PHILIPPINE AIRLINES, INC. v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES Court of Tax Appeals QUEZON CITY SECOND DIVISION PHILIPPINE AIRLINES, CTA CASE N0.10263 INC., Petitioner, Present: RINGPIS-LIBAN, Chairperson, vs. MODESTO-SAN PEDRO, and FERRER-FLORES, JJ COMMISSIONER OF Promulgated: INTERNAL REVENUE, Respondent. JUN Z7 2024 / ---------------- ~ )J: '-/J ~ X - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1 ~�4 . X DECISION FERRER-FLORES, J.: The Petition for Review involves a claim for refund or tax credit in the aggregate amount of P43,667,566.35, representing excise taxes. 1 THE PARTIES Petitioner Philippine Airlines, Inc. is a domestic corporation duly organized and existing under and by virtue of the laws of the Republic of the Philippines, with registered address at PNB Financial Center, President Diosdado P. Macapagal Avenue, CCP Complex, 1307, Pasay City.2 Respondent Commissioner of Internal Revenue (CIR) is the duly appointed Commissioner of the Bureau of Internal Revenue (BIR), a government agency tasked with assessment and collection of all national \ 1 Nature of the Case, Joint Stipulation ofFacts and Issues (JSFI), Docket- Vol. III, p. 1461. 2 Par. 2, Admitted Facts, JSFI, Docket- Vol. Ill, pp. 1461 to 1462.

DECISION CTA Case No. 10263 Philippine Airlines, Inc. vs. Commissioner ofInternal Revenue Page 2 of42 revenue taxes, fees, charges, including excise taxes paid on wine, liquors, and cigarettes under Section 142 and 145 of the National Internal Revenue Code (NIRC) of 1997, as amended, with office at the BIR National Office Building, Agham Road, Diliman, Quezon City.3 ANTECEDENTS (ADMINISTRATIVE LEVEL) On June 11, 1987, petitioner was granted a franchise to operate air transport services domestically and internationally by virtue of Presidential Decree (P.D.) No. 1590, otherwise known as "An Act Granting a New Franchise to Philippine Airlines, Inc. to Establish, Operate, and Maintain Air-Transport Services in the Philippines and Between the Philippines and Other Countries. "4 During the period from July 2013 to July 2017, petitioner imported assorted cigarettes, liquors and wine for international in-flight consumption as evidenced by various Bureau of Customs (BOC) Informal Import Declaration and Entry (IIDE), Air Waybills/Airway Bills or Bills of Lading/Sea Waybills, and Authorities to Release Imported Goods (ATRIGs).5 In the said ATRIGs, petitioner was assessed to pay the excise taxes stated therein, in the aggregate amount of P43,667,566.45.6 The BOC likewise wrote twenty-six (26) letters to petitioner demanding payment of excise taxes for its importation of liquor, wine and tobacco. 7 On February 28, 2018, petitioner paid under protest8 the said total amount of P43,667,566.35 as shown on BOC Official Receipt No. 01889898427. 9 Thereafter, petitioner filed an administrative claim for refund or tax credit on alleged excise taxes paid under protest on imported alcohol products constituting commissary and catering supplies for use or consumption in its international flights before the office of respondent, through the Excise Large Taxpayers Audit Division II, on February 21 , 2020. 10 \ 3 Par. 2, Petition for Review, vis-a-vis Par. 1, Answer, Docket- Vol. I, p. 8 and Docket- Vol. II, p. 1082, respectively . 4 Par. 3, Admitted Facts, JSFI, Docket- Vol. III, p. 1462. 5 Exhibits " P-4" to "P-4.254", "P-5" to "P-5.254", and "P-6" to " P-6.254", attached to petitioner's Amended Formal Offer ofEvidence filed on July 4, 2022. 6 The difference ofP0.1 0 from the amount actually paid is traced to ATRIG No. ELTRDALC43470 (Refer to Exhibit "P-6.140"), where the amount assessed in the ATRIG is actually Pl2,266 .10 but per BOC Letter dated February 9, 2018, the excise tax due indicated is only P12,266.00 (Refer to Exhibit "P-8.18"). 7 Exhibits "P-8" to "P-8.25", attached to petitioner' s Amended Formal Offer of Evidence filed on July 4, 2022. 8 Exhibit "P-9", attached to petitioner's Amended Formal Offer ofEvidence filed on July 4, 2022. 9 Exhibit "P-10", attached to petitioner' s Amended Formal Offer ofEvidence filed on July 4, 2022. 10 Exhibit "P-2", attached to petitioner's Amended Formal Offer ofEvidence filed on July 4, 2022 .

DECISION CTA Case No. 10263 Philippine Airlines, Inc. vs. Commissioner ofInternal Revenue Page 3 of42 PROCEEDINGS BEFORE THIS COURT Petitioner filed the present Petition for Review on February 28, 2020. 11 The case was initially raffled to this Court's former Second Division. Respondent filed his Answer on June 15, 2020, 12 interposing his special and affirmative defenses. The Pre-Trial Conference was initially set on July 13, 2020 _13 In view, however, of the failure of petitioner's counsel to file a Pre-Trial Brief and absence in the Pre-Trial Conference, the Petition for Review was dismissed and the case was closed and terminated. 14 Upon petitioner's Motion for Reconsideration filed on August 28, 2020, 15 with respondent's Opposition (Re: Motion for Reconsideration ofthe Order dated 13 July 2020) filed on October 5, 2020, 16 the Court, in the Resolution dated December 18,2020, 17 reversed and set aside its Order dated July 13, 2020 dismissing the instant case, and, accordingly, set the case for Pre-Trial Conference on February 24,2021. The Pre-Trial Conference, however, was reset to March 24, 2021, 18 and further reset to, and eventually held on, July 5, 2021. 19 Prior thereto, the Respondent's Pre-Trial Briefwas posted on July 1, 2020,20 while petitioner's Pre-Trial Briefwas submitted on March 19, 2021.21 On October 21, 2021, the parties submitted their Joint Stipulation of Facts and Issues,22 which was approved and adopted by the Court in the Pre- Trial Order dated October 21, 2021,23 thereby deeming the termination of the Pre-Trial. \ 11 Docket- Vol. I, pp. 6 to 36. 12 Docket- Vol. II, pp. I082 to 1087. 13 Notice of Pre-Trial Conference dated June 17, 2020, Docket- Vol. III, pp. 1089 to 1090. 14 Minutes of the hearing held on, and Order dated, July 13, 2020, Docket- Vol. III, pp. 1099 to 1100. 15 Docket- Vol. III, pp. 1101 to 1108. 16 Docket- Vol. III, pp. 1133 to 1137, attached to respondent's Motion to Admit Attached Opposition, Docket- Vol. III, pp. 1128 to 1131 , which was granted by the Court in the Resolution dated October 9, 2020, Docket- Vol. III, p. 1139. 17 Docket- Vol. III, pp. 1141 to 1146. 18 Notice ofResetting dated February 10,2021, Docket- Vol. III, p. 1147. 19 Notice of Resetting dated May 17, 2021 , Docket- Vol. III, p. 1456; Minutes of the hearing held on, and Order dated, July 5, 2021 , Docket - Vol. ITT, pp. 1457 and 1459, respectively . 20 Docket- Vol. III, pp. 1092 to 1095 . � 21 Docket- Vol. III , pp. 1429 to 1455 . 22 Docket- Vol. III, pp. 1461 to 1473 . 23 Docket- Vol. III, pp. 1568 to 1572.

DECISION CTA Case No. 10263 Philippine Airlines, Inc. vs. Commissioner ofInternal Revenue Page 4 of42 As trial ensued, petitioner presented its testimonial and documentary evidence. It offered the testimonies of the following individuals, namely: ( 1) Ms. Cheryl V. Capinpin,24 Manager of petitioner's In-flight Materials Purchasing Division; (2) Mr. Jonathan R. Castillo Lee,25 Manager for petitioner's Company Materials Handling Division; and (3) Mr. Ruel Ryan 0. Julian,26 Manager for petitioner's Tax Services Division. On November 19, 2021, petitioner filed its Formal Offer ofEvidence. 27 Thereafter, petitioner filed its Amended Formal Offer ofEvidence on July 4, 2022, 28 to which respondent filed his Comment (Re : Amended Formal Offer ofEvidence) on July 8, 2022.29 In the Resolution dated September 21,2022,30 the Court admitted petitioner's offered exhibits, except for (1) Exhibits "P-3", "P-4", "P-4.14", "P-4.23", "P-4.71", "P-4.83", "P-4.97", "P-4.164", "P- 4.194", "P-4.218", "P-4.244", "P-6.2", "P-6.6", "P-8.19", "P-8.21" and "P- 10", for failure of the exhibit formally offered to correspond with the duly marked document; (2) Exhibit "P-30-a", for not being found in the records of the case; and, (3) Exhibits "P-4.84", "P-5.61", "P-5.73" and "P-5.215", for being unclear/unreadable. In the meantime, the present case was transferred to the Third Division of this Court, per the Order dated June 29, 2022. 31 Thereafter, petitioner filed its Omnibus Motion (1. For Partial Reconsideration of the Resolution dated 21 September 2022; II. For Commissioner's Hearing; and III. To Defer Filing ofMemoranda) on October 24, 2022,32 to which respondent failed to file a comment.33 The Court, in the Resolution dated February 17,2023,34 granted the setting of a commissioner's hearing and deferred the filing of petitioner's memorandum. Thereafter, in the Resolution dated April 25, 2023,35 the Court granted petitioner's motion and admitted all of its denied exhibits. 24 Exhibit "P-51 ", attached to petitioner' s Amended Formal Offer of Evidence filed on July 4, 2022; Order dated October 20, 2021, Docket- Vol. III, p. 1566. 25 Exhibit "P-49", attached to petitioner' s Amended Formal Offer ofEvidence filed on July 4, 2022 ; Order dated October 20, 2021, Docket- Vol. III, p. 1566. 26 Exhibit "P-50", attached to petitioner's Amended Formal Offer ofEvidence filed on July 4, 2022; Order dated October 20, 2021 , Docket- Vol. III, p. 1566. 27 Docket- Vol. III, pp. 1474 to 1565. 28 Separate bundle. 29 Docket- Vol. IV, pp. 1674 to 1676. 30 Docket- Vol. IV, pp. 1680 to 1685 . 3 1 Docket- Vol. IV, p. 1669. 32 Docket- Vol. TV, pp . 1704 to 1718 . 33 Records Verification dated January I0, 2023 issued by the Judicial Records Division of this Court, Docket -Vol. IV, p. 1764. 34 Docket- Vol. IV, pp. 1766 to 1768. 35 Docket- Vol. IV, pp. 1786 to 1789.

DECISION CTA Case No . 10263 Philippine A irlines, Inc. vs. Commission er ofInternal Revenue Page 5 of42 In the Notice of Resolution dated June 6, 2023,36 the present case was transferred to the Second Division of this Court. Respondent filed his Memorandum on October 17, 2022,37 while petitioner's Memorandum was filed via accredited courier service and received by the Court on June 9, 2023.38 This case was considered submitted for decision on June 27, 2023.39 THE ISSUE As stipulated, the sole issue for the Court's determination is as follows: Whether [petitioner] PAL is entitled to the refund of excise taxes allegedly paid under protest for various importations on [February 28, 2018]40 amounting to FORTY-THREE MILLION SIX HUNDRED SIXTY-SEVEN THOUSAND FIVE HUNDRED SIXTY-SIX PESOS AND 35/100 (PHP 43,667,566.35) for its importations of liquor and wine for its catering and commissary supplies for international consumption. 41 Petitioner's arguments: Petitioner argues that its importation of commissary and catering supplies are exempt from all taxes, pursuant to its franchise as Republic Act (R.A.) No. 933442 did not repeal P.D. No. 1590. Respondent's counter-arguments: Respondent contends that Section 131 of the NIRC of 1997, as amended by R.A. No. 9334, expressly withdrew the conditional tax exemption granted to petitioner and that the letter of the law should prevail over rules of construction. Respondent also claims that petitioner failed to prove that the commissary supplies are not locally available in reasonable quantity, quality " Docket - Vol.IV, p. 1790. \ 37 Docket- Vol. IV, pp. 1686 to 1702. 38 Docket- Vol. IV, pp. 1797 to 1821. 39 Docket- Vol. IV, p. 1825 . 40 Exhibit "P-1 0", attached to petitioner's Amended Formal Offer ofEvidence filed on July 4, 2022. 41 Stipulated Issue, JSFI, Docket- Vol. III , p. 1464. 42 An Act Increasing the Excise Tax Rates Imposed on Alcohol and Tobacco Products, Amending for the Purpose Sections 131 , 141 , 142, 143, 144, 145 and 288 of the National Internal Revenue Code of 1997, As Amended, December 21, 2004.

DECISION CTA Case No. 10263 Philippine Airlines, Inc. vs. Commissioner ofInternal Revenue Page 6 of42 and price. Lastly, respondent maintains that the exemption granted to petitioner is not absolute, and to sustain petitioner's misguided and self- serving interpretation of its franchise provisions would ultimately convert the conditional exemption to one that is absolute. THE COURT'S RULING The present Petition for Review is partly meritorious. Governing provisions for refund claims Sections 204(C) and 229 of the NIRC of 1997, as amended, read: SEC. 204. Authority ofthe Commissioner to Compromise/Abate and Refund or Credit Taxes. -The Commissioner may- XXX XXX XXX (C) Credit or refund taxes erroneously or illegally received or penalties imposed without authority, refund the value of internal revenue stamps when they are returned in good condition by the purchaser, and, in his discretion, redeem or change unused stamps that have been rendered unfit for use and refund their value upon proof of destruction. No credit or refund of taxes or penalties shall be allowed unless the taxpayer files in writing with the Commissioner a claim for credit or refund within two (2) years after the payment ofthe tax or penalty: Provided, however, that a return filed showing an overpayment shall be considered as a written claim for credit or refund. XXX XXX XXX SEC. 229. Recovery ofTax Erroneously or Illegally Collected. -No suit or proceeding shall be maintained in any court for the recovery of any national internal revenue tax hereafter alleged to have been erroneously or illegally assessed or collected, or of any penalty claimed to have been collected without authority, or of any sum alleged to have been excessively or in any manner wrongfully collected, until a claim for refund or credit has been duly filed with the Commissioner; but such suit or proceeding may be maintained, whether or not such tax, penalty, or sum has been paid under protest or duress. In any case, no such suit or proceeding shall be filed after the expiration of two (2) years from the date of payment of the tax or penalty regardless of any supervening cause that may arise after payment: Provided, however, That the Commissioner may, even without a written claim therefor, refund or credit any tax, where on the face of the return upon which payment was made, such payment appears clearly to have been erroneously paid. (Emphasis supplied) \

DECISION CTA Case No. 10263 Philippine Airlines, In c. vs. Commissioner ofInternal Revenue The above-stated provisions are clear: within two (2) years from the date of payment of tax, the claimant must first file an administrative claim with respondent before filing its judicial claim with the courts of law. Both claims, however, must be filed within a two (2)-year reglementary period. Timeliness of the filing of the claim is mandatory and jurisdictional, and thus, the Court cannot take cognizance of a judicial claim for refund filed either prematurely or out of time. It is worthy to stress that, as for the judicial claim, tax law even explicitly provides that it be filed within two (2) years from payment of the tax "regardless of any supervening cause that may arise after payment. " 43 Moreover, the foregoing prov1s10ns allow the recovery of taxes erroneously or illegally collected. An "erroneous or illegal tax" is defined as one levied without statutory authority, or upon property not subject to taxation, or by some officer having no authority to levy the tax, or one which is some other similar aspect is illegal.44 Thus, for the present claim for refund to prosper, petitioner must not only establish that it has timely filed its refund claim, it must likewise prove that the subject excise taxes paid are "erroneous or illegal" . Petitioner timely filed its administrative and judicial claims. In the present case, it is already shown that petitioner paid excise taxes totaling P43,667,566.35 to the BOC on February 28, 2018.45 Counting from said date, petitioner had two (2) years, or until February 28, 2020, to file its administrative and judicial claims for refund, pursuant to the above-quoted prov1s10ns. Petitioner's administrative claim for refund was filed on February 21, 2020 before respondent,46 while the judicial claim for refund was filed before this Court on February 28, 2020.47 Clearly, both administrative and judicial claims were timely filed within the two (2)-year prescriptive period. \ 43 Commissioner of Internal Revenue vs. San Miguel Corporation, etseq., G.R. Nos . 180740 and 180910, November 11 ,2019. 44 Comm issioner of fn ternal Revenue vs. Pilipinas Shell Petroleum Corporation, G.R. No. 188497, April 25, 2012, citing the definition provided in BLACK'S LAW DICTIONARY, Fifth Edition, p. 486. 45 Exhibit "P-1 0", attached to petitioner' s Amended Formal Offer ofEvidence filed on July 4, 2022. 46 Exhibit "P-2", attached to petitioner' s Amended Formal Offer ofEvidence filed on July 4, 2022. 47 Docket - Vol. I, pp . 6 to 36.

DECISION CTA Case No. 10263 Philippine Airlines, Inc. vs. Commissioner of Internal Revenue Page 8 of42 As to respondent's argument that he was not given the opportunity to ascertain the veracity and validity ofthe claim considering that petitioner filed the present Petition for Review on February 28,2020, or barely seven (7) days from the filing of the administrative claim for refund on February 21, 2020, allegedly rendering the Petition for Review dismissible, it should be noted that the law only requires that an administrative claim be priorly filed, to give the BIR an opportunity to act on said claim at the administrative level. In other words, for as long as the administrative claim and judicial claim were filed within the two (2)-year prescriptive period, then there was exhaustion of administrative remedies.48 The taxpayer need not wait for respondent to act on the administrative claim for refund.49 Petitioner was able to prove that there was an erroneous or illegal excise tax which was collected by the government but only to the extent of ?27,275,640.48 of the excise taxes being claimedfor refund. Petitioner anchors its claim for refund of erroneously paid excise taxes on its exemption from payment of such taxes pursuant to P.D. No. 1590. Respondent argues that Section 131 of the NIRC of 1997, as amended by R.A. No. 9334, reveals the unmistakable intent of Congress to withdraw the conditional tax exemptions granted to petitioner under Section 13 ofP.D. No. 1590. On the other hand, petitioner contends that, despite the passage of R.A. No. 9334, its tax exemption under P.D. No. 1590 remains unamended. From the foregoing, in order to determine whether there was indeed erroneously paid excise tax, the issue on petitioner' s exemption from excise taxes must first be settled. Petitioner 's exemption (rom payment of excise taxes on importations of alcohol and tobacco products under P.D. No. 1590 was not repealed by R.A. No. 9334 We agree with petitioner that it remains to be exempt from payment of excise taxes on its importation of alcohol and tobacco products for use in its transport operations. \ ' 48 Commissioner of Internal Revenue vs. Un ivation Motor Philippines, Inc. (formerly Nissan Motor Philippines, Inc.), G.R. No. 231581 , April10, 2019. 49 !d.

DECISION CTA Case No. 10263 Philippine Airlines, Inc. vs. Commissioner ofInternal Revenue Page 9 of42 The Supreme Court has already settled the matter. In Commissioner of Internal Revenue, et al. vs. Philippine Airlines, Inc., 50 the Supreme Court held: This issue is not novel. Thus, as in previous cases resolving the same question and involving substantially similar factual backgrounds, the ruling will not change. In the fairly recent case of Commissioner of Internal Revenue and Commissioner ofCustoms v. Philippine Airlines, Inc.,51 the core issue raised was whether or not PAL ' s importations of alcohol and tobacco products for its commissary supplies are subject to excise tax. This Court, ruling in favor of PAL, held that: It is a basic principle of statutory construction that a later law, general in terms and not expressly repealing or amending a prior special law, will not ordinarily affect the special provisions of such earlier statute. So it must be here. Indeed, as things stand, PD 1590 has not been revoked by the NIRC of 1997, as amended. Or to be more precise, the tax privilege of PAL provided in Sec. 13 of PD 1590 has not been revoked by Sec. 131 of the NIRC of 1997, as amended by Sec. 6 of RA 9334. We said as much in Commissioner of Internal Revenue v. Philippine Air Lines, Inc. [G.R. No. 180066, July 7, 2009, 609 Phil. 695]: That the Legislature chose not to amend or repeal [PD] 1590 even after PAL was privatized reveals the intent of the Legislature to let PAL continue to enjoy, as a private corporation, the very same rights and privileges under the terms and conditions stated in said charter. x x x To be sure, the manner to effectively repeal or at least modify any specific provision of PAL ' s franchise under PD 1590, as decreed in the aforequoted Sec. 24, has not been demonstrated. And as aptly held by the CTA en bane, borrowing from the same Commissioner of Internal Revenue case: While it is true that Sec. 6 ofRA 9334 as previously quoted states that 'the provisions of any special or general law to the contrary notwithstanding,' such phrase left alone cannot be considered as an express repeal of the exemptions granted under PAL's franchise because it fails to 50 G.R. Nos. 215705-07, February 22,2017. \ 51 G.R. Nos . 212536-37, August 27, 2014.

DECISION CTA Case No. 10263 Philippine Airlines, Inc. vs. Commissioner ofInternal Revenue Page 10 of42 specifically identify PD 1590 as one of the acts intended to be repealed. x x x Noteworthy is the fact that PD 1590 is a special law, which governs the franchise of PAL. Between the provisions under PD 1590 as against the provisions under the NIRC of 1997, as amended by 9334, which is a general law, the former necessary prevails. This is in accordance with the rule that on a specific matter, the special law shall prevail over the general law, which shall be resorted only to supply deficiencies in the former. In addition, where there are two statutes, the earlier special � and the later general - the terms of the general broad enough to include the matter provided for in the special - the fact that one is special and other general creates a presumption that the special is considered as remaining an exception to the general, one as a general law of the land and the other as the law of a particular case. Any lingering doubt, however, as to the continued entitlement of PAL under Sec. 13 of its franchise to excise tax exemption on otherwise taxable items contemplated therein, e.g. , aviation gas, wine, liquor or cigarettes, should once and for all be put to rest by the fairly recent pronouncement in Philippine Airlines, Inc. v. Commissioner ofInternal Revenue. In that case, the Court, on the premise that the 'propriety of a tax refund is hinged on the kind of exemption which forms its basis,' declared in no uncertain terms that PAL has ' sufficiently prove[d]' its entitlement to a tax refund of the excise taxes and that PAL ' s payment of either the franchise tax or basic corporate income tax in the amount fixed thereat shall be in lieu of all other taxes or duties, and inclusive of all taxes on all importations of commissary and catering supplies, subject to the condition of their availability and eventual use. x x x In the more recent consolidated cases of Republic ofthe Philippines v. Philippine Airlines, Inc. (PALY 2 and Commissioner ofInternal Revenue v. Philippine Airlines, Inc. (PAL), 53 this Court, echoing the ruling in the abovecited case of CIR v. PAL, held that: " G.R. Nos In other words, the franchise of PAL remains the governing law on its exemption from taxes. Its payment of either basic corporate income tax or franchise tax - whichever is lower - shall be in lieu of all other taxes, duties, royalties, registrations, licenses, and other fees and charges, except only real property tax. The phrase 'in lieu of all other :::e:.::::~::,:ut is not limited to taxes, duties, charges\ 209 5 53 G.R. Nos. 211733-34, July 6, 2015.

DECISION CTA Case No. 10263 Philippine Airlines, Inc. vs. Commissioner ofInternal Revenue Page 11 of42 royalties, or fees due on all importations by the grantee of the commissary and catering supplies, provided that such articles or supplies or materials are imported for the use of the grantee in its transport and nontransport operations and other activities incidental thereto and are not locally available in reasonable quantity, quality, or price. On July 1, 2005, Republic Act No. 9337 (RA 9337) took effect thereby further amending certain provisions of the NIRC. Section 22 ofRA 9337 specifically provides as follows: SEC. 22. Franchises of Domestic Airlines. - The provisions of P.D. No. 1590 on the franchise tax of Philippine Airlines, Inc., R.A. No. 7151 on the franchise tax of Cebu Air, Inc. , R.A. No. 7583 on the franchise tax of Aboitiz Air Transport Corporation, R.A. No. 7909 on the franchise tax of Pacific Airways Corporation, R.A. No. 8339 on the franchise tax of Air Philippines, or any other franchise agreement or law pertaining to a domestic airline to the contrary notwithstanding: (A) The franchise tax is abolished; (B) The franchisee shall be liable to the corporate income tax; (C) The franchisee shall register for value-added tax under Section 236, and to account under Title IV of the National Internal Revenue Code of 1997, as amended, for value-added tax on its sale of goods, property or services and its lease of property; and (D) The franchisee shall otherwise remain exempt from any taxes, duties, royalties, registration, license, and other fees and charges, as may be provided by their respective franchise agreement. Thus, this Court held in the abovecited PAL consolidated cases: However, upon the amendment of the 1997 NIRC, Section 22 of R.A. 9337 abolished the franchise tax and subjected PAL and similar entities to corporate income tax and value-added tax (VAT). PAL nevertheless remains exempt from taxes, duties, royalties, registrations, licenses, and other fees and charges, provided it pays corporate income tax as granted in its franchise agreement. Accordingly, PAL is left with no other option but to pay its basic corporate income tax, the payment of which shall be in lieu of all other taxes, except VAT, and subject to certain conditions provided in its charter. It bears to note that the repealing clause ofRA 9337 enumerated the laws or provisions of laws which it repeals. However, there is nothing in the repealing clause, nor in any other provisions of the said \

DECISION CTA Case No. 10263 Philippine Airlines, Inc. vs. Commissioner ofInternal Revenue law, which makes specific mention of PD 1590 as one of the acts intended to be repealed. (Emphasis supplied) The foregoing jurisprudential pronouncements were reiterated by the Supreme Court in the later case of Philippine Airlines, Inc. vs. Commissioner ofInternal Revenue, et seq.,54 to wit: PAL' s tax liability was also modified on July 1, 2005 , when Republic Act No. 9337 further amended the National Internal Revenue Code. Section 22 of Republic Act No. 9337 abolished the franchise tax and subjected PAL to corporate income tax and to value-added tax. Nonetheless, it maintained PAL' s exemption from "any taxes, duties, royalties, registration, license, and other fees and charges, as may be provided by their respective franchise agreement." XXX XXX XXX Again, in Commissioner of Internal Revenue v. Philippine A irlines, Inc.,55 this Court maintained that despite these amendments to the National Internal Revenue Code, PAL remains exempt from all other taxes, duties, royalties, registrations, licenses, and other fees and charges, provided it pays the corporate income tax as granted in its franchise agreement. It further emphasized that no explicit repeals were made on Presidential Decree No. 1590. Thus, Presidential Decree No. 1590 and PAL's tax exemptions subsist. xxx. (Emphasis supplied) Accordingly, despite the enactment and effectivity of R.A. No. 9334, amending Section 131 of the NIRC of 1997, petitioner's tax exemptions subsist. It must be emphasized, however, that petitioner's tax exemptions are not without conditions. As can be gleaned from the above-quoted rulings of the High Court, petitioner remains exempt from taxes, duties, royalties, registrations, licenses, and other fees and charges, provided it pays corporate income tax as granted in its franchise agreement; the payment of which shall be in lieu of all other taxes, except VAT, and subject to certain conditions provided in its charter. In addition to the payment ofthe corporate income tax, Section 13(b)(2) of P.D. No. 1590 enumerates certain conditions that petitioner must comply 54 G.R. Nos . 206079-80 and 206309, January 17, 2018 . \ 55 G.R. Nos . 215705-07, February 22, 2017.

DECISION CTA Case No. 10263 Philippine Airlines, In c. vs. Commissioner of Internal Revenue with, in order to be exempt from excise tax for its imported alcohol and tobacco products, to wit: SECTION 13. XXX XXX XXX XXX The tax paid by the grantee under either of the above alternatives shall be in lieu of all other taxes, duties, royalties, registration, license, and other fees and charges of any 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: XXX XXX XXX (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 imported for the use of the grantee in its transport and transport operations and other activities incidental thereto and are not locally available in reasonable quantity, quality, or price; xxx (Emphasis and underscoring supplied) In sum, on the basis of jurisprudence and the foregoing provision, the following conditions must be fulfilled by petitioner for it to be exempt from excise tax on its importation of alcohol and tobacco products, to wit: (1) payment of the corporate income tax; (2) the said supplies are imported for the use of the franchisee in its transport/non-transport operations and other incidental activities;56 and, (3) they are not locally available in reasonable quantity, quality or price.57 We now proceed to evaluate petitioner's compliance with the above- mentioned conditions. \ 56 Commissioner ofInternal Revenue, et al. vs. Philippine A irlines, Inc., G.R. Nos . 215705-07, February 22, 2017; Commissioner ofInternal Revenue, eta/. vs. Philippine Airlines, Inc., G.R. Nos. 212536-37, August 27, 2014 . 57 !d.

DECISION CTA Case No. 10263 Philippine Airlines, In c. vs. Commissioner ofInternal Revenue First condition: Petitioner paid corporate income tax for calendar years (CYs) 2013 to 2017. To prove its payment of its corporate income taxes for the covered years, petitioner presented in evidence its Original/Amended Annual Income Tax Returns for CYs 2013 to 2018.58 Such being the case, petitioner has fulfilled the said.first condition. Parenthetically, petitioner further proved that it is a VAT-registered entity, that it paid the annual registration fee and VAT on its sales/receipts as evidenced by its BIR Certificate of Registration,59 BIR Payment Form No. 0605 for CYs 2013 to 201860 and 3rd Quarterly VAT Return for CY 2013 to 4 th Quarterly VAT Return for CY 2018.61 Second condition: Subject articles are importedfor the use ofpetitioner in its transport operations. Petitioner likewise fulfilled the second condition. The imported articles were described as "lnflight Materials " or "Catering Materials" under the column "Description of Articles" in the IIDE.62 Moreover, as indicated in the ATR1Gs63 issued by the respondent addressed to the Commissioner of Customs, it was stated that" .. .the shipment to be released at the port of Ninoy Aquino Int 'l Airport/Port of Manila/Mindanao Container Terminal/Manila Int 'l Container Port consisting of the above described articles, will be used exclusively For International Inflight Consumption Only xxx". Clearly, the imported articles are for the use of petitioner in its transport operations. \, 58 Exhibits "P-12" and "P-12-a", "P- 16" and "P-16-a", "P-22", "P-28", "P-34" and "P-34-a", and "P-40" to "P-40-b", attached to petitioner' s Amended Formal Offer of Evidence filed on July 4, 2022. 59 Exhibit "P-3", attached to petitioner' s Amended Formal Offer ofEvidence filed on July 4, 2022. 60 Exhibits "P-11 ", "P-15'', "P-21 ", "P-27", "P-33" and "P-39", attached to petitioner's Amended Formal Offer of Evidence filed on July 4, 2022. 61 Exhibits "P-13" to "P- 14-a", "P-17'' to "P-20-a", "P-23" to "P-26-b", "P-29" to "P-32-a", "P-35" to "P- 38-a", and "P-41 " to "P-44-a", attached to petitioner' s Amended Formal Offer ofEvidence filed on July 4, 2022, except Exhibit "P-30-a", Docket - Vol. Til , pp 1300 to 1301 . 62 Exhibits "P-4" to "P-4.254", attached to petitioner' s Amended Formal Offer ofEvidence filed on July 4, 2022 . 63 Exhibits "P-6" to "P-6 .254", attached to petitioner's Amended Formal Offer of Evidence filed on July 4, 2022 .

DECISION CTA Case No. 10263 Philippine Airlines, Inc. vs. Commissioner ofInternal Revenue Page 15 of42 Third condition: Petitioner was able to prove that certain imported articles were not locally available in reasonable quantity, quality or price. To support its claim, petitioner presented several documents, which includes BOC IIDE,64 Air Waybills/A irway Bills or Bills of Lading/Sea Waybills, 65 ATR1Gs,66 lnvoices,67 Table of Comparison,68 Absolute Sales Corporation 2013 to 2015 Price Lists,69 Future Trade International inc. Price Lists for 2013 to 2017,7� Minivan Enterprise Price Lists for 2013 to 2017,7 1 AB Heineken Philippines, Inc. 2016 and 2017 Price Lists,72 BIR Revenue Memorandum Circular (RMC) No. 90-2012 with annexes/3 Bangko Sentral ng Pilipinas (BSP) Peso per US Dollar Rate (2013-2017),74 and BSP US Dollar Rates ofSelected Currencies. 75 In the Judicial Affidavit of Ms. Capinpin,76 she explained that, for alcohol products, she compared the local prices based on the prices provided by Absolute Sales Corporation (ASC), Future Trade International, Inc. (FTII), Minivan Enterprise (MEnt), Heineken Philippines, Inc. (HPI) and the prices listed in BIR RMC No. 90-2012 against the importation costs based on the actual product value. She then concluded that it is cheaper to import the alcohol and tobacco products than to purchase them locally. We quote: 7. Q: As the Manager of the In-flight Materials Purchasing Division, why would PAL import said supplies instead ofjust buying them for the local sellers of similar products? A: PAL imported catering and commissary supplies, such as, alcohol, liquor, and tobacco products because the cost of said products, when imported, are cheaper compared to those locally \ -------------------- 64 Exhibits "P-4" to "P-4.254", attached to petitioner's Amended Formal Offer ofEvidence filed on July 4, 2022. 65 Exhibits "P-5" to "P-5.254", attached to petitioner's Amended Formal Offer ofEvidence filed on July 4, 2022 . 66 Exhibits "P-6" to "P-6.254", attached to petitioner' s Amended Formal Offer ofEvidence filed on July 4, 2022. 67 Exhibits "P-7" to "P-7 .254", attached to petitioner's Amended Formal Offer ofEvidence filed on July 4, 2022. 68 Exhibit "P-45", attached to petitioner's Amended Formal Offer ofEvidence filed on July 4, 2022. 69 Exhibits "P-46" to "P-46-b", attached to petitioner's Amended Formal Offer of Evidence filed on July 4, 2022 . 70 Exhibits "P-46-c" to "P-46-g", attached to petitioner's Amended Formal Offer of Evidence filed on July 4, 2022 . 71 Exhibits " P-46-h" to " P-46-1", attached to petitioner' s Amended Formal Offer of Evidence filed on July 4, 2022 . 72 Exhibits " P-46-m" to "P-46-n", attached to petitioner's Amended Formal Offer ofEvidence filed on July 4, 2022 . 73 Exhibit "P-46-o", attached to petitioner's Amended Formal Offer ofEvidence filed on July 4, 2022. 74 Exhibit "P-47", attached to petitioner's Amended Formal Offer ofEvidence filed on July 4, 2022 . 75 Exhibit "P-48", attached to petitioner's Amended Formal Offer ofEvidence filed on July 4, 2022. 76 Exhibit "P-51 ".

DECISION CTA Case No . 10263 Philippine Airlines, Inc. vs. Commissioner ofInternal Revenue available. Said products are not available locally in reasonable quantity, quality, or price. 8. Q: Why do you say that importing the said catering and commissary supplies are cheaper and reasonably priced than purchasing them locally? A: I have compared the local prices and the importation cost for the alcohol, liquor, and tobacco products. Upon comparison of these prices, it is easily determinable that importing these products are way cheaper than purchasing them locally. 9. Q: How do you compare the local prices and importation costs? A: I have prepared a Table of Comparison, comprised of different prices from local suppliers when purchased abroad, to show the complete comparison of prices for the alcohol, liquor, and tobacco products imported by PAL for the period July 2013 to July 2017. XXX XXX XXX 13. Q: You mentioned that you compared the local prices and the importation costs for the alcohol products. What documents did you use in comparing these prices? A: For alcohol products, I used the following as my sources of local pnces: 1. Absolute Sales Corporation 2013 , 2014, and 2015 Price Lists; 11. Future Trade International Travel Retail for 2013 , 2014, 2015 , 2016, and 2017 Price List; iii. Minivan Enterprise 2013, 2014, 2015 , 2016 and 20 17Price Lists; iv. Heineken Philippines, Inc. 2016 and 2017 Price Lists; and v. Bureau of Internal Revenue' s ("BIR") Revenue Memorandum Circular ("R.M.C.") No. 90-2012 Price List. For the importation costs, I used the actual product value as shown in the sales invoice issued by PAL's suppliers, product value as shown in the Authority to Release Imported Goods ("ATRIG"), and Product Value as shown in the Informal Import Declaration Entry ("IIDE" ). For tobacco products, I used BIR R.M.C. No. 90-2012 Price List as source of local prices. For importation cost, I used actual product value as shown in the sales invoice issued by PAL's suppliers, product value as shown in the ATRIG, and Product Value as shown in the IIDE. \

DECISION CTA Case No. 10263 Philippine Airlines, Inc. vs. Commissioner ofInternal Revenue XXX XXX XXX 31. Q: How do you compare the local prices and importation costs using the documents you just mentioned and identified? A: In using the pricing costs of several documents, it can be seen that the cost of importing goods is way cheaper than purchasing them locally. (Emphasis supplied) Essentially, petitioner is claiming that it has determined local prices based on five (5) price lists (i.e., ASC, FTII, MEnt, HPI, and RMC No. 90- 2012). At the outset, records show that, on February 28, 2018, petitioner paid under protest77 the excise taxes on its importations of alcohol products and cigarettes for the period July 2013 to July 2017 in the total amount of P43,667,566.35 evidenced by BC Form No. 38-A with OR No. 01889898427.78 This amount was corroborated by the related IIDE/9 Airway Bills/Bills of Lading,80 ATRIGs,81 and Sales Invoices, 82 which were identified by petitioner's witnesses, Ms. Capinpin, Manager of petitioner's In-flight Materials Purchasing Division, in her Judicial Affidavit dated March 19, 2021,83 and Mr. Castillo Lee, Manager for petitioner's Company Materials Handling Division, in his Judicial Affidavit dated March 19,2021,84 with the pertinent details summarized as follows: Table I: Summary ofExcise Taxes Paid Under Protest and the Pertinent Supporting Documents I IIDE II Air Waybill/Bill of [ Arrival I ; Value !I Excise Taxes Paid Date : � ATRIG No. I Description Under Protest � No. i Lading No. � (In USD) I (In PhP) 1 77 Exhibit "P-9". 78 Exhibit "P-1 0". 79 Exhibits "P-4" to "P-4.254". 80 Exhibits "P-5" to "P-5 .254". 81 Exhibits "P-6" to "P-6.254". 82 Exhibits "P-7" to "P-7.254". 83 Exhibit "P-51 ",attached to petitioner's Amended Formal Offer ofEvidence filed on July 4, 2022; Order dated October 20, 2021 , Docket- Vol. III, p. 1566. 84 Exhibit "P-49", attached to petitioner' s Amended Formal Offer of Evidence filed on July 4, 2022 ; Order dated October20, 2021 , Docket- Vol. III, p. 1566.

DECISION CTA Case No. 10263 Philippine Airlines, Inc. vs. Commissioner ofInternal Revenue Page 18 of42 o Excise Taxes Paid Under Protest and the Pertinent Su Arrival IIDE I ATRIG No. Description Date No. gt;;~)~~l~ I 685 �����������������������������������������������������! 687 01 /19/20 16 681 01 924 48 514.24 2,269,292.76 . moo 'i2"636:oo 1 12 636.00 i 0Ill 1120 I7 ~ ��� ��- �� m�����������������- l }?9.?.?.9?.99.9.9 .1}'0' l?<:liJ.~I~~~~~~~~!J.~I Lj �,9.~9:99. [..... ....... . ...~.~.,.:.:.:.:.:..=.....1 01118/2017 ���� I 22082020000 j !?~~~~l}!iJ:l~~~?~<:l!.~~'0'~i~l~y?.IY.Q . 079-3975-9650 j 22082o2oooo ; ~~ix~~g~g~~~~i.~~~?x9 ................ ... ... Tm 160-6757-0580 .! 22082030000 i Johnnie Walker Double Black Label .... ; 8 05 /05 /2017 2003 .L!. . 9?::1}�.!:.~54} o8263ooiio T ioh~~i~waik~~BiackLab~i l j _},}94:8.9 1 68,603.10 ; 7,257.60 WG00502026 I0,213. 71 t .�..� � iii.;�.?.~:9.9'' ! 79- -Beer 1��� _ ! .�~Q,99.....: i 079-3975-9823 [i.. j _�., l�Q,9.Q (. ....... m J3:~.r~�.~<:l!�~ .Y:I_h)~iiY. ..... 76,449.26 ! 1. : :i:J'~~6:6~ f � � � � � � � ~~~j;�.2~:QQ ] -�~~gt-&~~%~t~:~~!'' ........ . Qouble Black Label ck Brut 81 I I 1 04/20/2017 1817 ! i6o~s2-92-83oo !���� -t 03 /2712017 1640 t E:aLvs4o7ooi4293 I z:;~!~�.o.~o.o. ���������������3����1����8����,�9�����3����7����.�5���-0��������1i \ I

DECISION CTA Case No. 10263 Philippine Airlines, Inc. vs. Commissioner ofInternal Revenue Table I: Summary ofExcise Taxes Paid Under Protest and the Pertinent Supporting Documents 1 Arrival I Air Waybill/Bill of ATRIG No. D .f Value 1 Excise Taxes Paid Date Lading No. escnp JOn IIDE I No. (In USD) ! ! 07/ 19/2016 4675 I 07/ 15/2016 I 0/2016 : ~~i4./~~~$ :1 1: ~~8~};~:-~ 07/ 18/2015 .................. 4.2.2.1~-~~=~~ j ..........:.............. �����������������������������������-~-~-' !.Q~,QQ ] .................1..3...1...,42-2.-5-0- j! 292,050.00 l ~~~:~~~:~~ ~ l 14~~9~:~9

DECISION CTA Case No. 10263 Philippine Airlines, Inc. vs. Commissioner ofInternal Revenue Page 20 of42 Arrival I i IIDE \ Air Way.bill/Bill of 1, ATRIG No. I ! !1 Date No. Ladmg No. Descn.ph.on Value 'j (In USD) 1 \

DECISION CTA Case No. 10263 Philippine Airlines, Inc. vs. Commissioner ofInternal Revenue Table 1: Summary ofExcise Taxes Paid Under Protest and the Pertinent Supporting Documents Arrival 1, IIDE I Air Waybill/Bill of ATRIG No. Description Value 'ii Date 1 No. Lading No. I (In USD) 1 ! i 07/24/2015 4392 079-4072-3550 1-- ..................................................,_,,~.- ..................................... I 05/26/2015 3341 l 1705-A00633 o2!27120I6 i25i T -- 079-407 ....... : 75,937.00 I j~;~?9;~2] 1, ..... ........................ .... + ������ �H:iRij l . .. . . . . . . . . . . . . . . . !.. . �:�:�:.�::.�:�.:.�.�::::::: ~;?9~:i:~.. 1 127 079-4218-0460 ! 07/06/2016 l 3765 9?2~}�.9_2~~~?.~ Y~.r~Q?QQ!!JI J?�? L 079-4218-6351 .....0....6..../...2....9.../..2...0...16 ...........................�:::j....!?.~r!J1g~r. .S:::.~:~.I.i.fqJ1:l:i?.S:::h~:~r9gl}l}l:l.Y. 09 / 17/2015 i Asahi Su er D -Beer 5552 079-4073-6216 I ��������������!i 0Q.7~l9.~-;4.~2l.5~:7!:-l1~;0�~9t~3� �����+� 5 ����:�:: ...,.. ...... 079-3809-1900 079-3809-1911 079-3975-8283 �l �������������6'7�9~4073�=�5 192 � . .r��������� ���a-79~40"73-~si�o-:,����-- 079-4054-6623 I ~'.~.~~~~16 ~ '"'" :- !! ........................:::3:;0,6~,:6?.:Z,.?f:l.J 12/06/2016 6956 J?.,?E,?.Q_j . . . . . . . . .4. . 1. . ,. 7. . .3. .7. ...5. .0. . . . I! I I 121,234.35 I1.... ......................-�-�- ""l""""'"""'"""'-"'""""""" ........................................... ����������������-�������������������=��o=�9�'� 96i28"1 7049 �+ - I�:~~~~~~~:~ i~H ~,~QQ,QQ . . . ...... 71,779.20 ! H....hel:iln.!e~.k~lein~l~?.Q.~E~r!..l..:..J..1..9.....M..(..).I.,. .l.._..l_.i.i.}............ j~2,;2~i.~S.: j - I ....ii95,251"68"."0(j0g" ""[ I ����������������������������������]����� .�.�.:1 .� .� �. :.~:i-~�.~� �: 6�:� ;0� � � :, ~Q~,?~Q,QQ .�. ! l _ �.~~~:.~: B.:.~I1~i1~i.:======~l=~~~ .� . � �. ;_:�.-4:�.- .......... ... .. . Qg)q?,r()S~9C,:.()~Pl:!~!3.()!.!~gl:l ........ . ~.l:l.~.l:!~ Y�Q!"!:.l~g!l:J:l<,:~Pl.I2Pl:lc_~ ~,Q}2~Q J P,()~~Qqlci..�P..t.~.~'l.!l~~!?.()t.!~g'l........... . t .......... ?,6.9.9.,9.9....L... ................... :,;3,,22~,~~-) 7s;97s:oo-l �������������������������! 9,524.25 ! ��� .. . 25,524.97 i ��t::!I~~S.3i9.1 !I~J.9I~IJ .!!:::ll~~irn9Ye.~:~~D�!~!?f.!~I.P~.E 8!;!i~g~t<1:R2':v. ~.?�� ~�5�~� �~.t'�.� ��.�.��.�.��J.�.'�.��.I�.���~.4�.�~:.�-~:,�~.~�-.4_~~.�-}~-�_:~.~�.�~i.�.�_�.��j.J 1 5 .!::l.~.~l:!!S.I,!.T...I,l~}l:!P~I!~~~ �-.�.9.�:.�._,�..2:.�.�.�:..i_. �. � ����� ���� ��������� �.�.�.�.�.�.�.�. �.�.�.�.�.�����������������������������������������lj ~~:!~~ '?.{.jl}~ -- ����������- �i 360.61 ' ...... -f��������������� ................... .. I R~~~:sesili~~ - �--���J::::H:~l~:�.K:t:�:~::: � ~~~:~~~:g~-1 ............ _ .........................L....6.!, 1A.1. ,.?.9...i..... j,5.2,~;~~S.:iJiJ~�~

DECISION CTA Case No. 10263 Philippine Airlines, Inc. vs. Commissioner ofInternal Revenue Table I: Summary of Excise Taxes Paid Under Protest and the Pertinent Supporting Documents Arrival IIDE Air Wa~biiVBill of I1 i Excise Taxes Paid Date No. i Value 1 U d P t Ladmg No. ! ATRIG No. Description (In USD) n er rotes ,I , 1 (In PhP) 1 06/ 14/2016 In order to show that the imported wine and liquor products were not locally available in reasonable quantity, quality or price, the cost per unit of importation was compared against the prices provided by the ASC,85 FTII,86 \ 85 Exhibits "P-46" to "P-46-b" . 86 Exhibits " P-46-c" to "P-46-g".

DECISION CTA Case No . 10263 Philippine Airlines, Inc. vs. Commissioner ofInternal Revenue MEnt,87 HPI.88 With regard to the prices provided in RMC No. 90-2012, considering that the prices therein were based on the 2010 BIR price survey of alcohol and tobacco products, there can be no valid comparison between the prices of petitioner's imported alcohol and tobacco products for July 2013 to July 2017 and that of the said 2010 price survey; thus, the prices in RMC No. 90-2012 were no longer considered in the price comparison. In Table II, we summarize the computed purchase price of the imported products on a per unit basis: Description Table II: Computation ofPurchase Price Per Importation (Per Unit) Total Purchase Excise Taxes Paid Under Protest .j (In PhP) .?.?.:~.; �~- 26.3 26.32 87 Exhibits "P-46-h" to "P-46-1". 88 Exhibits " P-46-m" to "P-46-n".

DECISION CTA Case No. 10263 Philippine Airlines, Inc. vs. Commissioner ofInternal Revenue Page 24 of42 Table II: Computation ofPurchase Price Per Importation (Per Unit) I i 1 Exct.se Taxes pat'd i I , Ave. Purchase 1 Coover- i' Ave. Purchase Ave. Excise Total ' 1 ' . sion Price per Tax per Description ,:1 Under Protest : Value Bottles Purchase 1 .. : Pnce per Can/ ~ US~l ~ 1 (I!)l~Q) . I R~te l__ 5!;1.~~;.: ����������1' .......G~r�=�~.(~��A~,.~�c~�)�������li ,;.~~;t.:.tl~-~ �~ r1. . (In PhP)___ (In ___ lrl . /Cans__ I A I B c ! D = (B/C) E I F = (D X E) ! - - H = (F + G) \

DECISION CTA Case No. 10263 Philippine Airlines, Inc. vs. Commissioner ofInternal Revenue Page 25 of42 Table II: Computation ofPurchase Price Per Importation (Per Unit) Excise Taxes Paid I Ave. Purchase Conver- Total Under Protest sion Description Value Bottles ! Price per Can/ Rate (In PhP) (In USD) /Cans Bottle r���������. ���������������������-�������������������������............... +--. . . . . . . . . . . . ...A....................................... ~..............,s=����������--l�������������������c�=����-- J-- H': 13~;~ �.. - \

DECISION CTA Case No. 10263 Philippine Airlines, Inc. vs. Commissioner ofInternal Revenue Table II: Computation ofPurchase Price Per Importation (Per Unit) Excise Taxes Paid I Ave. Purchase Ave. Purchase Total Under Protest Description (In PhP) Value Bottles .1 Conver- (In USD) /Cans ....... [ A B !

DECISION CTA Case No. 10263 Philippine Airlines, Inc. vs. Commissioner ofInternal Revenue Table II: Computation ofPurchase Price Per Importation (Per Unit) Excise Taxes Paid Total Description Under Protest Purchase �������--1�-- 5~~~~~ -----J Price Per i "1 ��-������������������������������c:C3 ~,,J.~Q ,Q 1 ,:-~;:!! l ,_2,65.12 �����������������������-�-1'-., 1 292 050.00 : .... """l35:7il l ������������������������1���7-�'""9���6���7-��.-�6-�6--��-T[ ������������5���7-�5���.��8�--1��-���!i ..............J. 4 ,l~:!J.L l .. ����� 12&~2�4_J - I ......?.~9..,.~~---i . . ... . ... . ... . . ... . . .. . 3.75 .. 44_l2s..?2J___ 44.9 14 1 167.99 . ! ~l:'~~fO ���������������������i�i~T3s�--r-�- . . . . . . . . . . . . .!~Q,.7.Q . ..) ����������� ~~~~s � 44:79?2] __ :=:::~9.9.: E r ... J,~�.~,J� j 243.91 ! j """""''''1'96.79 ��i 14.1 .. ....1....2....6......4....1......... 150.11

DECISION CTA Case No. 10263 Philippine Airlines, Inc. vs. Commissioner ofInternal Revenue Page 28 of42 Table II: Computation ofPurchase Price Per Importation (Per Unit) Excise Taxes Paid Ave. Purchase Co~ver- !i Ave. Purchase Ave. Excise Total Under Protest Description Value Bottles SIOn ! _..J ). . . ~~~!. ...........f.... ... (I". I Rate 1 ... ~'.~~~~!. 1...C......a..."...s..... . ~~~~=F-�=���=���~��E�~��=���=-�=��-~! ~~~~~=+~~~~=*~~~~~~ A B c ! ! 1 ~ JC: :la~mgl�u.sJ~C~o?Qg!n!aLc..X. OI I 1 ! i Johnnie Walker Bl ack,.. 1},~1?,4.?. I !,~2~,~4. + 1 1 1 .1,2.?.?.,99 1i� � � � � � � � � � � �2..?5..32 ,l .........................1....,..5....3....0.......3....3........ ...... 48 1i ............ ...... 28.38.... T... 4.4.,2.2..14 ! -~ r ~~:.~~k~iiY.~~I~9~iii~~~: . I~~~~~~:~t:� :i:H~:.~~~l: -~!~��f��-� ~�~�~s.:~\Lt:: 4~:44.:�2?.?2.l1~4jf:.::::::~::�ji~i!4l~�9�~-.~�2Limjl ::::::::~:~:Q:~tt : :j�i.~;3.~;~!~:~:~t~li ! Rawson Private � �����������������������--��r��������� ������������---����--������ ! ~ ~~~~-~s.e.. ~h.i:r.az=����������������������������������i�����- J 21 00 L... ............J iJ .2.: ! ....4.4.:.2.?.}! m!..................................... !?...L2� ! 1 Baliantines 21 YO 2 331.62 I 1 Scotch Whisl r

DECISION CTA Case No. 10263 Philippine Airlines, Inc. vs. Commissioner ofInternal Revenue Table II: Computation ofPurchase Price Per Importation (Per Unit) Excise Taxes Paid Conver- Ave. Purchase Total Under Protest sio n Description (In PhP) Value Bottles Rate (In USD) /Cans A B c 1 2 ; ~�.,�~�~�~�5 .!.1:7.~4�.,~2�.~4 ~ ,;u i 3.75 ...... ]1~9~9;.~5o5. JI -----l-- . 0.67 .......... .......................... ~l .:..l~..;j................................... 21. oz J ....... . 2~?..Q} L............:..:..:.:.::.:...;..............1=-....1:.5=.,s,.,�.,2,.4.,....j! 25.31 1,228.34 171.51

DECISION CTA Case No . I0263 Philippine Airlines, Inc. vs. Commissioner ofInternal Revenue Page 30 of42 Table II: Computation ofPurchase Price Per Importation (Per Unit) I ::;:"'j _:<dpUoo ~�~~ i . Ave. Purchase [' C Ave. Purchase Total Excise Taxes Paid 1' o~ver- Ave. Excise Purchase Bottles Price per Can/ sJOn Tax per /Ca ns 1 Bottle I1 Product I 1 i [- H'.!ll~!>.) --I--.- ~at~ -f ; c i D = B/C E I 2 1. 07 17.63 .2=:2::;._6::.5:'--i___;_::..:..:..:::..:..::...+-------_L.9..?_8.,Q.~ _L_____'!9J.l.L,____ ,_!,_;i~9.33 j ------�5-8-4:.0r5--!-�-----2-7�1-.1r8�-I--���--��8�5��5--.2--3-1i 12.50 ------r---�- - �2-2-1-.-9-4--~'-324.99�-1! 103.05 . 63 .27 I 3.27 ' . ~�~?.~ ! .2?.:?21 } ,S.Q i ......?J.,~.?._l

DECISION CTA Case No. 10263 Philippine Airlines, Inc. vs. Commissioner ofInternal Revenue I Table II: Computation of Purchase Price Per Importation (Per Unit) I I i Total I APrviec~PpuerrcCh aasne/ 1 Ave. Purchase Ave. Exci se I Purchase 1�. II I I Description I I ' Excise Taxes Paid Value 1 Bottles Co?ver- Price per I Tax per Under Protest (I USD) ' /Cans r - _D(IB~o-~tBt~l/eD_C~,--1,!__ Rs�~otne ........FC(a~nn.,/,BD!'.~ox-!t_t1~le) Price Per !-----~~ PAh~ I c Li,.........- = \' ::0~/~) I i ................., .., _ _ _ _ _ _ _ _ _ _____I _ _ :B_.... !,,. i I"m.p.;oxrFt-a+tico)n"-1 = \' -J Using the purchase price per importation computed in Table II above, we now compare said prices with the prevailing prices of the products at the time of importation based on the periodic price lists (covering 2013 to 201 7), as applicable, to wit: Table III: Comparison ofPurchase Price Per Importation Against Local Suppliers' Price List I 11 Purchase l I Local Price per Price Lists FTII 1 HPJ Arrival Date . Excise Tax Paid Price Per 1 ASC MEnt Descripti on Under Protest I I Importation 1 Exhibits "P- Exhibits "P- 1 Exhibits "P- Exhibits "P-46- (ln PhP) II " to "P-46-1" ( Table II) 46" to "P- I 46-c " to "P- 1 46-m" to "P- 1 46-b " 1 46_g" 46_11 , 1 I ..---J, _ 0}2J/.o2___5!f/. 22�0_l]_ s.5...........11�.....A..A...s-s~ah..1�~s.s. u_u_P.e.e...r_DD_ ry~B_B__e_e_eer....... _____33_7_7'.3388�o._0o.9o. --~-- .........................33....66"�'..3~50.. !1.. ���� ���������� 5s0o..._0o���9o� � �� �.:�.�.�.�.�.:�. �.�.-.:~~--~- -~. -.�_-_.1: ~e n~ee ~.Q.n~ l -�-N_N_o0...nn. ....j.... ......................N...N...o..... l I _. LI...:.i9.!?{.?/i.?./~.?/~.:Q9lH~:_.!L.1A..\~~~.~~hh!L~~l~!PpP_~e~_d~_?Q.DiYI:Yj:i.-!B.i.!~.~i~.-::�: j! 1::!1?1:1~....J 1 ������������������������������������� ..::::::~j::... ! .�,: ____ .... 3377,,338~oQc.g0o0 .__ 1N::o!1n?~e~ -L1 ____ ..............................N.. o ne,.;.......................................:.. .~.'-' ack-1��---� 4/20 15 ...JCoohn~d~ei�~S--i\r\ui'eailkaeR�~�o-jb)'loeuble Bl I .....1...2...1..>.5....0....0......0. 0... ... . .......... 254.61 No ne . ....... -~���1������������������������������������������ ��� .....................N....o.....n...e.......1 .............................N......o.....n....e....... No...n....e...... I] ..t:~::~.;.~::~�:.~:;~~~; :~~~c~ . . . . . .-==:J~~;g�.~~~-� : =~};.~~~tl: B~~i ::::E.~~: . �����������~-~~ti � ::~B~~~ ~ i ~H1~)~ll~ -j ~~~~:\v;;i::;:~ac~~~~:e~~:.___l==~~~l~~~tHt-- -~�=--~~~~l~-~~==~~~~~- �~:�: -~~~~i~~:~: . ~~~-~- . . . ~~~-~ . :O ~U:2~Q:/::29:!:..:~- :j-~!i~~~r~dy~'~~_~?~tair~n.~p~~_cI)3S.~_j?s_g~~I~_-?:_-Ro-w No ne :------- ~..<!.~-~ 321.00 II __ ......J::lf?n~ ; .... . J':!gn~ ; ---1---- . : 1_____ .... !Q~299.QQ_t _ 53,15_�.25__ . ___ 165:?4_; _ . .00 _ _ _ No11e :- ______! 1_666Ai_J_ --~~~i~~:1i:~~;-~;t1~:~-1i==;;~~1: ...........! "' ���~�:�/~!);gH--� �l�-�g~!i:;1Hei~~:.;:s~~:.~:~~-~-~-�l -������� ��2�1�1~:1~~:~~- ....... ���t�;~IH~ -~ ��������~-~~~�� 7.,�~0~~ .... :��������~-~~~-1-- . �������~~-~-~��! ~~~::;+=::=;~==: ;;;;! ~ ~oo~;;l I 02/23/201 7 i Chardonnay j g ,('j}('j_.QQ 213.68 i No ne None I None I 579.00 ! ~.~ .� ~m~~ ___ ~--~::~:f~~-~1 I ~;~~;;.~ ~I~;~;:a~l~~~----~--~-~~~~0~;;; -!:::~~:~ j g�~�.QQ__ __ ::::~:;_~;.~;~:r=:::: ~~~.!. . .. ~9_Q~I~-- : ~~~:~ :r----- ~~ 01/20/20 17 i J&B Rare Scotch Whisi9' 23 983.20 234.77 i None J None I None ;........... .........................:..

DECISION CTA Case No. 10263 Philippine Airlines, Inc. vs. Commissioner ofInternal Revenue Page 32 of42 Table Ill: Comparison ofPurchase Price Per Importation Against Local Suppliers' Price List 1 1 '!,! Purchase 1-----::-:--.--L""=oc=a"'=l:=-P.:..;ric:.ce.:,-.:.pe::..:r-'P'::.:r::':ic::..:e_;L::c:i:=-stT-s--------1 Excise Tax Paid , ASC FTII i' HPI .\ MEnt Arrival Date Description Under Protest 1 Price Per ',� Exhibits "P- i Exhibits "P-iii Exhibits "P-46- Importation h" to "P-46-1" (In PhP) I, 46" to "P- 46-c" to "P- 46-b" 46_ .. (Table II) Exhibits "P- i 46-m" to "P- 46_,.. A~a.:hi _~.l:IP~r. .RI.Y:I?..~~r.-....__ _ None None . ........ N2ri~ . E9~~ 1:: ...J..o.....h....n....n....i..e.......W........a...l...k....e...r......B.....l..a....c...k.....~L.....a...b.....e....l. ................................t!s>J:l.~.!

DECISION CTA Case No. 10263 Philippine Airlines, Inc. vs. Commissioner ofInternal Revenue Page 33 of42 Table III: Comparison ofPurchase Price Per Importation Against Local Suppliers' Price List Arrival Date Description MEnt

DECISION CTA Case No. I0263 Philippine Airlines, Inc. vs. Commissioner ofInternal Revenue Table III: Comparison ofPurchase Price Per Importation Against Local Suppliers' Price List I I Purchase ASC I I Local Price per Price Lists Excise Tax Paid I! Price Per ; Exhibits "P- I FTII HPJ Under Protest Arrival Date Description Importation 46" to "P- Exhibits "P- Exhibits "P- � MEnt (In PhP) (Table II) 46-b" ii 46-c" to "P- 46-m" to "P- Exhibits "P-46- 46_11 " It " to uP-46-1 " None .-~�-- . -.=.N None ~N~on:e ::1:=:~--�~one NNo~n~~e ~ ............................- ............................!i I

DECISION CTA Case No . 10263 Philippine Airlines, Inc. vs. Commissioner of Internal Revenue I r------,---T,--'-a--'b-'-le'--II_l-'-:--'C--'o-m__.p'--'a-'--r-'-is'-'o_n'-o:.t,..f.:P=--u"-r'-'c"-h""a-=-s-=-e-=-P-'-r.:....:ic"'e-"P'---e'r'r-"1:c._m:..:Jp"--o:..:r...:.ta::.:.ctc:..io:..:n.=...=rA""gc:.:a..:..:in..:..:s:..:.t-=L=-=o-=c.:::.a.:..../S:::-:-:-uPoPc.:l=:=ie::..:r-s=-_'=-P-'-'n'=�c-=-e-=L::..:i::,:st'--_ _ _ ___J i Purchase ! Local Price per Price Lists '! Arrival Date Description : Excise Tax Paid Price Per ASC FTII HPI ! MEnt Under Protest Importaf1on Exhibits "P- Exhibits "P- Exhibits "P- Exhibits "P-46- 1 (ln PhP) (Table II) 46" to "P- 46-c " to "P- 46-m" to "P- It " to uP-46-1" 46_b " 11/26/201 4 1,-_ II~ 1�~~������~1 l j xO __ 196.79 No ne-�--,r 1 126.41 ! ! ....9?.!.9~/~Ql ?.......j . '!:!.h.i.~_l_y_ -����� Eie~:~~~ i 150.11�������!i No ne ...... I'JO[J~ j���. 1,808.57 ......................... : ; 0910212015 ; ;;us Cognac �� �� ���������� None I :.9?.!.9?1.~9!~ - ---l. i.;J.h~~i~~~i.~~i.~I~~k~-~b~!... ....j... No ~ e 1 __ 9?.!.9~!~9 1 ?. __ L_ P.'.l~~<:>J:l� i!~~~ I~g':!i11?.: . __ 1 _ i �����-�-��i 01 /06/2015 i No ne Rawson Private Release Shiraz 451. 50 ...............:.:_-_�:: N~ri~ l

DECISION CTA Case No. 10263 Philippine Airlines, Inc. vs. Commissioner ofInternal Revenue Page 36 of42 I Table Ill: Comparison o�Purchase Price Per Importation Against Local Suppliers' Price List I Arrival Date Excise Tax Paid Purchase Local Price per Price Lists i Unde r Protest Price Per Description Importation ASC FTII I HPI MEnt (In PhP) (Table II) Exilibits "P- Exhibits "P- Exilibits "P-46- 46-c" to "P- Exhibits "P- II " to "P-46-1" 46" to "P- 46-!!" 46-m" to "P- 46-b" 46-11" Lindemans Premier Shiraz 1 ' ! !

DECISION CTA Case No. 10263 Philippine Airlines, Inc. vs. Commissioner ofInternal Revenue Table III: Comparison ofPurchase Price Per Importation Against Local Suppliers' Price List . I Purchase I Local Price er Price Lists Arrival Date Description Excise Tax Paid 1 ASC FTII HPI MEnt Under Protest Exhibits "P- Exhibits "P- Exhibits "P- Exhibits "P-46- !i1 ImPrpiocretaPteiorn 46-c" to "P- 46-m" to "P- (In PhP) (Table II) 46" to "P- 11" to 11P-46-1" 46-b" Russian Vodka Standard r ?�a~r!:~-c~~~C:~. -i�����������������'� '�~�':'�'?�: !���......................��.������.....��.:�.� B,.r,..u".t,....................... I Gordon 's Gin .. i JW Blue Label Scotch JW Double Black Label ���������-����-4---�-���-�������- California .... . ..... .... , ... !~.I?QQQ California .......................................................................1.....................................I..Q?,?�I,~.? . ! . . . . . . . . . . . . . . . . . .~.~~9~-l' 1 . t:/<:J!l~ J None I Elegance Duo i 105 732.00 I 37.26 j I None . _ ?.?,g?} 2,323.85 i r:' .'?.9.~2..42.�?.19,,.?~?. .. � � � � � � � � ����=:3~8�..0j4~::J~ NBo~~~;~; ��1r ......... ...... }!;;~~] . . . . . . . . . . . . . . . . None I . 1 � � � � � � � l � 19?.,.7.?.~.:99 ~j:Q.( � ll�i~~:i~�:l� j;~~H~J�i������������=��'�' ����m ��; ������������������������ ����� ������������� N;;�~~� i ������������������������������������� . t ���������������� ��. No None , :.o,,.,n.:c~ J ........................................N...: I 0,974.90 i None i ________ .....) 1,337.25 t � � � � � � � � � � � E<i~:~ �l :.o.,�.�~,.,.e, +� .........:.. None d~~f~~:~~~~n::~ l �� ,1B~Bfl� : ~~r:~rl� :.c. :.:..:...+.�.�.�.�.�.�..�.�.�.�.�.�.�.�.�.�.�.�.�.�.�..�.�.�.�..�..N...: ....,J.�.��........................................N. .:.oc..'�'��'������! ............................... 1 ! None ��< ! NQI]~ ~~cit! �--N� one... 1i .. :t:'<J.!l~.J ..... t:I<J.n~ i None 1 t:I<Jr.!e j . . _j

DECISION CTA Case No . 10263 Philippine Airlines, Inc. vs. Commissioner ofInternal Revenue Page 38 of42 While the above table of comparison is sufficient in determining whether the cost of importing commissary and catering supplies is lower than purchasing them locally, the determination is limited, however, with the imported wine and liquor products which can be compared with the local prices for the same brand or products. As regards to those imported wine and liquor products without comparative prices from Absolute Sales Corporation, Future Trade International Travel, Minivan Enterprise or Heineken Philippines, Inc., this Court finds that the lack of comparative prices from said establishments is not conclusive proof of the products' unavailability in the local market. In fine, petitioner complied with the third condition, but only to the extent ofthe imported wine and liquor products that are supported by evidence showing that the cost per bottle of importing the same is lower than purchasing them locally from at least one supplier, to wit: Table IV: Summary ofImported Wine and Liquor Products with Comparative Prices [rom at Least One Local Supplier m�������� ~ �����������������i 0���0 � � � � �.�. �.�. �. .� . ..4' 1.50 i Niiii ~ ���l 579.00 i 579.00 i 451.50 ! e 579.00 ! \

DECISION CTA Case No. 10263 Philippine Airlines, Inc. vs. Commissioner ofInternal Revenue Table IV: Summa Arrival Date Desc ription \

DECISION CTA Case No . I0263 Philippine Airlines, Inc. vs. Commissioner ofInternal Revenue Page 40 of42 Table IV: Summa Arrival Date Des c r i p t i o n Excise Tax Paid Purchase Price 1 ~~c .. J ~~II" I . . " MEnt Under Protest Per Importation I! ......................-............. ... Exlubtls P- 1 Exlubtts P- Exlubtls P- Exhibits "P- ....................... _ (In PhP) ! 46" to "P-46- J 46-c " to "P- 46-m" to "P- 46-ft " to "P- b" 46- , 46-11 " 46-1" :1 ~�- ~17~5;,j93~I7.5I.:0qi: :::::~=~= 1~6n5.896 F~---�BN.ioiinie~=:=:::ir:: :J2~7i>6.~.~00 : 1 No~nheoiri~:::: :NN.;o;~n-~e~: ::~-~~, 15,187.50 1 202.43 t None I None 1 None ! 579.00 ............................... ~ None None...........) .... -�-�-�-��N��-o�-n��e��- i Charl es Heidsieck 1,547,72 1.00 i ................. ..!,711.10 .....................N......o....n....e... I 2,650.00 I None i None i i No ne .:~:~: : :~~~-~~~ I 09/ 13/ Charl es Heidsieck r T 26�------ 1,594,485.00 ....... �-�����--�---�-- oooo--i ;664:s9 �r--� N;~�~� rShir~-Cabemet _r:~::::::=):~H~H~=t - . ----�-I~~:~~:r ---~~~~==! t ...~::=~:::::::: E::~::~:::: ci~~:tf~:.~~ I:::::::::::::::i~I1:.f.~ : Non EQQ!l!l~Y. . J._____ !~, l~Q,QQ ( ... _..!2.2.:.~?. . rdonnay__,_ _L._.._____l~.!.E:2...Q. . L _______ 202.4~__[___________ _ ..1....................... ~r_g_~-~-~-f2.~-~-~-G..h~~~2-~.~-~Y............l . . . . . . . ....!.~J. L?.9:.9.9.. ...1 ��������������������~- !. 2?.. ~~~. . .; I: :~;~~r~~~lt::::j ~;r.~!}:~Q~~:� :s~~~ . . . _ ~ L.............. :~;.961 .28 i ~H! r�-- o21o3/2-oi-�� � ----c-----;--o-:s;~ ~-�--�---- � . . . . . . . . �-�--� I o3/2o/2o'i eidsieck Brut 795 I=i .0a�3~/32 1 in VSOP 24 ____________1)_' '{_e..r.1!!9..!!.!!l____ 3,364.62 j 71 I?.?IS.~;E J::~~::::: L?.~�~~~ 1 02/02/20 16 ' Cha les H 'ds�e k B t �-.- RH��~e:~l.~n: ie:kM;e��~n���B~i:~e��eyr~6.~::~=:~~:::: .. t ...~~~.~�?.J� L.. ~�~:�� :::� 0o.29/:/o2j0)/.22:::o:::,i-66:� :[,, ...f I ~Q~!!2~�.?.?..jl ���� mOmO moo��oo o�o�ooo���oo�oi l �.�.-.=. ._. . ._}.�. c�:=::~=:~:I!:9IA.-'"--------�-------�--- ~.,'! ����������m��� mmmmoo mm�m�����������������������i .7. N._..�.. �.�:_.9����-�.9......�.�.�..�...-..�..(..._...... -O.......n..._e..,_�����- No ne P27 ,21 0759,694601,.2488 ............._..._.. !'===-~~======= . 1 ��������-~����-��-l____ ......... ! Based on the foregoing, insofar as the excise tax paid on imported wine and liquor products, the above amount of P27,275,640.48 constitutes erroneously paid excise tax which is refundable pursuant to Sections 204 and 229(C) ofthe NIRC of 1997, as amended. As regards its importation of tobacco products, petitioner failed to offer supporting evidence through which the Court can verify the statement made by Ms. Capinpin in her Judicial Affidavit that the subject tobacco products are not locally available in reasonable quantity, quality or price. Petitioner failed to submit, at the very least, price lists of tobacco products which indicate the local market prices ofthe said products. The Court observes that only the price for West Full Flavor and West Lights listed on RMC No. 90-2012 were presented in the Table ofComparison.89 As stated earlier, the prices listed in the said RMC were based on the 201 0 BIR price survey of alcohol and tobacco products and, therefore, cannot be validly used for comparison since the present case involves importations for July 2013 to July 2017. Verily, the testimony of Ms. Capinpin, standing alone, is insufficient to ascertain whether the subject tobacco products were, indeed, not locally available in reasonable quantity, quality or price. \ 89 Exhibit "P-45", attached to petitioner' s Amended Formal Offer of Evidence filed on July 4, 2022.

DECISION CTA Case No. 10263 Philippine Airlines, Inc. vs. Commissioner of Internal Revenue Page 41 of42 WHEREFORE, premises considered, the present Petition for Review is PARTIALLY GRANTED. Accordingly, respondent is ORDERED TO REFUND OR ISSUE A TAX CREDIT CERTIFICATE, in favor of petitioner, in the amount of P27,275,640.48, representing the latter' s erroneously paid excise tax on its importations of wine and liquor products for its international flight consumption. SO ORDERED. s WE CONCUR: {On official business) MA. BELEN M. RINGPIS-LIBAN MARIA ATTESTATION I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. MARIA

DECISION CTA Case No. 10263 Philippine Airlines, In c. vs. Comm issioner ofInternal Revenue Page 42 of42 CERTIFICATION Pursuant to Article VIII, Section 13 of the Constitution and the Acting Division Chairperson's Attestation, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the write of the opinion of the Court. Presiding Justice