacco from Local Suppliers: .P 11,02 7,733.00 TOTAL KILOS RECEIVED: 14,703,644@ P0.75 = b) Partially Manufactured Tobacco from Foreign Suppliers: TOTAL KILOS RECEIVED: 3;794,910@ P0.75 = P2,846,182.5.0 Less: Specific Tax paid from Sept. 14, 1989 � t.o Nov. 20, 1990 = 2.264.015.25 Net Specific Tax Due .............................,.. 582; 167.25 c) Partially Manufactured 147.375.00 Tobacco Sold to Associated Anglo-American Tobacco Corp.: TOTAL KILOS SOLD: 157,200@ P0.75 = P 117,900.00 29.475.00 TOTAL SPECIFIC TAX DUE: .� ==============

I. OECISION- C.T.A. CASE NO. 4617 - PawJ - On January 25, 1991, petitionet filed a protest letter, dated January 22, 1991, requesting for the reconsideration and withdra-v-.,-al of the pre-assessment 11otice. Subsequently; on February 8, 1991, petitioner received � from respondent a demat1d 1ett.er1 dated January 30, 199111 reiterating the findings of the examit1ers as indicated in the pre- assessment notice sent. to petitiot1er. A fottnal protest.; da~d . ~ . 6ri March 6, 1991, vv-as filed by petitioner with respondent's office March 8, 199 1. Then on May 14, 199 C petitioner receivep r�~r'� :I respondent's decision; dated Apri1 29, 1991; denying the protest I �I with finality and upholding the ruling of fotmet Commissionet of ''! I Internal Revenu~, Efren I. Plana, whete he ru1ed1 in a sitniiar case I \ .I i involving the same party~ that stemtned-1eaf tobacco whether 1oca11y purchased or imported is subject to the specific tax of P0.75 per kilo pursuant to Section 141(b) of the Tax Code. .: .I Within t11e thirty -day period to appeal, petitioner filed . ~Nith this Coutt its petition for .review on June 13, 1991~ Petitioner contends that. Section 137 of the Tax Cod~ exetnp~�� manufacturer of stemmed-leaf tobacco ftom the excise tax when( J . it sells and purchase the same in bUlk as taw materials to anothe�1 manufacturer. While tespot1dent invokes the provision of Sectio~~ ;~� 141(b) as basis for the deficiency specific tax assessment sti11 tl1J" . same provision of law a11o-vvs� the ttailsfet1 disposal and sellingt ~ thereof without the pi'epayment of the specific tax if the same is ' exported or used in the manufacture of other toba_cco products on which the excise tax will eventua11y be paid on the finished product. With respect to the importation of stemmed-teat �I n , ~,

DEOSION - / C.T.A. CASE NO. 4617 / - Page 4 - t l tl . t f . t ' R 11� . t 1:::� _. 1o tH _.:J.. 1(_. ��._. _. _. 1e :::i:J.!Ile JJ- -_:.-::~.r-:_:-r:_-:o, ~-'~(:> tll p ,.... ,., ..,.,.. - -- :;eS U!h...e t -.epu. _:. e;~o:_:be - - -- .~ -. -- -- - - - ,. ... - - -. � ...... ~ .- , -. - -. - to .-. No. 69(:) [iUl J.l!.J.ct To Limit. The Importa.t.ion Of Foreign Leaf T..-_�)t--�1�':--,�,-._.,,..-_-,.._-1, ] a.nd Eepubllc J.~J.ct. No. 41 ~1 ~1 [An Ad T�) Pronwte And . Strengthen The \lirginia Tobacco IwlustJy]. Respondent., on the other hand, contends that Section 137 of the Ta.z Code covers the removal of (ertain a.rt.icles ta.x-free and :=::::dd provision doe~: not fall ~:quarely in t.l1i~: ca::::e. Instead Sect.i�:)n 14 1(b) of the ~:arne Code should govern "~Nith respect b) t__ll ;-:-:�. 1�1�1�11n.. r._�.,.c_�.1�t_1.�.,._-..,1�1 r._'.,f t__l�l ;v::. c�._.1r-_..� ;�:-:-.,.�_�. 1�f1�,..-_.. t..':1=..'...':~4 ,.._-1. 1-1 tr..J t~-.J�<�::'.>..r,�.i_�.rv�, n1,. t-"~'T1.l. c?.1.f ;..:.,:. ..r..} (Jf- 1r_.)�c�.1.t-t_.l�,�:::1.>llv,. 1n"t�;:�-:�.rr)��::>'.r�p�-�(�-l '1..1.!1-11.r.�..�.ll 1.t�l r�-��l1-1�....-.};:�-:�._c_�, �c-��t_ru.:; t�I-11�1�1;.:.:...t�_�}- 1;.:..:.-c�:>I. f t..r..)_ tt�.l. ar:.(--��(-��.(...). "Ll1. "1(�-1{�-::�.1- R..."~�'I,! t'::�:'tl 'l.l'.."-._.' F:e!�~-�ru.la.tions No. �17 -67_ N o"~.vhere in Section 141 1Nas stemmed - 1t�:'"�o::.-.f t)._--.,tL--1.�-:l,.t.�-..'-,-.�.'.....) !-1�1'�:-=�' t�lt_.i��..-_.1!-1P._�f.-_}1.11 t_.ll t':�- P.... 1.11J.1-1}e�-.�t�ca. tJ�(.) 1-1 t.)-f t_.l-1�'.....1. �CJ�p._. !}r._) t_..C_.�1J1J-, j�L-v>�(-<�t t...,..._-) �--=��r--�;;:�-:�.,�--���1�1�1�r...�... t"�="--�'-4Y.... The issue is '.�1lhet.1V?.r or no~. petitioner is liable t1) pay the specifk t:Jx on loca.lly pur-:::ha~:ed and imported sternmed -leaf td)acco u~:ed a~: r:::t"~N n1aterials in the production and manufacture of cigars and cigarettes and Uw sale of st.emmed-leaf tobacco to �-� u r� r�- .r-J.t-l r._�..t-�l�1e�._:..t� 1-113�-. 11-1�1-'�::)< ..-�t1J 1-P t" !! C�O:-(;r��1�? t;::.rJ .(A~ t l 6i-( 1(.,; - A H P.,1_1.(-A..:::.;. t�1 T r..)� l-'���L=-f. (~,.-.,.- ,~�~,�,J 1- f-' � �-� ' -� v -� � � �-��-� �-� '" �:�. ��-� �- J. � v v .) UH- r.jP.Jt- �~-::�:�;:-:�.,�.�-��t.-�1.(..;!-1.~..- 1l,f 1{,_~t,-1_"), 1.".:.0. u~:; .�-:J.!-Lrl 1<�-:�.~./(_��.=.-f.), (.Jf t�.l�L{::. T"a=T-~J~ �(~�-,', '�-�};.:,:.. Respondent relies on the provisions of Section 141(b), 127(a), ::md 12�3 of the Tax Code as basis for the deficiency� ' lll �:��- 1 r-�, p (�.�� ;1 !-1�('�"� t �:ty �1:-;l. �C-'��C-'��p��,�:-�'C�-�' t�I�l ;':�:'. 1�1t ~.ITl-11. r�1�1 1.1!.::. (; tP 11P!-"' Jl !}(}P!-. �� �'.o oI .,__. I I ��� '� ,_,. "i:? - � '� '�' � '�' -.3.-1,..&..4 -� ��� �"�' �sEC. 141 . T{'>bacco Pioduct.s.. - There shall be collected ;::1 t::ti': of :;eventy -fi ve cent;:).vos on .eacll t.ilogra.m of the fc�llOV�ling products of tobacco: "'(.1'~ "'-.="' "(_';'I' ..�:1&. .llo. .llo.

DEL1SION- C.T~A. CASE NO. 4617 - Page 5 - (b) Totx.Kco prepared or pa.rtially prepared T"'~'ith or T,qithout the use of any r.nachine or instruments or vli thout bein2 r:.re~:;::ed or svleetenecl,� �-� t- (c) X X X . V T._... . ...,,. ~7 "T...:"' "":7 ..::.. ~:.. ..::.. ..::.. ..:::.. ..L.A. ~SF-.-C. 127 . .'"r'ayme.nt. tJ�~"' exc11:.wt? lo~:- axes on do.meslic product_<;_ - (a) Pe.rso.ns liable_: tJme .ftJf payment Unle::s o ther~.vi;::e espe(:i;:Hly allov�?ed. exci:::e t:J.xe::; on domestic produd:s ::;hall be ~:1 t'Y Jl~ p~3}1U.fadu.rer or producer b#ore remov;:1.l fr~:::.rn__tlw pl:::t.ce _?f . p_r_odw~t,.iQlJ : i?rm�'.fd{?ri, Tha t the exci:;e ta.z on locally manufactured petroleum products and indigeneous petroleum levied under Sections 14:) and 15.1 (a)(4).. r e;::pedively, of tllis Title shall be paid Vv'itliin 1c ) d::1V::; from tl1e ClC:1.te Of retnOVCJ.l thereof frornI -� the place of production. Should domestic products be removed fn)m tlle p1a(e c�f produd.io:::.n without the r'" ,.-,f . C'. ni'1�1�1c�-:�, 1�1 t �- � t1�1,::, t���1_.',;.�~-,._, t-l� l?>�-� o'1 '' 'tl?>t- ,-, ~- rIJ"' ?�>-� t-'-Y:i �1-� l.�1 11���:1.'7' 1.11,0-,� -- �-� 'J' '�" �' .... J �-� posse!;:::::ion thereof !;;h::t.ll be liable for the tax due ther eon . ":T ~7 "'::" ":T -.,7 "'=1' Jf:.. ,,(;.. ~-� ~~ .o. ..-� . -sEC . 125. Payment of excise taxes t'J.n ,I i.mp{?.rttJd a.rt.icles:. - (a) h.rSt1ns liable.. -. E~~d:;e II I I t ���-� ...�:~.2~t:::-C_�� (.)�1�1 t"r�r�Jf-_"..,._-_,. r�t,-�:�:-�, '��-�1 :c:l.r�t-�t"t�-��1':�:~:"C'""� �C-'"llcri..11 t�)� '0\,.:-. r_-.~(.at" {...l t)r/ tl-l(:�-l� r� (-) ~,�VTl"l t':"� .I ,.,~..' 1- l�r�r-Jf-��''��-.�,r�t.-,�:.:�,r� t r����_.1 t-1� �1.:�:-:�. .�--�-n- .-�-=>-t..r,"\-..��' t-11'-:>. '�-.~�' rrt�,�,-,�:�:��, l� ..~,;) I t'r� r�Jft-,1�1nat�� 1Ti'T T...�.T.. t.t-1� l v .,} -.� ,;_ _} ! the r egulation::: of the Department of Fin8.nce 21.nd be i~.:;.re the relea~:e of such artio;::les iron} the o:::u::tomllouse. or bv the fH~rson V�lho i::: found in� I ,..;I f:":::Ot::::e::sio:::on oi ::lrticles Tvvllicll <:1.r e exempt frorn excise t:t.x-2::: other th:.u1 tll�:):::e 1ega.11y entitled to ez-2mption . --c. ., �� Ill ,.-..:-,c-p. (�,z� .., t.tl�,-�lp.c- t�) l-'' llnl�1t �-"'-��-� �- � 1�1-Ilrt�i� C't�t.rr.:�:.,�--1 t �=>~.'-l�t�p.;::, (> [ r.J. �-� �J -� �-� �J ...... �..,! - - . :' - " :.. "- '--� 1.l�l.t_�_,_�_�.. t-1-�1,:�-:�, rn1l1.11. T1'_.1f--l�1� 1�1 ~~.'-"~' l-v� 7:� rr-?�'>�-� t��-~-.p..'1��1-r::�._, C�-:�>tlt-�t"t�t"c--.-,-.=..' .. ~.~..-'z- �":�-Co1?.>.-1-1 '-..~. 1�e�:-,� .�J-� t.:?-;~��~t-:>1-fl[)-t..�e<�.1 l�r�c) t�1�1 t.-d<�:,o. T.,.,.T1�11�-<;1�1 c-J1. �e� :-:;;l_�tt~..o-:::-v"-<..ll-'�.<r�i.t1-t..l'/T :-_:-;o1t-�1.� t.l��c-.H�Lc�fe,:..t-l�e,:...-.1 (,.�,1� C, :..>.,'.'_r.�}l �.-::\!1� 6np,..(,l 1.1�1 tJ�Lp. P'1l1"11" f.,�J..,�lll e�:..~c� t<�.., 1"L(�1, 1� -

.' DEOSION- C.T.A. CASE NO. 4617 - Page6 - ! P-.-..4'7:..6-.- _1_1I.n�� t-� rr-�'..:,.:,.t�.c_,�r�-��,t�!.c_�. r�-)�t- ?�-:--l"!t-�l�t-1���6.., 0 �-�.� t-}� -1.:.,:.,. rr.J�tJ�t�r._�. l�l:�:---t�c..J�..:,.,:..t��c...J� ,�.--1.1- recipients :;hall be u.:msidered the importers thereof, . :.u1d =: h::Jll be Ha.ble for the dut.v ::;_nd internal revenue tax due ,_:,n :=:uch irnpo:o!�tation . The taz due on such a.rticle :::ha.ll cr.:;.rr:tit.ute ;:J lien on tlw a.rt.icle it:::elf. ��=-� n- �1r)�..:..:,.t�l�(.)�t� t_r..�) .c-.,. 11 c)t-1� �1.":J:.1- (� 1-l�c-.,.1�:c::;-e�-:�,.�=-�� (.).- 1- 11.;:._:..1-1.'-J.} i' t�t� ~ ,-,.�=,-��1r)� e.,:.., <�,.�,t-t�.T'�T~,.,. <)-.1- �-� t-�l--1~''� r!-) 1~.),.:-�.-,:-r.l.::,:',-:,�,-.=.�'�-)' 1" t_.ll J'::':' 1"~,,'..-.J.f - (b) .Rate and basis t?f tbt.? exr:ise t.ax on i..mpt"J.rted a.rticles. - Unle:;s (.\then��-1ise speciiied, imported ;:t_rtide::: :::hall be =: ubject to t.lw same rates and ba:::;i::=: c�f exci::=:e taxe::=: applicable to locally rn::H1U.fact.ured ar t.h::le:::. - and it::: irnplementing regul::t.tion Revenue Regulations No. 17-67.. ::r:: amended. pertinent portion of V�lllich provide::: .REVENUE REGULATIONS NO_ 17- 67 [as amended by Rev_ Regs _Nos_ 9 - 72 (Sept. 27. 1972), 1- 73 (Dec_ 26, 1972), 5-75 (Nov _ 11, 1975). and 1- 7 6 (flov _ 16, 19 7 6)l SUBJECT: Tobacco Revenue Regu.la.t.ions on l&af, scrap, other partially rnanuiactured tobacco and other tobacco proclucts: gr:::v:ling. cla.:::sific:J.tion, inspection. :;hipment;::, e:i{portat.ion, irnport=t: .tion ancl the manufacturers thereof under th-s- provisions c�f ,;.. ��� t 1�) L~ '�.� .-� J��T~ 1.-_-.~ �-~�f:\ .-1 .-..-1 1"!}0::. !"1(-l~rj ._)' �: � �:� �: . �.,.. - �- � � � -..- TO idl Interna.l Revenue Offi cers and Others Concerned : Section 1_ x x x -.:_:r .-._r ?..:r .,;:., .,;lo. ..::lrr. . Section 2 _ Definitions of terms "'tT -.;!" ~7 ~-~ "'.:" "l;" ..�11. ~� J:). . .�.. � ~�l. L'i.. {. m). ...p;;:,_rt.i:3llv' n1anufactured tobacco" - includes:

.. �, DELlSION - C.T.A. CASE NO. 4b17 - Page 7 - / �// / ( 1�. '�J "".::_. t.J:�::�: r�r-ll-I1P�.;-'��--l 1 r-:~:.c.-.,.1-" - t�!~..'-t�!r��l coJ�t�t�r� f->f��lP.....r�j t_~.�.-,~ t-��-,��::t..c�_.�;.,�',Jr�J c:.l,� c:l P.:=1 11 - � -� J CP� O- ("�',-j� J p:=1 r�t.1�:=1 11 '~ 1�)1- P11 1 t::.::~l- o t-11 'l ~ ff P.P. � -� - -� ,' -- '- .,_ ...,. :J. J - .,.. - fror.n r.no1d and dus t.� ".Ne ~;hall discm:s each of the iterns appearing in the pre - r�,fft' tir''l!}C.t- t �':-,�'�:-�'c'-�',.:,_:.:..c_:c._:t�I�l ,.::.:..l-1 . l'J(�-��,t.t.(.�.,.::.:... '\P (l t' �.:....�.c.....�. �L .... .... tk,�.�.,I\r 1-,.:..:..:.-c�-rr-��,,..-..�,t�! ,.'--1~ r. 1�1t.'.c... '-' .r..�.t.:.:., }}.r...�.,1 r..lt.115rf nI:" .:.:.:.. t1� .... v The fi r:=:t. and third it..ern:=: V�lill be discussed 1�ointlv' . In Item No. 1, re::::ponden t a~:!::essed the pe titioner ior specific tax on locally purcha:::ed ~:ternmed -leaf tobacco fr om local suppliers pur~:uant to Section 14 1(b) oi the Tax Code. Petitioner 's .-,,-.,-..-.,-.,-..-.(! .-, p n .. c.'-.:�.::�~.::� .:�t:::' .... � '/f C_) tn"",::...:..r� 1\�. t'1(..1. (..)!' .C-J,. fU- rv,t.ac. l 'r-)� f C.\ ,..-:��rr-.1�.,,:_::.. 1�._��. t�1�1�(.,�_. t .-C-..,\.~i"i�.. c~.tt. t1�J,:..:.:.. 1�-::.t ,:::. (l f c.\ .... ... r:. ll It1 It r�t'I'l J�J;; r-u.t1.t1'0t1Pt' r (r~� "/7 JJ'{' .�_;�) .�_; �) ..(..!. (-.) . .t;:: � ...... �.�i)J r� ~~- -c-�p (..'..t t'l (..lo�;;:.~>t1t aC. �~-�vCp....C....C......p... r~l .r--' 'C=" ... . )'"'t... tl-1,:.:.:.. n~ (...l �'�7C_) nr-�,.::.:.t- l'... t' l (..i..Ot:�'l-:c:.'1.1'1'1 c...-..p�p..... r'-��t.ft' i.'.. t.ac.~~)�. (..1..1�1 t' t .c...-.. c...�c~.,\.l ,.:.:.:.. (...) f 1 2 C_:) '17, ( l(..) rh...t' l r.�..,c...-. ,.-...,f 1' .. L 7 -tf ft�r; t-Il ��t-1 t (�t��"> (Ir, ,r::.- t.~.... l-1-lt�r-1 '�::--�'1�'�"i-J.;;;:C - .C-.,l c.-,-v.V ,�;�L1� 11t� tc,) Ae:.;nr .... _ .......t�ac. tP...-r...l .J:n-'.1 r1:c:rJlr'">'- . ,) ,f(. \ ._. .... .,_,1 .... C.\ Arn erican Tobacco Corporation equal to P 117,900.00 plus I n refuting the argumetits rai~:ed by respondent, petitioner in:::i~:ts that the applica ble prr,:..vision of lav.r is Section 1.37 oi tlw Tzn::: Code. and not Section 14 1(b), V�lhic:h provides: -SEC _ 13 7 _ Re-mt1 val of t(Jb.:JCCt1 p.roduct.s out p re-payment of t..ax - Products of t._.lx.v_...::o entirelv unfi t for che\�1ling- or r..,;.st�m1�1o�..�.br�-}�1n-1- r-~-g_t,-1� �m1�.":';_a1v'll--r~b�e._;e.,�' 1�,-:~:-:.1�1�1,.-)�T��l '=��:�=''�-:-l !' t�,:..:,:.�c-�. r�.'}�f t " " .~:t..:"... 1�''...1. 1- �.:..',�Cn:�1.�1�r-��J-J-1 t.l-l-t'�o�1. under ~:;uch cond i ti on~; ;::t~; r.nay be pre~;cri bed in the regulation::: oi the De.p:J.rtm ent. of Finance . Stemmed leaf t.ob::J.cco. fine-cut :::horts. the refuse ()[ fine-cut r:~: t�l P. ~ �,l1.1-l q t..(.),.1~.' ) ;-\-(�: (' () _, ,-.( �1�;:-1f-1;.:; (: 11 f.t.l� l .l !�J=t.�=J��' 1.,'_:11.f--lf--ll.!} .C~I~C�;.t !=;f.P l�!�l c; (l l- -- - _., - _. /, 0::� .. . .:;) "' - � "' - .� � - �- - .(lt'l�t��=� t �llll'" llll �- ll '(i.J:�:�:':--' .~, ,,,;:.,:::.r� t� l"'� ~�.� ,:'too._. �.� �� lll'=l n ��-�, 1.11 'C=.l.l l i''-i i�'.�� !- t�.n.., t.'���'-=\.iv' iv'(l C. . Y �c- .cJ. l .- j �- ~ ' - a:: ra.v�.' material by one rnanu.fa( turer directly to

I. DECISION - C.T.A. C/>SE NO. 4617 - Page8 - / I anotlkr, Tv~?itho:)Ut pa.vment of the t:1x under suc:h r- t- r�~��'��~�''t-l '��--lt"t-�t"e.) t1 .('"J� 0~:1.,-_-:.. 1-11-�:"~ i'T l_'.'o�-� 1n... t�o._.c0-r�-��1�1� t~-)� o�-� r�.} 1�11 t-1� �1.o., t"0.,... b01-1- l"0 � t1�-,v' '11-(:':":>� .} the Dep:::t.rtnw nt of Fina.nce . "Stemmed leaf tot�ao:::co", a.s herein used mea.rr; lea.f to \)::v::co V�lliicll ll::t::: lla..J t11e :;te rn or midrib rem�.)Ved . The term does not include broken leaf toba.o:::co .- (Emphasi::: Our:: .) r- r--11-r._-! ~,T� 1� �c--'1�r-)- t-1 � Tt1-1~.-. --- �~:,.f r.)� t- !;::''-~-11-1�'-�-J t.J~::-:-'---1 f-J1-'-�--�~ 'TI 1.c---' 1�'�---�) t-1 1�:c:::-:! t�.'.1.P,. C~�.\r- "CJ'.1�1r�l 1-~"\':a.1TI P..,C--'� 1�10 1~._~. o"' tn f ,.-,1- ._..� �c- '� t��t��L~f.1. 1"1P--.�;��"�l1" tlt.�P�-.� t" f-.�l 1"P._.. t_.:._:.\ t��t",-.-.-lt-1 � T}lP..._... 1�a- 11Ct:i�]_l\�(-.,.n;::-1,...:._., 1.".;:) ("..�.1-P~ �":.\'t" "r_l'1. 1(�-�I 'I..1.'.1"1Pv (-�lll_1.11l i�)(".",.=(} .'l l t "~r"11-1� c�t t�;p. t'='.�:1.1-�~� P'�-' 1'1 t_/.._-.} f-l}.":�>' C0.l\1} VuV.,:�~t:>:\ (���"t-1� V'I 1~1I ll"1��:>:�. t t" t .r:-O--C:>.\ Uf C�- �1 , "It is the , �" "�" J J � -' �" ' '1=�'1�1-l( "� . funda.n1ental duty of the courts to a pply tlle hPN. Construction �--:�\-1'1(-~11"t-1t~-P�-� t�r--�� t�P�-�. t:.,.-.:r:::l.. t-�t"�,�--.�,1-1 r�-�-r._~. t�I-1P�-� <_--,,1-11'i7 �":=1'.ft.0--� t- t"t-� 11�e:,>r_c._:, t.-,!.�:.>, ..:.>, 1} r�-}P.....-t�1�1,.-..,l. [1��:-��t-�r�-C-.,\ tp�.._.. \�_�} t-}� }C�-'...t-� applic:J.tion is impos~:ible or ina.dequate \nlithout thern" _ (People v _Mapa, G_R_flo _L - 2230 1, August 30, 1967J Th e record~: ,,~,,ill ~:hc~~:~~T that p etiti on er 's t.::.~c:al purch ases of :::temmed -le:JJ tob::J.ccc� 1,11ere :::v::quired from variOU!3 manufacturer and the ~:::u:ne ,,\,ere used ::J.::; ra.1N m3.terials for the rnanufacture of ,�---�.1�;C=f,-c-1.1��c-�� �--~f-1�1r--} r�-��t�:'=::',''-f�1�P...... t-�t-�P�-�.�c-�'� r� by T1-1P�-�. ,,,,,,,.�--.�,r�l,.�.. t"t-1b0 [-_)'("".1.f-_.lP._. 1- � .:>[-�.-� r-~t- P.rl ........ ..r .... _.(.1_ re:::po:)ndent's eza.rniners >Nill Sh OW that from june 20, 19,!:)9 to I 1()('() �.f P. ,��l ~7 t}�l tk�.-�,p---. t� .�:.)... (..l-, :.1 ) -- _, r-_��,p._.. f_�.1� t_1. �t..-_.1f} P._..1- f-.,11_11�.----��11t"".'I. C--��.--�� ,.~_} .c_-, t ..:._>.. f}-lf_I_1P'"'".(._}- 1p'"'".C��.l.f tJ,'-~)tL---,��::�.>v(P�-�I'-) , --- --� J. from its local <:;uppliers. The summary of <::aid pun::llases are presented as follo'.�1?~:: (E:z:h. CB-2, p. 90, BIR record ) SUPP LIERS OF ft. SSE SS1v1ENT TOTAL LOC.ii"L TtJe.ACCO GTJI A NO. KILOS Te lem._;,~t:Hl f.ro::;_ D~ Son L .~:.E - 6774 1 _,7D9,4~)o Orient Leaf L6 - 104 Tn:m~: Ma.nila L 3R - 66 14 2/:.1 c�, 72 7 F'hil . Tob:.l.cco Flucu.rring Lb - 42/ 1,33 1,700

; 'I DECISION- C.TA . CASE NO. 4617 - Page 9 - I (F�TFC) L F' - _, ~-~-' .� '�_c) ~-~! r=, 2, 0.3. 1,550 2, .3() 1,7 17 ., 1,4::,(\(WO L"='-l� T�-�Tni ,�.--��11 T.�--��,b-� �':-l�i-y~ �-�-,�..-�-, f'' .-:-:�>.�.--}r vl in oC� L6 - 11 4 z.oq I, 7oo F.ia. f-:. l. -_.1J t�I�l::-l-1-1 ...~1'C'�-' 1_1. c- n1t.J l� t-�'=-i� l To l�:o - -. -� - - (F A TC) L6 - 19::, Cc�ntinent:d Lear Tc�bacco L6 - 1 4~ TOTAL TOf!.ACCO RECEIVED 1 4,70_~;.644 e. v aw:l 1:3.tT�-�e the term �:manu.f8.cturers" as mentioned in ~ .�;:-�'-t�1C� t.1.�o-11� t� - � �1 1 T-�� (�� .~) ..1.., (�) 1� t.--t�1e- i:.t.:;, ._.(_)(Jr:.:_.. c-c.~~. n ) e 11�1tJ:-:t-p t�e� t.e�(_ tf�) t�iLr::oa.n t�JO� t1�1 "rmJ.nuf;:1.cturer of tob:tcco " (:t.nd/or "rnanufacturer of cigars ;:1_nd /or ci~_,._a.rette" ::r:: defin ed in Revenue Re�zula.tions No. 17- 67 as �� U I arnended_. to ,,.~,ri t: �section 2_ Definition of terrns ~:"' -.; ;r -.::r -.;;r 'l :'" "".:7 "'t:r ~T "":7 ,{:1. ~~ .c�~ ..:). L '). L�~ .c'l.. ~-~ ..:�). . (i) -Manufacturer of tobac<:o - - Ind udes everv f--'HSC�n V�ll1o:::e bu::::iness it is tf,:;. m' anu' facture tob::l.C(O or snuff or ~Nho emplo y~: otlwr:; to manufacture to): ba.cco or ~ ~�l�i ,::, t}�l ~ t- 1"1l ~t1} 1 lf Ca.'.�_�.� t�JJ 1- ,c,.. 1-l ~T J/ �: . L. V \-. ,::, c t-11Jfl- �- ' -� J .',' ��� J' �� � �C.J�lLJ.(�. ��l -1 k-1.... cutting_. pre:;sing (not baling), grinding, or . rubbing (gr:::Jting) :J.ny r :3.Vv' or l eaf toba.cco, or ;,::.tht-n ,..ri:::e preparing rav., or leaf t :)bao: cr), or rn:JfllJfac:tured or pa.rtially manufactured tobacco and :;nuff. or putting up for consumption ~:craps, refuse, or stems or tobacco resulting from any process of lKt.ndling tobacco stems, scraps, clip pings, or \I,�.,r�:-v-- -~�_t..;.:.:..:. <�-) 1- .,,-:..1�1-t-1��1-1CCi�l 1.h-� .�.T.t �r=>-t-�}.[!CbfJ .v-.,...-... t� r::. r::-1} 1.1}0b ' (-'� �1- t-��,T) r �.r �-� any other process. (j) -Manufacturer of cigars and/or cigarettes- - Includes those persons v.,rlwse business it i :; t::. mate or manufa.-;;ture cigars ::md/or cig:J.rette:; f�:)r :3:3Je, or v..r11o ern p1oy others to rn::t.ke r)f manufacture cigars and /or

DEL!SION - C.T.A. CASE NO. % 17 - Page 10 - cif';:t.rettes for <.::ale,� but the term does not �.J l� t-1�'�--��lJ-J�'���-} ~�-� -�-:1.1-t-�l��,:-0.�.:-1-.1"1"-~ ;._,�.' 1� .�-:,'. f--�.'f--'�1-?�-:�-t}tl�_,. ,...-, .�-~�r�:�'I ~ J �l-lf-> l (�...�! Ti'T ~�-�~-�-1 t-�(_),. �-� -� nEd:e cigar::: and,/or cigarettes from n1aterial <..:��lLl\r-.TI 1)lJ.~._.(""1 t .>TiT' t1�1~ �� t�':�'r�J-1f--�l1(,)�T;.T' .p.,. j"1 t11P l"f.\ tt.?:'"-' t" t1. A,_. !"t�1;n::, ... . lav.lfu.llv� enqu:au2ed in t11e ma.nufacture of d-� o;=.��=-H� ��--=�� �c1.. w�-l ;'(...�,r ...-.�.i:o::;.-�-:.trP�-� t-�t.A._,.�:-�_ ~:'"' 'tT "t:" 't,.,. ""t,..,. "t.T L-:.. ~-~ ..c.'la. .l. lo. .,C:L ~-... Petitioner'<.:: 1,.1?itness, lvlr. .~.l!.~ntonio Yao, Vice-President for (._"J. f-.�,�.:�:-:�. t�-.=J-t_!� ,-.-�' t�1:c_�., f-�;�:-:�:�.-c��f_1..f1.?v:-�'._l t} } .�~J t. f-_.';:�:-:�. t�-1��t_1.�,-�-.�,11P._.t-'c._�. �c--"1-l�f-_.'f-_.'l1.A._. t".S ;..�J�.f ~c��tA�-~l+i'} f-I 1 ?~:�-.-.�_} - l t~::'oa:. f _. tob::t�>>) are also "m::u1U.facturers of IJ:.'ba.c:er.)" as defined above. -. Excerp::: of lvlr. Ya.o's testimc,nies are quoted hereunder : (pp. 19- -} 1.. T .�..:.:.:. .r�.(T... H ;.:.:.:...�~_t_l"l. r�10Cl !..1,. 1- FA...l�_�. t"'Ll.�"-=t�1"1,.T ~ {�.-.:,� ._.t} 't ()l q-~.) .,. �- � . (}. r�.,.Ir . ~Nitness, you :;t:J.ted t.liat transfers of ste:::t.tn (sic) leaf tobacco from your suppliers to La. Suerte :.:t.r e exempt from the payment of specific t:u~ under Section 137 of the Tax Code. If: this co r r ect ! Ye:::_. sir. (�-1.:� ~hTho ;3_re you.r ~:uppliers specially (:;ic) during the year 3 1 9(~\6 t:) 1969? From Vlhom did you obt:dn v� ou.r :::team (~;ic) leaf tobacco? J.~ . F()r local tobacco, v.re a lread;.r h:1:.ve si~c or sevE:-n :;upplier::: T"\rho are ba:::ed in lvla nila and the r e::;t. in the province of La Union. w~~ a r e the t�r�l-�:-1�1.�.,-.,,. t�1it-�vl r�-��,f t.�l�l""."/' 1(..,;...(.,.�~._~_1 t._c._,.tt-_..,��_:1. .r..�,c...-.(..; t�r�r(....llJ_c.._.t_r. �T'\r {\.c"-�'t�,-"-.-'.��t� 1Nould (. sk ). v, c�u recall their names? .~ Amon2 1,.1,rhk:h are Continental LHtf Tobacco ~. �.J located at E-acnotan. L:J Union_: Orient Leaf Tob::J.cco located in .1t. ..J.:.��=o�o--}� I think, Lancaster Philippine:::, Inc., in .t..goo. I=t dli ppine Tobacco

DECI5ION - C.T.A. CASE NO. 4617 - Page 11 - Inc: . of Baes:::1.. Yotort.o Tobacco Corporation based in Arin.g_,::lv' ,� and there is anr;)ther one, Tran::: Ivl:3.nil::l, Inc., based also in A goo. Q. The::e supplier of yours. are they tobacco rnanu.facturers? A. They� :.1.re becaus e they have been issued the t:: IR t L - �.. 11� i��-��.�:-::�. t�l c-,:::. t r) !n-' t�<-_.J(�_.,::�-:�. �c-���c.J� t r--) t~-J0'"'.<~� v,~,v-, 1" 11(�}.:::-t- ~I�vY11.C'".'I. r�-}r�-�l �J �-� -��-� J . � v �' v-.1e c8.11 this the L60 (si c), L6R (sic), and some of th ern Vlith L3 license::: :~:tl so. Q. .\Nhcrt. d�") t.lwv do V�litl1 tlw tobacco ?t11'is �vI ~'hIv .are t hev given li ce n~:e d tl.) (.~:i c .) . ~ A . The license they are h::::;ues (::;ic) h:: for them tr;) h8.ndle tlle tobacco 'Nhich is to partially process the tobacco N - manufacture the tt.)bacco by t 3.t.ing�-� out the steam (.sic) or the mid --reeve (sic) of t11e t.obac:C(). And then happen under a propo-moisture (:::ic) content tobacco can be Kept for sometime vv�it1w ut (sic) Q. \iVhat about your company, is it also a rm1nu.f::.v:t u.rer of tobacco? A. Ye:;, sir . Vh~ have a. license for rn::.u1ufa.cturing � d!2,_..ft ret.tes... . ,L~.nc�t.lwr V�li tne:;~; for the petitioner, Ivlr. Cesar Ong. the hb.t.ert:1.l Control f�.,.la.nager of petitioner, t.A:::tified that both pet.iti�:)ner ::)n.J it::: loct~.l suppliers are tol)acc:o rn;3nufac:turers. Ivlr. Ce:::ar Ong�s testim(:otq st.::lte~: : (pp. 4-6, T.S. N... Hearing of january ~- 29, 199 1) "Q. In t.lw yea.r::: 19 f�9 and 1990. V.J11at line of bu~iness V�i'3.s La. Suerte e noc,-aL~�Ied in ? i-.. Cig:::trette rnanufacturer.

.. ' DECJSJON C.T.ACASENO. 4617 ; - PagetZ - / Q. As a manufacturer of cigarette, do you know what raw materials are used by the petitioner in the manufacture of cigarettes? A. We use imported tobacco and local stemmed-leaf tobacco. Q. You stated that among the raw materials that you used are local stemmed -leaf tobacco. Do you know from whom the petitioner purchased local stem med -Jeaf tobacco during the years 1989 and 1990 ? A. From va rious tobacco buyers. () . Do yo u knO\V their names? A. Yes. I can mention some of them like Continental Leaf Tobacco Corporation, Philippine Tobacco Procure lsic) Corporation, Lancaster Philippines, Orient Leaf Tobacco Corporation, La Union Drying (sic l Plant. and others. These are some. Q. What line of business are these suppliers of stemmed -leaf tobacco engaged in? ,� �; A. They are tobacco manuJacturers." Since petitioner 's purchases of JocaJ stem med -Jeaf tobacco came from tobacco manufacturers and� the same were used as raw materjals in the production of cigars and dgarettes it is thereiore clear that it is covered by Section 137 of the Tax Code. Thus , petitioner's purchases of JocaJ stemmed-leaf tobacco from various tobacco manufacturers are exempt from the payment of the ~pedfic ta x. Furthermore Section 201 a) of Revenue Regulati ons No. V- 39 ITh e Tobacco Products Regulations], as amemled . even bolsters the provision of Section 137 of the Tax Code considering that

DELlSION- CT.A. CASE NO. 4617 - Page 13 - t�.-. 11 t. ft. r.). t,_�.�,:_-:,_r__�_.,_._._� r__�_., ';�','T��":"lLc-� ~�-'- rt--,�.:.:�:..,.,-- 1� .,,:�. ~/" t�r�l ,.::,:.t�l t�1.�r-.)� t�l;:�.:�.r.j� 8.!1 Section 2O(a) of P�~� .'i.-:r'.6-.- 1�!��1r--���t1-��(�-�,t�l f t�(�-��,t�i�l t-1� �I�,-:-;�. rr���,'�:-);,l.it�.ar.�i ,�:-::-.l�lt-� (�-��,f t��l�i ,.:.:.:.. �C-��r-_�,,,�:.:,:.;��-��t' ft'(--�� t_.�.::>,_.�.,:r... "Secti;:.n 20. Exemption from t~x oi toba.cco product:; intenc!ed f(�r ::,_gricu.ltur::tl or indu~tri::1.l r-�,n t�n..-�,c:�.:-�=� - ,...,!- �- - J�' �-� �-' .. �-�. �=�t;::. t�l-ll�I�l ~..-1 1 ;::.~.[ t r"l b- ~� ri..-1 ~t IL-.--. ~,"T (:> '1 �:::-~.1 ~ o- 0\ .\ �- ... . ...... - � � - - ..... ... .... C.\ ..... C.l'"" .... ..... �' .... -. .. ,_ (.l .' (�ne L:v::t�)t-y to ;:,_notlwr. - �SUl)ject to Uw lirnit:1.tiOtt:; . herein esta bli:Jled.. ~r)r oduct:; of t~.) bacco entirelv unfit ta": t�;�-��,r� ;-.~-� 1il,:�-:�:.~.l..tl.llC~r� i�'-��l. �..=_,tJl r�'-o� 1'""1.1}:0=,' lll,'-_l' ~; T fl-� ;�:-:�. !�,.:.:.:..!l}!�-'�l':�7P.....i��-I ft�~�-,�::.:.... n--� f r_ .( ... for a.!udricu.ltura.l or industri;::d use;. and ~;te mmed leaf t::::.!::.:J(CO. fin e-cut ~JE�rt:::. th.s- r-f us.s- of fin.s- -cut clwvling toba.cC�:), r du%-, �;.:=r;::Jp :;, cuttings, clippings, and :::v,;r;:;eping of t.ob;::~. cco may be sold in bull(. as rav1l material:=: b'�l one rnanufacturer directlv� to another (�r� t t� t f'-'�'1!t'�t.-.t�11-��)n� . f�-.� .Jlp..- rj �t�,:�:.:�. tr-�)�.-:1.T'IT1�!�11.�::.;'!.1 .. .) tJ� t�� " .� !':h:;' �.-;:-.,r..�!p.�. (.,�t' ft' (_-.. d_.;, , ::;tt"lJlm,;..J lea.f tob;J..::ro. fine-cut shorts, the rd u::;e c�f fine-(ut chevling t.ob;:J_(:C�), ::;cnt.ps, cutting_. clippings. a.nd !:;~..~l.s-eping of lec:l.f tobacco or partiall y - rnanuf:Jo::tured t�:ob;:v::.:=:o .:or other re-fuse of tobac(:r) mav be tr:::,_n~;ferred fr orn one fa.d.('rv to another under an officiai L- 7 in voke 1) 11 '�i�lhk h shall be entered t11 e exact -.:,:..r>?igl1 t. (A the t(�b;:tcco at tlw tirne of its removal. and entry ::;hall be rnade in tlw L-7 regi::;ter in the place f-�rovided on the T...XJE,_,e for removals. Corres1�)ondin8.....�. debi t entr ;...- ;,.-.till be rna�:Je in _the L-7 regi::t er boot of t.l.l.:�-:�. 1��::-:-�,.�.--�- t-�.�----~ r�Iv t�o�:-:�...�--��{�-.>� t.vI 1�!�1;a=, t1�1,-:~::. t-l��-,� t~�-n'-,�-.�_.�.�._�.�c_-, 1-1�1�1r�..l ;�:-:�.t� 1�1 ;�-:�..�_~�...�.--11� 1-l ;o=� "E.:;:.fuse, etc., rec;:;i~.:9d frorn otller factory", shovling date of receipt, a::se::srnent and invoi�Ge. numbets, n::;_nw ;::~nd add re~;~; (_)f the con::;ignor, form in 'l�lhich This re.--:. ~iv-~d-- . r-:-�1n- d- t-.h~- HP-. t-. V�lP-.i l!�=::1t lt�. o- f t�.lw- t-.;:. b�- ;=-i�(:C- (-) . p;:u::Jg r:::~.pli :::il(:.JJ.ld w:.t. 110 ~.-\Teve r. \)e corr:ti�ued to � p12.rmit the tra.n:.fer c�f m .:Jt~3-riaJ:. unsu.i t:J.ble for the manu.f.J.ctu r~:?. of tob;::t.V~o p:t(.ldu.cl:s fro rn one f i3.(:t(~r y b) ;)tY�Uwr. .. (Empll:J. ~j~; our<:<CJ

; DF.CIS10N - C:f..t\ . ((\._SE NO. tl-617 - Page 14: - ;. / enumerate and ddine t � � ��-=��]-]�tL--, _1� ~.-.'�--��� t_. '-..' t.} 'l?..>_. '=.::.'�.::,:..'-��.�1�C�-�,.'=-:.:' t. �-:.,� �...:'~ "�:'1.1"1 '��-1 t_l �lr�-'�: t"?.._>. �-":1'.!-t-�;�-:�,t� '=��:�:';�,r._;::.__. l-I-1[-)' t. t.}, 1� ;.:_., t-111'f t.l-1~"'" -,:-"-�:-.tl ~�� '.�-..'!- :;temmed -le;::tf tc� l:>:J.r::co .~ ~.;ra:_:; nn .de bv' one manufc:,_ctlJ.rer diredlv, to :::t.not.ller then the t.en :n "rn;:Jnuf;::,_cturer " ::1s broa.dlv used should be ' t..'_.�. f-� 1!-.!�r 1-,._-.._�. 1,__-_,_.-._,-.. � ._�} t....-_.�, 1-1-1.___-_..-~-'-.1-1 "!-I�l �.:-�..1.11-1-f.c-1 r�-�� t-�1-1-1�t�':'1-~c�� i..�)1- tobac(:o" and "ma.nuJ;Jcturer:: of t.oba.cco r-:rroducts" or "manufactu.rers of c:i,2_,-.:Jrs �--:��.n,.-�-1 .---��iuc.��:-,�r.:�.-�t-�-�t-�p�-�c�-:" - t Th.:> ~.vhole concer-:�t t�ein�E-_�. that the stenurk d -leaf t�:)lX.Kco tr-t ---,-----r, .-,,-. t��-n �� 0:.�.-: � 0:. l',' 1-I�l-�:1-. ..t-1'::�::t� t� ��-:,..1 �-:-�- 1�!-1 t.�ll ;-:~o. !-I-1'C-t.!-!1-1� [-C-,..'�r-.� t�1. 1-� !-;:...:.-. ;�'-Jl- �..�.' .) �:.1._,'._��_, p� r�(--)1�._'l'L1'.'�rJ'�t,_c,� �c-��1_1t�,-,.-.1-1 1e>J.vc� tf�lp tl�! -~ft t-��:-f-�v~ 1�1�1,.-.1',--l PJl .--� ,o, 1'r:� 1'I 1' P f -;::. 1vI f--�l (.,,c__�,t-r�--�ltr_l. f-1?�-->� ��r-l f_...-,,1- t' t-� ~I.1','1' 11 l (~.t_ t_.P._. f- tL--lP--� -� '- � - � -� �-� --� � - ., . _ . ._ . �-' 'J �- � '�----'�---��'11':��:-',--��t.':�:�''-~�I. .�-~�.-.--=�. f---'-�:.'U�t, ,.-_-. t- t.j�L;::. ':r::.:'�~'�--�.---.L �c�;:_, t.8.�,;r, C��-tl t__l�11-:-:-' fl'l-!�Lc-h ':r:::�'<.:l p1�(h_--It Lt't. {..r�---1� :r:r:.8.1- Tl tl� -=- t r� -11_1.-'=--' .' .- 1�-- f-.-ll.l.t�r�-�� l�1��:-'c-��-e���:-�. .�----�,1- ~c�� t.-P-.-�t-I-!1-I lP�-��~,l - .1;:�-:.�'�--.'�f t_...-�_-J,~_�J-�,:_:t__...-_._....-_..,..-_.., ..) r.nats-ri;::tJ ~; by� petitioner in its fn anufact ure of ..-�,1�-cu-;�d::.t��.:_�, .'--'1� -1(-.l (._�.1� -u,:-:.,-..J~.1-P--� t,t_.;.:,:.-�:-�� 1..c_�, t__l�1P.,-1-P--�-!-_-.--�.,!-P._. t.;,...:,:,.-p.-t�1-11r) t. t't�_..-)1-I-1 t.l�LP [.,'��'=:1'.V�, t'l-LP ! -l t_. f�--��,f t--l-L,-::. �c-��rn��;:.:....,---.-1�.f. l.,.-..�. t_.�:_.r.. .'�.. 1llith re::;pect to its ::;ale c�f :::tenuned-leaf. toba.cco ~.~?i th ,l!.,::;;::;ociated Anglo-1\merican Tobacco Corporation (Item No. .3), petiti�:::.ner aJ::;.::) rm:dntains tl18.t it need not fXl.Y t lie specific tax there.:m pur::;u;::mt to Section 1.37 of the Tax Code . Peti t.i�:)ner has eviden-:::ed by its lk3.yc�r'::: Perirli t. issued by the lvla.yor c�f CT.-'\ rer::r::�rd) ;:::tnd 1990 (E:1L C�N - 1. p. 232. CTi\ record)_. ::;tati ng

DEClSION- C.I A. CASE NO. 4617 . / th:3t it i::: e.ng:::~.~:ed in bu:::ine.s<.:: as :J Cig::J.rett� 1viJ.t1ufa.;::turer. Tlwrdore-. '::te-mme�J-1s-:::;J tr:�t .::1.r:co s.::,1d in bull: by petitioner, a " !!�.-�:_�c. .�_,..-'-J,..�-.--1;�,-.�..t_..'._". ''A1- �;,." r-1-,v:-:,..1, ,�...�.�, _t�_L r-I-.l::�_._.,t�l�..�---�-�:-)�.r�1 T��--���1-�-�..�-~'.-.-.._....-_....._-i r�-��'---'r�r-�,..�-.��,r�-C:>t t-1��,-�-.�,r1.' 1�c~�� ;�-:�,��.��e��-:�.r-I-lr--���t. 1-r-.-�-�.�, r-I-l t tl��P t �:-o . , . 4:..1..�.:&. T1�1 p ��� �� .1 �.� [--,:. -p t�,-1.::,!-1 ,...,1- t1�1p cr-�,p.---1�fl.;' c� �l-.�P�.�1-.!-11-I1 P.., r..'}- 1;:..,.�:o-o:J. f t..._--, 1.-�-��-~1-��.-.r.�.'-�..(_.l �C-' f��l� 1.�-��1 . � ' - ' � / l.Jo. � � ., -.- .- .� . �_: �� ��� ���� .o. �-� -- � ft',.-. (�-��'-:--,. Jt.'1 1�.\I~ 1� t-1� �11_1_.�:_:�, f�-���.�p-� -t' .-.:_:.,!�r�1,-�--�.,iIi�-.:.:�.>�-(1 t-1� �1,�.--�.�1.J1. t � tl�lp InJ' t�p�-� r---��:�>:t..V,r f'I1C-._..f'1t-� 1.._-..,1- f�1-1P �c-'�Ir.�'�P._. l._-..1� .... t_.�.::>!...v.::... -� �-- .t �..r - ,,_-_-_,--).!..�_1~��� r��~��'�-.'l 1-1-1�r�-t:-'i--c-� t-�l�1�~�:�. t-� p�.-a..'!...'-.--�.1�.--:�.t.-:.' t.~:�.-.1....::...c._...c_.� 1..-_.,1-1 r�-'l r�-'�l1"Il t�::�:�:'-c-��t-�t'(..�. r-)�t �'�-.�.'�'r�.11J� r� t~4c.J c- 11 �.:-1. 111�)-.p.... [.)' C"'\ 1' .-1 �4� �- ' '�4 ,0r�,f r-�. r r-.,.-1'1 ..--ti.-���t-1 t1�1,.::. l�''<-l1�11,�... .�-���� 1- t1�1;::.:. �:>c�c�;::.:.c�:�t�r-1P!-it l'!Pf'P1.!1 1�1�r�1.rn-�r.l_':,:._�;.::�.-:�..-�-�1 �~-r�:�;.=-�''=-1�1. t�rc:t 4� 4 - � - : � f__ �-� - �- ��� . . .� �-� - 4� 0:..\�-� �-� �..- ._�._, ._, 4� �-� �-� .L. �- � ..... t_.l-1p.. 1n_. �..:_::.. t_{.� t-�1' ,.�_��.�-t���.6._.!' 1.-C�� (._.if'1 t_.l�1p-.� 1_-.-..�~-'-�c--�1�.C_.� t_.t�1�'-:''�t~ 1' t_. 1'~C�� ';:"-,' ._.._. ._.._,. r--�-,-(~�,C�C�pC�C.J� (�, t� , 1�1.�::>�.1�11.!1;'::', tL-li-'~rl1- -:,-::,-.l}t_. .J the. ::: ternrne.d-le.::.~J tob:=:vx:o frorn other tobac.;::o manufad.urer:.: (;f 1 1t-~.-:t."2~?r).�:-1. n;1 ~-:�:�- 1� 1~�-!r� l�r�ir-�1.�-:,�.1-1.1?" 11'..-:t. l-_.,l tr::- "o'.1'1'-�-�1 11�P._. t.� t�;.:_:...:._c.�r-)�'.--.�,1-1'�-1e' tlt_. 1-a.t' l;::..:. ��.-.1 t.-'r-J ..:_:..1�1[,..�.j1�r.�---'�::�" t' t__c_�. ! -t.:--.: ,-:-�. r-� .-. ! '1!�._�1!r::.:' l -1t-�� _.' 1._.! f- t..-�, � t�,.-. ,.-..::,.-�Jnt�;::. ,-.,.-�,11;:,.--- t r-��P tl't�l� ,.-.,!�1.::,1- l�c� 11' 1��P ~ .,rt' c�p 1�-, .,:,1�1-1 '' �f""_>I��c.J-�c-' p.�. c�-�'�c-�-tr::-:',..-�1 11...�-.��t_. '-~-,���=-'� � ���� ��� ��� ��� - � �� � - � �. � �-� �- � . �-� ��� -� , - �� ._, -� - � ��� ���� �-' �._ �-� o t .._, �-� �� "7 C. ~ 1�--�l l-1�',:.~�P-� t--n.r--���,�-c��c-��,--:~;:�-.�-�:-���.-:�� ,�.--�, 1- t-���, J-l�t-� t-�l-11�.�:-�� t.1��1�1�1�..::., �--~,� �c--� t�l-1�'=:1'.1'11-1� f �c-1.. ,�--�' t-t�:1.!' ��-� 1� - c�p 11Pf' ,.-. !- c� t;::.:.!-!'11-I'! P�.,.~r.._l �-� �.J �-� �-' � -� -��-� \!.l P d..-�, 1-1.-� t� 1.1�1��=�11 t ..-�, r'lll .:::.c t1�.--,1�1 t11 .:::. ~I.,IT�r::,. 1,.! 1�.�:-:�.�c-;f-.�'i'�-J!l,�.--l;�:-.�:.t�rt.. P...-tlfr..�.,t�,.-...�..p...c�-�� t.1� �1;�-:�, 1��=.:.-.\1..1t�' I f �-� �- - �� �-' -� I ' �-� - �-� -� ��� �- - � �-� � - � �� ._, but fo::.r the �i-2��uir:l::::mce of LJZT.a.r)-:311?e.rs a uniform ev.forcement c�f t:::t;r tt-- T'/T','Tl-11'1e-. I' t_.1.'c_; t.t'l1__e'. t.}-1�-;::�-.,t. -11.::.� r�;v:,~-)r-(.'l! '1('lt:r;t�1t- 1'I'I:-;IF/ ,.-.,-. l1 e:...-�t ;:,,,,..;,:�.-::. t �:> v;::. c� P 1!P11 ,,,c,1�r�1.:� 1- 1'!1 1-;::.:. c-f�l;:, 1�c� 1-l�t�c�t '�' ��.r J. '�.� �.� �� �.� .&.:...._,1-_: '�' �.~:1,..::.. �.� �-' '�' 1 �.� '=' 6 f-'nc� c-~ , c-c-nr - � <.� �- ' � -' ��� �- 1 � - 1 "-' �..J �.� '-' ._o �' '-�;::, '-� �- ' '-� (.'. \ .� '�' } required to o:::olle..::t the :::::une fro rn the rnanufadu.rer or producer, interpret .--:�,.,�-=�. t_.l�1".t-:." t�:��'t�.�1 t�..-q1�-.�v. [-.�''1_1�!�I1..:-1.!-1.11,' lt' o.-,1_-.�11~�� t.r.����.t t_.l�l t:.:-:.- .c_.-.-:-t.1-''...1 t.4�-:,..�(""~~ . T oII '�-�..�'t.1� �1~.-.:' 1- ~v\,.Ti�-,--=�..��:-:�, .1,,�,,.'--).1-1� lc._l r�'�:-:�:' t�1'�-�-lt�::':�-J� t_1. �1p.., fl�f..-::�.:1.-. 1r.-'t�..�.�' t-t_1. ',t-_.1t1 (�-�'f ~"�p..r, -._�.t_.t' i.�-.\f'1 1.c-::.,, .-,�, .c-.t 1}'fP._. t'L�._:.. �-� �0-::�'1-1�!' [--��r-11-l�-��-:"--'--0~:.:.-;�-p� 1I�',!l'LJ�(�-��1�1 (._'.(._'..1�-1�1� .�--�1 !'1(-.�lt-� 1��1��:-n�. ,'';:�->� l-.,.::. ,:::. 1-1 t-j�1,:-:.�. t' .t1� t.':�-:�.1}t-1��,..�_�)t�1 (�-��, [ t-�l�1,:-:.:�. 1_. �-� 'J

.. I / DEL1SION- C.TA. CAS'"~ NO. 4617 / ma.nui:J.::ture-r c�r r-�r.:::..:lucer cc�uld nc�t r-�:=-�l1v or fai. l~- d- t.Fv. r-�a',l the re::::pc�ndent. run 8.fter th e po~:::;e:::;<::or. The 'Nay respondent enforce::: ths- lai,�'.' tn:::n? nc�t. ha.ve been the intention of the ' ~Nhib it. i::: true tl1::.1.t ~:tem med -leaf tobacco are das:::ified as "r-�, ��::�..rt��i1�: �l. l~/� n n t�In- f��=C1. .r._�. rnt�---�1 _. -� ":;:'1._ t-�- l~-).�:.t-.,. '.�--�,.-.,.'.---�,� " n- �t-I�'�--It�;-1� t� "~�f�t��-._-.� t_.t��'-.�)t�I ~�-�r�t.-I1'J. '�.�) f ".r:'.�.1t::T: I.c�-:�.t-l�tlr:�-:�. _. �:. ).) 1 c�tt"llt"t -l;ri"ll 1)>=> t11rtt p,t.,':�,' .b(�l-l�l='-�Jt-�i;��.��,t}��-:' N(�1.� . 1-~_~. .�C-' '7 _f:, '7 ��::>l t"l�l r�;,�:.l�!(._l r�-;�:.;��.} ,I 1 � '�' 1�)� 1�)C�-�'{�:.:,.t - V'{.C���:.�Ij � - � �� I ._, I .I �-' �� �� V, 1.!.1 .�.-::�;'-'.:-:.:''.��-�.tJ��..�J.!.l 'f-.'_�:~�. �r--�' f t.1� �1"':�::' ~c-..�:.iJH.�":_:,:' f.-.�'!�:�>1,T e��.H� Ue.-. rD , e� rf U18. tJ� u.� n , rd�- 111'11I:::f, UW- .�i"'::�:'!. 6 Cha."r:�ter XI entitled "Pa.rtiallv, ma.nufactured tobacco ;:md tobacco f-�� 1�,.�--....��-}J-�v�-��r--�-:�� r�..�-��,1- ?�---..'..'.T.r-��,(..; 1�t. ," 1 1�t in"' r�n�-� v� 1'r�.}..c...:.�-c���� -� �s~ction 43 . Tobacco exempted from s-J.r-_',""IU""�~:~t� I~. t-, �_ f�.., .,.._ t-," r�t�l.-tll I�Ir� r�(� ll pr�tt=>r1 .-GA '.) '-' - �-�::��,rt-�-''<=.:=-.-'"�.��1�1�1�'��.�.-� ...-: ..4:.. .:� �: . t�-,�r�;-:�. .�. . } .. . .. . . .. . .. . J. <--�,1��1 [ ��� 1'1 ��� t��l�.l ~.�. 1.) '.) ' T','''/ 1�t"t!~<. .- C:d L-2.::tf tobao::(o and p:utiallv tmmufa.d.ured tc�bJcco. "?::cept im[":)rte.J b::tf tobacco. unle% entered in ths- L- 7 offid:3.1 r e~ i :;ter bc~~:::.L (b) 1�/Ianufadured products c;f tobacco for e:::r..�;:ott <:t.n.J/or '-'-'::<:> lY,�l the ,t:~.rmed Force::; of the Philippine:: �)r tile United St;::,.tes �Arrned Foret:-:;_, ancl oU1er entities ::pecifically exempted by laV�l." n , lEt-(rnl�r \ .A. ! �" r�:~. .--~.1���-=�� .__, -1�1�.�-=- . ..,. . t I �~t 1�,--:�. '�'-��1'=��:�:'��-:1�.r� !�t���.)r�1�1 t.�l�1'~� --.:f. tL-.',-.---1�V,T�p-� - r..l1l-l�'�'-,� ~t-._p. '-��.l r-)�t�n._~1T1I.c-�-1'�,-...)- r-1 t-1� -1�.:-1. � tl'.__i,. ,c_-_, r-J�r.:_:..,-..-,1�f1�,.�--.� t:ti~ :::hall be cc�llected �)11 partially tnanu.iactu.red tobacco including ::ter:nmed-1-e�:::.f toba.cco. Tl tl�l'ft tr; f -11-1���-::�_, >._=- v, >._=.-1�1 �--~,� ��-::��c-�� n-�t�l-11�1-1;0=, .��-� t".���r:-.v..�r...�(..l ~-=--t r�.C:r�1-1� '."_.�!�!.r_lr.�-1 �� r__ ~� -c.J-t~�t��:� >tl"l!H Ml - l...:_:.:C.r~. ._, ._

DECIS10N - C.T.A.CASENO. 4617 / - Page 17 - t._-.1���,..:_,..c_-.-.::.).j."I l t�":�- 1�r�=-� t.:-.-.~.:~..~�-� t�u� 1r_-.. t.-t�:-���.�lt"t���-,1�t�I�! t.-t!-1p... 1n.- ��:::><T;,.Tt"I"lt~:-- rlt. �,~.~r t__l�lt.:--. �C-�T1"P' -.-<._�l'fl' c~ t_-.-:.�]~-~. 1-1�1�1,--.l.p_..t� t ..-. r� Tl- �~-::� t.:-.''��.-�. '.-�. .'_):. (,_.:-1. ',) '��-�-�'t" Ln t.:�.' pI p.... tl-lJ.-,.:.., F�'t-:~';,:-:,,U td�- .hALC�� 'T1'�.---.' . 1...,(- f.�l. ..(.,} ..3..,:-�. 8.1- ILp.. tl<-.}<~;::'\�j � 1P....f-p�-�. i:::: no shov?ing that the provision of Sedion �f3(a) ha~: been The respondent found to be contr::J.rv b:::. la. ~..~,1_ ' The Secret:u-,.:r of Finance lws the aut.horitv to T~ X OnlU.l!d' a te f I U r-� rn�t.-:.'t-t-�1-'t-l P._..t"1t-� ,,._-..' 1- �~:�'t::.-:.' r�._�.�t-1�'<.J�t"1 . ) ��� r� ti'<� t-1 L.-t, '!fc) �' t�p�-.�-�-:1..,�--1.�=-.'.. ' ._.1 -� .) BSEC 245- Autho..rity l>f Ser..:ret.a.ry vf Finance to p..ro.mulgate IZJJ-es and ..regulations. - . Tho::.- Secret.c}f Voi FinatKe.. ur~<�otl recommendation of the Cotnrni�::::io:::oner. ::hall promulgate all needful rules ::mel regu.l::; Uon::. for the dfective enforcement of � the provi:;h::on�; of this Code . '7 ~;r "":;r' -r..,T. -.:.:"' '";.T ...:::.. ..::.. .i:.. ..:.:.. .i..::O. ..::a. 17-67, implementing the prry:.rision c�f . Sectk�n 14 1 of the. Ta.x Code. v..::t; issued b>'? the Secretarv of Ints rmJJ Eevenue. It is v.rell se ttled thM-�-. RP- venu.e f: P. PCo1-1� la. t-.i�Nl:3 t �-� 1�-,-~.-,~-.l:_";_ >.�=.> '��--11�)- v/ t_1. 1�~~ J�::'~.-'~--.~..t- .._:.:.t_..-.-:J.1- T;:T '���-�-'t� Fl' t-l �:�:t.t�1'�-�-��p._.. _.'.....' 1�1�1-1 1n..lP-.-.~ t"1l�t-:�' tlt. t...rt�l p-.-. r---�'t� ,._-.,T�.l l- .~:) 1�~'--.it-!.r.:"~� ,.-..,.1- T�-1' t --, T�TI'tll t-�l.l '�:-:�:' 1' 1" !"l (�t '"'11(1 1' 11 �.:..~7:.. ,'.�---� '.�--�..''�.�A!� .~-. J t...:..,~ ,-. ('fl}-,�I r�-:. lt1 \.-,. ~..,. <' <'l"Itt��-1 t"TT 1�-.T\, .) -� �-� .) �,��,� _. -� �: . ;� - �'�. 0:,.1. 'I �.:1. �- v -� .... �- Revet1ue re!.2_,"ulation:; i:;sued bv, thP Se(r e t3.rv' of Finance. cannot be ��1 te:.,-1 '��-���1�.16..c-1.1�1.,o__,'�:�:�:' '-- �-._�.�tt� 1.1�l t'--�~"t�r-)� t�1�:�:�:' .��-� ._ the Comrnis:;ioner of Intern::1J Eevenu-::�.

DECISION:- ~~ C.I.A. CAS""E NO. 4617 - Page 18 - / t�nl<=: ~L"-n�r �tl�lP.!� t�I-101-F� 1�t. 1�c; :=-tt-1 P. l P.!-,-1 P. t-1t~~t-v in statu.torv - - - - �' - - - - .&. - - -� I -� - -� ' V�7ith re.:::pect tc� ::dl the r::�thers, a.nd in harmony 1Hith the whc1le . {St. Martin, et. aL v _ Iberville Parish, et. aL, 2 12 La_ 886. cited in 1-JARTI.I'f's Statutory Construction, P- 132J Under 1� (11 .s ~�.l�cr��---�,1� -.�.--I ,�--�-!,�r'�, .�-s� t�:�-~�tt-�l� PI .�s-� t� ��:!:.>-~�}l.�-S�!- t1. �1 �-~-f. !-1 .�---�-,1�1,�:-:�, '1I 'I1-11�..-.-,-1-1 !-1�1-.::>�.l''\.P.. ._',=�-'' �c--�.-.,�_.�, t�l �1�p-� 1.l;rrJt�.-�j �: � �� �-� 1 I �- �- ._, Tt'llanan (rht-monPk �:-~,� 1-1 (�-1 r�I]-]r�;:=r�,-'-~,��t.�-��-��-,!-1/~ . .Jo 1 P- 2 f.__-fJ-J 154,- 1-bt-d - ) - ._, uT - .r T1 t�tr� .-, r��' tn r-�t .-.. ' .11 -.1 -1'��C-��., r.��-�.!.._.l -1��.-. .-.:> �: . �--:~. ~ (. j]j. _. 'l 1�)� 1..-). 11 !-1�1 t ��� C--~.'-�--1 '-.}- j '�-� '��-.' 1�1c--��t_.t-1-1-'��.-..� t t� �� 11 t�l-1�":1'.t � 'I,�IfT1.11 �0-'1. P,� P._, �� J _._ ) .) � .} ~ ,-.,!- P!-f.s.-�-t tn f-'"t�t P~7,:::.rv ~, t>Jj�,s c� t �~, t.f �o::>t. t ...,11 f <(lc�c- 1�1,-�J1r�:,.- , f <-�11��-l1 ~~1� 1�1 r:r t1�1.s ��� �.� '�' �� � ���� ' ' � ' 0 �.� .I. I -' r:J. �' ��� J �' '-' '-'�-' J ._, ' ' -w � �..� (_, . �-' �"� � � � '- � �' '�' 1 (_1, rn:::t:dm ~ut magis va-lea-t quam pe.rea-t- (that C(:rnstruction is to be scr1_1. :~: ht ~.vhir::ll gives effect. to the 1,.171lo 1e st:t.tute) . (Almeda v _Florentino, G_R_No _ L- 2 3()00, December 2 1, 1965J In tlle r::::::c::e at b:::1.1�, there beinQ�-�� no conflict 1,.i?ith the �1 ea 1" ( �I ----1--. .. - ._.. '.7. _. ..:-f..c_�. r~:J. td'l~. l.-l.'.-..-�1~.-.�-- .. t.t- �1.~-. �1'.�--�."��-�����::<�.1 f-l-U!�._k�.�c-���,�:-,�c�--� �.,11- .C_.� t.-~�'11-11-1-1r~. -- -1 . 1- t_..r-.._.~r;~_�-':�':�I.(�-��'-vy�---' ��-:�.-c�-�� nr--��~-���t-t��1���~-t-11 '',' !�I�1 -�~-f- ~1�..�. 1_1_f .�_~,�_ �.�_�.� t_.JJ.t- .._s.�~�l .'-s" ~~:-.'. -P.- l �l-lf.lT - ,�--���1 '�~-~-�-c�--c-��t� l- 1�.�-s�.-�-.�l. t..-��--��,1..��1��::>1...-_-....._-,...._-.l �?:1.t�.._s, t_J.�r,::._-.1-,:._:.,.f n._. t� .s , _. �..r 1�1-,.�--�,1�1-J. t-1- �1,:�:-:�. �c-:!n�,':::-:--..-�---�1�1�1�,�.--� t-~, '.! -"- - ~..L - t' r r u!c. 16�._. ,tI�_. t.�J�L,::-, -o�:�,._::.,.,._-...,-_.�,t�1-..-I t' .-1�:1t-I-I, 1-P..!:,__r,;~_,_ t-,--_It' tl ,!:__.,- t,1�1,�:-:�, .c-.,.11.�:�-�:.6rr P�-�r�j .�--�l.-s.-t�l�,�---�.1�P�-� tl (-~�1'/' t--n tl�r. . -�=��rtJ�t�:�:�'r�.�_�.1�1"1�.'�--�. .-d..i'i. t.._�..'1-1 1�!-I lr1-.-"��--��' t�t-�-�~��'-�-} .,-:t.t_~.p....!-I-i1�I�l.~-.'.-.�lt-.s�a��=-:t.1� t.-,.-...'\t�-1�:�f.-.(..'(.."..(._�.� 1.11 __ lt:: d-1�I-l�.-..�..' J-J� !}t__ '�-)��1� .lc.t_tl-,t��=: 1.111�,,--:t.nt�;:.. rt-:,;:-:- i-�J�.t.l�,.--,1-1".-"1. ! :.,_- .i 111Pt�j t1�1 :=tt. 1�t . t' lr��l''!:-r(-!l-t-A.. t-l f o-t�;:::--1�!�=:',r-1 j_" ) J,. - - �� - -- - - .. .1. �� � .!. - } - � ... - - ... - J l P-. :-�'_!_1- h.-.-�:. \L�:, �.-~l�f_.-._ ,__._� ,..�., /�!�,_-_., 1-1-1 rl -,:_,l�l�.-,_-�, ]_J C.,� l__l2�;�_;:';t.:l__l:f:..l:.i!_..-;::,.:.�..t.:>..!.l:_l_"��".:-.�!�r:"_':"::. (��.� f t~;-~f�) �-.1,C"T'.1..-.�,.r..-r..1. f� l-.-..-J� t�l-1 t.;1�1~.��� L- 'Tl ]_-J.r�:.::-_�:..?�.�,�, >,�~,�:�:..J�� ,:;. ~-�, t�,.-, .,t.--�., ,�:.:�, 1- 1 1' I T 1- ,�.~�,�-~'(�-�� t�r�-J,:�-:�::�.-,.-11�1-1 1� t-�:-:� �� .- . �-� ' ..

DEOSION - / C.T jL Cl1SE f�iO. ~61 7 I 7 i :=A c,. E��dlc; D~.! . 1-�1n� I.t:.. [r''~- -4 .� itY:�ln-:�=-;i 1'~ ,�:, ,�� :-=�md� E '~hc; [:rl!. -0 1 t h r OJJ��i==�' h .a. -� .l -' J.. J. - 1 '� - � � I. � � DS-3L ino::lu::: ive) and L- 7-1/2 (~;>?.e Eidl~;- FA to FP. indusive) r e�gi::;t.:;r�:;. "t-l-l-�J: �d� n--f�c�--�,-,-..�..�t. l-l�!.P-..--t� " ��-J_.c_.� r�I-Lp-.t-.�t.-t�.�-.-.--,11-~-....--.-11� 1.1 <~:�p-..-,---~�t.t�'��....it."1 1.~_!'7r r1[ t..-l-Lt:>- T c-:.:.).T.::J. r-~� ...-..-~.r..lP-.-.� . Tl-1c-.,. v 1-l.-.,�.;.f.!'L11.!"�.7_f.�.��'t..�1-1�t"P---�1" t..-'I-L-;,.t.-��.=��J.J..f.��r-.'� lt'p._...c_-. .c.,;-t..P...-.t"1"1!1"1"-.P.-.-(..1-lP., --:rf. f t_..-_�-,.tL-ldr.,-.��.-.-,--..-J-. t�11<-:::>.\~/� er.-' tLl"LP-1" 1J"�pv 1 f- C��!"p-�j-;C=,'!..i._ ,�.�-.�, !. \Ul-1?:-!"P. t1"1P l�;f ' 'liT (1(1>=:-c- 1"1''Jt (11' c�tt'f-10'111.c�ll ~1\g, f j �C-:�J-1�r-.��r-.���11.P���-t"��:-�' . J. ( . i (�.�"*-7 � II �-� ,_. � �-� �- - \ �- ,� �- � �-' � � � �- �-' . � ;:) - � "1.) �, � � � c-1- ���1� Tl- ._:1'�.�)�J-l��l 1P-.--1"Pr::.: ,.-.-.!. "�\'[-) t��t�r'J� �":l.tL-�l-c-�'t-t�"�:G:)-.r-.��t~ ��l 1"1'-.J-. Lf.. '��.+!1- -c-'�t.�-!.t,..l,u-=-.n�-1-1.-:� 1. t' c--'� 1�1'.-...tt__l�11. tlr-u.=r. !l '"l!- 1�1-1 ' ,.. !__ j_-..t~.11.:_:.:. 11.�~-f�!"1 ;0:=i ,]-j-��:-)-cCi.P�-.� (._�.,t" t.-t1} P._. C._.".:_'f_1�,._.l f-.->!"(--'� ~,Tl� .C_�.t�,-.---.,!"1 �o::>..C_.' ~'~�~�'-~'-� 1_J_lr.j 1r..�,.�.-..lC... ;-P~- '<). .!} ca. t-!lt-~.,110.0'1_..'1--t-V~\ 1�1-1 ;l t_.:_=: ;:-:-�f 1r�)f-.)..l.t' (-:;-l-t-.i.L (-)1.1. - Vl'2. :::h�: :. uld E>tE;lJ.r e th e continue-d applica tion of �~:;� �,...-...,� ~it-� �':-:�--1,r-�-,lr"'.p�..�.��::>1.t"C�-�'! J"P���.C�- �' 1r-��, �.-�-' t-1,.--.!+ ,:,_ t-1t, f ��.i�!" l"1P-. � !" r-_.l��::-J>. t' t f'=>:1.'t' lp._. ,��.".l t~i�-"�l ,�--�.,.�)� r-1t..1-,-.-.�-lIF.P... t"t..� �..� ..� o:)r rebu t petith::.ner 's subrni::s ion that the ~;u.bject pu.rcllase of :::t.-'2-r.nmed-le;:J.f tob;:t.�::co \VHE? rn ::t.de. 'trorn various tobacco "rna.n uf:::u: ture n .. . It..,.. 1-0".'.�--�.t_.�_, !"P._.. .C_,' r-)--'-�.�.'1�1'.�-Al-"r:.t!lt f"�:"'.t' l;:-:.:-.'�..-.} f../..--.' r-_�l r�-~--c--'-':�:-:�" t�1t-� ���:'.t-1F/ �, , , tl- .�-:-�::.��"� 1-.----}~--r-1!�.�_.-,�-:-::�, t).��)� -~:"�� J-J�-Jr.)� r-)�,.-.J� t- t_. 1-1;-:-:�:.!- '-.-.-..d-..--::..'.:.:." . H e~. t- ,-----'--.-.�'J-J~ t-f.c_�..=-.:�-1 ~t,�,�Tc--1.1- ~,T. '-=-:-="'---- 1 _ 1"~::-: t�t' ~r.r l�1t ''-..�. t-,..-.�J~'c-.-J ,-:.,-_1:�.'~�:::-.jt"Il1�1.1 ~�' r-_�.t'�:-'�f t� t' t�.t' !._._..'.ll. t:'�:t"-�:���' T\'\,(1'r1_.-tl�t-=�' -C-��-C-�' t�:"-�:C.--��- lt"1C--��t--~��C-l.-., ,-j } .C_.�l"1{.:.>. .C_,�tJ.tk".i. jJ"1t' t..t�.t":�::(~l t~�l11' .C_.' �...-..�.:-',.,�=-�.�c�.:�, f or d;::-ci::;ion on t11'2. b::ts i::: of th;::- record<:; and the pleadihg'::. Neithe-r did ::::lw ':;ubmit :Jny m em orandum btiE�f to guide this r��.��.-�-.�-,;o::�. t-1 1. 7:;, 1.1,�.��-�.�:�::�. �"�!" t.�.r t.~.-...,1::�.:.., t�:";�: F,� t.r�.".l "�:f�r-! (.....~... r-)�r� ht:" c�-'-~--.� tt"l t.�"�=�'�i'��".l 1)-� ~/T r-)�P...t.�t't.�t' '�,.�l! -lt:':!�t� . ~ �-�.

DEC1SION- .C.Tu~. CASE NO. 4bl7 - Pa~20- 1----� lt��-� v ��� 1�1�--t t1� .-. 1--..-,1- ,-- f )t:' t-:,. t: _. l=:i.-4- _. l r-: Ir)�J_l1��'-�.��1�1 ��:-'.c--��'�~c�--� ._! c- t---~~ t-111-1l t�::~:"'�---l - ~t:1- t.;-r-.�Jtt--~�,:,_�.-.-....,._-..,J-. !-1l �..:,1. .'.�--1.~., l�"�l ~/T -- � nr� tr��at- r1�-�,�u�c l-i ~t_.1_- (�-�,� .t}.�:.�-1�� 1-t-..---��� t�H- l (�-�l(�-�"':-\�1 ��:.�:>. t�1r-.l c..�--�~t- ~._.1� ;::. 1 -�=-��J-l�rn-�nI '11-..:,-r�c._-. d~ r~,. .� �- 1-::-o-c~.�.;.�,� t,i.<-_~1-Lc�� �-� � r-� r . r��-�" .-..-. 1-.. --1 t�� !' _.It:-:'.tf_..'�'''.'~"-;-;�:!tr:;.: 1 "t-I-l ��::>I..tJ�.!1-1-1�.�:-T,.'�.���-t-1--1-!' '.:-=.' .:- '�-�'�--' pl ~'� t�~.-.�-- <vI t-�l�1~-.- ~....�ii�t~:: I l _.. t-�t'��.)' 11 ft�r._�.' t�1-1 t-�l�1;.:..... p;::,_yment �A the ~;pedfic t:.m pur::ua.nt t() Sed.i on 1.37 of tlle Tax It 11T�-,~. '�::�' .r:.�t.'..>:1.l-'��'lt',,�:.�l'l~����---�1- l)'� Ti'T r--��',�-C�.'~-�1't-�t' !�,_'.�1t'l,C�-�.l' 1_�.11��:'>1.t-� 1' t.-,:-�� 1-r.".,Jt-�~-� 1,61( !'1 -C..)� l\.'.J.f--�l f-_.l ll'.~., t�c- �� i ,� �:.�.::� �-1 r C� l� .-. -''--6�f~..1, t��1'.'-�.J- r�l t�:�;�:r� t_.r�._�.l -- ' l '-J 1�,�\,�T t.�l�1.�:--,1.f-_. 1' t_c__�, f '��-���'r-rt-;".1',t-:;.1'.'l. C�J J[-'f- 11.~ !- ,--~. 1 r�l cr.;�.r�1-1 ~-J 11I( .� t.Jtl1�v ~�-�r� �c-�"r:~.1 --� --� -� ) ) L;:>�:j� r�, r�,_,:> D- ln D- 1--J)- �-� �- .1 r..-�-��,b~� ��-:<�.(._'.(.�...-(.�_) (�-'�n�-� � {'�E�.1,.ri.Jt.�lc�-�'. � .' [1� -"~ .' .1. .r [i� -7 I ~:1- 1'1(1 6 '1 11 �c- '-~t i n �- . �-� J ~J. -� ��1 1 11 1";�� � l I (._�.-!.)� t:r�l1r) ��:-.,.t-1�;I� I t-l '.�.�. �-� t�f--�.".����.t r�q�:.. t�.t�:��:'�- f'�E �~':j. �J�c-�'� [l. - [i ' . - .~_.IJ _r1L:- �~:1. 11 '��-�1 [ l. - ( .r _.c-h'J.<~'" - . !.� .! rLJ _(-�~J� [)-1 [)-1 ~ [ J-1fJ: ) � ,~ .l I .1. .L . '..I. It-1(: 8 1\,'11' 11~1- T o l ' i :-f�(-:(-:(~) C/:r fE'-d� �1c; [i-c, �;:, ?:t.11'"1"' I .1. - � - ... �.. -' '� .J. ..... � - �� .' - �..) I 1,,..rL,,,!-l1.� r(_~.,. (._�.,.-_..,!I--lf.-~-�J: l�i.v-, I1-L.-....t.'E�.-:c��t�1c--�� . [1. - f._:., "1 .�-3.1-1~. D- lc_�)) ;c:.o\.ll-<�.1 r--~-c-l.t-,�---'11�1-1--:J L~...c~l.1- Tobacco Co., Inc. (E:1l . D-M ar e li~:t.ed in tlle ~Norld Tobacco GH -2 ). A.:: ~:hall ::,� rule nc� :::pecific t:::tx be colle(:te�d on lea.f t(:�b:::,_Gco .. f."-1 � �llr f.-1 --1 ' t .-.,-..-, 1-1-,.-, .1-11 1 111' �.:-.,.!-1�,.-_1 )::., r.~,.t-'�1�' :::. �' 1. �:. -� �: .. .-. Lf - � P --~ ~----, ��1��� c:� t .-. f,1. I,I~1-11' (._.�1�1 1�1-!(.,' [1-1'.'�- ':."c--�1 �..J ��t:::!'111�1�1�t-�:�:'�-�-} - !._. -� �- � '�- ) ��� ) �:�. '�-� �- � '�-�� le::�.f tobacc�::r), e::x:ept impc�rted le;:).f tobacco. un1e~:s entered in the L-7 �Afici:::!.l regi::::ter boo:;ic [Sec 43(;J) of Rev. Heg~:- No. 17 -67. as amend-2.d l. T 1-1-J J;:. 1'�:� i l' ]] C� 1�I~_. tl �l -~f t 1 ~�--� �::>'. f ... - ��-� 1 \,.�\TI 1'11' 1;�:.:�. �-� I. - � �-- �� '- � �� t'tl'jT�'l' (�'�tt' t�P.., <�'l t~�;-�, t~-�-)C-:.l�:..,i��I-��(�-�l 1'c�-�' tl� �--=��-Jl�l_�.�-._i,.-c.:_...-��-�- t-��.�c-�. .�-�-il.!_�..�_-.~-- 1,-c.�. �c-'�!r'�,,�:--:�,.-��--.�1�1-1';��--� t.��:::�>..:':-'.. �c-'-t_i,ll t-�ll 6-._. .c_.�.-:�:.:>111�-~� 1�c,_�, ~�-���.�;-~-�1-1lf-) t_.~.,..�--11� 1- P.t-�-l t ~ t� ,c.;�} !;;: �-� �- in the L-7 officia.l register b�:)cd::.. Fc�r its part. pe-titioner has <:t.mp1y prc�1.:r-2.n tll;=)t the imported tob;::t.r:::co Vlers- properly recorded in it::; L- 7 :=it-lri L -7 1 ,,.,,.,lr Du I �- � �- ;�, r� 1�1�,-. 1�--, 1t�;:.�-.�(o:-, 1�c�--'�t�~�~�t - ��� �.� (.. [l t ;-; [1'::' -<=> � I -L11' . - i }~ t~.-.- . �-' '- (, _.�,:_-�-r~.�:.�u-� E .va.ilt�i.c._�, , LL .�-..� � o,�.' J. J ,' requirement .:A Se-:::ti ~:.n 43(a) of E-s-verm~ Regulations Ho. 17-67,

/ DECISION- LT .A. CASE NO. 4617 / -Page 21 - as amended, We seee no reason vf.hy petitioner should not be exempted from the payment of the specific tax in question. WHEREFORE, in view of the foregoing, We find the petition for review meritorious and the same is he{eby GRANTED. Respondent's decision dated April 29, 1991 is hereby set aside and the formal assessment for deficiency specific tax in the sum of ~11,757,275.25 subject of respondent's letter, elated January 30, 1991, is deemed cancelled. No pronouncement as to costs of suit. SO ORDERED. Associat Judge WE CONCUR: {See Separate Concurring Opinion) ER ESTO D. ACOSTA Presiding Judge � ~ ~:_jw RAMON 0 . DE VEYR . . Associat Judge

DECISlON- / I C.T.A. CASE NO. 4617 -Page 22 - CERTIFICATION This is to certify that the above decision was reached after due consultation among the . members of the Court of Tax Appeals in accordance with Section 13, Article VI II of the Constitution. c.~cQ ..~ 'fi'NifsTo D. ACOSTA Presiding Judge Court of Tax Appeals