PETRON CORPORATION v. COMMISSIONER OF INTERNAL REVENUE (Consolidated with CTA Case No. 10905)

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY SPECIAL THIRD DIVISION PETRON CORPORATION, CTA Case Nos.10750 & 10905 Petitioner, -versus- Members: REYES-FAJARDO, Chairperson, and ANGELES,]].. COMMISSIONER OF Promulgated: INTERNAL REVENUE, APR 0 8 2026 Respondent. x-----------------------------------------------------x DECISION REYES-FAJARDO, J.: These Petitions for Review filed by Petron Corporation seek the refund of excise taxes it paid on locally produced and imported Jet A- 1 fuel, subsequently sold and delivered to various international carriers and tax-exempt entities from January 1, 2020 to December 31, 2020, in the total amount of PS86,958,664.00.1 FACTS Petitioner Petron Corporation is a domestic corporation duly organized and existing under Philippine laws, with principal office address at SMC Head Office Complex 40 San Miguel Avenue, Mandaluyong City.2 It is registered with the Bureau of Internal Revenue (BIR) under Taxpayer Identification Number (TIN) 000-168- 801-00000.3 Prayer, Petition for Review, Docket (CTA Case No. 10750)- Vol. I, p. 48; Prayer, Petition for Review, Docket (CTA Case No. 10905), p. 40. 2 Par. 1, Summary of Admitted Facts, Joint Stipulation of Facts and Issues OSFI), Docket (CTA Case No. 10750)- Vol. I, p. 426; Exhibits " P-1" and " P-2," Docket (CTA Case No. 10750)- Vol. 2, pp. 801 to 819. 3 Exhibit "P-3," Docket (CTA Case No. 10750) -Vol. 2, pp. 820 to 821.

DECISION CTA Case Nos. 10750 & 10905 Respondent Commissioner of Internal Revenue is sued in his official capacity, having been duly appointed and empowered to perform the duties of his office, including, among others, the duty to act on and approve claims for refund as provided by law.4 Petitioner filed its Applications for Tax Credits/Refunds (BIR Form No. 1914), with letters requesting a tax refund of the excise taxes it paid on its locally produced and imported Jet A-1 fuel, which were subsequently sold and delivered to various international carriers and tax-exempt entities, for the following periods: Period Source of Jet A-1 Date of Filing Excise Tax Paid Jan. 1 to June 30, Locally manufactured Nov. 5, 2021 5 I' 9,383,688.00 2020 308,863,888.00 Imported Nov. 26, 20216 48,684,692.00 July 1 to Dec. 31, Locally manufactured Apr. 11, 20227 220,026,396.00 2020 Imported Apr. 11, 20228 P 586,95M64.00 Total On February 2, 2022,9 petitioner filed its Petition for Review docketed as CTA Case No. 10750, to refund the amount of P318,247,576.00, representing excise taxes paid from January 1, 2020 to June 30, 2020. Respondent filed his Answer,10 thereto on May 10, 2022. On June 29, 2022,11 petitioner filed another Petition for Review docketed as CTA Case No. 10905, to refund the amount of P268,711,088.00, representing excise taxes paid during the period July 1, 2020 to December 31, 2020. Respondent posted his Answer12 thereto on September 9, 2022. Petitioner thereafter moved13 to consolidate the two (2) cases. 4 Par. 3, Summary of Admitted Facts, JSFI, Docket (CTA Case No. 10750)- Vol. I, p. 426. 5 Exhibits "P-7-A" and "P-8-A," Docket (CTA Case No. 10750) -Vol. 2, pp. 838 to 844, and 852, respectively. 6 Exhibits "P-13-A" and "P-14-A," Docket (CTA Case No. 10750)- Vol. 2, pp. 876 to 883. 7 Exhibits "P-7-B" and "P-8-B," Docket (CTA Case No. 10750)- Vol. 2, pp. 845 to 851, and 853, respectively. 8 Exhibits "P-9-B" and "P-10-B," Docket (CTA Case No. 10750)- Vol. 2, pp. 858 to 863, and 870, respectively. 9 Docket (CTA Case No. 10750)- Vol. I, pp. 11 to 54. 10 Docket (CTA Case No. 10750)- Vol. I, pp. 188 Lo 197. 11 Docket (CTA Case No. 10905), pp. 6 to 49. 12 Docket (CTA Case No.10905), pp. 157 to 172. Docket (CTA Case No. 10905), p. 156. 13 Docket (CTA Case No. 10750)- Vol. I, pp. 268 to 278.

DECISION CT A Case Nos. 10750 & 10905 Page 3 of31 In separate Resolutions dated August 23, 202214 and September 23, 2022,15 the Court consolidated CTA Case No. 10905 with CTA Case No. 10750. On January 19, 2023,16 the Pre-Trial Conference of the two (2) consolidated cases was set and held. On February 20, 2023, the parties filed their Joint Stipulation of Facts and Issues,17 which was approved by the Court by Resolution dated February 28, 2023.18 The Consolidated Pre-Trial Order dated May 10, 202319 was then issued. Trial then ensued. Petitioner presented: (1) Ms. Ma. Clarissa C. Arguelles,20 petitioner's Tax Manager; (2) Ms. Marissa U. Viray,21 petitioner's then Operations Finance Manager, and presently Accounting Services Manager; (3) Mr. Francis Herthiel N. Carino,22 petitioner's then Area Sales Manager - Industrial South Luzon, and presently petitioner's Key Accounts Manager - Industrial Fuels Trade; (4) Mr. Raymond John M. Valin,23 petitioner's then Account Sales Coordinator - National Accounts Industrial Trade, and presently petitioner's Manager- VisMin Field Technical Services; (5) Mr. Emmanuel Victor T. Tatoy,24 petitioner's Terminal Manager for the Joint Oil Companies Aviation Fuel Storage Plant Ninoy Aquino International Airport Terminal 2, Pasay City (JOCASP/NAIA); (6) Mr. Ronalda A. 14 Docket (CTA Case No. 10905), pp. 6 to 49. 15 Docket (CTA Case No. 10750)- Vol. I, pp. 288 to 290. 16 Resolution dated October 25, 2022, Docket (CTA Case No. 10750)- Vol. I, p. 293; Minutes of the hearing held on, and Order dated, on January 19, 2023, Docket (CTA Case No. 10750)- Vol. I, pp. 357 to 364. 17 Docket (CTA Case No. 10750)- Vol. I, pp. 426 to 455. 18 Docket (CTA Case No. 10750)- Vol. I, pp. 463 to 464. 19 Docket (CTA Case No. 10750)- Vol. I, pp. 509 to 55��. 20 Exhibits "P-41-A" and "P-39-B," Docket (CTA Case No. 10750)- Vol. I, pp. 59 to 84, and 381 to 391, respectively; Exhibit "P-34-B," Docket (CTA Case No. 10905), pp. 55 to 81; Minutes of the hearing held on, and Order dated, March 28,2023, Docket (CTA Case No. 10750)- Vol. I, pp. 488 to 492, and 494 to 496, respectively. 21 Exhibit "P-42-A," Docket (CTA Case No. 10750)- Vol. I, pp. 88 to 101; Exhibit "P-35-B,'' Docket (CTA Case No. 10905), pp. 85 to 99; Minutes of the hearing held on, and Order dated, March 28, 2023, Docket (CTA Case No. 10750)- Vol. I, pp. 488 to 492, and 494 to 496, respectively. Exhibit "P-44-A," Docket (CTA Case No. 10750)- Vol. I, pp. 116 to 124; Order dated April 20, 2023, Docket (CTA Case No. 10750)- Vol. I, pp. 499 to 501. 23 Exhibit "P-45-A," Docket (CTA Case No. 10750)- Vol. I, pp. 128 to 135; Exhibit "P-37-B," Docket (CTA Case No. 10905), pp. 115 to 122; Order dated April 20, 2023, Docket (CTA Case No. 10750)- Vol. I, pp. 499 to 501. Exhibit "P-46-A," Docket (CTA Case No. 10750)- Vol. I, pp. 139 to 147; Exhibit "P-38-B," Docket (CTA Case No. 10905), pp. 126 to 135; Order dated April 20, 2023, Docket (CTA Case No. 10750)- Vol. I, pp. 499 to 501.

DECISION CTA Case Nos. 10750 & 10905 Page 4 of31 Tadena,25 petitioner's then Terminalling Manager, and presently Oil Movement & Storage and Terminalling Manager; (7) Mr. Jake Martin A. Magana,26 petitioner's OIC-Commercial Services Manager; and (8) Ms. Madonna Mia S. Dayego,27 the Court-commissioned Independent Certified Public Accountant (ICPA Dayego), 28 as its witnesses. On February 27, 2024, petitioner filed its Formal Offer of Evidence,29 with respondent's Comment filed on March 8, 2024.30 By the Resolution dated May 30, 2024,31 the Court admitted petitioner's offered exhibits, while several exhibits were denied. On June 14, 2024,32petitioner filed a Motion for Reconsideration with respondent's Manifestation filed on September 16, 2024.33 By Resolution dated September 7, 2022,34 the Court admitted Exhibits "P-1007," "P-1008," "P-1010," and "P-1018." Respondent presented Revenue Officer Alexander M. Atienza as his witness (RO Atienza).35 On June 25, 2024, Respondent filed his Formal Offer of Evidence,36 with petitioner's Comment filed on July 11, 2024.37 By Resolution dated October 9, 2024,38 the Court admitted all of respondent's offered exhibits. 25 Exhibit "P-47/' Docket (CTA Case No. 10750) - Vol. I, pp. 151 to 161; Minutes of the hearing held on, and Order dated, February 7, 2021, Docket (CTA Case No. 10750) -Vol. 2, pp. 681 to 681. 26 Exhibit "P-43-a," Docket (CTA Case No. 10750)- Vol. I, pp. 259 to 267; Exhibit "P-36-B," Docket (CTA Case No. 10905), pp. 103 to 111; Minutes of the hearing held on, and Order dated, February 7, 2024, Docket (CTA Case No.10750)- Vol. 2, pp. 681 to 684. 27 Exhibit "P-48," Docket (CTA Case No. 10750) - Vol. 2, pp. 738 to 775; Minutes of the hearing held on, and Order dated, February 7, 2024, Docket (CTA Case No.10750)- Vol. 2, pp. 681 to 681. Oath of Commission dated March 28,2023, Docket (CTA Case No. 10750)- Vol. I, p. 492; Minutes of the hearing held on, and Order dated, March 28, 2023, Docket (CTA Case No. 10750)- Vol. I, pp. 488 to 492, and 494 to 4% respectively. 29 Docket (CTA Case No. 10750)- Vol. 2, pp. 686 to 800. 30 Docket (CTA Case No. 10750)- Vol. 2, pp. 902 to 904. 31 Docket (CTA Case No. 10750)- Vol. 2, pp. 909 to 921. Docket (CTA Case No. 10750)- Vol. 2, pp. 935 to 972, and 973 to 976 (!CPA's Certification dated june 14, 2024). 33 Docket (CTA Case No. 10750)- Vol. 2, pp. 996 to 998. 34 Docket (CTA Case No. 10232)- Vol. 2, pp. 1335 to 1336. 35 Exhibit "R-9," Docket (CTA Case No. 10750)- Vol. I, pp. 340 to 345; Exhibit "R-10," (CTA Case No. 10750)- Vol. 2, pp. 894 to 901; Minutes of the hearing held on, and Order dated, May 30, 2024, Docket (CTA Case No. 10750)- Vol. 2, pp. 926 to 928. 36 Docket (CTA Case No. 10750)- Vol. 2, pp. 979 to 983. 37 Docket (CTA Case No. 10750)- Vol. 2, pp. 989 to 993.

DECISION CTA Case Nos. 10750 & 10905 On November 13, 2024, petitioner filed its Memorandum,39 while respondent's Memorandum was submitted on November 19, 2024.40 By Resolution dated April10, 2025,-n the Court admitted42 and denied43 certain exhibits of petitioner, and submitted the case for decision. ISSUES44 1. Whether We obtained jurisdiction over CTA Case Nos. 10750 & 10905. 2. Whether petitioner is entitled to the refund in the amount of Five Hundred Eighty-Six Million, Nine Hundred Fifty-Eight Thousand Six Hundred Sixty-Four Pesos (f'586,958,664.00), representing excise taxes paid during the period January 1, 2020 to June 30, 2020 amounting to Three Hundred Eighteen Million Two Hundred Forty-Seven Thousand Five Hundred Seventy-Six Pesos (f'318,247,576.00) docketed as CTA Case No. 10750; and excise taxes paid during the period July 1, 2020 to December 31, 2020 amounting to Two Hundred Sixty-Eight Million Seven Hundred Eleven Thousand Eighty-Eight Pesos (f'268,711,088.00) docketed as CTA Case No. 10905, for petitioner's locally produced and imported Jet A-1 fuel, which were subsequently sold and delivered to various international carriers and tax-exempt entities. 38 Docket (CTA Case No. 10750)- Vol. 3, pp. 1002 to 1003. 39 Docket (CTA Case No. 10750)- Vol. 3, pp. 1006 to 1089. 40 Docket (CTA Case No. 10750)- Vol. 3, pp. 1091to 1110. 41 Docket (CT A Case No. 10750)- Vol. 3, pp. 1117 to 1125. 42 Exhibits, "P-108-1-46," "P-109-1736," "P-109-1760," "P-111-1" to "P-111-21," "P-114-13-1 to P-114-13-12" and "P-114-14-1 to P-114-14-12," "P-115-1," "P-118-1-1512," "P-118-1- 3415," "P-118-1-3726," "P-119-1-20," 11P-8-B," "P-8-1-B," "P-28-B," and "P-29-B." 43 Exhibits "P-6-A," "P-6-1-A to P-6-6103-A," "P-6-B," "P-6-B to P-6-5260-B," "P-11-B," "P- 11-1-B to P-11-56-B," "P-12-B," "P-13-B," "P-13-1-B to P-13-15-B," "P-14-B," "P-14-1-B to P-14-5-B," "P-15-A," "P-15-A to P-15-89-A," "P-15-1-B to P-15-34-B," "P-16-A," "P-16-1-A to P-16-11-A," "P-16-B to P-16-6-B," "P-17-A," "P-17-B," "P-17-1-A to P-17-15-A," "P-17-1- B to P-17-6-B," "P-18-B," "P-18-B to P-18-30-B," "P-19-A," "P-19-1-A to P-19-4-A," "P-19- B," "P-19-1-B to P-19-10-B," "P-20-A," "P-20-1-A to P-20-33-A," "P-20-B," "P-20-1-B toP- 20-2767-B," "P-21-A," "P-21-1-A to P-21-6-A," "P-21-B," "P-21-1-B to P-21-135-B," "P-21- 1-A to P-22-6-A," "P-22-A," "P-22-B," "P-22-1-B to P-22-14-B," "P-23-A," "P-23-1-A toP- 23-57-A," "P-23-B," "P-23-1-B to P-23-512-B," "P-24-A," "P-24-1-A to P-24-12-A," "P-24-1- B to P-24-6-B," "P-25-A," "P-25-1-A to P-25-4266-A," "P-25-B," "P-25-1-B to P-25-93-B," "P-26-A," "P-26-1-A to P-26-238-A," "P-26-B," "P-26-1-B to P-26-93-B," "P-27-A," "P-27-1- A to P-21-17-A," "P-27-B," "P-27-1-B to P-27-93-B," "P-28-A," "P-28-1-A to P-28-1056-A," "P-29-A," "P-29-1-A to P-29-12-A," "P-30-A," "P-30-1-A to P-30-117-A," "P-30-B," "P-31- A," "P-31-1-A to P-31-157-A," "P-31-B," "P-32-A," "P-32-1-A to P-32-104-A" and "P-35- A." 44 See Statement of the Issues, JSFI, Docket (CT A Case No. 10750)- Vol. I, p. 427.

DECISION CTA Case Nos. 10750 & 10905 Page 6 of31 ARGUMENTS Petitioner maintains that its administrative and judicial claims for refund were timely filed; that the imported and locally produced Jet A-1 fuel sold to international carriers and tax-exempt entities is exempt from excise tax under Section 135 of the National Internal Revenue Code of 1997 (NIRC), as amended; and that the excise taxes paid thereon were erroneously collected. Thus, it is entitled to a tax refund of 'P586,958,664.00. Taking an opposite view, respondent ripostes that: (1) petitioner failed to file the required administrative claim for refund; (2) petitioner is not entitled to a refund of excise taxes, as such claims are governed solely by Section 130(D) of the NIRC, as amended; and (3) the denial of petitioner's claim in CTA Case No. 10905 is supported by factual and legal bases. RULING We partly grant the Petitions. First. Did We acquire jurisdiction over CTA Case Nos. 10750 and 10905? Yes. Petitioner timely filed its administrative and judicial claim within the two (2)-year period from date of its payment of excise tax on locally produced and imported Jet A-1 fuel, which were subsequently sold and delivered to various international carriers and tax-exempt entities. Section 7(a)(2) of Republic Act (RA) No. 1125,45 as amended by RA No. 9282 reads: Sec. 7. Jurisdiction.- The CTA shall exercise: a. Exclusive appellate jurisdiction to review by appeal, as herein provided: 45 An Act Creating the Court of Tax Appeals.

DECISION CTA Case Nos. 10750 & 10905 Page 7 of31 2. Inaction by the Commissioner of Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties in relations thereto, or other matters arising under the National Internal Revenue Code or other laws administered by the Bureau of Internal Revenue, where the National Internal Revenue Code provides a specific period of action, in which case the inaction shall be deemed a denial; ...46 Section 3(a)(2), Rule 4 of the Revised Rules of the Court of Tax Appeals clarified that the CTA in Division has jurisdiction over the inaction of respondent involving refunds of internal revenue taxes. Among the classes thereof is one premised upon illegal, erroneous, or excessive collection of internal revenue taxes, as recognized in Sections 204(C) and 229 of the NIRC, as amended. Commissioner of Internal Revenue v. Carrier Air Conditioning Philippines, Inc. (Carrier)47 clarified that for Us to acquire jurisdiction over said type of refund case, the taxpayer must, within two (2) years from the date of payment of the tax, file an administrative claim with respondent prior to instituting a judicial claim. Both the administrative and judicial claims must be filed within the same two (2)-year period, viz.: Section 204 [of the NIRC, as amended] refers to the Commissioner of Internal Revenue's administrative authority to credit or refund erroneously paid or illegally collected taxes. Under this provision, an administrative claim for refund or credit must be filed within two years from payment of the tax. Section 229 [of the NIRC, as amended], on the other hand, requires two conditions for the filing of judicial claims: (1) an administrative claim must be filed first; and (2) the judicial claim must be filed within two years after payment of the tax sought to be refunded. Reading the two provisiOns together, both administrative and judicial claims must be filed within the two[(2)]-year period. Furthermore, the administrative claim must be filed before the judicial claim. This Court has previously declared that "[t]imeliness of the filing of the claim is mandatory and jurisdictional. The [Court of Tax Appeals] cannot take cognizance of a judicial claim for refund filed either prematurely or out of time." 46 Emphasis ours. 47 G.R. No. 226592, July 27, 2021.

DECISION CTA Case Nos. 10750 & 10905 Page 8 of31 Relevantly, for imported Jet A-1 fuel, the two(2)-year period is reckoned from the date of actual payment of the excise tax pursuant to Section 131(A) of the NIRC as amended. Meanwhile, for locally produced Jet A-1 fuel, the two(2)-year period is counted from the date of removal of the petroleum products from the place of production pursuant to Section 130(A)(2) of the NIRC as amended. Parsed from these observations, petitioner timely filed its administrative and judicial claims within the two(2)-year period, as shown below: Type of Case Earliest Last Day to File Administrative Judicial Claim JetA-1 No. Payment/ (2-year period) Claim Filed Filed Removal Date Fuel 10750 Jan. 7, 2020 48 Jan. 7, 2022 Nov. 5, 2021 49 Feb. 2, 2022 5o July 29, 2022 Aprilll, 2022 52 June 29, 2022 53 Imported 10905 July 29, 2020 51 Jan. 2, 2022 Nov. 5, 2021 55 Feb. 2, 2022 56 July 1, 2022 Aprilll, 2022 ss June 29, 2022 59 10750 Jan. 2, 2020 5-l Locally Produced 10905 July 1, 2020 57 To be sure, the judicial claim in CTA Case No. 10750, although filed on February 2, 2022, is timely filed. The Court, through CTA Circular No. 02-2021,60 suspended the filing of pleadings from December 21, 2021 to January 3, 2022 in light of Super Typhoon Odette, and granted an additional seven (7) calendar day extension from January 4, 2022. Thereafter, the Supreme Court, through Administrative Circular No. 01-2022,61 further extended all filing deadlines in all courts falling in January 2022 until February 1, 2022. 48 Exhibit "P-104-3-1 (1/3 and 2/3), !CPA USB (Exhibit "P-50-3"). 49 Exhibits "P-13-A" and "P-14-A," Docket (CTA Case No. 10750)- Vol. 2, pp. 876 to 883. 50 Docket (CTA Case No. 10750)- Vol. I, pp. 11 to 54. 51 Exhibit "P-104-3-7 (1/3 and 2/3), ICP A USB (Exhibit "P-50-3"). 52 Exhibits "P-9-B" and "P-10-B," Docket (CTA Case No. 10750)- Vol. 2, pp. 858 to 863 and 870. 53 Docket (CTA Case No. 10905), pp. 6 to 45. 54 Q&A No. 24, Exhibit "P-41-A," Docket (CTA Case No. 10750)- Vol. I, p. 64; Exhibit "P- 109-1 (1/2), !CPA USB (Exhibit "P-50-3). 55 Exhibits "P-7-A" and "P-8-A." Docket (CTA Case No. 10750) -Vol. 2, pp. 838 to 844, and 832, respectively. 56 Docket (CTA Case No. 10730)- Vol. I, pp. 11 to 54. 57 Q&A No. 24, Exhibit "P-34-B," Docket (CTA Case No. 10905), p. 61; Exhibit "P-109-3026." 58 Exhibits "P-9-B" and "P-10-B," Docket (CTA Case No.10750)- Vol. 2, pp. 838 to 863 and 870. 59 Docket (CTA Case No. 10905), pp. 6 to 43. 60 RE: EXTENSION OF THE DEADLINES FOR THE FILING OF ANY AND ALL PLEADINGS AND OTHER COURT SUBMISSIONS WITH THE COURT OF TAX APPEALS IN LIGHT OF SUPER TYPHOON ODETTE. 61 RE: EXTENSION OF THE DEADLINES FOR THE FILING OF ANY AND ALL PLEADINGS AND OTHER COURT SUBMISSIONS FALLING DUE IN THE MONTH OF JANUARY 2022 IN ALL COURTS.

DECISION CTA Case Nos. 10750 & 10905 Page 9 of31 Considering that February 1, 2022, fell on a holiday, filing the judicial claim on February 2, 2022, the next working day, was considered on time. Respondent claims that petitioner's administrative claim for CTA Case No. 10905 filed on April 11, 2022 was improper as it was not accepted by the BIR and was returned along with petitioner's documents. For him, the proper filing was made only on July 22, 2022. Hence, when petitioner filed the Petition for Review on June 29, 2022, there was still no valid administrative claim, thereby depriving Us of jurisdiction over the case.62 We are not persuaded. For one, a perusal of petitioner's Application for Refund,63 shows that the same was filed with the BIR on April 11, 2022, as per the stamped receipt on the first page of the Application. For another, RO Atienza said that he returned "several boxes with unaccounted and loose documents to petitioner for proper documentation," as evidenced by a transmittal letter.64 He did not state that petitioner's refund application itself was returned. In fact, the transmittal letter dated June 30, 2022, offered in evidence by respondent, shows only the return of loose documents for proper accounting, such as paging and preparation of schedules. The refund application was not listed among the returned documents. Thus, contrary to respondent's claim, petitioner timely filed both its administrative and judicial claims in CTA Case No. 10905, thereby vesting Us with jurisdiction over the case. Next. Is petitioner entitled to the refund of excise tax paid on its imported and locally produced Jet A-1 fuel, which were subsequently sold and delivered to various international carriers and to tax-exempt entities, covering the period January 1, 2020 to December 31, 2020? Yes, albeit in part. " Respondent's Memorandum, Docket (CTA Case No. 10750)- Vol. 3, pp. 1094 to 1095. 63 Exhibit "P-7-B," Docket (CTA Case No. 10750)- Vol. 2, pp. 845 to 851. 64 Q&A Nos. 14 and 15, Exhibit "R-9," Docket (CTA Case No. 10750)- Vol. I, p. 342.

DECISION CTA Case Nos. 10750 & 10905 Page 10 of31 Respondent contends that petitioner is not the proper party to claim for a refund of excise taxes paid on its petroleum products sold to international carriers and exempt entities. For respondent, Section 135 of the NIRC, as amended does not provide an exemption to sellers like petitioner, as such exemption can only be invoked by buyers who are exempt entities.65 We disagree. Pilipinas Shell Petroleum Corporation v. Commissioner of Internal Revenue,(2021 Pililipinas Shell)66 categorically declared that the excise tax exemption under Section 135 of the NIRC, as amended, pertains to the importer/manufacturer of petroleum products, as the statutory taxpayer, viz.: Based on (a) the nature of excise taxes as a property tax and an indirect tax, and (b) the principle that a buyer, when shouldering the tax burden, does not become the statutory taxpayer, it is thus clear that the purchaser of local products (such as international carriers) cannot be deemed to have been conferred a tax exemption when it has not been imposed a tax liability. In the ordinary course of things, international carriers do not manufacture or import petroleum products and hence, are not statutory taxpayers to which the exemption under Section 135 could pertain. If anything, international carriers merely bear the tax burden when the costs therefor are passed on to them by the actual manufacturers or importers. However, as earlier discussed, the "passing on" of the tax burden is largely a contractual affair between the parties and should not determine the tax incidence imposed by law unless the contrary is provided. As such, the tax exemption under Section 135 must correspondingly benefit the one who actually bears the liability to pay the same (i.e., the importers/manufacturers of petroleum products sold to international carriers, among others), and not the one who simply bears the economic burden thereof (i.e., the purchasers of the products, such as international carriers)P Following 2021 Pilipinas Shell, petitioner as the statutory taxpayer can claim a refund under Section 135 of the NIRC for the sale of its imported and locally manufactured Jet A-1 fuel to various international air carriers and tax-exempt entities. 65 Respondent's Memorandum, Docket (CTA Case No. 10750), at pp. 1103. 6o G.R. No. 211303, June 15, 2021. 67 Emphasis ours.

DECISION CTA Case Nos. 10750 & 10905 Section 135 of the NIRC, as amended, provides distinct categories of sale of petroleum products that are exempt from excise tax, which may be the subject of a claim for tax refund when excise taxes were erroneously paid thereon, viz.: SEC. 135. Petroleum Products Sold to International Carriers and Exempt Entities or Agencies.- Petroleum products sold to the following are exempt from excise tax: (a) International carriers of Philippine or foreign registry on their use or consumption outside the Philippines: Provided, That the petroleum products sold to these international carriers shall be stored in a bonded storage tank and may be disposed of only in accordance with the rules and regulations to be prescribed by the Secretary of Finance, upon recommendation of the Commissioner; (b) Exempt entities or agencies covered by tax treaties, conventions and other international agreements for their use or consumption: Provided, however, That the country of said foreign international carrier or exempt entities or agencies exempts from similar taxes petroleum products sold to Philippine carriers, entities or agencies; and (c) Entities which are by law exempt from direct and indirect taxes.68 In this case, petitioner's sales subject of the refund claim for the taxable year 2020, are as follows:69 Particulars Volume Sales to: (In [Liters]) International air carrier use 144,258,829 Domestic air carrier with tax exemption (Alphaland Aviation) 46,735 144,305,564 Tax-exempt entity (Petron Singapore PTE) [Total] 2,434,102 146,739,666 From the foregoing, petitioner's sales to international air carriers and its sales to Petron Singapore PTE fall under Section 135 (a) and (b) of the NIRC, as amended, while its sales to Alphaland Aviation fall under Section 135(c). Accordingly, petitioner's entitlement to an excise tax refund must be determined by applying 68 Emphasis Ours. 69 Table 18, Exhibit "P-50," Docket (CTA Case No. 10750)- Vol. 2, p. 637.

DECISION CTA Case Nos. 10750 & 10905 Page 12 o�31 the specific requirements of Section 135 (a), (b), and (c) of the NIRC, as amended. Petitioner's sales of imported and locally-produced Jet A-1 fuel to international carriers and exempt entities To engage the application of excise tax exemption under Section 135 of the NIRC, as amended, on petitioner's sales of imported and locally-produced Jet A-1 fuel to international carriers and exempt entities, petitioner must establish the following requirements: a. Sales to international carriers of Philippine or foreign registnr on their use or consumption outside the Philippines under Section 135(a) of the NIRC, as amended 1. Proof of foreign registry of the international carrier, or in case of Philippine-registered air carriers, the latter's proof of authority to operate international flights; 2. Proof that the petroleum products were used or consumed outside the Philippines; and 3. Proof that the petroleum products were stored in a bonded storage tank and may be disposed of only in accordance with the rules and regulations to be prescribed by the Secretary of Finance, upon recommendation of the Commissioner. In this regard, petitioner, presented the following: (a) Certification issued by the Civil Aeronautics Board certifying that its customers: (1) have been issued a valid and existing Foreign Air Carrier's Permit to Operate International Air Transportation Services between the Philippines and their country of registration during the period of January 1, 2020 to December 31, 2020; and (2) that Philippine carriers have been issued a Certificate of Public Convenience and Necessity to operate domestic and international air transportation services during the period of January 1, 2020 to December 31, 2020;70 (b) Aviation Delivery Receipts (ADRs), which indicate among other things, the details of the Jet A-1 fuel deliveries made by petitioner to international air carriers, including the origin and destination of the aircrafts; and 7o Exhibit "P-123-1," USB (Exhibit "P-50-3").

DECISION CTA Case Nos. 10750 & 10905 Page 13 of31 (c) Commingling Permit No. LTAD II (P)-008-12-07-14268 dated December 20, 2007 that is renewed and valid from January 1, 2020 until December 31, 2020, which represents that petitioner's imported Jet A-1 fuel are stored and commingled along with locally manufactured Jet A-1 fuel. 71 (d) Testimony of (1) Mr. Ronaldo A. Tadena72 on storage, withdrawals and deliveries to clients supported by Shipment Schedules, Shore Tank Gauge Sheets, Withdrawal Certificates, Product Reconciliation Statements, and Cargo Outturn Certificates, which show the loading, delivery, and taxes paid on the fuel; and (2) Mr. Emmanuel Victor T. Tatoy on withdrawals from JOCASPjNAIA to international carriers evidenced by the Manual Official Register Book, Withdrawal Certificates, and Jet A-1 Liquidation Statements, which indicate the volumes delivered, dates, and receiving vessels. b. Sales to exempt entities or agencies ciJVered bu tax treaties, conventions and other international agreements under Section 135(b) of the NIRC as amended 1. Copy of tax treaty, convention and other international agreement showing that that the country of said foreign international carrier or exempt entities/agencies exempts from similar taxes petroleum products sold to Philippine carriers, entities or agencies; and 2. Proof that the petroleum products were used or consumed by the said entities or agencies. For this purpose, petitioner submitted the following: (a) Certification, issued by the Office of Treaties and Legal Affairs of the Department of Foreign Affairs, listing the Air Service Agreements or Air Transport Agreements and other agreements between the Philippines and the following countries/ states that were in effect for the years 2019 and 2020/3 (b) Certified true copies of various treaties/ agreements between the Philippines and other countries, showing that the country of said international carriers or exempt entities/agencies exempts from similar taxes petroleum products sold to Philippine carriers, entities or agencies/4 71 Exhibit "P-5", Docket (CTA Case No. 10750)- Vol. 2, p. 837. See also Exhibit "P-100-2/' USB (Exhibit "P-50-3"). 72 Q&A No. 10 and 11, Exhibit "P-47," Docket (CTA Case No. 10750)- Vol. I, pp. 153 to 154. '' Exhibit "P-123-2," USB (Exhibit "P-50-3"). 74 Exhibit "P-100-19" to Exhibit "P-100-50."

DECISION CTA Case Nos. 10750 & 10905 (c) Certified true copy of the Memorandum of Association and Articles of Association of Petron Singapore Trading PTE. LTD., issued by Asst. Registrar of Companies & Business Names Singapore/s and the sales invoice showing sales volume of 2,434,102 liters;76 and (d) Aviation Delivery Receipts (ADRs), which indicate among other things, the details of the Jet A-1 fuel deliveries made by petitioner to international air carriers, including the origin and destination of the aircrafts. c. Sales to entities which are b11 law exempt from direct and indirect taxes 1. Proof that the entity is by law exempt from direct and indirect taxes. (a) petitioner submitted the Certificate of Registration and Tax Exemption Clark Business Registration No. C2018-044 of Alphaland Aviation-Pampanga, Inc., which is effective from 2018 January 10 until 2021 January 09.77 After verifying petitioner's claims and submissions, ICPA Dayego prepared a summary of sales in volume totaling 140,330,680 liters.78 Our validation thereof disclosed that: One. The following sales in volume of 3,974,884liters should be disallowed for lack of proper substantiation, viz.:79 I'articulars Exhibit No. Volume in Liters Equivalent Excise "P-118" 140,330,680 Tax Aviation Delivery Receipts (ADR) "P-119-1- 944" 2,434,102 P561,322,720.00 Sales Invoice (Petron Singapore 142,764,782 Trading PTE. LTD.) "P-101" 9,736,408.00 146,739,666 571,059,128.00 Sales per Schedule of excise taxes (3,974,884) claimed for refund of or issuance of 586,958,664.00 TCC prepared by the Petitioner (Pl5,899,536.00) Downward adjustments The disallowance of the difference of 3,974,884 liters pertains to the following reasons:so Exhibit Particulars Volume in Equivalent Excise No. Recommended for disallowances: Liters Tax 1. Local destination not covered by 2,923,633 1"11,694,532.00 " Exhibit "P-100-51," USB (Exhibit "P-50-3"). 76 Exhibits "P-119-1-944" and "P-108-1-104," USB (Exhibit "P-50-3"). ,.., Exhibit "T-100-18," USB (Exhibit "P-50-3"). 78 Exhibit "P-118," USB (Exhibit "P-50-3"). " Table 20, Exhibit "P-50," Docket (CTA Case No. 10750)- Vol. 2, p. 642. 8o Table 21, Exhibit "P-50," Docket (CTA Case No. 10750)- Vol. 2, p. 642.

DECISION CTA Case Nos. 10750 & 10905 Page 15 of31 tax exemplion 521,641 2,086,564.00 2. No destinations indicated 264,263 1,057,052.00 3. Unsupported ADR 177,410 4. Out-of-period ADR Date 709,640.00 5. Unreadable 61,750 247,000.00 6. No date and no sil!l1ature 26,187 104,748.00 "P-119"/ 3,974,884 1!15,899,536.00 Table 20 Two. Out of the total ADRs examined by the ICPA Dayego, with a total sales volume of 140,330,680 liters, ADRs traced to the CAB and DFA Certifications showed a total sales volume of only 139,233,005 liters.81 Upon examination, the total volume in liters for ADRs traced to CAB and DFA Certifications should be 139,201,149. Thus, the difference of 1,129,531 liters (140,330,680 less 139,201,149) should likewise be disallowed. Three. Further examination of the ADRs traced to the CAB and DFA Certifications shows that the following sales of 1,080,410 liters should likewise be disallowed due to failure to meet the requirements to prove the foreign registry of the international carrier or, in the case of Philippine-registered air carriers, the latter's proof of authority to operate international flights, as summarized below: PERADR Traced to Certifications? (Exhibit No. "P-118") Exhibit Date ADR Client/ Destination Volume CAB DFA No. June 07, No. Customer Nadi in Liters No No AIR CALEDONIE Macau "P-118-1-3" 2020 0011064 58,172 No "P-118-1-247" AIR MACAU Macau Sep.03,2020 NA1302- 4,506 country of "P-118-1-248" 0- AIR MACAU Belgium No registry not Sep. 12, 2020 "P-118-1-290" 0014111 7,357 known NA1302- country of registry not 0- 0014484 known No Feb. 07, 2020 0003527 CAL CARGO 123,121 No AIR! LINES country of registry not "P-118-1-309" Jan. 23, 2020 0001508 CARGOL=ICAIR Hongkong 16,231 No known "P-118-1-1108" July 12, 2020 NA1302- HIMALAYA Tribhuvan 18,956 No 0- AIRLINES country of 11P-118-l-1416" June 05, Phnom Penh 8,598 "P-118-1-1417" 20?0 0012491 JC INTERNATIONAL Phnom Penh "P-118-1-1418" 0010958 AIRLINES 8,165 "P-118-1-1419" june 19, JC INTERNATIONAL Cambodia No "P-118-1-2021" 2020 0011527 AIRLINES Cambodia ]C INTERNATIONAL Singapore 8,523 July 31, 2020 0013074 AIRLINES ]C INTERNATIONAL 7,806 Aug. 04, 0013263 AIRLINES 3,200 No 0013064 2020 PACIFIC FLIGHT julv 31, 2020 s1 Exhibit "P-123," USB (Exhibit "P-50-3").

DECISION CTA Case Nos. 10750 & 10905 Page 16 o�31 NA1302- SERVICES registry not 0- known PACIFIC FLIGHT "P-118-1-2022" Sep. 18, 2020 001~667 SERVICES Singapore 2,805 "P-118--1-2023" Sep. 22,2020 NA1302- PACIFIC FLIGHT Singapore 3,103 0- SERVICES 3,526 "P-118-1-202401 Sep. 23,2020 Singapore 0014~9 PACIFIC FLIGHT 17,958 No No "P-118-1-3916" l\.1ar. 05, SERVICES Hongkong "P-118-1-4026" 2021 NA1302- 182 country of fiP-118--1-4027 1 0- SILKW AY WEST Saigon 3,931 registry not "P-118-1-4028" June 07, AIRLINES Saigon "P-118-1-4029" 2020 0014868 Saigon 703 known "P-118-1-4030" NA1302- SMARTWINGS Sub hash No June 08, Chandra "P-118-1-4031" 2020 0- SMARTWINGS 13,773 "P-118-1-4038" 00??741 Bose "P-118-1-4062" June 08, SMARTWINGS India 11 P-118-1-4063 11 2020 0011062 Kuching "P-118-1-4064" 0011083 Colombo "P-118-1-4065" 0011113 HoChi "P-118-1-4066" Minh June 21, 0011648 SMARTWINGS Camranh "P-118-1-4067" 2020 "P-118-1-4068" Caniho "P-118-1-4144" July 03, 2020 NA1302- SMARTWINGS Vietnam 19,~3 "P-118-1-4145" 0- "P-118-1-4146" Mar. 16, SOLOMON AIRLINES Saigon 18,025 No No "P-118-1--4148" 2021 001?082 SRI LANKAN "P-118-1-4149" NA1302- AIRLINES Saigon 42,191 No No "P-118-1-4689" June 11, VIETJET AIR 2020 0- VIETJET AIR Saigon 7,635 "P-118-1-4690" 0023330 June 20, VIETJET AIR Caniho 4,353 "P-118-1-4691" 2020 0011222 Vietnam "P-118-1-4692" VIETJET AIR 5,775 country of Sep.04,2020 0011599 VIETJET AIR HKG 6,677 No registry not HKG 6,503 Sep.06,2020 NA1302- VIETJET AIR HKG known 0- HKG Sep.09,2020 VIETJET AIR HKG 5,704 0014166 CATHAY DRAGON FAOROR Sep.09,2020 NA1302- TAMEO 7,987 Sep. 10, 2020 0- FAOROR 4,080 0014271 1,270 Sep. 15, 2020 NA1302- FAOROR 3,040 No Jan. 16, 2020 TAMBO 1,430 0- FAOROR 3,470 0014336 TAMBO NA1302- 2,362 0- 0014350 NA1302- 0- 0014388 NA1302- 0- 0013516 18 Jan. 17, 2020 44 CATHAY DRAGON country of jan. 18, 2020 CATHAY DRAGON registry not January 20, 49 CATHAY DRA=N known 2020 80 CATHAY DRAGON jan. 21, 2020 30,810 93 SOUTH AFRICAN Aug. 14, PB1101- AIRWAYS No No 2020 0- SOUTH AFRICAN 42,330 Aug. 14, 0000860 AIRWAYS 2020 PB1101- 14,459 SOUTH AFRICAN Aug. 14, 0- AIRWAYS 2020 0000859 PB1101- SOUTH AFRICAN Aug. 13, AIRWAYS 2020 0- 0000858 PB1101- 0- 0000857

DECISION CTA Case Nos. 10750 & 10905 "P~118-1-4693" Aug. 13, PB1101- SOUTH AFRICAN ORTAMBO 32,475 2020 0- AIRWAYS FAOR-OR "P-118-1-4694" PVG/ ZSPD 20,428 "P-118-1-4695" Aug. 13, 0000856 SOUTH AFRICAN PVG/ ZSPD "P-118-1-4696" 2020 PB1101- AIRWAYS PVG/ ZSPD 28,567 "P-118-1-4697" PVG/ ZSPD "P-118-1-4698" Aug. 13, 0- SOUTH AFRICAN PVG/ ZSPD 34,560 11 P-118-1-469911 2020 0000854 AIRWAYS 11 P-118-1-4700" PB1101- ZSPD 32,200 "P-118-1-4701" Aug. 13, SOUTH AFRICAN JNB/FAOR "P-118-1-4702" 2020 0- AIRWAYS ORTAMBO 28,886 "P-118-1-4703" 0000849 "P-118-1-4704" Aug. 22, PB1101- SOUTH AFRICAN INTL 24,160 "P-118-1-4705" 2020 AIRWAYS JNB 25,702 "P-118-1-4706" 0- JNB "P-118-1-4707'' Aug. 22, 0000848 SOUTH AFRICAN JNB 28,182 "P-118-1-4708" 2020 PB1101- AIRWAYS JNB 11 P-118-1-4709" JNB 10,274 "P-118-1-4710" Aug. 22, 0- SOUTH AFRICAN ZSPD nP-118-1-6048" 2020 0000909 AIRWAYS ZSPD 40,000 "P-118-1-6114" PB1101- ZSPD Aug. 22, SOUTH AFRICAN PVG/ ZSPD 34,900 2020 0- AIRWAYS Thailand 0000908 UAAA 33,537 Aug. 23, PB1101- SOUTH AFRICAN TOTAL 8,916 2020 AIRWAYS 0- 34,532 Aug. 23, 0000907 SOUTH AFRICAN 2020 PB1101- AIRWAYS 34,148 34,537 Aug. 23, 0- SOUTH AFRICAN 2020 0000906 AIRWAYS 29,610 PB1101- 9,649 No Aug. 23, SOUTH AFRICAN 16,587 No 2020 0- AIRWAYS 1,080,410 0000915 Aug. 23, PB1101- SOUTH AFRICAN 2020 AIRWAYS 0- Aug. 23, 0000918 SOUTH AFRICAN 2020 PB1101- AIRWAYS Aug. 24, 0- SOUTH AFRICAN 2020 0000916 AIRWAYS PB1101- Aug. 24, SOUTH AFRICAN 2020 0- AIRWAYS 0000917 Aug. 24, PB1101- SOUTH AFRICAN 2020 AIRWAYS 0- Aug. 24, 0000919 SOUTH AFRICAN 2020 PB1101- AIRWAYS Mar. 24, 0- 2020 0000920 PB1101- Mar. 01, 2020 0- 0000927 PB1101- 0- 00009?8 PB1101- 0- 0000929 PB1101- 0- 0000930 3819 SMARTWINGS country of registry not PW1211- VJSTA JET LIMITED 0- known country of 0000807 registry not known Four. Petitioner's sales to Royal Air Philippines in the volume of 1,346 liters should be excluded for the reason that the destination of

DECISION CTA Case Nos. 10750 & 10905 Page 18 of31 the aircraft cannot be determined as the corresponding ADR only indicates "ferry flight."82 Summing up Our observations, petitioner's sales to international carriers and exempt entities per ADRs and Sales Invoices for the period from January 1, 2020, to December 31, 2020, which are properly supported, amount to 140,553,495 liters, calculated as follows: Sales (Volume in Liters) Domestic air carrier with tax exemption Tax-exempt International air (Alphaland entity (Petron carriers 144,258,829 Aviation) Singapore PTE) Total 140,290,887 146,739,666 Claim 46,735 2,434,102 142,764,782 3,967,942 Supported by ADRs/Sales 39,793 2,434,102 3,974,884 Invoice (Exhibit "P-118") 6,942 - 142,764,782 Unsupported sales (Table 21, Exhibit 141,635,251 JIP-50") 1,129,531 Supported by ADRs/Sales 140,290,887 39,793 2,434,102 Invoice 139,162,896 38,253 2,434,102 Traced to CAB & OFA 1,127,991 1,540 - Certifications (Exhibit "P-123") Not supported by certifications Additional disallowance found by the Court: Not supported by certifications 1,080,410 - - 1,080,410 Destination of aircraft not 1,346 - - 1,346 indicated - - 1,081,756 Total 1,081,756 - 6,186,171 8,482 140,553,495 Total disallowances 6,177,689 38,253 2,434,102 Properly supported sales 138,081,140 Excise taxes paid on the imported and locally-produced Jet A-lfuel Excise Taxes Paid on Imported Jet A-1 Fuel Petitioner paid excise taxes for imported Jet A-1 fuel for the period January 1, 2020 to December 31, 2020 as follows: 83 '' Exhibit "P-118-1-5060," USB (Exhibit "P-50-3"). 83 Table 2, Exhibit "P-50," Docket (CTA Case No. 10750)- Vol. 2, pp. 626 to 627.

DECISION CTA Case Nos. 10750 & 10905 Dates of Payment SADNo.84 Im portationj Tentative Final Volume85 Amount of Arrival Date� (In Liters) Excise Tax Assessment Assessment 6WOA2000003 Jan. 4, 2020 Jan. 7, 2020 Feb.26,2020 16,808,233 1>67,232,932.00 6WOA2000008 Jan. 14, 2020 Jan. 16, 2020 Feb. 27, 2020 18,514,200 74,056,800.00 6WOA2000011 Jan. 22, 2020 Jan. 23, 2020 June 24, 2020 17,831,506 71,326,024.00 6WOA2000021 Feb.6,2020 Feb. 7, 2020 Sep. 1, 2020 17,462,283 69,849,132.00 6WOA2000041 Mar. 16,2020 Mar. 18, 2020 17,658,144 70,632,576.00 6WOA2000071 June 18, 2020 June 23, 2020 - 12,610,103 50,440,412.00 6WOA2000100 July 26, 2020 July 29, 2020 18,393,817 73,575,268.00 Oct. 29, 2020 Oct. 29, 2020 6WOA2000119 Aug. 13, 2020 Aug. 17, 2020 Nov. 26, 2020 15,324,971 61,299,884.00 6WOA2000153 Sep.25,2020 Sep.28,2020 Nov. 26, 2020 17,714,548 70,858,192.00 Total 152,317,805 1!609,271,220.00 'Arrival date is considered the last day when the imported jet A-1 fuel was fully discharged from the cargo vessel to the Petitioner's storage tanks in Petron Bataan Refinery (PBR). The foregoing importations are likewise supported by Statements of Settlement of Taxes and Duties,86 Customs Payment Receipts,B? and Authority to Release Imported Goods (ATRIGs).88 ICPA Dayego noted that of the total volume of 152,317,805 liters, 132,222,571 liters of imported Jet A-1 fuel are subject to the refund claim. The difference of 20,095,234 liters pertains to imported Jet A-1 fuel sold to domestic carriers not related to the refund claim.89 We also note the difference found by ICPA Dayego between volumes of Jet A-1 fuel per importation documents as compared with the Certificates (CIS), thus:9o Per Importation Documents - Per CIS Difference Final Volume (Actual Volume Received) (From Table 4) US Barrels Liters US Barrels Liters US Barrels Liters at 60�F at Air at 60�F at Air at60�F at Air Vessel (a) (c) (e)= (f) = 6WOA2000003 104,657,080 (b) 104,657,080 (d) (a) - (c) (b) - (d) 6WOA2000008 114,030,000 16,808,233 114,047,420 6WOA2000011 110,912,520 18,514,200 110,912,520 16,808,233 - - 6WOA2000021 108,143,000 17,831,506 107,884,690 18,424,775 6WOA2000041 109,907,000 17,462,283 109,646,770 17,831,506 (17,420) 89,425 6WOA2000071 78,074,730 17,658,144 78,074,730 17,396,714 6WOA2000100 113,877,000 12,610,103 113,802,130 17,640,402 - - 6WOA2000119 94,980,910 18,393,817 94,117,120 12,610,103 6WOA2000153 109,772,000 15,324,971 109,580,320 18,370,915 258,310 65,569 944,354,240 17,714,548 942,722,780 15,179,514 Total 152,317,805 17,700,906 260,230 17,742 151,963,068 - - 74,870 22,902 863,790 145,457 191,680 13,642 1,631,460 354,737 84 Exhibits "P-104-1-1" to "P-104-1-9," USB (Exhibit "P-50-3"). 85 Exhibits "P-103-3-1" to "P-103-3-9," USB (Exhibit "P-50-3"). 86 Exhibits "P-104-2-1" to "P-104-2-9," USB (Exhibit "P-50-3"). �, Exhibits "P-104-3-1" to "P-104-3-9,"' USB (Exhibit 'T-30-3"). 8s Exhibits "P-104-4-1" to "P-104-4-9," USB (Exhibit "P-50-3"). 89 Exhibit "P-50," Docket (CTA Case No. 10750)- Vol. 2, p. 627. oo Table 5, Exhibit "P-50," Docket (CTA Case No. 10750) -Vol. 2, p. 627.

DECISION CTA Case Nos. 10750 & 10905 Page 20 of31 ICPA Dayego found discrepancies between the volumes reflected in importation documents and the actual volumes received per Certificates of Inspection (CIS), resulting in a net variance of 354,737 liters. As per ICPA Dayego, petitioner explained that these differences were due to normal factors such as temperature, density, and measurement conditions. Any excess volume required additional tax payment, while any shortfall resulted in absorbed losses, with no corresponding refund from the BOC. This difference does not affect the Petitioner's claim for refund since the refund claim was lower than the amount actually paid. Excise Taxes Paid on Locally-produced Jet A-1 Fuel An examination of the summary of Electronic Tax Returns (ETRs)91 for the period from January to December 2020 shows that petitioner paid the following excise taxes, viz.:92 Petroleum Products Volume in Liters Excise tax Jet A-1 Fuel 119,142,660.54 Others I' 476,644,797.90 Total 10,248,372,632.66 10,367,515,293.20 73,071,103,849.96 p 73,547,748,647.86 It is also noted that per ETR filed on January 2, 2020, petitioner had an excise tax payment balance carried over from previous return of :P592,836,827.98,93 while its ETR for December 31, 2020 shows a balance to be carried over to next return of !>863,643,674.75.94 On the other hand, a summary of petitioner's Product Replenishment Debit Memos 95 (BIR Form No. 2331) shows a beginning balance of P77,843,820.00, additions of P1,320,000,000.00, and an ending balance of P39,796,180.00.96 For the locally-produced Jet A-1 fuel, ICPA Dayego summarized petitioner's excise taxes payments on the following withdrawals:97 " Exhibits "P-109-1" to "P-109-5632," USB (Exhibit "P-50-3"). 92 Exhibit "P-109," USB (Exhibit "P-50-3"). 93 Exhibit "P-109-1," USB (Exhibit "P-50-3"). " Exhibit ""P-109-5627,"' USB (Exhibit "P-50-3"'). " Exhibits "P-111-1" to "P-111-21," USB (Exhibit "P-50-3"). 96 Exhibit "P-111," USB (Exhibit "P-50-3"). 97 Tables 10 and 11, Exhibit "P-50," Docket (CTA Case No. 10750)- Vol. 2, pp. 630 to 631.

DECISION CTA Case Nos. 10750 & 10905 Less: Other JET A-1 Excisable Particulars Total PBR- Products -Not Total Imported Locally SOPD Related to the 471,946,173 148,622,373 Produced PerWC/PBR- 166,223,013 148,622,373 SOPO (Exhibit Claim 323,323,800 No. "P-110")* 3, 930,647,483 3,460,252,127 17,600,640 Per ETR (Exhibit 305,723,160 No. "P- 323,323,800 109")** - PROM (Exhibit No. "P-111") 305,723,160 - 471,946,173 148,622,373 Difference Exln.b.zt - - * SAP-generated PBR-SOPD marked as Nos. "P-110-1" to "P-110-256" ** ETR marked as Exhibit Nos. "P-109-1" to "P-109-5632" Particulars Imported JetA-1 Fuel Total Total volume of removals from PBR per Locally Produced we (in Liters) 1-�8,622,373 323,323,800 471,946,173 Multiply by: Equivalent Exdse Tax Rate 1>4.00 1>4.00 per Liter i> - 1>1,293,295,200 1>1,293,295,200 Amount of exdse tax that should have been paid in ETR/PRDM - 1,293,295,200 1,293,295,200 Actual amount of excise tax due and paid 1"- 1"- 1"- on PBR removals per ETR/PRDM Difference Out of the total volume of locally produced of 323,323,800 liters, 14,517,095 liters were related to and part of the claim. The difference of 308,806,705 liters were either refunded thru PRC or sold to domestic airline carrier not related to nor part of the claim of refund. 98 In fine, the excise taxes paid on the imported and locally- produced Jet A-1 fuel may be claimed for refund pursuant to Sections 129 and 135, of the NIRC, as amended. Sales and delivery of locally- produced and imported fuel to international carriers and tax- exempt entities Under Section 135 of the NIRC, as amended, petitioner must prove that the paid and claimed excise taxes on the petroleum products paid in taxable year 2020 were sold to international carriers and exempt entities. 98 Exhibit "P-50," Docket (CTA Case No. 10750)- Vol. 2, p. 631.

DECISION CTA Case Nos. 10750 & 10905 Page 22 o�31 In this regard, petitioner avers that the following pieces of evidence prove that excise taxes on the locally-produced and imported Jet A-1 are paid, and that the Jet A-1 was withdrawn from the Petron Bataan Refinery (PBR) and subsequently sold and delivered to international carriers and tax-exempt clients, to wit: 1. PBR Official Register Books (ORBs) signed by the BIR Revenue Officer on Premise99 and SAP-Generated ORBJoo for the year 2020; 2. Withdrawal Certificates (WCs);lOJ 3. ATRIGs;102 4. ETRs with Schedule 1 Summary of Removals and Excise Tax Due on Petroleum Products Chargeable against Payments;103 5. Cargo Outturn Certificates;liJ.J 6. Cargo Intake Certificates;JOs 7. Liquidation Statements (LS);106 8. Product Movement by Movement Type (PMMT)1�7 9. ADRs108 10. Sis;l09 and 11. Cash Receipts.JlO We partly agree. To properly understand the foundation of Our conclusion, it is necessary to elaborate on the movement of petitioner's Jet A-1 fuel from local production or importation including the payment of excise taxes due and withdrawal should to the delivery of the same to the international carriers and tax-exempt entities. 1. Volume of]et A-1 in Petron Bataan Refinery (PBR) The ORB of the Petron Bataan Refinery for the month of January 2020 shows a beginning balance of 22,190,632 liters, broken down as follows:m 99 Exhibits "P-105-1-1" to "P-105-1-12," USB (Exhibit "P-50-3"). 1oo Exhibits "P-105-2-1" to "P-105-2-12," USB (Exhibit "P-50-3"). 1o1 Exhibits "P-108-2-1" to "P-108-2--�91," USB (Exhibit "P-50-3"). 1o2 Exhibits "P-10-�-4-1" to "P-10-�-4-9," USB (Exhibit "P-50-3"). 1m Exhibits "P-109-1" to "P-109-5632," USB (Exhibit "P-50-3"). 104 Exhibits "P-108-1-1" to "P-108-1-290," USB (Exhibit "P-50-3"). 10s Exhibits "P-107-1" to "P-107-9," USB (Exhibit "P-50-3"). 106 Exhibits "P-116-1-1-1" to "P-116-8-1-1," USB (Exhibit "P-50-3"). 107 Exhibits "P-106-1" to "P-106-12," "P-115-1-1" to "P-115-22-1," USB (Exhibit "P-50-3"). 108 Exhibits "P-118-1-1" to "P-118-1-6116," USB (Exhibit "P-50-3"). 109 Exhibits "P-119-1-1" to "P-119-944," USB (Exhibit "P-50-3"). no Exhibits "P-122-1" to "P-122-20," USB (Exhibit "P-50-3"). 111 Exhibits "P-105-1-1" and "P-105-2-1," USB (Exhibit "P-50-3").

DECISION Volume in Liters CTA Case Nos. 10750 & 10905 4,683,676 Page 23 of 31 17,506,956 Beginning Balance -January 2020: 22,190,632 Local Imported Total A scrutiny of the summary of WCs reveals that 27,967,064liters of imported Jet A-1 fuel were withdrawn from the PBR112 before the date of the earliest Authority to Release Imported Goods (ATRIG) which was January 10, 2020,113 We disallow this withdrawal. Any withdrawal from the PBR prior to this date is not covered by the importation upon which the claimed deliveries to international carriers and exempt entities were sourced. 2. Withdrawal of jet A-1 Fuel from PBR to various depots Per ORBs of the PBR, total removals of Jet A-1 fuel from importation and local production for the year 2020 is 494,230,699 liters.114 The same were transferred to the following depots namely, (1) SL Harbor; (2) Navotas; (3) Rosario; (4) Palawan; (5) Mactan; (6) Iloilo; (7) Davao; (9) Tagoloan; and (10) Zamboanga, where petitioner's claim for refund were sourced_115 Excluding the volume of sales to Petron Singapore Trading PTE LTD, We adopt ICPA Dayego's findings on the movements of 452,332,199 liters of petitioner's locally manufactured and imported Jet A-1 fuel from the PBR to the various depots are as follows:116 PerCOC/WC Per Deoot's L5-Receiots Per Depot's PMMT- Receiots - Withdrawals fromPBR Gross In-transit Net Volume Volume Volume Gain to be Received by (Exhibit No. Exhibit Received (Loss) Exhibit (36,708) Received No. Deoot Deoots P-108) No. 5,685,682 (477,073) 5,648,974 5,648,974 Davao 13,151,210 (262,458) "P-115-4" Iloilo 5,685,682 "P-116-3" 46,608,745 249,614 12,674,137 JJP-115-5" 12,674,137 Mactan 46,346,287 "P-115-8" 46,346,287 Palawan 13,151,210 "P-116-4" 3,800,643 4,050,257 "P-115-9" 4,050,257 46,608,745 "P-116-5" 3,800,643 "P-116-6" 112 Exhibits "P-108-2-2," "P-108-2-4" to "P-108-2-18," "P-108-2-227" to "P-108-2-234," and "P- 108-2-456" to "P-108-2-459," USB (Exhibit "P-50-3"). m Exhibit "P-104-4-1," USB (Exhibit "P-50-3"). 114 Exhibit "P-105," USB (Exhibit "P-50-3"). 11 ' Exhibit "P-50," Docket (CTA Case No. 10750)- Vol. 2, p. 623. 116 Tables 12 and 13, Exhibit "P-50," Docket (CTA Case No. 10750)- Vol. 2, p. 632.

DECISION CIA Case Nos. 10750 & 10905 Tagoloan 2,638,398 "P-116-2" 2,638,398 18,280 2,656,678 "P-115-16" 2,656,678 Zamboanga 3,618,433 "P-116-7" 3,618,433 5%,372 4,214,805 "P-115-11" 4,214,805 DMIA/Cla rk 34,281,521 "P-116-1" 34,281,521 - 34,281,521 "P-115-2" 34,281,521 JOCASP 1,080,000 - Navotas - - - Rosario 38,571,985 (91,351) Harbor 4,831,987 38,571,985 (15,405) 38,480,634 "P-115-12" 38,480,634 4,831,987 (213,510) 4,816,582 "P-115-13" 4,816,582 Total 298,063,595 298,063,595 (320,266) 297,850,085 "P-115-14" 297,850,085 341,467,567 "P-116-8" 341,467,567 (232,239) 341,147,301 341,147,301 452,332,199 451,252,199 451,019,960 451,019,960 Per Depot's PMMT-Receipts Per Depot's ORB-Receipts Volume Exhibit Received by Not Related Exhibit Related to Not Related No. Claim to claim Depots Depot to claim Total No. 5,648,974 2,811,642 Total 12,674,137 ?,3?4,511 8,460,616 Davao "P-115-4" 5,648,974 2,806,728 8,453,70? "P-114-4" 46,346,287 13,018,852 14,998,648 4,050,257 602,028 59,365,139 Iloilo "P-115-5" 1?,674,137 2,3?3,574 14,997,711 ''P-114-5" 2,656,678 582,241 4,652,285 4,214,805 720 3,238,919 :tv!actan "P-115-8" 46,346,287 12,255,279 58,601,:>66 "P-114-8" 4,215,525 Palawan "P-115-9" 4,050,257 620,315 4,670,:>72 "P-114-9" 35,T::>4,910 - Tagoloan "P-115-16" 2,656,678 581,773 3,238,451 "P-114-15" 40,614,058 Zamboanga "P-115-11" 4,214,80:> - 4,?14,805 "P-114-11" 4,817,102 326,613,010 DMIA/Clar 372,044,170 502,730,212 k "P-115-2" 34,281,521 1,333,479 35,615,000 "P-114-2" 34,281,521 1,473,389 - - - JOCASP - - ?,133,131 40,613,76:> "P-114-12" 2,133,424 Navotas "P-115-12" 38,480,634 - 4,816,582 "P-114-13" 38,480,634 520 4,816,:>82 326,654,292 "P-114-14" 4,816,582 Rosario "P-115-13" 297,850,085 28,804,207 372,084,639 297,850,085 28,762,925 341,147,301 30,937,338 501,878,446 341,147,301 30,896,869 Harbor "P-115-14" 451,019,960 50,858,486 451,019,960 51,710,252 I Total Thus, after reconciliation and accounting for in-transit losses of 232,239 liters, only 451,019,960 liters confirmed received by the depots. We also found that there is a discrepancy of 6,327,103 liters when the foregoing volume of removals is compared with the WCs:117 Jet A-1 Fuel Related Other Particulars Exhibit No. Depots Depots Total Per PBR-ORB - Removals "P-108" 5,685,682 andCOC 5,685,682 - 13,151,210 Davao Depot 46,608,745 Iloilo Depot 13,151,210 - Mactan Depot 3,800,643 Palawan Depot 46,608,745 - 2,638,398 Tagoloan Depot 3,618,433 Zamboanga Depot 3,800,643 - 34,281,521 DMlA/Clark Depot 38,571,985 Navotas Depot 2,638,398 - 4,831,987 Rosario Depot 298,063,595 Harbor Depot 3,618,433 - 1,080,000 JOC:ASP 34,281,521 - 38,571,985 - 4,831,987 - 298,063,595 - 1,080,000 - m Table 8, Exhibit "P-50," Docket (CTA Case No. 10750)- Vol. 2, p. 629. See also Exhibit "P- 108," USB (Exhibit "P-50-3").

DECISION CTA Case Nos. 10750 & 10905 Jet A-1 Fuel Related Other Particulars Exhibit No. Deuots Depots Total Petron Singapore Trading "P-110" 18,391,527 - 18,391,527 PTE LTD (Export) 23,506,973 Others - 23,506,973 494,230,699 487,903,596 PerWC 470,723,726 23,506,973 6,327,103 Difference 464,396,623 23,506,973 6,327,103 - ICPA Dayego noted that the difference in volume totalling 6,327,103 liters pertains to the WCs which were not provided due to time constraint. Hence, the same should be disallowed for being unsupported. The details of the said WCs are as follows:118 Depot/ Volume per Volume Excise Tax Traced to Customer Dinectly (Volume x Exhibit No. coc Related to Name Claim 1"4.00) P-125-7-1 Navotas depot 1,551,497 i> 4,758,540.00 P-116-5-1 MC!Adepot 2,729,861 1,189,635 Not Traced JOCASP 281,700 1,126,800.00 P-116-4-1 Iloilo depot 520,000 520,000 2,080,000.00 P-116-1-1 DMIA-Oark 805,743 720,000 - - Difference 6,327,103119 - - 1,991,335 1"7,%5,340.00 3. Transfer from Depots to into-plane (ITP) facilities and refuellers From the foregoing depots, petitioner's Jet A-1 fuel is subsequently transferred to another depot, into-plane (ITP) facilities and refueller before it is delivered to the international carrier or exempt entity:120 SAP Plant Code Source SAP Plant Code Destination 1202 Plant/Depot Depot/Facility 1?10 Rosario Terminal 1302 )OCASP/NAIA Depot 1?11 Navolas depot 1302 JOCASP/NAIA Depot Palawan d~pot Direct to Customer 1215 - SL Harbor depot Laoag!TP 1304 1301 2307 DMIA/Clark depot 130? )OCASP/NAIA Deoot Mactan depot Direct to Customer 2209 - Direct to Customer 3209 Iloilo depot Tagbilaran ITP 3203 - Iloilo ITP 3205 Davao deoot Kalibo ITP Tagoloan depot ??04 Davao ITP Zambomwa deoot 2301 2305 Laguindingan (Cagayan) 3302 ITP 3303 Zamboanga refueller 3301 na Table 9, Exhibit 'T-50," Docket (CTA Case No. 10750)- Vol. 2, p. 629. See also Exhibil "P- 108," USB (Exhibit "P-50-3"). 119 Should be 6,327,101. 120 Exhibit "P-50," Docket (CTA Case No. 10750)- Vol. 2, p. 623.

DECISION CIA Case Nos. 10750 & 10905 Page 26 of31 The aforementioned depots issued a total of 441,923,025 liters of petitioner's Jet A-1 fuel to another depot, ITP and refueller as shown hereafter: 121 Per Depot's LS-Issuance Per Depot's PMMf-Issuance Exhibit Related to Not Related Exhibit Volume Issued No. Depots Claim to claim Total No. by Depot Davao "P-117-2" 8,483,427 Iloilo "P-117-3" 67,948 8,415,479 13,850,000 "P-115-4" 8,483,427 Mactan "P-117-4" 51,664,773 Tagoloan "P-117-1" 3,924,652 9,925,348 4,091,960 "P-115-5" 13,850,000 Zamboang a "P-117-5" 9,223,562 42,441,211 "P-115-8" 51,664,773 Navotas Rosario "P-117-6" 17,649 4,074,311 "P-115-16" 4,091,960 Harbor 13,182 3,945,778 3,958,960 "P-115-11" 3,958,960 Total 34,958,000 3,657,205 38,615,205 "P-115-12" 38,615,205 4,520,000 "P-115-13" 4,520,000 - 316,738,700 "P-115-14" 4,520,000 78,918,849 359,873,905 316,738,700 118,396,849 237,819,851 441,923,025 359,873,905 131,643,842 241,477,056 441,923,025 310,279,183 Per Depot's PMMT-Issuance Per Depot's ORB-Issuance Volume Volume Exhibit Issued by Not Related Exhibit Issued by Not Related No. Depots No. Depot to claim Total Depot to claim Total 8,483,427 "P-114-4" 8,486,919 Davao "P-115-4" 67,948 8,415,479 13,850,000 "P-114-5" 67,948 8,418,971 13,850,000 51,664,773 "P-114-8" 52,561,628 Iloilo "P-115-5" 3,924,652 9,925,348 4,091,%0 "P-114-15" 3,924,652 9,925,348 4,091,%0 3,958,%0 "P-114-11" 3,958,%0 Mactan "P-113-8" 9,223,562 42,441,211 38,615,205 "P-114-12" 9,223,562 43,338,066 35,078,000 4,520,000 "P-114-13" 4,520,000 Tagoloan "P-115-16" 17,649 4,074,311 316,738,700 "P-114-15" 17,649 4,074,311 318,463,297 3:>9,873,905 358,061,297 Zamboanga "P-115-11" 13,182 3,945,778 441,923,025 13,182 3,945,778 441,010,764 Navotas "P-115-12" 34,9:>8.000 3,657,205 34,958.000 120,000 Rosario "P-115-13" 4,520,000 - 4,520,000 - Harbor "P-115-14" 78,918,849 237,819,851 78,918,849 239,544,448 118,396,849 241,477,056 118,396,849 239,664,448 Total 131,643,842 310,279,183 131,643,842 309,366,922 Based on the foregoing information, of the 441,923,025 liters total issuances of Jet A-1 fuel from petitioner's depots per ORB, LS, and PMMT, only 131,643,842 liters are related to petitioner's claim. The issuances are broken down as follows:122 Per Depot LS-Issuances Per SAP Per Depots/ Recei- Direct Subject to Claim PMMT- ITPsj ving Delivery Issuances ITP to Custo- Issuances- Exhibit Locally Imported Related to Refueller Exhibit Depots to Another No. Produced Claim LS-Receipts No. mers (c) DepotfiTP/ "P-117-2" (a) (b) Refueller "P-117-3" 67,948 67,948 67,948 "P-125-2" Davao depot to Davao ITP "P-117-4" 2,534 13,817 16,351 16,351 "P-125-3" 35,544 3,872,757 3,908,301 3,908,301 "p-125-4" Iloilo depot to: 38,078 3,886,574 3,924,652 3,924,652 Iloilo ITP Kahbo ITP 3,370 249,617 252,987 252,987 II p-125-5" 8,970,575 1,745,872 7,224,703 8,970,575 Mactan depot to: 252,987 8,970,575 Tagbilaran ITP 1,749,242 7,474,320 9,223,562 Customers 121 Tables 14 and 15, Exhibit "P-50," Docket (CTA Case No. 10750)- Vol. 2, p. 635. 122 Tables 16 and 17, Exhibit "P-50," Docket (CTA Case No. 10750)- Vol. 2, p. 636.

DECISION CTA Case Nos. 10750 & 10905 Per Depot LS-Issuances Per SAP Per Depots/ Recei- Direct Subject to Claim PMMT- ving Delivery Issuances ITPsf ITP to Custo- Issuances- Exhibit Locally Imported Related to Refueller Exhibit Depots to Another No. Produced Claim LS-Receipts No. mers (c) DepolfiTP/ "P-117-1" (a) (b) Refueller "P-117-5" 17,649 17,649 17,649 "P-125-1" Tagoloan to "P-117-6" Laguindingan 13,182 13,182 13,182 "P-125-6" (Caga.)'an) deEot 11,809,053 106,567,716 118,376,769 118,376,769 "P-125-7" 8,970,575 Zamboanga depot 20,080 20,080 20,080 "P-125-8" to Zamboanga 106,567,716 refueller 11,829,133 117,928,610 118,396,849 118,396,849 13,715,232 131,643,842 122,673,267 Navotas, Rosario and SL Harbor depot to: JOCASP /NAJA LaoagiTP Total Per ITP's PMMT-Receipts Per ITP's ORB-Receipts Volume Related to Received by Claim ITPName Exhibit No. 67,948 ITP Exhibit No. ITP Davao ITP " P-115-18 " 16,351 Iloilo!TP "P-115-19" 3,908,301 Davao ITP " P-114-4�" 67,948 Kalibo ITP "P-115-6" 252,987 Tagbilaran ITP "P-115-10" Iloilo ITP "P-114-5" 16,351 Laguindingan (Cagayan) ITP Kalibo ITP "P-114-6" 3,908,301 Zamboanga ITP JOCASP Tagbilaran ITP "P-114-10" 252,987 Laoag ITP Total Laguindingan "P-115-3" 17,649 (Cagayan) ITP "P-114-3" 17,649 "P-115-20" 13,182 "P-115-1" 118,376,769 Zamboanga ITP "P-114-11" 13,182 "P-115-7" 20,080 122,673,267 JOCASP "P-114-1" 118,376,769 Laoag ITP "P-114-7" 20,080 122,673,267 Thus, the issuances from the depots to another depot, ITP, or refueller per LS, PMMT, and ORB of the receiving facility tally at 122,673,267 liters, excluding the direct delivery to customers of 8,970,575 liters. 4. Delivery to petitioner's customers From the depots, ITP, or refueller, petitioner's imported and locally manufactured Jet A-1 fuel is delivered to international carriers and exempt entities. Per their LS, PMMT, and ORB, 144,305,564liters were issued:123 Per LS -Receipts Per LS - Issuances (Exhibit Nos. "P-116" and "P-125") (Exhibit Nos. "P-117" and "P-128") Related to Claim Depot!VITPs/ Exhibit From From Total Exhibit From From Total Locally Imported Receipts No. Locally Imported Refueller No. Produced Produced 123 Tables 18 and 19, Exhibit "P-50," Docket (CTA Case No. 10750)- Vol. 2, p. 638.

DECISION crA Case Nos. 10750 & 10905 Page 28 of31 PerLS Receipts Per LS - Issuances (Exhibit Nos. "P-116" and "P-125") (Exltibil Nos. "P-117" and "P-128") Related to Claim DepotsfllPs/ Exhlbit From From Total Exhlbit From From Locally hnported Receipts No. Locally Imported Refueller No. Produced Produced Total - 67,948 "P-128-3" - 67,948 Davao ITP "P-12o-2" 67,948 106,567,716 118,376,769 "P-128-9" 67,948 106,567,716 11,809,053 "P-128-10" 11,809,053 118,376,769 TOCASP/NAIA "P-123-7" - 20,080 "P-128-4" - ?0,080 20,080 16,351 "P-1 ?8-5" 20,080 16,351 LaoaF;ITP "P-125-8" 2,534 13,817 3,908,301 "P-1 ?8-6" 2,534 13,817 3,872,757 252,987 "P-128-7" 3,872,757 3,908,301 Iloilo!TP "P-123-3" 35,544 48,353 35,544 252,987 3,370 249,617 3,370 249,617 48,353 Kalibo ITP "P-125-4" 31,090 31,090 17,263 17,263 Tagbilaran ITP "P-1 ?o-5" Palawan ITP "P-116-6" Laguindingan (Cagayan) ITP "P-125-1" 17,649 - 17,649 "P-128-2" 17,649 - 17,649 13,18? 13,182 "P-128-8" 13,182 13,182 Zamboanga ITP "P-125-6" 1,745,872 - 8,970,o75 "P-117-4" 1,745,872 - 8,970,575 784,600 12,613,369 "P-128-1" 784,600 7,224,703 12,613,369 Mactan (MCIA) "P-116-5" 14,517,095 7,224,703 144,305,564 14,517,095 11,828,769 144,305,564 11,828,769 129,788,469 DMIA/Clark "P-116-1" 129,788,469 Total Per ITP's PMMT-Issuance Per ITP's ORB-Issuance Related to Related to ITPName Exhibit No. Claim ITP Exhibit No. Claim Davao ITP JOC:ASP-NAIA ~~P-115-18" 67,948 Davao ITP "P-114-4" 67,948 Laoag!TP lloilo!TP "P-115-1" 118,376,769 JOC:ASP "P-114-1" 118,376,769 Kalibo!TP Tagbilaran ITP "P-115-7" 20,080 Laoag ITP "P-114-7" 20,080 Palawan ITP Laguinclingan "P-115-19" 16,351 Iloilo!TP "P-114-5" 16,351 (Cagayan) ITP Zamboanga ITP "P-115-6" 3,908,301 Kalibo ITP "p-114-6" 3,908,301 Mactan (MCIA) DMIA/Clark "P-115-10" 252,987 Tagbilaran ITP "P-114-10" 252,987 Total "P-115-9" 48,353 Palawan ITP "P-114-9" 48,353 Laguinclingan "P-115-3" 17,649 (Cagayan) ITP "P-114-3" 17,649 "P-115-20" 13,182 "P-115-8" 8,970,575 Zamboanga ITP "P-114-11" 13,182 "P-115-2" 12,613,369 144,305,.564 Mactan (MCIA) "P-114-8" 8,970,575 DMIA/Clark "P-114-2" 12,613,369 144,305,.564 However, as previously discussed, petitioner substantiated the foregoing issuances with ADRs amounting only to 140,330,680 liters.1 24 Moreover, the volume of imported and locally-manufactured Jet A-1 fuel that has been traced from the PBR all the way to the depots, ITP, refueller, or direct delivery to its customers that is related to the claim is 131,643,842 liters. However, based on the issuances shown above, the depots, ITP, and refueller collectively issued more than what they received. Notably, the difference of 12,661,722liters is not accounted for by petitioner: Received by depots, ITPs, refueller Volume in Liters Issued by depots, ITPs, refueller to international carriers 131,643,842 Difference 144,305,564 (12,661,722) 124 Tables 20 and 21, Exhibit "P-50," Docket (CTA Case No. 10750)- Vol. 2, p. 642.

DECISION CTA Case Nos. 10750 & 10905 Page 29 o�31 After tracing the movement of the Jet A-1 fuel, ICPA Dayego summarized her findings as follows:125 Ref./ Exhibit Volume Excise Tax (in Liters) Amount Table No. Particulars 146,739,666 1'586,958,664 "P-101" Amount of Claim per Schedule of Excise Tax Paid/Petition for Review 1,189,635 P'4,758,540.00 281,700 1,126,800.00 Less recommended for downward 520,000 2,080,000.00 7,965,340.00 adjustments 1,991,335 2,240,000.00 4.f "P-108" Unsupported WC: 560,000 11,694,532 Table 9 Navotas depot 2,923,633 2,086,564 521,641 1,057,052 MCIA depot 264,263 709,640 177,410 247,000 JOCASP 61,750 104,748 26,187 Sub-total 15,899,536 3,974,884 4.h Table Not traced to PMMT, LS and ORB - 26,104,876 6,526,219 1'560,853,788 13 - JOC:ASP 140,213,447 "P-119" Disallowance of ADRs: Local destination not covered by tax exemption 4.k No destinations indicated Table 21 Unsupported ADR Out-of-period ADR Date Unreadable No date and no signature Sub-total Total recommended for downward adjustments Recommended for refund or issuance of TCC In sum, considering the disallowances We found, along with the adoption of the disallowances made by ICPA Dayego, petitioner's refundable excise taxes paid on Jet A-1 fuel sold to international carriers and exempt entities for the period covering January 1, 2020 to December 31, 2020 is P389,493,496.00, computed as follows: Volume Excise Tax Amount (in Liters) Total Amount of Claim 146,739,666 1"586,958,664.00 Less: Disallowances per !CPA Dayego 1,991,335 f' 7,965,340.00 Unsupported Withdrawals Withdrawals not traced to PMMT, LS, and ORB- 560,000 2,240,000.00 3,974,884 15,899,536.00 JOCASP 6,526,219 !' 26,104,876.00 Disallowed ADRS 1,129,531 f' 4,518,124.00 Total Disallowances per ICPA Dayego 1,080,410 4,321,640.00 5,384.00 Disallowances per Our findings: 1,346 ADRs not traced to certifications 27,967,064 111,868,256.00 Additional ADRs not supported by certifications 12,661,722 Destination of aircraft not indicated in ADR Withdrawals before date of earliest ATRlG Difference between fuel traced to depots, ITPs, and 12s Table 26, Exhibit "P-50," Docket (CTA Case No. 10750)- Vol. 2, p. 646.

DECISION 42,840,073 50,646,888.00 CTA Case Nos. 10750 & 10905 97_373_374 !' 171,360,292.00 Page 30 of31 p 197,465,168.00 refuellers vs fuel issued by depots, ITPs, and refuellers P389,493,496.00 Total Disallowances per Our findings Total disallowances Refundable excise taxes WHEREFORE, the Petitions for Review are PARTIALLY GRANTED. Accordingly, respondent is ORDERED to REFUND in favor of petitioner in the total amount of P389,493,496.00, representing petitioner's erroneously paid excise taxes for its imported and locally-produced Jet A-1 fuel for the periods from January 1, 2020 to June 30, 2020, and from July 1, 2020 to December 31, 2020, which were subsequently sold and delivered to various international carriers and tax-exempt entities. SO ORDERED. ~ ~ f. ~ '~A,k MARIAN IVM. REYES'-FAJARDO Associate Justice I CONCUR: HENRY 1/fNGELES Associate Justice 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. ~ frp, f.~ - /Fr;;;.cl. MARIAN IVY' F. REY~S~FAJARDO Associate Justice Chairperson

DECISION CIA Case Nos. 10750 & 10905 Page 31 of31 CERTIFICATION Pursuant to Article VIII, Section 13 of the Constitution, it is hereby certified 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. ~. ~ ).....________ MA. BELEN M. RINGPIS-LIBAN Presiding Justice