PHILIPPINE AIRLINES, INC. v. COMMISSIONER OF INTERNAL REVENUE AND COMMISSIONER OF CUSTOMS

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS Quezon City Second Division PHILIPPINE AIRLINES, INC., CTA CASE NO. 8340 Petitioner, Members: -versus- RINGPIS-LIBAN, Chairperson MODESTO-SAN PEDRO, and FERRER-FLORES, JJ. COMMISSIONER OF INTERNAL Promulgated: 5 ~/ REVENUE AND COMMISSIONER OCT 0 OF CUSTOMS, Respondents. X----------------------------------------------------------------------------~-- -~~~-~-~~ . AMENDED DECISION RINGPIS-LIBAN, J: The Case This is a remanded case for the determination of the final amount to be refunded to petitioner Philippine Airlines, Inc., ("PAL") pursuant to the Supreme Court Resolution dated July 09, 2018 rendered in G.R. No. 238163,1 and this Court En Bane's Resolution dated May 25, 2022.2 The Facts To recall, on September 23, 2011, petitioner PAL filed a Petition for Review before this Court,3 praying for it to be declared under its franchise, Presidential Decree ("PD") No. 1590, exempt from specific tax on its importation of liquor~ 1 Rollo (CTA EB No. 1347). 2 Docket (CTA Case No. 8340), pp. 1200-1203. 3 Id., pp. 6-24.

DECISION CTA CASE NO. 8340 wine and cigarettes for international flight consumption and therefore entitled to the refund of: a) Php2,630,868.83 specific tax paid under protest on September 23,2009;and b) Php2,922,755.57 specific tax paid under protest on September 23, 2009, or a total of Php5,553,624.40 all paid to the respondent Commissioner of Customs ("COC"). Petitioner further prays that respondents COC and Commissioner of Internal Revenue ("CIR") be ordered to refund the total amount of Php5,553,624.40 specific taxes, which was erroneously collected from petitioner in connection with its subject importations of assorted liquor, wine and cigarettes for international flight consumption. On February 17, 2015, the Third Division, promulgated its Decision; denying petitioner's Petition for Review, the dispositive portion of which reads: "WHEREFORE, the Petition for Review filed by Philippine Airlines, Inc. on September 23, 2011 is hereby DENIED, for lack of merit. SO ORDERED." Petitioner then filed its Motion for Partial Reconsideration [of the Decision dated 17 February 2015} via registered mail on March 10, 2015.5 Respondent COC failed to file comment on the said Motion.6 For his part, respondent CIR filed a Comment / Opposition (Re: Motion for Reconsideration of the Decision promulgated 17 February 2015) on April 21, 2015,7 praying that petitioner's Motion for Partial Reconsideration be denied for lack of meri/ 4 Id., pp. 1086-1120; Penned by Associate Justice Esperanza R. Fabon-Victorino (Retired), and concurred by Associate Justice Lovell R. Bautista (Deceased) and Associate Justice Ma. Belen M. Ringpis-Liban. 5 Id., pp. 1130-1140. 6 !d., Records Verification Report dated May 04, 2015 issued by the Judicial Records Division of this Court, p. 1159. 7 Id., pp. 1145-1151.

DECISION CTA CASE NO. 8340 In the Resolution dated July 22, 2015, 8 the Third Division denied petitioner's Motion for Partial Reconsideration, the dispositive portion of which reads: "WHEREFORE, finding no valid justification to compel a modification or reversal of the assailed Decision, petitioner Philippine Airlines, Inc.'s Motion for Partial Reconsideration posted on March 10, 2015, is hereby DENIED for lack of merit. SO ORDERED." Consequently, petitioner flied with the Court En Bane a Motion for Extension oftime to File Petition for Review on August 20, 2015,9 and later, its Petition for Review, on September 3, 2015. 10 The case was docketed as CTA EB No. 1347. In the Resolution dated December 09, 2015,11 the Court En Bane ordered respondents to file their comment, not a motion to dismiss, within ten (10) days from receipt thereof. Respondent CIR complied and submitted his Comment (Re: Petition for Review) on December 22, 2015,12 while respondent COC filed a Motion for Extension ofTime to file Comment on December 29, 201513 which was granted in the Minute Resolution dated January 08, 2016. 14 Thereafter, respondent COC posted his Comment on February 01,2016.15 In the Resolution dated March 22, 2016,16 the Court En Bane gave due course to the Petitionfor Review, and required the parties to submit their respective memorandum within thirty (30) days from notice. Petitioner flied its Memorandum on April29, 2016,17 while respondents CIR and COC separately flied their Manifestation and Manifestation (in Lieu of Memorandum) on April 04, 2016,18 and May 03,2016,19 respectively, stating to the effect that they are adopting their respective comment to the Petition for / 8 !d., pp. 1154-1158. 9 Rollo (CTA EB No. 1347), pp. 1-5. 10 !d., pp. 49-64. 11 !d., pp. 367-368. 12 !d., pp. 369-374. 13 !d., pp. 376-378. 14 !d., p. 382. 15 !d., pp. 383-401. 16 !d., pp. 406-407. 17 !d., pp. 413-430. 18 !d., pp. 408-410. 19 !d., pp. 433-435.

DECISION CTA CASE NO. 8340 Review as their memoranda. The case was then submitted for decision on June 01, 2016.20 On August 30, 2017, the Court En Bane rendered its Decision, 21 the dispositive portion of which reads: "WHEREFORE, premises considered, the instant Petition for Review is hereby PARTIALLY GRANTED. The Court in Division's Decision and Resolution promulgated on February 17, 2015 and July 22, 2015, respectively, are hereby REVERSED AND SET ASIDE. The case is REMANDED to the Court in Division for the determination of the amount of refund due to petitioner. SO ORDERED." Respondent CIR then filed a Motion for Partial Reconsideration with the Court En Bane on September 29, 2017,22 while respondent COC ftled his Motion for Reconsideration on October 03, 2017. 23 Petitioner, for its part, posted its Comment/ Opposition on November 20, 2017.24 In the Resolution dated February 21, 2018,25 the Court En Bane denied respondents CIR and COC's motions for reconsiderations, the dispositive portion of which states: "WHEREFORE, premises considered, respondents CIR and COC's Motions for Reconsideration are hereby DENIED for lack of merit. SO ORDERED." On April 20, 2018, respondent filed with the Supreme Court a Petition for Review on Certiorari entided "Commissioner of Internal Revenue and Commissioner of Customs, Petitioners, versus Philippine Airlines, Inc., Respondent". The case was docketed as G.R. No 238163.2/ 20 Id., Resolution dated June 01, 2016, pp. 441-442. 21 Id., pp. 445-461. 22 Id., pp. 488-501. 23 Id., pp. 503-515. 24 Id., pp. 521-527. 25 Id., pp. 534-536. 26 Id.

DECISION CTA CASE NO. 8340 On July 09 2018, the Supreme Court rendered a Resolution,27 denying the Petition for Review on Certiorari, the pertinent portions of which read: "The Court further resolves to DENY the present petition for review on certiorari assailing the Decision dated August 30, 2017 and Resolution dated February 21, 2018 of the CTA En Bane in CTA EB No. 1347 for failure of petitioners (a) to sufficiently show that the CTA En Bane committed any reversible error in the challenged decision and resolution xxx. XXX XXX XXX The CTA En Bane's decision is clearly supported by evidence. In its evaluation, the CTA En Bane found it fit to grant PAL's claim only to the extent of the refund of taxes paid on imported liquors, because its evidence only established that the cost of importing alcohol for its commissary and catering supplies is lower than purchasing them locally. It did not prove the same as to its imported cigarettes. Thus, the remand of the case for the reception of evidence on this point is likewise proper. SO ORDERED. xxx." In the Resolution dated May 25, 2022,28 the Court En Bane noted the receipt of the above Resolution, as well as the Entry of Judgment dated November 25, 2020, which states that the Resolution rendered in G.R. No. 238163 has become final and executory and recorded in the Books of Entries of Judgment on November 25, 2020. Thus, the Court En Bane remanded the present case to the Court's Third Division for the determination of the final amount to be refunded to petitioner. Subsequently, the Third Division issued the Resolution dated August 02, 2022, 29 directing the parties to submit within five (5) days from notice a manifestation, informing this Court of any supervening event that may affect the disposition of CTA Case No. 8340, and whether they intend to present evidence pertaining to petitioner's claim for refund on its importation of cigarettes, in order to afford them the fullest opportunity to establish the merits of their claim or defense for the proper and just determination of the present case/ 27 !d. 28 Docket (CTA Case No. 8340), pp. 1200-1203. 29 Id, pp. 1205-1206.

DECISION CTA CASE NO. 8340 Petitioner then posted its Compliance on September 19, 2022,3� stating that it is not aware of the occurrence of any supervening event that may affect the disposition of the instant case, and that it does not intend to present further evidence pertaining to its claim for refund on its importation of cigarettes. Respondents, however, failed to comply with the said Resolution dated August 02, 2022.31 In the Resolution dated October 25, 2022,32 the Court noted petitioner's Compliance, and submitted the case for decision once again for the proper determination of the final amount to be refunded to petitioner, in accordance with Resolution dated May 25,2022 of this Court En Bane in CTA EB No. 1347. DiscussionI Ruling The present Petition for Review is PARTIALLY GRANTED. As previously mentioned, the Supreme Court, in G.R. No 238163, pursuant to its Resolution dated July 09, 2018,33 denied respondents CIR and COC's Petition for Review on Certiorari, which assailed the Decision dated August 30, 2017 and Resolution dated February 21, 2018 of the CTA En Bane in CTA EB No. 1347, for failure to sufficiently show that the CTA En Bane committed any reversible error in the challenged Decision and Resolution. The Supreme Court also found that the CTA En Bane's Decision is clearly supported by evidence, and that a remand of the case for the reception of evidence on petitioner's importation of cigarettes is likewise proper. Pursuant to the above Supreme Court Resolution, the Court En Bane issued the Resolution dated May 25, 2022,34 remanding the present case to the Court's Third Division, the pertinent portions of which read: "xxx XXX XXX Here, the only thing the Court En Bane can do is to remand CTA Case No. 8340 to the court of origin (Court of Tax Appeals Third Division) for the reception of evidence pertaining to / 30 !d., pp. 1208-1209. 31 !d., Records Verification Report dated October 05, 2022 issued by the Judicial Records Division of this Court, p. 1207. 32 !d., pp. 1215-1216. 33 Docket (CTA EB No. 1347), pp. 445-461. 34 Docket (CTA Case No. 8340), pp. 1200-1203.

DECISION CTA CASE NO. 8340 petmoner Philippine Airlines, Inc's imported cigarettes, and consequently, for the proper determination of the amount of refund to which petitioner is entitled. WHEREFORE, premises considered, CTA Case No. 8340, entitled Philippine Airlines, Inc. vs. Commissionerofinterna/Revenue and Commissioner ofCustoms, is REMANDED to this Court's Third Division for the determination of the final amount to be refunded to petitioner Philippine Airlines, Inc. SO ORDERED." From all the foregoing, it can be deduced that the Supreme Court, in effect, upheld the Court En Bane's Decision dated August 30, 2017, and that the case was remanded to the Court's Third Division for: (1) the reception of evidence pertaining to petitioner's imported cigarettes, and consequently, (2) the proper determination of the amount of refund to which petitioner is entitled, both for its importation of cigarettes and alcohol products. Accordingly, the Court shall confine the succeeding discussions on the findings of the Court En Bane dated August 30, 2017, and the determination of the above matters as ordered by the Supreme Court and Court En Bane. Governingprovisions for refund claims. Sections 204(C) and 229 of the National Internal Revenue Code (NIRC) of 1997 read: "SEC. 204. Authority of the 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 /

DECISION erA CASE NO. 8340 Commissioner a claim for credit or refund within two (2) years after the payment of the tax or penalty: Provided, however, that a return filed showing an overpayment shall be considered as a written claim for credit or refund."35 "SEC. 229. Recovery of Tax Erroneous!J or I/legal!J 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 ftled 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."36 The aforequoted provisions are clear: within two (2) years from the date of payment of tax, the claimant must first flle an administrative claim with respondent before filing its judicial claim with the courts of law. Both claims must be ftled 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."37 Moreover, the foregoing provisions 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 / 35 Emphasis supplied. 36 Emphasis supplied. 37 Commissioner of Internal Revenue v. San Miguel Corporation, Et. AI., G.R. Nos. 180740 and 180910, November 11, 2019.

DECISION CTA CASE NO. 8340 by some officer having no authority to levy the tax, or one which is some other similar aspect is illegal.38 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". The timeliness of petitioner's refund claim has already been addressed in the Court's Decision dated February 17,2015. Thus, the determination of this Court shall only be on the issue of whether petitioner was able to establish that the subject excise taxes paid are "erroneous or illegal". Requisites in claiming exemption under Section 13 ofPD No. 1590. In the Court En Bane's Decision dated August 30,2017,39 it was stated that there is no question that the tax privilege of petitioner provided under Section 13 of PD No. 1590 has not been revoked by Section 131 of the NIRC of 1997, as amended by Section 6 of Republic Act No. 9334. Also, this matter has already been settled and exhaustively discussed in the Court's Third Division Decision dated February 17, 2015. 40 As ruled therein, petitioner's tax privilege under Section 13 of PD No. 1590 still applies, subject however to certain conditions. To recall, the pertinent portions of Section 13 ofPD No. 1590 provide as follows: "SECTION 13. In consideration of the franchise and rights hereby granted, the grantee shall pay to the Philippine Government during the life of this franchise whichever of subsections (a) and (b) hereunder will result in a lower tax: (a) The basic corporate income tax based on the grantee's annual net taxable income computed in accordance with the provisions of the National Internal Revenue Code; or (b) A franchise tax of two per cent (2%) of the gross revenues derived by the grantee from all sources, without/ 38 Commissioner of Internal Revenue v. Pilipinas Shell Petroleum Corporation, G.R. No. 188497, April 25, 2012, citing the definition provided in BlACK'S lAW DICTIONARY, Fifth Edition, p. 486. 39 Docket (CTA EB No. 1347), pp. 445-461. 40 Docket (CTA Case No. 8340), pp. 1086-1119.

DEGSION CTA CASE NO. 8340 distinction as to transport or nontransport operations; provided, that with respect to international air-transport service, only the gross passenger, mail, and freight revenues from its outgoing flights shall be subject to this tax. 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."41 Based on the above provision, for exemption to apply, three (3) requisites must be complied with by petitioner, namely: 1. it paid its corporate income tax and VAT liabilities for the subject period of importation; 2. the imported articles, supplies or materials are intended to be used in its transport and non-transport operations and other activities incidental thereto; and 3. the imported articles, supplies or materials are not locally available in reasonable quantity, quality, or price. ~ 41 Emphasis supplied.

DECISION CTA CASE NO. 8340 It must be pointed out that this Court's Decision promulgated on February 17, 2015 has already ruled that petitioner complied with the first and second requisites,42 which was later upheld by the Court En Bane in its Decision dated August 30, 2017. Thus, the Court shall proceed to discuss petitioner's compliance with the third requisite. Petitioner complied with the third requisite for its importation of alcohol products. The Court En Bane, in its August 30, 2017 Decision, 43 explicitly stated that as to the third requisite, petitioner has sufficiently established that the alcohol products it imported were not available in reasonable quantity, quality or price in the local market. The pertinent portions of the said Decision is hereunder quoted for easy reference: "In a catena of cases involving Philippine Airlines, Inc., although involving different taxable periods, the Court En Bane had consistently ruled that the Table of Comparison between Cost of Importing and Cost of Locally Purchasing Commissary and Catering Supplies with local prices reflected in the Philippine Wine Merchants' Price List and/or Duty Free Philippines Retail Prices, coupled with the testimony of petitioner's witness, were deemed sufficient to rule that the cost of importing commissary and catering supplies is lower than purchasing them locally. The Supreme Court even affirmed the factual findings of the Court of Tax Appeals in Republic of the Philippines, represented by the Commissioner of Customs vs. Philzppine Airlines, Inc., where We ruled that the 'tabulation of comparison of the cost of importing the subject articles and the cost of purchasing them locally x x x and Price List for 2005 of Duty-Free Philippines,' together with the testimony of petitioner's witness, were sufficient in proving that the subject imported articles were not locally available in reasonable quantity, quality or price. Similarly, in the more recent case of Commissioner of Internal Revenue and Commissioner of Customs vs. Philippine Airlines, Inc., the Second Division of the Supreme Court acknowledged the factual determinations of this Court in the consolidated cases of Philippine / 42 Id., pp. 1109-1110. 43 Docket (CTA EB No. 1347), p. 458.

DECISION CTA CASE NO. 8340 Airlines, Inc. vs. Commissioner of Internal Revenue and Commissioner of Customs, Commissioner ofInternal Revenue and Commissioner ofCustoms vs. Philippine Airlines, Inc., and Commissioner of Customs vs. Philippine Airlines, Inc., docketed as CTA EB Nos. 1029, 1031 and 1032, that PAL made a prima facie case that the cost of importing the alcohol products were reasonably cheaper than purchasing them locally through the following evidence: (a) testimony of Mr. Victor Santos, PAL's Assistant Vice President in charge of the Catering and In- flight Materials Purchasing; (b) Table of Comparison between Cost of Importing and Cost of Locally Purchasing Commissary and Catering Supplies; (c) Philippine Wine Merchant's January 11, 2007 Price List; and, (6) Monthly PDS rates for the year 2007-2008, 2008-2009, and 2009-2010. Therefore, it is of no moment even if petitioner will compare the prices of its imported wines and liquor with only one supplier. Applying the foregoing, the Court En Bane is convinced that petitioner has sufficiently established that the alcohol products it imported were not available in reasonable quantity. quality or price in the local market through the following: testimony of Ms. Cheryl V. Capinpin, petitioner's Manager-In-flight Materials Purchasing Division, Catering and In-flight Materials Purchasing Sub-Department; Table of Comparison between Cost of Importing and Cost of Locally Purchasing Commissary and Catering Supplies; sales invoices issued by foreign suppliers; Philippine Wine Merchants Price Lists for 2007, 2008 and 2009; Future Trade International Price list dated April 8, 2009; Booking Rates- August 2007; and, Monthly Philippine Dealing System (PDS) rates. The general rule is that claimants of tax refunds bear the burden of proving the factual basis of their claims. Taxes are the lifeblood of the nation. Therefore, statutes that allow exemptions are construed strictly against the grantee and liberally in favor of the government. And, when a prima facie case is established, the burden of evidence or the burden of going forward with the evidence shifts to the defensive party. However, the afore-mentioned evidence presented by petitioner remained unrebutted as both respondents CIR and COC /

DECISION CTA CASE NO. 8340 failed to present any controverting evidence to refute petitioner's claim."44 In other words, the Court En Bane, in its determination of petitioner's satisfaction of the third requisite, gave evidentiary weight to petitioner's documentary and testimonial evidence relating to its importation of alcohol products. Thus, in compliance with the Court En Bane' s Decision and Resolution dated August 30, 2017 and May 25, 2022, respectively, as well as the Supreme Court Resolution dated July 09, 2018 in G.R. No. 238163, the same evidence shall be considered in ascertaining the amount of excise tax to be refunded to petitioner in this case. To recall, a closer review of the records would show that petitioner presented the following evidence to prove its compliance with the third requisite: 1. Table of Comparison Between Cost of Importing and Cost of Locally Purchasing Commissary and Catering Supplies;45 2. Philippine Wine Merchants (PWM) Price List for Year 200746, 200847 and 200948; 3. Affidavit of Gilbert M. Galedo, petitioner's Senior Planning & Purchasing Specialist of Catering & In-flight Materials Purchasing Sub-Department Corporate Logistics & Service Departrnent49; 4. Future Trade International Price List dated April 08, 2009. 50 5. Letter of Ms. Marianne C. Raymundo, petitioner's Vice President for Financial Services with the subject "Booking Rates-August 2007"51 ; / 44 Id., Decision dated August 30, 2017, pp. 457-459; Emphasis and underscoring supplied. 45 Docket (CTA Case No. 8340), Exhibit "DDD-2", pp. 542-549. 46 Id, Exhibit "DDD-3", p. 601. 47 Id., Exhibit "DDD-4", p. 602. 48 Id., Exhibit "DDD-5", p. 603. 49 Id., Exhibit "DDD-6", pp. 604-605. 50 Id., Exhibit "DDD-7", p. 886. 51 Id., Exhibit "DDD-8", pp. 887-891.

DECISION CTA CASE NO. 8340 6. Monthly Philippine Dealing System (PDS) rates for the years 2000 to 201 052; 7. Judicial Affidavit of Mr. Jonathan Castillo Lee, petitioner's Manager for Company Materials Handling Division;53 and 8. Judicial Affidavit of Ms. Cheryl V. Capinpin, petitioner's Manager for In-flight Materials Purchasing Division, Catering & In-Flight Materials Purchasing Sub-Department;54 As borne by the records, on September 23, 2009, petitioner paid under protest55 the excise taxes on its cigarette and alcohol importations in the total amount of Php5,553,624.40, broken down as follows: BOC Form No. 38-A Amount Paid 16736109256 Ph�2,630,868.83 16736108357 2,922,755.57 Total Php5,553,624.40 The above excise tax ofPhp5,553,624.40 is supported by Informal Import Declarations and Entries (liDE),58 Airway Bills/Bills of Lading (AWB/BL),59 Authority to Release Imported Goods (ATRIG)60 and Sales Invoices,61 which were identified by petitioner's witnesses, Ms. Cheryl V. Capinpin, petitioner's Manager-In-Flight Materials Purchasing Division, Catering and Inflight Materials Purchasing Sub-Department, in her Judicial Affidavit dated August 13, 2012,62 and Mr. Jonathan Castillo Lee, petitioner's Manager for Company Materials Handling Division, per his Judicial Affidavit dated February 06, 2012/ 52 !d., Exhibit "DDD-9", p. 613. 5' !d., Exhibit "BBB", pp. 303-321. 54 !d., Exhibit "ODD", pp. 522-541. 55 !d., Exhibits "CC", "DD" and "EE", and "XX", "YY", and "ZZ", pp. 727-747, and 782-801, respectively. 5� !d., Exhibit "S", p. 717. 57 Id., Exhibit "00", p. 773. 58 Id., Exhibits "I", "J", "K", "L", "M", "N", "0", "P", ''Q", "FF", "GG", "HH", "II", "JJ", ''KK", "LL", and "MM", pp. 690, 692, 695, 698, 701, 704, 707, 710, 713, 748, 751, 754, 757, 760, 763, 766, and 769, respectively. 59 ld., Exhibits "I-1", "J-1", "K-1", ''L-1", "M-1", "N-1", "0-1", "P-1", "Q-1", "FF-1", "GG-1", "HH- 1", "II-1", "JJ-1", "KK-1", "LL-1", and "MM-1", pp. 691,693,696,699,702,705, 708, 711, 714, 749, 752, 755, 758, 761, 764, 767 and 770, respectively. "PP", "QQ 11 "RR", "55", "TT", "UU", 60 !d., Exhibits "T", "U", "V", "W", "X", "Y", ''Z", "AA", ''BB", , "W", and "WW", pp. 718-726, and, 774-781, respectively. 61 Id., Exhibits ''1-2", "J-2", ''K-2", "L-2", "M-2", "N-2", "0-2", "P-2", "Q-2", "FF-2", "GG-2", "HH- 2", "II-2", "JJ-2", "KK-2", "LL-2", and "MM-2", pp. 691, 694, 697, 700, 703, 706, 709, 712, 715, 750, 753, 756, 759, 762, 765, 768, and 771, respectively. 6> !d., Exhibit "DOD", pp. 522-541. 63 !d., Exhibit "BBB", pp. 303-321.

DECISION CTA CASE NO. 8340 Below is the summary of the value of imported wines, liquors and cigarettes as indicated in the IIDE/ATRIG and the corresponding excise taxes paid: Arrival Date IIDE AWB/BL ATRIG Invoice Description Value Amount of (Exhibit) (Exhibit) (Exhibit) (Exhibit) Lindemans Premier Excise Taxes Shiraz Cabernet Paid Under "T" "I-2" Carlos I Brandy "l-2" Camus Cognac XO Protest "U" Superieur August 18, 2007 "I" "I-1" "V" "K-2" Chivas Regal Whisky $ 4,054.62 Php 27,513.00 "L-2" West Red KS Full August 20, 2007 "J" "T-1" "W' "M-2" Flavor 11,904.00 395,048.64 "X" "N-2" West KS A\lj\Ust 26, 2007 "K" "K-1" Davidoff Lights 3,150.00 21,163.32 "L-1" "Y" "0-2" Davidoff Classic 32,400.00 546,121.94 A\lj\Ust 27, 2007 "L" "P-2" "Z" "Q-2" Chivas Regal Whisky October 26, 2008 "M" "M-1" "AA" 3,375.00 217,280.00 "FF-2" Chivas Regal Whisky 9,000.00 217,280.00 November 6, "N" "N-1" "BB" 108,640.00 "GG-2" Piper Heidsieck Brut 2008 "PP" 95,060.00 "HH-2" Lindemans Premier November 21, "QQ" Chardonnay 100,100.80 "II-2" Lindemans Premier 2008 "0" "0-1, "RR" Shiraz Cabernet 6,600.00 "Tl-2" Penfolds December 6, "SS" "KK-2" Chardonnay 100,230.13 "LL-2" Penfolds Shiraz 2008 "P" "P-1" "IT" Cabernet 6,600.00 "UU" West KS December 19, ''VV'' West Menthol 802,431.00 West Ice 2,630,868.83 2008 "Q" "Q-1" Davidoff Classic 32,812.50 Ballantines Scotch 109,896.12 Sub-Total (BOC OR No. 167361092) Whisky 17 YO Ballantines Scotch Whisl<y 21 YO 20,176.20 Carlos 1 December 17, "FF" "FF-1" Camus Cognac 29,268.00 29,347.20 2008 VSOP Elegance 20,176.20 Camus Cognac XO January 16, 2009 "GG" "GG-1" Superieur 16,740.00 34,849.80 Pij:>er Heidsieck Brut 434,560.00 Piper Heidsieck Brut 108,640.00 West Menthol 162,960.00 West Ice 190,120.00 January 15, 2009 "HH" "HH-1" 37,857.60 106,406.47 127,567.79 355,661.35 January 21, 2009 "II" "II-1" 6,168.00 47,617.47 February 4, 2009 "JT' "Il-l, 10,312.50 28,217.76 February 5, 2009 10,312.50 252,192.60 "KI<" "KK-1" 10,800.00 252,192.60 February 10, "LL-1" 298,760.00 2009 "LL" 353,080.00

DECISION CTA CASE NO. 8340 1 December 11, ' ' :t'v11v:[ ' ' I I "MM-1" ''WW' I I "MM-2" Chivas Regal Whisky 6,600.00 100,230.13 2008 TOTAL Sub-Total (BOC OR No. 167361083) 128,058.60 2,922,755.57 $237,954.72 Php5,553,624.40 It must be noted however that as to cigarettes, the Court En Bane held that petitioner fell short in proving the non-availability of imported cigarettes at a reasonable quantity, quality or price in the local market.64 Notably also, even after the Supreme Court and the CTA En Bane's order to remand the case for reception of evidence on this matter,65 petitioner manifested that it does not intend to present further evidence pertaining to its claim for refund on its importation of cigarettes.66 Considering petitioner's failure to present evidence to show compliance with the third requisite relating to its importation of cigarettes, the Court En Bane's ruling in its August 30, 2017 Decision, stating that the claimed excise tax on cigarettes should be denied by the Court, is reiterated. Thus, petitioner's claim corresponding to the excise taxes paid for importation of cigarettes amounting to Php2,186,380.00 shall be denied, vit: Arrival Date IIDE AWB/BL ATRIG Invoice Description Value Amount of October 26, 2008 (Exhibit) (Exhibit) (Exhibit) (Exhibit) West Red KS Excise Taxes Full Flavor Paid Under "X" "M-2" West KS "N-2" Davidoff Lights Protest "Y" Davidoff "M" "M-1" "GG-2" Classic $3,375.00 Php 217,280.00 "QQ" 9,000.00 217,280.00 November 6, 2008 "N" "N-1" "LL-2" West KS 108,640.00 "VV" West Menthol $12,375.00 Sub- Total (part ofBOC OR No. 167361092) West Ice $16,740.00 95,060.00 Davidoff Php 638,260.00 January 16, 2009 "GG" "GG-1" Classic Php 434,560.00 West Menthol 108,640.00 West Ice 162,960.00 February 10, 2009 "LL" "LL-1" 10,800.00 190,120.00 298,760.00 Sub- Total (part ofBOC OR No. 167361083) 27,540.00 353,080.00 TOTAL $39,915.00 1,548,120.00 Php 2,186,380.00 On the other hand, in order to ascertain whether petitioner was able to establish that the imported wine and liquor products were not locally available in 64 Docket (CTA EB No. 1347), p. 459. 65 Refer to Supreme Court's Resolution in G.R. No. 238163 dated July 09, 2018 and CTA EB No. 1347 Resolution dated May 25, 2022. 66 Docket (CTA Case No. 8340), pp. 1208-1209.

DECISION CfA CASE NO. 8340 reasonable quantity, quality or price, the Court compared the cost per botde of importation against the prices provided by the Philippine Wine Merchants for the years 2007,2008 and 2009; and Future Trade International for the year 2009, to wit: Description Amount of Value No. of Ave. US$ Average Ave. Total Lindernans Excise Taxes (US$) Bottles Purchase Conversion Purchase Excise Purchase Premier Shiraz Paid Under (B) price per Price per Tax per Price per Cabernet (C) bottle in rate per Product Importatio (Australian Wine) Protest (A) PDS Rates Bottle (G=A/C) US$ (F=DxE) n Carlos I Brandy (D=B/C) (Exhibit (H=F+G) Camus Cognac "DDD-9") XO Superieur Chivas Regal (E) Whisky Chivas Regal Php 1,800 2.25 46.664 Php105.11 15.29 Php 120.40 Whisky 27,513.00 4,054.62 1,200 9.92 Chivas Regal 395,048.64 11,904.00 35.00 46.664 462.91 329.21 792.11 Whisky 90 11.25 Piper Heidsieck 21,163.32 3,150.00 2,880 12.50 46.664 1,633.24 235.15 1,868.39 Brut 12.50 546,121.94 32,400.00 528 15.63 46.664 524.97 189.63 714.60 Sub-Total 528 Lindemans 100,100.80 6,600.00 2,100 49.471 618.39 189.58 807.97 Premier Chardonnay 100,230.13 6,600.00 47.647 595.59 189.83 785.42 (Australian Wine) Lindemans 802,431.00 32,812.50 47.647 744.48 382.11 1,126.59 Premier Shiraz Php1,992,608.83 Cabernet (Australian Wine) Php 1,320 3.70 47.647 Php176.29 15.29 Php 191.58 Penfolds 20,176.20 4,884.00 Chardonnay (Australian Wine) 29,347.20 7,104.00 1,920 3.70 47.647 176.29 15.29 191.58 Penfolds Shiraz Cabernet 20,176.20 6,336.00 1,320 4.80 47.647 228.71 15.29 243.99 (Australian Wine) Ballantines Scotch 34,849.80 10,944.00 2,280 4.80 47.647 228.71 15.29 243.99 Whisky 17 YO 106,406.47 10,584.00 300 35.28 47.340 1,670.16 354.69 2,024.84 Baliantines Scotch 127,567.79 16,560.00 360 46.00 47.340 2,177.64 354.35 2,531.99 Whisky 21 YO 355,661.35 10,713.60 47.340 329.32 1,080 9.92 47.340 469.61 330.68 798.93 Carlos 1 47,617.47 1,968.00 144 13.67 47.340 646.98 235.15 977.66 Camus Cognac 28,217.76 4,200.00 120 35.00 48.662 1,656.90 382.11 1,892.05 VSOP Elegance 252,192.60 10,312.50 660 15.63 48.662 760.34 382.11 1,142.45 Camus Cognac 252,192.60 10,312.50 660 15.63 760.34 1,142.45 XO Superieur Piper Heidsieck Brut Piper Heidsieck Brut

DECISION erA CASE NO. 8340 Chivas Regal 100,230.13 6,600.00 12.50 47.647 595.59 785.42 Whisk Sub-Total TOTAL Arrival Date Description Amount of Total Price per Per Future August 18, 2007 Lindemans Premier Shiraz Excise Taxes Purchase PWM Trade Cabernet (Australian Wine) Paid Under Price per Importation (Exhibits International Protest "DDD- (Exhibit 3"; "DDD-7") "DDD- 4"; and "DDD- 5") Php 27,513.00 Php 120.40 Php267.50 None August 20, 2007 Carlos I Brandy 395,048.64 792.11 1,099.00 None August 26, 2007 Camus Cognac XO Superieur 21,163.32 1,868.39 4,200.00 None 546,121.94 714.60 1,100.00 None August 27, 2007 Chivas Regal Whisky_ 100,100.80 807.97 1,100.00 None 100,230.13 785.42 1,100.00 None November 21, 2008 Chivas Regal Whisky 802,431.00 2,540.00 None 1,992,608.83 1,126.59 December 6, 2008 Chivas Regal Whisky 20,176.20 December 19, 2008 Piper Heidsieck Brut 29,347.20 Sub-Total_{p_art ofBOG OR No. 167361092) 191.58 267.50 None Lindemans Premier 20,176.20 191.58 267.50 None Chardonnay (Australian 243.99 267.50 None Wine) 34,849.80 243.99 267.50 None Lindemans Premier Shiraz 2,024.84 None None 106,406.47 2,531.99 None None December 17, 2008 Cabernet (Australian Wine) 798.93 1,099.00 None Penfolds Chardonnay 127,567.79 977.66 1,800.00 None _(_Australian Wine) 355,661.35 1,892.05 4,200.00 None Penfolds Shiraz Cabernet 1,142.45 2,540.00 (Australian Wine) 47,617.47 2,365.00 Baliantines Scotch Whisky 28,217.76 January 15, 2009 17YO 252,192.60 Ballantines Scotch Whisky 21 YO January 21, 2009 Carlos 1 Camus Cognac VSOP Elegance Camus Cognac XO Superieur February 4, 2009 Piper Heidsieck Brut February 5, 2009 Piper Heidsieck Brut 252,192.60 1,142.45 2,540.00 2,365.00 December 11, 2008 Chivas Reg1!1 Whisky 100,230.13 785.42 1,100.00 None Sub- Total (part ofBOG OR No. 167361083)_ 1,374,635.57 Php3,367 ,244.40 TOTAL While the above table of comparison shall be considered in detennining whether the cost of importing commissary and catering supplies is lower than ~

DECISION CTA CASE NO. 8340 purchasing them locally, pursuant to the Court En Bane's Decision dated August 30, 2017, the determination is limited, however, to imported wine and liquor products with costs that can be compared with the local prices for the same brand or products. As to those imported wine and liquor products without comparative prices from the Philippine Wine Merchants or Future Trade International Travel, 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 requisite, but only to the extent of the imported wine and liquor products that are supported by evidence showing that the cost per botde of importing the same is lower than purchasing them locally, and, thus, should be exempt from excise tax, to wit: Arrival Date Description Amount of Total Price per Per Future August 18, 2007 Lindemans Premier Shiraz Excise Taxes Purchase PWM Trade August 20, 2007 Cabernet (Australian Wine) Paid Under Price per August 26, 2007 Importation (Exhibits International August 27, 2007 Carlos I Brandy Protest "DDD-3"; (Exhibit November 21, 2008 Camus Cognac XO Superieur Php "DDD-4"; December 6, 2008 Php 27,513.00 120.40 and "DOD- "DDD-7") December 19, 2008 Chivas Regal Whisky 395,048.64 792.11 21,163.32 1,868.39 5") None December 17, 2008 Chivas Regal Whisky 546,121.94 714.60 Php None 100,100.80 807.97 None January 21, 2009 Chivas Regal Whisky 100,230.13 267.50 None 802,431.00 785.42 None Piper Heidsieck Brut 1,126.59 1,099.00 None Lindemans Premier 20,176.20 None Chardonnay (Australian 4,200.00 Wine) 29,347.20 None Lindemans Premier Shiraz 1,100.00 Cabemet (Australian Wine) 20,176.20 None Penfolds Chardonnay 1,100.00 (Australian Wine) 34,849.80 None Penfolds Shiraz Cabernet 355,661.35 1,100.00 (Australian Wine) None 47,617.47 2,540.00 None Carlos 1 28,217.76 Camus Cognac VSOP 191.58 267.50 None Elegance None Camus Cognac XO Superieur 191.58 267.50 243.99 267.50 243.99 267.50 798.93 1,099.00 977.66 1,800.00 235.15 4,200.00 February 4, 2009 Piper Heidsieck Brut 252,192.60 1,142.45 2,540.00 2,365.00 February 5, 2009 Piper Heidsieck Brut 252,192.60 1,142.45 2,540.00 2,365.00 December 11, 2008 Chivas Regal Whisky 100,230.13 785.42 1,100.00 None Php3,133,270.14 TOTAL

DECISION CfA CASE NO. 8340 Verily, the excise tax in the amount of Php3,133,270.14 constitutes erroneously paid excise tax which is refundable pursuant to Sections 204 and 229(C) of the NIRC of 1997, as amended. WHEREFORE, in view of the foregoing, petitioner's claim for refund is PARTIALLY GRANTED. Accordingly, the Decision dated February 17, 2015 of this Court in Division is AMENDED to read as follows: "WHEREFORE, in light of the foregoing considerations, the Petition for Review is PARTIALLY GRANTED. Accordingly, respondent is DIRECTED TO REFUND petitioner the amount of Php3,133,270.14, representing the latter's erroneously paid excise tax on its importations of wine and liquor products for its international flight consumption. SO ORDERED." ~.�~.A\.__ MA. BELEN M. RINGPIS-LIBAN Associate Justice WE CONCUR: c~~~l�tiRE'Dl%i&s ) Assodate Justice

DECISION CTA CASE NO. 8340 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. ~.~-?~ MA. BELEN M. RINGPIS-LIBAN Associate Justice Chairperson CERTIFICATION Pursuant to Article VIII, Section 13 of the Constitution, and the 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 writer of the opinion of the Court. Presiding Justice